Archive for the ‘Logistics’ Category


 

The Issues and Solutions of Container Exams at the Port of Vancouver

Container Exams at the Port of Vancouver

Importers like you are frustrated with the lengthy delays and subsequent costs of Canada Border Services Agency (CBSA) container exams moving through Canadian Ports, especially in the Port of Vancouver. Let us take a closer look at the cause, reasons for extended delays, and the associated fees with the current CBSA Vancouver container exam program.

Why the Trade Community is Frustrated With Container Exams in Vancouver

According to the Canadian International Freight Forwarders Association (CIFFA) and the container examination cost survey they conducted, delays of up to four weeks were experienced in the Port of Vancouver compared to three to five days in the Port of Montreal.  Their blog post entitled “Container Examinations Out of Control” reported that their members have experienced the following with the current container exam process at the Port of Vancouver:

  • Six to seven week delays in receiving their goods
  • Thousands of dollars in unexpected costs for container exams, storage, detention, per diem and demurrage charges
  • Lost sales as a result of the delays
  • Lost goods in the case of perishables

CIFFA estimates that invoices for examination, demurrage, and storage of containers can range up to $4,000 per container. Those fees add up to millions of dollars, which are inevitably passed on to the consumer.

CIFFA argues that there is no incentive to improve inspection efficiency because container terminal operators charge daily per container storage fees of $150 or more, and shipping lines bill shippers and freight forwarders for demurrage.

Importers bear all the direct costs incurred for the exams. Importers are also responsible for all indirect costs resulting from exams such as damages or losses during the exam, lost sales, production and/or contract penalties due to delivery delays. Another cause of frustration is the unnecessary confusion an importer is faced with when the demurrage, detention, and per diem terms are often and incorrectly used interchangeably on invoices.

Tip: Always clarify in advance what shipping delay charges you face.

Why is the Container Exam Process Longer at the Port of Vancouver?

The two main factors in the delays are the location of the exam facility and the volume of containers at the Port of Vancouver.

It is important to understand CBSA and the transportation industry agreed the best option for examining marine cargo containers for contraband was to use a specialized central examination facility.  With this centralized facility, CBSA officers can conduct efficient examinations using high tech equipment in a secure environment.  The current inspection facility for the Ports of Vancouver is located in Burnaby, a fair distance away from the ports.

More than 80% of global merchandise is transported across oceans as marine cargo, and over 95% of marine cargo imported into Canada comes through five major marine ports:

  • Vancouver
  • Prince Rupert
  • Montreal
  • Saint John
  • Halifax

The three largest Canadian container ports are the Port of Vancouver, Prince Rupert and Montreal. Together, they handled five million, twenty-foot equivalent units (TEU) in 2016. Around 50% of this freight comes through the Vancouver and Prince Rupert ports. The Port of Vancouver consists of 4 container terminals with an annual capacity of just under three million TEUs per year. The volume clearly shows the one CEF/MCEF in Burnaby is busy.

Who is Responsible for the Container Exam Delays in Vancouver?

The delays experienced in Vancouver are further compounded by an already lengthy process. To gain an understanding of where issues lie we need to take a quick look at the stakeholders and their general responsibilities and possible contribution to the issue.

The Current Container Examination Process

Regardless of the Port, the container exam steps are the same as detailed below.

  1. The marine carrier reports to CBSA with information on the vessel, the crew and the routing via Electronic Data Interchange (EDI) at least 96 hours prior to arrival.
  2. The marine carrier sends cargo data via EDI to CBSA 24 hours prior to loading the cargo onto the vessel at the foreign port.
  3. Using the marine carrier’s information, CBSA performs a risk assessment at the CBSA National Targeting Centre in Ottawa.
  4. At the first Port of Arrival (POA) the vessel arrives and the containers are discharged, put through a radiation portal, and then stacked at the Terminal storage.
  5. Containers that are targeted or selected by CBSA for examination are staged for dockside exam, Mobile Large Scale Imaging or for furtherance to Container Examination Facilities (CEF) or Marine Container Examination Facilities (MCEF) for an intrusive examination.
  6. The containers, which require de-stuffing, are transported to the CEF/MCEF for fumigant testing, possible ventilation, assignment to an examination bay and offloaded and reloaded following an examination.
  7. Containers are authorized to move by CBSA from the CEF/MCEF back to the Terminal and released for transport to the Importer/Consignee.

