GHY Tradelines

(Handy Shipping Guide)

Gold Vanishes in Air Cargo Heist Whilst Technology Aids Enforcement

With another massive air cargo crime this week comes good news for road haulage freight truck operators as Heavy Vehicle Electronic License Plate Inc (Help), a not-for-profit public-private partnership dedicated to advancing the safety and efficiency of the transportation industry, has announced that it is to bolster its support of stolen cargo recovery efforts by delivering CargoNet® theft alerts through the Automated Vehicle Identification (AVI) system, PrePass.

Firstly the story of a scheduled American Airlines flight from Guayaquil, Equador into Miami, Florida. The plane was disembarked in the early hours on Tuesday and five cargo handlers unloaded the freight carried aboard. Amongst the items was a single box containing – $625,000 worth of gold. Closed circuit TV has the freight moved to the far side of the aircraft and shortly after shows a cargo tug passing the area, stopping and proceeding out of shot. The tug was found later several gates away and sworn statements from the staff on the tarmac state none know who was driving and, with the gold still missing, the FBI is appealing for information. Read more here.
 

(STR Trade Report)

A May 1 message from U.S. Customs and Border Protection suggests that participants in the Customs-Trade Partnership Against Terrorism need to improve their reporting of suspicious activities, anomalies and security breaches. The message appears designed to reassure participants that such reporting will not result in negative consequences. CBP notes that it is working to ensure that this practice is also required and encouraged by Mexico’s supply chain security program, the New Scheme of Certified Companies, as it is by Canada’s Partners in Protection Program.

CBP states that if a C-TPAT partner reports suspicious activities, anomalies or security breaches prior to CBP’s discovery, the company will not be immediately suspended from the program. The goal of C-TPAT is to secure the international supply chain through cooperation and information sharing, the message states, and such reporting demonstrates that the partner’s security procedures are functioning. While reporting a breach will result in an immediate joint review of the totality of circumstances, a swift and proactive response to a breach is a factor considered during that review. If CBP determines that the C-TPAT partner exhibited due diligence, followed its established security procedures and has proactively enhanced its security practices following the incident, the company will not be suspended from the program. However, if the review indicates that the partner failed to meet the minimum security criteria, follow its own established security procedures or adequately address the security vulnerabilities that led to the breach, a suspension may be necessary until CBP can ensure that all potential security vulnerabilities are addressed.
Read more »

(STR Trade Report)

U.S. Customs and Border Protection has posted to its Web site its annual performance and accountability report, which indicates that fiscal year 2012 saw a decline in several measurements related to compliance and supply chain security programs. Details revealed in this report include the following.

Compliance
The percentage of imports compliant with applicable U.S. trade laws, including customs revenue laws, fell for the second straight year to 96.46%, below the goal of 98%. CBP attributes the decline to classification errors by importers.

C-TPAT
The compliance rate for members of the Customs-Trade Partnership Against Terrorism with established program security guidelines declined to a five-year low of 94.5%, compared to 95.1% in FY 2011. CBP explains that a number of companies were suspended or removed due to the implementation of strengthened C-TPAT security criteria. In addition, the percentage of cargo by value imported by participants in CBP trade partnership programs (C-TPAT and Importer Self-Assessment) dropped from 55.07% to 54.66%, though this was still well above the goal of 45%.

CBP notes that recently C-TPAT Tier 2 and 3 members became exempt from stratified compliance exams and that it is working to also exempt them from non-intrusive inspection exams in the near future. In addition, CBP and the Transportation Security Administration have conducted three of six planned joint validations/inspections of airports and air carriers. It is expected that the results of this pilot program will lead to CBP’s acceptance that TSA security assessments are commensurate with a validation site visit, meaning CBP will no longer have to conduct C-TPAT visits for that sector.

CSI – Container Security Initiative

CBP officers reviewed 10.8 million bills of lading and conducted 49,415 examinations of high-risk cargo in cooperation with host country counterparts under the Container Security Initiative. The percentage of such exams requested that were actually conducted rose for the third straight year to 98%, up from 96% in 2011. CBP notes that over the next two fiscal years it intends for CSI to become a hybrid of different operational models based on individual ports and host governments.

Cargo Screening
CBP did not meet its target for the percentage of inbound cargo identified as potentially high-risk by the Automated Targeting System that has been screened and had its entry status resolved prior to or during processing at a port of entry, but a specific figure was not given. CBP notes that reporting this measure in the land environment continues to be a challenge due to data accessibility and system data exchange issues.

Revenue Collection
CBP successfully collected 98.88% of all collectable revenue due from commercial imports that is directed by trade laws, regulations and agreements, down from 99.12% the previous year. Total collectible revenue is defined as total collection plus the estimated net under collection due to noncompliance with U.S. trade laws and regulations.
 

