Embracing '10+2'

Embracing '10+2'

I was pleased to read my colleague Bob Edmonson's article in last week's JoC that Customs and Border Protection is getting serious about implementing "10+2." This is the term for 12 additional pieces of information that Customs will require about each U.S.-bound container prior to it being loaded at the foreign port - 10 provided by importers and two by ocean carriers. I believe that once implemented, it will result in a needed enhancement to a port-security regime that remains far from perfect.

But not everyone will agree. Ever since 9/11, some in the trade community have resisted the concept of importers supplying additional data to be used for targeting. And making this new layer of security work will not be easy, either for Customs, for which this is certain to be one of its biggest projects in 2007, or for the trade, which will have to adapt to a new, nonvoluntary regime that will require potentially significant changes in business practices.

The basis for "10+2" is acknowledged gaps in the data set currently used to screen incoming containers. The vessel manifest submitted since 2002 for each incoming ship 24 hours prior to sailing is currently the main source of data used to assess the risk of incoming containers.

But the manifest has well-known limitations. In screening containers for terrorism, the government presumably would want to know where the container was stuffed, by whom, and in what country the goods originated. The manifest doesn't reveal that, and despite Customs' assurances that its Automated Targeting System is still effective in fingering risky shipments, the argument has been easily shot down by pointing to the underlying gaps in the data. Customs understands this and had worked with private-sector groups to find a solution.

But given the opposition, particularly among importers worried about confidentiality and additional costs, it took the SAFE Port Act enacted in October to get the ball rolling. The law requires that, to enhance targeting, additional data elements be provided for ocean shipments prior to loading at the foreign port.

How to make this happen is the difficult part. There are any number of scenarios in which the importer won't necessarily have the information it will be required to submit. Many shipments are sold in transit, or they're imported into the U.S. long after they were produced, making the manufacturer difficult to identify. There are literally dozens, if not hundreds, of possible complicating scenarios, meaning that a one-size-fits-all approach is doomed to failure.

However, the agency in charge is Customs, and that is encouraging. It has years of experience implementing complex rule changes that affect trade and has earned the trust of the private sector. The list of systems that Cus-toms has implemented, all of which if mishandled would have seriously disrupted trade, is a long one. Recent examples include the Food and Drug Administration's Bioterrorism rules and the 24-hour manifest rule that "10+2 "will build upon, not to mention the ACE e-manifest system for trucks.

Customs by all indications is determined to move forward quickly with 10+2, but is approaching the task with an open mind. "I take some comfort that CBP recognizes that there will be legitimate situations where this information doesn't exist in a reliable format. As long as they build exceptions into the system, everyone will be OK," said Mary Jo Muoio, president of the National Customs Brokers and Forwarders Association of America and senior vice president of Barthco International, a division of Ozburn-Hessey Logistics.

The other positive aspect of this is automation; simply put, it will force more of it. Just like former Customs Commission William van Raab's infamous line from the 1980s - "automate or perish" - many importers will have no choice but to enhance their IT systems in order to aggregate and transmit the required data to Customs. But the point is that, just like in earlier days, the pain will worth the effort. No customs broker can live without the automation forced on them by van Raab. Today, creating or altering internal company systems to provide new data to Customs will yield information and tools that companies previously didn't have.

"This will be liberating because many companies have this kind of information in their systems," Muoio said. "Ultimately, I think it will encourage more and more people to automate their supply chains."

Peter Tirschwell is vice president and editorial director of Commonwealth Business Media's Magazine Division. He can be contacted at (973) 848-7158, or at ptirschwell@joc.com.