News and Views for the clients of Universal Logistics Winter 2007
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  In This Issue...
  Why it pays to take control of your freight  
  What you need to know about Other Government Departments (OGDs)  
 

 I N D U S T R Y   R O U N D U P

 
  2007 HS Classification changes - one more value-added service
for clients of Universal Logistics
 
  NAFTA Reminder  
  Are you compliant with strict wood packaging regulations?  
  Security Compliance Loans available from Export Development Canada  
  U.S. Customs – E-Manifest at specific ports  
  Closure of Toronto Sufferance Truck Terminal  
  Canada invests over $430M for smart, secure borders  
 

 C O M P A N Y   C O R N E R

 
  Who is a leading expert on AMPS compliance, according
to Canadian Bookseller Magazine?
 
  Expanded Asia Service  
  At Your Service - Islay Fairholm, Supervisor - Airfreight Services  
   

International Transportation, Trucking, Customs Brokerage, Distribution
 

 

Why it pays to take control of your freight

Taking control of your freight is a proven way to cut freight costs and reduce transit times. But what does “taking control of your freight” mean? How much technical expertise is required, especially with shipments from Asia or other markets with unique business practices and government regulations? Why is proper insurance vital? And where do you go if you need some training? It’s simple. Just ask for our Freight ED Seminar. Here are just a few samples of what you can expect to learn.

Understanding Incoterms 2000.  Whether you are buying or selling, negotiating favourable commercial terms of sale is the most effective way to cut costs and reduce transit times.

The word “Incoterm” is an abbreviation of International Commercial Terms. Incoterms are the key element of international contracts of sale as they indicate whether the seller or buyer is responsible for:

  • arranging for carriage of the goods from seller to buyer
  • paying of freight charges
  • transferring risks from seller to buyer
  • performing export and import customs clearance

The wrong term is used almost 30% of the time, resulting in misunderstandings that inevitably lead to additional costs, most often for unwanted services.

For more information on Incoterms, visit the ICC Incoterms 2000 website at www.iccwbo.org/incoterms/id3045/index.html.

Make sure your contracts of sale include the appropriate trade term in conjunction with the words “Incoterms 2000”.

Using the proper Incoterm will ensure a clear division of responsibilities is established between seller and buyer.

Incoterms were first published by the International Chamber of Commerce (ICC) in 1936 and since then have been updated in 1953, 1967, 1976, 1980, 1990 and the current revision 2000. Including the phrase “Incoterms 2000” will avoid the application of any previous version of Incoterms.

Know when the reward of taking control of your shipment is worth the risk. Selecting the right Incoterm will allow you to get the most from your contract of sale during negotiation.

Many factors influence the Incoterm selection, but your own commercial practices and the type of goods will dictate whether:

  • the seller should refrain from undertaking any additional obligation
  • the seller is prepared to do more than to make the goods available to the buyer at the seller’s premises
  • the buyer’s bargaining position allows them to require the seller to undertake extended obligations
  • the seller is able to undertake additional obligations, and, in particular, to quote a more competitive price by extending his or her obligations (is the seller taking on more obligation to reduce pricing or should the buyer take more obligation?)

By controlling your freight, you can choose the best routing and service level for your business.

Time critical? If saving time saves you money, ensure your freight is moving on the fastest route available.

Cost the issue? Deferred services offer good savings.

Different carriers offer various service options, ranging from “no frills” to “executive treatment.” Choose what works best for you.

Insure Your Success

Don’t engage in risky business by employing unsafe stowage methods, failing to maximize load capacity or purchasing inadequate insurance. Eighty-three per cent of all cargo losses are preventable. Almost one-third of preventable losses are attributed to theft, pilferage and non-delivery.

Reduce the risk by putting a priority on proper insurance and packing.

When packing goods, take into account the natural strengths and weaknesses of the goods, and the means of transportation.

Consult a packaging specialist to establish detailed packing requirements for your product. This small investment can protect you from a big loss. Here is a small sample of what needs to be considered when packing your goods:

Commodity Typical Packing Probable Causes of Damage
You Need to Avoid
Confectionery Cartons or Cases Sweat, Heat, Theft
Canned Food Cases Bursting, Rusting, Label Damage
Machinery Cases, Crates, Unpacked Breakage, Rust, Oxidization
Textiles Cases, Bales Theft, Staining
Computers Specialized Packing Impact Damage, Distortion, Contact with Water

Don’t advertise your product to thieves and pilferers.

Avoid descriptive labeling, illustrations or prominent trademarks and brand names. Use code markings instead.

Register for Freight ED SeminarPut clear and complete delivery and handling instructions on at least three of the exterior package surfaces to ensure a successful delivery.

