CBP's Proposed Rule on 10+2 for Maritime Cargo (Part X - Cost, Comments, Projected Effective Date)

CBP states that this additional information, which would be submitted by way of a CBP-approved electronic data interchange system¹, will further improve the ability of CBP to identify high-risk shipments in order to prevent the smuggling of terrorist weapons into the U.S. and ensure cargo safety and security.

This is Part X, the final part of a multipart series of summaries of this proposed rule, and highlights the estimated costs of 10+2, information on submitting comments, and the projected effective date of 10+2.

10+2 Proposed Rule is "Economically Significant"

CBP states that the 10+2 proposed rule is considered an "economically significant" regulatory action under Executive Order 12866 because it may result in the expenditure of over $100 million in any one year. Accordingly, this proposed rule has been reviewed by the Office of Management and Budget (OMB). (See ITT's Online Archives or 12/27/07 news, 07122705, for BP summary of OMB completing its review of the 10+2 proposed rule.)

$20 to $38 Estimated Increase in Costs per Imported Shipments

The increase in costs of imported shipments is estimated to range from $20 to $38 per shipment, depending on the discount rate applied.

$12 to $84 Estimated Increase in Costs per Vessel Trip due to Vessel Stow Plan

For the incremental costs of providing vessel stow plans to CBP, it is estimated that the total number of non-bulk vessel trips affected will be approximately 414,000. The increase in costs of a vessel trip due to sending of the vessel stow plan is estimated to range from $12 to $84, depending on the discount rate.

$4,000 to $730,000 Estimated Increase in Costs per Carrier (Over 10 Years) due to CSMs

For the incremental costs of providing container status messages (CSMs) to CBP, it is estimated that the total number of large carriers importing containerized cargo affected is 74. The increase in the total costs per carrier for sending the CSMs for the 10-year analysis period (2008-2017) is estimated to range from $4,000 to $730,000, depending on the discount rate.

10+2 May Increase Time Consolidated Shipments are in Transit, Etc.

The 10+2 proposed regulation may increase the time shipments are in transit, particularly for shipments consolidated in containers. For such shipments, the supply chain is generally more complex, and the importer has less control of the flow of goods and associated security filing information.

Foreign cargo consolidators may be consolidating multiple shipments from one or more shippers in a container destined for one or more buyers or consignees. In order to ensure that the SF data would be provided by the shippers to the importers (or their designated agents) and is then transmitted to and accepted by CBP in advance of the 24-hour deadline, consolidators would be able to advance their cut-off times for receipt of shipments and associated SF data. These advanced cut-off times would help prevent a consolidator or carrier from having to unpack or unload a container in the event the SF for one of the shipments contained in the container is inadequate or not accepted by CBP.

For example, consolidators could require shippers to submit, transmit, and/or obtain CBP approval of their SF data before their shipment(s) are stuffed in the container, before the container is sealed, or before the container is delivered to the port for lading. In such cases, importers would likely have to increase the times they hold their goods as inventory and thus incur additional inventory carrying costs to sufficiently meet these advanced cut-off times imposed by their foreign consolidators.

Written Comments on Proposed Rule due by March 3, 2008

CBP states that written comments on the proposed rule are due by March 3, 2008 and may be submitted on all aspects of the proposal. Comments that will provide the most assistance will reference a specific portion of the proposal, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. CBP also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposed rule.

Comments may be submitted via the Federal eRulemaking portal: http://www.regulations.gov (via docket number USCBP-2007-0077), or by mail to Border Security Regulations Branch, Office of International Trade, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229 (see proposed rule for specific submission instructions).

(Note that the above comment instructions reflect two corrections made by a CBP January 8, 2008 Federal Register notice.)

2007 Assessment Projected an Effective Date of April 1, 2008

According to the December 2007 Regulatory Assessment and Initial Regulatory Flexibility Analysis for this proposed rule, the projected effective date for the final rule on 10+2 was April 1, 2008. The report added that as of that date, approximately 11 million import shipments conveyed by 1,200 different carrier companies operating 50,000 unique voyages or vessel trips to the U.S. would be subject to the new 10 2 requirements.

¹The current approved electronic data interchange systems for the importer SF are the Automated Broker Interface (ABI) and the Vessel Automated Manifest System (AMS). The current approved electronic data interchange system for the vessel stow plan and CSMs is vessel AMS. CBP states that if it approves a different or additional electronic data interchange system, CBP will publish notice in the Federal Register.

(See ITT's Online Archives or 01/15/08 news, 08011505, for Part IX of BP's summary on this proposed rule, with a link to Parts I - VIII.)

CBP contact - Richard Di Nucci (202) 344-2513

CBP proposed rule (D/N USCBP-2007-0077, FR Pub 01/02/08) available at http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E7-25306.pdf

The Regulatory Assessment and Initial Regulatory Flexibility Analysis (dated 12/03/07) available at http://www.cbp.gov/linkhandler/cgov/import/carriers/security_filing/import_ruling.ctt/import_ruling.pdf

CBP correction notice on submission of comments (FR Pub 01/08/08) available at http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E8-50.pdf)