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Excellent Rail Industry and Port Trends Article

Rail Industry Trends Article
Panama Canal expansion spurs railroads, ports to prepare for new business

Rail Industry Trends

— by Julie Sneider, assistant editor

As the $5.25 billion Panama Canal expansion nears its 2015 completion to allow supersize, "Post-Panamax" cargo ships to pass through on their way to markets farther north, eastern U.S. ports and a number of railroads are gearing up for an anticipated increase in international intermodal traffic in the coming years.

East and Gulf Coast port authorities are developing and deepening their harbors in preparation for the influx of giant ships, and eastern railroads are building or expanding on-dock rail facilities, building intermodal centers or advancing other plans to accommodate an expected increase in freight traffic.

The aim of the multi-stage Panama Canal expansion project, which began in 2007, is to enable giant cargo ships coming from Asia to pass through the 51-mile canal's channels. The construction entails two sets of locks, one on the Pacific and one on the Atlantic side of the canal, with each lock containing three chambers with three water reutilization basins, according to the Panama Canal Authority's website.

The project also involves widening and deepening the navigation channels in Gatun Lake, and deepening the Culebra Cut, which required four dry excavation projects. In mid-March, the canal project reached a milestone when dredging work was completed at Culebra Cut, the narrowest point in the canal's navigation channel.

When the entire expansion is completed, it will be the largest project taken on by the canal since its 1914 opening and will double its capacity, according to canal officials.

Among railroads anticipating a bump in intermodal traffic after the bigger canal opens is Florida East Coast Railway L.L.C. (FEC), the only rail provider to south Florida's ports. Based in Jacksonville, Fla., the 351-mile regional is working with PortMiami andPort Everglades to build on-dock rail facilities as part of their expansion programs, which FEC execs view as a big part of the railroad's strategy to grow intermodal traffic.

"We're prepared to handle the cargo, and we've got plenty of capacity," says FEC President and Chief Executive Officer James Hertwig.

Getting Miami Back On Track

In Miami, FEC is part of a plan to reconnect the port with freight-rail service, which was suspended after a hurricane in 2005. The public-private effort has involved reconstruction of a 4.4-mile port lead, which was the original rail mainline to the port; rehabilitating the bascule bridge that connects the port to FEC; constructing an on-port rail facility; and expanding FEC's rail yard to make room for more traffic.

FEC is contributing $9 million to the $50 million project, with the remainder coming from federal, state and port sources.

"By summer 2014, we'll have the on-dock rail facility fully operational, which means that from PortMiami we can hit 70 percent of the American population in a matter of days," says PortMiami Director Bill Johnson. "It will allow us to double stack containers directly to Jacksonville in under nine hours, and connect to Norfolk Southern Railwayand CSX directly to the heartland of America."

Two additional PortMiami projects are under way as part of $2 billion in capital improvements to accommodate the bigger cargo vessels: construction of a four-lane tunnel that will run under Biscayne Bay to connect the port directly to the interstate system; and a $77 million dredging project to deepen the port's channel to 50 feet. The tunnel is scheduled for completion in summer 2014 and the dredging in late 2014 or early 2015.

"When the Panama Canal opens at 50 feet, Miami will be the only port south of Norfolk, Va., at the same depth on the East Coast, and that will be a huge advantage," Johnson says.

Johnson anticipates PortMiami will register an upturn in business starting in 2015. By the decade's end, the port should reach 2 million 20-foot equivalent units (TEUs) — it's just under 1 million now — and 3.5 million TEUs by 2025.

In addition, commercial real estate firm Flagler, an FEC sister company, is developing the South Florida Logistics Center adjacent to FEC's intermodal center in Miami. The center will offer shippers transloading, perishable- and dry-freight warehouse capabilities, helping them reduce drayage costs, Hertwig says.

Meanwhile, FEC broke ground in January on an on-dock intermodal container transfer facility that the railway is building with Port Everglades in Fort Lauderdale. That facility, slated for completion in 2014, will help eliminate about 180,000 truck trips by 2029, according to the port's website.

Also in the works is a Port Everglades project to deepen and widen its navigational channels from 42 feet to 50 feet, and double the number of berths. The project is expected to wrap up in 2016. Moreover, the Florida Department of Transportation, in partnership with the port and Broward County, is overseeing construction of the Port Everglades Eller Drive Overpass, which will elevate a section of Interstate 595 to enable trains to access the port on ground-level track. That project is expected to be completed in mid-2014.

"Within a couple of years of the Panama Canal expansion, you will have two ports with 50 feet of water and on-dock rail," Hertwig says. "And Port Everglades is a unique terminal because it will be for international cargo, but it also will be a domestic facility, where we will bring 53-foot containers in and out of the same facility."

Class I Interchanges In Jacksonville

FEC's traffic moving north of Florida via rail will interchange in Jacksonville with NS or CSX Transportation, whose preparations for the canal expansion are part of the Class Is' broader strategies to manage growth in international freight entering eastern U.S. ports.

Over the past decade, NS and CSX have experienced a shift in international traffic via the East Coast ports, say execs for the two Class Is. They trace that trend to the 11-day shutdown of West Coast ports in 2002, when 10,500 longshoremen were locked out during a contract extension dispute between the ports and the International Longshore and Warehouse Union (ILWU).

CSX has been preparing its infrastructure to support additional traffic "however it wants to come onto the CSX network," says CSX Vice President of Intermodal Bill Clement. That means ensuring the Class I has seamless connectivity to western railroads so that freight flows through Pacific ports. On the East Coast, CSX has taken a similar approach by locating near-dock or on-dock rail facilities to move freight entering the ports, he says.

An example of CSX's infrastructure preparation? Clement cites the National Gateway initiative to create a more efficient double-stack route between mid-Atlantic ports and the Midwest markets. And a cornerstone of the double-stack corridor is CSX's Northwest Ohio Terminal that opened in 2011 near North Baltimore, Ohio.

"One of our main objectives at that terminal is that, whichever port the freight comes over, we'll be able to take it into that facility and get it out to the important destinations in the Ohio Valley and the Chicago market very reliably," Clement says.

Other CSX efforts to improve the flow of double-stack traffic through the East Coast are the Liberty Corridor Freightway, a public-private partnership that offers expanded access to the Port of New York and New Jersey (PANYNJ); the expansion of an on-dock rail facility at the Port of Savannah, Ga.; and construction of a new, near-dock intermodal facility near the Port of Baltimore that will enable CSX to operate double-stack trains from the port's Seagirt Marine Terminal. The new facility will be located south of the Howard Street Tunnel, which lacks double-stack clearance.

All the East Coast ports have been "working hard" to accommodate the larger cargo vessels, and "all have obstacles to overcome in getting them to where they would like to be," Clement says, noting the PANYNJ's Bayonne Bridge project to raise the structure's navigational clearance from 151 feet to 215 feet — enough to accommodate the larger ships.

"We think we are in a good position as far as connectivity on the ports," Clement says. "Our focus now is to make sure that we have the inland capacity, and we're doing some targeted expansion projects to handle that."

