H O M E          L A T E   B R E A K I N G   N E W S            P A S T   N E W S L E T T E R S

Fast Enrollment Notice

            As of August 10, 2006, 49 CFR 1572 requires Canadian and Mexican licensed truck drivers to possess a valid FAST card in order to transport placarded hazardous materials (HAZMAT) and explosives into the United States.

            If your shipment has been identified as containing HAZMAT and the driver is not in possession of a valid FAST card and does not meet the requirements of the regulation on November 13, 2006 your driver will no longer be allowed to transport HAZMAT into the United States.  Fast Application information and the locations of FAST enrollment centers are available at www.cbp.gov U.S. Customs and Border Protection 

For additional information, please contact us at M. E. Dey 414-747-7000 or email info@medey.com.

Customs sets truck e-filing

Fri Oct 27, 2006  By R.G. Edmonson
excerpted from The JOURNAL of COMMERCE ONLINE

WASHINGTON -- Advance electronic manifest filing for truckers will become mandatory on Jan. 25, 2007, at all ports of entry in Washington, Arizona, and northeastern North Dakota, Customs and Border Protection announced Friday.

As reported, the e-manifest system will become mandatory at other land border crossings in five groups after Customs gives 90 days notice.

The first ports that will require e-manifests are also the first locations where Customs introduced the system beginning in 2004. The e-manifest is one of the first operational components of the Automated Commercial Environment, Customs' new computer system.

After the official dates, Customs officers will exercise a period of "informed compliance," to educate truckers about their obligations without levying fines or penalties. At the same time, Customs will step up its education and outreach efforts.

The requirement will finally allow truckers to comply with the Trade Act of 2002, which requires advance electronic manifest reporting in all modes. Electronic manifesting was already available through the legacy Automated Commercial System for ocean, air, and rail carriers. Truckers were required to use paper-based manifest systems to report cargo data.

After the e-manifest becomes mandatory at the first group of ports, Customs will make it mandatory at ports in the following groups of states:

     1. Michigan, Texas, California, New Mexico, New York.
     2. Vermont, Alaska.
     3. Maine, Idaho, Montana.
     4. All remaining ports in North Dakota.
     5. Minnesota.

Look at these Air Export Rates! ...click here...

DeyTimes2006/Nov/Export Rates.pdf

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SHIPPING

Panamanians back canal expansion

Voters in Panama have overwhelmingly approved an ambitious project to expand the country's famous shipping canal.

In a nationwide referendum, people voted by a margin of four to one to back the $5.2bn plan, which involves building a new channel and new locks. Many modern container ships are too large for the 50-mile (80km) canal linking the Pacific and Atlantic.

The government hopes the scheme, which will double the canal's capacity, will help lift the nation out of poverty. President Martin Torrijos welcomed the result as celebratory fireworks lit up the sky. "Never in the history of the country have we Panamanians taken a decision of this magnitude," he said. "We have laid the foundation to build a better country."

Work on the expansion plan is due to start in 2008 and be completed in 2014. Panamanian authorities say it will generate thousands of jobs.

Traffic jam

The canal was completed in 1914 and, despite a series of upgrades over the past 92 years, has failed to keep pace with the growing scale of cargo ships. Forty ships a day - 14,000 a year - pass through it, about 5% of all world shipping. Traffic has become so heavy that vessels using the canal can face costly delays as they wait in a queue to pass through.

The Panama Canal Authority, which runs the waterway, had warned that if the canal was not expanded, business would be lost to other shipping routes, including the Suez Canal. Nicaragua, to the north, has proposed building its own canal between the Pacific and Atlantic oceans.

'Top source of income'

Panama's canal expansion has been the subject of nationwide debate, although voter turnout was low at about 40%. Supporters say it will bring widespread benefits to the country, but opponents argue it will add to Panama's debt.

In Panama City, voters wearing green "Yes" T-shirts far outnumbered opponents of the plan. "Voting 'No' is like closing the door on the canal," boat salesman Leonardo Aspira told the Associated Press news agency. "It's the top source of income for Panama and improving it means more money for the government and less poverty," he said.

