Future Forwarding Partnering for Online Invoice Payments

The trend by consumers to move to more electronic forms of payment and eliminate traditional payment methods which took off during the pandemic is only accelerating. Understandably business to business payments require a more robust solution than tapping phones or snapping QR codes to send a few dollars to your favorite comedian or musician.

Future Forwarding uses industry-leading software provider CargoWise for our operational technology and our IT group, working in tandem with our financial partner Regions Bank, developed a system to make it quicker, easier and more secure to pay our invoices.

Here’s how it works:

On regular intervals, CargoWise and Regions communicate securely with one another, providing an updated ledger of outstanding invoices. The underlying platform can be logged into here or bookmark this URL in your favorites: https://regions.billeriq.com/ebpp/FutureFwding/Login/Index

You’ll get a login screen that looks like this:

You can either set up your own account or Future Forwarding would be happy to do so on your behalf. To set up your own login ID you will need to match your Client ID (located in the upper right-hand corner of the invoice) and billing zip code.

Once logged in, you’ll be able to perform a variety of accounting functions, including:

View and download invoices
View history of payments
Pay an invoice (or invoices)

Future developments for the platform include setting up automatic payments in the future, but for now users can quickly and easily log in, review their account and make payments. It is faster and more secure than sending paper checks and supports financial audit trails.

For more information including learning more, scheduling a demonstration or setting up your portal account, email receivables@usffcl.com.

Insights into OSRA

When the Ocean Shipping Reform Act (OSRA) was signed into law on June 16, 2022, it not only became a beacon that provided guidance for companies who felt they were being unfairly charged demurrage and detention (D&D) fees by carriers, it opened the door for cargo owners to have a more vocal advocate to fight those unfair charges imposed by carriers.

According to the White House Briefing Room, OSRA authorizes the Federal Maritime Commission (FMC) for fiscal years 2022-2025, creates a list of necessary and banned behavior for ocean carriers, requires the FMC to create rules related to certain fee assessments, creates a shipping register, and gives permission for the FMC to issue emergency order necessary common carriers to exchange information directly with shippers, rail, and truck carriers.

OSRA has declared carriers won’t be able to be as cavalier or as easily dismissive of claims made by small and medium sized companies whose survival depends on getting a spot on these shipments for a reasonable price.

The FMC will help force carriers to be more honest in their accounting and will perhaps be an incentive to change their behavior towards shippers. Creating equality across the board whether they are a large company or small could mean an economic boost for smaller companies, and make it so that they have a chance to grow. The FMC announced that these complaints, however, must be made after the ruling on June 16, 2022, and not before it was made into law.

Future Forwarding has always advocated for our clients and when we act as a freight forwarder or NVOCC, we keep the most accurate accounting of a container’s location, time out of the port or ramp, and whether or not there were issues which prevented the equipment’s return. Future Forwarding will stand with you to fight against these excessive fees. Should you have any questions regarding this or how we can help you in the future, please don’t hesitate to contact your Future Forwarding representative today.

Dockworkers on Strike in Germany

In the wake of a breakdown in negotiations between employers and the union, 12,000 dockworkers in the German ports of Bremerhaven, Wilhelmshaven, and Hamburg have gone on strike.

The workers’ demand is for a 14% increase including bonuses to offset inflation concerns and the offer for consideration from employers is a 12.5% increase to current pay, but over a two year span. Maya Schwiegershausen-Güth, ver.di’s chief negotiator, says they’re still ready to find a negotiated settlement, but not without a “real wage increase” for its members. She also said, “…against the background of the uncertain economic development the current offer was still insufficient.”

The Loadstar reports: “ The third ‘warning strike’ is the longest so far and will further aggravate port congestion at Hamburg’s container terminals where yard density already stands at an unproductive level of 90%. Moreover, ships idled in the German bight are stacking up with berthing delays, even before the stoppage, extending to up to 14 days.”

ZDS’s chief negotiator Ulrike Riedel rebutted that the action can no longer be called a warning strike. She went on to say that the strike has “damaged the international reputation and competitiveness of our ports and endangers the existence of many companies.” Although, one could argue it’s not the dockworkers’ responsibility to keep companies afloat. That responsibility rests solely on the shoulders of company leadership.