CBSA Roles and Responsibilities

CBSA targets 1.3% of all containers for examination as it views containerized cargo as a huge risk.  Physical exams are done with the assistance of the Canada Port Authorities. They are legislated to provide facilities for CBSA inspection. These facilities are known as Container Examination Facilities (CEF) and Marine Container Examination Facilities (MCEF).

CBSA has a number of methods to examine Containers:

Container Examination Facilities (CEF) and Marine Container Examination Facilities (MCEF): Containers are moved from the marine port to the CEF or MCEF where they are fully de-stuffed, the contents intrusively examined, followed by an examination of the container itself.  CBSA has a service standard for examination, which states that CBSA will strive to conduct a marine container examination within 24 hours of the arrival of the container at the CEF or MCEF. This service standard does not include weekends or holidays. Additional time is required for fumigant testing and ventilation procedures in addition to container reloading times and containers that are resultant for contraband.

Note on fumigation: The CBSA requires testing of all marine containers for fumigants before examination. Fumigants include methyl bromide, phosphine and benzene. Fumigant testing identifies chemical levels prior to the execution of an in-depth examination. Chemical levels found to be above acceptable levels require that the container be ventilated in order to reduce the elevated chemical levels to a safe level. The maximum time that may be required to ventilate is three days. Once the contents and container can be safely examined,  the container is de-stuffed, examined, and then reloaded and returned to the port.

Large Scale Imaging (LSI) Examinations: LSI examinations are non-intrusive, dockside x-ray examinations of containers, enabling the CBSA officer to see inside the container. Anomalies deep within a container, such as contraband, can be detected, depending on the commodities density. A LSI examination can also assist in determining whether an intrusive examination is needed, and is especially useful in selective examinations.

Pier Examinations: This dockside examination is partially intrusive and involves the CBSA officer opening the container doors to perform visual inspections and a limited physical examination of the cargo closest to the door. The inspection may result in referral for an intrusive examination conducted at the container examination facility.

The CBSA is responsible only for the costs associated with their services, such as the officers examining the container and the equipment and tools required for marine container examinations. They do not bill the importer for these costs.

Goods found violating Canadian legislation may be subject to enforcement action such as a monetary penalty or seizure.

CEF/MCEF Warehouse Operators Roles and Responsibilities

CBSA informs the Warehouse Operator of the containers requiring exam and works with CBSA on priorities. The Warehouse Operator coordinates with the Highway Carriers to move the containers from the Terminal to the CEF/MCEF. They then coordinate and are responsible for the offloading and reloading of containers for presentation of cargo for exam. The warehouse operator is responsible for all truck movements at the CEF/MCEF such as moves to and from the ventilation area and examination bays.

The CEF Warehouse Operator generates the fees for presenting the goods for exam, to cover the cost of transportation to and from the examination facility and the unloading and reloading of the container. They then bill these costs to the shipping lines that in turn pass the cost on to the importer.  

Marine Carriers Roles and Responsibilities

The marine carrier is responsible to present the cargo for examination when requested by CBSA.

If CBSA requests a full container exam the marine carrier is responsible to:

  • Ensure the container is picked up from the terminal and transported to the CEF/MCEF
  • Monitor the pick-up of the container and the subsequent return of the container to the terminal after examination
  • Field any calls from the importer regarding any delays on their shipment

They must obtain any terminal charges for a dockside/tailgate and LSI exam completed at the Terminal.  If the CBSA container hold is removed after an exam the carrier then invoices the importer for the costs incurred at the Terminal. Once the importer pays the costs to the marine carrier the container will be released to the importer.

Marine Terminal Operators Roles and Responsibilities

After the Terminal Operator receives EDI data regarding the vessel and the cargo from the marine carrier they will:

  • ‘Arrive’ the cargo electronically to CBSA when the vessel arrives
  • Discharges the cargo from the vessel to the shipyard
  • Arranges for on-dock and off-dock examinations as requested by the CBSA
  • Permits containers to depart the terminal when released by the marine carrier and CBSA

Importer Roles and Responsibilities

The Importer orders goods for import and then organizes logistics or depends on third party links in the supply chain to facilitate the movement and subsequent entry of the import into Canada.

