US TELLS IMPORTERS: PESTS ARE "UNPALLETABLE' USDA TO IMPOSE CERTIFICATION BURDEN

US TELLS IMPORTERS: PESTS ARE "UNPALLETABLE' USDA TO IMPOSE CERTIFICATION BURDEN

On Wednesday, an importer of, say, sewing machines or refrigerators will have to start worrying about tree bark and bugs.

That's because inbound pallets - those ubiquitous flat wooden crates on which just about any type of cargo is secured for shipment - must be certified as "totally free of bark and apparently free from live plant pests" under regulations issued by the U.S. Department of Agriculture's Animal Plant and Health Inspection Service (Aphis). Other types of wooden packing materials also are subject to the new rules.Certification that a pallet is bark-free and pest-free must be part of one of the import documents, such as a manifest, bill of lading or general permit. If not, the entire shipment will be delayed while the cargo is either shifted to a clean pallet or the suspect pallet is fumigated or otherwise treated.

No one knows how many pallets are used in the import process and thus how many will need to be certified. But there were about 400 million pallets built in the United States last year, so there are probably billions of pallets in world commerce, said Sam Baker, director of technical services for the National Wooden Pallet and Container Association in Alexandria, Va.

"About 98 percent of everything we use was on a pallet at some point," Mr. Baker said.

While Aphis has indicated that the rule won't be enforced immediately, compliance at any point could mean substantial additional cost. And that's not playing too well with customs brokers and freight forwarders.

Pallets have always been subject to inspection for pests. But putting the burden of certification on importers is new. How, for example, is an importer of widgets - who may not even know whether a shipment entered the country on pallets, and who probably has no direct knowledge of their source and condition in the transportation chain - to make the required certification?

"An importer sometimes doesn't know if the stuff is on pallets or not and has no idea where the wood comes from," said Norman Elisberg, owner of Lafayette Shipping Co., a licensed customs broker in Englewood Cliffs, N.J. ''And they don't know what Aphis is.

"It would be like you and I certifying there are no cockroaches on Mars," he said. Brokers, who prepare the import documents, and shippers "often don't know if there are pallets involved in the shipment," said Mr. Elisberg.

Verifying the certification statements could mean "stopping container after container. An awful lot of cargo could get delayed. I agree there's a problem that Aphis wants to address, but the solution is a disaster," he said.

Mr. Baker, however, said certification is a "logical extension to the inspection process."

"It's not asking too much to expect that pallets be free of bark and

bugs," he said.

The Aphis rule is not very novel or different from what other countries, such as Japan and Australia, require, "so this shouldn't come as a massive surprise," he said. Fumigation and heat treatment are "common-sense industrywide practices that are well known, if not always used. Some people might have to clean their act up and spend more money if they have to upgrade their pallets."

Fumigation can delay a shipment for a week to 10 days, and fumigating pallets in a 40-foot container can cost $900 to $1,400, depending on whether the cargo has to be unloaded and reloaded, said Crystal Osborne, president of A.H. Marzolf & Co., a Seattle brokerage and forwarding firm. "Yes, I do have concerns. It's definitely going to have an impact." Ms. Osborne is also president of the Customhouse Brokers and International Freight Forwarders Association of Washington State.

Richard Orr, an operations officer for Aphis in Riverdale, Md., said there will be a grace period of up to a year to make sure everyone understands the certification requirement.

"We don't anticipate any problems, but that's probably naive," he said.

"We do not intend to precipitously start enforcing the rule," said Jim Fons, a senior operations officer. Delays will occur when bark or live pests are present, he said, but that is already the case.

Once the rule is fully enforced, though, failure to have the certification could result in criminal and civil sanctions.

The pallet-certification requirement is a part of a larger, more complex regulation that finalizes interim standards for importing logs, lumber and items such as wood chips. It includes specific requirements - heat treatment and fumigants - for imports from all countries except Canada and Mexico.

Requiring importers to have certification is the "hang-up," said Fred Higdon, director of import compliance for Fritz Cos. in San Francisco. "They

went after the importer, even if they have nothing to do with wood packaging. The burden is on the importer to tell shippers to use bark- and pest-free pallets."

Still, Mr. Higdon said, delaying enforcement will lessen the immediate effect of the rule. "Perhaps it will only be a speed bump," he said.

Mr. Baker said he did not view the Aphis rule as a nontariff trade barrier, ''although someone may be unhappy and want to make that claim. It's not taking effect as though a guillotine will fall. There will be time for people to make the adjustment."