CUSTOMS ANTI-DRUG PLAN ANGERS CARRIERS LINE RELEASE TO BE CURBED

CUSTOMS ANTI-DRUG PLAN ANGERS CARRIERS LINE RELEASE TO BE CURBED

A plan by U.S. Customs to get tough on drug trafficking by limiting expedited cargo clearance only to those trucking companies undertaking strict security measures is drawing fire from the trade community.

Customs officials announced earlier this month that special expedited cargo clearance granted to importers - known as line release - will be overhauled to prevent drug traffickers from hitching a ride on the growing U.S.-Mexico trade.The agency is not accepting any more applications for line release through the end of 1995. Next year new applications will be accepted, but only importers working with motor carriers who participate in the Landborder Carrier Initiative will receive the line release privileges.

Truckers who do business through Laredo, Texas, - the busiest land border for long-haul traffic between the United States and Mexico - are reluctantly agreeing to take part in the program but say it misses its mark. That is

because even if U.S. carriers agree to a 19-step security plan, they have no control over Mexican carriers who bring freight to the border.

"Our problem is that unlike the airlines and steamship lines we do not employ people handling our conveyances (in Mexico)," said Charla Griffin, a Laredo-based region manager-Latin American for Landstar Ranger.

Lack of Understanding Cited

Customs officials in Washington, she said, fail to understand the complexities of a cross-border movement out of Mexico and the lack of control importers and truckers have over the conveyance.

Under Mexican law, a licensed Mexican customs broker must process export documents and collect ad valorem taxes. A Mexican trucker usually brings the load to a broker's warehouse and after processing a drayage hauler drives the trailer across the border to an import lot where often another transfer hauler takes the freight to an importer's warehouse, freight forwarder or trucker's terminal.

"Believe me, there is not a carrier here in Laredo, Texas, who wants to be transporting drugs in the United States. But it's kind of hard to sign a contract where you have no control over the parties," said Ms. Griffin. "The basic security measures (under the Customs plan) are on this side of the border. That does not impact the other side of the border, which is where the drugs are being loaded onto our conveyances. The carrier initiative is not necessarily attacking the problem where the problem really is."

Rules Differences a Problem

Because of the structural differences in how Mexico regulates trade, there will continue to be additional risks until Mexican brokers at the border no longer are required to process all export documents - known as "pedimentos de exportacion."

"Why can't I pick up my pedimento in Monterrey (three hours south) and drive direct? And that eliminates a lot of those risks," said David P. Higgerson, chief inspector for Customs in Laredo. "For a shipper or importer, it eliminates the one area that he cannot control - and that's where papers get lost, that's where merchandise gets lost, that's where there's pilferage."

Mexico is one of the few developed countries that requires all international trade be processed at its borders by customs brokers. The powerful brokers

serve as de facto customs authorities, given Mexico's scare budgetary resources.

"When you look at how international trade is conducted at the border, your Mexican broker conducts three-quarters of it. The U.S. broker controls very little," said Mr. Higgerson, appearing to validate the concerns of U.S. carriers.

Carriers Joining Program

Despite the lack of control and what they see as duplicity in the new program, carriers are reluctantly planning to join in order to serve importers who qualify for line release.

"I think it's something we are going to have to learn to deal with," said Gary Nichols, marketing director for Contract Freighters Inc. in Joplin, Mo.

Mexican companies have also expressed interest in joining the carrier initiative, said Customs officials.

"I think what you're going to see out of the big-time shippers and exporters in Mexico is that they will put pressure on their carriers and draymen to actually sign this," said Mr. Higgerson. "The carrier initiative is actually targeted to Mexican carriers as much as it is U.S. carriers, probably more so."

"Very few companies exporting from Mexico to the United States actually

haul their own merchandise. They contract with a broker" who selects the Mexican transporter with the lowest bid, said Linda Wilcox, assistant district director of inspection and control for Customs in Laredo. "That person with the lowest bid may be the one who is most highly suspect for smuggling. The hope is the more people who sign the carrier initiative agreement, the more smuggling operators will be forced to use non-signatory carriers."

While agreeing that there are a lot of matters out of the control of truckers and importers, Ms. Wilcox said truckers can use the new plan to their advantage.

"For a carrier it makes good business sense. They can market the fact without per se increasing their charges," she said. "If I have a choice between using a non-signatory company and a signatory company, and I want my freight to get there without being used for smuggling, I will go with a signatory company."

SECURITY PROVISIONS OF LANDBORDER CARRIER INITIATIVE AGREEMENT AMONG CARRIER RESPONSIBILITIES

1. Establish security systems for foreign and domestic cargo storage and handling facilities, container yards. Safeguard use of seals and maintain log of seal numbers used.

2. Adopt security measures that restrict access to conveyances.

3. Conduct employment and criminal record checks on all permanent new hires.

4. Maintain current employee list with employment dates and social security numbers, provide to authorities upon request.

5. Create system to ensure that manifests and bills of lading are complete and develop system to verify seal numbers, weights, marks and quantity of cargo received.

6. Designate at each port of entry company representative to help customs with searches of conveyances and containers.

7. Notify customs of first-time shippers and cargo documentation anomalies.

8. Develop photo identification system for employees and require visitors to display proper identification.