There are many laws on the books, but changes to Customs and Border Protection (CBP) programs due to the Safe Port Act of 2006, the National Defense Authorization Act (NDAA) for Fiscal Year 2012, and numerous worldwide customs efforts stimulated by the Kyoto Convention Information and Communication Technologies (ICT) Guidelines, and the U.S.’s own International Trade Data System have resulted in the streamlining of supply chain security practices encapsulated in CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) program.
Filing practices required by the Automated Commercial Environment (ACE) system, through the Automated Broker Interface (ABI) and other customs electronic systems, such as the Automated Manifest System (AMS), the Automated Export System (AES) and the Automated Commercial System (ACS), are only as good as the accuracy of the information obtained and entered into the systems.
For the last decade or so—or since 9/11—all of these laws and programs have focused on one single element without which these programs fail. That single element is accurate and verified knowledge of the contents of the shipping containers or trailers moving through the supply chain. This fundamental element, however, is the most difficult to control.
For instance, it is common knowledge among those who work in the field that trailer or container contents coming into the United States across the southern border are identified on a “hearsay” basis. That is, the U.S. Customs broker files data provided by a third party. In Mexico, because the container or trailer is already sealed when the Mexican carrier picks it up, motor carriers and U.S. Customs brokers must take the word of the Mexican shipper as to the cargo identity and quantity. Additionally, U.S. authorities may know very little about the Mexican manufacturer or carrier. CBP consequently has little or no evidence of what is actually in the trailer or container.
Even with the use of the ACE system and the e-manifest used on the southern border, CBP only knows what the container is “said to contain.” The level of what is known about the cargo coming from Mexico through U.S. ports of entry can best be explained by the actual words of a major U.S. Customs broker in Laredo, Texas. I asked, “How do you know that what is said to be in the conveyance is, in fact, in the conveyance?” His answer was: “We don’t. It is all in good faith.”
Add to that the border’s trans-carriage problem, which is the dropping of northbound containers or trailers at unsecured “drop lots” or “pensiones” located on the Mexican side of the border for days or weeks prior to a Mexican customs broker releasing them for entry into the United States. The cargo is easily accessible for manipulation.
Like port-of-entry truck crossings in the United States, vessel carriers also take the word of the shipper, motor carrier or rail carrier as to the contents of containers or trailers, which the vessel carriers then file with CBP. Vessel carriers, like border motor carriers, are merely reporting what the container is “said to contain,” an expression banned from use by CBP reporting practices.
So what is the fix to this fundamental vulnerability? For vessel carriers, the solution appears to be making the shipper, motor carrier or mail carrier the responsible parties for cargo identification through the adoption of the new Rotterdam Rules. In September 2009, the United States became a signatory to the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (informally known as the Rotterdam Rules). When ratified by the U.S., the Rotterdam Rules would replace the 1936 Carriage of Goods by Sea Act (COGSA), as well as other rules. COGSA’s “tackle-to-tackle” mode (the period of time in which the goods laden into and discharged from the vessel are the responsibility of the vessel carrier) disappears under the Rotterdam Rules.