Taking A Two-Step Approach

The shift in international traffic direction prompted NS to take two key steps: tighten its relationships with East Coast ports and launch an infrastructure investment program to increase capacity through multiple corridors, says Jeffrey Heller, NS group vice president for international intermodal.

"We reinvigorated our discussions with our East Coast partners about having more on-dock rail, more capacity for on-dock rail, and more synergy between the railroads and all the ports" to reduce costs in order to be more competitive with short-haul truck markets, he says.

In 2012, about 60 percent of NS' international business moved through the East Coast ports versus 40 percent from the West Coast.

The thinking behind the infrastructure investment program was to offer shippers as many options on the NS network as possible "so that, at the end of the day, as an Eastern railroad, we really won't dictate whether the box moves from the East Coast or the West Coast," Heller says. The program included the Heartland Corridor project, a $200 million public-private venture among NS, federal and state governments to enable double-stack international freight capabilities by increasing clearances through some 30 tunnels between Hampton Roads, Va., and the Midwest.

"That has allowed us to take 250 miles or a full day off our route between Hampton Roads and Chicago," Heller says.

Then there's the joint venture between NS and Kansas City Southern to manage the 320-mile Meridian Speedway between Meridian, Miss., and Shreveport, La. The joint venture investment means "we now have additional capacity and velocity between what primarily are the Southeast ports and Dallas," says Heller. "And it facilitates business from southern California to Atlanta."

NS execs also consider the railroad's new Crescent Corridor service, developed to bolster domestic intermodal business, as a complement to business coming through the East Coast ports, Heller says. The corridor features new intermodal terminals in Birmingham, Ala., and Greencastle, Pa., and will sport a future terminal in Charlotte, N.C., that will be able to serve international intermodal customers.

Once the expanded Panama Canal opens, the growth in related traffic will be gradual, Heller believes.

"It's not going to be this surge or tsunami of freight that some people imagine will happen," he says.

East Coast ports and the railroads that serve them aren't the only ones planning for new business opportunities after the expanded canal opens. Texas state transportation officials, too, have been examining how the state's Gulf Coast ports might capture new maritime cargo activity. Last year, the Texas Department of Transportation (TxDOT) organized the Panama Canal Stakeholder Working Group, which was charged with identifying projects that would put the state in a better position to take advantage of the canal's expansion.

BNSF Railway Co. and Union Pacific Railroad were members of the group, which recommended TxDOT draft a formal Texas Freight Plan and work with railroads, Texas ports and other stakeholders to support rail capacity projects that would accommodate growth in imports and exports.

Costs Will Influence Cargo's Direction

UP has been investing in its intermodal network regardless of where freight is coming from, says spokesman Tom Lange.

"We haven't really been preparing for the Panama Canal expansion specifically," he says, adding that UP continually invests in expanding its network capacity.

How or whether freight flows change after the expanded Panama Canal opens will depend on multiple factors, such as time sensitivity of cargo and costs associated with transporting freight through West versus East Coast ports, says Lange. The cost to expand the canal and the billions invested in East Coast ports to handle the bigger ships will "have to be recovered somewhere," he adds.

"We feel pretty good that the total imports going into the U.S. will go from about 30 percent to 33 percent [after the Panama Canal expansion]," Lange says. "We also feel that the total volume of imports will continue to grow. And with our investments in our overall network — and specifically in our intermodal business — we're prepared to handle an influx of ongoing growth in that business."

One question that won't be answered until after 2015 is whether all the East Coast port expansions will amount to overbuilding, as some media reports have suggested.

PortMiami's Johnson is confident in his answer: No way.

"Economists tell us that within the next 20 to 25 years, a minimum 35 percent of GDP will be based on international trade. That's a huge, important fact to understand," Johnson says. "You have to continue to improve and strengthen your ports. Not every port needs to be super Post-Panamax ready, not every port needs to be at 50 feet. But ports need to continue to reinvest in the right strategic investments."

With Miami being the first U.S. port north of the Panama Canal, it must be Post-Panamax ready, and that includes immediate access to rail infrastructure, Johnson adds.

That's music to Jim Hertwig's ears.

"I think it's going to be great for the railroad," he says of FEC. "At the end of the day, it's all about the customers making the decision based on price and time to market. And we already have had pilot shipments where we've moved cargo from ships from Asia to the southeast and had it at destination before the shipper ever got to Savannah. So, I believe we will have not only a service advantage, but a cost advantage in that equation."

Related articles

Colliers International Port Analysis: CapEx or Capsize

Shipping lines could save $10m by cutting 30 minutes off port calls

By Gavin van Marle in Amsterdam

11.28.2012 · Posted in Loadstar posts, Sea  Add to favorites

 

Hapag-Lloyd

Shipping lines could save millions of dollars in fuel costs if time spent in ports was decreased by even the most marginal amounts, claims new analysis from container shipping consultancy SeaIntel.

The company, in conjunction with industry group the Global Institute of Logistics and software provider Cirrus Group, set out to discover what the effects would be on a scheduled liner service if the time it took for a port to berth a vessel was incrementally reduced. The study focused on time savings that could be made through the optimisation of the berthing process, from the point a ship arrives, on time, at its station.

The results are nothing less than startling. By reducing the berthing time of a vessel in and out of ports, an extra lag is created in the liner’s schedule which the shipping line can use to slow down the vessel en route to its next port of call by the equivalent amount of time saved in the previous port.

“If the berthing process is systematically reduced in a given port, this will allow vessel operators to slow their vessels down slightly, and still be able to berth in a timely fashion. Of course, this is only possible if the process improvement is a genuine time saving, and hence the port changes the time set aside for the berthing process,” the paper says.

The study had to make a few assumptions, given that the possible financial savings made by carriers would be derived from subsequent fuel savings made by being able to cut vessel speeds between ports. In this case, it used the fuel consumption data for the 11,400teu CMA CGM Andromeda.

The cost of fuel consumption does not work in a linear fashion – the savings made from reducing a vessel from 18 knots to 17.9 knots are greater than reducing from 14 knots to 13.9 knots. So the savings made by shipping companies on fuel costs depend on the speeds that the ships are able to reduce from. If a port was able to reduce berthing time by two hours, which was then built into a 200-mile trip to the next port, the line would save $2,000 per port call if the vessel was steaming at 14 knots, and nearly $6,000 if it was steaming close to 19 knots.

But when this type of saving is multiplied across a scheduled container liner service, where vessels of identical size would be calling at the same port on a weekly basis and steaming at the same speeds, SeaIntel calculates that a 11,400teu vessel would see annual savings of between $150,000-$300,000, depending on the currently scheduled speeds, at that one port – although there appears to be something of a ceiling on savings, depending on the distances from the previous port in the string.

“We find that savings tangentially reach a maximum level after a certain distance. However, that distance depends on the time saving obtained in the port. Generally we find that more than 90% of the savings are obtained with a port-to-port distance below 500-600 miles,” it said.