(STR Trade Report)

U.S. Customs and Border Protection has made available the following statistics concerning participation in and operations of the Customs-Trade Partnership Against Terrorism program as of April 1.

- There were 10,512 certified partners, including 4,338 importers (327 of which have been certified for tier 3 benefits), 3,057 carriers, 1,297 foreign manufacturers, 915 consolidators and third-party logistics providers, 845 customs brokers, and 60 marine port authorities and terminal operators.

- 22,492 total validations had been completed but the annual trend declined from about 3,100 in 2010 to about 2,400 in 2012. There had been 11,775 total initial validations (640 in 2012) and 10,717 revalidations (1,736 in 2012).

- There were mutual recognition arrangements between C-TPAT and the supply chain security programs of New Zealand, Canada, Jordan, Japan, Korea, Taiwan and the European Union as well as mutual recognition projects ongoing with Singapore, Israel, China, Mexico and Switzerland. The U.S. is conducting technical assistance projects with Malaysia, the Philippines, Guatemala, Colombia, Peru, Vietnam, the Dominican Republic, Costa Rica and India as well as capacity building training programs with Ghana and Kenya.

- There have been four rounds of joint validations with the General Administration of China Customs.
 

(MM&D)

The federal government is investing $800,000 in a project that will allow the province of New Brunswick determine the risks to the provincial supply chain.

Word of the investment came as part of a $20 million smorgasbord of funding announcements made by Defence Research and Development Canada, an agency of Canada’s department of national defence. The money is earmarked for 26 individual projects that fall under the Canadian Safety and Security Program.

The New Brunswick supply chain project is being headed by the province’s department of public safety. The Conference Board of Canada, Dalhousie University and Deep Logic Solutions Inc are all partners on the project. Read more here.
 

(AirCargo World)

European commissioner for transport Siim Kallas announced Wednesday the postponement of the starting date of anti-terrorism rules for companies who use airfreight.

The tougher rules – known as the “known cosigner” status – will be implemented April 29 instead of March 25 due to the European Shippers’ Council (ESC) protesting against the original state date.

The rules dictate that companies who use airfreight must take specific security and employee-training measures in order to receive this status. They can apply for the known cosigner status at a domestic agency. If companies don’t follow these rules, their freight can’t be loaded on board an aircraft without prior extensive screening measures. Read more here.
 

(The White House)

The National Strategy for Global Supply Chain Security, released in January 2012, established the U.S. Government’s policy to strengthen the global supply chain to protect the interests of the American people and enhance our Nation’s economic prosperity.

The Administration, in coordination with private sector stakeholders and foreign government partners, made significant progress in implementing the Strategy throughout 2012 and in defining our priorities for future work. As required by the Strategy, Federal Departments and Agencies prepared a consolidated report outlining these efforts and defining 2013 implementation goals. The public version of this report is available here.
 

(CBSA)

Sent by the Canada Border Services Agency (CBSA) Border Commercial Consultative Committee (BCCC) Secretariat

The BCCC Secretariat is pleased to announce the signing of an Agreement between Canada and the European Union on Customs Cooperation with respect to matters of Supply Chain Security, on March 4, 2013, in Brussels, Belgium. The Ambassador of Canada to the European Union (EU), Mr. David Plunkett, alongside Ireland’s Permanent Representative to the EU, Ambassador Rory Montgomery, and Director General, Taxation and Customs Union Directorate (TAXUD), Mr. Heinz Zourek, signed the Agreement. Once in force, this Agreement will enhance cooperation in matters related to supply-chain security, risk management practices and trade facilitation as they pertain to customs processes.

The Agreement will be the platform for sharing of best practices and on which future arrangements can be negotiated between Canada and the EU in the areas of: Risk Management Practices, Cooperative Cargo Inspection, Mutual Recognition of Trade Partnership Programs and Advance Commercial Information. This Agreement supports Canada’s adherence to the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) and strengthens our relationship with EU counterparts on customs-related matters of supply-chain security.

For further information on the Agreement and signing event please visit here.
 

(CBP)

Unified Global Security: The Challenge Ahead

U.S. Customs and Border Protection (CBP) hosted the annual Customs-Trade Partnership Against Terrorism (C-TPAT) conference last week to discuss the unified approach to securing the global supply chain and best practices to address challenges ahead. More than 1,200 participants from the private sector joined the conference which was held in National Harbor, Md.

“C-TPAT is really at the heart of where we are going with the country’s national effort on global supply chain security,” said CBP Acting Chief Operating Officer Thomas S. Winkowski. “The program allows us to work together to address risk at the earliest point of the supply chain process while expediting trade. It keeps our nation safe and promotes economic competitiveness.”

