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

Pre-qualify export customers

When selling to foreign customers, we recommend that your sales process pre-qualify customers beforehand.  This prequalification test concerns whether or not our government has prohibited doing business with the potential (or current) customer.  The Department of Commerce http://www.bis.doc.gov maintains several data bases of persons or entities that you may not export product to, or the person or entity has not been verified by our government and you need to call first prior to exporting.

Pre-qualification is not the only step in this process.  We recommend that you qualify the customer again when you secure a sale and finally again when you are shipping the goods.  M.E.Dey & Co, can assist you.  M.E.Dey & Co already verifies the non-inclusion of your customer at the time we are arranging for shipment.  We offer a service to our exporting customers for advance pre-qualification.  Make us a regular part of your sales effort!

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U.S. CUSTOMS

DANGER: IMPORTATION OF GOODS SUBJECT TO FDA

CBP has clarified ‘conditional Release’ for goods subject to FDA review.  Goods affected are food, drug, medical device or cosmetics.  When these goods are released by CBP, the importer has only a CONDITIONAL release.  FDA has a period of time after Customs release to compel CBP to order redelivery of the goods back into Customs custody.

In most cases, the conditional release period for determining FDA admissibility of any food, drug, device, or cosmetic, will expire upon the EARLIEST occurring of the following events:

• The date that FDA issues a notice of refusal of admission;

• The date that FDA issues a notice that the merchandise may proceed; or

• Upon the end of the 30-day period following the date of release.

Extension of conditional release period for sampling, etc. The FDA must issue a written or electronic notice of sampling, detention, or other FDA action to importer of record within 30 days of the release of the merchandise in order for the extension of the conditional release period to be valid.  

If CBP issues a redelivery notice and the importer fails to redeliver all of the merchandise, will result in the assessment of liquidated damages equal to three times the value of the merchandise involved.   This clarification will go into effect on May 1, 2007

10 + 2 CBP plan to go into effect in 2007

Customs and Border Protection (CBP) plans to start implementing their “10+2” proposal in September 2007.  The 10 + 2 program is a natural growth of the “24 hour manifest rule” under which all cargo inbound to the United States must first be electronically reported to CBP.  The “24 hour manifest rule” provides CBP the ability to deny transit of the cargo to the US or order an exam prior to loading.  The “10+2” proposal is named for the number of  additional data elements that CBP will require at least 24 hours before goods are loaded on an ocean vessel bound for the U.S. (this rule will also apply to Air and Truck imports – but with shorter time requirements). The data collected will be checked for inconsistencies, assisting CBP to indicate which containers may be linked with terrorists or criminals.  While this proposal is in the rule making stage and is subject to some change; there is no doubt that a plan substantially like what has been proposed will go into effect later this year. 

Proposed 10+2 data elements:

1. Manufacturer name and address

2. Seller name and address

3. Container stuffing location

4. Consolidator name and address

5. Buyer name and address

6. Ship to name and address

7. Importer of record number

8. Consignee number

9. Country of origin of the goods

10. Commodity Harmonized Tariff Schedule number (six digit)

In addition to the ten data elements, CBP will require ocean carriers to provide two additional data sets to complete the security filing: vessel stow plan and container status messages. 

10 + 2 WHAT YOU CAN DO TO PREPARE

A review of the data elements that will be required before your cargo can be loaded onto the plane, truck or vessel is worrisome to many importers.   At this time, CBP does not know how this data will be transmitted to them or who will be responsible to insure that it is done.  It is our opinion that CBP will place the responsibility for the collection and transmission of the data on the forwarder overseas.  But CBP will place the liability for the accuracy of the information on the importer!  Importer’s will play a strategic role in this new requirement.

M.E. Dey & Co has several initiatives in place that can assist importers as they prepare for this new future responsibility.  An examination of each new data element and our recommendation on a suitable response:

(1)           Manufacturer name and address:  Importers should prepare for the 10+2 program.  Importers should verify their relationships with their partners overseas.  Are you buying direct from the manufacturer or through an agent, distributor or even your own buying office.  M.E. Dey & Co will prefer to build our database ahead of time and invite you to share this information with us. 

