AAEI's Rowden Beginning to See Shipments Stopped at Border, Transport Groups Report Minimal Impact
Importers and exporters are beginning to encounter problems related to the shutdown from government agencies that regulate their products, said Marianne Rowden, president-American Association of Exporters and Importers. Import and export shipments haven’t faced many delays because of shortfalls at Department of Homeland Security agencies like CBP and the Transportation Security Administration, she said. But shipments that require other government agency (OGA) release, or certificates and permits related to release and shipment, are already encountering problems, said Rowden in an interview Oct. 2.
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CBP Aware of Missing HTS Webpage, Will Use ‘Common Sense,’ Rowden Says
One problem many importers and exporters are already dealing with are agency websites going offline, including the International Trade Commission’s Harmonized Tariff Schedule page. “That’s a problem, because companies are under an obligation to use reasonable care,” said Rowden. With many companies moving away from paper, importers and exporters are going to have to do the best they can, Rowden said. Some service providers have posted electronic versions of the HTS, Rowden said, but that may not be considered to be an official source. In conversations with CBP, the agency told Rowden that it is going to use a “common sense approach.” Then, when CBP’s staff is back, it will issue guidance to the trade community about the classification of goods during the furlough, Rowden said.
Import Holds Could Cost Importers Storage and Drayage Fees
But at least on the import side, Rowden sees the shutdown posing the biggest problems for shipments of products that are heavily regulated by federal government agencies, like food, pharmaceuticals, devices and chemicals. The Food and Drug Administration is one of the most important regulators, with jurisdiction over about 30 percent of goods coming into the country by AAEI’s estimates, she said. But even though the Food and Drug Administration has said its import entry review would be unaffected by the shutdown, AAEI has gotten mixed messages from the ports, Rowden said, which is causing consternation among AAEI members.
Another problem AAEI is trying to work out is Environmental Protection Agency’s regulation of pesticides, Rowden said. EPA requires that importers of pesticides notify the agency of arrival. “Apparently that’s not happening,” Rowden said. Complicating matters, EPA’s offices are closed, and about 96 percent of its employees have been furloughed. Rowden is starting to see shipments getting stopped, and not getting cleared.
As the shutdown goes on, these problems will only grow, and could cost importers, Rowden said. A backlog could develop for understaffed OGAs. And the agencies of most concern have release and hold authority, so affected goods would have to go into storage, and importers will have to pay drayage and warehousing costs. CBP has already said it is not going to declare any snow days. “If Customs is fully functioning, they’re not going to take into account the OGA issues, so that’s why this is going to rack up costs for importers and exporters,” Rowden said.
Some Export Shipments Also Stopped at Border
Export shipments are getting stopped too, Rowden said. For example, one AAEI member company that exports nutritional products has been unable to get Department of Agriculture (USDA) certificates that are required by the governments of importing countries as a condition for importation, Rowden said. That company has had to stop its shipment from being exported. “Now that we have this push to double exports, and we have the impact of export shipments being stopped, that’s a problem,” Rowden said.
Rowden said AAEI is trying to be the “feedback loop to the government” for its members during the shutdown. “We’re in the mode now of taking in issues from our members, feeding it back to CBP and the OGAs, and finding out what we can,” she said. “And if you go to our website, we’re updating information as we get it.
Others Say Disruptions Minimal So Far
Other trade groups say the effect on trade processing has so far been minimal for their members. For instance, the American Association of Airport Executives (AAAE) has not gotten reports of significant disruptions so far as "many frontline federal workers who operate at airports -- air traffic controllers, TSA screeners, CBP personnel and others have remained on the job during the partial shutdown,", said AAAE Vice President Joel Bacon. Still "our members remain concerned about the prospect of a long-term shutdown and future budget actions that could impact federal staffing and critical construction programs," he said. The International Association of Ports and Harbors said it has "not heard of a single story from our members about serious impacts caused by the U.S. Federal shutdown." a IAPH spokesman said.