Carrier Maersk says they have “decided to observe a full stoppage for rail, road and ocean freight for both import and export across our German terminals for the duration of the planned strike.”

Some carriers may be able to transload cargo from other ports, but congestion is already an issue at most alternative ports as well.

Head of Kiel Trade Indicator Vincent Stamer says, “There is currently no end in sight to the congestion in container shipping. This is very unusual for the North Sea, while long queues off Shanghai have also been observed in the past, for example.”

Even after a settlement is reached, it’s going to take some time to untangle this supply chain snarl, especially with the already stifling port congestion as a contributing factor.

A Recipe for Compliance

For the average consumer, there’s the cookbook and the shopping list that comes with following those instructions. Particularly now with the Fourth of July holiday this weekend, we’re probably all digging out those hand-written, handed-down books laden with summertime barbecue and boat favorites.

With grocery shelves having some gaping holes or old reliable ingredients no longer available, the need for clever last-minute substitutions and improvisation is quickly becoming the norm rather than the exception. If you’re good, you can ingredient swap without people even noticing the difference.

For buyers of finished goods, the quality and efficacy of the end product they receive has traditionally been sufficient. Needing to know not just the country of origin but the manufacturer, the source of the earliest precursor components and even the name and location of a farm are now all part of an importer’s responsibility. If Customs or a participating government agency like FDA or the EPA wants to know, not having an answer is not an option.

Years ago, CBP was focused on the country of origin of merchandise for both evasion of quotas (limitations on the quantity and type of a product which could be imported) and because USDA laws may permit the import of a product from one country but not another because of the risk to American agriculture. There are no shortage of invasive species which have now become ubiquitous such as the Longhorn Beetle or Asian Carp which threaten to destroy ecosystems.

Moving past quotas, CBP has been focused on the issue of forced and child labor, with an entire page devoted to products, manufacturers and countries from which items are prohibited entry ranging from latex gloves to peeled garlic and electric fans. These goods are tracked on a page with Withhold Release Orders maintained by the agency.

This month, the Uyghur Forced Labor Protection Act (UFLPA) came into law, and unlike any other mechanism preceding this statute, the presumption of innocence came first. Under UFLPA, the term being used is “rebuttable presumption”. As we wrote about in our last entry, CBP is looking not just to where a good was finished, but where any underlying component was sourced for a direct line to the affected region. The agency is using both public data sources and their own intelligence and targeting to identify shipments which may contain violative material from the Xinjiang Uyghur Autonomous Region, or XUAR.

What does this mean for US importers? Three well-known exports from Xinjiang are cotton, tomatoes and polysilicate (a precursor to solar cells).

For a textile or footwear importer, does any part of the garment or shoe contain cotton that was grown in Xinjiang?
For a food importer, does any part of the ingredient list contain tomatoes and can they go back to the manufacturer to provide verifiable records showing the source of the fruit?
For an importer of solar-powered lawn and garden lights, do the solar cells contain raw materials or components that could cause the shipment to be detained?

The level of detail that importers are required to maintain to remain in compliance has increased as governments have wanted to know more. A condition of importing, these agencies contend, is complying with a bevy of laws increasingly designed to follow a product from its earliest identifiable components, both to enforce trade laws and to protect consumers from fraudulent or harmful food, drugs or ineffective or dangerous medical devices.

Future Forwarding has been in the business of helping importers keep compliance for decades and our senior customs and compliance leaders have watched the evolution of these agencies and the granular level of detail they now require. Knowing what’s in a product isn’t just an importer’s legal responsibility, but can also open doors to classification changes that reduce or eliminate duties or provide information to support drawback claims at the time of export.

Let Future Forwarding help ensure your supply chain meets the requisite levels of transparency and compliance to prevent delays and provide savings opportunities. Contact us today.

UFLPA Guidance from CBP

In late December, a nearly unanimous House and Senate passed the Uyghur Forced Labor Protection Act (UFLPA) and sent the bill to President Biden for his signature. He did so, beginning the 180-day clock to the day it would become law.