Nonetheless, if berthing time reductions can be achieved across a string of ports on a particular service, the savings can be magnified. A typical Asia-Europe service calls at eight to 12 ports. If five of those ports can reduce berthing times by half an hour, the study concluded that almost $10m can be saved annually from reduced fuel consumption on the trade as a whole. If those five ports can reduce berthing times by three hours, the annual savings on the trade would jump to $40m.

The next step was to extrapolate that calculation out to the global liner industry, with the result that if five ports per string were to reduce berthing times by three hours the industry would stand to save $180m by improved optimisation of slow-steaming techniques.

Clearly, the actual savings remain hypothetical – sailing speeds vary according to a variety of factors; fuel consumption depends on the ratio of laden and empty containers; port productivity can vary wildly and so on – but the potential benefits to the liner shipping through even marginally improved, but consistent, berthing efficiencies are huge, and would give ports an important competitive tool.

“A port which improves berthing times by a few hours can easily argue that instead of offering a carrier a reduced handling charge, the carrier is getting the value straight from the bunker fuel savings,” it concluded.

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3 Responses to “Shipping lines could save $10m by cutting 30 minutes off port calls”

1. Kevin monteath says:

November 28, 2012 at 2:32 pm

With the ships getting bigger, and the old system of joint service, this time saving will not be possible at ports. The shipping giants need to address these points of port services in respective countries. Bigger and more containers, and joint service with partners bring in more cargo, hence the port authorities need to understand this and bunker cost. I am sure the pencil can be sharpened to save shipping lines millions of dollars… My views..

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1. Mike Harrison says:

January 3, 2013 at 5:18 pm

If you want to save time when berthing, the pilot and master must have confidence in the approach manoeuvre, should know the permitted berthing speeds and angles of the installed fenders, and have the right Portable Piloting Units (PPUs) to see the full picture. The cost is peanuts compared to the savings on more efficient operations. At Inshore Systems we advise clients on reducing risks and cost without compromise.

Perhaps container lines should consider equipping pilots with PPUs as well as reviewing the fenders on the berths they use. Small investments will pay large dividends.

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1. Ted Daly says:

March 28, 2013 at 12:28 pm

The real savings comes about by evaluating and determining the best schedule to keep for the entire round trip voyage of the vessel. While I agree pilot time and maneuvering are two critical components of a port stay, many times there is little to no opportunities to save enough time to justify slow steaming unless you have a good amount of pilotage time, considered over 2 hours in duration. Most pilots and vessel captains work hand in hand to get the vessel quickly to the dock, as long as the weather conditions allow for that safe transit. So it is hard to find more time there.
The real savings comes at the dock. Vessel clearance by authorities can take up to 2 hours in some locations. Stevedoring time or the production and the number of gangs put on the vessel upon arrival also is a contributing factor. With ever larger move counts and larger vessels stowage planners need to know each port limitations intimately and make sure the vessel is stowed in the most efficient manner to allow for the most gangs and best productivity, decreasing the total port time. As an example, with a move count is 3,500 and 4 gangs to total port stay would be 35 hours, at 25 GMPH/Gang. With the same move count and production with 6 gangs you can save almost 12 hours of port time. This can be a more realistic and sustainable time savings opportunity than just saving 30 min of pilot time or maneuvering time at a few ports of call. Manage to save this kind of time over 8 to 10 port calls and you can save up to 120 hours per round trip, that is 5 days saved, now that is a significant amount of time and the vessel could then save money by slow steaming. Roll it all together, stevedoring time saved, reduce time in port, better pilot times, slow steaming and you can make a significant impact on the overall cost of operating a vessel.

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• Rick Eyerdam says:

April 9, 2013 at 3:34 pm

Your comment is awaiting moderation.

Great comments. Tideworks Technology among others can improve the loading/off-loading configuration and some scheduling. Ted is right on but he needs to take it to the next step in the logistics chain gang. Are there enough roadworthy chassis, TWIC empowered truck drivers, or space to store containers that must wait days for a move? When does demurrage kick in? Are the gates fast enough – in and out — and what about the highways?

Then there are the train intersection issues. In short fast cranes and agile gangs are essential unless the fill the yard so fast the cargo is bogged by its own time-sensitive volume.

These are some of the issues we are trying to reduce to the least common denominator as part of the stand up of the Caribbean Maritime Exchange.

 

Colliers International Port Analysis: CapEx or Capsize

Colliers International Port Analysis: Capex or Capsize: Developers' View of US Opportunities

By Colliers International

Published: Monday, Apr. 8, 2013 - 5:12 am

SEATTLE, April 8, 2013 -- North America's Port Cities Prepare for the First Post-Panamax Decade

SEATTLE, April 8, 2013 /PRNewswire-USNewswire/ -- Colliers International released its third North American Port Analysis report which examines evolving trade patterns resulting from the upcoming Panama Canal expansion in 2015.

The report's theme, "CapEx or Capsize," underscores the idea that cities need to spend the capital to upgrade their ports, or risk "capsizing" their economies. Report author, KC Conway, notes that America needs $3.6 trillion in funding for infrastructure by 2020 to remain competitive in light of the upcoming Panama Canal expansion.

"This is 'make-it-or-break-it' time for North America's port cities," said KC Conway, chief economist for Colliers International in the U.S. "Changing trade patterns and evolving e-commerce trends will present great economic opportunities for the cities that that invest CapEx in their transportation infrastructure. And for those cities that don't invest, they put their economies at serious risk."

The report also looks at emerging inland ports and intermodal facilities in markets such as Charleston, Indianapolis, Philadelphia and the Great Lakes, and the impact that the Panama Canal expansion and changing global trade patterns are having on industrial commercial real estate.

Key Findings Colliers identifies a number of key takeaways, including:

 

• Poor Infrastructure. The American Society of Civil Engineers (ASCE) recently gave America's overall infrastructure a D+ grade. Although ports and rails earned a C, America's infrastructure is only as healthy as its weakest link: inland waterways, roads and airports. Further developing and capitalizing on some of these more basic, traditional modes of transportation would be beneficial to U.S. economies.
• Shift in Trade Powers. The balance of influence in trade is shifting from Asia to Latin America, and from West Coast to Gulf/East Coast ports. Expanding U.S. trade with Latin America, Russia and India offset the impact of Eurozone recession and China's slowing GDP.
• Growth in the Great Lakes. The Great Lakes region is an often overlooked "Fourth Coast." But this region is the undisputed leader in bulk cargo trade, processing roughly 240 million tons of cargo annually, and its ports accounted for 28 percent of the U.S. GDP in 2012.
• The Future of Air Cargo. Air cargo is expanding primarily in the Middle East, Africa, andAsia Pacific, where underdeveloped infrastructure makes air freight the primary option. In North America, however, only a handful of air cargo centers will survive, as overall volume declines and e-commerce becomes the primary business driver. Air cargo's role in the future of global trade will be defined by the tug-of-war between energy/infrastructure costs and e-commerce growth in the first post-Panamax decade (2015-2025).
• Intermodal on the Move. Intermodal transportation activity was at an all-time high in 2012, and is the next transportation growth segment in the post-Panamax era. Industrial real estate development in 2013 is directionally pointed toward port markets, inland distribution markets with dominant intermodal facilities, and a handful of dominant air cargo markets. Several differentiating trends will dictate where industrial real estate will be most in demand, including port markets that are post-Panamax ready, occupy a commodity or product niche, and are aligned with the national intermodal rail system.
• Rise of the Rail. More container cargo will migrate to rail due to new hours-worked rules and other regulations affecting the trucking industry. Rail speed, reliability, and cost now rival movement of goods by truck. And, environmental and traffic congestion challenges will enhance the movement of cargo traffic to rail.

