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November, 2017

Global Shipping Industry at Risk With Swashbuckling Cyber Attacks?

Thursday, November 30th, 2017

computer pirate

 

The days of Captain Jack Sparrow hijackings are over, but there are new threats at sea.

The Maritime Executive reports, in a October 30th, 2017 article, Cyberattack: What’s at Stake?”, that vessels and ships have become victims of cyber attacks like malware, phishing, and theft of credentials, among others.  These attacks led to financial losses, loss of corporate data and affected the functionality of shipborne systems and IT systems.

Why?  The global shipping industry has come of age with more automation, game-changing technologies and the-internet-of-things. But embarking on this voyage has also made it a prime target for unforeseen, invisible, and highly destructive cyber-attacks. As systems get more complex and ships become smarter due to technological advancements, every area of operation is exposed to cyber risks.   Read more here.

 

 

Reminder! Electronic Filing Requirement for In-Bonds Now in Place

Wednesday, November 29th, 2017

Loading Dock

All in-bonds must be filed electronically.

As a follow up to our eariler blog, November 27th, 2017 is the implementation date for  CBP’s updated in-bond regulations.   CBP’s mandated electronic filing of all In-bonds for ocean, rail and truck merchandise as well as six-digit HTS.

CBP has issued CSMS #17-000736 to further clarify CBP’s enforcement strategy for these new requirements.

Need help navigating this change?  CustomsNow can help you automate the in-bond process.  Doing so will provide savings in time and/or money, plus provide valuable visibility to the status.  Learn more here.

Please contact us today to learn more and schedule a demo.   Tel:  888-669-7501 ext. 1 (sales), or email:  sales@cusomsnow.com  www.customsnow.com

 

Over $1 Billion Sold by Shopify Merchants During Black Friday and Cyber Monday

Tuesday, November 28th, 2017

Money Dollar bills on digital stock market financial exchange information and Trading graph

According to a November 28th, 2017 Business Wire news article, Shopify merchants report 1 Billion in sales in 2017.

“This $1 billion milestone emphatically stakes a flag in the ground for entrepreneurs and small business owners all around the world”, said Tobi Lutke, Founder and CEO, Shopify.  ”Their global impact was felt through each and every sale to a customer who chose to buy from our unique merchants, and we’re fiercely proud of helping them be successful during a period historically dominated by big box retailers.”

500,000 merchants in 175 countries sold over $1 billion (USD) in gross merchandise volume (GMV) during the Black Friday and Cyber Monday weekend. Interestingly, mobile sales outpaced desktop sales for the third year by more than 10%, with apparel, accessories, and hardware leading the way.

Interesting Trends in Freight Forwarder Compensation

Tuesday, November 28th, 2017

Hanjin_container_shipNCBFAA Clarifies Forwarder Compensation Guidelines

An interesting trend as discussed by our friends at NCBFAA in a recent Monday Morning eBriefing… A number of it’s members have reported the growing trend by several steamship lines to stop paying forwarder compensation to ocean forwarders.  Some carriers have explained their rationale for doing so is that the use of IT systems to exchange shipping data has somehow reduced the importance of services provided by ocean forwarders.  The NCBFAA’s stance is that this is not the case and that forwarders are often required, for example, to correct data entry errors made by the carriers, just to mention one of the key services that forwarders provide. Other carriers have provided no explanation and just take the position that they won’t continue to pay compensation and simply eliminate their tariff rule providing for the payment of compensation.

Regardless, those lines that have elected to stop paying brokerage have generally used two different mechanisms to eliminate the payment of forwarder compensation.  First, they have removed items from their rules tariffs specifying that required them to pay brokerage.  And, in negotiating service contracts with the shipper customers, they have either intentionally or unintentionally failed to include any provision by which forwarder compensation would be paid.

Historically speaking… As this trend has raised a number of questions from members concerning its propriety, the Association felt it might be helpful to explain what the law does and does not require with respect to this issue.

Initially, going back many years, ocean carriers were not required by law to pay forwarder compensation.  To the extent that they did so, the carriers put provisions in their rules tariffs specifying when compensation was to be paid and the amount.  But, there was no statutory or regulatory requirement that the carriers had to pay compensation to ocean forwarders until the Shipping Act was amended in 1984.  In 1984, Congress for the first time added a provision requiring that two or more carriers or conferences that acted collectively in pricing their services were obligated to pay ocean forwarders a minimum of 1.25% of the applicable ocean freight charges.  Consequently, since a significant amount of traffic was being priced through the collective action of antitrust-immunized ocean shipping conferences, all of that traffic was subject to that statutory requirement that forwarders be paid a minimum of 1.25% of the freight charges.  However, the important thing to remember is that the requirement applied only with respect to collective action by the carriers so that a VOCC that independently priced its services were not required by law at any time to pay forwarder compensation.