That day is June 21, 2022, and importers and government agencies and task forces have been working furiously towards that deadline. UFLPA is slightly different from the agency’s traditional Withhold Release Order (WRO) where it has researched and determined that a particular country, region or manufacturer is guilty of using forced labor. UFLPA supersedes existing WROs for the Xinjiang region.

UFLPA’s “rebuttable presumption” presumes guilt and places the burden of proof of innocence (read: no forced labor was used) on the importer. How do they plan to enforce this, and how are importers expected to affirmatively demonstrate that no forced labor was used? Since the law’s passage, the agency has been communicating with affected importers, a pool drawn from the entry data submitted for cargo release.

They began with Known Importer Letters in April, with the key paragraph of obligation in that letter reading:

“The Act requires CBP to apply the rebuttable presumption unless the importer can overcome the presumption of forced labor by establishing, by clear and convincing evidence, that the good, ware, article, or merchandise was not mined, produced, or manufactured wholly or in part by forced labor. This elevated standard will require the importer to not only use due diligence in evaluation of its supply chain, but also to respond completely and substantively to CBP requests for information regarding entries it may review.”

For companies who are members of CTPAT, the agency went further – informing them of their potential suspension or removal from the program for non-compliance.

“As your company has previously imported merchandise from locations or entities potentially subject to the Act, you are being notified that subsequent entries of such merchandise may result in, among other things, suspension or removal from the Customs-Trade Partnership Against Terrorism (CTPAT) program, seizure, forfeiture and/or penalties, or other appropriate action under the customs laws. Please note that this notice may serve as an aggravating factor should CBP take enforcement action upon determining future violations of the Act.”

Within the guidance document VIEWABLE HERE, the agency lays out what will happen with regards to the holding of an entry, remanding for an examination, their time frame to review, and methods of disposition if the goods are found to either be excepted from, or included in, the detention and prohibited entry. If excepted, as per the law, the exemption will be reported by the Commissioner of Customs to Congress.

In reviewing this guidance document, the agency remains silent on many things. Importers should expect that once enforcement begins that the time to release goods being held for UFLPA proof may rise and along with that, applicable storage, detention and demurrage documents.

CBP provides instructions on administrative relief when importers cannot provide sufficient proof at time of entry to protest a prohibited entry order. They have also provided a not insubstantial list of places that companies can go across multiple government agencies to determine compliance and actions to take with suppliers.

Finally, they have also grouped into three key areas of product export from the region – cotton, tomatoes and polysilicon – what specific action companies can take.

The beginnings of this process for importers whose supply chains run through the affected region will be bumpy, but Future Forwarding’s customs brokerage team is committed to working with our clients to quickly and readily respond to holds and inquiries from the agency. We encourage our customers with affected goods to carefully read this document and if you have not already done so, begin assembling proof to submit for entries which are held or detained. Together, we can work through these challenges with as minimal delays and additional costs as possible.

Building a relationship with Customs through ACH

Importers with compliance programs understand that such a program includes multiple business activities. It starts with sourcing, moves through country of origin marking and proper classification, screening for potential trade remedy duties like AD/CVD, Section 301 or Section 232 inclusion and finally through to finance. For companies seeking to enhance their import compliance program, a direct relationship for the payment of duties and taxes with CBP is one that makes sense and is easy to implement.

CBP offers importers the ability to pay duty directly by ACH and, if approved, using the agency’s Periodic Monthly Statement process where duties can be paid once per month like a credit card statement that has all of the entries from the preceding month. At a time when payments from customers are being stretched, the ability to have up to an additional 45 days’ time to pay Customs is a definite advantage.

The process is quite simple and presents an opportunity for an importer to further establish a relationship with CBP. The CBP Form 400 is available online here, and is quick and easy to complete. In order to qualify, an importer must:

File entries through the Automated Broker Interface (ABI) and paying via a US bank which is a National Automated Clearinghouse Association’s (NACHA) participant with electronic data interchange capabilities.
Have a Federal identification number such as a tax ID or a Social Security Number submitted to CBP via form 5106. Should this not be applicable or providable, a Customs-assigned alternative number will do.
Complete a separate application for each account should there be multiple ones or multiple importer IDs.
Match all blank information on the application to the Check Specification Sheet.
Confirm your bank’s routing number and account numbers are correct as CBP holds the filer responsible for any errors that result from any incorrect information put in.

