November 12, 2008
The Importer Security Filing (ISF) initiative, also known as 10+2, may soon take effect. As your business partner, Customs Brokerage from UPS will be able to file the additional information for you electronically. This will affect ocean freight only.
The proposed regulation will require carriers to submit 2 additional pieces of information (the 2 of the 10+2) in order to enhance the security of the maritime environment. The additional information includes: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).
The Importer Security Filing requires the following 10 data elements from the importer or importer's agent (the 10 of the 10 + 2):
- Manufacturer (or supplier) name and address
- Seller (or owner) name and address
- Buyer (or owner) name and address
- Ship-to name and address
- Container stuffing location
- Consolidator (stuffer) name and address
- Importer of record number/foreign trade zone applicant identification number
- Consignee number(s)
- Country of origin, and
- Commodity Harmonized Tariff Schedule number
Based on the proposed rule, U.S. importers must submit the required security data electronically to CBP 24 hours prior to loading ocean containers on vessels destined for the U.S. For additional information on ISF requirements, please visit the following web site: http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/2008_news_releases/
jan_2008/01022008.xml
Under the proposed rule, CBP will allow an importer to designate an agent to act on their behalf to submit the ISF. It is our intent to offer our services as an agent for your convenience at a reasonable cost. Our pricing for this service will be determined after CBP issues the final rule later this year, and we've had the opportunity to finalize our systems and processes.
We plan to capture the ISF information in a simple, compliant, and timely manner from both internal and external sources. Additionally, the solution we envision will be able to share data between multiple systems, submit data to CBP, and provide accurate and timely client visibility, messaging, and reporting.
Below is the second in a series of questions and answers to help familiarize you with 10+2.
Frequently Asked Questions
Method
- Is there a form that can be used for the collection of security filing data elements?
ISF information should be provided on the actual commercial shipping documents or a separate ISF data capture form (web-based or soft copy) provided by the agent who collects security data to file on the importer's behalf.
- Should importers provide shippers with HTS codes and IRS numbers for the importer and consignee so this information can be included in their invoice, P/L and the rest of the shipping documents?
Because the importer is responsible for the submission of ISF data, and the cargo will not be loaded on the vessel for export to the US until the ISF data is submitted and accepted, it's in the importer's best interest to streamline the communication of ISF elements to the ISF agent as much as possible, whether the ISF agent is a broker submitting through ABI, the forwarder or carrier submitting through AMS, or another party using either system.
The importer can achieve this by ensuring the agent has the data elements commonly known by the importer (see Importer Elements below), the seller (see Seller Elements below), and the forwarder (see Forwarder elements below) as early as possible. This can be accomplished by providing the importer's elements to the shipper to include on the commercial documents, or by sending the importer's elements to the agent directly. Where possible, communication of the elements electronically from all parties to the agent will ensure the quickest receipt, processing, and submission by the ISF agent to CBP.
Importer Elements
- Buyer (owner) name and address
- Ship to name and address
- Importer of record number / foreign trade zone (FTZ) applicant identification number
- Consignee number(s)
- Commodity HTSUS number (6-digit level required, 10-digit level optional)
Seller Elements
- Manufacturer (or supplier) name and address
- Seller (or owner) name and address
- Container stuffing location
- Consolidator (stuffer) name and address
- Country of origin
Forwarder Elements
- Master bill of lading SCAC and number (MBL), if no HBL exists
- House bill of lading SCAC number (HBL), if HBL exists
- Vessel name and SCAC
- Container SCAC, number, and type
- UPS SCS handles our supplier management/freight forwarding and brokerage and should have access to the required ISF information, so I would assume this should not have a big impact on us. I would assume origin and brokerage will have to work together to have all 10 pieces of information filed on time. Is there a procedure being developed to ensure that this happens?
Yes, both transportation and the broker will work together to compile the needed information. Much of the information is already captured during the booking and customs clearance process, but there are new data elements that UPS will need to collect prior to submission.