 

In the report, Colliers also recognizes the top 10 North American ports, including:

 

• North America's Top Air Cargo Port: Memphis Air Cargo Port
• Fastest-Growing North American Port: Port of Virginia
• Florida's Best Kept Secret: Port Everglades – Florida's top TEU container port
• Best Logistics: GA Port Authority & the Georgia Center of Innovation for Logistics

 

For a full list and further analysis on the North American ports, a complete PDF version of the 13-page report is available at http://www.colliers.com/us/port-1h2013.

Read more here: http://www.sacbee.com/2013/04/08/5324302/colliers-international-port-analysis.html#storylink=cpy

 

Report details economic downturn in global shipping Posted on 04 April 2013 ShareThis Global ship operators face significant refinancing and default risks as a result of tight bank funding, enormous industry overcapacity and depressed global tradin

Globalship operators face significant refinancing and default risks as a result of tight bank funding, enormous industry overcapacity and depressed global trading conditions, Standard & Poor's Ratings Services said in a report released this week.

"Global Ship Operators Scramble For Liquidity To Stay Afloat" depicts an industry that has been dramatically hurt by the economic downturn. Ship charter rates have fallen to between 30 and 80 percent below their 10-year historical average in parallel with declining economic activity, according to the report. High operating costs, particularly for fuel, also are depressing shipping companies’ earnings.

Furthermore, ship operators accelerated orders of new vessels in years when shipping markets flourished, so these vessels are now hitting the water at a time when trade demand is subdued. During the last 10 years, the global container ship and dry bulk fleets have more than doubled and the tanker fleet has grown by more than 50 percent.

Ship operators are also finding it increasingly difficult to raise capital for new ships and to refinance existing loans. Banks, faced with their own financial difficulties and a riskier shipping industry, are imposing tougher conditions for lending and charging higher premiums, according to the report.

"We expect asset values and the performance and credit quality of shipping companies to remain weak in the coming quarters, which will further exacerbate banks' reluctance to lend," Standard & Poor's credit analyst Izabela Listowska said in a statement. "As a result, we think further shipping company defaults and financial restructurings are likely over the next few quarters."

The report is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. Non-subscribers can purchase a copy of the report by calling (212) 438-7280 or sending an e-mail to research_request@standardandpoors.com.

Last month, the New York Times reported on the issue, focusing on the European market.

“A glut of ships, and slack demand for shipping in the weak global economy, have reduced the value of cargo ships. According to some estimates, as many as half the cargo carriers on the high seas today may no longer be worth as much as the debt they carry — putting them underwater, in financial jargon,” the story notes.

Click here for the full report.

A recent report on the issue by Investor’s Business Daily was more optimistic, noting, “Shipping stocks have finally charted a new course due north after sailing south for most of the past three years.”

Click here for that report.

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Fitch: Virginia Port Decision May Hurt Other Privatization Attempts

Fitch: Virginia Port Decision May Hurt Other Privatizations

NEW YORK -- 

Virginia Port Authority's decision to discontinue negotiations with two potential lessors of its ocean terminals may create negative momentum for other large port privatization projects because of the length of the negotiation, the strong brand names of the bidders, and the meaningful pricing that was considered. It would have been the first privatization of a major U.S. port facility. In our view, the privatization of smaller, individual terminals is less likely to be affected.

The authority had received bids from APM Terminals, a group headed by JP Morgan IIF Acquisitions, the port's existing operating unit, and two other firms that dropped out. The process began in 2011, and estimates of the lease payments were in the $3 billion to $4 billion range over 20 years. In 2009, three parties approached the port with bids to operate the port. They were also turned down by the state. The port's board is opting instead to reorganize the port's structure, integrate the operating unit, and cut costs through the elimination of duplicate management positions.

We believe that those contemplating similar large port privatizations will consider this decision and the events surrounding The Dubai Ports World bid for six major U.S. ports in 1996. Both were politically complicated and suggest that future privatizations will be similarly challenging. We would expect the privatization of smaller, individual terminals to continue, as they present smaller political challenges.

We anticipate no rating action as a result of this development. We have always included the port's existing structure as an operator in analysing the Virginia Port Authority's credit.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed atwww.fitchratings.com. All opinions expressed are those of Fitch Ratings.

Canaveral Port Authority parking experts reveal Iago as their kinda inexperienced port director

Moments after Canaveral Port Authority commissioners approved a deal Wednesday that removed Chief Executive Officer Stan Payne from his position, commission Secretary/Treasurer Frank Sullivan was nominating the man he wanted to succeed Payne. Then, Chairman Tom Weinberg was handing out the candidate’s resume.

 

And, moments after that, commissioners unanimously approved promoting that man, port Deputy Executive Director of Infrastructure John Walsh, to interim CEO while a consulting firm does a nationwide search for candidates to succeed Payne. Commissioners say Walsh will be a candidate for CEO on a permanent basis, and he will be able to show what he can do in the coming months.

 

“Clearly, he’s the best person to move the port forward,” Weinberg said. “I think John is the obvious choice.”

 

In addition to his three decades of experience in the construction industry, Walsh “is a great communicator,” Weinberg said. “He’s got a combination of experience, intelligence and a keen ability to work with people. He has that skill set to remedy many of the problems” at the port.

 

Weinberg said those problems include broken lines of communication between the port and other players in the local tourism and business community, as well as morale issues within the port staff.

 

“John’s done a good job,” Weinberg said. “He knows how to present to the board and how to communicate to board members.”

 

Walsh has been involved in recent efforts at the port to plan and build cruise terminals and parking facilities, as well as projects under way for a new seven-story Welcome Center/observation tower and a concert amphitheater.

 

He has the reputation as a tough negotiator when dealing with construction companies, which was showcased at Wednesday’s Canaveral Port Authority meeting, when he was questioned by commissioners on the finances of ongoing projects.

 

And while he hasn’t worked directly in the tourism industry, he has dealt with the cruise lines on construction projects at the port, and is a member of a special port committee working to improve parking and ground transportation. He also is the port’s point person in development of the Cove entertainment district, including the new Welcome Center and amphitheater.

