How to Deal with Vendors Not Filing ISF

Since the beginning of Importer Security Filing (10+2), US importers have struggled with complying and with the recent January 26th enforcement date, many are still trying to find the silver lining in their ISF compliance.  In a webcast sponsored by Integration Point, Virginia Thompson, Manager – Import/Export Operations and Trade Compliance at EuroMarket Designs, Inc. (d/b/a Crate & Barrel), shared how her company is making 10+2 work for them.

During the webcast there were several topics many people had questions about.  Over the next few weeks, we will be posting those questions and the answers from Virginia Thompson here.

These questions deal with getting other supply chain partners to cooperate with ISF regulations and filing time.

Q:  We have challenges getting our vendors, suppliers, shippers, etc to participate.  How can we put pressure on them to file ISFs?

A:  The reality is that not all parties are going to be as compliant as you’d like.  We have done a couple of things – added into our vendors operations guide a whole section about ISF and informed them if we have any CBP penalties for ISF filings that are due to late or inaccurate information from them, they are responsible for those penalties.  We have also implemented a late ASN filing fee, so if they send the ASN late, even if we don’t get hit with a penalty from CBP, we are going to charge them a small fee for late filing.  We know that even if we avoid a penalty from CBP, it’s not making our numbers look good.

Q:  How can you tell if the AMS BOL data timeliness is the fault of the supplier or forwarder?  How do you know who to go after?

A:  This is definitely something we’ve struggled with.  The only answer I can give is to have good communication and work with parties whom you trust.  At the end of the day, you have to develop a good relationship with your business parties.  We’ve had a number of conversations where the vendor comes to us and says the freight forwarder didn’t give me the BOL number and we ask them to prove it so they send us the email they sent.  And we look at the email and they’re right, the forwarder didn’t give the right BOL number.  So asking for documentation is important when you have a “he said, she said” situation.

The other thing we’ve worked up with a number of our freight forwarders is a specific form that we developed in Excel that they are to give our vendors with the appropriate information.  In many cases they’re also giving them the stuffing location and consolidator information so this form has those data fields on it.  We specifically designed this form not to capture all the other BOLs because if your forwarder is not automated, there may be 3 different BOL numbers out there (master bill, house bill in AMS and a house bill that prints on the BOL copy).  We took off the other BOL numbers that we didn’t want to see and only asked them to fill in the AMS house BOL number.  So one of the ways we are auditing this is by asking the forwarder to prove that they sent the form to the vendor and when, or asking the vendor to prove that the forwarder did not send it.  So we are really trying to get into the details and specifics of the situation.

Q:  Our fright forwarder is filing our ISFs, but ensuring accuracy of the data is something we need to own as the importer.  We are still having problems getting the forwarder to provide exception reports for shipments that don’t have ISF filed.  Any thoughts on this?

A:  I wish there was such a thing as an arrival notice for ISF because then you would know what’s out there that has to be filed for.  If you have a robust transportation management system that all your vendors use, then you’re fine.  We don’t have a system like that but we may look to implement it over the next couple of years.  For right now, you can look at the purchase orders because they have dates that goods are supposed to ship.  But, those dates may not end up being exact.  We have done a couple of things – we have some transportation providers that are starting to send us notices when something is laden on board and there is no ISF filed.  The only problem with this approach is that sometimes it’s a timing issue.  So we are spending a lot of time looking this up.  Another thing we’re doing is a manual final check at the point of receiving shipping documents (usually a couple of days after something ships) to make sure an ISF is filed.  Unless you have one forwarder who is moving all of your goods and you have them do your reporting, this is difficult.

Do you have questions about ISF enforcement?  Feel free to post your questions here using the comment box.  We will be happy to reply.  Also, if you missed the webcast, you can view it on-demand here.