Proper labeling on your shipment will:

  • prevent tumbling and flipping of packages in search of instructions
  • aid in identification, and reduce stray parcels

To learn more or book your Freight ED Seminar, call Kitt Jacques at 905-882-4880.


 
 

What you need to know about Other Government Departments (OGDs)

Most importers know the duty and tax requirements of the goods they import, but did you know that many products fall under the jurisdiction of Other Government Department (OGD) regulations? Failure to comply with an applicable OGD could result in delayed freight, or, in the worst case scenario, refusal to allow goods into Canada.

Remember. Getting your products into Canada is just the first step in the process. Products that don’t meet consumer regulations will be pulled from the shelves. Here is a review of key OGDs:

Canadian Food Inspection Agency (CFIA)

The CFIA regulates specific product imports, based on commodity and also enforces a number of regulations on behalf of other OGDs. They are probably the most visible OGD to importers, with responsibility for Animals and Animal Products, Plant and Plant Products, Food, Wood Packaging and enforcement of Health Canada regulations.

The CFIA Automated Import Reference System (AIRS) is a searchable reference tool (utilizing the first 6-digits of the Harmonized System Tariff Classification number) that details import restrictions/requirements, based on commodity/end-use and country of origin.

CFIA - Automated Import Reference System (AIRS):
http://airs-sari.inspection.gc.ca/AIRS/airs_decisions.asp?l=E

CFIA - Animal and Animal Products Imports:
http://www.inspection.gc.ca/english/anima/impe.shtml

CFIA - Plant and Plant Products Imports:
http://www.inspection.gc.ca/english/plaveg/impe.shtml

CFIA - Food Imports:
http://www.inspection.gc.ca/english/fssa/impe.shtml

Health Canada

The regulations, imposed by Health Canada, cover a vast range of products and are geared toward overall health issues - Consumer Product Safety, Drugs and Health Products, Environmental Health, Cosmetics and Medical Products to name just a few.

Health Canada - Consumer Product Safety Regulations:
http://www.hc-sc.gc.ca/cps-spc/legislation/acts-lois/index_e.html

Food & Drugs Act:
http://laws.justice.gc.ca/en/F-27/index.html

Cosmetic Regulations:
http://laws.justice.gc.ca/en/F-27/C.R.C.-c.869/index.html

Industry Canada

A number of goods must be properly labelled to be offered for sale in Canada. These regulations fall under the following Industry Canada guidelines:

Textile Labelling Act:
http://laws.justice.gc.ca/en/T-10/index.html

Consumer Packaging and Labelling Act:
http://lois.justice.gc.ca/en/C-38/

CBSA - Marking of Imported Goods

Specific goods imported into Canada must be marked with the country of origin - failure to do so will result in AMPS penalties. CBSA Directive Memorandum provides the what, where and how of required product marking:
http://www.cbsa-asfc.gc.ca/E/pub/cm/d11-3-1/README.html

Other OGDs

Following are links to the other main OGDs that affect the import/distribution of goods into Canada:

Hazardous Products Act:
http://laws.justice.gc.ca/en/H-3/index.html

Natural Resources Canada - Guide to Energy Efficiency Regulations:
http://oee.nrcan.gc.ca/regulations/guide.cfm?text=N

Transport Canada - Vehicle Importation:
http://www.tc.gc.ca/roadsafety/importation/menu.htm

Department of Foreign Affairs and International Trade - Import Controls:
http://www.dfait-maeci.gc.ca/trade/eicb/whatsnew-en.asp

Department of Foreign Affairs and International Trade - Export Controls:
http://www.dfait-maeci.gc.ca/trade/eicb/military/milit_tech-en.asp

 


 
Industry RoundUp

2007 HS Classification changes – one more value-added
service for clients of Universal Logistics

On January 1, 2007, the Canada Border Services Agency (CBSA) implemented one of the most extensive revisions to the Harmonized Commodity Description and Coding System (HS), based on changes issued by the World Customs Organization.

These revisions affect thousands of individual tariff classifications. Some revisions are a direct one-to-one change, while others are a one-to-many change, i.e. one classification number has been redefined into two or more new classifications.

Following the issuing of the revised 2007 Customs Tariff by the CBSA on October 13, 2006, we created a dedicated team of our employees to handle the necessary conversion of tens of thousands of product database lines for our clients, one more value-added service offered by Universal Logistics. We are making every effort to make the transition as seamless as possible for our clients. You may be contacted if additional information is required to determine an applicable tariff classification.

The 2006 Customs Tariff contained 8,500 lines and 19,000 classifications. Five thousand of the 19,000 classifications have been impacted by the 2007 tariff. The 2007 tariff added 2,000 items, and 3,200 items from 2006 were deleted.

