Damien Stile, Vince Iacopella, Brenda Espeleta and Leslie Bresnaider attended the conference earlier this month. The agenda covered every important topic to customs brokers, freight forwarders and their shipper customers. Senior leadership from a number of the government agencies were there, including the first public speech from CBP Commissioner Magnus, and some candid remarks by FMC Chairman Daniel Maffei.
There were a number of things, of which we made specific notes and wanted to share them with our Alba audience.
CBP is working furiously on withhold release orders, forced labor and the Uyghur Forced Labor Protection Act.
As you can see in the picture, CBP already had a short timeline from the time UFLPA was signed in late December until it becomes law on June 21st. Not being ready is not an option and between now and then, the agency is working furiously to building training, education and outreach materials both for the officers who must administer the law in the field, as well as for the trade and stakeholders whose imports and entries will be subject to the provisions of the law and will need to prove their innocence rather than their guilt.
CBP also spoke candidly to the work they are doing to improve operations and service within their Centers of Excellence and Expertise. The agency shared that since the agency’s creation in 2002 (from the Treasury Department) there have been no increases to non-uniform resources, which are essentially the trade-focused personnel up and down the agency. Their review yielded places for improvement in communication, budgeting and tools to do their jobs better.
The agency also has had to deal with an exponential increase in protests. In 2020, the agency received 200,000 protests, up from 40,000 in an annual year. They reported having worked through 86% of the 2020 protests and the number of protests received in 2021 was down by more than half, but still 80,000.
CBP Commissioner Magnus also detailed his vision and places for the agency to focus on, echoing many of the things mentioned by CBP staff in other sessions throughout the conference. Regardless of the redundancy, the fact that he traveled from Washington to Tucson where he previously served as the city’s Chief of Police was still notable.
FMC Chairman Daniel Maffei and LA’s Gene Seroka were candid with their challenges and opportunities.
The FMC Chairman used an analogy that many in the room could relate to – the problems in Southern California are not different from a plumber who is called not because a drain is blocked, but because a homeowner tried to shove twice as much water down the drain as it can handle, causing a flood. Home improvement metaphors aside, there are other moving parts beneath this including container availability, rail service levels and artificially constrained return rules, just to name a few things, but there is tremendous volume going through the ports.
Seroka said as much – citing a figure of just 53% truck appointment utilization. The problem with just saying that truckers should use more appointments glosses over full warehouses, carrier or terminal restrictions on dual-use trips or just a refusal of the terminals to receive containers at certain times altogether.
Those refusals have also led to many demurrage and detention claims – and finger pointing – between cargo owners, truckers, freight forwarders and steamship lines and terminals. Why, shippers rightly ask, should they have to be penalized because they can’t return equipment? It’s like a library being closed and charging for overdue fines when they won’t accept books back.
The FMC is looking to Congress for conference negotiation, agreement and final passage of a revised Ocean Shipping Reform Act. Original deregulation happened in 1984, Maffei reminded the crowd, when the average container ship was 5,000 TEU and there were two dozen steamship lines, including American-flagged operators. Today that number of carriers stands at ten or so, no American carriers and ships are 25,000 TEU. Obviously, he said, conditions have changed dramatically.
With this information and other knowledge in hand about CPSC, FDA, BIS and Fish and Wildlife, Alba remains engaged in the industry and focused on opportunities to hear from and learn from the people who regulate our business and that of our clients.
Stay tuned for the next event we attend and have a report from, most likely CBP’s Trade Symposium in July in Anaheim, California.
