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2015 NCBFAA Annual Report
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President’s Report
First, I want to thank the officers, Board Members, Staff and the Members for their confidence in me and the continued support that was received this past year. Together, we addressed a number of issues that we hope assisted our members, while also making the National Customs Brokers and Forwarders Association of America a stronger entity to serve as the voice of our industry in Washington with all the government agencies and Congress.
In my report last year, I identified a number of goals of the Association had for the upcoming year and want to provide an update.
We had hoped for a smooth transition to ACE in November 2015. This date was pushed further back to February 28, 2016, then still later to a phased adoption to begin on March 31st, 2016. The NCBFAA was very proactive in communicating with Customs and Border Protection (CBP), Department of Homeland Security (DHS), the Department of Commerce, the Border Interagency Executive Council (BIEC) and a number of other government agencies who were to transition to Single Window. The NCBFAA wrote a number of letters, and held meetings with key individuals stressing that we wanted to ensure that the migration was going to be a success. The NCBFAA understands the importance of updating and assisting our members on current issues and drafted letters that were to be used to update our respective customers. The NCBFAA continued to stress that all the government agencies must be held accountable for delivering a complete and tested system before mandating migration.
In 2015, we planned for the NCBFAA to be the leading association working with the Border Interagency Executive Council to assist in the implementation of Single Window by December 2016, per Executive Order 13659. A number of dedicated NCBFAA members and NCBFAA Counsel joined a weekly call to strategize and brainstorm on the multitude of issues that would impact our members with the ACE/Single Window rollout. I believe these efforts provided a roadmap to the BIEC, identified the problems and made recommendations to ensure a successful migration. These weekly calls will continue through 2016 until Single Window becomes a system that not only benefits all the government agencies, but provides measurable productivity gains and further trade facilitation for the trade community as well.
One of the 2015 goals was to extend our professional relationship beyond just CBP, to many of the other Government Agencies and Departments as well. Roger Clarke and Mike Lahar, working with a number of the members of the Regulatory Agency Committee, took the lead in ensuring that there was a direct line of communication between the NCBFAA and the three agencies that were the first to be scheduled for Single Window, Food and Drug Administration (FDA), Animal and Plant Health Inspection Service (APHIS) and National Highway Transportation Safety Administration (NHTSA). The NCBFAA also initiated and strengthened other strategic relationships with senior officials at the Department of Homeland Security, Commerce Department, while regularly meeting with Assistant Commissioners and the Commissioner’s office at CBP. In 2015, NCBFAA members were appointed and very active with the Bureau of Industry and Security’s Presidents Export Council, subcommittee on Export Administration (PECSEA) and the Regulations and Procedures Technical Advisory Committee (RPTAC). The NCBFAA is also well represented on the Commercial Operations Advisory Committee (COAC) to CBP providing key advice from the customs brokers perspective. The NCBFAA continues to be a highly respected and active organization in the eyes of the government agencies, which will continue to be most important in 2016.
As stated in the 2015 Annual Report, the NCBFAA sees the importance our role not only in the U.S., but on an international level and therefore the NCBFAA’s goal was to show our relevance and work closer with other global trade associations and the World Customs Organization. NCBFAA Chairman of the Board, Darrell Sekin, is a Managing Director of the International Federation of Customs Brokers (IFCBA), which is very active on the Private Sector Consultative Group (PSCG) to the World Customs Organization (WCO). As you may know, the WCO is an international body that represents over 180 Customs Authorities around the world, and CBP is very active in this organization. Many policies that are enacted by CBP, and by Customs Authorities throughout the world, have initiated with the WCO’s SAFE Framework of Standards, agreed to approaches on terrorism, protection of revenues and promotion of trade facilitation, and therefore our voice in policies is very important. In addition to the NCBFAA’s work with IFCBA, in 2015 the association joined ASAPRA, an organization that represents licensed customs broker throughout South and Central America. Kiko Zuniga and I traveled to the Annual ASAPRA meeting in Panama in November to further strengthen the NCBFAA’s relationship with other North American and South American Customs Brokers. The NCBFAA continues to work closely with our counterparts in Mexico and Canada and expect a formal agreement to be signed between the NCBFAA and our partners.
In the following pages, our members will be provided an updated status by the various committees on the work that was accomplished in 2015. Mary Jo Muoio and Dan Meylor and all the dedicated members of the Customs Committee continue to work on critical issues with CBP on ACE, Permits, modernizing Broker regulations, ISF, Drawback, and Single Window to name a few. The Customs Committee also has a number of subcommittees that have done an amazing job in other areas that impact all of us such as Fred Klemashevich in the Automation Committee, Tom Molloy with the ISF Subcommittee and Mark Shacklette and the CEE Subcommittee . All the chairs and individuals on these committees are actively engaging with government agencies on a regular basis on behalf of our industry and continue to direct policy for the industry as a whole.
Jan Fields, Chair of the Transportation Committee, Melzie Wilson, Vice Chair of the Transportation Committee, along with Rich Roche, NVOCC Chair, Donna Mullins, Airfreight Chair and Paulette Kolba, Export Compliance Chair continue to address key issues on behalf of our members with the Federal Maritime Commission (FMC), Federal Motor Carrier Safety Administration (FMSCA), Bureau of Industry and Security (BIS), Transportation Security Administration (TSA) and the Department of State. The Transportation Committee dealt with a number of issues that impacted all our businesses such as Demurrage/Detention, FMC Regulations, updated BIS Regulations, TSA’s Air Cargo Advanced Screening (ACS) and Safety of Life at Sea (SOLAS) requirements. It is due to the efforts of these individuals and the members of their respective committees that the NCBFAA is a well-respected association that these agencies turn to and rely on for expertise on many different issues.