Customs Brokers & Freight Forwarders Roles and Responsibilities

Customs Brokers and/or Freight Forwarders directly represent Importers in the coordination or facilitation of the exam processes with the Terminal Operators, the Marine Carriers, Drayage Carriers and CBSA.

The Customs Broker and/or Freight Forwarders may be involved in the logistics and may pay charges on behalf of the importer as their client.  The Customs Broker and/or Freight Forwarder is generally aware that a hold has been placed on an Importer’s shipment for examination by CBSA.  Although not a responsibility, the Customs Broker and/or Freight Forwarder generally fields calls from the Importer regarding the status of the delays in the release of the container.

Highway Carriers Roles and Responsibilities

The Terminal Operator informs the Highway Carrier which containers need to be examined by CBSA. The Highway Carrier then makes a reservation for pick-up of the container at the Terminal with the Terminal Operator.

Reservations sometimes have to be made about three days in advance. The Highway Carrier then has a one-hour window around their reservation time to pick up the container at the Terminal and transport it to the CEF/MCEF for CBSA examination.

Once the examination is complete, the Highway Carrier returns the container to the Terminal. The container is then released by CBSA and can now be delivered to the Importer/Consignee by the Highway Carrier or the Drayage Company once a reservation has been made to pick the container up from the Terminal.

Stakeholder Summary

As each stakeholder carries out their responsibility, it results in more opportunities for delays. These can quickly add up to become lengthy delays.

Many of the stakeholders state there needs to be improved transparency and efficiency in the inspection process by ALL parties. CIFFA urges CBSA to address both the pricing model and the regulatory framework of the shipping lines, terminal operators, and warehouse operators surrounding container examinations across the country.

CBSA’s Action to Improve Ocean Trade

The CBSA has made a commitment in their 2017/18 departmental plan “to work with industry partners and the Port Authority in Vancouver to advance the Marine Container Examination Facility (MCEF) project over the course of the year. The opening of a new MCEF will increase the Agency’s examination capacity and enhance the facilitation of legitimate trade.”

The CBSA held a one-day conference with all stakeholders in Vancouver in September of 2017. The conference identified a number of opportunities for improvement.  Some areas of improvement included the communication between all stakeholders regarding delays, service hours, and service standards including:

  • Shipping lines, Terminal Operators and Warehouse Operators must post standard fees associated with the movement and facilitation of freight through the marine process.
  • Terminal Operators need to improve the reservation system for pickup and return of CBSA examined or targeted containers. CBSA needs to provide proof of examination, LSI exam and ventilation timelines to stakeholders.
  • There needs to be a transparent dispute resolution between all stakeholders. Use of technology for real-time status and progress of the exam providing importers and their service providers’ insight to better plan and mitigate impacts of the exam to their business and supply chains.
  • Importers need the flexibility and the option to deliver direct from the exam site.
  • CBSA needs to identify opportunities to improve efficiencies and consistencies with their targeting and examination of container freight. A clear focus on the client is necessary which is transparent with defined and measurable service standards.

Steps To Improve The CBSA Marine Container Exam Program

CBSA argues that numerous factors complicate the issue, and terminal/warehouse operators are only one part. CBSA states it is working with the Port of Vancouver, terminal operators, and other industry stakeholders to improve the system’s efficiency.

This initiative includes the construction of a new federal government container examination facility (MCEF) on Tsawwassen First Nation land which is strategically adjacent to the Port of Vancouver’s Deltaport and the new Delta iPort container logistics center.

A New MCEF in Tsawwassen

A new MCEF in Tsawwassen (TCEF) will augment the severely constrained facility in Burnaby and will initiate the new CBSA marine container examination program focusing on technology (scans) and less on manual inspections. The TCEF will consist of a new warehouse complex, which will house CBSA container examination facilities, a fumigant ventilation area, a LSI fixed building site and operator transload area in the warehouse. The facility is currently under construction and should be operational as of May 2018.