But others have warned of corruption, and journalist Maribel Cuervo told the BBC the money would be better spent helping the poor. "So how come the government is thinking [about] the maritime, commerce, and the shippers and all that? We have people living in extreme poverty."

As many as 60% of Panama's three million people live in poverty, according to some estimates. Increased revenue from tolls is expected to cover some of the costs, but the plan still needs $2.3bn in loans.

BBC NEWS: 2006/10/23

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Nicaragua plans rival canal route

Nicaragua has announced plans to build a waterway linking the Pacific and Atlantic that would carry bigger ships than the existing Panama Canal.

President Enrique Bolanos said the new route - which would cost $18bn (£9.5bn) and take 12 years to complete - was needed for the rise in world shipping.

Panama is due to vote in three weeks on whether to expand its own canal, to let larger ships pass and cut queues. Nicaragua sought to play down fears its canal would compete for the same trade.

Speaking to Western defense ministers meeting in Nicaragua, Mr Bolanos called for international backing for a project he said would bring new economic life to the region. "The galloping increase in world business demands another canal in addition to a widened Panama Canal," he said.

Super-ships

If built, the Inter-Oceanic Nicaragua Canal would cut time and several hundred miles off the route from China to Europe or North America. It would also carry super-ships of up to 250,000 tonnes, significantly bigger than the vessels that currently pass through Panama. Nicaragua has long held dreams of its own canal and was considered a potential route before the Panama waterway was constructed. Panamanians will vote in a referendum on 22 October on whether to upgrade their canal, in what would be the biggest expansion since it opened in 1914.

Some modern ships are now too wide to go through the canal, and those ships that can pass have to queue for hours.

Under the proposals, wider locks and deeper and wider access canals would enable the canal to take ships carrying up to 10,000 containers. At present the limit is 4,000 containers. However, critics argue that when the work is finished in 2014-15, the Panama Canal will still be inadequate, causing it to miss out on business. The 80km (50-mile) waterway, which is used mainly by the US, Japan, China and Chile, currently handles nearly 5% of global trade.

 BBC NEWS:

Container Security Initiative Reaches Gold: Fifty Seaports Now Targeting and Pre-Screening Cargo Destined For U.S.
Tuesday, October 03, 2006

Washington, D.C. — United States Customs and Border Protection (CBP) Commissioner Ralph Basham announced today that with the stationing of CBP personnel at the Port of Freeport, Bahamas, 50 foreign seaports are now fully participating in the Container Security Initiative (CSI) program. CSI is designed to protect the stream of imports into the U.S. by deploying CBP personnel to critical foreign seaports in order to work with their foreign counterparts in targeting and prescreening cargo containers. The program began in January, 2002 as a response to the new terrorist threats to the ocean-bound containerized movement of goods.

“This milestone represents an extraordinary accomplishment,” said Commissioner Basham. “In the span of five years, a system has been created that protects and promotes the movement of goods into the U.S. Additionally, CSI holds forth the promise of protecting and promoting trade around the globe.”

The 50 fully operational seaports account for screening abroad about 82 percent of all merchandise imported into the U.S. CSI has deployed CBP officers to Europe, Asia, Africa, North, South and Central America, and the Middle East. CSI serves the interests of business and security. Under this program, containers destined for U.S. shores that are deemed high-risk are inspected at CSI ports, thereby securing then global trade lanes and facilitating the movement of goods.

CSI is a critical component of the government’s strategy to secure the Nation from the terrorist threat using maritime cargo containers. Twenty-eight customs administrations have committed to joining CSI and are at various stages of implementation.

CSI initially deployed agency personnel to the top 20 largest volume ports that export to the U.S. The program will continue to expand to strategic locations globally that ship goods to the U.S. and that have appropriate infrastructure and technology to participate in the CSI. By the end of 2007, CBP officials hope to expand CSI to 58 ports. This expansion would mean that approximately 85 percent of imported goods would be covered by CSI.

The World Customs Organization (WCO), the European Union (EU), and the G8 support CSI expansion and have adopted resolutions implementing CSI security measures introduced at ports throughout the world.

