ISF 10+2 Interim Final Rule went into effect January 23, 2009. Today, five months later importers are still struggling with the impact, costs and challenges of Importer Security Filing (ISF) compliance. The one year grace period for implementation is nearing its deadline. U.S. Customs and Border Protection (CBP) is scheduled to begin penalty enforcement against non-compliant organizations in seven months. According to the CBP, penalties will be capped at $5,000 per ISF transmission. It is unclear the maximum extent of these penalties and how they will applied CBP is accepting comments on specific elements of the ISF Interim Final Rule until June 1st.
The eagerness to comply along with overflowing attendance to CBP Outreach Events and other ISF discussion forums has been impressive. Large importers and well-known logistics providers have already implemented procedures to comply with the new ISF regulations. They eagerly signed software contracts with technology providers and customs brokers. Unfortunately, most did so without fully understanding what features they were getting and how this new software would be integrated into their existing ERPs. Meanwhile the majority of importers are still studying how and when they will begin their internal ISF processes of collecting, compiling and filing ISF data elements. The exposure to liquidated damages is imminent.
For those companies who are studying the costs and challenges of implementing Importer Security Filing ISF compliance, Logistics Wisdom offers the following guidance.
First, the new Importer Security Filing ISF regulations apply to United States ocean imports only. Do a study of your last twelve months ocean import activity. Determine how many ocean bills of lading (B/Ls) you had.
Second, ask both your custom broker and logistics provider about their ISF procedures. Gather as much information as you can.
Third, talk with several ISF software providers who have ISF 10+2 solutions. Ask for a demonstration of their software. Importer Security Filing ISF regulations require EDI transmission of the 10+2 data elements. Paper submissions will not be accepted. You will need access to ISF software to ensure compliance.
Fourth, every ISF 10+2 software provider offers a different solution. Some are stand-alone packages with just the basics to be in compliance. Others, are large costly applications embedded with Customs Brokerage and Inventory Tracking. Many solutions have features like built-in databases, templates to eliminate time-consuming repetitive data entry for repeat shipments, and shipment tracking. The best solutions are hosted SaaS real-time applications that offer customization, flexibility and can be easily updated and maintained.
Fifth, currently ISF 10+2 software providers are charging between $5.00 to .85 cents per ISF transaction with varying fees for filing amendments to the original ISF record. In addition, most software providers charge a flat setup fee. It is important to calculate the total spend cost prorated to each Bill of Lading. To calculate this: divide your annual number of ocean B/L’s into the software setup charge, then add-in the per transaction fees. Avoid software solutions with total spend cost of more than $35.00 per ocean bill of lading. Also, beware of off-shore foreign agents offering low-cost solutions without a secure CBP EDI connection.
Overall, Freightgate’s ISF Solution named Compliance-Trek! has one of the lowest cost per ISF transaction combined with user-friendly screens providing real-time visibility. This solution is quick to implement. The advantage is companies can get their ISF process up and running very fast. Compliance-Trek’ offers seamless integration into existing ERP’s along with special features such as event-driven alert functionality, RDV technology and daily updating with the latest U.S. Customs and Border Protection information. Freightgate’s customers say it is the best ISF 10+2 solution on the market.
Sixth, the biggest challenge to Importer Security Filing ISF compliance is obtaining timely accurate data from the overseas suppliers, logistics handlers and other intermediates. When selecting ISF software made sure the solution has RDV technology. RDV is known as Role Dependent View. RDV allows users only to view information and input data which is important to their participation in the ISF compliance process. Field offices and overseas suppliers view their part; carriers see their part; logistics handlers and forwarders see their part; and corporate management has end-to-end visibility of the entire ISF information collecting and filing process. RDV ensures data confidentially and security.
For the latest information on the Importer Security Filing requirements visit the Logistics Wisdom website: http://www.logisticswisdom.com
About Logistics Wisdom
LogisticsWisdom.com has compiled the most extensive information on the new Importer Security Filing ISF 10+2 regulations. The website portal offers the ISF Guide in a easy to understand format. It contains compliance information for both importers and carriers, along with Importer Security Filing software information and the latest ISF 10+2 news. Find the ISF Guide at: http://www.logisticswisdom.com