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Transportation News Bulletins - Logistics

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Time Runs Out For Transport Lobbyists
Friday, 18 September 2009 00:00

On Oct. 1, authorization for the current U.S. transportation bill is set to expire. A $500 billion replacement bill sponsored by Rep. James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, is now the focus of intense lobbying by special interest groups.

The current $286 billion bill was signed into law by President Bush in August 2005 after two years of debate that produced 6,371 earmarks including a notorious $223 million “Bridge to Nowhere” in Alaska.

According to the Washington DC-based Center for Public Integrity (CPI), to get their own projects included in the new bill, 1,800 special interests employing 2,100 lobbyists have spent $45 million on lawmakers this year—equivalent to the lobbying cost of climate change.

The CPI has identified lobbyists represent 475 U.S. cities and 160 counties in 44 states; more than 55 local development authorities; 65 private real estate development companies; 95 transit agencies, 25 metro and regional planning organizations; 75 organizations from highway builders and car manufacturers to interstate coalitions and trucking interests; 65 construction and engineering groups; 45 rail organizations, 50 shipping companies and port managers; and 140 universities.

With $500 billion to be allocated, the CPI says the process has attracted many well-connected lobbyists including 24 individuals with experience as either House Transportation Committee staff or as personal staff to Transportation Committee members; a dozen individuals with experience on one of the three Senate committees working on transportation policy or as personal staff to committee members; 36 former House and Senate staffers with experience working on appropriations committees or as aides for members who served on those committees; former presidential appointees to various positions in the Department of Transportation, including former Secretary James Burnley; and 20 former members of Congress, including one-time House Transportation Committee members Robert Borski, William Lipinski, and Bill Brewster.

But despite the lobbying frenzy, the CPI says the real problem is money.

The U.S. government pays for national transportation via the Highway Trust Fund, which raises 90 percent of its revenue from a federal gas tax. The levy has not been adjusted since 1993 and in Sept. 2008 the fund ran out of cash. Since then, Congress has transferred $15 billion from the Treasury to make up the shortfall. Mean while the Congressional Budget Office says it will take another $100 billion between 2010 and 2018 just to cover projected expenses.

With Congress facing a $trillion deficit and less than two weeks to go before another run to the Treasury, the CPI says nobody is sure where the money for the new bill is going to come from.

Air Cargo World, 9/18/2009

AAFA statement on decision to impose tire import duties
Friday, 18 September 2009 00:00

American Apparel & Footwear Association (AAFA) President and CEO Kevin M. Burke released the following statement after the decision by the Obama Administration to impose tariffs on imported tires from China.

“With the US economy on the verge of recovery, we strongly urge our leadership to follow through on G-8 commitments to not erect protectionist barriers that would open the door for larger trade frictions and, more importantly, put our economic recovery in peril.

“Although we expected the Obama Administration to pursue tough enforcement of current trade laws, placing tariffs on imported tires from China will likely lead to inquiries about other imported goods, including textile and apparel products.

“While it should be politically difficult for any group to even ask for new import taxes on clothing, or any other life necessity, bought by hardworking families during these trying economic times, we are also confident that such a petition would not factually substantiate the need for tariffs on clothing.

“However, we are concerned that the affirmative decision on tires raises political expectations that additional protectionist measures on these and other products could be easily granted which could result in an international trade war and jeopardize our economic recovery. As we are already seeing with this case, and with earlier episodes involving Mexican trucking, protectionist measures by the United States often trigger retaliation from trading partners. In fact, China has already indicated they will retaliate against the United States for this decision.

“The United States should lead by example. By limiting how we apply the safeguard measures that were put into place upon China’s accession to the World Trade Organization, we will signal to our international trading partners that the United States remains open for business.”

(AAFA) American Journal of Transportation, 9/18/2009

Hazmat regulation must maintain safety without unnecessary burdens
Wednesday, 16 September 2009 00:00

The following is the opening statement of US Rep. Bill Shuster (R-PA), Railroads, Pipelines and Hazardous Materials Subcommittee Ranking Republican, from a hearing entitled “Concerns with Hazardous Materials Safety in the US: Is PHMSA Performing its Mission?” The Pipeline and Hazardous Materials Safety Administration (PHMSA) oversees federal programs and regulations to ensure the safe movement of hazardous materials by all modes of transportation.

“The Department of Transportation Inspector General has raised legitimate concerns about PHMSA’s handling of special permits and approvals for hazardous materials transportation practices that fall outside of the normal regulations. We want to make sure that PHMSA is following its own regulations and doing an adequate job vetting companies before issuing permits and approvals. I look forward to hearing from PHMSA on how they plan to improve this process, including an explanation of the action plan they have developed.