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SSA joins venture to build Vietnamese port

Mon Oct 16, 2006  The JOURNAL of COMMERCE ONLINE

Vietnam's Ministry of Planning and Investment last week licensed a joint venture to develop a US$160 million container terminal in the southern province of Ba Ria-Vung Tau.

The Cai Mep International Container Port will be developed by the joint-venture of SSA Marine Inc., the largest port operator in the U.S., and Sai Gon Port Authority, Hoang Van Nhuong, deputy director of Sai Gon Port Authority, told Viet Nam News.

The container port will be built about 75 miles east of Ho Chi Minh City and will be able to accommodate vessels carrying 6,000 TEUs each, Nhuong said.

He said Sai Gon Port had a 51 per cent stake in the 50-year project and SSA Marine 49 percent.

"We are doing our best to pave the way for construction of the terminal. It could begin next year and could begin operating in 2010," Viet Nam News quoted Nhuong as saying.

Note: This published material is copyrighted by Commonwealth Business Media Inc. for the exclusive use of our paid subscribers. Reproduction, retransmission, or reuse of this material in any form is forbidden without prior permission from CBMI. Reproduction, retransmission or reuse of this material without such permission is illegal.

 T R A N S P O R T A T I O N

TSA delays air-cargo rule
Wed Oct 25, 2006   The JOURNAL of COMMERCE ONLINE

WASHINGTON -- The Transportation Security Administration is delaying a broad range of deadlines for the air-cargo security rule it unveiled last May, giving the industry until mid-2007 to comply with portions of it.

Industry sources said the delays become official when the new schedule is printed in the Federal Register but that TSA is already telling various air freight groups about it.

The agency also said it would be taking public comment on the changes.

Although TSA is still saying the rule officially took effect Oct. 20, it is pushing back the dates for different cargo groups to submit official Security Threat Assessments, for forwarders to train their freight handlers under new security programs and for freight-related workers to go through criminal background checks and get new credentials.

Industry officials have warned for months they could not meet a series of deadlines kicking in this fall unless TSA first provided its long-awaited detailed security programs for each of seven industry groups. Privately, many said they expected the agency to wait until the rule was to take effect, and then delay it.

DHL facing UK strike
Tue Sep 26, 2006   By Bruce Barnard
The JOURNAL of COMMERCE ONLINE

LONDON -- DHL is facing a national strike in the United Kingdom which labor leaders warn will cripple the express company's operations during the peak shipping season in one of its biggest markets.

The GMB union said it will poll around 5,000 workers at DHL, a unit of Germany's Deutsche Post, over restructuring plans which it claims will result in sizeable job losses and force many other employees to accept casual, or part-time, contracts.

The union charges the jobs of up 3,000 workers could be affected by the restructuring. It claims the company plans to replace permanent jobs with 2,500 part-time staff and close 20 out of 85 local depots and four out of five of its national delivery hubs.

The union also rejected a three-year wage offer, claiming it was an effective "pay cut."

The strike threat emerged as logistics workers at the state-run National Health Service prepared for their second 24-hour walk-out Tuesday night to protest plans to transfer the service to DHL under a 10-year $3-billion contract. The deal is the single-largest contract secured by any Deutsche Post business.

The government says it will save $1.9 billion over the lifetime of the contract. But the unions claim it is part of a larger plan to privatize the state health system.

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U.S. ports tighten trucker regulations

WASHINGTON, Oct. 17 (UPI) -- The Safe Port Act signed into law by President Bush last week will have a significant impact on the trucking industry as well as shipping.

Fleet Owner reported on Monday that the legislation imposes stricter standards for the issuance of commercial driver licenses, or CDLs. Under the act's provisions holders of such licenses must be either U.S. citizens or permanent legal residents.

The legislation also strengthens anti-fraud measures for CDL programs and requires that all truckers visiting commercial ports undergo a background check prior to being given permission to work within the facility.

Within 90 days of the bill becoming law Oct. 13, the Department of Homeland Security must implement a threat assessment process for port truckers who don't have currently hold a hazardous materials endorsement. This process will include identity checks against terrorist watch lists and an immigration status check.

Holders of the so-called Hazmat licenses have been subjected to similar checks for two years.

