BDP study finds uncertainty over proposed 10+2 security regulation

PHILADELPHIA, September 23, 2008 – U.S. importers are challenged to understand the impact of proposed regulations called 10+2 on their supply chains, according to a survey conducted by BDP International® (BDP), a global logistics and transportation management company, and Centrx, a BDP knowledge venture®. 

The survey also shows import logistics and transportation managers are concerned about obtaining new information from their origin export partners before their cargo ships, whether their IT systems can handle the additional data and how they will recover the costs of compliance. 

Proposed by U.S. Customs and Border Protection as part of the SAFE Port Act of 2006, the 10+2 regulation, also known as the Importer Security Filing program, will require importers and carriers to submit additional data elements to Customs before a container is loaded on board a vessel in the origin country. Some of that information is currently hard to obtain. It includes the exact name and location of companies that manufactured the goods as well as the exact site (known in the regulation as the stuffing location) where the container was actually loaded. 

The regulation is designed to improve the government’s knowledge about the content, origin and destination of international containers and to identify potential high-risk shipments before the cargo leaves the country of export. For security purposes, the 10+2 rule will require importers to provide 10 data elements that currently do not appear on a cargo manifest, plus an additional two elements about the container status from ocean carriers. Customs issued the proposed regulation in January 2008. The regulation is under final review and has yet to be published. 

In the survey, respondents highlighted a number of issues of uncertainty surrounding the proposed ruling, including: 

Understanding. Only 32% of U.S. importers say they have a full understanding of the proposed regulations. Companies with annual revenues of less than $50 million are most unclear, while retail and industrial respondents feel more unclear about the requirements. 

Confidence. Only 11% of respondents feel very confident that their current information flows will meet the requirement for filing the new data elements 24 hours prior to vessel loading. 

Difficulty. Only 36% claim they will have no difficulty obtaining information about the stuffing location (where the container is loaded with products) while 42% see no trouble in obtaining the ocean bill of lading number. 

Costs. A full 70% of importers say they don’t have a plan for recovering the costs of compliance. 

Assistance. Since the majority of respondents do not have the expertise to handle the new regulations themselves, some 91% say they will turn to U.S. Customs brokers for help in filing the 10+2 data elements. 

"The pressure to obtain new data elements from new partners is one of the biggest challenges an importer will face in complying with 10+2," said Michael Ford, vice president of regulatory compliance and quality for BDP International. "Many companies are looking to U.S. brokers to develop the right solution at the right price to deal with the additional requirements." 

Complicating an already complex situation is the issue of confidentiality. "U.S. importers will need to report exactly where that ocean container is being loaded," Ford said. "Sometimes the exporter is not the manufacturer; there are middlemen who have multiple countries of origin for these products. The exporter may want to keep that information confidential." 

Ford went on to say he expects 10+2 will be phased-in beginning in the first quarter of 2009.

The survey was distributed electronically to a select list of companies that have undergone at least one learning session on the basic points of 10+2. Respondents came from a cross-section of industries in which a majority had annual revenues between $51 million and $750 million. The survey was conducted in June 2008. The response rate was 38%. 

About BDP
BDP International is one of the leading privately held freight logistics/transportation management firms based in the U.S. It operates freight logistics centers in more than 20 cities throughout North America and a network of subsidiaries, joint ventures and strategic partnerships in more than 120 countries. The company serves more than 4,000 customers worldwide. Clients include Bayer, Cargill, CIBA, Conoco Phillips, Dow Chemical, DuPont, Heineken USA, Honeywell, Johnson & Johnson, Marks & Spencer, Revlon, Rohm & Haas, Trek Bicycle, and others. BDP provides a range of services, including sea, air and land transportation; lead logistics process analysis, design and management; export freight forwarding; import customs brokerage and regulatory compliance; project and energy logistics; warehousing/consolidation/distribution; and BDPSmart© , a comprehensive on-line logistics customer service portal providing end-to-end global visibility of shipment information, metrics, reports via a single, Web-based interface. For more information visit: 

Centrx, a BDP Knowledge Venture ®, is an executive resource that helps clients discover and deploy successful global strategies and processes. Centrx delivers client-specific ROI, by combining business imperatives and process needs with technology and hands-on global experience. Centrx clients enjoy an array of tangible values including: singular global standardization logistics processes, improved alignment of resources to markets, mastery of regulatory compliance, and common data flows and reporting. The Centrx® service portfolio includes international supply chain/logistics design and assembly; deployment and management; global network design; global logistics benchmarking; order cycle analysis and design; compliance audit, program design and training; security assessments; and, collaborative planning enablement. For more information please