ILA strike looms on the East Coast

Just two weeks after striking union workers returned to work at the Los Angeles/Long Beach Seaport, members of the International Longshoremen’s Association threaten to disrupt operations by striking at container ports from Maine to Texas.

Fearing a hit to a still-struggling economy, the National Retail Federation has appealed to President Obama to intervene in the dispute, which centers around payments of container royalties.

Learn more at the Journal of Commerce website.

Beyond the Border — improvements for US/Canada trade

Canada is the United States’ largest trading partner, with billions of dollars in goods crossing the border annually.  Last year, the United States and Canada agreed to implement the Beyond the Border Action Plan, which is intended to expedite trade between the two countries while enhancing border security.

As noted in a recent piece posted on the Government Security News website, Canada recently took a significant step in this regard by expanding its trusted travelers’ expedited border crossing pilot (Free and Secure Trade or FAST) program to a third crossing in Ontario.  Under FAST, participants that are either in Canada’s Partners in Protection (PIP) or Customs Self Assessment (CSA) program to have expedited border crossings.  Previously, expedited service was available only to carriers and shippers who were participants in both programs.  Now, the program is more in alignment with America’s trusted trader programs:  C-TPAT and ISA.

While this is a solid step in the right direction, significant work remains to meet the goals of Beyond the Border.  A recent article in Canada’s Financial Post, “Will the new Can-Am border agreement be a supply-chain headache?”, lays out several concerns.  For example, much effort must be expended to harmonize the two countries’ regulatory schemes for trade.  As pointed out by Joy Nott, president and CEO of the Canadian Association of Importers and Exporters,

[i]f we all live another 300 years, I suppose all regulations would end up being harmonized.  In the interim, it’s still the biggest hurdle to business, irrespective of the sector.  And no sector is exempt from this.

Until that time, as pointed out in the Financial Post article, traders will need to be well-versed in the trade requirements of both the US and Canada.  Ruth Snowden, executive director of the Canadian International Freight Forwarders Association, stated:

Traders will have to have both types of in-house expertise, as well as develop processes and systems to ensure compliance.  That’s getting increasingly difficult because it’s expensive to build the systems, relationships and third-party connectivity needed.

Nevertheless, in addition to the Ontario border crossing pilot, there are glimmers of progress .  For instance, as reported on this blog, CBP just increased the the dollar value of goods that would qualify for “informal entry” processing to $2,500, in a move to harmonize the values for the US and Canada in line with the Beyond the Border initiative.

CBP updates “informal entry” threshold

Effective January 7, 2013, US Customs will increase the threshold value to $2,500 for merchandise to qualify for “informal entry” treatment.

From the Federal Register website:

Currently, for any merchandise valued over $2,000, CBP requires importers to provide a surety bond, complete CBP form 7501, and pay a minimum of $25 in Merchandise Processing Fees (MPF). The final rule increases the limit, from $2,000 to $2,500, for which merchandise may qualify for an “informal entry”, thereby eliminating the need for a surety bond, expediting the customs clearance process, and reducing the required MPF amount to $2 (assuming the entries are filed electronically). CBP is increasing the informal entry limit to mitigate the effects of inflation and in addition, to meet a commitment of the Beyond the Border Initiative between the United States and Canada, to increase and harmonize the value thresholds to $2,500 for expedited customs clearance from the current levels of $2,000 for the United States and $1,600 for Canada.

Hurricane Sandy – drawback claims for damaged goods

US Customs has issued guidance for claiming drawback on imported goods that were damaged or destroyed during Hurricane Sandy. If duties and taxes were paid and the goods are either exported or destroyed, the goods may qualify for a duty drawback refund.

The importer will be required to provide documentation to CBP with details about the condition of the merchandise, as well as any insurance claims filed.  If the importer has been reimbursed for duties and taxes via an insurance claim, the merchandise is not eligible for drawback.

Additional information and instructions can be found in CBP’s CSMS #12-000535.

Deal reached to halt strike at LA/LB Ports; ops restoration begins

Striking union workers have reached agreement with management to return to work today, hopefully ending a shutdown of the Los Angeles/Long Beach Seaport, the busiest in the US.  The deal will not become final until it is ratified by the full union membership.  See details here.

Learn what CPB is doing to restore port operations in US Customs’ CSMS #12-000537.