(2)           Seller name and address:  Verify this relationship in a similar fashion as the Manufacturer name and address. 

(3)           Container stuffing location:   for full loads:  CBP may require that the container loading point is indicated (name and address!).  This address may be very different from the manufacturer name and address.  For consolidated containers:  The forwarder may be able to provide this information.  M.E. Dey & Co offers consolidation services and can easily supply this information on cargo routed through our company. 

(4)           Consolidator name and address:   Verify this relationship in a similar fashion as the container stuffing location.  Keep in mind that M.E. Dey cargo services make the capture of this information very easy. 

(5)           Buyer name and address:   At this moment, CBP is unclear on the definition of the buyer.  Imported cargo is often bought and sold while the cargo is on the high seas.  We believe that any effort here should be deferred until CBP is clear on the data element requirements.

(6)           Ship to name and address:  When this information is the same as the buyer name and address, there is little difficulty.  This will apply to drop ships, 3^rd party warehousing or even your remote plants.  

(7)           Importer of record number:  If you do not know this – we do.   

(8)           Consignee number:  CBP may require that you provide the ship to customer’s IRS#.  

(9)           Country of origin of the goods:  Country of origin is already a requirement for the imported goods.  As a result, country of origin must be an easy data element that the manufacturer or seller can provide.   

(10)         Commodity Harmonized Tariff Schedule number (six digit):  In theory, the use of the Harmonized tariff system around the world must then improve the consistency of duty classification.   In practice, it does not.  Manufacturers, sellers and the freight forwarders are often out of touch with the application of a correct classification.  Indeed in the end, it is the importer who must apply the correct duty classification.  We believe that this will continue under the 10 + 2 program.  M.E. Dey & Co offers a service of ‘advance’ classification of articles that you plan on importing.  We urge you to consider making M.E.Dey & Co. a vital link in the purchasing process.  Consider our Advance classification service.  There are additional advantages to our services.  We can advise on possible duty preference programs, possible sanctions, current special duty applications or duty suspensions, duty engineering alternatives.   In addition, we offer Purchase order management in many of our trade lanes.  Purchase order management can provide the tools to move all of the required data elements seamlessly through to our partner.  Call M.E.Dey & Co toll free at 800-635-5573 to learn more about our services for all importers. 

Prepare for the future.  Let us help you succeed.

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CBP readies C-TPAT for mutual recognition, 3rd party validators
04 Jan 2007, American Shipper

The United States plans in 2007 to internationalize its supply chain security program for importers by mutually recognizing for the first time similar programs in a handful of countries, according to a top U.S. Customs and Border Protection official.

The move would allow companies accredited in one country as having adequate safeguards for container shipments to receive faster U.S. customs clearance without having to go through multiple application and vetting processes, or wait until U.S. officers can arrive to do the job.

CBP also will outline its plans for outsourcing some supply chain validations to private sector contractors by mid-February, said Todd Owen, executive director of cargo and conveyance security.

Under the U.S. Customs-Trade Partnership Against Terrorism… CBP provides expedited customs clearance and other benefits to shippers that meet baseline criteria for strong shipment controls. The World Customs Organization, at U.S. urging, has passed a global security blueprint for customs administrations to follow that is largely modeled on U.S. programs, including C-TPAT. One of the goals is to convince customs administrations to start partnership programs with industry similar to C-TPAT.

U.S. officials must send teams overseas to verify the security practices of foreign suppliers. But they envision a global cooperative network whereby countries audit domestic shippers and share the results with trading partners so that customs agencies don't have to send inspection teams around the world to check supply chain security practices of each company. Multinational corporations in particular are pushing for a common approach to customs processes, including voluntary trusted shipper programs, so that companies do not have to comply with multiple security and data requirements in the nations in which they do business. Companies also favor a multilateral approach because they can gain more credits towards inspection-free status by expanding the universe of suppliers directly and indirectly participating in C-TPAT.

CBP will move “very quickly” towards recognizing supply chain security programs in a half-dozen countries, including New Zealand, Jordan, Canada, Australia and Sweden, that meet U.S. standards, Owen said during the agency’s Trade Symposium last month. These countries already have strong security partnership programs in place and have gained the confidence of U.S. officials.