 

 

Walsh describes himself in his resume as having “a bottom-line-oriented and no-nonsense, but congenial, team-based approach” and said he focuses on “results, firm deadlines and budgets.” He also said he is “a tireless and energetic team player with high morals, ethics and loyalty.”

 

He said his early work experience as a union carpenter, superintendent and project manager for Philadelphia Northeast Construction “taught me to respect and value every worker and stakeholder in a project, and to build dynamic and productive teams.”

 

Those who have worked with Walsh don’t see any drastic changes in the port’s strategy for growth.

 

Payne’s plan was to develop Port Canaveral into a major Central Florida destination, and not simply a site to transport cargo and a place to load and unload the millions of cruise passengers who pass through Brevard County each year.

 

“I’ve dealt with John on two or three different occasions,” said Brevard County Commissioner Chuck Nelson, whose district includes Port Canaveral. “I’ve found him to be very knowledgeable and very businesslike. I’ve been impressed.”

 

Walsh “has been beneficial to us,” Cape Canaveral Mayor Rocky Randels said. “He pretty much does all the intergovernmental relations.”

 

Canaveral Port Authority Commissioner Bruce Deardoff, who announced his intentions to vacate his seat in the next two months, said Walsh faces many challenges as interim CEO — from negotiating deals to healing wounds caused by the months-long battle to oust Payne, who hired Walsh in February 2011.

 

Port commissioners on Wednesday approved an agreement under which Payne will be on administrative leave until July 1, while collecting his regular salary. Payne will work on cruise contract negotiations during that time. After that, he’ll receive 20 weeks of severance.

 

“I think that John is walking into a very, very difficult situation, with everything that we have going on there,” said Deardoff, a Payne ally. “I wish him the best of luck, and that’s really all I want to say about it.”

 

Sullivan said that while he thought the Port Authority was “making a mistake” in forcing Payne out, he supports promoting Walsh.

 

“We’ve got a good man right here” in Walsh, Sullivan told fellow commissioners.

 

Weinberg said he expects there will be a smooth transition. Payne will work on cruise contracts for the time being, but Walsh has the experience and background needed to be in charge of the port immediately.

 

“He’s got to pick up the torch at this point,” Weinberg said. “He’s a people person. He knows how to work well with everybody at all levels. I think he’ll do a great job in healing.”

Shipping has won a tenth of global air cargo volumes

Shipping has won a tenth of global air cargo volumes

By Alex Lennane in Doha

03.14.2013 · Posted in Air, Loadstar posts, Sea, Topics Add to favorites

If air freight wants to retain market share and prevent modal shift, innovation will be critical, said industry leaders, after it was revealed today that air cargo lost 2.6m tonnes – equivalent to 10% of its global volumes – to sea freight since 2000, according to analysis from Seabury Group, as the maritime industry improved its products and services.

“Innovation will be our key challenge in the short term, and we need to accelerate our transit times,” Robbie Anderson, president, United Cargo, told delegates at the World Cargo Symposium in Doha.

Noting various examples of innovation and investment in the shipping and road freight sectors, he urged the air cargo industry to act. “There are lots of things going on in other modes, so it’s up to us to do the same.  There are also some changes in the business-to-consumer market that are going to change the landscape for us.”

But, he said innovation would have to be on the ground, not in the air. “It needs to be in the linkages and processes – suppliers like ground handlers and road feeder services will all play a key role in helping us move that forward. Innovation on the maritime side means there is more focus on shipping.”

The tradelane most affected by modal shift is the transpacific, said Gert-Jan Jansen, executive director Seabury.  “Many of the goods America is buying are now going by sea,” he said. “It’s in security and Customs that the maritime industry has been making progress. And transpacific is the most obvious way to go. “

The remarks followed a pledge by IATA’s Cargo Committee to modernise the industry. Chairman Steve Gunning said:  “If we are going to fight modal shift we need to act as an industry. We need to bring the processes right up to date – we need to accelerate transit times.”

Des Vertannes, head of IATA Cargo, added: “Modal shift always happens – and then it rebounds. What is incumbent on us, however, is to make a difference – which we haven’t done in 30 years. Let’s reduce transit times from five or six days by 24 or 36 hours.”

Related articles

Hi-tech shippers switch from air to ocean

Issues facing the Caribbean Maritime Community

Issues facing the Caribbean Maritime Community

From CaribbeanMaritimeExchange.org March 16, 2013

Maersk's decision to cease use of Panama Canal a crushing blow to Caribbean Basin and Southeast US Transshipment Hopes.

 

by Rick Eyerdam

 

Maersk has announced that it will stop using the Panama Canal to transport goods from Asia to the US East Coast, as bigger ships, some larger even than Post Panamax, will help the company to generate profit via the Suez Canal.

 The last sailing through Panama will be on April 7 and the first service through Suez will be a week later, the company said.

 "The economics are much, much better via the Suez Canal simply because you have half the number of ships," Mr Skou said. "One of the reasons for why this is happening now is that the cost for passing through the Panama Canal has gone up. At the end of the day, it comes down to cost."

 The decision to deploy some Super-Post Panamax ships from Asia to the US East Coast eliminates today's Panama Canal and the one Panama hopes to open before 2016. The Suezmax vessels are too large for either Panama Canal configuration.

 Worse yet for transshipment ports along the Caribbean Basin and the Ports of Miami, Jacksonville, Savannah and Charleston, these Suez max vessels require even larger berths than Post Panamax, longer crane reach and huge turning basins. And none of the East Coast ports are preparing for this eventuality.

 

The decision will also be a blow to the Panama Canal Authority which must pay for the over-budget canal expansion from revenues generated by the canal without much of the business of the largest ocean cargo carrier in the world.

 

 

What will be interesting to see will be if Maersk goes all out to secure the operation of the Virginia ports where it is bidding for control. Norfolk is already at 50 feet. If Maersk settles on Virginia then invests in the cranes and chassis required to handle the huge fleet it could make Virginia the shipping capital of the East Coast and to the exclusion of all the other contenders.

Update: Customs Employing Sequester discomforts to instill benefits of automated compliance

PortaMiami and some at Miami International Airport appear more stunned than usual that the sequester is causing delays when, of course, we told you and them on March 4 of this year that was the exact plan. And we told you how to avoid delays. Here it is again: 

" Companies that participate in CBP partnership and modernization initiatives, such as Customs-Trade Partnership Against Terrorism (C-TPAT) and Air Cargo Advance Screening (ACAS), will continue to have access to their respective CBP point of contacts"

 "Providing such access to our Trade partners that have invested time and resources to participate in CBP programs is important to CBP. "

(03/02/2013)Using lessons learned from the impact of previous trade disruptions, U.S. Customs and Border Protection and trade stakeholders strive to improve our business resilience strategy to secure the supply chain and facilitate legitimate trade and travel. As a roadmap for effective prevention and recovery, the following framework seeks to minimize the impact of trade disruptions:

Improving the automated systems and processes for receiving advance information on cargo and passengers and using that information for targeting terrorism risks or other threats;

Modernizing our commercial operations, and working with our trade partners to secure the nation and to keep commerce flowing;

Integrating other government agencies into our risk-based strategy and into a seamless process that is both efficient and effective; and

Working with other countries to secure the global trade lanes and with the World Customs Organization to promote a global and more unified approach to supply chain security.

