I recently attended a meeting populated by representatives of large importers and some of their service providers (carriers and 3PLs, mostly).

When asked how many considered 10+2 to be a priority issue for them, there was a minor stirring in the room but nothing like the full-throated panic some pundits are suggesting is actually the right response.

Now, these are all smart people. Why aren’t they more worried? Do they know something the pundits and consultants don’t? Or do they not know something the pundits and consultants do? (Let’s leave aside for the moment that the pundits and consultants see 10+2 as a revenue opportunity — while this means we should take their warnings with a grain of salt, it doesn’t mean we should discount them altogether. The Y2K issue was a real problem that had to be addressed, even if people made money from it and some of the coverage in the business press had more than a tinge of “head for the hills!” hysteria.)

Here are some things to consider when asking yourself what level of urgency 10+2 should inspire in your organization:

• The rule has not been finalized and even once it has, there will be a long phase-in period. True enough. The rule has not been finalized and CBP is projecting it will not be until some time in September (see section 192 on page 24704) , after which there will be a year-long phase-in period where violators will receive notices in lieu of actual penalties. So, two questions: (1) do you gain anything by waiting? And (2) how long will it take you to put in place the systems and processes you will need to comply with the regulation?

(1) If you wait until the rule is final, you will know precisely what you need to do. That said, the broad nature of the requirements and even draft technical specifications have already been published and gone through a public comment period and no one is expecting massive changes from what we have already seen to what we will see in the final rule. You know you will need key data elements from both your suppliers and your carriers. You can set up the systems and processes needed to collect them now, without the threat of catastrophic penalties breathing down your neck. Or you can wait and hope that everyone in your company and all of your partner organizations can quickly agree upon and implement all of the technical and organizational changes that need to be made before those penalties start to bite in earnest.

(2) There is no question but that the rule will require a lot of data, very early in the importation process. How are you going to get that data? Who will be responsible for getting the data? How long will it take to design and implement the systems and business processes needed in your own company, much less those of your partners? Who is going to pay for it all? It’s not hard to imagine burning through a year just trying to answer these questions, much less implementing the decisions that are made in answer to them.

To some degree, it only really makes sense to wait if you can give happy “no worries!” answers to the questions above, or if you think the rule will never be implemented. Given that it was mandated by an Act of Congress in response to terrorism-related fears about cargo safety, this is probably not a good bet – and for big importers, make no mistake, you would be betting the company.

• How much do we really have to do? Don’t we have all this stuff already? The short answer is, no, you don’t. A typical importer’s OMS-generated purchase order has only 30% of the data needed for the Importer Security Filing. Some of the data elements, such as container stuffing location and consolidator (stuffer) name and address are missing from current entry filings. Other information, such as country of origin of goods and commodity HTS number, are often difficult to come by or incorrect at the time of lading. Finally, manufacturer information (manufacturer name and address) is often considered confidential by suppliers and not currently provided to importers at all. And these things will all need to be provided to CBP 24 hours prior to vessel lading, rather than 24 hours after vessel arrival, in order to prevent expensive fines and delay

• A dozen data elements – how hard could it be? Heh. Multiply those data elements by the number of shipments you get in a year. Or multiply it by the number of your suppliers. How are you going to get the data from them? Manually? Who will handle all of the faxes, emails and phone calls? Who will pay for that labor? How many mistakes will they make? How many messages will go astray? If you plan on getting the data electronically, how will you integrate your systems with those of your suppliers? Who will pay for those integrations? How will you ensure that your suppliers and carriers are providing you with data in a format your systems can use? Does your company have the IT resources necessary to get those integrations done? Can you get access to them when you need them? How long will all of this take?
  

It may not be a case of, “Be afraid, be very afraid,” but it should be a case of, “Be concerned, be very concerned.”