Cross-Border Flow Analysis: Findings Matrix - Updated September 2009 The following matrix displays all of the key findings from each of the seven case studies for seven different categories of observations. The criticality of each issue is specific to the industry and to the organization. 1) Shipping Steps / Wait Time 2) Regulatory Requirements/ 3) Logistics Related Issues 4) Security Issues 5) Existing Programs & 6) Compliance Cost Data Issues Initiatives to Address Issues Shipper Does Not Take Heed of Advice FDA Shipments Restricted None noted FAST and C-TPAT CBP Officer Training, Experience and Lacey Act Requirements Company 1: Services of Service Provider from Changing Ports Programs Effective Port Inconsistency Sector Involved in FDA Hours of Operations IRS Personal Tax Intra-Supply Chain Problem with Movement of Goods Carrier Hesitating to Supply Shipper with SCN
Company 2: SmallMedium Sized Enterprise - Custom Textiles Producer Company 3: Small Product Processing Registered with Free and Secure Trade Program Company 4: Food Producer
Inconsistency between CBP Ports Implementation of APHIS Fee from Canada into U.S. Universal Port Code Not Working IRS Personal Tax Identification Number Single U.S. Warehouse Located in East (vs. Canadian Warehouse in West)
None Noted
None Noted
Time-Definite Deadlines LTL Shipments Air Freight Incurred if a Shipment is Delayed
None Noted
None Noted
None Noted
FDA Reporting FDA Prohibited In-Transit Lacey Act Requirements
In-Transit via U.S. Driver Hour Daily Limitation LTL Shipments to Secondary Processing
None Noted
FAST is Very Beneficial IRS Personal Tax Identification Number ACE Messaging
C-TPAT Certification FDA Hours of Operations Inconsistency between CBP Ports Universal Port Code is Not Working Implementation of APHIS Fee From
SCN Duplicates PAPS Code Causing Conflict and Delay
Meat Inspection Precludes the Use of Rail FDA Shipments Restricted from Changing Ports
FAST Drivers Very Successful
Adjustments to Comply with FDA Requirement FDA Hours of Operations Universal Port Code is Not Working
Inter-Agency Communication Compatibility is NonExistent
In-transit and In-bond Inclusion in FAST must be Achieved System Required for Mixed FAST and Non-FAST Loads (clearing at Primary) LTL Should be Able to Clear at Primary for FAST Lane Need System for LTL Mixed Loads (to clear at Primary using non-FAST lane)
Need for Dedicated Lanes or Crossings for Low-risk Companies C-TPAT Privileges Revoked for Carrier with a Single Driver Incident
Company 7: Chemical Producer
SCN Duplicates PAPS Code Causing Conflict and Delay
Having to Submit Customs Information to Broker One Day Ahead of Pickup
Company 6: Consumer Goods Producer
Identification Number ACE Messaging
Company 5: Automotive Parts Manufacturer
7) Observations/ Gaps
Compliance Documentation Appears to be Excessive and Sometimes Duplicative Applying Stickers to Meat Shipment Cases vs. Pallets CFIA Inspection Process Requires Company 4 to Obtain a Veterinary Sign-Off of the Onsite CFIA Inspector CBP Officer Training, Experience and Port Inconsistency FAST and Non-FAST Truck Traffic Mixing at CBP Shift Change CBP Operations are Inefficient Department of Transportation Road/Bridge Maintenance In-bond Moves are Currently not Authorized for FAST Program C-TPAT Green Lane Trucks Not Inspected in Secondary Key U.S. PGAs Should Provide 24/7 Service FDA Hours of Operation FDA Port Inconsistency Re-instate CBP/FDA Co-Release C-TPAT Green Lane FDA Cross-Designation of CBP No Major Issues Reported
No Significant Issues Noted
Duplication of Food Inspection in Canada and U.S. Lacey Act Requirements
Trade Responses For New Procedures Given Little Weight CBP Cost/Benefit Studies Must be Improved Non-tariff Trade Barriers from PGA Requirements Some Positive Examples of Reduction in PGA Requirements Lacey Act Requirements
Lacey Act Requirements Maritime 10 Plus 2 Preclearance Status
FDA Shipments Restricted from Changing Ports
None noted
Pre-requisites for Importers Harmonized Classification of Regulated Substances Between Canada and U.S. Trade Compliance Impacts on Border Compliance
None noted
10 plus 2 Requirements Onerous on Marine Transport
Drivers of Carriers with Good Records Approached for Criminal Activity
System Needed to Process ACE and Standard Manifests Together C-TPAT Has Been Helpful but Should Be More Beneficial FAST is an Excellent Program
Preparation for and Maintenance of CTPAT Certification C-TPAT and FAST help Achieve Almost 100% Compliance ISA Validation and Maintenance Cost
C-TPAT and FAST are Excellent Programs
Universal Port Code is Not Working C-TPAT Certification Costs
Canada Needs to Implement a Universal Port Code
C-TPAT Benefits not as High as Desired FAST Drivers Very Beneficial
New Internal Mechanisms Invested in for Compliance
Information Systems need Greater Integration for Aid in Compliance Research Centre Role
Cross-Border Flow Analysis: Top 10 Findings Matrix - Updated September 2009 The following matrix summarizes the top 10 most common findings that are shared between the seven companies. The leftmost column displays the most frequently cited finding. Note, however, that these issues affect each company differently.
Company 1: Services Sector Involved in Movement of Goods
Port Inconsistency
FDA Hours of Operations
Universal Port Code is Not Working
LTL Shipments to Secondary Processing
FDA Shipments Restricted from Changing Ports
IRS Personal Tax Identification Number
C-TPAT Certification Costs
In-Transit Shipments
5 companies expressed concern with Lacey Act amendment requirements for labelling of genus, species, and country of origin of every wood product.