“I also look forward to hearing from the Institute of Makers of Explosives about advances in the safety of transporting blasting materials essential to the mining and construction industries. Given the inherent risks associated with transporting materials designed to explode, the industry has an outstanding safety record. The use of Multipurpose Bulk Trucks (MBT’s) allows the industry to move a wide range of materials necessary for blasting operations all in the same vehicle, thereby reducing the total number of vehicles carrying hazmat over the highways. Remarkably, these MBT’s have never caused a single injury or fatality in transportation.

“We need to strike a balance in hazmat transportation policy between making sure that appropriate safeguards are in place, while at the same time being careful that we do not unnecessarily burden the workhorse industries of our economy.

“Safe and efficient transportation of hazardous materials is enormously important to the national economy and our way of life. Twenty-eight percent, nearly a third, of all ton-miles of annual freight on our roads, rails, waterways and air cargo is considered a hazardous material. These shipments include everything from heating oil, gasoline, fertilizer, drinking water chemicals, and medical materials to diagnose and treat the sick. It is absolutely essential that we be able to safely and quickly deliver a wide range of potentially dangerous materials without unnecessary bureaucratic interference.

“Hazmat carriers have a remarkable safety record. The percentage of movements of hazardous goods resulting in an injury or fatality is an astonishing statistic. I’ve said it before, but about 0.00002% result in an injury, and about 0.0000014% of movements result in a fatality. There are about four times as many deaths caused by lightning strikes annually than by hazardous materials transportation accidents. So this is really a remarkably safe industry considering the volume of goods that flow in commerce. “Of course, when you are talking about moving dangerous goods, there is going to be risk, and there are going to be accidents. There is no way to completely eliminate risk. What we need to do is make careful choices about where we can best use our resources to minimize these risks, while maintaining an effectively functioning system. If we regulate too much, we risk knotting the system in so much red tape that it will cease to be effective for its users, and could damage the economy and our society.”

American Journal of Transportation, 9/16/2009

Customs reauthorization focuses on trade over security
Monday, 14 September 2009 00:00
Pending bill reverses trends of last eight years.

Ever since the United States was hit by terror attacks in September 2001, many international trade practitioners have complained that the reaction of the federal government emphasized the role of Customs in providing cargo security at the expense of facilitating trade.

A bill currently pending before the Senate Finance Committee, dubbed the Customs Facilitation and Trade Enforcement Reauthorization Act of 2009, could put trade facilitation back in the mix if it should become law. The committee plans to take up the bill once it is finished with its health insurance reform measure, perhaps in three or four weeks.

The bill includes several provisions that should gladden that hearts of traders, such as those pertaining to the Customs-Trade Partnership Against Terrorism. There are also a few potential worrisome provisions in the measure.

Key provisions of the bill would create several new positions and offices within Customs & Border Protection (CBP) and the Department of Homeland security focusing on Customs facilitation and enforcement. The legislation would also mandate the assignment of additional commercial enforcement officers at the nation's 40 busiest ports of entry, authorize $300 million a year for the Automated Commercial Environment (ACE), streamline the duty drawback process, and create pilot programs at several land border crossings on the northern and southern borders at which Customs would be open 24 hours a day. The proposal would also reverse current policy by allowing CBP to use data from Importer Security Filings for commercial enforcement purposes.

"There is likely to be strong industry support for many provisions in the bill," said Jon Kent, the Washington legislative representative of the National Customs Brokers and Freight Forwarders Association of America. "There appears to be a renewed sense in the bill of the importance of Customs for commercial operations. For so long this has been dwarfed by the agency's attention to security-related issues." Kent emphasized that the NCBFAA has yet to take an official position on the legislation.

Michael Ford, vice president for regulatory compliance at BDP International in Philadelphia, viewed the appointment of a commissioner for trade facilitation and enforcement in a positive light. "It's not that Customs hasn't worked enough in those areas," he said. "But it is better to have this designation, so that if someone has an issue they know where to go. Having a commissioner focused 100 percent on trade will be a good thing."

Kent was somewhat skeptical of the reorganization provisions in the bill. "Some people may be concerned about the effect this will have on the smooth operation of the agency in the short term," he said. "They have been through reorganizations before and may be concerned about going through another."

Amy Magnus, a district director with A.N. Deringer in Champlain, NY, is particularly pleased with the creation of the position of trade advocate. "It shows Congress wants the agencies to work closely with industry," she said. "The bill also mentions coordinating with the World Customs Union. We need to stop thinking about trade in US-centric terms. Trade is global and we need to harmonize and coordinate efforts globally."

