Vllad, I need your opinion

[OrsunVZ]

You're the master of logistics here, and there is something that is driving me nuts with my container imports (I know you're more of a trucking guy that ocean freight, but maybe you can point me in the right direction).

Currently around 70% of our imports are getting pulled for inspection (either customs or agriculture). About 1/3 of those inspections turn into intensives. It is adding upwards of 2 weeks delay (and in once case over 3 weeks) before I can get my material to my customers. And even though there is never anything wrong with my goods, I am still stuck with thousands of dollars of inspections fees (on top of the discounts I have to give to customers to smooth ruffled feathers due to delays).

I know this is not uncommon. I know everyone that imports goes through this.

However. This is now something that is pissing me off to the point I'm going to try and do something about it. Ultimately the need for national security is something I fully understand. And even though I think the costs around the inspections are ridiculous, especially when there isn't anything wrong, the thing that drives me into a total rage is that my container will get pulled for inspection, and then not get inspected for 8-10 days (or even more). If there is an 8-10 day back log on containers ahead of mine that need to get inspected, why the hell are they pulling more containers to get inspected???? It doesn't make ANY sense. Work through the stupid backlog first!

There is a very real cost to the American consumer that is surrounding this sham. And a very real negative affect on small businesses who are already operating on very thin margins just to stay afloat.

So I am going to start a petition, but I don't know who I should be petitioning to... any advice? I look online, and I see bunch of people complaining, but nobody seems to be doing anything about it. Or, if they are, they doing a lousy job of letting the people who import know.

[Slamz]

It does make sense in the sense that if you are tasked with inspecting 70% of all containers, you must pull 70%. If you can't get to them all and a backlog develops, you still need to keep pulling because you still need to meet the 70% mark.

The problem sounds like they simply don't have enough inspectors to meet their quota. Either they need to lower their quota or they need more inspectors. Pulling a container for inspection and then sitting on it for 10 days sounds like standard government work. Their job is secure; nobody can fire them for being slackers; what's the rush (in their eyes)?

I would think the trick would be to try and figure out what elected government official this could be pinned on and then trying to get some lobby pressure in that direction: fix it or we give lots of money to your opponent next election.

[OrsunVZ]

The ridiculous part is that you have a very limited time to offload your material from containers, and after 5 days, if your container is still in the port, you are getting charged demurrage.

So, 1) you pay a fee for the inspection
2) you pay an additional fee for intensive
3) you pay demurrage
4) you lose money on your orders

And this is just US Customs. Then you get US agriculture coming in (because we import lumber) and they want their piece too and we are subject to roughly the same situation as Customs. These agencies operate independently, despite very similar tasks. Both missions could easily be accomplished by the same inspection agent. DUMB.

What's worse, is that we've been charged for intensive inspections, and based on how our containers are packed, we can tell no inspection actually ever took place (this has happened numerous times).

As for a 70% directive, I don't know what the number is supposed to be, but I guarantee the Wal-Marts of the world are not dealing with this kind of crap.

This definitely slides into the political forum a bit, and honestly I think any traction that could be gained, surrounds the length of time they can sit with containers without doing anything, which I think avoids any political partisan hang-ups. Bottom line is that not a single container in the last 5 years or so has cleared inspection in the same day (or day after) that it was pulled. Standard inspection is an x-ray of the container. something that should be easy to manage throughput.

Anyway, I think it's a total racket, and one of the most overt cash grabs by our government, which has occurred under both Rep and Dem governments. I'm just thinking in this current political climate, this could be the time to actually change some of this crap.

[Jakensama]

Are you working with a freight forwarder/consolidator or shipping containers yourself? When I worked for my Dad's liner service I was the head of our CTPAT (Customs-Trade Partnership Against Terrorism) program, which essentially allowed us to have preferred access and our cargo cleared quicker. I am not sure if you can find a forwarder who is a member. It may be that consolidated containers are just pulled more often due to the nature that anyone can stick shit in them, but nowhere near 70% of the containers that we offloaded from our vessels were ever physically inspected unless seals were broker or something.

We also never had that turn around for inspecting things, but we did own our own terminal so that helped.

Anyways, it's the terminals that are fleecing you with demurrage (and possibly the shipping line that wants their container back) - so there isn't much you are going to do to change the system. Ocean Shipping is a lot of large companies that fix prices so your shopping around options are limited.

[OrsunVZ]

Yeah the frequency of inspections have gone up dramatically. I would really like to know what percentage is reasonable, so that I can make a case. I wonder if competition has done something underhanded to get our containers inspected more often than they should... I am really getting suspicious - it's just that bad.

[OrsunVZ]

CTPAT works (to a degree) for some businesses, but you have to have a secure facility to qualify, and the vast majority of businesses cannot meet the requirements of what DHS deems "secure". SO that's a non-starter for me.

And yeah the shipping lines ARE the ones fleecing me on demurrage, but only because the government is holding my good for longer than is necessary to conduct their inspections.
Edit: I do work through an agent who clears for us as well.

[Jakensama]

Have you considered trying a different agent? I honestly haven't dealt with individual cargo clearances in 6 years or so back when I dealt with parcels instead of ships, but I do know back then incorrectly entering manifests into the custom system leads to more red flags/inspections.

What about terminal options, any options to get on a shipping line that owns a CT-PAT regulated terminal or are you dealing with an NVOCC?

