Archive for the ‘Transportation’ 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.

 

 

 

AMPS Changes to ACI eManifest Effective November 1, 2016

 

 

 

Canada Border Services (CBSA) has announced changes to the Administrative Monetary Penalty System (AMPS) in the Third Phase of ACI, known as eManifest. These changes will take effect November 1st, 2016.

CBSA’s Advance Commercial Information System (ACI) introduced an effective risk management process to identify threats prior to arrival of cargo and conveyance into Canada. eManifest is the third phase of the ACI program.

Carriers in all modes of transportation are required to transmit cargo and conveyance data electronically to the CBSA prior to arrival. CBSA will issue monetary penalties to any carriers identified for non-compliance.

Penalties for ACI contraventions range from $250 to $8000 depending on the contravention and risk applied. The AMPS system is a graduated system and monetary penalties increase with continued non-compliance. Below is the grid of Penalties:

Contravention 1st Penalty 2nd Penalty 3rd and Subsequent Penalty
Person failed to submit pre-arrival information relating to their cargo and/or conveyance $2000 $4000 $8000 (and in all likelihood the conveyance will be turned around to submit the ACI information from the US in the prescribed format and timeframes)
Person failed to submit advance information in the prescribed time or prescribed manner to the Agency. $250 $375 $750
Person failed to notify the Agency within the prescribed timeframes and without delay of any correction to any pre-arrival information sent to the Agency. $500 $750 $1500
Person submitted information prescribed by the Reporting of Imported Goods Regulations that was not true, accurate and complete. $500 $750 $1500
Person failed to comply with notification issued by the CBSA regarding the goods on board or expected to be on board the conveyance. $2000 $4000 $8000


CBSA recognized the potential impact to clients of the monetary penalties and since January 2016, when they were implemented, CBSA mitigated penalty levels to just Level 1 regardless of repeated non-compliance. This was done in an effort to provide additional time for carriers to make appropriate changes to their processes and training requirements. CBSA is now moving forward with the graduated ACI penalties.

Effective November 1,2016:

  • Carriers who have never received a penalty will receive a penalty at level I if non-compliant.
  • Carriers who have received a penalty at level I will receive a penalty at level 2 for repeated non-compliance.

Effective December 1,2016

  • Carriers who have not received a penalty will receive a penalty at level I if non-compliant.
  • Carriers who have received a penalty at level 1 will receive a penalty at level 2 for repeated non-compliance.
  • Carriers who have received a penalty at level 2 will receive a penalty at level 3 for continued non-compliance.

Carriers must be compliant for at least 12 months to return to level 1.

CBSA has announced to the Canadian Trucking Alliance “that a letter will be sent to individual carriers and their company contacts most at risk for non-compliance or ACI contraventions. These letters will outline the AMPS penalty system and the number of instances of non-compliance for the carrier and an offer from CBSA to assist these carriers in correcting their issues. CBSA encourages these carriers to respond to these offers of assistance to take corrective action.” (http://Cantruck.ca/compliance)

Carriers are reminded that with the implementation of eManifest, transmission of highway pre-arrival cargo and conveyance data is in addition to the release requirements. If carriers are seeking the release of their goods at the first point of arrival (FPOA), they must contact the importer/broker prior to arriving at the FPOA to ensure the release request is submitted and accepted in the CBSA system. Having the ACI/eManifest data on file as per the requirements, as well as the release request on file will help ensure a faster and more efficient border crossing.

10 Ways CBSA is Improving EDI Communication with eManifest Electronic Notices

eManifest EDI CommunicationThe Canada Border Services Agency (CBSA) is improving two way communication with new electronic notices. These notices will communicate to carriers and importers the status and disposition of their shipments as they move through the commercial process whether that be via Electronic Data Interchange (EDI) or the eManifest Portal.

The first phase of these notices – Deconsolidation Notices and Document not on File, related to house bill close messages, were made available to carriers and importers (clients) on Thursday June 30, 2016.