For the most rapid processing, email the application to ACH-Customs@cbp.dhs.gov. If you prefer to mail in the application:

U.S. Customs and Border Protection

Revenue Division

ACH Debit Applications

6650 Telecom Drive, Suite 100

Indianapolis, IN 46278

New applications take up to 15 business days from the receipt date to process. For changes to an existing ACH account, filers should allow at least 3 business days for processing.

Once the account is created, CBP will assign the filer a unique Payer Unit Number (PUN), which is used as a security measure. CBP will only share the PUN with the point of contact listed on the ACH application. This will be used to identify the payer when attempting to submit payments.

If you need help completing the ACH application, or just need some clarification on the process, please contact your Future Forwarding representative to learn more today!

NCBFAA Conference Summary: Regulatory and Transportation Takeaways

Held this year in Tucson, Arizona, the National Customs Brokers and Forwarders Association of America’s (NCBFAA) Annual Conference is our chance to hear from regulators, private sector leaders and chat with our peers to get an accurate accounting as well as some first-hand guidance on the issues that affect our customers. Whether import, export or domestic, the three-day event is key to meet with people face-to-face and get answers to questions that we sometimes cannot lock in from lower-level people within these organizations.

Looking back on the sessions and what we heard, here are a number of key takeaways that we feel will warrant paying attention to heading into the summer and the rest of this year.

Customs issues:

The Uygur Forced Labor Prevention Act comes into law on June 21st and CBP shared with the crowd how furiously they are working to provide guidance, train their officers in the field and aggressively communicate and do outreach to businesses which will be impacted by the law.

Check out CBP’s website for all the details, but know that the date cannot and will not slip because it is prescribed by law. CBP shared that they are currently enforcing 54 active Withhold Release Orders (WRO’s) and 9 active findings across various industries with more to come.

For those of our customers who use our duty drawback services, the agency shared that there is currently $3 billion in claims which have been filed for duty refunds. The drawback offices have also been moved in with CBP’s Centers of Excellence and Expertise (CEE’s) and the changes that have been occurring to the drawback program are the largest since the inception of the program which dates back to 1789.

Fun fact: A drawback claim needs to get through 314 validations before it is accepted.

Port Congestion:

We heard from Gene Seroka, Executive Director of the Port of Los Angeles, Dan Maffei, Chairman of the FMC and Jonathan Gold, Vice President Supply Chain and Customs Policy of the National Retail Federation. Seroka provided background and details on the Dwell Fee which the ports have continued to push out. He said that they looked at the terminals and more than 40% of the containers left on docks were containers which had been there nine days or more. Just the threat of the fee, he shared, led to a drop of 75% of containers of that duration.

Maffei used a great analogy about port congestion, likening it to plumbing. “If your sink clogs you call a plumber. You don’t call a plumber because you’re trying to stuff twice as much water in the sink and it clogs up.”

He cautioned that more cargo is moving earlier – back to school is shipping and arriving now – because retailers don’t want to be caught without inventory. This will only contribute to the problems, but while Seroka cited only a 53% appointment utilization rate, the crowd and FMC were quick to point out that this figure was artificially constrained by terminal return restrictions, chassis availability (or lack thereof) and the delays in making turns that truckers rely on because they’re paid by the trip.

Demurrage and Detention

While the ALJ’s decision in the Hapag Lloyd case had been announced by the conference, it was nearly matched just days afterwards by the $850,000 settlement with Wan Hai. This and the current conditions for exporters have led the FMC to take a much deeper look at what is happening. Maffei pointed out the changes that have happened in containerized shipping since ocean shipping was deregulated in 1984, including ship sizes going from 5,000 TEU’s to now 25,000 TEU’s, from more than 24 carriers (including US flagged carriers) operating on the transpacific to now less than 10 – with no US carriers remaining.

The Commission, Maffei shared, does this with a budget of about $30 million annually and a staff of only 120 nationwide. But Congress is taking note and will likely increase the budget, allowing for more staff and affording them the opportunity to beef up their consumer affairs and enforcement bureaus.