More worrisome are the bills provisions allowing security filings, the 10+2 data, to be used for commercial enforcement purposes. "There is a level of confidentiality in the security information," said Kent. "There is a concern about how the information will be deployed across the agency for commercial purposes." In other words, some may fret that sensitive information will become public.

Magnus is confident that the agencies in question can keep a secret. Anyway, she said, "I could never understand how they could not use this data for commercial targeting because the two could be linked."

Her concern relates to the technicalities of trade law that prevent anyone but licensed Customs brokers from filing Customs data. The Importer Security Filings (ISF) can and are being filed by others, such as freight forwarders.

"With the nuance of ISF data being used for commercial targeting, we need to rethink all of that," said Magnus.

For Ford, the benefits of Customs' access to security data far outweigh the small risk of leaking that data. "The data being collected is giving Customs a better picture of what is being shipped in a container," he said. "It could help Customs make better decisions over time on which companies and shipments to target."

Ford also believes that use of the data could streamline the importation process by facilitating a Customs account management process. "We have heard over the years that Customs want to treat importers as an account with centralized management regardless of where goods enter the US," he said. "This data could provide Customs and the importer a better understanding of the goods coming in."

The draft legislation also provides for streamlined procedures for duty drawback. "This is the first simplification of drawback procedures undertaken in years," said Kent. "These came about through discussions between CBP and the private sector through the Trade Support Network and an agreement was reached 18 months ago. The provisions will make it easier to claim refunds, allowing companies to reduce staffing and alleviating the general burden of applying for drawbacks."

Ford emphasized that reform of duty drawback procedures should be linked to the further development of the Automated Commercial Environment (ACE). In other words, electronic drawback processes need to be put in place.

ACE may be getting a boost in the draft legislation, as the bill would authorize spending of $300 million per year on the continued development of ACE. ACE has been developed in fits and starts over the last several years and funding for the project has been a problem. The legislation's authorization provides a ceiling for funding and is not equivalent to the actual appropriation of funds.

ACE received appropriation of $265 million during the current fiscal year, noted Kent, a marked decline from previous funding levels. "ACE has fallen behind schedule," he said, "and Customs has had problems setting priorities. The NCBFAA is working with customs to define those priorities. The authorization in the bill is more of a statement in support of ACE than in actually providing funding for the completion of ACE."

"Three-hundred million dollars sounds huge but there is still so much left to be done," said Magnus. "ACE may never be finalized but we need to be able to get to a point where we have an end-to-end commercial system which captures all of the information required by Customs and other government agencies. It is not clear to me whether there is enough funding in the act to get us there."

Magnus is more excited about the proposal to open Customs operations at some land crossings 24 hours a day. "Those who make our livings at the land borders would love to be able to file statements, pay duties, and talk to commercial specialists 24/7," she said. "Trucks don't stop operating at 5 o'clock when the customs house closes. When you have a commercial or operational issue after hours, you have to wait until the next day. This is an example of the emphasis in this bill on genuinely facilitating trade."

The big picture for Magnus is just that: bringing trade facilitation up to par with security concerns. "The totality of the bill has a clear focus on trade and that is refreshing," she said.

American Journal of Transportation, 9/14/2009

Customs reauthorization bill would enhance C-TPAT benefits
Monday, 14 September 2009 00:00

The Customs reauthorization bill currently being considered by the Senate Finance Committee would firm up the requirements and benefits for participation in the Customs-Trade Partnership Against Terrorism (C-TPAT).

C-TPAT was initiated in the aftermath of the terror attacks of September 11, 2001 and was designed to provide benefits such as expedited shipment clearances to importers, intermediaries, and carriers that voluntarily upgraded their security infrastructures and practices.

The ultimate benefit of C-TPAT, the so-called "green lane" for top-shelf C-TPAT members has never come about, according to Amy Magnus, a district director at A.N. Deringer.

"The bill requires Customs to come up with defined benefits for participation in C-TPAT," she said. "CTPAT was originally designed and implemented for security. Now we're talking about a partnership program that focuses on the trade part of compliance." The bill would require Customs & Border Protection (CBP) to submit a report to Congress by the end of 2010 describing the trade benefits provided to the three tiers of C-TPAT participants, and the additional benefits for each tier that have not yet been implemented.

Benefits to C-TPAT members under the bill may include:

  • Entry into a Customs Facilitation Partnership Program that would facilitate entry of merchandise entry into the US,
  • Targeting and clearance benefits, and
  • Taking participation into account when assessing commercial risk.

CBP would also be required to establish minimum requirements for participation in the partnership program, focusing on the applicant's compliance history.

Non-compliance would lead to suspension of some or all partnership benefits. If a participant fails to meet partnership program requirements, CBP would be able to suspend all or some benefits until the participant brings itself into compliance.

American Journal of Transportation, 9/14/2009

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