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October 2019

News and Views for the clients of Universal Logistics

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Changes to Release Prior to Payment Bond Amounts


The Canada Border Services Agency (CBSA) recently conducted their annual review of importer security in order to ensure release prior to payment bonds meet the requirement of being equal to the average monthly duties and taxes owed over a 12-month period.

This review resulted in a number of importers receiving notices to increase their bond amounts as, over the last 12-month period, they were subject to surtaxes paid on USA origin goods which were subsequently terminated on May 19, 2019.

The CBSA has confirmed they are now reviewing the security requirements of those importers who did pay surtax last year and will be contacting each with further instruction.  The deadline for posting release prior to payment security for 2019-2020 has now been extended until November 29, 2019.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Incoterms 2020 – What has changed


Incoterms, officially known as International Commercial Terms, were developed by the International Chamber of Commerce (ICC) to facilitate trade and have become a globally recognized standard.  Their main purpose is to prevent confusion in foreign trade transactions by clarifying the obligations of buyers and sellers.  Incoterms are currently in their 8th version (Incoterms 2010).

Incoterms 2020 were released in early September 2019, and will come into effect on January 1, 2020.  As per the ICC, Incoterms 2020 reflect the ever-changing nature of today’s international trade system.  During the drafting process, several revisions were made in order to ensure that the Incoterms rules clearly and accurately reflect current trade practices.

The key changes being implemented for Incoterms 2020, are as follows:

DAT is changed to DPU

  • In Incoterms 2010, DAT (Delivered at Terminal) means the goods are delivered once unloaded at the named terminal.  Feedback received was that users wanted an Incoterm that allowed delivery not just at a terminal.  Therefore, the reference to terminal has been removed to make it more general and the Incoterm was changed to DPU (Delivered at Place Unloaded).

Change of insurance under CIP/CIF

  • The Incoterm CIP (Carriage and Insurance Paid to) means that the seller delivers the cargo to the carrier and also pays for the carriage and insurance to the named destination.  CIF (Carriage Insurance and Freight) is the same, however, it can only be used for maritime transport (delivery is onto a ship and the destination needs to be a port).
  • Under Incoterms 2010 the seller is obliged to provide insurance for the buyer that is equivalent to Clause C (Institute of Cargo Clauses).  This is a basic level of insurance, and is applicable to both CIF & CIP terms.
  • Under Incoterms 2020, CIF keeps the same insurance requirements (i.e. Clause C), but CIP has increased the insurance required to Clause A (All Risk – Institute of Cargo Clauses).  The reasoning behind this is that CIF is more often used with bulk commodity trades and CIP (as a multimodal term) is more often used for manufactured goods.

For more information, contact David Lychek, Manager – Ocean & Air Services.

Customs Valuation – Assists

Determining the value to be declared to Customs for imported goods is generally very straightforward – it’s the price you pay to your shipper for the goods.  However, in a number of transactions the declared value must be increased by any amounts provided by or on behalf of the buyer to the producer – these additions are referred to as “Assists”.

Customs Valuation regulations into Canada and the USA vary slightly, but are based upon the World Trade Organization (WTO) requirements.  As the dollar value amounts of Assists are generally not provided to the producer, these amounts will not be stated on import invoices resulting in imports being under valued.

What Is an Assist?

In basic terms, an assist occurs when an importer of foreign merchandise provides something of tangible value to the producer or supplier of that merchandise.  The effect of providing this something makes the cost of production less than what it would have been had the producer obtained the something from third-party sources.

The following are treated as Assists:

  • Materials, components, parts, and similar items incorporated in the imported merchandise.
  • Tools, dies, molds, and similar items used in the production of the imported merchandise.
  • Merchandise consumed in the production of the imported merchandise.
  • Engineering, development, artwork, design work, and plans and sketches that are undertaken elsewhere than in the country of import and are necessary for the production of the imported merchandise.

How Are Assists Declared?

Generally speaking, assists must be apportioned in accordance with Generally Accepted Accounting Principles (GAAP).  In cases where the entire value of the assist is for a single importation, the entire assist is declared on that importation.  In cases where it is for several importations, it can be declared on the first importation, or it can be apportioned over all the imports.

In cases where the total volume of imports is unknown when the importation begins, then a method of apportionment must be decided upon and followed until the entire value of the assist has been declared.  As with valuing the assist, the method of apportioning the assist must be legally correct and must be available to Customs upon request.

Determination of Assists is a very complicated process and requires consultation with your customs broker in order to ensure you will not be subject to any fines or penalties in the event of a Customs Audit for undervaluation of imported goods.

For detailed information concerning Assists refer to the Canada Border Services Agency (CBSA) and U.S. Customs & Border Protection (CBP).

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

U.S. container inspections reveal mis-declared
cargo and poor stowage

Loading containers on ship

During recent random inspections, the U.S.-based National Cargo Bureau (NCB) discovered a number of ocean containers with mis-declared and improperly packaged cargo, during recent random inspections.

The NCB, which normally inspects export containers leaving the U.S., offered to do free inspections on a sample of containers, including imports.  A mixture of containers carrying dangerous goods and general cargo, both imports to and exports from U.S., were examined and the findings were quite shocking.

Of the 500 containers inspected, 55% failed inspection with one or more deficiencies; 49% of the import containers containing dangerous goods failed; and 38% of export containers containing dangerous goods failed.