These changes represent the amendments to the Nomenclature appended to the International Convention on the Harmonized Commodity Description and Coding System (HS Convention), which entered into force on January 1, 2007.

The main sources of the amendments, the third set of major revisions since the Harmonized System was introduced in 1983, are:

  • Technological progress;
  • Change in trade patterns;
  • Clarification of texts to ensure uniform application;
  • Adaptation of the Nomenclature to reflect trade practice; and
  • Amendments related to the social and environmental fields, i.e., new subheadings to facilitate the monitoring and control of :
    • certain species of fish;
    • products of bamboo (INBAR (FAO))
    • pesticides (Rotterdam Convention)
    • ozone-depleting substances (Montreal Protocol)
    • products containing asbestos

To check the status of your database conversion, please contact Brian Rowe, General Manager - Customs Consulting Services.

NAFTA Reminder

To avoid penalty, duty is payable on shipments of goods if NAFTA Certificates for 2006 have not been replaced with valid 2007 Certificates. If you claim preferential treatment without a valid NAFTA Certificate, the shipment is subject to an AMPS (Administrative Monetary Penalty System) transactional penalty of $1,000 for a first infraction and escalating penalties for repeat infractions.

If a Certificate is obtained post import, a claim to recover the duties paid may be presented to the Canada Border Services Agency (CBSA) for up to one year after import. Duty is refundable, penalties are not.

If you are not compliant and don’t have the time to do the necessary follow-up with your vendors and CBSA submissions, take advantage of our NAFTA Management Service. For more information, please contact Brian Rowe.


Are you compliant with strict wood packaging regulations?

Under new wood packaging regulations (ISPM No. 15), which became fully enforced on July 5, 2006, all shipments entering North America that contain non-compliant wood packaging materials will be refused entry and the entire shipment ordered returned to origin. If ocean LCL shipments are involved, the entire container will be refused entry, not just the non-compliant portion.

Treated wood packaging imported into Canada must be marked with the appropriate ISPM stamp or accompanied by a Phytosanitary Certificate attesting to the treatment (note, a fumigation certificate alone is not valid). However, the Phytosanitary Certificate is valid for Canada only. Any shipments moving through the USA for destination to Canada must be fully compliant with the U.S. regulation, i.e. all treated wood packaging materials must contain the ISPM stamp. Any non-compliant wood packaging found by the U.S. Department of Agriculture Animal and Plant Health Inspection Service (USDA-APHIS) will be refused entry and ordered re-exported back to the country of origin even though the goods are not destined for the USA.

Universal's recommendation: Have all wood packaging materials (pallets, crates, dunnage, etc.) treated and stamped in accordance with ISPM No. 15. This is the best way to avoid any documentation issues related to improper Phytosanitary or fumigation certificates, while making sure your shipment is compliant with world-wide regulations.

Examples of ISPM stamps:

    Examples of ISPM stamps

The ISPM stamp includes the International Plant Protection Convention (IPPC) logo and the appropriate code, e.g. XX-000-YY.

    International Plant Protection Convention (IPPC) logo

The XX represents the International Standards Organization two letter country code for the country in which the wood packaging is produced; the 000 represents the official certification number issued by the National Plant Protection Organization to the facility producing the compliant wood packaging; the YY represents the treatment carried out (e.g. HT for heat treated wood or MB for methyl bromide treated wood).

In addition to having the wood stamped, the Bill of Lading should also contain the stamp information. For example, "Wood packing marked in accordance with ISPM No. 15 per IPPC stamp CN-001-HT".

Following are links to ISPM No. 15 Wood Packaging Regulations for Canada and the USA:

Canada:
www.inspection.gc.ca/english/plaveg/protect/dir/d-98-08e.shtml#4.0

USA:
www.aphis.usda.gov/import_export/plants/plant_imports/wood_packaging_materials.shtml

For more information, please contact Brian Rowe or David Lychek, Manager – Ocean Services, or call (905) 882-4880.


Security Compliance Loans available from Export Development Canada

If you are a Canadian company shipping to the USA and qualify for C-TPAT registration, Export Development Canada's (EDC’s) Security Compliance Loan may assist you to finance the upgrades required to meet security standards.

The EDC can provide a 3-year term loan for up to 85% of the specific costs identified, to maximum of $150,000, to finance C-TPAT registration.

Business Benefits

  • Maintain cash flow: The loan provides you with the ability to finance the cost of these upgrades.
  • Business growth: Compete and secure U.S. opportunities that now require suppliers to have obtained security clearance.
  • Faster and smoother shipments: Border clearance times are reduced, and your goods have access to the FAST lanes at the Canada/U.S. border.
  • Reduced risk of theft: Improved security to your place of work protects your establishment.