CBP supply chain specialists have attended joint training sessions with customs officers in these countries, as well as conducted vulnerability assessments of manufacturing and transportation facilities under the oversight of the host customs agencies. CBP officers, in turn, have shadowed local customs officials conducting supply chain inspections, Owen said.

“We are getting very close to the point where now we need to map out what is the next step to mutual recognition because these programs exist. They are very comparable. We are very comfortable with the programs. And now we need to institutionalize that approach," he said.

In addition to relying on foreign customs agencies to validate whether foreign suppliers have systems in place to maintain shipment integrity, CBP will begin to implement a congressional requirement for a limited pilot test using third-party validators.

CBP will post an announcement on the FedBiz contracting Web site in mid-February outlining its qualification requirements and standard operating procedures for vendors seeking to conduct supply chain audits on CBP’s behalf, Owen said.

Agency officials stress that they are only interested in subcontracting supply chain inspections for areas such as China, where government regulators lack access, not as a way of supplementing C-TPAT resources to speed up validations. Owen added that private sector auditors would be used on low-risk supply chains where CBP doesn't have good intelligence.

Under the voluntary pilot test, C-TPAT members can opt to pay for certified inspection services to review their overseas security processes and facilities. During the pilot phase CBP will direct importers on which trade lanes they can use the third-party service.

Outside vendors seeking to qualify for C-TPAT business will need to maintain liability insurance, sign a confidentiality agreement, have a strong presence in the designated country, and a strong program for training the inspectors, among other requirements, Owen said.

CBP conducted 2,200 validations in 2006, compared to 183 when the program first started in 2003 and more than double the number completed in 2005, according to the latest CBP figures. So far more than 3,740 companies (66 percent of the program’s membership) have been validated as meeting C-TPAT criteria in key trade lanes, up from more than 3,500 companies in early November and 3,200 in mid-September. CBP expects to catch up and complete on-site vulnerability assessments for every one of the more than 6,000 certified applicants in the program sometime this year after recently reaching its hiring goal of 156 supply chain evaluators.

Mutual recognition is expected to reduce CBP’s workload and potentially speed up the validation process for importers and their overseas partners.

CBP conducted on-site audits in 74 countries last year, including first-time visits to facilities in the Russian Federation, Kenya, Botswana, Swaziland, Slovenia, Latvia, Egypt, Pakistan, Oman and the United Arab Emirates, Owens said. He reiterated that CBP is directing its verification resources to trade lanes that pose the most risk for having shipments compromised.

On Dec. 31, minimum-security criteria for customs brokers enrolled in C-TPAT went into effect. New entrants to the program will need to meet the baseline security standards and existing members will have 90 days to update their security controls for information technology, access, physical security, business partnerships, training, container security and other areas. U.S. Customs has previously issued elevated security standards for other industry sectors.

Owen said CBP will host its annual C-TPAT conference in New Orleans on April 4-6.

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USCBP - Custom user fee increase effective April 1
January 26, 2007

This document amends the rules dealing with customs financial and accounting procedures by revising the fees charged for certain customs inspectional services under section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and incorporates two technical corrections to the existing fee chart. Read more... (pdf)

Mandatory e-Manifest Filings Set to Begin in Washington, Arizona, North Dakota
(Thursday, January 25, 2007)

Washington, D.C. — Effective today, truck carriers entering the United States through all ports of entry in the states of Washington and Arizona, as well as the North Dakota ports of Pembina, Neche, Walhalla, Maida, Hannah, Sarles and Hansboro will be required to file electronic manifests through the Automated Commercial Environment (ACE).

ACE is the U.S. Customs and Border Protection trade processing system being developed to enhance national security and facilitate legitimate trade. It provides CBP with the ability to collect electronic manifests for trucks. It also provides the trade community with additional capabilities to comply with the Trade Act of 2002 requirement for the electronic transmission of advance cargo information to CBP.

This e-manifest mandate will be enforced by CBP in phases beginning with an informed compliance period of at least 60 days. During this period, CBP officers working in primary lanes at the designated land border ports will provide an informed compliance notice to truck drivers who fail to meet the requirement.