 That situation persisted for approximately the next fifteen years until in 1998, when Congress enacted the Ocean Shipping Reform Act (OSRA). That statute significantly changed how international ocean shipping was regulated.  As particularly relevant to this issue, OSRA did several things.  First, it essentially ended the ability of the steamship line to enter into antitrust-immunized conferences.  Instead, the carriers were able to obtain limited antitrust immunity by entering into discussion agreements that permitted them to discuss, but not agree upon, how their services were priced.  So, while the Shipping Act still contains a statutory provision requiring the payment of forwarder compensation by carriers that price their services collectively, the carriers no longer operate through shipping conferences or otherwise set prices collectively.  Moreover, OSRA amended the compensation requirement so that it now only applies to traffic moving under tariffs.

The second significant and related change that took place due to OSRA was that the shipping industry moved from one of common carrier tariffs to a contracting context, where virtually all VOCC pricing was done individually through confidential service contracts.  In other words, OSRA specifically gives the carriers the right to enter into individualized arrangements with their customers.  Consequently, as long as the carriers do not jointly price their services to customers through collectively established tariff rates, the Shipping Act does not require that they continue to pay forwarder compensation.

It is certainly true that ocean forwarders provide valuable services both to their customers and to the steamship lines.  Nonetheless, while the shipping lines are permitted to provide compensation – either in their tariffs or through their service contracts – there is no longer a statutory requirement that they do so.  Instead, forwarder compensation, as is the case with many pricing and service issues due to the deregulatory thrust of OSRA, is now largely a commercial matter.

The NCBFAA recognizes that this could have a significant financial effect on ocean forwarders that rely on the continued payment of forwarder compensation.  However, whether a carrier will pay a forwarder “compensation” or brokerage in consideration of the services a forwarder provides must now be addressed in a forwarder’s individual commercial negotiations with the carrier and/or its customers.

Tesla Reveals Groundbreaking Self-Driving Electric Semi Trucks

Monday, November 27th, 2017

18TEsla-trueck-web-superJumbo

In an evening meeting on November 16, Tesla CEO Elon Musk announced a smack-down to gasoline powered cars and trucks by announcing the prototype of their self-driving truck. This innovative design by the company that pioneered electric cars promises more efficiency, less cost to operate and no exhaust.

Read more about the future of self-driving cars and trucks here.

2018 Customs Broker Triennial Status Report and Fee Submission Begins Dec. 15

Wednesday, November 22nd, 2017

CBP-logo-1Customs Brokers… don’t forget!

 

The submission period for the 2018 CBP Triennial Status Report and fee for all licensed Customs brokers opens Dec. 15, 2017, and runs through Feb. 28, 2018.

The deadline for submitting the 2018 triennial status report and fee is Feb. 28, 2018, at 11:59 p.m. (EST).

Over 14,000 active U.S. Customs brokers can pay electronically through Pay.gov with a credit card, debit card, and digital wallet payments, e.g., PayPal and Amazon Pay. No additional fees are charged for any payments, and receipts are provided electronically. CBP encourages brokers to submit fees electronically via Pay.gov; however, a paper status report and payment may be submitted to the port that originally delivered the license.

Licensed Customs brokers must include an employee list, if applicable, with each status report submitted to CBP in accordance with 19 CFR 111.28(b). In addition, each individually licensed broker must state whether or not he/she still meets the applicable requirements of 19 CFR 111.11 and 111.19 and has not engaged in any conduct that could constitute grounds for suspension or revocation under section 111.53. Broker employee lists and any additional detail can be submitted as a PDF file attachment to the Pay.gov online form.

Click here to learn more about filing options and requirements for the 2018 Triennial submission.

 

Switch from ACS to ACE Means Changes to Consignee and Importer Queries

Saturday, November 18th, 2017

Foreign-Base-Company-Income

The ability to query a consignee in ACS was shut off with the  September 15, 2017 ACE deployment, and CBP is not planning to create this same ability in the new Automated Commercial Environment (ACE).  Read on:

In CBP’s legacy system, ACS, there was a way to query a consignee “as a means for filers to obtain a number which may be used as the ultimate consignee number in cargo release and border cargo release processing when the actual consignee number is not immediately available.”  The application identifier associated with this query was ‘KN.’