 In the face of sequestration, CBP has identified the following information to be critical for business resumption:

Companies that participate in CBP partnership and modernization initiatives, such as Customs-Trade Partnership Against Terrorism (C-TPAT) and Air Cargo Advance Screening (ACAS), will continue to have access to their respective CBP point of contacts. This would include supply chain security specialists, account managers, and Center of Excellence and Expertise (CEE) personnel, to assist with any inquiries. Providing such access to our Trade partners that have invested time and resources to participate in CBP programs is important to CBP.

Recognizing the significance of sufficient communication channels, CBP will hold national-level weekly telephone conference calls. The Office of Field Operations (OFO) and Office of International Trade (OT) Headquarters staff, coordinated through the Office of Trade Relations, will engage cargo industry stakeholders to discuss any trade issues that may be the result of sequestration.

CBP will ensure that its core antiterrorism mission is not compromised. Radiation Portal Monitors (RPMs) serve a critical role in this mission and will continue to be used at their current rate. However, industry stakeholders should note that there may be some delays in cargo processing.

Due to the nature of the type of cuts the sequestration demands, there will be no special procedures for conveyance diversions. Unlike the business resumption plan during Hurricane Sandy, all ports will be operating with reduced resources, providing no realistic gain for conveyance diversions.

CBP is continuing to coordinate with other U.S. government agencies to assess how the sequestration plans of other agencies will impact the flow of international trade. For example, CBP identified that the sequestration plan of the Animal Plant and Health Inspection Service (APHIS) may not have a significant impact on trade transactions at the port level.

 

In preparation for operating under sequestration, CBP has redirected resources toward only the most critical, core functions within (OFO) and has discontinued or postponed certain important but less critical activities in an effort to reduce budget expenditures. The mandated across-the-board spending cuts took effect on March 1, 2013. The cuts tied to the sequestration will be made equally across our agency, with no preference by port of arrival. The first, immediate cuts will reduce overtime beginning March 1st, and personnel furloughs may begin in mid-April. CBP managers at the field offices and ports of entry conducted an in-depth analysis of their operations to identify any current activities, duties, and hours of operation that could be adjusted to mitigate the impact of the significant reductions in expenditures mandated by the sequester. However, given the magnitude of the reductions, we currently estimate that there may potentially be delays up to several hours at land border crossings, passenger processing times may increase by about 50 percent, and there may be up to an additional five days added to cargo inspections at ocean ports of entry.

 Once furloughs commence, there may be more risk-based adjustments made regarding other inspections, with less impact to trusted travelers and trusted traders. There could be some eventual delays in providing advice and rulings. Additionally, strategic initiatives such as the Automated Commercial Environment (ACE) and the rollout of the Centers of Excellence and Expertise (CEE) may be impacted.

 Advice for Importers

 Pre-filing Entry Data – While not all importers are participating in CBP trade facilitation initiatives, we cannot over-emphasize the importance of pre-filing entry information. Pre-filing the entry gives CBP and other federal agencies an opportunity to conduct risk assessments and resolve outstanding issues before the cargo arrives in the United States and allows agencies to provide the trade with a release decision as early as possible.

Perishable Commodities – CBP will continue to process perishable commodities as a top cargo priority.

Other Government Agencies – CBP will work with its partner government agencies that have oversight responsibilities for import and export shipments to minimize the disruption caused by sequestration.

CBP Partnership Programs – At this time there are no plans to eliminate or reduce trade facilitation benefits for CBP trusted trader participants. Customs-Trade Partnership Against Terrorism (C-TPAT) members will continue to receive priority (“front-of-the-line”) treatment for examinations. As a tangible benefit for the substantial efforts taken to secure the supply chain, C-TPAT companies are 4-6 times less likely to undergo an inspection. During the first 30 days of the sequestration (March 1-30) we expect minimal delays. However, once the furloughs commence, delays will impact shipments for trusted partners that have been designated for examination.

Communication – CBP is committed to ongoing communication with the trade community, both at the national level and through communication at the port level, as port directors reach out to their local stakeholder groups. Additionally, CBP managed accounts have their assigned CBP account managers to assist them with any issues that arise and the CEE staff to provide guidance.

 Please note that due to the fact that CBP will redirect all available resources to the most critical core functions, non-mission critical expenditures such as travel and training will be curtailed. While regrettable, this means that trade stakeholders should not plan on attendance by CBP personnel (or as a speaker) for conferences or meetings in the near to mid-term. CBP will ensure to keep conference and meeting hosts apprised as conditions develop.

 

 

 

 

Related articles

Centers of Excellence and Expertise at CBP - background and a survey for you

CBP Issues Sequestration FAQs and Plans

Customs Employing Sequester discomforts to instill benefits of automated compliance

Expect Reduced hours, long delays at US ports - CBP on Sequestration

Centers of Excellence and Expertise at CBP - background and a survey for you

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CBP is embarking on one of the first ever Centers of Excellence and Expertise (CEE) customer satisfaction surveys. The CEEs are the "virtual" ports that offer one-point processing for participating accounts.  Information gathered in this survey will be used to obtain facilitation priorities by CEE and assess the efficiency of the CEE’s facilitation efforts.  Recognizing that information resides in many different areas, we ask both importers and non-importers to respond (NOTE to non-importers: Please respond with your collective / average client base in mind). The survey consists of multiple-choice questions that request information on CEE interaction, and it takes only 20 minutes to complete.  CBP is asking for responses by Wednesday, March 13th. Keep in mind, the survey is anonymous and the results are stored in a secure web-based survey tool. The survey can be accessed by clicking here or on the below link.  Please feel free to forward this link to your network. We wish to achieve feedback from the widest possible audience in order to get the most comprehensive input on CBP's CEEs. http://www.surveyshare.com/s/AQAM4SD

 

 

 

 

Shrinking the Regulatory Haystack

CBP Centers for Expertise and Excellence

By Rick Eyerdam –

The federal regulators call it Trade Facilitation and its center piece is a new test program that assigns each of the 10 related sections of the Harmonized Tariff to a national Center of Excellence and Expertise (CEE) for improved post-entry processing using an account-based approach.

At each of the 10 CEEs the expert staff replaces the involvement of the 300 or so port directors at Customs ports of entry after imported products are released. This segments risk allowing the Port Directors to focus more exclusively on security concerns, according to CBP. (see box) According to CBP documents, “the issuances of all requests for information and notices of action, extensions and suspensions of liquidations, and reviewing and acting on protests will be performed by the CEE director rather than the port director.”

 Miami will host the CEE for all imported Agriculture and Packaged Goods which are contained in the first 24 chapters in the vast Harmonized Tariff document. The Textiles and Apparel CEE will be based in San Francisco.