In phase 2, beginning no earlier than March 26, carriers arriving at e-manifest mandated ports will have to show proof that an attempt was made to submit an e-manifest in order to enter the United States. CBP officers may accept the ACE e-Manifest cover sheet as initial proof of this attempt.

In the third phase, beginning no earlier than April 26, carriers arriving at e-manifest mandated ports will be denied entry into the U.S. if an e-manifest was not successfully submitted to CBP for that trip. For egregious violations, a monetary penalty ($5000 for the first offence and $10,000 for subsequent offences) may be issued to the driver.

“The implementation of a mandatory e-manifest policy is just one of many steps CBP is taking to fulfill its twin goals of ensuring border security and facilitating legitimate trade,” said Lou Samenfink, executive director for CBP’s Cargo Systems Program Office. “With advance access to truck cargo information, CBP officers are able to pre-screen trucks and shipments, and dedicate more time to inspecting suspicious cargo without delaying the border crossings of legitimate carriers.”

For more information on CBP’s enforcement plan, please see the ACE e-Manifest/Trade Act Enforcement Plan. ( ACE e-Manifest/Trade Act Enforcement Plan )

Future requirements of e-manifest filing for other land border ports of entry will be announced through the Federal Register at least 90 days in advance of implementation.

For information regarding ACE, please e-mail CBP at CBP.CSPO@dhs.gov or visit the CBP Modernization section. ( ACE: Modernization Information Systems )

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Information from US Customs
22 Jan 2006, CSCB

Information from US Customs on Forthcoming Changes to HS Tariff, effective 3 February 2007.

The US Customs and Border Protection web site has numerous pages about conversion to the WCO 2007 Harmonized Tariff Schedule; these are found on the CBP web site, at:
http://www.customs.gov/xp/cgov/import/
communications_to_trade/world_customs_org/

U.S. RELEASES NEW TARIFF CODES
January 29, 2007  JOC

Customs and Border Protection has published the 2007 Harmonized Tariff Schedule of the United States (HTSUS).

The codes, incorporating the extensive World Customs Organization revisions, have been published in the Federal Register, and will become effective in 30 days.

The final "draft" of the 2007 HTSUS is now available on the Web site of the United States International Trade Commission, at http://www.usitc.gov/tata/hts/bychapter/index.htm. The new version is currently labeled "draft" because the effective date is Feb. 3.

According to Pisani & Roll, an international law firm, Customs may informally provide importers with a grace period of approximately two weeks beyond the effective date.

In the interim, importers should rely on the Preliminary 2007 HTSUS, which is based on the 2006 tariff nomenclature, and also is available on the ITC website at http://www.usitc.gov/tata/hts/bychapter/index_old-01032007.htm

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SHIPPING

A kite to pull a cargo ship
December 4, 2006 8:23 AM PDT

It won't replace propellers, but an oversize paraglider-shaped kite could help cut fuel costs for ocean-going vessels as it also reduces their emissions. The airborne gear, from a Hamburg, Germany-based company called SkySails, has been tested on smaller ships over several years and now is being fitted for a cargo ship from Beluga Shipping, headquartered in nearby Bremen. The maiden voyage for the 130-meter MV Beluga SkySails is expected in 2007.

The kite for the cargo ship spreads out over about 160 square meters (190 square yards). Unlike the sails of sailing ships, which hang from masts and are only a short distance above the decks, the SkySail runs 100 to 300 meters up and out in front of the ship on a long tether.

"Ours will be the first commercial use in cargo shipping," Verena Frank, project manager at Beluga, told the Reuters news agency. "There will be some teething pains." If the SkySail works well enough, the shipping company plans to add the system one ship at a time to its fleet of some 40 vessels.     Credit: SkySails

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Shippers eye Mexico port as West Coast gateway

Thu Jan 11, 2007   By Bill Mongelluzzo   The JOURNAL of COMMERCE ONLINE

MONTEREY PARK, Calif. -- Importers in the United States are looking for gateways to supplement traditional West and East Coast ports, and the Mexican port of Lazaro Cardenas provides a cost-effective alternative, according to an executive with Kansas City Southern Railway.

