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Changes in the Works for Canadian Shipments to the U.S.

June 17, 2013

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Today’s Trucking--There are two new changes (one official and one potential) that will both help and hinder cross-border trade between Canada and the United States, according to the Canadian Trucking Alliance.

The U.S. Department of Homeland Security has announced new regulations changing potential suspensions and removals from the Customs-Trade Partnership Against Terrorism (C-TPAT) list of trusted traders. CTA says this is the good news.

The U.S. Animal and Plant Health Inspection Service, which charges a fee of $5.25 for each truck crossing the border whether it is carrying agricultural products or not, is looking to increase the cross-border charge. This, CTA warns, is the potentially bad news.

Let’s continue with the bad news. The U.S. Government Accountability Office released a study in March saying APHIS doesn’t collect enough fee revenue to sustain its inspection duties. The fees currently generate only $534 million, whereas the inspections actually cost over $861 million.

The CTA says that “trucking companies already pay more for their annual decal to APHIS than they do to the United States Customs and Border Protection Agency (CBP), which has the prime responsibility for security at the border.”

“Motor carriers don’t even own the goods that APHIS is targeting for inspection, yet they are the ones who receive the bill,” says David Bradley, CTA president and CEO.

“At the same time the governments of Canada and the US are trying to find ways to make the border more efficient and less costly through the Beyond the Border initiative, individual agencies are contemplating ways to drive the costs of trade up again,” says Bradley.

Now, let’s end on the good news. The new regulations that the DHS has announced will mean there will be no automatic suspensions or removals from the C-TPAT program.

In the past, some companies have been removed from the program from for what the CTA calls “relatively minor or infrequent incidents,” such as not properly sealing a trailer.

“The presumption that one is innocent until proven guilty was a major concern to us,” says Bradley. “We’re not talking about situations involving serious security breaches, or protecting companies that are not living up to their security commitments, but the kinds of things that happen on any given day to any good company.”

Some particular changes with this newly published document include:

• Partners will not be immediately suspended if they identify a security breach and report it. The DHS notes that self-reporting “…demonstrates that the partner’s security procedures are functioning.”

• Partners will not automatically be suspended from the program if a breach occurs. Instead, DHS will conduct a review to determine the cause and then take appropriate action. However, DHS still has to right to automatically suspend partners in certain cases.

• If a partner is suspended they will get a letter that “will clearly articulate the reasons for the suspension and include requirements the partner must meet to be reinstated.”

In the past, these automatic suspensions can be devastating to a business. “All your customers know is that your C-TPAT privileges have been suspended,” Bradley says. “By the time the Department of Homeland Security conducts their investigation and even if the company is reinstated, the customer is already lost.”

With the new rules, he says, “the document demonstrates a clear commitment to partnership – the foundation on which the program is built – which sometimes seemed to be lacking in the past.”

The DHS has given the CTA a list of ten questions C-TPAT members can use to figure out why a relationship in good standing could be in jeopardy. To read the list, click here.

 

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