Qualification Criteria

To apply for the loan, you must:

  • Be a registered Canadian company
  • Be an Importer of Record into the United States or a Canadian Highway Carrier
  • Have been in business for at least 3 years
  • Agree to work with an EDC-approved advisory service to conduct a security gap analysis required as part of the loan application

More information on EDC Security Compliance loans.


U.S. Customs - E-Manifest Mandatory at specific ports

Effective January 25, 2007, E-Manifest became mandatory for truck carriers into the USA, under U.S. Customs Automated Commercial Environment (ACE) at all ports in Washington and Arizona, Pembina, Neche, Walhalla, Maida, Hannah, Sarles and Hansboro, North Dakota.

The remaining U.S. ports have been divided into five groups and will be phased-in in the following order:

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

More information on ACE and E-Manifest.


Closure of Toronto Sufferance Truck Terminal

The Toronto Sufferance Truck Terminal (TSTT) office at Kennedy Road and Hwy 401 in Scarborough closed on November 30, 2006.

Effective December 1, Customs services in the greater Toronto area were available at alternate CBSA offices only. The last remaining Customs Sufferance Warehouse in the GTA is Interport Sufferance Terminal (Dixie Road/401).


Canada invests over $430M for smart, secure borders

The Canadian government is investing $431.6M over the next five years to reinforce smart, secure borders. This funding will allow three key initiatives under the Security and Prosperity Partnership of North America (SPP): eManifest, Business Resumption and Partners in Protection to move forward.

The $396M investment in eManifest will provide the CBSA with electronic data that allows for 100 percent automated risk assessment before shipments reach the border. Highway and rail carriers will be required to submit electronically and pre-arrival all cargo, crew and conveyance information. This will allow the CBSA to have the right information at the right time in order to make informed decisions.

An investment of $24M will allow the CBSA to further harmonize and strengthen its business resumption planning with the United States, a necessary step to ensure trade keeps moving across the border in the event of an emergency.

Finally, border security will be further enhanced with an investment of $11.6M to strengthen the Partners in Protection (PIP) program .The PIP program will expand to maximize benefits for members and become harmonized with a similar program in the United States called the Customs-Trade Partnership Against Terrorism (C-TPAT).

For more information, go to the CBSA web site.

 

 
Company Corner

Who is a leading expert on AMPS compliance,
according to Canadian Bookseller Magazine?

Canadian BooksellersWhen the Book & Periodical Council needed insights on the implications of AMPS compliance for members of the book publishing industry, they went to Mark Glionna, Vice President – Client Relations for Universal Logistics. It was a good decision as Mark addressed key misconceptions and the implications of non action. For example, overages and shortages are among the “most abused and easiest to fix” discrepancies. If the exporter over-ships and you fail to report it, it can be considered smuggling – one of Custom’s biggest offences.

Read the entire story as published by the Canadian Bookseller magazine. Book our Compliance Made Easy seminar.


     Paul Glionna
  Paul Glionna
Vice President – Operations

Expanded Asia Service

Paul Glionna, Vice President – Operations visited Hong Kong recently to attend the grand opening of a new Hong Kong office by our long-time UK partner, World Transport Agency (WTA).

The new WTA office is good news for our clients that import from Eastern Asia, because WTA is now in a position to offer a level of service that matches the quality of WTA’s popular ocean consolidation service from the UK.

     Islay Fairholm
  Islay Fairholm
Supervisor – Airfreight Services

AT YOUR SERVICE

Islay Fairholm, the new head of our Airfreight Services department, joins the Universal team with over 10 years experience in international forwarding & logistics.

Islay, who will work out of our airport office, has worked for both a steamship line and airline (plus she has been an Aviation Instructor for three years), a unique mix of experience that will be of great value to our clients. She also has impressive formal training, including Civil Aviation/Airport Management at Georgian College, the education course offered by Canadian International Freight Forwarders Association, and certification from IATA Cargo and IATA Dangerous Goods.


 
   
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is produced quarterly for the clients of Universal Logistics. Reader comment and story ideas are welcome. Comments of general interest to all Route readers will, with the permission of the writer, be published. Copyright © 2007 Universal Logistics Inc. All rights reserved. Reproduction for any commercial use is strictly prohibited.

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is produced for Universal Logistics by Words at Work Advertising and Marketing (Tel: 905-940-6610). Editor: Bettina Scharnberg. Email: bscharnberg@universallogistics.ca While every effort has been made to ensure the accuracy of information contained herein, Universal Logistics accepts no responsibility or liability for errors or omissions. Written correspondence should be forwarded to:

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