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Home » will the real shipper please stand up?
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will the real shipper please stand up?

March 1, 2004
DC Velocity Staff
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It sounded simple enough: Ordered to tighten security at the nation's ports, U.S. Customs drafted a rule that would help it identify high-risk containers by requiring ocean carriers to notify the agency of all incoming shipments 24 hours before lading at a foreign port. But implementation of the measure has been anything but smooth sailing. Though the measure's been in effect for more than a year now, the final rule was only published in December.And though that rule was scheduled to take effect in January, Customs postponed compliance until the beginning of this month. Now, four organizations representing ocean shippers, carriers and intermediaries have petitioned the Bureau of Customs and Border Protection to suspend its final rule.

Their objection? The rule as written threatens to cause substantial confusion over who exactly is the "shipper." Because of the way the rule is worded, carriers filling out inbound ocean bills of lading could be required to depart from usual commercial practice and identify as the "shipper" a foreign vendor, supplier or manufacturer that did not contract for the transportation, the groups charge. In some cases, the effect would be to require the ocean carrier to obtain the names of its customers' customers—information that the carriers would not know first hand. That requirement could lead carriers afoul of another law."Not having first-hand knowledge … is contrary to the Trade Act, which states that 'the requirement to provide information shall be imposed on the party most likely to have direct knowledge of that information,'" said one of the petitioners, the National Industrial Transportation League, in a newsletter to its members.

In addition, the rule could force carriers to issue multiple bills of lading for consolidated shipments naming individual foreign suppliers as the "shipper."

The National Industrial Transportation League, whose 600 member companies are predominantly shippers, is joined in the petition by three other organizations. They are the World Shipping Council, which represents more than 40 ocean carriers operating in the U.S. trades; the National Customs Brokers and Forwarders Association of America, which represents about 1,000 licensed intermediaries; and the Retail Industry Leaders Association, representing major retail shippers with a combined 100,000 stores, plants and DCs.

In their petition, the groups urged the bureau to revise the rule in one of two ways. Their first suggestion is to resurrect the original version of the rule, which was published in October 2002, which required submitting to Customs each shipper's identification, but left it to the carrier to decide which name to provide.

Alternatively, the groups suggest changing the wording of the final rule so that carriers would still report a shipper's complete name and address, but for bills of lading not involving non-vessel owning common carriers (NVOCCs), require only that the named shipper have a foreign address. In their petition, the groups argue that this change would provide Customs with information on the cargo's origin but would not necessarily require that the foreign supplier or manufacturer be named as the "shipper."

Transportation Regulation/Government
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