The Regulatory Agency Committee, chaired by Roger Clarke and co-chaired by Mike Lahar have had no small task this last year dealing with, and initiating policy with all the other government agencies that we work with. With President Obama’s Executive Order 13659 signed in February 2014 requiring all federal agencies involved in international trade to be on the International Trade Data System (ITDS), the subcommittee has been meeting regularly with these agencies and working closely with Sandra Scott and Stuart Schmidt, who are on the ITDS Board of Directors to meet the December 2016 deadline. The RAC has set up subcommittees to work with each of the PGA’s in 2016 to ensure Executive Order 13659 is met by December 31st, 2016.
The association, and myself personally, rely heavily on Alan Klestadt, Ed Greenberg and Jon Kent, our Customs Counsel, Transportation Counsel, and Legislative Counsel, respectively for continued advice on a daily basis on all matters that the association is involved with. Their work not only provides the association with any legal or regulatory advice, but also assists us in working directly with these federal agencies, congress and other Washington based associations shaping policy that impacts our industry.
The NCBFAA continued an aggressive campaign of bringing more members into our association under the leadership of Bruce Goodwin, working directly with Chrystal Hunter in the Washington office. The NCBFAA continues to see growth in our membership, as companies understand the benefits of the joining an association that is pro-actively addressing issues that impact their business. The NCBFAA reached the milestone in 2015 of reaching 1,000+ members, something that former President Jeff Coppersmith had set as a goal. The NCBFAA is very proud of this accomplishment and is currently working with a professional marketing company to assist us in ensuring the association is meeting the needs of our membership and has the tools that allows the NCBFAA to continue to gain new members. I am very appreciative of the NCBFAA Board of Directors’ efforts in the formal on-boarding of new members and believe the experience for new members is very positive.
Michelle Francis continued as chair of The Affiliated Presidents Network (APN) this past year and continues to work closely with the very important local affiliates. As there is still considerable work for a successful ACE/Single Window migration, the APN and the local associations will play a critical role in working with local CBP Ports on mutual education, communication and trade facilitation. This coming year, this group will be critical to the success for ACE migration and the NCBFAA very much appreciates all the efforts each of the presidents of the local associations do on behalf of all of our members.
Shane Garcia and Gerry Becnel have done an outstanding job as chairs of the Annual Conference Committee and Government Affairs Conference, respectively. These two events are the only opportunities for all our members to gather, learn, lobby congress, meet face-to-face with senior leadership from all the government agencies and just social network. I believe our members really appreciate these conferences as the attendees increase every year.
The NCBFAA’s Educational Institute (NEI) continues to grow and provide more value to every one of our members. In late 2015, the NEI was very pleased with a strategic move to hire Ken Bargteil to the NEI staff, after retiring from the Customs Brokerage industry. Education is the key to success, something which Ken Bargteil and Federico (Kiko) Zuniga espouse every day in the programs and webinars they provide to the industry. In almost all the advertisements I see from all facets of the trade community regarding education offerings, prominently displayed is the NCBFAA Educational Institute Logo and the words ‘CCS/CES’ Points available, which shows the impact this institute is having.
2016 is going to be a very challenging year with ACE migration required by all members of our community, along with the implementation of Single Window, and the new requirements of SOLAS, but firmly believe that all the volunteers, and our wonderful staff in Washington D.C., the NCBFAA is poised to assist our members make this as seamless as possible. The NCBFAA is here to assist, guide, educate and be a voice for all our members’ behalf and I look forward to my upcoming year as president to meet not only the NCBFAA’s goals, but those of all of our members.
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| Executive Vice President’s Report By barbara reilly, CAE
For the last thirty-six years, I have served the Association community in one management capacity or another that includes the local, statewide and national level. Throughout that time, I have always felt the deepest admiration for those volunteer activists who generously share their time and expertise to further the interests of their industry and their colleagues. Whether finding fulfillment in serving as the member of a committee who deliberates the minutiae of some arcane but influential rule, contributing at the highest levels by helping to make organization-wide policy that affects the entire operation, or engaging in activity anywhere in between, all such involvement is vital to the success of an industry association and its credibility to the public at large - as are the 1,000 plus dues paying loyal member organizations of NCBFAA. Like many of you; I too once paid our member dues, served on and chaired committees, and volunteered as a board of director at an association….and I’m still a recovering freight forwarder at heart.
While serving the NCBFAA community I have experienced the dedication and seen the effectiveness of a diverse cadre of professionals who recognized the value of joining together to make an enterprise greater than the sum of its parts. That is because volunteers, motivated by affection for their vocation, bring with them to the table a willing spirit, competent hands, a focused sense of purpose, and intense desire to accomplish the goals of the national organization, while juggling their own lives locally.
With its network of 38 committees and subcommittees that touch on virtually all aspects of the transportation logistics industry, our Association’s transformational governance offers its members and other practitioners of the trade numerous opportunities to learn, assist and achieve extraordinary industry change and accomplishments, as a platform for engagement and a conduit for members to pursue their chosen goals, recognizing the ultimate mission of the association. Through a variety of options provided to them, there is a mechanism that allows them to help participate in or direct programs and policies, which are designed to further those commercial interests of not only our diverse industry participants but also those of the United States, and ultimately the global economy, at large.
Since its inception almost 120 years ago, the NCBFAA has depended primarily on volunteer professional support to transform society through the power of healthy collaboration while advancing its mission to the membership. Due to the technological advances recently experienced in most industries, including those that have been addressed by various NCBFAA committees, it’s no wonder one might consider this organization as somewhat of an epicenter of industry innovation in the 21st century, and as the Voice of the Industry at the table, perhaps even a model to learn from and emulate in countless ways. And that is only made possible by all of you. By volunteering, individuals help both the Association and their colleagues. But volunteering is also a great way to discover new skills or further develop an existing skill through wonderful opportunities to try new things and develop expertise in fresh innovative areas as well as contribute to skill development while fostering leadership skills.
Every volunteer really does make a difference. Those SMEs engaged in willingly supporting the NCBFAA’s initiatives, signal their employers that they are invested in this industry and are willing to do what they can to make certain that those initiatives have the greatest chance of prevailing.