The Operator of the TCEF will charge fees such as drayage, scans, ventilation and de-stuffing. The Vancouver Fraser Port Authority (VFPA) will set the fees the TCEF Operator can charge but will consult with the Industry to ensure fees stay competitive.

CBSA and VFPA are considering options to release goods at the earliest opportunity for consignees so that delays are minimized. This would suggest that the container arrives at Deltaport and is selected by CBSA to be examined and/or LSI scanned. The container is moved from the adjacent Deltaport to the TCEF and scanned through the LSI facility. Then the container will be released or transported to the adjacent warehouse for examination, ventilation testing and then subsequently released directly from TCEF by CBSA to be delivered to the importer.

Outcome for Importers & Consumers

This post will help you gain a clearer understanding of the issues associated with the current CBSA Vancouver container examination operations. It is a complex problem, which will require all stakeholders to collaborate and take responsibility in improving their role in the process in order to provide consumers with goods that are not subject to a flawed and costly system.


If you have any questions on CBSA container exams, please leave them in the comments section below, and I would be happy to look into them for you.

 

 

 

Perishables Shipping | 12 Questions Every Shipper Must Ask

Perishables Shipping | 12 Questions Every Shipper Must Ask

Seldom do shippers or product owners know or understand the terminologies or intricacies of perishables shipping to ensure safe, and seamless passage of their goods. Without industry expertise, critical shipment details may be overlooked resulting in product damage or contract loss. Here are tips and tools to be a successful perishables exporter.

When we are contacted to move perishables shipments, the conversation may include the commodity trade name and that it must be kept at a specific temperature. It is packed in boxes, on skids, and is delivering to a foreign city, ready for pickup tomorrow. We then ask them the following questions:

  • What are the Incoterms® (terms of sale)?
  • Is there a letter of credit (L/C) involved?
  • How many commodities (SKU) make up the shipment?
  • What are the weights and dimensions of each shipping piece?
  • Are any pallets used certified and does the product contain the required markings?
  • Have the pallets been shrink-wrapped and were corners used?
  • Are there temperature recorders on the freight?
  • *What export documentation has been prepared to accompany the shipment?
  • Will your company file the B13A export document for Statistics Canada?
  • ** Does your product require phytosanitary certificates and has the Canadian Food Inspection Agency (CFIA) completed the
  • inspection?
  • What mode of transport is optimal: air, ocean, or highway?
  • Has this shipment been pre-quoted – what is the quote reference?

TIP: Be ready to share your knowledge of the shipment to ensure proper handling and transportation to destination.

This list of condensed questions will start a conversation about a perishables shipment. It is important to note that although the client is familiar with their products and may not understand the need for these questions, we are not and therefore are required to ask in order to meet your specific shipping requirements. This ever-changing field is a constant learning process for freight forwarders and carriers. The freight forwarder, the person in charge of the shipment, must have a clear understanding of the shipment to be able to react to any situation following pickup from origin door. This would include after hours and weekends when the shipper is not available.

TIP: Be proactive and start the discussion early.

From this list of questions the conversation continues until we have a complete picture of the shipment and knowledge of where, when and how it must move. From door to door any number of issues, security measures or documentation questions can arise that would cause a delay and/or negative result.

Conversely the carriers – truckers, steamship lines and airlines – have a similar list of questions when the freight forwarder is booking the shipment. If we are not able to provide a complete understanding of the shipment, those carriers may have doubts about a successful delivery, which could affect them supplying a booking confirmation and final freight rates as a matter of liability. All parties involved in a freight movement want to deliver the shipment in its best possible condition, on time and as quoted. Carriers are bound by the information contained in the bill of lading and/or in the booking confirmation. Therefore, all questions must be asked, answered and understood, and itemized on the export documentation and on-hand with the freight forwarder.

TIP: Exporters must be as detailed as possible when organizing their shipments. Be ready and prepared to share all information with your freight forwarder so they can ensure the documentation is correct and in order, as well as being your conduit to the carriers. If your freight forwarder does not ask all these questions or is not available 24/7, you will require a freight forwarder that better meets your needs.