Richard Reed, deputy assistant to the president for Homeland Security, also shared his thoughts on the value of programs like C-TPAT for both government and industry to enhance not only the security of critical infrastructure, but also resiliency and response. Reed cited Hurricane Sandy as an example of the private/public partnership working hand-in-hand to re-constitute trade and travel at our ports of entry. Additional keynote speakers at the conference included CBP Acting Assistant Commissioner for the Office of Field Operations, Kevin K. McAleenan, who announced the selection of Ms. Lauren M. Kaufer as the new C-TPAT director.

After the 9/11 tragedy, the biggest challenge CBP faced was securing imports from terrorist infiltration via smuggling of weapons, terrorists, or weapons of mass effect. C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. The C-TPAT program is one layer in CBP’s multi-layered cargo enforcement strategy. Today, the program has nearly 10,500 members, 700 of which joined this past year.
 

(Laurie Sullivan — EBN)

The US Patent and Trademark Office granted Google a patent this month for securing, monitoring, and tracking cargo shipping containers. The abstract describes a two-way communication system supported by an electronic bolt, a network gateway, a Web-based platform, and a mobile device.

The wireless system would augment the mechanical seals used today. It would enable nearly real-time, end-to-end monitoring of the location and status of secured shipping containers through a series of gateways connected to a network. Each gateway is associated with a location that would transmit information to a cloud server.

The patent makes no mention of using Google’s Android operating system to run the platform, but it does highlight the ability to access the platform from a handheld device. The application was submitted in 2009; this suggests Google’s plans to build a mobile enterprise service started long before the Motorola Mobility acquisition or the launch of the Nexus 7 tablet manufactured by Asus in Taiwan and China. Now that Google offers a hardware line, the patent supports its emerging business model. Read more here.
 

(STR Trade Report)

With just a few more legislative days before lawmakers break to focus on their campaigns, there is little expectation that any trade-related measures will be taken up until after the November elections. Unless Congress approves the following bills during such a “lame duck” session, efforts to enact them will have to begin again next January.

PNTR for Russia

Repealing the Jackson-Vanik Amendment and extending permanent normal trade relations status to Russia is necessary to allow U.S. businesses to take advantage of the trade liberalization measures associated with Russia’s accession to the World Trade Organization, which became official Aug. 22. PNTR legislation was approved by the Senate Finance Committee July 18 and by the House Ways and Means Committee July 26, but despite widespread support from both lawmakers and the Obama administration neither chamber seems likely to vote on a PNTR bill before the upcoming recess.

Lacey Act

The Retailers and Entertainers Lacey Implementation and Enforcement Fairness (RELIEF) Act (H.R. 3210) was reported by the House Natural Resources Committee and placed on the House calendar. This bill would exempt any plant product imported or manufactured before May 22, 2008, from the requirements of the Lacey Act amendments and limit the import declaration requirement to solid wood and items imported only for commerce. It would also clarify that the Lacey Act only prohibits the importation of wood products harvested in violation of foreign laws that pertain to plants.
Read more »

(STR Trade Report)

A report released recently by the Alliance for American Manufacturing asserts that the U.S. “is at risk of being dangerously unprepared for serious emergencies because of the offshoring of critical manufacturing sectors and a reliance on foreign suppliers for products needed in the wake of catastrophic events.” To reduce this vulnerability, which the AAM says is increasing along with the frequency of natural and manmade disasters, the report calls on the federal government to revitalize domestic manufacturing capacity and tighten enforcement of trade laws. The report is the latest addition to a politically divisive debate on trade and jobs that is likely to grow louder ahead of this November’s presidential and congressional elections.

According to an AAM press release, the report highlights U.S. reliance on foreign suppliers for items ranging from steel, cement and batteries to high-tech components and medical supplies such as antibiotics and penicillin. The risks of this reliance include not having access to needed materials and products as well as delayed delivery times. The report explains that some global suppliers “may not have the best interests of the United States at heart in a time of crisis” or could be unable to meet demand quickly in times of emergency. More generally, the report asserts, problems associated with “America’s growing dependence on off-shore manufacturing” include quality, design and performance problems; a lack of reliable product specifications and standards; the “drain of high tech innovation, basic research and advanced development;” and the possibility of a “deliberate introduction of design flaws, vulnerabilities or cyber ‘bugs’ into products and technologies key to U.S. national security.”
 

(Journal of Commerce – Mike King)

Agreements would reduce supply chain disruption, TIACA says

Security regimes would cause less disruption to supply chains if more countries adopted mutual recognition agreements on air cargo security, according to The International Air Cargo Association.

TIACA said agreements between the EU, Switzerland and the U.S., and between the U.S. and Canada, that recognize each other’s security regimes has improved security without impeding international air cargo supply chains. Read more here.

