ISF Benchmark Study: Achieving Compliance—Against All Odds Benchmark Report: 2009 Written By: James Blaeser, Publisher, American Shipper Beth Peterson, President, BPE Sponsored by: Published December 2009Executive Summary The Basics American Shipper, BPE, the International Compliance Professionals Association (ICPA), the National Retail Federation (NRF), and the American Association of Exporters and Importers (AAEI) conducted this research initiative to follow up on our groundbreaking “ISF Benchmark Study: From Concept to Compliance” published in May 2009. “From Concept to Compliance” analyzed ISF readiness, costs and challenges of more than 200 participants and has been read by many more. The second ISF Benchmark Study—“Achieving ISF Compliance— Against All Odds”—provides an assessment of U.S.-based importers on their importer security filing (ISF) compliance efforts and their i preparedness in advance of the Jan. 26, 2010 enforcement deadline. In addition this study reviews the challenges involved in complying with the ISF and explores the costs of compliance. From Sept. 17 to Oct. 14, more than 200 companies importing goods into the United States participated in this survey to understand the state of ISF regulation compliance. Their responses to a 24-question survey allow for a qualitative analysis, including: • The state of ISF compliance. • Costs associated with ISF compliance. • Challenges importers face in becoming compliant. • Best ...
ISF Benchmark Study: Achieving Compliance—Against All Odds
Benchmark Report: 2009
Written By: James Blaeser, Publisher, American Shipper
Beth Peterson, President,BPE
Published December 2009
Sponsored by:
i
Executive Summary
The Basics
Winners
American Shipper, BPE, the International Compliance Professionals Association (ICPA), the National Retail Federation (NRF), and the American Association of Exporters and Importers (AAEI) conducted this research initiative to follo up on our roundreain “IF Benchmar tud From Concept to Compliance” pulished in a “From Concept to Compliance” analed IF readiness, costs and challenes of more than participants and has een read man more
e second IF Benchmar tud—“Achievin IF Compliance— Aainst All dds”—provides an assessment of ased importers on their importer securit filin (IF) compliance efforts and their preparedness in advance of the an , enforcement deadline In addition this stud revies the challenes involved in complin ith the IF and explores the costs of compliance
From ept to ct , more than companies importin oods into the nited tates participated in this surve to understand the state of IF reulation compliance eir responses to a uestion surve allo for a ualitative analsis, includin
• e state of IF compliance
• Costs associated ith IF compliance
• Challenes importers face in ecomin compliant
• Best practices for IF compliance manaement
In each enchmarin exerciseAmerican Shipperaims to separate “inners” from the rest of the population ese inners are companies ho perform particularl ell the’re the “A” students in this class B separatin and comparin them ac to the stud averae e can investiate their ehavior and identif the est practices that other companies should imitate to attain the same performance level For the purposes of this stud, inners meet five e criteria
Achieve compliance the an , enforcement deadline •
• ave a hih or ver hih level of confidence that their IF filins are timel, accurate and complete
• eep total cost of IF compliance elo per ear
• Pa or less per filin
• ae amendments to contracts and service areements to incorporate IF compliance
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
Executive Summary
Level of Compliance Still Low
Cost of ISF Compliance
sin these measures inners account for rouhl percent of the stud population Further examination demonstrates that inners follo these est practices
• se a roer to file IF
• ae measures to ensure their data is accurate
• se electronic data (advanced shipment notices or purchase orders) to create their filins
Fortto percent of surve respondents report the are filin IF for all of their ocean imports Compared to the percent ho reported percent compliance in the sprin stud this is a noticeale increase, ut it’s still not enouh e deadline is onl months aa and more than half of the respondents are not completel compliant oever, nearl all of the respondents ( percent) express confidence that the ill e compliant the an enforcement deadline
is enchmarin initiative focused more on the cost of compliance than previous efforts Costs are not limited to filin fees ut have een roadl expanded to include costs in terms of technolo investments, staffin, delas, and more
In eneral, surve respondents demonstrate that their overall costs are aout hat the expected In terms of dollars the maorit of respon dents estimate their costs ill e less than , per annum e scariest source of cost associated ith IF compliance appears to e delas e averae respondent reports that IF compliance is addin to das on to their ccle time ith respect to fees associated ith each filin, costs remained aout the same as the ere in the sprin enchmarin stud e averae respondent pas a little less than per filin
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
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Challenges
Methods ISF Creation
estraint is esired
urin the ill of ladin (Bo) emered as the larest source of frustration to importers trin to achieve compliance Rouhl half of respondents sa the Bo is not reported to CBP at the time of IF filin alf report that the Bo is not accurate or availale e larest issue remains the lac of timel data ith percent of respondents citin this as a prolem
urve respondents provided in a variet of as aout ho their IF filins are created, all of hich are nearl eual in popularit ome choose to uild their IF from advanced shipment notice (AN) data and file themselves thers elect to have their roer run the entire process It’s clear from this diverse set of ansers that the IF filin has not found a set of commonl areeale est practices ith no standard emerin, companies are strulin to leverae est practices for IF filin
