Homeland Security and Importers Showing Stress as Regulatory Deadline Approaches
Customs has major processing issues and importers are still working to comply with new import security rules
December 1st, 2009, Red Bank, NJ - A new set of regulations established by the Department of Homeland Security, known as the Importer Security Filing (ISF), has been ramping up through 2009. The regulations will begin to elicit fines and penalties at the end of January 2010. This regulation requires the importer to provide the US Customs and Border Protection (CBP) service with detail information on the trading partners involved in bringing goods in to the United States prior to those goods being loaded on a vessel bound for the United States. Customs and the importing community have been showing signs of stress as the penalty deadline approaches. While volumes and timeliness have been steadily improving amongst importers this past month saw significant shifts in timeliness and responsiveness by both CBP and importers. Customs also experienced a major system disruption that delayed some security filing responses up to three days. The system is supposed to respond within two minutes as importers are rushing goods to catch a vessel. Response delays of this magnitude would cost hundreds of millions of dollars in expedited freight and low vessel utilization as tens of thousands of containers could have missed their intended departures.
Average processing speeds down dramatically due to processing delays within Customs
Statistics for this month are off dramatically due to the processing issues which occurred within CBP:
Average Time for CBP to respond: 59 minutes, up from 1.81 minutes
Median Time for CBP to respond: 1.98 minutes, up from 1.83 minutes
Fastest Response Time: 15 seconds, down from 17 seconds
Slowest Response Time: 2.87 days, up from 4.86 minutes
The difference between the median processing time and the average tends to indicate a change occurred in the CBP systems environment.
Assessment of CBP Processing Delays
Average processing response began to slow dramatically during the morning of November 25th and came to a standstill within 24 hours. CBP's system was not restored to near normal processing until the evening of the 29th of November.
Importers running out of time to comply
With the holidays approaching there are fewer and fewer working days available for importers to set up an ISF program. The average importer is taking one month or more to establish the processes and controls necessary to locate the information required by Homeland Security and to then input the information to a system to transmit to Customs. While the LOG-NET ISF set-up only takes a few minutes at www.LOG-NET.com/ISF there are requirements for the quality of the data set by CBP. Working with trading partners to insure the quality and timeliness of the data required tends to be the biggest challenge taking most importers four to six weeks to work this out with many setting up overseas input by suppliers while they review and file from the United States.
About LOG-NET, Inc.
Founded in 1991, LOG-NET, Inc. of Red Bank, N.J. provides the trade, transportation and logistics information systems globally. The company provides and international trade and logistics portal capability that enables order management, inventory management, transportation management and compliance on a global end to end (E2E) basis. For more information, please visit www.LOG-NET.com.