For importers and logistics companies, it will be nothing short of a new era. Such is the magnitude of change that will be brought about by the so-called 10+2 regulation released in proposed form on Jan. 2. "It's going to be a sea change for everyone," said Rob Pisani, a Washington trade lawyer and former Customs official.
The final rule, once it's issued after comments from the trade community, will invariably differ somewhat from the version released this month, but only on the margins. Beginning sometime later this year, Customs and Border Protection will begin phasing in the requirement that importers submit to the agency a wealth of information about every ocean container shipment entering the U.S. The effort to gather this information and transmit it to the agency 24 hours before the vessel sails to a U.S. port will represent the most significant demand placed on the trade community since 9/11, exceeding the C-TPAT program and the 24-hour rule. It will require millions of dollars in expense, from computer programming to the costs associated with outsourcing the collection and transmission of the information to Customs.
But what the trade community needs to realize amid the hardship that implementing this rule will inevitably involve, is that for the integrity and viability of U.S. trade, this needs to happen. The 10+2 rule, which stems from a requirement in the SAFE Port Act, certainly serves a political purpose by undermining arguments for 100 percent scanning at foreign ports, an idea universally seen as impossible to implement. The need to push back on Democrats clammoring for 100 percent scanning played a role in the evolution of the 10+2 requirement. But the value of the requirement itself should not be lost in the discussion. It serves a critical purpose in expanding the data set Customs uses to undertake security reviews on incoming containers.
Customs itself certainly believes this. In other words, it would be a mistake to view the 10+2 rule as something that was done out of political necessity to ward off more Draconian measures and that didn't have the support of Customs itself, as has been suggested. To the contrary, the agency has long believed that the manifest information that it receives under the 24-hour rule provides too limited a picture of a shipment and its origins.
"It is fair to say that they (at Customs) are looking at this as something that they need and want," said Doug Browning, senior vice president of Sandler & Travis Trade Advisory Services and deputy Customs commissioner from 2002 to 2004. "They had been looking at taking it to the next step, asking what would that next step be, and what would enhance their ability to enhance security screenings."
"Way back with the 24-hour rule, they were making pretty strong indications that eventually they would be working with the trade to develop procedures for more advanced cargo information, including data beyond what was on the cargo manifest," said Carol Fuchs, international trade consul for Tyco International, who chaired the COAC subcommittee that worked with Customs to develop the 24-hour rule.
Under the 10+2 rule, the importer of record or its designated agent will be required to submit a security filing on every incoming shipment, including information such as the country of origin, the seller, manufacturer, location of container stuffing, and Harmonized Tariff System number numbers. The 10 in 10+2 refers to the 10 data elements that importers will have to submit, while the 2 refers to two filings - the vessel stowage plan and container status messages - that will have to be made by the ocean carrier.
The real value of the rule is in enhancing the viability of the trade system. Many have long worried about the consequences of another attack on U.S. soil, particularly if it were traced back to goods shipped in a container. The DP World episode and the incessant demands by some Democrats for a 100 percent scanning rule attest to the continuing lack of faith in the container security system.
That lack of confidence could translate into a protracted shutdown of the system in the event of another attack, hurting everyone. The response in such a situation has to be evidence that a system is in place to protect the public. The proposed rule, enhanced by the major cost and effort that will be required to get it up and running, will be a major piece of evidence to support that argument.
It is thus an investment, and one that can't be made fast enough.