It’s been six months since the Importer Security Filing (aka Customs 10+2) regulations took effect, but some companies are still struggling to achieve 100% timely and accurate filings as required by these new regulations.
With fines of $5,000 per infraction and broker fees averaging $30 per filling, importers are very aware of the expenses associated with complying with the program, but struggling to understand where their responsibilities lay, and how to best comply while staying inside their budget.
Check out this new eBook by Management Dynamics, and learn twelve vital facts about the ISF regulations including answers to frequently asked questions such as:
What are the basic elements of an ISF filing?
What are the penalties of non-compliance and for unintentional errors?
How does my company minimize the costs and risks of compliance?
What resources are available for more information on ISF?
In a recent AMR Research study, 53% of 160 global trade professionals surveyed claimed that they would be increasing their investment on global trade management (GTM) software in 2010. Some of the main reasons cited in the study for the increase include: to improve coordination of GTM functions internally; to meet government mandates; to meet security requirements; to protect the brand; and to control various costs.
As companies become more global, increasing and expanding operations all over the world, it becomes very difficult to manually manage supply chain processes. Especially when employees are spread out across multiple locations. GTM technologies allow users to seamlessly communicate with trading partners, manage suppliers, optimize global transportation, ensure trade compliance, automate key aspects of trade finance, and develop timely resolutions of operational issues.
To be more specific, a supply chain visibility solution can provide shippers with near-real time visibility to the status of orders, shipments and in-transit inventory to optimize their network. Without a system in place, companies may be handcuffed with longer lead times, higher inventory levels, budget overruns, and continued supply-demand imbalances. Furthermore, with regulations such as the Importer Security Filing (aka 10+2), it is more important than ever to have more visibility and control over what happens at origin. (And speaking of ISF, check out how Bunzl Distribution integrated a supply chain visibility solution with a trade import solution to establish a transparent and compliant import supply chain.)
The bottom line is that we are moving into an era where manual supply chain processes are becoming inept for companies who import or export. To learn more about how different types of GTM technologies can benefit your organization, please download one of Management Dynamics’ GTM Success eKits.
Here’s a great article I found in Logistics Management that gives a basic overview of the Importer Security Filing (“10+2″) rule: Complying with the Importer Security Filing. The rule, which goes into full effect very soon – Jan. 26, 2010, will require importers of ocean freight to complete a properly executed Importer Security Filing (ISF). To comply with this rule, the importer must submit 10 pieces of data related to the container’s contents 24 hours prior to loading, and the carrier must submit an additional 2 items no later than 48 hours after departure.
In order to comply with this rule (noncompliance could result in fines and costly supply chain disruptions), importers need to have processes in place that will allow them to classify and store compliance-related product details; screen suppliers against government-maintained restricted party lists; communicate effectively both internally and with partners so that they will have the information needed to complete the requirements; and measure the process with performance metrics.
Implementing Global Trade Management (GTM) technology can mitigate the risk of non-compliance, fines and product delays resulting from Customs 10+2. The hidden benefit, however, is in deploying a level of automation that will allow importers to effectively shift to a Direct Procurement model. Ultimately, the price of complying with heightened security regulations will cost more, but this new business model promises to generate a new stream of benefits for the importer. For further information on complying with the ISF, and tips on how GTM technologies can help you, please check out our 10+2 Practical Guide.
Automating the import supply chain today is complicated by new compliance regulations like Customs 10+2 and C-TPAT. In this interview with Global Logistics & Supply Chain Strategies magazine, VP Customs Compliance at Leggett & Platt discusses best practices for import compliance and for transforming a fragmented global procurement approach into a centralized global import process:
Today, importers must deal with end-to-end supply chain accountability and are increasingly challenged to have visibility and control over their supply base and origin operations. Here is a short video gives a good overview of how GTM technology can help companies manage these complexities of going global by automating their inbound processes, improving regulatory compliance and attaining landed cost objectives:
Recent research shows that the average cost per Importer Security Filing is $30.* With large importers filing 5,000 ISFs or more per year, the cost of compliance totals to upwards of $150,000 and provides no ROI other than penalty avoidance.
In this short video, Ty Bordner, VP of Solutions Consulting at Management Dynamics discusses some of the strategic opportunities that ISF Compliance can present to an organization, including:
Reducing the effort of complying with Customs 10+2
Minimizing errors upon entry by linking to ISFs
Eliminating manually re-keying data
Preventing potential penalties of $5,000 per ISF
Reducing broker fees (on average, $30 per ISF)
Managing the import process with complete visibility from origin, through customs, to the final destination
Here is an interesting video on SupplyChainBrain about 10+2: Strategic Opportunities That 10 Plus 2 Presents. In the video, Ty Bordner, VP of Solutions Consulting at Management Dynamics, discusses how importers can use 10+2 to their advantage. For instance, since the elements of 10+2 filings are the same for other import documentation, importers should leverage the former to reduce data inaccuracies.
After posting yesterday on some of the issues the new 10+2 rule is creating for importers, I found this article in American Shipper that discusses some of the challenges specific to smaller importers: Reaching the Little Guy. Some major challenges are that many small businesses do not have representatives in foreign countries to track down the necessary information, they are hindered by working in different time zones, or they do now even know who the primary manufacturers are that are used by the buyers with whom they place their orders. I haven’t seen this issue discussed a whole lot in the extensive press coverage on 10+2, but seeing as how small and medium-sized enterprises do make up a significant percentage of importers, it’s definitely worth taking a look at.
There’s been a lot of buzz in recent months about the “10+2″ rule, which is planned to go into full effect on Jan. 26, 2010. The rule went into effect last January, taking a phase-in approach with enforcement. During the first 12 months, violators of the rule will only receive warnings. Beginning next year, fines will be issued of up to $5000 per violation. Importers must provide 10 sets of data before key milestones for U.S. bound shipments. In addition, importers must ensure that the ocean carrier provides an additional two sets of data prior to vessel arrival in the U.S. Some people may be hopeful that the Obama administration will offer a last-minute reprieve to the regulation, but according to Journal of Commerce, that’s not going to happen.
In order to meet these requirements, importers must have a system in place to collect, organize and report the key data elements. A centralized visibility platform can help you integrate all of your supply chain partners to capture key information flows, measure SLAs with supply chain partners on filing timeliness and accuracy, and develop a reporting mechanism to proactively identify “at risk” shipments in advance due to missing required data.
Supply Chain Visibility Best Practices reports on current issues, news and events associated with supply chain management. The authors of this blog are not trade attorneys and in no way should any posting be construed as compliance advice; furthermore, the authors are not responsible for any comments posted by others.
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