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New U.S. Customs Security Regulations Change the Game for Global Shippers

Alameda, California, November 21, 2002 — With the "go live" date of new government regulations for cargo container security approaching rapidly, carriers, forwarders and shippers alike are scrambling to devise and implement responses to the new rules. Effective December 2, new regulations mandate that U.S. Customs receive detailed cargo information 24 hours before a U.S.-bound ship is loaded at a foreign port. In addition, this information must be filed electronically with the Customs Automated Manifest System (AMS). 

Companies that don't comply with the new regulations face the risk of their cargoes being left on the dock - effectively stranding their goods overseas while exposing the companies to onerous fines, penalties and fees. 

The challenge is a daunting one. Some 200 million containers - over 90 percent of global cargo flows -- are transported between the world's seaports each year. Six million cargo containers, which by value represent half the incoming trade into the United States, arrive and are offloaded at U.S. seaports each year. 

The new regulations force dramatic change upon current business practices. "Today, shippers and forwarders can submit their documentation to the carrier even after the vessel has departed, and still be assured their cargo was loaded. Carriers can file the requisite 'vessel manifest' with U.S. Customs up to two weeks following a ship's departure from the foreign port," noted John Urban, president of GT Nexus, a logistics software company that provides technology to global shippers and ocean carriers. "The new regulation now requires this information in advance. It essentially collapses that two-week window while requiring more detailed and precise descriptions of cargoes." 

"Less than three years ago, regulations like this would have slowed global trade to a crawl, given the maritime industry's traditional paper-based processes and lack of automation," explained Urban. "Today, proven technologies like the GTN portal have the web-based infrastructure in place to help shippers, forwarders and carriers worldwide to comply with these important security measures." 

GT Nexus operates the GTN portal, a technology initiative sponsored by a consortium of leading ocean carriers. GTN automates and standardizes transactions between shippers, forwarders and their ocean carriers. Included among the online tools on the GTN portal is the ability to prepare and transmit key shipping documents, such as the shipper's letter of instruction and the bill of lading. The mandatory information required by the new regulation is already contained within the shipping documents currently processed through the GTN system. Furthermore, the GTN platform is integrated with the back-office systems of a host of carriers, supporting rapid and timely transmission of this information over the AMS network to Customs. 

"Employing existing and proven technology will be the key in achieving compliance with the new CSI regulations," noted Jack Maynard, research director, collaborative business solutions for The Aberdeen Group, a leading business technology research and advisory firm. "Timely compliance, while maintaining maximum shipping flexibility is a two-fold need: first, have access to the manifest data at the line-item detail level -- including harmonized codes; second is the ability to move the information electronically to US Customs. Importers and carriers need to act immediately and will be well served by deploying systems that capture the relevant information and streamline these processes today." 

Maynard explained that the value of GTN is that it provides shippers with an electronic transaction platform that quickly and accurately sends information to their carriers. "It's in place today and has been adopted by many leading shippers and carriers worldwide," said Maynard. "For this security initiative to have its intended effect, Customs must be able to receive early, accurate, and complete information about U.S.-bound shipments 24 hours prior to scheduled departure. That's the crux of the regulation. GTN can help shippers and carriers accomplish this, thereby reducing the likelihood of delays from Customs and missing the outbound vessel." CSI and the Customs Trade Partnership Against Terrorism (C-TPAT) initiative are newly created programs intended to address the security threat to containerized cargo from potential terrorist activities. 

"This is a particularly beneficial technology for shippers and forwarders in Europe and Asia, who as exporters to the U.S., must comply with this new regulation," said John Gurrad, vice president, business planning and e-commerce for MOL America, the U.S. subsidiary of global shipping giant Mitsui O.S.K. Lines. "GTN provides the ability to submit cargo information, over a standard web application, directly into our systems. Shippers and forwarders can do it once on the GTN portal and cover both requirements: give the carrier complete information about the shipment, while providing it in an electronic form that can then be transmitted seamlessly by the carrier to Customs." MOL is one of several global ocean lines that have integrated its systems with the GTN portal. 

Launched in April 2001, the GTN portal today hosts over 6,000 users worldwide from some 2,500 organizations that use the portal to manage their global shipments. In October 2002, GTN's parent company, GT Nexus, was named by Forbes magazine as a Best of the Web pick. This month, InfoWorld, a leading technology weekly, named the GTN portal to the 2002 InfoWorld 100. Looking across industries, their editors ranked GTN as the #3 technology initiative in their top 100 list. 

To learn more about how GT Nexus and the GTN portal can help your business respond to the new security regulations, visit www.gtnexus.com/gtn. 

About GT Nexus
GT Nexus runs the world's only industry-backed, on-demand global trade & logistics portal. Today, more than 40,000 registered users, from over 15,000 organizations use a range of capabilities on the portal to optimize the global flow of goods and trade information from order point to final payment. GT Nexus connects the physical and financial supply chains. This allows buyers, sellers, banks and logistics providers to work over a common platform with a core set of information that supports multiple trade and logistics functions. Customers include Xerox, American Eagle Outfitters, Procter & Gamble, Weyerhaeuser and The Home Depot. For information, visit www.gtnexus.com. 

Source: http://www.gtnexus.com/press_room/press_releases.php?releaseID=43


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