The Kansas City, Kansas-based carrier daily operates two northbound and two southbound trains between the Pacific Coast port of Lazaro Cardenas and the border crossing at Laredo, Texas. The intermodal services are especially competitive in the Texas market and the U.S. Southeast, said Theodore Prince, vice president, sales and marketing for intermodal and international business.

Three ocean carriers -- APL, Maersk Line and Hapag-Lloyd -- offer service between Asia and Lazaro Cardenas, with one or two additional services anticipated later this year, Prince said. Until now, cargo destined for Mexico's industrial triangle of Monterrey, Guadalajara and Mexico City has taken up most of the space on the vessels, although some retailers and importers have tested service through Lazaro Cardenas to the U.S. interior.

Congestion problems such as occurred at U.S. West Coast ports in 2004 generated interest among shippers in alternative gateways in Mexico and Canada. Lazaro Cardenas is an established port in Mexico with rail service to the U.S.; a container terminal is scheduled to open later this year at Prince Rupert, Canada, about 500 miles north of Vancouver, with intermodal service to the U.S. Midwest to be provided by Canadian National.

Retailers are hedging their bets in the trans-Pacific as they seek to spread their shipments out over a number of gateways. "They are saying, 'We want to have options,'" Prince told the Los Angeles Transportation Club Tuesday.

In the short-term, shippers see Lazaro Cardenas as a cost-competitive alternative to West Coast ports. Importers can save "a couple of hundred dollars" per container shipping through Lazaro Cardenas compared to Los Angeles-Long Beach, Prince said.

Also, large importers and retailers are looking ahead to July, 2008, and expiration of the International Longshore and Warehouse Union's contract on the West Coast.

In the longer term, importers believe it will be impossible for U.S. ports to handle all of the projected growth in cargo, and they see Mexican and Canadian ports as viable alternative gateways.

Prince compared Lazaro Cardenas to LA-Long Beach 20 years ago. It has naturally deep water, plenty of waterfront land for container terminals, a large local population, and rail access to the U.S. interior.

Cargo security is not a problem in Lazaro Cardenas. Each U.S.-bound container is x-rayed three times -- once at the port, on the Mexican side of the border and finally on the U.S. side, Prince said. The rail border crossing in Texas is congestion-free, he said.

Lazaro Cardenas will not compete directly with West Coast ports for most markets in the interior U.S., Prince said. The transportation community has invested too much money in infrastructure and processes to abandon those gateways, he said.

The natural markets for intermodal-through service from Lazaro Cardenas are Texas and southeastern distribution centers such as Atlanta. Intermodal service to Houston is 400 miles shorter via Lazaro Cardenas than LA -Long Beach, Prince noted.

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SECURITY

GE UPGRADES CONTAINER SECURITY SOLUTION
January 30, 2007   JOC

GE Security announced Tuesday the release of the latest version of its in-container security CommerceGuard System.

The CommerceGuard container security device is positioned inside an intermodal container and registers any opening of the container door. Fixed and handheld readers at critical points along the supply chain collect container status from the device and report it using the CommerceGuard Information Network.

Version 3.0 includes new readers; automated XML data feeds to enable tracking, and a secure protocol for wireless messaging. The Bradenton- Fla.-based company said the new package enhances security by encrypting all data communications and authenticating all hardware transactions and authorized users.

“The supply chain’s weakest link is the transport of containers from the factory point of origin to a foreign port," said Randy Koch, president and chief executive of  the CommerceGuard business unit. "[The solution] addresses this vulnerability today by detecting and reporting security breaches while the containers are in-transit.”

GE said the CommerceGuard Information Network is established in 14 international seaports, and is slated for additional expansion through ports in 2007.

The CommerceGuard 3.0 products are available worldwide through a global business collaboration of GE Security, Mitsubishi Corp., Samsung Corp., and Siemens Building Technologies.

House passes security bill
Thu Jan 11, 2007

A long-promised bill that sharply increases security requirements for airlines and ports passed in the U.S. House of Representatives on Jan. 9.

The bill is the first passed under new Democratic majority in the House and the first of six measures promised for the first 100 hours of the 110th Congress.

