Importers Report Increase in ISF Compliance, Use of Duty Avoidance Programs
Importers markedly improved the accuracy and timeliness of Importer Security Filing submissions in the past year, according to the “Import Operations and Compliance Benchmark Study” published in July by American Shipper magazine and BPE Global. About 75% of the 250 importers and third-party logistics providers (3PLs) surveyed now say that 95-100% of their ISF declarations are accurate (up from about 65% in 2013), and about the same proportion also say their ISF declarations are timely. CBP began ISF enforcement last year. The survey also says importers are automating more compliance and operations processes, and have increased use of duty avoidance programs by about 5%.
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The main drivers in the increase in the use of duty avoidance programs are a sharp uptick in the use of U.S. goods returned and an increase in importers shipping goods under free trade agreements. The proportion of importers using foreign-trade zones declined. Overall, the percentage of importers that don’t use any duty avoidance programs fell from 13% to 7% for large importers, and 32% to 27% for small importers.
Nearly three-quarters of respondents to the survey say they outsource customs brokerage operations. About a quarter of respondents outsource classification to their brokers, with the proportion higher for retailers than manufacturers. Other commonly outsourced functions are duty drawback, warehouse operations, and transportation management. Some 14% of respondents didn’t outsource any import functions at all.
The main worry going forward for both manufacturers and retailers is the prospect of a port labor disruption, probably because of the chance of a strike or lockout on the West Coast, said the survey. Although labor disruptions are also a major concern for 3PLs, their biggest worries were instead carrier capacity withdrawal and increasing freight rates, with customs delays and carrier consolidation also holding top spots.