In any career path, there are innumerable stages that fundamentally include rudimentary learning and harnessing the industry procedures, sharing the process through industry networking internally and later externally, eventually raising your hand to consider engaging in a Leadership position, and finally, mentoring the next generation of potential industry experts, as reflected in the NCBFAA Emerging Leaders Mentor Program (ELMP) . Take time to insure that no matter what station you might be at in your career, you are potentially focused on accomplishing some of these steps as personal legacy footprints, before you someday consider a life outside this international trade arena.
I strongly encourage those of you who truly care about this business that supports them and their families to heed the call when it comes and step up by sharing with your Association the particular skill set that you have acquired over your years in this business. The complexity of the challenges that face us in the months and years ahead will require a vast array of talents to address and yours may be just what is needed to solve a pressing concern. Our committees are always looking for knowledgeable and experienced members; our grass root Affiliated Associations - the basic foundation of any national association through identifying and supporting potential future leaders -can always use motivated and eager volunteers to share the workload that they carry; while our experienced, innovative and proficient HQ Team in Washington, DC, (Thanks to Kim, Tom, Drenda, Ceci and Kim in particular) is always looking to our industry professionals for help in fielding logistics questions posed by those outside the Association as well as outside our industry. So remember that although we now have a formal membership department, the job of caring for the membership experience belongs to everyone in the association, as the association itself belongs to the members.
In conclusion, although this will be my final report to you, I can honestly say that my experiences with the NCBFAA have been an honor, a privilege and a pleasure, as well as rewarding in terms of ever increasing, substantial accomplishments within the association and through collaboration with the various state and federal regulatory agency partners and other sister organizations. Those with whom I have worked with for the last 18 years here at NCBFAA, have been some of the kindest, most caring, wise and welcoming colleagues someone could hope for, from numerous diverse corners and demographics of the USA, including my previous southeastern home. And as I count down my final days, I know that I shall miss them, but I will never forget them. You know who you are, and I genuinely thank you.
And on an even more personal level, please indulge me in this, my closing report, as I add that like perhaps many of you, these long hours and efforts would not have been possible if not for my family. My dear mother, Betty - a retired CBP agent soon to celebrate her 93rd birthday (yes; on that same weekend that the Board of Directors meets every June!) nurtured my extremely gifted, patient, indulgent and most significant accomplishment of my life - my son, Travis - after school each day, until he enthusiastically agreed to being uprooted to relocate to NCBFAA in DC, at a time when other teenagers might have rebelled, only to endure his mother’s passion, the industry we serve.
By Scott Larson
What is financial success? Some consider it to be wealth, meeting your monetary goals, living without debt, picking the right stock or perhaps winning the lottery. As treasurer for NCBFAA, I have the duty to watch the success of the organization from a financial perspective. That success is not measured just within our balance sheet, but within the success we provide our members.
As you may recall, the Board of Directors approved the FY-2015 budget on the premises of a negative return justified with the many hurtles before our association and its members. We exceeded on our expenditure estimation. Yet, as a member you should consider this a great success.
We introduced to the membership the trucking vetting service FREE to all of its members. We have been on the forefront of all the ACE issues. Services were added to bring you the daily ACE update reports. NEI staff has been expanded to with the addition of great leadership who will lead the NEI beyond expectations in years to come. NEI put together is first ever education summit G-TEC in August of 2015. Our Regulatory Agencies committee was able to conduct extended meeting to focus on the PGA requirements. The LMI system was launched. NCBFAA improved your web site experience. We made investments in marketing to improve upon our membership goals.
Most importantly we invested in you, our members, to bring value and professionalism in return for your membership and loyalty. The association remains financially strong with budgeted retained earnings to support the investments of today. A copy of the financial report is included for your review. You should be proud of the accomplishments and investments made on your behalf. Please thank those who work so hard and volunteer their time and knowledge supporting this association and its members.
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Customs Committee Report
The Customs Committee actively and aggressively served the interests of our members in 2015 with much of the focus being on ACE readiness and the future of broker regulations. However, these were not our exclusive areas of focus as many other topics—while not headline grabbing—did deserve and get our attention. Throughout the year, we held monthly full committee conference calls, bi-weekly and monthly subcommittee calls for the Automation Subcommittee, ISF, CEEs, and Role of the Broker, single subject, in-person meetings, full committee meetings, daily ACE calls, meetings and calls with CBP, Congressional briefings, CBP webinars, conference presentations, countless phone calls and correspondence.
All of the work done by the Customs Committee, counsel and countless volunteer members is focused on what is in the best interest of our members and our industry. This past year saw those efforts focused on several key developments:
Automated Commercial Environment and International Trade Data System - The Customs Committee focused on ensuring that CBP placed reasonable expectations on the brokerage community. When it was apparent that CBP and the PGAs were not going to be ready for mandatory use deadlines, the NCBFAA was not shy about informing Customs of what was needed for a successful implementation and providing our members with materials to present to their clients. Our voices were heard as CBP adjusted the timelines. The Customs Committee ACE Taskforce convened to continue their work. This Taskforce focusses on the strategic issues of ACE development including prioritization of development, need for robust training of CBP users, need for Business Rules documents (user guides) published before brokers are expected to use ACE functionality, well thought out integration of the PGAs, and Post 2016 continuation planning.
President Powell represents the NCBFAA at outreach meetings of the Border Interagency Executive Council. This group is tasked with managing the integration of the PGAs into using ITDS. The interests of the NCBFAA membership are supported by President Powell at regular BIEC meetings and he prepares for those with weekly calls with representatives from the Customs Committee and NCBFAA representatives to the TSN ITDS subcommittee.
The Automation subcommittee meets regularly with CBP to iron out operational issues related to ACE functionality. Certain functionality challenges still persist for brokers and the Customs Committee regularly brings the needs of the broker forward to ensure they are taken into consideration with ACE development and fixes.