By a roll-call vote of 299-128, a bipartisan majority, representatives moved toward enacting recommendations of the 9/11 commission. The bill would require screening of all U.S.-bound containers at foreign ports, as well as more stringent screening for cargo on passenger flights.

More federal funds would be distributed on the basis of need. Airport screening workers would have collective bargaining rights.

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Concerns Raised Over Container Inspection Requirements

After House passage of legislation mandating 100% inspection of all cargo containers inbound to U.S. ports, a chorus of industry voices have raised concerns about the cost and practicality of implementation. Delays in cargo processing in an age of "just in time" delivery, the potential resistance of foreign and domestic ports, shippers, and governments has raised the specter of a slowdown or a reduction in the amount of cargo shipped through U.S. ports. In the view of many industry observers the more deliberative pace of the Senate offers some hope to mold the current proposal contained in H.R. 1 into a more manageable process. Also, criticism from the White House, the Office of Management and Budget and the Department of Homeland Security about costs and feasibility added to the hurdles that the House proposal must face before being enacted into law.

BROKERS HIT ALL-INSPECT BILL
January 29, 2007    JOC

The National Customs Brokers & Forwarders Association of America on Thursday said it opposes tougher cargo security measures in legislation recently passed by the House of Representatives.

The Washington-based brokers group in a statement said it opposes the requirement by the bill, H.R. 1, for 100-percent inspection of all cargo carried by passenger aircraft by 2009.

It also criticized the bill's requirement that all U.S.-bound containers be scanned at foreign ports.

"The Association's primary concern with the 100-percent inspection requirement is that such an approach will diminish the effectiveness of resources by spreading them too thin while simultaneously significantly slowing the flow of commerce thus increasing the cost of goods and services," the statement said. "If legitimate air cargo cannot flow expeditiously, then the public will believe that there is little reason to use this mode of transportation for just-in-time delivery. A much better solution is to require that air cargo inspections be risk-based to focus resources on areas where there is some likelihood of uncovering terrorist activity."

The group said the legislation would have a deleterious on the pilot Secure Freight Initiative. "Moving the initiative immediately from being a pilot into implementation ignores the wisdom of the bi-partisan SAFE Ports Act: the purpose of a pilot is to measure a program's effectiveness -- H.R.1 does not permit the government to correct deficiencies in any substantial way should the pilot prove unworkable."

The group is working with other organizations to "mitigate" the measures in the Senate, which is expected to introduce its version of security legislation later this month.

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ASIA

U.S. bans luxury exports to North Korea
By Carol Giacomo, Diplomatic Correspondent

WASHINGTON (Reuters) - The United States on Friday banned exports of luxury items to North Korea, including jet skis, iPods, jewelry and fancy cars, in an effort to pressure Pyongyang's communist leaders by denying their reputed high-end taste

A rule issued by the U.S. Commerce Department details the kinds of luxury goods Washington plans to block under U.N. trade sanctions mandated after Pyongyang conducted a nuclear test on October 9.

Commerce Secretary Carlos Gutierrez had issued a press release discussing the luxury goods list in November, but publication of a formal rule was delayed until Friday so U.S. negotiator Chris Hill could pursue talks aimed at persuading North Korea to end its nuclear programs, U.S. officials told Reuters.

Hill's talks, which took place recently in Berlin, appear to have made some progress, prompting predictions by Hill and Asian officials that six-country negotiations could soon resume.

A senior Russian official was quoted by the Itar-Tass news agency as saying the six-party negotiations -- involving the two Koreas, the United States, Russia, China and Japan -- are likely to meet in the period from February 5 to 8.

Some U.S. officials and Republican sources described a vigorous Bush administration debate, with Hill strongly resisting formal publication of the rule, fearing it would give Pyongyang another excuse to jettison the talks.

Responding to North Korea's nuclear test on October 9, the U.N. Security Council voted to ban military supplies and weapons shipments -- sanctions already imposed by the United States.

It also prohibited sales of luxury goods but left each country to define such items. Japan included beef, caviar and fatty tuna, along with expensive cars, motorcycles, cameras and more. Many European nations are still working on their lists.