This Consignee Name/Address Query transaction allowed a filer to query ACS’s Importer File by transmitting the name and address for an ultimate consignee of interest and receiving a name and address information plus the consignee identification number.

Most importantly, this functionality also provided the ability to determine if CBP had assigned an identification number to a non-resident importer of record.  This feature was a valuable tool for brokers, but no longer.

In a response from the ACE Support Hotline, CBP stated; “U.S. Customs and Border Protection (CBP) is aware of the trade communities concerns related to the discontinuation of the KN application in the Automated Commercial System (ACS). At this time, CBP has decided not to develop or transition the KN application in the Automated Commercial Environment (ACE). To query a Foreign-Based Importer of Record (IOR) number that is already on file with CBP, filers should contact their local or Remote Location Filing (RLF) ports to obtain the CBP-Assigned  IOR number.”

This is one update to ACE that seems to run contrary to the tenant of making information more accessible and transparent.  Brokers and local CBP port staff will have to take additional, and sometimes manual steps to determine this information.

What exactly are CBP’s downtime procedures?

Friday, November 17th, 2017

ACEA follow up to our earlier blog regarding the downtime experienced on ACE on November 14,  CBP has released the following formal statement.  In it, they discuss the outage, their evaluation of the current downtime procedures, and what steps they are taking to further enhance their procedures.  CBP is also working closely with Commercial Operations Advisory Council (COAC) to identify areas of concern, and NCBFAA is seeking feedback from it’s members to assist.

CBP Statement Regarding ACE System Status

November 15, 2017

The ACE system resumed cargo processing at approximately 10:00 p.m. EST last night and continues to process normally.  All transactions backlogged in the queue were processed as of approximately 1:00 a.m. EST.  Our technicians, in collaboration with IBM technicians, are working around the clock to identify the root cause of the disruption to the ACE database.  We do know that this issue and the Aug. 2 outage issue are unrelated.

CBP executive leadership continues to communicate with our ports receiving initial reports that downtime procedures worked as expected. The Office of Field Operations is using this event to perform an evaluation of these procedures by polling the ports to identify issues or deficiencies, as well as best practices, in order to enhance our downtime procedures.  In addition, CBP client representatives are continuing to assess impacts to trade.  Further, CBP will continue engaging the COAC Outage working group and other trade partners to identify areas of concern surrounding operations and our response to the event.

NCBFAA Seeking Input from Members on Most Recent ACE Downtime

Friday, November 17th, 2017

NCBFAA_2013_VOTI_Final
The ACE outage on November 14th causes concern over current CBP downtime procedures. For a time system errors were preventing users from logging into the ACE Portal screens as well as issues with Trade electronic EDI message processing.
See the original reports CMS#17-000709  CMS#17-000710, CMS#17-000711

At 22:05 on November 14 it was reported that systems were up and functional, and this update was posted. 

NCBFAA seeks input from members on any issues related to the downtime and encourages you to report any examples of lack of uniformity between ports during downtime. Please email NCBFA’s Executive Vice President Megan Montgomery at mmontgomery@ncbfaa.org with any feedback or suggestions for ways in which NCBFAA can minimize disruptions to your business should future ACE outages occur.

CBP’s New Announcement on the Transition of Duty Statements to ACE

Wednesday, November 15th, 2017

ACE
On Wednesday, November 8th, CBP published a General Notice in the Federal Register announcing the transition of Daily and Preliminary Monthly Statements to ACE. “As of December 9th, 2017, ACE will be the sole CBP-authorized EDI system for generating, transmitting and updating daily and monthly statements, and ACE will no longer be a CBP authorized EDI system for such purpose”. The one exception is Reconciliation entries (type 09) which are scheduled to be deployed to ACE on February 24th, 2018.

Also scheduled to transition to ACE on December 9th is the ability to file e214’s, for FTZ admission, and
the creation and maintenance of Manufacturer ID’s (MID.

In addition to Reconciliation entries, the release scheduled for February 24th includes:
• Drawback: Support for core trade processing and
TFTEA provisions
• Liquidation
• Transition:
›Automated Surety Interface (ASI)
(Entry Summary Nightly, Entry Summary Quarterly, and Monthly Continuous Bond
Extracts)
• Reconciliation
• HTS Query
• eBond
› Drawback Bond Decrementation
› Continuous Bond Sufficiency

No additional ACE deployments are scheduled beyond this release at this time.