Finally, do not hesitate to ask any and all questions of your freight forwarder. They may not have all the answers exactly when you ask them but they gain the knowledge and reply as promptly as possible, as to put your mind at ease that you are receiving the best possible service.

We hope you will drop in again as this series on perishables shipping continues. If you have any questions or suggestions regarding the movement of perishable commodities, please do not hesitate to call us at 888.538.1566.

Cost Insurance Freight CIF Incoterm ® 2010 | Use Case Scenario

Risk, Responsibility and Rewards – How The CIF Incoterms ® rule delivers and what it covers in greater detail:

cif-incoterms

 

In order to better reflect modern commercial reality, the ICC created a new classification system for Incoterms and abolished the previous classification system which was based on the first letter of the Incoterm rule. Under Incoterms 2010, the ICC has divided the Incoterms in accordance with the means of transportation as follows:

Rules for any Mode or Modes of Transport: EXW, FCA, CPT, CIP, DAT, DAP, DDP

Rules for Sea and Inland Waterway Transport: FAS, FOB, CFR and CIF

 

CIF Incoterms ® (Cost Insurance Freight)

 

In our series on the importance of understanding and leveraging Incoterms® 2010, we take a deeper and more detailed look into the CIF Incoterm and the impacts negotiated, as well as often overlooked during the establishment of project viability or business case development for capital projects that are going to be requiring international sales contracts to fulfill their mandates.

First we review what CIF Incoterm is as defined by the International Chamber of Commerce (ICC): CIF is recommended for use with non-containerized sea freight.

CIF Definition: CIF, or “cost, insurance and freight”, is a term used in international contracts for the sale of goods being shipped by sea to a port of destination where the seller pays the cost of the insurance and transport of the goods to the destination, and provides the buyer with the documents necessary to obtain the goods from the carrier. Legal delivery occurs when the goods cross the ship’s rail in the port of shipment (where they are being shipped FROM).

 

Insurance Charges:

Under CIF, the seller is required to obtain insurance only for minimum coverage. If the buyer wants more comprehensive insurance, they must ensure that the seller is contractually obliged to do so within their contract.

Insurance coverage for goods during shipment:

Freight insurance can be purchased directly from a shipper or from a third-party insurer. also called cargo insurance.

 

Cargo insurance Types:

Insurers offer two basic types of ocean cargo insurance policies. A voyage policy is used when insuring a single voyage, sometimes referred to as a “stray risk” or “trip risk.” Voyage policies are used primarily to cover shipments made by infrequent shippers. The other basic type of policy is the open cargo policy.

 

Motor Truck Cargo insurance (Cargo) provides insurance on the freight or commodity hauled by a For-hire trucker. It covers your liability for cargo that is lost or damaged due to causes such as fire, collision, or striking of a load.

 

Marine insurance:

Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination.

 

Cargo Management Charges:

 

Stevedoring charges:

Stevedoring is the process of loading and unloading ships. The main sectors of stevedoring are container terminal operations – the loading and discharge of container vessels at terminal ports, largely using advanced mechanical technology. Stevedoring charges are the charges incurred for unloading the goods from ship hold to wharf. These charges are treated as forming part of the freight and are to be added to the value for the purpose of charging duty on imported goods. This contingency arises only when the carrier does not include these charges in the Freight Bill.

 

Wharfage charges?:

A charge assessed by a shipping terminal or port when goods are moved through the location. Wharfage is one of the costs of transport goods within the distribution system used by a business to bring its goods to market.

 

Terminal Handling Charges:

Terminal handling charges or Container Service Charges (CSC or THC) are essentially charges on top of the sea freight, collected by shipping lines to recover from the shippers the cost of paying the container terminals or mid stream operators for the loading or unloading of the containers, and other related costs borne by the shipping lines at the port of shipment or destination terminal before being loaded onboard a vessel.

 

Container Freight Station (CFS) charges:

CFS is the term used at the loading port and means the location designated by carriers for the receiving of cargo to be loaded into containers by the carrier. At discharge or destination ports, the term CFS means the bonded location designated by carriers for devanning of containerized cargo.