Broker Regulation Review
Permitting - After broad consultation with the membership, the NCBFAA presented proposed regulatory change to CBP regarding permitting regulations. NCBFAA aggressively ‘socialized’ this discussion within our membership and the larger brokerage community over the last several years. It was important to us that our members understood the impact ACE and full utilization of RLF could have on the makeup of brokerage companies. Our proposal of a supervision ratio of 1 licensed broker to 12 employees engaged in the conduct of customs business reflects a concensus among our members that active involvement of a licensed individual is critical to the mandate of responsible supervision and control. It also reflects our changing work processes where remote management is common and supervision can be performed by a licensed individual in one location for employees in various other locations. It was important to the NCBFAA that broker regulations for permitting both preserve the engagement of a licensed broker and were adaptable to changing business processes. It was also important to the NCBFAA that CBP understand how critical the engagement of a licensed broker was to ensuring accurate import declarations upon which CBP can rely. After several discussions with CBP, it became clear that CBP will not support regulations which specify the ration. CBP states that they are constrained from regulating business practices. The Committee continues to dialogue with CBP on ways to support the involvement of licensed brokers.
Customs Business - The definition of customs business was actively discussed by the Committee through the year and it is becoming increasingly apparent that CBP is also looking at the definition and geographical restraints. For now the regulatory definition and CBP interpretations persist. However, the Committee has challenged CBP’s enforcement of the regulations and called for action against those engaged in but not licensed to conduct customs business—in and out of the Customs territory of the US. The definition of customs business will have direct impact on brokerage operations in both day-to day means, such as employee reporting, and in strategic means, as brokers confront the lure of moving business operations out of this country.
The Broker Regulations Working Group redoubled efforts with a new CBP team to advance modernization of other regulations, including employee reporting, continuing education, broker examination, activities with unlicensed individuals, confidentiality, recordkeeping, andn responsible supervision and control.
Broker-Known Importer Program [BKIP] - With ACE release now a part of a broker’s entry process, BKIP is ready for prime time. We expect to see growing numbers of entries flagged for BKIP as brokers bring their clients into the program. The merits of this program are underscored by the reports we have received of enforcement actions taken against brokers who fell prey to fraudulent importers. The Customs Committee encourages all members to embrace this program and recognize multiple benefits.
The Customs Committee ISF Subcommittee continued its active engagement with CBP on enforcement of the ISF. Central to the committee efforts was to ensure that the enforcement standards are transparent so customs brokers can successfully comply. This is important due to the difficulty obtaining accurate lading times.
The membership of the NCBFAA has benefited from the service of countless volunteer members who have served on this and other committees and off-spring subcommittees, working groups, task forces and the like. Currently the Area Representatives to the Customs Committee are:
The roster of the Customs Committee goes way beyond the Area Representatives as the Committee is supported by many wise advisors including NCBFAA officers, NCBFAA Past Presidents and past committee chairs and co-chairs. We are expertly represented and counseled by NCBFAA Customs Committee Counsel Alan Klestadt (who is not just a lawyer, but a licensed customs broker as well) and NCBFAA Legislative Representative Jon Kent. The value of their tireless, earnest, and effective representation of our interests cannot be overstated.
The issues addressed by the Customs Committee are as varied as our businesses. Sub-committees or working groups have been established for the more enduring issues; these groups come and go as issues warrant and participation is open to any NCBFAA regular member. Currently there are groups established to focus on the Importer Security Filing chaired by Tom Malloy, Remote Location Filing chaired by John Peterson, Broker Regulations and Role of the Broker chaired by Mary Jo Muoio and Daniel Meylor, ACE Taskforce chaired by Mary Jo Muoio, Centers of Excellence and Expertise chaired by Mark Shacklette, Automation Chaired by Fred Klemeshevich.
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Transportation Committee Annual Report By Janet Fields and Melzana Wilson
The year began with a flurry of calls and discussions surrounding the ongoing West Coast labor negotiations. As forwarders and brokers are the cog in the wheel of transportation our customers look to us to keep them advised of congestion issues and the best way to move their cargo. We aligned ourselves with several groups of concerned beneficial cargo owners such as the National Retailers Association and signed on to their efforts to address labor slowdowns. In December of 2014, we signed on to a letter to President Obama urging use of a mediator to expedite a settlement. We kept our membership up to date with the latest status of the negotiations until a settlement was finally reached.
We continue to meet with the Federal Motor Carrier Safety Administration (FMCSA) to clarify the exemption for Customs brokers, NVOCCs and Foreign Freight Forwarders from bonding and licensing requirements of MAP-21 when handling the domestic movement as part of an international shipment. We’ve worked with the FMCSA to minimize the liability of our industry when handling shipments on behalf of exporters and importers.
In March of 2015, Paulette Kolba, Jan Fields and Geoff Powell met with three agencies in Washington DC to foster relationships and emphasize our philosophies. With U.S. Census officials, we discussed routed export transactions, the broker named as the USPPI only by default, and ACE transition. We brought up the challenges when one ITN covers multiple containers and is closed out when the first container crosses the border. At the Bureau of Industry and Security (BIS) we discussed regulatory processes, liabilities of foreign freight forwarders and best practices with routed shipments. We requested BIS consider amending the current Anti-boycott regulations to be more user-friendly. We met with Customs and Border Protection regarding export penalties and the variance by ports citing examples of aggressive penalty issuance from specific area. We ended each of our meetings offering our assistance and invited the agencies to visit our ports for a first-hand look at our operations. BIS actually took us up on our offer and sent three representatives to the ports of Savannah GA and Charleston SC to meet with several foreign freight forwarders on a desk level.
On April 15 2015, we petitioned before the Federal Maritime Commission (FMC) to initiate a rulemaking that would expand the Negotiated Rate Arrangement (NRA) exemption in 46 CFR part 532 to allow both the inclusion of economic terms beyond rates into NRAs and modification of NRAs at any time upon mutual agreement between the NVOCC and their customer. Removing restrictions on NRAs would eliminate the need for NVOCC Service Arrangements (NSAs) simplifying NVOCC filing requirements.
The annual Global Supply Chain Summit was held in Washington DC on May 12, 2015. Several Transportation Committee members and NCBFAA officers attended the summit as a sponsor. Arranged by the U. S. Chamber of Commerce the focus was connecting business to global markets presented by a list of high level speakers, including the commissioner of Customs.
