AN IMPERFECT PAPER TRAIL

AN IMPERFECT PAPER TRAIL

Containerizing cargo reduces pilferage and the need for export crating, while providing carriers with uniform shipping units for transportation. However, loading cargo in a container conceals it from even cursory inspection en route. While customs authorities throughout the world have been aware of the smuggling potential for years, the events of Sept. 11 make the matter everyone's concern. Surprisingly, there is little conclusive documentation in containerized marine transport. As a result, there is significant potential for false description and even subsequent introduction of undeclared items. We'll start on the exporter's side, whether that exporter is in the U.S. or another country. Full-container shippers typically book empty containers for on-site loading. Once loaded, containers are usually sealed with 'tamperproof' seals typically provided by the shipper or the trucker. Both the container and seal numbers are noted on the truck bill of lading and are reported to the forwarder or carrier for inclusion on subsequent transport documents. Although some seals are more tamperproof than others, they are pre-numbered, and would be difficult to replace without arousing suspicion. The only legitimate reason for seal replacement would be inspection by government authorities or the ocean carrier.

Savvy shippers either know the weights of their cargoes very well or have the loaded containers weighed at public scales near the shipping point. The 1996 International Safe Container Transportation Amendments Act requires shippers to provide a weight certificate for all shipments exceeding 29,000 pounds net. Heavy fines are imposed for shipments exceeding the weight certificate.Experienced exporters prepare a packing list itemizing the shipping pieces (boxes, etc.) and the items they contain. Well-executed packing lists also indicate the net weight and sometimes dimensions of each piece.

Some countries require pre-shipment inspection for imported goods. The resulting document, called a clean report of findings, shows product descriptions and weights. However, it usually isn't available to carriers.

Some countries require exporters to report their shipments. U.S. exporters are required to report shipments to all countries except Canada that contain one or more items on the Shippers Export Declaration valued at $2,500 or more. All shipments that require an export license are reportable regardless of dollar amount or destination. However, most governments (including the U.S.) do not make such information available to authorities overseas.

Shipments with hazardous materials require additional labeling and documentation. This must be furnished by a qualified person at the shipper's company, given to the first carrier and passed on to all subsequent carriers.

Since there is usually some precarriage involved, the first transport document will likely be a truck bill of lading. The forwarder or carrier usually prepares a dock receipt for port receiving, and a marine transport document. Both usually indicate the weights provided by the shipper, and at least a general description of the shipped goods. However, these documents also bear caveats such as 'said to contain,' or 'shipper's load and count,' which demonstrates the confidence carriers traditionally have had in this information. The information in the marine transport document is also recorded on the ship's manifest.

The situation is somewhat different with less-than-container load shipments. These are consolidated to full container loads (called groupage) by consolidators, usually NVOCCs. Such cargo is either shipped to or picked up by the consolidator, and a house bill of lading is issued for each shipment. The consolidated container is covered by a master bill of lading issued by the operating carrier for a full container shipment of 'freight of all kinds' to the consolidator's overseas warehouse. The master bill does not itemize individual LCL cargoes, shippers or consignees.

On goods coming into the U.S., carriers file copies of ships' manifests with Customs prior to their arrival. Most countries require that importers file an entry with local customs authorities. In the U.S., most entries are filed electronically. That consists of an 'entry,' which triggers either inspection or immediate release, and includes basic information such as the manufacturer, importer of record and ultimate consignee. It does not say who the seller is, though that party is often the manufacturer. It also consists of an 'entry summary,' which provides additional information, often used for statistical purposes, and is due along with payment of duty and taxes within 10 working days of cargo release. There are variations for such things as quota merchandise, shipments to bonded warehouses or foreign trade zones, and other situations.

Once cleared, full containers are either picked up or sent to their consignees. Consolidated loads are sent to warehouses operated by their consolidators where individual shipments are made available or shipped to the consignees. Both full container consignees and consolidators should check incoming containers for seal integrity.

Frank Reynolds is president of International Projects Inc., a trading company based in Toledo, Ohio. He can be reached via e-mail at FJR424@aol.com.