 

Entry of Goods Valuation and Charges:

 

Entry costs and their determination are also a part of negotiating the international sales contract under CIF. You may wonder how Incoterms selection impact the landed entry costs, it is often overlooked that the Incoterms define where the responsibility for costs rests within the contract covering all of the aspects mentioned above and in certain circumstances there may also be packaging requirements for containers where inspection is required for example.

It is often overlooked that inspection for customs or quality control / delivery inspections incur a cost of service that needs to be considered in the overall costing process.

 

What is included in CIF value?

For the purpose of customs valuation, the CIF value is the price paid for the goods plus the cost of transportation, loading, unloading, handling, insurance, and associated costs incidental to delivery of the goods from the port or place of export in the country of export to the port or place of import in the country.

Assessable value:

Assessable value is a very broad term and complicated, it means the total end assessed value upon which various duties and taxes are levied . The Assessable value is calculated based on various factors/valuation rules mentioned in the Excise Act/Rules as per the Import or Export country.

 

Use Case Scenario:

 

For our case study purpose, below is an example of an international sales contract announced by Northern Minerals Ltd. where CIF was selected from the 2010 Incoterms to guide the pricing, risk and responsibility for this agreement where they are leveraging CIF to determine clarity on costs for their sales agreement:

Northern Minerals Ltd. (ASX:NTU) announced that it has entered into a sales agreement with Lianyugang Zeyu New Materials Sales Co. Ltd. (JFMAG). The agreement covers all planned production from the company’s Browns Range pilot plant.

JFMAG is a subsidiary of Guangdong Rare Earths Group, and Guangdong Rare Earths Group is a subsidiary of Guangdong Raising Asset Management. Guangdong Rare Earths Group is one of China’s five major vertically integrated heavy rare earths companies.

The Sales Agreement terms are based off CIF Incoterms 2010 with pricing referenced from a 2-month average of quoted prices on Asian Metals and Beijing Ruidow Information Technology.

Under the Sales Agreement, prior to the first shipment of rare earth carbonates, JFMAG will make a pre-payment to Northern Minerals of A$10 million. The prepayment covers approximately 15% of the expected value of production during the Pilot Plant phase, with the remaining 85% to be paid to Northern Minerals over the course of the agreement based on volumes delivered. JFMAG or its nominated beneficiary will be issued 40 million unlisted options at $0.25 exercise price which can be converted to ordinary shares to offset the pre-payment of A$10 million.

Northern Minerals Enters Sales Agreement for Browns Range Pilot Plant Output

 

 

The Disadvantages of Delivered Duty Paid (DDP)

Outsourcing your Transportation and Customs Control

Have you ever asked yourself why you choose Delivered Duty Paid (DDP Incoterms ®) for your international business? Many companies choose international terms of sale based on their company philosophy, history, costs, seller options or perceived ease of transaction. Without knowing the options beyond Incoterms DDP; a company could be losing control of their shipments and increasing their costs dramatically. The solution is to understand all Incoterms®; the responsibility involved, and to select the most advantageous term for your business strategy.

DDP Incoterms ®

Incoterms® DDP being an example, are terms that are agreed upon during the negotiation of a contract or sale and deal exclusively with;

  • The obligation of buyers and sellers (with regard to each of the 13 stages involved in the transport and clearance of a shipment – see Incoterms® chart), and
  • The stipulations on which party bears the risk of loss during transit.

Additional Information:

  • The purpose of these terms are to provide a set of international rules for the interpretation of the most commonly used trade terms.
  • The parties to the transaction select the Incoterms®, which determines who pays the cost of each transportation segment.
  • Incoterms® influence customs valuation of imported merchandise. Certain costs within the supply chain may or may not be included in the value for Customs, depending on the term selected.

It is important that your buyers understand and select terms of sale that are in the best interest of your company. The best time to determine the chosen one is when the buyer is evaluating whether or not to move forward with the purchase. Decisions made after the fact will inevitably affect the initial price that was being considered.

DDP – Delivered Duty Paid

This commonly used term places the maximum obligations on the seller and minimum obligations on the buyer.

The seller is responsible for delivering the goods to the named place, in the country of the buyer, and pays all costs and risks in bringing the goods to the destination, including, import duties and taxes. Risk transfers from seller to buyer when the goods are made available to the buyer, ready for unloading from the arriving conveyance.