Two years ago we began a focus on placing NCBFAA representatives on various advisory committees. We have several members representing exports on Advisory Committee on Commercial Operations to U.S. Customs and Border Protection (COAC) and members of the Transportation committee have been placed on:
Due to our close relationship with Census, our committee was requested to participate in a demonstration of refactored AESDirect beta testing the system and we proudly provided three participants.
A goal of our committee is to review and comment on related NPRMs even when we agree with the content. We were successful in commenting on
The most exciting and beneficial deliverable to our industry was Geoff Powell’s decision to purchase a trucker vetting program for our member’s use. How wonderful it is to be able to minimize your liability at no cost to you? To find out more about this exceptional benefit, check out these alerts at members.ncbfaa.org
Our committee works closely with the FMC, ports and carriers on the ever increasing cost and consequences of port congestion. In 2014 we sent members of our committee to attend each of the FMC’s fact finding forums throughout the US. Each spoke on behalf of the NCBFAA and addressed our challenges. Our NVOCC chairman Rich Roche followed up with an letter to FMC Commissioners Doyle and Lidinsky citing examples of astronomical expense incurred by beneficial cargo owners when they had no opportunity to minimize. A full report of the FMC’s findings may be found on their website www.fmc.gov.
Our committee continues to fight the assessment of demurrage charges when cargo is not available for pickup. Some of our members were successful in mitigating charges by addressing the issue with CADRS, the FMC’s dispute resolution service.
Jon Kent closely followed legislation affecting our industry including the Ports Act which requires the collection of port statistics and key performance indicators to identify when there is a slow down due to negotiations. We support the requirement for ports to maintain statistics and have signed on to several letters encouraging adoption.
Paulette Kolba’s export compliance committee is addressing export vehicle processes and the wide variance among ports. Her committee, meeting monthly, continues to produce vital compliance information along with useful tool for OTIs. These are currently posted on the NCBFAA website under Publications and Resources.
In September we signed a Memorandum of Agreement with the Department of Commerce’s International Trade Administration to form a strategic partnership intended to encourage exports. Patrick Kirwan from DOC, attended our GAC to outline our working relationship and potential plans together. We are incorporating our APN committee to assist with outreach.
Donna Mullins and her Air Freight Committee are working closely with Cargo Network Services to develop electronic processes for the Air Freight industry. The committee meets regularly with the Transportation Security Administration (TSA) to discuss the challenges of securing air freight while expediting processes.
SOLAS regulations has been a hot topic and our committee continues to involve ourselves in shaping the United States processes to meet this international regulation. Our counsel, Ed Greenberg updated several of our widely used publications to address our member’s liabilities under SOLAS.
Ed Greenberg and our committee worked closely with Federal Maritime Commission to ensure our voices were heard. On November 3, 2015, the FMC issued their final notice on Ocean Transportation Intermediary Licensing and Financial Responsibility Requirements and General Duties. Under new rules OTIs will be required to renew licenses every three years through an on line portal beginning late 2016. Hearing processes have been expedited and additional bond requirements for U.S. branch offices have been eliminated. For a full scope, visit the FMC’s website.
Our committee was contacted by the Government Accountability Office (GAO) to arrange a teleconference our association to better understand the role of freight forwarders and customs brokers in freight movement. They were particularly interested in our response to disruptions from such events as labor disputes, natural disasters, etc. at major west coast ports. GAO is the investigative arm of Congress. They aggregate information and write reports. On December 9, 2015, eleven of our association members joined a conference call with GAO to provide our input on these topics:
We followed up with written comments and provided individual subject matter expert’s contact information for further questions.
We look forward to an equally busy 2016 representing our members.
NCBFAA Regulatory Agencies Committee Annual Report Again 2015-2016 has been very challenging period for the Regulatory Agencies Committee (RAC). The RAC continues its monthly phone conference calls along with an open formal meeting at the NCBFAA Annual Conference and the Government Affairs Conference. Proposed implementation of the FDA Food Safety Modernization ACE regulations and preparation for the transition into the Automated Commercial Environment Single Window at the Border has necessitated increasing our monthly conference call to 1 ½ hours and holding a full day RAC strategy retreat in December 2015.
The RAC has increased its membership to 18 volunteers along with active participation by the NCBFAA Legislative and Customs Counsel offices. We have been very fortunate to also have representatives from FDA and other government agencies sit in on some of the RAC conference calls. The NCBFAA is also very fortunate that this group of industry leaders, who also individually serve on such groups as COAC and the ITDS Board of Directors, also devote a great amount of time and expertise to the RAC efforts.
The RAC continued its efforts in both NPRM comments and direct agency interaction to convey:
These are just a few of the areas of concern the RAC addressed on behalf of our members. We feel our efforts have shown up by a better understanding by various government agencies of our true supply chain role. One area which has reflected our efforts is in FDA defining the FDA importer as the party causing the importation to take place which could be a party other than the Importer of Record.
For many years the RAC has been working with FDA to develop fair, standardized, comprehensive Filer Review Guidelines with proper due process provisions. FDA heard and understood the various issues the RAC brought forward on the current review process. To the agencies credit they have worked hard to develop guidelines which will meet their goals for accurate data while still being fair to filers. In November of last year, FDA put forward their proposal for national guidelines which was reviewed by an ad hoc RAC subcommittee. While being a very thoughtful and complete process the RAC subcommittee did develop an eight page comment document outlining areas that still need to be addressed or improved on. It is anticipated FDA will soon put out a draft Filer Review Guideline for further review and comment. After many years of hard work by the RAC we feel we are very close to having a fare and standardized Filer Review process.
