New 24-Hour Rule Delays Shipments Into California
Customs broker Lorie Adams has become almost deaf in one ear from fielding calls from irate customers who are not receiving their imported goods on time.
“This is bad,” said Adams, who estimates that one out of five shipments she brokers has been arriving late into the ports of Los Angeles and Long Beach, Calif.
As the owner of A & W International Customs Brokers in Long Beach, Adams handles imports that range from apparel made in Indonesia to bicycles made in China.
The delays, she said, have been caused by U.S. Customs’ mandatory 24-hour rule—also known as the Container Security Initiative— which went into effect Feb. 2 after a 60-day trial period. The rule requires exporters to file detailed cargo manifest information electronically with U.S. Customs at least 24 hours before shipping goods on vessels bound for the United States.
Some overseas exporters and shippers, accustomed to loading goods onto a ship just an hour or two before departure, have been late in delivering that information to U.S. officials.
Consequently, shipments to U.S. apparel importers and retailers have been delayed up to 10 days.
“There are quite a few problems getting all this worked out,” said Enrico Salvo, chief executive of Carmichael International Service, a Los Angeles-based freight forwarder and customs broker that works with the local apparel industry.
He noted that delays of two to three days have not been uncommon.
“The ruling was implemented pretty fast, and some didn’t have sufficient time to change some of their business practices,” he said.
Robert Krieger, president of Norman Krieger Inc., another Los Angeles-based freight forwarder and customs broker, has also experienced problems. His employees have been making phone calls in the middle of the night to Asian agents to ensure that goods will be shipped on time.
But delays still exist.
“We had an agent in from Atlanta who said he had a shipment that sat 10 days in Los Angeles because of unknown problems in the inbound system,” Krieger said.
Fortunately for everyone, the ruling went into effect during the weeks of the Chinese New Year celebration, when shipping activity from Asia is usually low because of workers taking time off to enjoy the holiday.
“It’s a blessing that all these changes came now,” Salvo said, noting that the true test will come when the shipping season starts to heat up in May. Peak shipping season, he said, runs from July to October.
Ocean carriers announced they will start adding $25 surcharges for each bill of lading by late March. Also, some carriers plan to charge importers for every correction they must make to freight bills.
Some apparel companies have remained unscathed by the new rule. Others, such as misses manufacturer John Paul Richards Inc. in Calabasas, Calif., have seen goods arrive a day or two late. Such delays can put kinks in supply systems.
“We work on fairly tight lead times here,” said Ed Redding, John Paul Richards’ executive vice president in charge of importing and sourcing. “So losing a day [in delivery] can mean missing a week down the road.”
Some freight forwarders and shippers— particularly those in bigger ports such as Hong Kong and Shanghai, China—have been filing their cargo manifests on time.
But for freight forwarders and shippers in remote destinations, the problem of late filing has been acute.
Redding noted that many of the sweaters his company imports from northern China leave from Qingdao, where ships do not make daily departures. If an exporter in Qingdao does not file a cargo manifest on time, it will often have to wait another week for the next departing vessel.
The 24-hour rule has made it difficult for shippers to make just-in-time deliveries to vessels. Many of the shippers that engage in this practice are consolidators that ship small batches of goods in one container at the last minute.
In the past, vessel operators were allowed to leave their foreign ports without sending manifests to U.S. Customs as long as they reported them at least four days before the arrival of goods in the United States. It usually takes a ship 12 to 14 days to travel from Asia to Los Angeles.
Now, just-in-time shippers are finding their goods are sitting in container warehouses two or three days before being loaded onto ships. Shippers must pay warehouse fees to store goods during those days.
“We’ve been building just-in-time systems that are hours long, so slowing the supply chain for two days is pretty expensive for just-in-time manufacturers,” said Robin Lanier, executive director of the Waterfront Coalition, a trade group that represents importers, exporters and ocean carriers.
Aileen Suliveras, U.S. Customs’ assistant director of the Los Angeles–Long Beach seaport area, said there have been some glitches in the system because of its steep learning curve.
U.S. Customs did not inform shippers and transportation companies of the new rule until January 2002.
Suliveras said her office has issued several “no-load” messages to vessels whose shippers have not complied with the 24- hour rule. She said those messages have set shippers straight very quickly.
“We get a good response rate to comply when those are issued,” said Suliveras.