(Government Security News – Mark Rockwell)

Over 2,000 companies across the Caribbean and Latin America said they would work with U.S. Customs and Border Protection to promote and enhance supply chain security in their regions under the Customs-Trade Partnership Against Terrorism (C-TPAT) initiative.

CBP and the World Business Alliance for Secure Commerce Organization (World BASC) signed a joint statement on May 31 at CBP’s National Targeting Center in Virginia, recognizing what CBP said was “the mutually beneficial working relationship of promoting and enhancing supply chain security throughout the Americas and the Caribbean.” Read more here.
 

(STR Trade Report)

U.S. Customs and Border Protection recently advised members of the Customs-Trade Partnership Against Terrorism that effective March 1 the current International Organization for Standardization (ISO) mechanical seal standard (ISO/PAS 17712) will be replaced with new standard ISO 17712:2010.

CBP is not requiring C-TPAT participants to discard any high-security container seals that may not comply with the new standard that are currently in stock but is encouraging them to purchase compliant seals when their existing stocks are exhausted. CBP also states that when C-TPAT companies transition to new seals they should request documentation (lab reports) to confirm that the seals comply with the new standard.

CBP states that the updated standard includes the following requirements: testing to determine a seal’s classification for physical strength (as a barrier of entry), process auditing of the manufacturer’s security-related business practices, testing (pass/fail) of a seal’s ability to indicate evidence of tampering, and a new 18mm minimum width diameter for bolt seals.

CBP adds that benefits of complying with the revised standard include a reduced possibility of cargo theft or tampering, fewer shipping delays resulting from missing or broken seals, and easier detection of compromised seals.
 

(International Freighting Weekly)

US Secretary Napolitano says DHS is committed to protecting transport systems from attack and disruption

US Secretary of Homeland Security Janet Napolitano has issued a new call for global co-operation on supply chain security.

Discussing the new National Strategy for Global Supply Chain Security at last week’s World Economic Forum in Davos, Switzerland, she said the Department of Homeland Security (DHS) was committed to protecting transport systems from attacks and disruptions, and increasing the resilience of global supply chains.

“We must continue to strengthen global supply chains to ensure that they operate effectively in time of crisis, recover quickly from disruptions and facilitate international trade,” she said. Read more here.
 

(Transport Intelligence – John Manners-Bell)

At the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, the issue of supply chain risk took a high profile, with senior government figures and industry leaders seeking to develop ways in which economic damage caused by disrupted supply chains could be mitigated.

As part of the initiative, a new report was launched at the event. The report, New Models for Addressing Supply Chain and Transport Risks produced in collaboration with Accenture, highlighted the urgent need to review risk management practices. Read more here.
 

(AirCargoInsights.com)

Agencies and government leaders around the world are starting to get it – security and efficiency are mutually dependent and effectively addressing risk requires a focus on both. The White House released today its  National Strategy for Global Supply Chain Security, which presents the international supply chain as critical to America’s national security. It aims at realizing a secure and efficient supply chain and also speaks to resilience and harmonization – which is in line with the current efforts of the joint CBP/TSA Air Cargo Advanced Screening (ACAS) initiative. Having one of the most powerful organizations in the world include efficiency and coordination in its national strategy speaks volumes about the direction we are heading in cargo security. Read more here.
 

(Canadian Manufacturing)

A white paper from Supply & Demand Chain Executive offers procurement professionals some approaches to take to avoid the pitfalls of counterfeit parts entering their supply chains.

The white paper, called Fighting the Fakes, describes the scope of the problem and how industry is reacting. In particular it looks at the electronic sector and how one company, L-3 Communications, tackled the issue.

Counterfeit and fraudulent goods, says the white paper, cost businesses in the U.S. more than US$200 billion per year and result in the loss of 250,000 U.S. jobs, reports the Federal Bureau of Investigations.

But it’s not just the economic impact. Inferior or counterfeit goods also pose risks to health and safety. In the electronics sector, which is still grappling with the issue, its losses are at US$ 10 billion per year. Read more here.
 

(Industry Week – Josh Cable)

Prior to the March disaster in Japan, Xirallic – a popular pigment that gives cars a pearly shine – was manufactured at just one factory in the world.

Production of the pigment, which is made by German chemical company Merck KGaA, took place at a factory in Onahama, Japan, 57 kilometers south of the Fukushima Daiichi nuclear-power plant. The damaged pigment plant had to close, causing some automakers to temporarily restrict orders on vehicles in certain shades of black, red and other colors.

The plant resumed production in June, and Merck plans to add a production line in Germany. But the factory’s temporary closure is a perfect example of why the term “supply chain disruption” became a permanent part of the manufacturing vocabulary after the crisis.

And it highlights the need for manufacturers to rethink their supply chain strategies in a climate of instability, a new PwC report warns. Read more here.