Industry fears new red tape at border

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Monica Wolfson, Windsor Star ---Published: Thursday, August 21, 2008

As the U.S. government finalizes a customs rule that requires foreign ships to notify customs of details of U.S.-bound cargo 24 hours before it's loaded on the boat, manufacturers who rely on just-in-time deliveries worry that it will eventually be applied to land crossings.

"It could be paralyzing and devastating for the border," said Jayson Myers, president of Canadian Manufacturers and Exporters.

At issue is a rule U.S. Customs and Border Protection plans to complete in November. Exporters will be required to provide detailed information about every cargo container loaded on a ship bound for the U.S., including the location of the product on the boat, the buyer, seller, manufacturer and other records, 24 hours before the cargo is loaded on the ship.

The cargo container rule will enable customs to identify cargo to be inspected and help officials to spot a security threat before the ship leaves the foreign port.

CBP hasn't got an implementation date yet, said Lynn Hollinger, spokeswoman for the U.S. Customs and Border Protection. While CBP said there are no plans to apply the vessel rule to land crossings, a Detroit business official expressed doubts.

"We are convinced they will try," said Sarah Hubbard, vice-president of public affairs and government relations for the Detroit Regional Chamber of Commerce. "The impact would be to eliminate just-in-time (delivery) and would result in a pulling back in the supply chain."

Despite CBP denials, Hubbard said the U.S. government stated in writing when it published the rule that it intended to bring it to land crossings.

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"People who are closer to the decision-makers in Washington are aware of this intention," Hubbard said. "There is a letter signed by our association and about 30 other trade groups that was sent to Washington about this. They wouldn't sign that if they didn't think it was a threat."

The Canadian embassy in Washington has been lobbying the U.S. government "extremely hard" to discourage it from applying the rule to land crossings, Myers said.

While the new border rule may disrupt shipping, a product probably only crosses into the U.S. once by boat. Canadian and U.S. manufacturing is so integrated, a product like a car might cross the border six or seven times until it's finished.

Myers said manufacturers don't object to supplying the information, but it would be difficult for a trucking firm to do it 24 hours in advance and to provide the exact location of the product on the truck.

Myers said trucking companies currently file cargo information to U.S. customs an hour ahead, which is manageable.

But just-in-time delivery usually means placing an order and delivering it in 24 hours or less, Myers said.

"Is there such a security risk that reporting an hour before isn't good enough?" Myers said.

"The economic consequences of doing this on land will (be devastating)."

U.S. Customs and Border Patrol in Detroit Chief Ron Smith said he has not been told the vessel rule might apply to land crossings.