- How will ISF submission be accomplished with shipments consolidated on a single master but under multiple house bills of lading?
ISF filing must be made at the lowest bill of lading level; in this case, the HBL level.
- How will container stuffing location and consolidator name and address be communicated to UPS-SCS? If this information is added to the commercial invoice and provided to UPS-SCS at origin for export purposes, will the origin UPS-SCS location provide it to the UPS-SCS ISF agent? If so, what steps are being taken to ensure that the UPS-SCS ISF agent will receive it far enough in advance to meet the 24 hours before loading requirement?
The container stuffing location and consolidator name and address may be provided to UPS by a variety of means - with the booking request, with the commercial documents, entered via web-form, etc. and may be provided by the shipper or any other party with knowledge of the facts. If received electronically or manually entered by our staff, this data will be routed electronically to the UPS ISF team responsible for compiling all information, validating the data, and submitting to CBP. To ensure proper timing, the required information must be collected well in advance of intended container lading.
- Can the forwarder through contract or SOP be bound to ensure the ISF acceptance is received 24 hours prior to the container being laden on the vessel?
The forwarder may agree under contract or an SOP to ensure the ISF acceptance is received 24 hours prior to the container being laden on the vessel; however, this may only be the case if the forwarder has possession of the container.
- How much protection would this give the importer for failures?
While the importer is ultimately responsible for compliance with ISF requirements, an agreement between the forwarder and the importer will give greater assurance that the importer’s cargo won’t be laden on board without ISF acceptance, reducing the risk of penalty.
- How will the Service Provider want the ISF information provided to them (electronic/paper/both)?
UPS prefers to receive ISF information electronically, but if an electronic data feed isn't possible, we will provide a Webform for entry of data by parties in your supply chain.
- How will the ISF acceptance information flow to the party controlling the container if ISF collection and submission is managed in the U.S. as opposed to origin?
Regardless of where ISF processing occurs, notification will be made by the ISF agent to the party with possession of the container that an ISF acceptance is in place and the container can be tendered to steamship line.
- What is the estimated cost to comply with ISF on a per shipment basis?
The NPRM, issued the following statement on January 2, 2008, "Shipment data indicate that the median value of a shipment of goods imported into the United States is approximately $37,000.…. the increase in costs of imported shipments will range from $20 to $38 per shipment, depending on the discount rate applied, the cost scenario, and whether or not bulk shipments are exempt. The added costs of this regulation are estimated to be only 0.05 percent to 0.10 percent of the median value of $37,000 per shipment."
However, many in the industry feel this cost estimate is understated due to the potential cost of inventory delays, potential surety bond increase, and effort to compile ISF data from multiple sources so early in the supply chain.
- As technology vendors roll out ISF submission software, what are the options for in-house and outsourced software solutions and their costs?
Options vary from self-filing with an internally developed system having ABI or AMS connectivity to CBP, to self-filing through a 3rd party application, to contracting an agent who will submit ISF data electronically on the importer's behalf. Costs vary widely for in-house development and are generally on a per-transaction basis when using the services of a 3rd party software vendor or ISF agent. Additional factors to consider are the cost of future ongoing programming to an in-house system, the reliability of a 3rd party system, and internal resources required to self-file.
- If an ISF needs to be corrected after sailing, who can make the correction—and how?
The ISF agent who has submitted the electronic ISF record is the only party who can make an electronic correction, and the correction must occur prior to cargo arrival.
- Which record formats should you use and what are the pros and cons of filing through ABI versus AMS?
The decision to use one format over another ultimately rests with the importer or ISF agent. It primarily depends on existing technological capability and whether the importer’s strategy includes plans to file a combined ISF with the customs entry. CBP has been clear they intend to accept a combined ISF record and entry record at some point in the future. Use of ABI would allow that. It's possible that CBP will at some point accept a combined ISF record and AMS record, which would be possible only if filing through AMS. An ISF agent will typically use one or the other method.