It's EDI, or else

It's EDI, or else

It is the proverbial calm before the storm. In the final six weeks before U.S. Customs' 24-hour advanced manifest rule takes effect, the parlor game among U.S. importers is assessing the practical impact of a rule demanding that ocean container lines provide manifest information to the agency 24 hours before a ship is loaded.

Since Customs will not begin enforcing the rule until Feb. 1, the end of the 60-day grace period that followed the rule's official promulgation at the beginning of December, one can't know precisely how the rule will play out. But it's possible at this point to make an educated assessment.

In general, the rule will provide a major incentive for factories, shippers and logistics providers to transmit bill-of-lading data electronically to the container lines. And it will benefit those carriers able to accept and process electronic transmissions of bill-of-lading information from shippers. The reason is simple: Carriers do not necessarily need both the data and physical possession of the cargo in order to compile and transmit to Customs a manifest 24 hours before vessel loading.

If the data can arrive early, the shipment will not have to meet an earlier cut-off time, and a shipper's existing transit time can be preserved. A carrier, for example, may require the 15 data elements required for the manifest 48 hours before the 24-hour deadline - in other words, three days before loading. If the information can be transmitted to the carrier, there's no pressure on the shipper to get the container to the terminal with the same lead time.

That is why some shippers with electronic systems in place, either within their companies or through their logistics provider, aren't sweating the 24-hour rule. "We're finding it relatively easy to deal with," said Andy Rosener, director of international logistics with Hasbro Toys. "The carriers are telling us the physical cut-offs aren't being affected at all. I had a 24-hour CY (full container) cut-off time prior to sailing. The only requirement is that the information be there 48 to 72 hours prior to the CY cut-off."

Being able to operate in such an efficient manner, however, requires that the process begin early, and that's where the problems will start. Accurate bill-of-lading data, including such items as the count and description of cartons inside the container, would have to be captured at the point of loading, which isn't always done today.

More importantly, Asian factories often load containers directly from their assembly line and dispatch them immediately to the port. That process, sort of a reverse just-in-time scenario, eliminates the need for warehouse space or parking lots for idle containers. But it's not a process designed to allow the factory to capture data before the container is sealed. In fact, it makes the idea of loading at the last minute potentially very problematic. "Some of these factories are loading the container as stuff is coming off the production line," said John Lewis, director of imports for Dollar Tree Stores. "There is no warehouse. They load it, and off it goes."

For those kinds of operations, the 24-hour rule is "going to take days away from their production cycle," Lewis said. "That is where the biggest impact is going to be - on the manufacturing side."

Many believe data is the key to allowing shippers to avoid the earlier cut-off times that for some shippers will soon become a reality. For that reason, Log-Net, a supply-chain software company in Little Silver, N.J., is working with carriers and shippers that use its system in a project it calls Shield to automate the transmission of the standard shipping instruction document, ANSI 304, to the carriers. That document contains the bill-of-lading information from which the carrier will assemble the vessel manifest.

The idea is that if the shipper and its logistics providers are certified as maintaining a secure supply chain under the Customs-Trade Partnership Against Terrorism program, meaning that the container is loaded and trucked in a secure environment, the shipper should be able to transmit data well in advance of the actual container load. "If the shipping instructions can be sent electronically to the carrier, and the shipper is C-TPAT-certified, can that shipper maintain the existing gate cut-off?" said Tom Wyville, director at Log-Net.

The implementation of the 24-hour rule will bear close watching, both to reveal best practices and the vigor of Customs' enforcement.