The second phase of eManifest Notices was made available September 1, 2016 and included the remainder of the eManifest Notices. The following is the list of Notices available now with a brief description of what the Notice entails:

  1. Matched
    Informs the clients that a specific trade document is linked to a related trade document. Example: When a Pre-Arrival Review System (PARS) shipment has been submitted and the related cargo has already been submitted, then the PARS is matched.
  2. Not Matched
    Informs the clients that either no links to a related trade document have been established, or that a document that has previously been matched to another document becomes unlinked through a change or cancellation. Example: When a PARS has been submitted but the related cargo has not yet been submitted, the PARS is not matched.
  3. Cargo Complete
    Informs the client that a non-consolidated primary cargo document has been submitted to and accepted by the CBSA. If consolidated, it indicates that all of the related Secondary Cargo (House Bills) has been transmitted. Documents that have achieved this status have not yet been linked to a related PARS or Integrated Import Declaration (IID) documents.
  4. Document Package Complete
    Informs clients that the cargo and all other required pre-arrival trade documents, including related release documentation necessary for CBSA to determine if the goods should be released (PARS or IID), have been submitted to and accepted by the CBSA.
  5. Reported
    Informs the client that their cargo has been presented to the CBSA at the Port of Report or First Port of Arrival.
  6. Arrived
    Informs the client when goods have been authorized to be removed from a CBSA office, a sufferance warehouse, or a bonded warehouse for use in Canada.
  7. Document Not on File
    Informs clients that a CCN that is not in good standing, was quoted on a trade document which has been submitted to the CBSA. When clients transmit documents that reference other trade documents that it is expected to link to, a Document Not on File Notice will be sent automatically to the sender of the referenced document that is not in good standing. Documents that will trigger this notice are a House Bill Close Message, PARS, IID, Release on Minimum Documentation (RMD) and B3. Carriers or Freight Forwarders that are quoted on the submitted documents will receive this notice for Cargo Control Documents (CCNs) that have been cancelled, or rejected, or not on file.
  8. Authorize to Deliver
    Informs Customs Self Assessment (CSA) clients that their CSA goods can be delivered to the intended recipient.
  9. Released
    Informs clients when goods have authorized to be removed from a CBSA office, a sufferance warehouse, or a bonded warehouse for use in Canada.
  10. Held for CBSA
    Informs clients that their goods are being held for further determination or processing and cannot be released.

In order to receive electronic notices all clients including Primary Notify Parties, Secondary Notify Parties and Automated Notify Parties, must be registered with the CBSA. They must also have their EDI communications profiles set up to receive EDI notifications. An EDI profile is a set of data that identifies clients EDI communication preferences and methods with the CBSA and EDI addresses to which notices are to be sent.

Clients can contact the CBSA TCCU for information on how to register to receive the notices currently available to clients contact the [email protected]

ACI eManifest and the Definition of a Consolidated Shipment

ACI eManifest Help

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There is much confusion surrounding what is considered a consolidated and deconsolidated shipment. Considering one requires multiple cargo control numbers and therefore multiple declarations while the other does not, it’s important to understand the difference. So let’s first take a look at the definitions of each:

Canada Border Services Agency (CBSA) considers a consolidated shipment to be a number of separate shipments grouped together by a consolidator or freight forwarder and shipped under one cargo control document. A deconsolidated shipment is a consolidated shipment that is divided into individual shipments consigned to individual consignees and reported to the CBSA on individual cargo control documents.