It has ecome evident that CBP ill not liel dela the enforcement phase of IF Althouh more companies reported that the are filin IFs this stud identified a percent drop in companies statin that the ill e ale to file percent of their IFs the an dead line iven the herculean effort on the part of the trade communit to tr to meet this deadline, e ure CBP to sho restraint not issuin penalties to companies ho mae a est effort to compl
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
Table of Contents
Executive Summary.......................................................................................................................................................... i
tud ethodolo and Timeframe........................................................................................................................
Section VII: Lessons from the Winners3...............2........................................................................................................ Section VIII: A Message to CBP.................................................................................................................2..................
Section IX: How to Use This Study....................2..........................................................................................................
Section X: Index............................................................................................................................................................ 2 Section XI: About our Partners..........................................................................................92..........................................
merican ssociation of ports mporters ...................................................................................2.9........
nteration Point 3 ...................................................................................................................................................
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
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F I G U R E 1 :Purchased Products Process............................................................................................................. F I G U R E 2 :ndustr sements.................................................................................................................................... F I G U R E 3 : Compan ie in nnual ales................................................................................................................. F I G U R E 4 :Compan ie—cean Bs Per ear9...................................................................................................... F I G U R E 5 :ob Titles..................................................................................................................................9................ F I G U R E 6 :Compliance ith anuar 2 200 Deadline......................................................................................... F I G U R E 7 :of cean B’s Currentl ilin Percentae .......................................................................2.............. F I G U R E 8 :eel of Confidence ith ilins..................................................................................................3.... F I G U R E 9 : Creation............................................................................................................................................ F I G U R E 1 0 :nified ecurit ilins........................................................................................................................ F I G U R E 1 1 : Cost Proections............................................................................................................................ F I G U R E 1 2 :Total Cost of Compliance.............................................................................................................. F I G U R E 1 3 :Cost per ........................................................................................................................................F I G U R E 1 4 :Ccle Time Dela in Das.................................................................................................................... F I G U R E 1 5 :dditional Costs f ....................................................................................................................... F I G U R E 1 6 :Pain for Compliance.................................................................................................................. F I G U R E 1 7 :Challenes to Compliance.........................................................................................................9... F I G U R E 1 8 : Creation......2................................................................................................................................... F I G U R E 1 9 :Cause for mendments to ...........................................................................2.2................................ F I G U R E 2 0 : ilin ethod..................................................................23..............................................................F I G U R E 2 1 :mendments to erice reements and Contracts..........................................23................................ F I G U R E 2 2 : mpression of CBP Reports................................................................................................................. 2 F I G U R E 2 3 :earned bout .2............................................................................................................................. F I G U R E 2 4 :Contacted B CBP.............................................................................................................2.................
F I G U R E 2 5 : mpression of CBP Reports........2.........................................................................................................
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009