Already CEEs have been established in Detroit for Automotive and Aerospace; Houston for Petroleum, Natural Gas and Minerals; Long Beach for Electronics and New York for Pharmaceuticals.

Their operating rules were published at 52048 Federal Register / Vol. 77, No. 167 / Tuesday, August 28, 2012 / Notices. The Agriculture and Packaged Goods CEE that is slated to begin by September of 2013 will be a blessing for Miami International Airport which is by far the major agriculture importing hub – greater than 85%- in the nation; and to a lesser extent to PortMiami.

John P.Leonard, (pictured above at a planniing session) Acting Executive Director of Policy and Trade Programs at CBP told CNS Focus. “The CEE will enhance the expertise that Miami currently has in agriculture goods, which is one of the reasons why the CEE is located in Miami. Additionally, it takes the expertise currently in Miami and gives it a national focus, so for participating importers, no matter if their agricultural shipments are brought into Atlanta or Lorado, the Miami CEE will be responsible for processing these entries.”

“The Centers bring benefits for all importers who import in any mode of transportation,” Leonard said.“It doesn’t matter how the goods get into the country whether by air, sea, truck, train; the Centers will serve them all equally. We will bring as much value to the air cargo world as we will the vessel container world.”

Instead of dealing with each individual Customs entry, Leonard said, the Centers of Expertise will deal with the importer of record as a distinct client with a corporate account for each category of imported goods. “If you are ABC Company, Inc. and you regularly import fruit and apparel at several ports across the country, you will have an account at the CEE in Miami for the import of agriculture and another at the CEE in San Francisco for the import of apparel,” Leonard explained. “When you have a hitch in the release of your shipment, a missing document, you call up your account representative at the appropriate CEE and work out the difficulty,” Leonard said. “Instead of dealing with scores of different interpretations of the import regulations at scores of different ports of entry, each with a different port director, the importer of record deals only with the staff at the appropriate CEE,” Leonard explained. “Once a problem is identified in the process and the issue resolved, the resolution becomes a template that prevents the same thing from slowing release of identical cargo imported by the same importer in the future,” Leonard said.

At least for the current test period with the four established CEEs, the Federal Register says, “Decisions made by a CEE which are within the authority granted under this test shall govern the transactions to which they pertain; test participants may not seek to have such decisions referred to a Port Director or another CEE Director.

Why the fundamental change? Shrinking the Haystack

Since the air attacks of 9/11 the Department of Homeland Security’s front line agencies, Transportation Security Administration (TSA) and CBP, Customs and Border Protection have ramped up the importation process over trying to accomplish the essential goal of preventing another terrorist attack – a needle in the haystack of trade – while enforcing thousands of trade related laws without crippling the flow of imported goods.

Trade is more ponderous, all would agree, and it is certainly safer. A generation later the CBP has finally come up with an adequate description of its intended goals: make the haystack smaller. For both CBP and the importer the haystack is that jumble of federal laws, rules and regulations, the trade agreements and differing practices among the 300 plus Customs ports of entry stacked against the free trade practices, filing short cuts, floor tiles filled with coke, knock-off designer goods and down-right dangerous products imported as if they are safe and legal.

As Leonard told CNS Focus, after much thought and many trials and error, Customs plans to work directly with the importers of record to expedite release of imported products and thus save importers time, money and that precious freshness.

To accomplish that goal Leonard and Deputy Customs Commissioner David V. Aguilar turned to the COAC (Advisory Committee on Commercial Operations of Customs and Border Protection better known as COAC ) and its Trade Facilitation Subcommittee to establish baseline industry metrics especially metrics of time delays, man hours and real costs.

Leonard explained, “This benchmark can then be used to determine what facilitation benefits “save” the industry, and therefore can have a bearing on key partnership benefits CBP can offer the Trade.” COAC conducted this benchmarking survey in June 2012 to measure how effective CBP’s current trade facilitation efforts are at lowering the cost and burden associated with a company’s compliance and operations efforts.

The survey was also designed to capture trade priorities that can be used by CBP to provide meaningful partnership benefits and employed in the CEE process.

The results were mixed. From the survey, highlights include:

• The Majority of respondents were with companies filing anywhere from 100 to 99,999 entries per year.

• As prioritized by businesses, CBP’s facilitation efforts should be focused on reducing CBP processing times, CBP holds, exams, and PGA (participating government agency) processing times. • A majority of companies spend up to 14 hours managing the lifecycle of a single entry.

• A one-day delay in the release of merchandise costs companies over $700 for each affected shipment.

• The first 24 hours is critical to resolve CBP or PGA freight holds or exams; thereafter, respondents revealed multiple days.

• The survey was favorable to CBP’s responsiveness to addressing issues, indicating a good level of customer service at the ports when issues arise. Specifically, 53% of the respondents stated that most issues are communicated in 30 minutes or under, and over 90% of the time the respondents have stated that the end result was positive versus a 9% “not-positive” response.

• 90% of respondents indicated their ability to file all required data electronically for U.S. imports was a very important issue for the Single Window to resolve. (The Single Window system enables importers or their agents to submit regulatory documents only once in one place.)

 These regulatory documents are typically customs declarations, applications for permits, certificates of origin, trading invoices, etc.

Costs & Holds

The results of the COAC study show that there is not much difference when it comes to the element of time between a CBP hold or exam and a PGA (participating government agency) hold. In addition to the element of time, it seems that the first 24 hours is critical is trying to resolve the issue, after a 24 hour time period the element of time can get extended to multiple days. Direct costs for the exams can get quite expensive.

While 42% of the respondents revealed their costs of an exam were under $500, another 40% told said that their costs were more than $700. Indirect costs to the supply chain for a hold/exam split respondents: 51% revealed that when a shipment is held for a hold/exam impacts to their daily supply chain costs more than $700; 49% have comments that their costs are under the $700 cost on a daily basis.

Costs associated for processing entries, as indicated by a majority of respondents, were less than $299 per entry for internal costs and less than $299 for external costs. Time associated with managing the lifecycle of a single entry was up to 7 hours internal and up to 7 hours external.

Improving any of these metrics assures a real benefit to all parties in the supply chain especially the importer of record, according to Leonard. And the CEE system is the new method of choice. The threshold for participation as explained in the Federal Register require an Importer of Record number, enrollment in the CTPAT (Customs Trade Partnership Against Terrorism) program as Tier 2 or Tier 3 members and completion of the ISA; Importer Self-Assessment process.

Leonard said participation in Air Cargo Advance Screening is always beneficial but it is not associated with CEE participation, which focuses entirely on post release issues. Leonard explained that the port directors at ports of entry will remain in control of all the pre-clearance functions currently under their jurisdiction.

 “Once the goods are released the required entry documents and certain revenue-related functions, such as requests for computed value information, waivers of invoice requirements, issuances of all requests for information and notices of action, extensions and suspensions of liquidations, and reviewing and acting on protests will be performed by the CEE director rather than the port director.”

