Cargo Exam Messaging Issues Prominent in 2014 Trade Efficiency Survey, Say COAC Members
Members of the CBP Advisory Committee on Commercial Operations (COAC) reviewed the preliminary results of the 2014 Trade Efficiency Survey at a meeting held Oct. 7 in Washington. Cargo delays and exams were again reported as the biggest issue facing importers, with problems concentrated in shipments regulated by other government agencies. More descriptive messaging was repeatedly discussed as a way to resolve some of these issues, and brokers could play a major role in facilitating exam messages, said COAC members.
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This year, 1,674 importers, exporters, brokers and other members of the trade community responded to the 85-question survey, up from 815 respondents in 2013 and 521 respondents in 2012. The results will be posted to CBP’s website once they are finalized. “The third annual trade efficiency survey highlights the key role the government can play in reducing transaction costs and increasing predictability and efficiency in the supply chain, on both imports and exports,” said Ted Sherman of the Target Corporation. “Now that we have three years of data under our belts, we have a much better understanding of the impact of initiatives such as the centers of excellence and ITDS on parties in the supply chain.”
Responses to the survey suggest the trade community continues to give CBP high marks, with the percentage of respondents satisfied with CBP up from 81 percent in 2013 to 83 percent in this year’s edition. Broken down by region, the Pacific states scored the highest, said Jim Phillips of General Motors. On the other hand, only 46 percent said they were satisfied with the performance of participating government agencies (PGA), with 21 percent of respondents voicing overall dissatisfaction.
A major factor behind the trade community’s dissatisfaction with other agencies may be related to communication issues. The survey reported delays and exams were again the trade community’s biggest facilitation concerns. Noting that document required messages were the biggest cause of cargo stops, Vince Iacopella of Janel Group said “respondents reported that the messaging wasn’t detailed enough on the exams to tell which agency was holding it. The CBP messages were quite detailed, but the participating government agency messages needed to be more detailed,” he said. When survey respondents were asked to rank solutions to their problems, more descriptive messaging from CBP and participating government agencies scored the highest at 55 percent. “The takeaway on costs and holds for imports is earlier messaging, more descriptive messaging, and more cooperation from the PGAs,” said Iacopella.
Brokers could act as a “force multiplier” to help CBP and other agencies with messaging by sending exam messages onto other parties with an interest in the shipment as they are received, said Iacopella. “I think this is an example where an intermediary can be a partner with CBP on the exam messaging,” he said. Iacopella also noted that 38% of respondents said better communication with their brokers could help, so “perhaps access to the broker’s data or messaging that’s getting pushed from the broker to the importer can actually keep importers better informed.”
When importer respondents were faced with delays, 66 percent reported contacting their broker. Another 26% went to the port of entry or directly to the participating government agency, said Mary Ann Comstock of UPS Supply Chain Solutions. Only 7 percent contacted the relevant Center for Excellence and Expertise, but of the 115 respondents that did 81 reported being satisfied. “In general we think the Centers of Excellence are really working well for those importers, and in some cases brokers, that are most directly engaged,” said Jim Phillips.
Troublingly, the survey still shows what appears to be a “knowledge gap” about PGA requirements, said Comstock. When asked about delays they had faced, only 34 percent of importers said they were related to PGA requirements, and 29 percent didn’t know. Brokers, on the other hand, indicated that 79 percent of their delays had to do with PGA requirements. “We broke these numbers out by various categories,” she said. “When we see food and pharma people say ‘no, a PGA doesn’t regulate them,’ we’re not sure we believe that.”
Port Difficulties Biggest Problem for Exporters
In its 2014 Trade Efficiency Survey, COAC attempted to delve deeper than past surveys into exports. Of the exporter respondents, about 60 percent reported some kind of stoppage, but that doesn’t necessarily mean government agencies, said Iacopella. A majority of 55 percent reported that 1-5 percent of their shipments were delayed by export control authorities, with 34 percent reporting that none of their shipments were delayed and 10 percent reporting that 6-10 percent were delayed, said Julie Parks of Raytheon. But the main reason for stops was instead terminal operations, followed by inconsistent port procedures at number two. “CBP on the outbound side is down the list as far as the reason for the stop,” said Iacopella. “Anybody who has tried to move anything in and out of the West Coast knows that the number one stop is terminal operations right now.”
In terms of CBP export priorities, Parks reported that 64 percent of respondents said harmonization with other agencies to develop a risk-based export model to be very important. She said 51 percent responded that elimination of paper manifests is very important, followed by 47 percent listing the standardization of port practices as a top priority.
Similarly to the import side, 8 percent of exporters reported costs of more than $1,000 per hold, said Iacopella. “I think that the people that get caught in the net are less experienced exporters with less automation,” he said. “The targeting is different, and the cost of those entry-level exporters may be higher. I think automation might be the solution for that.”