The new legislation instructs the Department of Transportation to issue regulations that will require all CDL holders to demonstrate citizenship or legal presence and to tighten CDL standards, using fingerprinting or Social Security numbers to verify identities. The Secretary of Transportation must do this within 18 months of the bill's becoming law.

S E C U R I T Y

Security bill sails through Congress
Tue Oct 3, 2006   By R.G. Edmonson   The JOURNAL of COMMERCE ONLINE

WASHINGTON - Congress has overwhelmingly passed the legislation aimed at improving international supply-chain security while giving shippers that demonstrate the best security practices expedited treatment for their cargo. The House on Saturday passed the

Security and Accountability for Every Port Act in a 409-2 vote. The Senate approved the bill by unanimous consent. Rather than breaking new ground, the bill takes port security to the next step. Congress put its stamp of approval on the Customs-Trade Partnership Against Terrorism and the Container Security Initiative, even though they have been Customs and Border Protection programs for three years. Congress also gave C-TPAT members the criteria they will have to meet to get the "green lane," the term coined for cargo that is to get expedited clearance by Customs for being shipped through a highly secure supply chain. "This is a huge victory for our security, our economy and the American people. After five long years of work, my cargo security legislation is headed to the president's desk to be signed into law," said Sen. Patty Murray, D-Wash, one of the principal authors of the legislation. "This is a tribute to those who lost their lives on Sept. 11 and a promise to the American people that we will do everything in our power to ensure that such a tragedy never happens again."

Among other features, the bill:

-- Provides $400 million for port security grants.

-- Requires the installation of radiation detectors at 22 major U.S. ports by the end of 2007.

-- Requires the Department of Homeland Security to develop strategic plans for international supply-chain security, and protocols for post-incident resumption of trade.

-- Requires DHS to develop additional sources of cargo data for security screening.

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Jamaica to Implement Container Security Initiative and Begin Targeting and Pre-Screening Cargo Destined for the United States
Thursday, September 28, 2006

Washington, D.C. - United States Customs and Border Protection (CBP) Commissioner Ralph Basham announced today that the Container Security Initiative will become operational at the port of Kingston. CBP personnel will be stationed at the port to work with their Jamaican counterparts in targeting and prescreening cargo containers destined for the United States.

“This marks a step forward in the protection of goods moving from the Caribbean to the United States, as well as a step ahead for Jamaican and United States commerce,” said Commissioner Basham. “This program is a key instrument in CBP’s effort to protect and promote the expeditious movement of goods.”

CSI is operational in Europe, Asia, Africa, North, South and Central America, and the Middle East. Approximately 82 percent of all maritime cargo destined for the U.S. is screened at CSI ports. Unveiled in January 2002, CSI serves the interests of both business and security. Under CSI, containers scheduled for importation into the United States that are deemed high-risk are inspected at CSI ports. By “extending the borders,” CSI thus secures shipping lanes and facilitates the movement of goods.

CSI is a critical component of the government’s strategy to secure the Nation from the terrorist threat using maritime cargo containers. Twenty-eight Customs administrations have committed to joining CSI and are at various stages of implementation.

CSI initially became operational in the top 20 largest volume ports that export to the United States. The program will continue to expand to strategic locations globally that ship goods to the U.S. and that have appropriate infrastructure and technology to participate in the CSI. By the end of 2007, CBP officials hope to expand CSI to 58 ports. This expansion would mean that about 85 percent of imported goods would be covered by CSI.

Currently, there are 48 operational CSI ports worldwide. Kingston is the 49th seaport at which CSI has become operational.

The World Customs Organization (WCO), the European Union (EU), and the G8 support CSI expansion and have adopted resolutions implementing CSI security measures introduced at ports throughout the world.

ASIA

China's trade surplus likely to top 150 billion dollars this year
10-30-2006, SHANGHAI (AFP)

A Logistical Look At China
Robert Malone, 10.02.06,  Forbes

China is clearly the place to do business. But many analysts strongly believe that China also has significant problems, particularly in getting the goods it produces to market.

One factor that impacts heavily on Chinese logistics is the cost of moving goods through the many road tolls. Trucking a 40-foot container from Beijing to Shanghai can cost as much as $400 in tolls (along toll roads). The alternative is nontoll roads and endless congestion.