The U.S. list would disallow items including Rolex and other high-end watches, designer clothes, furs, diamonds, laptop computers, racing cars, yachts, and iPods.

Other U.S.-banned items includes cognac wine, beer and snowmobiles.

The measures are targeted to hurt North Korean leader Kim Jong-il and the elite families he favors with luxury goods in effort to maintain their loyalty, in a country where most of the population lives in poverty and outside help is needed to stave off starvation.

U.S. officials argue that if the elites directly feel the sting of international outrage, it could loosen Kim's control of the government.

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Vietnam should speed transportation upgrades, says new NOL report

Thu Jan 25, 2007 By Peter T. Leach   The JOURNAL of COMMERCE ONLINE

Vietnam must accelerate the development of its transportation infrastructure and logistics systems if it is to realize its potential as one of the fastest growing economies in the world, according to a report by Neptune Orient Lines released this week.

The report, compiled with consultant Frost & Sullivan, notes Vietnam's economy is forecast to grow by around eight percent annually for the next decade.

To cope with this expansion, however, the Southeast Asia nation must address several major challenges such as improving its infrastructure and systems for transportation and logistics.

Business-friendly government policies have led to increased inflows of foreign direct investment, the report finds. Initiatives to further integrate with the world economy, including Vietnam's recent membership in the World Trade Organization, are likely to accelerate trade growth even more.

"The success Vietnam has seen is just the beginning," said NOL Group President and Chief Executive Dr. Thomas Held in Ho Chi Minh City Wednesday. "It has the potential to become a global trading power and a leading Asian logistics and shipping hub. But with great opportunities come great challenges. Vietnam's development must be supported and facilitated by cargo-handling facilities and related infrastructure of international standard. If it fails to do this, inefficiency, high costs and congestion could become a painful reality."

The report suggests that the relative inefficiency of Vietnam's air and ocean transportation system, as well as landside infrastructure such as warehouses and distribution facilities, is hampering the growth of efficient logistics practices in the country.

Logistics outsourcing is nascent and highly fragmented with around 800 operators, mainly local operators with limited coverage, service ranges and IT capabilities.

The report adds that the Vietnamese government is introducing measures to improve logistics infrastructure and the participation of international operators, "but change will take time. "

Vietnam joins World Trade Organization
Thu Jan 11, 2007   By Alan Field  The JOURNAL of COMMERCE ONLINE

After a twelve-year wait, Vietnam on Thursday officially joined the World Trade Organization as the trade body's 150th member.

Vietnam's membership was approved in November.

"This is an historic day for Vietnam and the rules-based global trading system," said U.S. Trade Representative Susan C. Schwab. "It marks the beginning of a new era in the political and economic relationship between our two countries -- an era that will witness expanding economic opportunities and cooperation. We welcome Vietnam...and regard this step as an important milestone in the continuing process of expanding commerce and raising living standards around the world."

Vietnam, with a fast-growing economy and domestic market of over 82 million people, will be required to slash tariffs and open previously closed sectors of its economy to foreign investors. Vietnam will also be required to enhance transparency in government processes and increase economic freedoms. While many of the changes will take effect immediately, others will be phased in. Foreign banks, for example, won't be allowed to open their own branches until April 1.

In the final step of the bilateral accession process with the United States, President Bush on Dec. 29 granted Vietnam Permanent Normal Trade Relations.

In Hanoi, Foreign Ministry spokesman Le Dung told reporters: "This is a momentous event in the international economic integration of Vietnam, showing Vietnam's deep and comprehensive participation in the global trading system."

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HOLIDAY NOTICE

FEBRUARY 17-19, 2007 - CHINESE NEW YEAR'S DAY

The PRC is closed down for one entire week (18-26 Feb,2007) in celebration of the Chinese new year holiday in China.

We recommend that shipments be expedited because right now, space is extremely tight & we expect vessels to be full the week prior to Feb 18 & after Feb 26.

Keep in mind that some cargo, particular LCL, not shipped prior to the holiday, may not ship until the end of Feb as it takes factories a week to “ramp up” after a week long holiday.  This is why it is important to ship any urgent freight well in advance of Feb. 18 as the alternative may be airfreight.