Consolidated shipments have additional requirements for eManifest submission. Here is a typical consolidation shipment scenario:

  1. CBSA would expect one eManifest cargo transmission from the highway carrier per single contract of carriage or bill of lading.
  2. The highway carrier would be required to indicate “yes” for the consolidated freight indicator field of the cargo map within the eManifest. A consolidated freight indicator is an indicator that specifies whether house bill(s) are expected to follow by indicating if the freight is consolidated.
  3. Electronic house bill submissions that will be further deconsolidated must be identified as “consolidated” in order to ensure the cargo matching the process is complete for authorization to move, release and referral notifications to take place. A house bill close message is required for each cargo document or house bill that includes freight identified as consolidated.
  4. The CBSA would expect multiple eManifest house bill transmissions from the freight forwarder.
  5. CBSA would expect freight forwarders to transmit a house bill CLOSE eManifest message once all the house bills within a consolidated shipment have been sent to the CBSA and accepted by the system. For clarity a ‘house bill close message’ is provided by the freight forwarder to identify all house bills to a consolidated primary document or consolidated house bill document for closure purposes.
  6. Multiple Pre-Arrival Review System (PARS) or other release request types would be submitted by the importer or customs broker, quoting the multiple house bills. This can only be initiated with the arrival of the conveyance in Canada.
  7. The consignee would be listed as the Canadian freight forwarder or other consolidator who will de-consolidate the cargo(s) in Canada.
  8. Additionally, entry declarations, or releases, which are submitted by the importer or their customs broker, are required to be linked to the house bills of lading submitted by the freight forwarder and not the primary cargo(s) or CCNs submitted by the highway carrier to report (section 12(1) of the Customs Act) the goods at the First Port of Arrival (FPOA).

Consolidated shipments do not require specific commodity descriptions due to multiple cargo descriptions within the house bills attached. Instead a general description can be used such as “freight of all kinds.”

Consolidation shipments require the involvement of CBSA registered freight forwarders. These freight forwarders must possess a valid 8000 series Carrier Code. Freight forwarders are not involved in the international movement of freight unless bonded. Freight can not be moved or transported internationally by a freight forwarder, the freight must be transported across the border by a valid CBSA approved highway carrier.

Freight forwarders who are not already registered and participating in electronic house bills should contact the CBSA Technical Commercial Client Unit (TCCU) at [email protected] to register and get a copy of the ECCRD Chapter 5.

Freight forwarders can transmit their data on their own via an EDI transmission option or engage a third party such as Borderpro to transmit their data.

Have any questions or comments regarding consolidated shipments? Share them in the comments section below or email Ask Your Broker today.

In-Bond Trailer and Container Sealing Requirements

 

container-forklift-600Carriers who move goods in-bond from the First Port of Arrival (FPOA) into Canada may need to seal the trailer and/or containers as required by Canada Border Services Agency (CBSA).

Shipment sealing is required for:

  • Carriers who are participating in a CBSA Trusted Trader Program
  • Cargo that is controlled or regulated by an Act of Parliament
  • Cargo moving in-transit
  • Conveyance and containers moving from FPOA to a CBSA examination location as directed by CBSA.

Some exemptions apply to these sealing requirements when customs is overseeing the movement.

These exemptions include:

  • Inland Inspection
    Customs Self Assessment (CSA) carriers may move in-bond goods without a seal except in cases when CBSA requires an inland inspection. In this case CBSA would affix a seal on the load at the FPOA for transport to the examination warehouse. The load must then be delivered to the release point and/or examination warehouse designated by CBSA with the seals intact. If company seals are already affixed CBSA will accept those seals and notate them.
  • High Risk Convoy
    CBSA may permit a load to move in-bond to a destination under the convoy of a Border Services Officer (BSO), where the nature or type of vehicle is considered high risk. In this case the carrier will be expensed for the time and labour of the BSO to convoy and examine the shipment.

Tips:

  1. Ensure the seal remains intact
    This company seal must remain intact unless CBSA performs an examination at the FPOA. If the seal did not remain sealed and/or the seal was broken without CBSA approval, penalties may incurred.
  2. eManifest requirements
    When a company places a seal on a trailer, vehicle or container that contains in-bond goods, the seal number must be noted correctly on the pre-arrival conveyance transmission.

Please note, CBSA has the right to seal any conveyance, container or compartment at any time.

Have a question regarding in-bond trailer or container sealing requirements? Share them in the comments section below or email Ask Your Broker.