Another issue is trash. Part of becoming a major manufacturer and a nation of consumers is the dreadful increase in refuse production. China now produces 190 million tons of trash a year, and that outdistances even the U.S. This is just one aspect of pollution facing China. The air in many of the manufacturing regions is notoriously bad.

But despite the negatives, there are lots of positives, and for many companies the benefits create a good reason not just for being there but for increasing their presence.

Forbes.com discussed the China supply chain and logistics situation with Mark Hillman, the research director of AMR Research, a key member of their supply chain team who deals with supply chain risk, contract management, questions of procurement and sourcing; and Adrian Gonzalez of the ARC Advisory Group, director of their logistics executive council. He analyzes supply chain execution, performance management, transportation management and international trade.

Forbes: How do you see China with respect to supply chain strategies of those wishing to do business there?

Hillman: China has become an integral part of the supply chain strategy of a large number of companies that we work with. However, the thinking about the role of China sourcing, or the use of China-based contract manufacturing, has certainly matured in a significant way. Two to three years ago, it was almost a reflexive action for companies to say, "Our competitors are sourcing from China, therefore we must, or we won't be able to compete." Many of those same companies did not apply much thought to the management of China-based manufacturing or the total cost implications of goods sourced from China.

The major impacts of China sourcing are increases both in lead times and in lead time variability, which often leads to a requirement to stage more inventory at various levels of the supply chain to buffer against that increased variability, and that activity eats away at the cost benefits of the procured supply. One client of ours uses the rule of thumb that "if the cost difference of a part that I am considering for China sourcing is not at least 30%, I don't even consider it, because the cost benefit will usually be negated by inventory, freight and expediting costs and reduced agility for my supply chain."

How does any company entering China sidestep the inevitable local land mines?

Hillman: It’s critical to find a way to leverage local knowledge. This is certainly one of the major challenges, because the ranks of experienced Chinese middle managers are not as plentiful as the current need for that skill set.

To address this, many companies chose to locate a few critical employees to China to help manage processes and collaboration on the ground. However, the other issue that is nontrivial is the language issue.

Do you have any success stories of businesses that have entered the Chinese market or who manufacture in China?

Hillman: There are several companies who have made significant investments in and reaped tangible benefit from China. The common success factors that we have seen from these firms include taking a strategic look at the China opportunity. It's not just about sourcing cheaper goods, it’s about thinking longer-term about China’s role as a consumer of foreign-branded, locally manufactured products. Taking a total-cost view of China sourcing is critical to leveraging the expected savings and returns.

Carefully considering a segmentation strategy for sourcing is also critical, and hybrid approaches are often the best strategy. For products with stable demand patterns, China sourcing is a great option because of the longer lead times and stable replenishment demand patterns. However, products with highly variable demand are not normally great candidates for China sourcing unless they have a very high value to weight ratio, which makes the occasional use of air freight a viable option.

Gonzalez: It all depends on what you mean by "success." In terms of having the most experience working in China, Caterpillar (over 80 years) and Volkswagen (22 years) are good examples. Being early to market enabled Volkswagen to establish a strong brand and gain market share in the country, but the company is struggling a bit these days as lower-priced competitors, both domestic and foreign [e.g. Hyundai], have emerged. YUM! Brands is another success story. KFC and Pizza Hut are the two most recognizable brands in China according to a Nielsen survey, ahead of other brands like Coca-Cola and Nike. The company opened over 400 new units in 2005, bringing its total to over 1,900 KFCs and over 300 Pizza Hut restaurants. China accounted for $1.2 billion in revenues and $200 million in operating profit for YUM! Brands in 2005.

Are there cautions that you would suggest?

Hillman: You need to consider a total cost view of China sourcing or use of contract manufacturing. Another caution or concern that is commonly raised is concern over the protection of intellectual property.

Gonzalez: The political and economic landscape is continually changing in China. Commitments made today can be softened or pulled back tomorrow. Operating on yesterday’s reality can be risky and costly. If something is important to your company or industry [e.g., tariffs, intellectual property protection], engage with lobbying groups to make your voice heard.