[OrsunVZ]

I have used multiple agents recently just to see. The paperwork is being done correctly though, and back when they switched to the 10+2 programs we did a whole exercise to make sure we were doing things correctly. As to the second point, I don't know - I will have to check on that.

[Jakensama]

Are your containers all your stuff or do you share them with other shippers?

[OrsunVZ]

All mine.

[Jakensama]

I've shot an email to the old imports manager I used to work with when I was still doing shipping on a cargo basis rather than entire ship basis. I don't know if things have changed in the last 6-7 years since I have been involved with it but will see if your situation is normal and if he knows anything that can be done to lessen these.

For the container demmurage have you ever spoken with the lines and ever tried to negotiate a different demurrage time citing how often these things are held over for inspections? Might also be a non starter if you don't use the same shippers or just don't do much volume, but can't hurt.

[OrsunVZ]

not a huge volume, and due to importing from 14 different countries, my hands are tied in terms of who the shipper is sometimes, so it varies.

Jake thanks for looking into this, though!

[Vllad]

Sorry O,

I was on vacation and not paying attention to the boards.

Here are my suggestions: Just keep in mind that your goods (lumber) are more likely to be inspected than most other goods so you have an issue there. You have a big red target on you basically. Lumber presents very difficult problems.

1. Use an NVO that does not only the ocean transportation but the customs brokerage and potential transloads all as one bundled service. FedEx Trade Networks, Expeditors etc. This will help you get some priority through the ports and can (not guarenteed) save you time there.

2. You should consider transload options at the ports directly. Strip containers at the port city and run inland via truck. While more expensive it will keep your inspections seemless to your customers.

3. Don't clear multiple containers on single entries. This can save you duty and tax but customs hold goods for inspection on an entry level. Do one entry per container and over the long run it will reduce the amount of containers held at the port. Again more expensive but if your goal is to reduce containers held only money can fix that.

4. Use an NVO that has alternative port options. You didn't list your port of entries so I will make a guess. i.e., Instead of paying for LA/LB port pay for a SEA service instead. Different ports have different levels of inspection capabilities.

What is your port of entry now?

5. Make sure your containers are loaded for easy movement of the goods. Most inspections take longer because containers aren't loaded worth a shit. Plus if you want to transload the faster the transload the cheaper the option gets.

I have a few more comments that I will quote you from.

I know the FedEx Trade Networks guys and can hook you up with people to help you. Just PM me with some details.

[Vllad]

CTPAT works (to a degree) for some businesses, but you have to have a secure facility to qualify, and the vast majority of businesses cannot meet the requirements of what DHS deems "secure". SO that's a non-starter for me.

This is an easy fix. That is why you need to use an NVO. Just use an NVO that has its own distribution facilities at or near the ports.

Again get an NVO that does your brokerage, ocean and has distribution capabilities. This may cost you a little more but it will solve most of your headaches.

And yeah the shipping lines ARE the ones fleecing me on demurrage, but only because the government is holding my good for longer than is necessary to conduct their inspections.
Edit: I do work through an agent who clears for us as well.

No way around this accept to get it off of the ocean carriers equipment. You can try to find an NVO that has better demurrage rates and longer hold times. You have to use a big boy NVO for that.

Doing this on your own is asking for trouble. Unless you are doing 100,000 containers a year an Ocean carrier won't even consider it.

[Vllad]

I highly recommend you put together the list of challenges you have than you bring a bunch of sales guys from bigger NVO's and say "This is what I need fixed" than ask "How much?".

This is just a guess but your complaints are not uncommon for companies still trying to do business directly in non bundled fashions.

Unbundled is still cheap but you have to live with these things.

Bundled options cost more but create a faster supply chain.

It really comes down to how important is it that you get your containers faster?

[Jakensama]

Doing this on your own is asking for trouble. Unless you are doing 100,000 containers a year an Ocean carrier won't even consider it.

Depends if you are using Maersk or some little line, but by and large these are the reasons you use a big NVO, even though they are crooks.

Good advice on the separate bills of lading per container, that was just what my traffic guy told me to ask.

[Vllad]

Doing this on your own is asking for trouble. Unless you are doing 100,000 containers a year an Ocean carrier won't even consider it.

Depends if you are using Maersk or some little line, but by and large these are the reasons you use a big NVO, even though they are crooks.

I am making a lot of assumptions since he didn't list volume, ports, origin country and ocean carriers.

It is also entirely possible his company if flagged for inspections because of past violations. It is too hard to tell without further info.

Since over all customs inspects less than 8% of the total containers coming into the country something is wrong in Orsun's supply chain process somewhere.

[Jakensama]

Typical feds, you smuggle in one 40DV full of blow and illegal immigrants and they give you a scarlet letter for life.

[Vllad]

Typical feds, you smuggle in one 40DV full of blow and illegal immigrants and they give you a scarlet letter for life.

Ironically even a High Cube full of blow isn't as serious as one container of lumber full of exotic bugs.

It is easier to get 10,000 lbs of crank pass customs than one wooden pallet.

[Jakensama]

Yeah, during Gypsy moth season it can be a giant pain in the ass getting entire ships into US ports - one egg sack found and the whole fucking thing has to be sent back or decontaminated in international waters.

A lot of owners won't even call ports in Asia for several months out of the year to avoid the problem.

[OrsunVZ]

Lots of great advice here... will take some time to digest. Thank you sooooo much - some very good suggestions indeed.