Buyer Advantages

  • Lower risk, as the seller assumes all responsibilities and charges to the destination. However, risk is not gone!
  • Landed cost is known at the time of purchase.
  • No administrative supply chain management, arrangement of vendors or payment of such charges.

Buyer Disadvantages

  • Can not be used if the seller is unable to obtain import licenses, permits or certain payment options with Canada Customs. Some taxes such as GST are only payable by registered business entities, so there may be no mechanism for the seller to make payment.
  • No control over the movement or importation of the goods.
  • No direct contacts to track a shipment other than through your vendor.
  • No ability to interject in the event of an issue.
  • Hidden transport and import costs may lie in the markup calculated by the seller.

An Alternative to DDP: FCA – Free Carrier

This commonly used term places the maximum obligations on the buyer and minimum obligations on the seller.

The buyer is now responsible for delivering the goods to their intended destination, and pays all costs and risks in bringing the goods to the destination, including, import duties and taxes.

The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place. The seller pays for carriage to the named point of delivery, and risk passes when the goods are handed over to the first carrier

Buyer Advantages

  • Control over the movement or importation of the goods.
  • Direct contacts to track a shipment.
  • Ability to interject in the event of an issue.
  • No hidden transport and import costs.

Buyer Disadvantages

  • Administrative resources to liaise with service provider.

Always review and consider terms of sale proposed for use in a new contractual agreement to ensure they are consistent with your business plan. Ask for advice from your customs broker or freight forwarder, as often times they can recommend advantageous terms of sale.

Need assistance in reviewing your terms of sale? Please leave your questions and comments in the section below or email Ask Your Broker.

Freight Forwarders Take Note: eManifest in effect November 7, 2016

Canada Border Services Agency (CBSA) has announced that bonded and non-bonded freight forwarders, who are responsible for consolidated imports are required to transmit advance house bill data electronically for in-bond and in-transit shipments commencing November 7, 2016.

The implementation timeline as it applies to eManifest requirements for freight forwarders is as follows:

  • November 7, 2016 to January 10, 2017
    Transition period during which penalties for non-compliance will not be issued. CBSA will work closely with freight forwarders on corrective measures to become compliant.
  • January 11, 2017- July 11, 2017
    Non-compliant freight forwarders may be issued zero-rated (non-monetary) penalties under the CBSA Administrative Monetary Penalty System (AMPS).
  • July 12, 2017
    Freight Forwarders deemed non-compliant may be issued monetary penalties.

CBSA encourages freight forwarders to adopt the eManifest requirements now before they become mandatory. By doing so freight forwarders will have time to adjust to eManifest processes and correct problems effectively reducing the risk of non-compliance.

Start to prepare now:

  1. Ensure you have a valid CBSA-issued 8000-series freight forwarder carrier code and that CBSA has your current company contact information. For detailed information on obtaining a carrier code visit the Commercial Carrier section of the CBSA website.
    Choose a transmission option. Available options included:

    1. Electronic Data Interchange (EDI)
    2. Third party service provider (Borderpro)
    3. CBSA’s eManifest portal
  2. Secure a copy of the technical reference chapter of the Electronic Commerce Client Requirements Document (ECCRD) – Chapter 5 and 8. These chapters provide the business rules and data requirements when transmitting data to CBSA. Contact the CBSA Technical Commercial Client Unit (TCCU) for a copy.
  3. Review the tools, resources and client support available on the CBSA website.

Available eManifest filing options:

  • Full-service filing as primary service provider – For carriers who would prefer Pacific Customs Brokers to file eManifest on their behalf.
  • Full-service filing as secondary service provider – A backup option for carriers that are registered with another third party service provider, or who plan to use the CBSA web portal in the event of system failures, power outages, internet connectivity issues, etc.
  • Self-filing (partial) – For carriers choosing to enter eManifest data themselves.Note: Pacific Customs Brokers offers 24/7 carrier support with all of our service options listed above.

We are a third party service provider and know how to be compliant with filing your ACI eManifest. Contact us at 855-542-6644 or leave us a comment in the comment section below.