As CBP moved more aggressively towards the transition to ACE, and the PGA CATAIR data sets became published, the RAC moved to start addressing concerns of meeting the published milestones for full ACE processing. Through the efforts of RAC member Myra Reynolds, John S. James Co, work groups were formed to develop PGA technical guidance documents based on CATAIR and supplemental guide information. These documents are being posted on the NCBFAA website as they become available. The goals of these documents are to convert technical specifications into plain language for discussions with internal staff and import clients. The work group concentrated on the three core PGA’s scheduled to come on line February 28, 2016. Additional guidance documents will be published as additional PGA pilot programs are initiated.
As PGA pilot programs became available and major processing issues started to materialize it became evident that additional information and help would be necessary as CBP moved forward with planned Single Window implementation. With so many programming problems, CBP was forced to move full implementation of ACE from November 1, 2015 to February 28, 2016. After the November ACE push back, the RAC decided a one day strategy retreat was necessary to determine how to best help our membership. Upon approval by the NCBFAA Board of Director, the retreat was accomplished on December 5, 2015. The main emphasis of this retreat was to establish specific agency sub-committees. These sub-committees will establish contact with the PGA pilot participants to gain information of what is and what is not working, make contact with the specific PGA to discuss operational issues, and establish some form of communication structure to the membership. The main effort is to be directed towards the PGA coming on line February 28th. The following RAC sub-committees were established and some volunteer chairs secured:
These sub-committees will be our backbone for working with the various PGAs as they fully integrate into Ace. The RAC is planning a series commodity specific grassroots webinars to help the membership better understand the PGA requirements and address some of the pitfalls and fixes. The RAC will continue to look for subcommittee volunteers and solicit information from PGA pilot programs participants.
Other ACE areas discussed at the strategy retreat were:
The RAC is working on establishing an FDA training center session on the role of a Customs Broker similar to what Myra Reynolds conducts with CBP. Myra has furnished the RAC with a copy of her presentations for possible alteration and use for an FDA presentation. Mr. Matt Brauner has volunteered to work on this project.
Many new PGA NPRM notices are continually being published in the Federal Register stating development plans, programming, and changes in regulatory structure. It is extremely important for the NCBFAA to furnish comments on any issue which may impact our industry. The RAC will continue to address any NPRM which contains language or requirements beyond the scope of our members. We ask for membership support by conveying to the committee any NPRM issue which may affect your organization.
Large Broker & Forwarder Sub-Committee Report
The Large Broker & Forwarder Sub-Committee (LB&F) focuses on the impact of U.S. Customs and Border Protection (CBP), Federal Maritime Commission (FMC) and other government agency directives, actions and initiatives on large member corporations. As a sub-committee of the Customs Committee, the LB&F is charged with the identification of issues, the sharing of member perspectives and proposed solutions, and then elevating the information with comments to the Customs Committee.
In 2015, the LB&F convened via conference call on a bi-monthly basis. The main topics discussed were: ACE implementation, the PGA message sets and pilot; Broker Confidentiality; 19 CFR part 111 Rewrite and associated topics, notably a specific definition of “Customs business” and the proposed National Permit recommendations, and continuing education requirements; Broker employee information in the ACE portal; and the Broker Known Importer Program.
Issues escalated to the Customs Committee by the Large Broker & Forwarder Sub-Committee include:
The LB&F Committee will meet via conference call throughout 2016 and will evaluate opportunities for in-person meetings at NCBFAA Conferences.
NCBFAA Educational Institute Report
Four years into its current five-year plan the NCBFAA Educational Institute (NEI) has made impressive progress in some areas while continuing to face challenges in others. Perhaps our most significant progress has been in the area of I.T. and Administration. Under the leadership of that Subcommittee Chairman, Steve Powell, our NEI Director, Cecilia (Ceci) Ferrara and with the contribution of both NEI staff and Subcommittee members the NEI successfully moved its CCS course and all case studies to its own learning management system (LMS), LOGISTICS EI, a platform engineered and hosted by Meridian Knowledge Solutions LLC. The I.T. and Administration Subcommittee remains focused on the management of the LMS, implementation of its eCommerce module and realization of the system’s full potential for reports and automation of administrative functions.
Also noteworthy in 2015 was the hugely successful launch of our first conference, the Global Trade Educational Conference (G.TEC). The brainchild of its Executive Director, Federico (Kiko) Zuniga and with the enthusiastic support of Ceci and staff, conference attendance exceeded its already ambitious goal by 33 percent and received rave reviews from its audience, presenters and sponsors. G.TEC One was held in Chicago August 3 and 4. While the primary goal of this conference was to provide a unique educational opportunity to front line managers and burnish the NCBFAA image across the trade community, it happily also made a sizable contribution to Association revenues. Building on this inaugural success, the NEI is hoping to expand conference attendance in 2016 by 100. The 2016 event will be held August 8 and 9 in Atlanta, GA.
At the outset of the current five-year plan it was clear that we had embarked on an extremely challenging mission. Central to our enterprise is the accreditation of NEI as an institution of higher education built on a distance learning model. The disciplines of Global Logistics and Supply Chain Management are becoming more sophisticated; changes in these fields are coming more quickly and demand for well trained, highly skilled and expert professionals is accelerating. These conditions all argue for the need of an institutional leader for developing the abilities of individuals seeking employment or advancement in the career paths we are attempting to foster. That is the need the NEI aspires to satisfy. In 2015 we made great progress in developing new content for our programs. The Master Customs Specialist (MCS) program made strong progress toward implementation, and is expected to be completed by year end 2016. Even more exciting is the development of a Master Export Specialist (MES) program. For this, after much consideration we confidently engaged Dan Gardener, an expert in export compliance, and his company, Trade Facilitators, to create the curriculum, and we hope to be offering this program by the third quarter 2016 with great anticipation.
Despite these exciting developments, much remains to be done. The Certified Export Specialist (CES) Subcommittee continues to struggle for volunteers, and as such, sometimes has trouble meeting project milestones on time. The Chair, Michele Pluta sincerely hopes that membership reaches out within their respective companies for volunteers. In the final quarter of 2015 leadership of the Content Subcommittee changed once again and under the direction of Merit Tremper is back on track. This Subcommittee is organizing itself into well-defined Work Groups that have clear objectives, the integration of which will foster development of NEI content and create structure for its accessibility and use. Elements of this critical Subcommittee’s mission plan include the creation of an NEI library, archives and wiki. These will become the principal repositories of NEI content.