“We need to increase the already noteworthy voluntary participation level in the automated and pre-clearance programs especially CTPAT and ISA,” Leonard said. “Now we can demonstrate the value of participation beyond shrinking the haystack to find that needle of Terrorism. We can show value that is both a benefit to the importer and to the gross national product.”

 The centers that to be established in FY 2013 are: 1. Agriculture & Prepared Products: Miami 2. Apparel, Footwear & Textiles: San Francisco 3. Base Metals: Chicago 4. Consumer Products & Mass Merchandising: Atlanta 5. Industrial & Manufacturing Materials: Buffalo 6. Machinery: Laredo

 

Role of the importer of record Customs requires that the importer of record have a certain level of financial interest in the import transaction so as to ensure that the importer of record, as the person liable for the import transaction, also has an interest in the goods themselves. Since Customs maintains authority over goods crossing the borders, this requirement of a financial interest in the transaction helps ensure that the importer of record will be responsive to Customs in terms of compliance with duty payment and regulatory enforcement. It also ensures that the party entering the goods will have access to the documents necessary to establish the proprieties of the transaction in terms of proper valuation, classification, marking and other matters.

52048 Federal Register / Vol. 77, No. 167 / Tuesday, August 28, 2012 / Notices CBP’s goal is to incrementally transition the operational trade functions that traditionally reside with the ports of entry until they reside entirely with the CEEs. By focusing on industry-specific issues and providing tailored support for the participating importers, CBP is seeking to facilitate trade, to reduce transaction costs, increase compliance with applicable import laws, and to achieve uniformity of treatment at the ports of entry for the identified industries. CBP believes that providing broad decision-making authority to the CEEs for entry processing issues will better enable the CEEs to achieve these goals for CBP and the trade. Please note that 19 CFR 134.54(a) will be waived only to the extent to provide the CEE Directors with the authority to extend the number of days from the date of the notice of redelivery for the importer to properly mark or redeliver all merchandise previously released to him. The Port Director will continue to retain the authority for demanding liquidated damages incurred under the bond in an amount equal to the entered value of the articles not properly marked or redelivered.

 

 CEE Determinations Not Requiring Regulatory Suspension

The following determinations do not require the waiver of regulations, but are determinations that would usually otherwise be made by the Port Directors, and will be made by the CEE Directors under this test: performing all validation activities; reviewing and processing of post entry amendments and post summary corrections; and fixing the final appraisement of merchandise, and fixing the classification and duty rate of such merchandise.

Processes That Will Change for Selected Test Participants

 The following is a list of processes that will change for test participants effective upon the beginning of this test: • Requests for entry cancellations must be submitted electronically to the CEE; • Census resolution processes will be handled by the CEE, therefore, rejected ACS entry summaries must be electronically transmitted to the CEE’s email address, unless other arrangements have been made with the CEE to resolve Census issues; • Timely responses to Requests for Information (CBP Form 28) and Notices of Action (CBP Form 29) must be sent directly to the CEE; • Requests for Internal Advice must be submitted electronically to the CEE for further coordination with the Office of International Trade, Regulations and Rulings; and • Protests must be filed via the electronic protest module in ACS (including a note in the filing that designates the CEE team), or, submitted electronically on a scanned copy of the CBP Form 19 with all supporting documents to the CEE via the ACE Portal or the CEE’s email address.

Processes That Will Remain Unchanged For Selected Test Participants

Unless specified in this document or in the ‘‘Centers of Excellence and Expertise Test Guidelines’’ (CEE Test Guidelines), which will be posted on the web at http://www.cbp.gov/xp/cgov/ trade/trade_transformation/ industry_int/, all current processes will remain unchanged. For example, the following processes will remain unchanged:

• Quota entry summaries will continue to be processed by the ports of entry;

• The bulletin notice of liquidation (CBP Form 4333) will continue to be posted at the ports of entry;

• Revenue collection and the resolution of discrepancies in the amount of monies presented will remain with the ports of entry;

• Requests for further review and requests to void the denial of the protests will continue to be issued by Regulations and Rulings, Office of International Trade;

• Entry filers must continue to file Electronic Invoice Program (EIP) and Remote Location Filing (RLF) entry summaries as usual in the Automated Commercial Environment (ACE); and

• Entry filers must continue to submit entry summaries through the Automated Commercial System (ACS) or ACE and will not be required to change the respective port of entry.

ADDRESSES:

To submit comments concerning this test program: send an email to CEE@cbp.dhs.gov. In the subject line of an email, please use, ‘‘Comment on CEE test.’’ To apply to participate: submit a letter to U.S. Customs and Border Protection, Office of Field Operations, Trade Operations Division, 1300 Pennsylvania Ave., NW., Suite 2.3D, Washington, DC 20229, or an email to CEE@cbp.dhs.gov. The letter or email must include the name and contact information for the business interested in participating in the test, the business’s industry, and the business’s importer of record (IOR) number(s).

Rules Changes

All changes to procedures during the test will be posted in the CEE Test Guidelines two weeks before the change goes into effect. CBP will be posting the CEE Test Guidelines on the web to provide information regarding CEE operations. Test participants must check the CEE Test Guidelines on a weekly basis to determine: (1) How their responsibilities and required processes will differ from non-CEE participants and the effective date of the new responsibility or required processes; (2) whether the new responsibilities and required processes are being changed again and the effective date of the change; (3) whether there will be a change to any procedure that is required by CBP in a manner otherwise than by regulation, e.g., reconciliation test notice; and (4) when §§ 159.7 and 191.61 will be waived.

Trade Advisory Group Members

 Leman Chip Bown, Jr., FedEx Trade Networks, Buffalo, N.Y. Scott Childers, The Walt Disney Company, Kissimmee, Fla. Colleen Clarke, Roanoke Trade Services, Inc., Schaumburg, Ill. Mary Ann Comstock, UPS Supply Chain Solutions, Sweet Grass, Mont. Jeffrey Coppersmith, Coppersmith Global Logistics, Inc., El Segundo, Calif. Robert DeCamp, A.N. Deringer, Inc., Rouses Point, N.Y. Matthew Fass, Maritime Products International, Newport News, Va. William Ferguson, NYK Line (North America) Inc., Jackson, N.J. Michael Ford, BDP International, Philadelphia, Pa. Carol Hallett, U.S. Chamber of Commerce, Washington, D.C. Donald Huber, General Electric Company, Ft. Myers, Fla. Karen M. Kenney, Liberty International, Inc., Pawtucket, R.I. Karen Lobdell, Integration Point, Chicago, Ill. Kathleen Neal, A.O. Smith Corporation, El Paso, Texas James Phillips, General Motors LLC, Detroit, Mich. Edward Ted Sherman, Target Corporation, Brooklyn Park, Minn. Barbara Vatier, Air Transport Association, Washington, D.C. David Vitale, Urban Partnership Bank, Chicago, Ill. George Weise, Sandler & Travis Trade Advisory Services, Leesburg, Va. Jeffrey Whalen, Nike, Inc., Beaverton, Ore.