5 companies noted significant inconsistencies between ports in which officers are not familiar with a number of policies and procedures resulting in extended discussions and delays.
4 companies (i.e., all companies that make FDA shipments) found that the limited FDA hours of operations have caused delays or are a significant inconvenience in cross-border shipments.
4 companies agreed that the universal port code submitted as part of an eManifest is not accepted at a number of ports of entry.
3 companies had issues with less-thantruckload shipments automatically being sent to Secondary. One company noted that FAST LTL shipments should be able to clear at Primary for FAST.
3 companies observed that the inability to change ports of entry once an eManifest is submitted for a FDA shipment has been cause for a number of logistics issues.
3 companies indicated that the requirement to provide a social security number when the ultimate consignee is an individual shipping items worth over $2000 (i.e., formal entry) has caused delays and costs.
3 companies have found that while participation in C-TPAT has been very beneficial, the cost of certification and compliance is quite high. These companies would like added benefits to C-TPAT.
2 companies have noted that the inability to make in-transit shipments or use the FAST lane (via U.S. or via Canada) has hindered their competitiveness.
9
9
9
9
9
9
9
9
9
9
FAST is an Excellent Program
Lacey Act Requirements
6 companies indicated that the FAST program has been very beneficial in facilitating border crossings and have spoken positively of their participation in it. Members of C-TPAT similarly find the program beneficial.
9
Company 2: SmallMedium Sized Enterprise - Custom Textiles Producer Company 3: Small Product Processing Registered with Free and Secure Trade Program
9
9
9
9
9
Company 4: Food Producer
9
9
9
9
9
Company 5: Automotive Parts Manufacturer
9
9
9
Company 6: Consumer Goods Producer
9
9
9
Company 7: Chemical Producer
9
9
9
9
9
9
9
9
9
9
9
Cross-Border Flow Analysis: Border Crossing Costs - Updated January 2010 The following table summarizes the cost to move goods across the border and can be divided into compliance costs or other costs (e.g., delays, issue resolution, etc.). Cost drivers at the border were vastly different between companies due to characteristics of the industry sectors and the companies themselves. For example, some organizations have service providers who transport and process shipments for them at the border so have little visibility of or concern for what happens at the border. Others are directly involved with border processes and have staff physically located at the border. Similarly, delays at the border affect each organization differently depending on the supply chain (e.g., time definite deliveries, stock replenishment, just-in-time system, anticipated delays built into order lead time, etc.). Many of the organizations recognize that virtually all of their shipments will be required at CBP Secondary processing (i.e., LTL, textiles, FDA inspections, etc.) and incorporate these delays into their shipping estimates and procedures. Costs are further categorized as either fixed (taking place away from the border) or at the border (incurred during border processing or as a result of border delays). Of the total annual costs, organizations can incur { little cost, some costs z or most costs at the border. Other Costs
Total Annual Costs
% Costs At Border
$280,000
$280,000
~10%
Tax identification number required delays shipment resulting in lost sale and shipping cost (1 time per year).
$2,500
$62,500
~5%
A number of small product shipments are delayed by 24 hours for various reasons for which personnel must individually address.
$140,000
$770,000
~20%
Bioterrorism Act requirements need several years of staff time to adjust to.
$315,000
$525,000
{ <5%
Importer Self Assessment and C-TPAT program maintenance. Estimated cost is $13,000 per minute of downtime to the assembly line (although none incurred from border delays). Goods are held for FDA approval before "May Proceed" signal is sent back and requires personnel to resolve. C-TPAT certification maintenance requires staff time.
$120,000
$520,000
{ <5%
$56,000
$216,000
~5%
-
$140,000
{ <5%
Compliance Costs Company 1: Services Sector Involved in Movement of Goods Company 2: SmallMedium Sized Enterprise - Custom Textiles Producer Company 3: Small Product Processing Registered with Free and Secure Trade Program Company 4: Food Producer Company 5: Automotive Parts Manufacturer Company 6: Consumer Goods Producer
Not Applicable*
Other Costs - Description
$60,000
$630,000
$210,000
$400,000
$160,000
Company 7: Chemical Producer
$140,000
“Lost” shipments that require personnel to reconcile shipments physically arriving, but not being released by CBP.
No other costs were noted.
*Although Company 1 has numerous staff employed specifically for compliance, it is a service provider for border processing. While employing FTEs is a cost, an increased number of transactions for compliance actually results in net revenue to Company 1 and is therefore not counted as a cost.
Cross-Border Flow Analysis: Border Process Percentages - Updated September 2009 The following table summarizes the main border process value stream routing percentages for each company when its goods cross the border. Each column shows the point in the process a shipment is processed and potentially released. These percentage routings are highly dependent on the product/industry, truck load vs. less-than-truckload and whether the company is a member of FAST and/or C-TPAT (Tier I, II or III). Secondary Change Data/Make Payment
Secondary Open Doors
75%
20%
5%
25%
70%
5%
Primary Company 1: Services Sector Involved in Movement of Goods
Company 2: SmallMedium Sized Enterprise - Custom Textiles Producer Company 3: Small Product Processing Registered with Free and Secure Trade Program
0%
1%
77%
3%
99%
1%
99%
1%
99%
1%
Secondary LTL for FAST/C-TPAT
iHouse (meat inspection)
99%
Company 4: Food Producer
Company 5: Automotive Parts Manufacturer
Company 6: Consumer Goods Producer
Company 7: Chemical Producer
20%