The Policy Subcommittee fully supported its role in defining and nurturing the NEI; ensuring that it is firmly rooted in the best traditions of NCBFAA while continuing to reach out in an ever-expanding way to the larger trade community.
With help from its Steering Subcommittee Chairman, Dr. Robert (Bob) Perkins and Kiko, the NEI relationship with Texas A&M (TAMU) continued to develop in a very positive fashion, including sharing of content and curriculum and improved brand recognition. NEI efforts to enlarge its academic outreach with other institutions have been very encouraging and can be expected to continue in 2016.
All of the above areas continue to benefit from the strong footing the NEI has cemented with its first and most successful certification program, the CCS. The ongoing work in the CCS Subcommittee cannot be overemphasized, and the NEI is very fortunate to have Karen Damon leading those efforts as its Chairwoman. Likewise, all the good works that are being contributed by NEI volunteers, staff and contractors might otherwise go unnoticed if not brought to market, and for this we rely on our Marketing Subcommittee lead by Chairwoman Katrina Dill. The hard work and creative skills that Katrina brings to this vital role continues to be the hallmark for the success of our brand. In today’s competitive environment, the ever expanding brand recognition and approval of NEI is a “pearl of great value.”
Lastly, it should be mentioned that in 2015 our Association President, Geoff Powell created a new NEI position – Chancellor, and it is the writer’s extraordinary honor to have been selected to fill this position.
NCBFAA Drawback Committee 2015 was a very busy year for the Drawback Committee. Congress moved forward with the Customs Reauthorization Bill and, after many stops and starts, the House and Senate finally passed two similar bills modernizing and streamlining the drawback process. Members of our committee spent significant time on the Hill and with Senate Finance and House Ways & Means Committees working on proposed language in an attempt to reconcile both bills. It was a whirlwind, but a conference report was finally issued and agreed to by the full Congress, leading to the signing of the bill in late February this year.
This marks the end of a 12-year effort by this committee to modify drawback to allow substitution at the 8-digit HTS level. This is a significant and positive change for drawback. However, like all legislation, there are some aspects of the law that we didn’t necessarily want, and some last minute changes that need interpretation through regulation. We now embark on an effort to revise the drawback regulations in time for the effective date of the drawback changes in February 2018 and we expect to spend significant time working with Customs to hammer out exactly how drawback will look under the new law. Many thanks to our Legislative Counsel Jon Kent who has guided this committee through many ups and downs with this legislation always providing sound advice. We also need to thank for their support over the over the last 12 years NCBFAA’s executive committee, and past Customs Committee Chair Ken Bargteil, as well as current Chair Mary-Jo Muio and Vice Chair Dan Meylor.
If the legislation wasn’t enough, as 2015 came to a close, CBP finally started its effort to develop how drawback would look in the ACE environment. Many members of our committee are engaged with Customs through the Trade Support Network and other organizations regarding the development of ACE. Members of our committee were part of a working group with CBP officials that developed a new Drawback CATAIR, a draft of which was made available on the Customs website in January. We are working closely with our membership, software providers, and CBP to make any necessary revisions to that document, as well as to get policy guidance from CBP on various changes being made to the data elements now being requested by CBP. With drawback slated to transition to ACE by the end of this year, we anticipate significant work on the CATAIR over the next six to eight months.
We have also been working on two additional issues. First, CBP reinstituted a post entry compliance measurement program in an attempt to respond to the criticisms posed by the General Accounting Office about how CBP monitors drawback filings and accounts for drawback paid out. While the number of claims reviewed has been few, only 400 nationwide per year, our members’ experience has been that that the 100% review done post entry can result in requests for significant documentation, some of which is quite old. We have worked closely with CBP to modify the parameters of requests, and CBP has made changes to accommodate some claimants and filers. However, our committee is looking for CBP to make significant changes to this program in 2016.
Second, we have been working with CBP on their plans to eventually transition drawback into the new Centers of Excellence. Our membership believes that moving the current drawback process into a CEE would be counterproductive, at least until drawback becomes completely electronic. We provided a position paper to Customs and the current Customs thinking appears to be that drawback will not be included in the CEE until it becomes completely automated in ACE.
Nominating Committee Report
The Nominating Committee this year is pleased to put forth the following individuals to be voted on at the 2016 NCBFAA Annual Meeting during the 2016 NCBFAA Annual Conference in Tucson, Arizona.
The Nominating Committee
Legislative Committee Report
2015 witnessed the creation of a new NCBFAA Committee. Together with the Officers, Board of Directors and other relevant committees, the committee is designed to participate in the process of taking NCBFAA positions on legislation before the Congress. Often though, taking a position is only the start of the process – next comes the hard work of advancing those positions in the Senate and House of Representatives. Here too is where the committee comes in - providing a grassroots network to show support. Finally, the committee members will keep the Association advised of matters of local importance so that National can represent the views of our affiliate associations.
As chair, I will also assist in planning the Government Affairs Conference and have a say in our PAC donations, as a member of the NCBFAA PAC Board of Governors.
The Legislative Committee, however, is different from other NCBFAA committees in that we are not limited by area, numbers, or form of membership. Any member can join – be they regular or affiliated members – as long as they will take part in promoting National’s positions before the Congress. Currently, there are 22 committee members spread evenly throughout the country. While everyone is welcome, we need additional representation from Boston, the Northern Border (west of Chicago), the DC-MD-VA area, and Texas. We hold monthly conference calls so that we can discuss committee business, as well as hear Jon Kent’s update on key customs broker and forwarder issues pending in the Congress.
I urge you to join. You can do so my letting me know about your interest or calling (215) 922-6610 or emailing c.riley@jasteer.com. You will find yourself contributing in one more way to advancing our profession.
