- The Washington Times - Saturday, January 18, 2003

International companies and haulers are warning federal officials about the potentially devastating economic effect of new anti-terrorism measures that affect cargo entering and leaving the United States on trucks, airplanes, trains and ships.
U.S. Customs Service officials are trying to balance cargo security with commercial interests as they implement post-September 11 rules that would require transportation companies to electronically transmit cargo information to customs agents before arrival in or departure from the United States.
The information would be fed into a computer system so that customs agents could identify and inspect suspicious shipments for weapons or other terrorist-related items.
Congress last year mandated that new rules be on the books by October 2003. As part of the process, customs officials this month are holding meetings to listen to industry concerns about the new programs.
"We intend to get this right. We understand that this is your livelihood," Andrew Maner, chief of staff for U.S. Customs Commissioner Robert Bonner, told private-sector representatives during a public hearing this week.
If it isn't done right, industry representatives warn, dire consequences may follow.
Neither customs officials nor industry groups have conducted a formal economic survey, but an executive with an express-delivery firm said his industry would disappear, leaving a $60 billion hole in the U.S. economy, if proposed rules go into effect.
Manufacturers that operate facilities in Mexico and Canada said they would not be able to effectively ship to and from the United States and would become less competitive with companies operating in other markets.
The initial customs proposal calls for trucking companies to deliver electronically cargo manifests four hours before the trucks are loaded with products entering the United States and 24 hours in advance when leaving the United States.
Mr. Maner and other customs officials cautioned that the proposed rules are "straw men" at this point and subject to change. But that hasn't lessened industry concern.
"You have to look at the economic consequences. This could shut down the just-in-time delivery system," said Martin Rojas, director for cross-border operations at the American Trucking Associations, an Alexandria group that represents companies such as United Parcel Service, Roadway Express and Yellow Corp.
Just-in-time is an inventory-management strategy that delivers raw materials or components immediately before they are needed in the manufacturing process, or ships finished products from the assembly line to retailers. The process, pioneered in Japan and implemented at North American plants in recent decades, eliminates costly warehousing but requires exacting supply-chain management.
Companies are worried that they will have to hold freight in trailers, which would mean investing in new equipment or new warehouses. And manufacturers said parts would sit around while information is being transmitted, slowing assembly lines, disrupting work at plants and making operations less competitive on the world market.
Gil Duhn, general manager for customs at General Motors, said automotive components can cross from one assembly line in Canada to another in the United States, and back, in less than two hours.
"This [rule] could do enormous damage to my industry and the economy. I don't even order parts four hours before I need them," he said at the hearing.
Carriers say the rules can destroy some businesses, such as express delivery.
"They can wipe an industry out," said David Miller, president of Con-Way Southern Express, a carrier specializing in next- and second-day service.
Customs officials already are trying to make ocean carriers comply with a rule that requires cargo manifests to be sent to the United States 24 hours before ships are loaded. The rules, mandated by Congress, took effect last year, but customs is not punishing companies for noncompliance until after Feb. 2.
Mr. Bonner last week said the 24-hour rule is "necessary to protect the American people against potential for terrorist exploitation."
"We're seeing a significant amount of compliance. I can't sit here and say at the same time that compliance is so substantial in terms of all the ports of the world that I'm satisfied with it," Mr. Bonner said.
Although the 24-hour advance-manifest rule is appropriate to ships, different approaches may be necessary for different modes of transportation, he said.
"We have to keep moving forward on that process," he said.

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