What are the growth areas in China?

Gonzalez: In general, growth will come from industries where China significantly lags behind the West and/or are critical to long-term economic growth and social stability. Logistics certainly falls into these categories. Logistics costs as a percent of GDP are about double what they are in the U.S., and in order to keep pace with the economy, logistics services have to grow 2.8% for every 1% increase in GDP.

The pharmaceutical industry is another important industry for China, considering its large and aging population. The country is currently investing to modernize the industry and its distribution network. Finally, although China isn't exactly a poster child for the environment today, the country’s leaders realize that it must take action or else China, with its huge population and limited developable land, will ultimately become the world's largest garbage dump. Therefore, remanufacturing [i.e. reclaiming parts from used automobiles, machinery, high tech equipment and the like] will be a hot growth area in the years to come.

What should you know before doing business in China?

Gonzalez: China is not always the lowest-cost or best option for your supply chain. For example, if speed to market is more critical than cost, local sourcing and production may be better. We're certainly seeing this among "fast fashion" retailers like Topshop and H&M.

The same thinking applies to new product introductions, especially for first of a kind products that may experience quality issues in the near term. It's much easier and faster to replace products and resolve quality issues if manufacturing is performed locally, by workers who speak the same language as the engineers who designed the product, as opposed to fighting fires across time zones and languages. It's important to have local resources that can help you navigate through the web of regulations and differences in cultural norms.

Finally, China is not a homogeneous society. There are 56 ethnic groups in the country. Although the Han group accounts for 92% of the population, the other 55 ethnic groups still represent over 100 million people. Each of these groups has different customs, tastes and preferences.

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Taiwan to Implement Container Security Initiative and Begin Targeting and Pre-Screening Cargo Destined for U.S.
Tuesday, September 26, 2006

Washington, D.C. - United States Customs and Border Protection (CBP) Commissioner Ralph Basham announced today that CBP personnel will be stationed at the Port of Keelung to assist their Taiwan counterparts in targeting and prescreening cargo containers destined for the U.S. The deployment is part of CBP's Container Security Initiative (CSI).

“This adds an important new layer to our defense,” said Commissioner Basham. “It also represents a step forward for trade facilitation. Our goal is to protect and promote the movement of trade.”

CSI has deployed CBP officers to Europe, Asia, Africa, North, South and Central America, and the Middle East. Approximately 82 percent of all maritime cargo destined for the U.S. is screened at CSI ports. Unveiled in January 2002, CSI serves the interests of business and security. Under CSI, containers scheduled for importation into the U.S. that are deemed high-risk are inspected at CSI ports. By “extending the borders”, CSI thus secures shipping lanes and facilitates the movement of goods.

CSI is a critical component of the government’s strategy to secure the Nation from the terrorist threat using maritime cargo containers. Twenty-eight customs administrations have committed to joining CSI and are at various stages of implementation.

CSI initially deployed agency personnel to the top 20 largest volume ports that export to the U.S. The program will continue to expand to strategic locations globally that ship goods to the U.S. and that have appropriate infrastructure and technology to participate in the CSI. By the end of 2007, CBP officials hope to expand CSI to 58 ports. This expansion would mean that about 85 percent of imported goods would be covered by CSI.

The World Customs Organization (WCO), the European Union (EU), and the G8 support CSI expansion and have adopted resolutions implementing CSI security measures introduced at ports throughout the world.

S E M I N A R S

MWTA November Program
“The Competitive Advantage of Export Compliance
Register Now For The Next MWTA Event!

http://r.vresp.com/?FinnDigitalLLC/1a1520c7f2/730416/6baf01dc9e/7d64c1d

International Trade Event Calendar

http://www.commerce.state.wi.us/IE/IE-TradeShowCalendar.html

Joint Wisconsin/Minnesota Delegation to China Medical Equipment Fair
Zhengzhou, China October 28 – November 4, 2007

Benelux Business Matchmaker Mission
Amsterdam, the Netherlands  November 8-14, 2006

Export Sales Mission to Central America
Panama City, Panama and San Jose, Costa Rica  January 28 - February 2, 2007