Cargo Insurance and Why You Need It

When you are transporting cargo, there are multiple modes of transportation utilized before it reaches the final destination. Be it by air, sea, truck, or by rail, there are usually at least two modes of transportation that it takes between origin and consignee. Sometimes things get jostled in transit, or even broken and smashed. All purely by accident. And when this loss or damage occurs, no one usually wants to take the blame to make things right between the cargo owner, and the cargo receiver.

Because of this, sometimes it’s necessary to invest in insurance for your cargo, as each mode of transport has its own, limited form of liability that may or may not make the cargo owner whole again. This is where cargo insurance steps in.

Future Forwarding is not only experienced in this, but when a loss or claim occurs, we submit a claim to the insurer who will review the claim and if approved, pay the cargo owner and subrogate against the responsible party.

While cargo insurance is, well, added insurance, there are also three simple ways to protect cargo in transit and avoid a claim. They are:

Pack the goods in containers of proper strength and weight.
Properly, block and brace cargo to eliminate empty spaces where cargo could move around and be damaged.
Consider the forces put on a shipment during transit and pack appropriately.

There are a number of things that can happen to the cargo if it’s not packed properly, but have you considered what would occur if something happened to the vessel? The rule of General Average comes into play then.

If you don’t have cargo insurance, then a cash bond must be posted and is held until the final General Average amount and settlements are agreed upon. This, however, could take years to process. The best thing about cargo insurance? You get to avoid this hassle and have your cargo discharged without delay or a pending financial guarantee.

Supply chains are stretched thin and every piece of cargo is in demand upon arrival. While the loss of overdue cargo cannot make it reappear and satisfy upset customers, it can at least protect the cargo owner from being out of pocket for the loss of the merchandise. Future Forwarding’s open cargo policy is extremely competitive and coverage can be attached mid-shipment. Contact your Future Forwarding representative for a quote today.

CBP SENDING LETTERS FOR UFLPA

CBP made news this week as the ramp-up to the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) signed by the President late last year comes into force on June 21st.

CBP posted an announcement on April 12th of its intention to issue “Known Importer Letters” before June 21st, the effective date of the rebuttable presumption under the Act. As a reminder, goods that are mined, produced, manufactured wholly or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR) will be considered by CBP to be in violation of the forced labor statute under the UFLPA and prohibited entry into the US by the Section 307 of the Tariff Act of 1930.

There are certain circumstances where exceptions will apply. In these cases, the CBP commissioner will determine if:

The importer has fully complied with guidance to be established under the UFLPA and has completely substantively responded to all associated CBP inquiries.
By clear, convincing evidence, that the goods were not produced, wholly or in part, by forced labor.

CBP will also be issuing letters to parties identified as having previously imported merchandise that could be subject to the UFLPA. Those parties are encouraged to examine and address any forced labor issues in their supply chains with due diligence.

Regardless if they received the letters, the announcement also states that all importers are expected to review their supply chains and institute reliable measures to ensure that imported goods fall under the UFLPA guidelines. So if any goods are wholly or partly made with convict labor, forced labor, and/or indentured labor, including forced or indentured child labor, these goods are to be examined and addressed accordingly.

Intending to strenuously enforce the UFLPA, CBP’s issuance of “Known Importer Letters’’ serves as the latest reminder to importers that they are expected to put into practice supply chain programs that address raw material acquisitions, including the production process.

The agency held a hearing and solicited testimony a week ago on April 8th, and June 21st is fast approaching. Importers who have not already done so should urgently communicate with their suppliers and ask whether or not the goods they are purchasing are manufactured, partly or in whole, with anything sourced from Xinjiang province and risk being detained or denied entry upon arrival.

If you are uncertain as to where to start this process, please contact your Future Forwarding representative today and we can help you get to the source and clarify anything that may be prohibiting you from getting answers.

Author: Colin Smith

Felixstowe: Ships Surge Post Strike

Future Forwarding Partnering for Online Invoice Payments

Insights into OSRA

Dockworkers on Strike in Germany

A Recipe for Compliance

UFLPA Guidance from CBP

Building a relationship with Customs through ACH

NCBFAA Conference Summary: Regulatory and Transportation Takeaways

Cargo Insurance and Why You Need It

CBP SENDING LETTERS FOR UFLPA

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U.S. Legal

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