Of the import containers with dangerous goods, 44% had problems with the way cargo was secured, 39% had improper placarding and 8% had misdeclared cargo.  Of the export containers with dangerous goods, 25% had securing issues, 15% were improperly placarded and 5% were mis-declared.

For containers failing inspection, fixing the problem may be very costly.  Documentation may have to be revised and a container may have to be retrieved from a terminal and repackaged – not to mention the potential fines or penalties that could be levied by federal authorities and or steamship lines for mis-declared cargo.

The findings clearly illustrate the magnitude of the problem as well as the value of cargo inspections.  It is imperative that shippers clearly understand the importance of accurate declarations as well as proper stowage, as they will be liable for any issues that result from non-compliance.

For more information, contact David Lychek, Manager – Ocean & Air Services.

Canadian government & industry spend big on West Coast ports

Container Lift

There has been an influx of investment from industry players, both private and public, to improve efficiency and remove bottlenecks in a port-and-rail system under pressure to run smoothly, while at the same time trying to deal with increasing east-west trade under Canada’s new trade deals with Europe and Asia.

The ports of Vancouver and Prince Rupert give credit to the billions of dollars in private and public investment spent on a series of expansion projects that are forecast to supply enough capacity until about 2030.  The underlying challenge is keeping up with increasing cargo volume levels, which continue to grow at a rate that is putting pressure on supply chains.  The concern that government and industry have is that they may not be doing enough, and fast enough, to stay ahead of ever evolving growth in cargo volumes and ensure the network functions optimally.

Industry players are debating what to build where – and with whose money – to avoid a long-term capacity crunch that could hurt Canada’s ability to compete with West Coast terminals in the United States.

To meet that demand and to set Canada up for future success, the private sector and ports need to collaborate to keep goods moving.  Port cities that make the wrong decisions can see terminals close as other locations pick off their business.

For more information, contact David Lychek, Manager – Ocean & Air Services.

Global Spotlight Quiz
Global Spotlight
This National Park includes an
area called “Devil’s Golf Course”.

Global Spotlight Quiz

Follow the clues and name one of the hottest place on Earth

  • The name of this place is relatively new and came from a group of lost, would be miners who lost their way in 1849 and fought the elements, hunger and thirst for two gruelling months before making their way out.
  • Despite its foreboding name, life abounds with 1000 species of plants (including 50 that are found nowhere else in the world), 300 species of birds, 51 species of mammals (including bighorn sheep and mountain lions), 36 species of reptiles and a handful of amphibian and fish species including one of the world’s rarest fish, able to live in 93º F salty waters, lethal to most other fish.
  • A place of extremes, covering 3.4 million acres with scorching desert, sand dunes, salt flats and tall snow capped mountains.
  • This place had the highest recorded temperature in the world at 134º F in July 1913.  In  July 2018 it had the hottest month on record with an average temperature of 108.1º F, including overnight lows.
  • One of the driest places in the country, with fewer than 2 inches (5 centimeters) of rainfall annually.
  • Home of the roadrunner who achieved international fame in the Looney Tunes TV show.
  • To survive this place you would need a supply of one gallon of water daily.
Quick Tip

Quick Tip

Understand why AMPS is so important

The Administrative Monetary Penalty System (AMPS) was introduced by the Canada Border Services Agency (CBSA) effective October 7, 2002.  The master penalty document outlines 181 contraventions and the responsibility for these contraventions has been downloaded to the Canadian importers and exporters.

Since 2002, the CBSA has issued penalties totalling over $63 million in fines under AMPS.

Effective April 1, 2019, as a result of the Auditor General of Canada’s report of 2017, which deemed AMPS penalties being too low to improve compliance levels, the CBSA increased a number of AMPS penalties related to commercial trade.

Take the time to review all 181 contraventions.  Focus on the areas where your company may be susceptible and evaluate your procedures.  The best way to avoid penalties under AMPS is to invest in compliance.

Keep informed of the changing requirements of AMPS.  For more information, visit and sign up for our Customs Compliance Made Easy seminar, or visit the CBSA website.

Pamela Randolph, Ocean Services Import & Export Cleveland
Pamela Randolph,
Ocean Services
Import & Export Cleveland

At Your Service: Pamela Randolph, Ocean Services Import & Export Cleveland

Pamela Randolph’s ability to multitask while at the same time providing excellent customer service, makes her a key member of our U.S. freight operations team in Cleveland, Ohio, and someone who can be relied on to ensure cargo moves smoothly.

Pamela excels at handling various modes of transport, and is a great example of the benefits of cross training.  She currently handles both ocean import and export cargo, and also has experience coordinating air shipments and domestic truck moves.

Pamela can be reached by phone (440) 360-7850, ext. 106 or by email.

October 2019

is produced monthly 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 ©
Universal Logistics Inc. All rights reserved. Reproduction for any commercial use is strictly prohibited.

Route is produced by Universal Logistics. Editor: Bettina Scharnberg. Email: 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:

Universal Logistics Inc.
125 Commerce Valley Drive West
Suite 750, Thornhill, Ontario L3T 7W4
Tel: 905-882-4880    Fax: 905-882-2250
Attention: Bettina Scharnberg
Universal Logistics

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