Legislative Representative’s Report Titles don’t tell everything; so let me start out with a brief job description. As your representative in Washington, my responsibilities are really oriented to policy development and execution – reconciling legislative and regulatory government activity with the Association’s positions on issues like customs regulation and automation, or maritime regulation and port metrics, or air cargo. While I am sometimes accused of being an “attorney”, the vast amount of my work involves my political background. The job calls for having a strategy and devising tactics to achieve a good result, whether in the Congress or at the regulatory agencies.
2015 was a lackluster year on Capitol Hill, but brought three important pieces of legislation to, or almost to, fruition. With the strong support of the Government Affairs Conference, which floods the Hill with our members who are on a mission, three important bills passed the Congress: Trade Promotion Authority, which enables the President to negotiate free trade agreements; a massive transportation bill, that included a means of measuring the efficiency of individual ports; and, a customs reauthorization bill, which has almost reached final passage at the time of this report. The customs bill was a highlight for us because NCBFAA was successful -- in placing responsibility for identifying importers on the importers themselves, in eliminating a requirement of a U.S. agent for overseas importers, and finally completing work on a drawback simplification package. Eventually, NCBFAA has arrived at a position whereby we could support passage of this legislation.
But the big news for the industry was the transition to ACE. CBP’s deadlines failed to match its progress towards preparing the trade community for full implementation. Noticeably absent from preparation to meet the deadlines was completion of the software, a “lock-down” period where changes to software would be suspended prior to brokers going “live”, and a 90-day timeframe for importers, software vendors and customs brokers to prepare data and test in ACE before access to ACS was discontinued. NCBFAA worked on almost a daily basis to ensure that the broker community was prepared for the transition. There were many players involved – from President Geoff Powell, to our COAC and TSN representatives, to NCBFAA committee chairs, to our most knowledgeable members, to the Association staff. My primary role was to understand the details and provide the best strategic advice that I could.
In the maritime realm, the most glaring issue was the cost of demurrage and detention to our members and their clients, especially in the backdrop of the recent West Coast labor disputes. It continues to be an issue for the Association in 2016. Beyond that, it has also been important to address the myriad of factors that impede the passage of cargo from the ocean-going vessel to its final destination. In the end, Congress simply passed the ball to the Department of Transportation which has been charged with the responsibility of a comprehensive report. NCBFAA joined a guidance letter to the Department with ideas about what must be measured to understand the efficiency of ports.
Finally, the Legislative Representative must participate in the many NCBFAA activities and programs, notably: the Government Affairs Conference which has consistently been a huge success; the PAC which assists in relationships within the Congress; the key Association Committees which focus on the regulatory agencies; and the birth of a new NCBFAA Committee – the Legislative Committee under Charles Riley.
As always, it is an honor to serve in this multi-faced capacity, primarily because of the quality of NCBFAA’s membership and their tireless efforts to improve the standing of the industry.
NCBFAA PAC Annual Report
As always, the Political Action Committee (PAC) has succeeded through the generosity and commitment of the members of the Association. 2015 was no exception. The PAC made contributions of $15,000 to candidates for Congress, while its opening and closing balances were nearly identical – there was a little more than $25,000 at year’s end.
But, operating a successful PAC is more than compiling good numbers, it is about the goodwill and political clout that it brings to the Congress on behalf of the customs broker and freight forwarder community. Buttressed by the Government Affairs Conference in the fall and PAC donations made throughout the year, NCBFAA has developed a reputation for the strength of its advocacy and the authenticity of its positions on trade. We are the acknowledged experts on the operational elements of customs, partner agency regulation, transportation, and automated trade processing. NCBFAA’s PAC takes good policy positions and puts them into play in the political environment.
2015 was not an election year, nor was it a very productive year for the Congress. Nonetheless, it has been important for the Association to be visible on Capitol Hill and apply its advocacy to meet specific legislative issues. Reflecting this and because Republicans controlled the agenda on both sides of the Congress, NCBFAA PAC’s donations (which are bipartisan) favored Republicans by a 60:40 ration this time. A strong majority of the contributions went to trade committee Senators and Congressmen, with others going to transportation, small business and appropriations Members. Those contributions were directed to Ted Poe (R-TX), Debbie Stabenow (D-MI), Nydia Velazquez (D-NY), Charles Grassley (R-IA), Rob Portman (R-OH), Ron Kind (D-WI), Ron Wyden (D-OR), Dave Reichert (R-WA), Lamar Alexander (R-TN), Johnny Isakson (R-GA), Richard Blumenthal (D-CT), Kevin Brady (R-TX), Bob Corker (R-TN) and Frank LoBiondo (R-NJ).
Special thanks need to be directed to our Chair, Kathy Wilkins, and a strong cadre of volunteers that has included Mary Peglow, Julie Moore, Leah Ellis and Paige Stewart-Morgan. They have become familiar to all of you, who in turn have generously donated in support of NCBFAA’s continued political strength.
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| Affiliated Presidents Network (APN) Report By Michelle Francis
As reflected in its charter, the Affiliate Presidents Network (APN) Committee facilitates information sharing, lines of communication, and identification of common issues among the local Affiliated Associations and the NCBFAA. It accomplishes this through monthly teleconference calls as well as meetings during the NCBFAA’s Annual Conference in the Spring and its Government Affairs Conference every fall.
During our teleconference calls and meetings we discuss a wide variety of issues/topics pertaining to successfully and efficiently running a local association. These topics include, increasing membership, educational offerings, association policy and procedures as well as sharing local port news. All APN members have access to the APN Organizational Documents website on the NCBFAA website. This website is a compilation of association management resources for the exclusive use of Affiliated Presidents. The material covers a wide range of topics including, by-laws, budget preparation, treasury operations, insurance needs, committee management, meeting scheduling, educational programs, communication tools, human resources, legal issues, association management, marketing initiatives, and member relations.
The APN currently includes 28 local Broker and Forwarder associations.
Membership Committee Report
To succeed, all associations rely on their membership base. The NCBFAA is no exception. With access to a cadre of extremely talented professionals, this Association is able to staff its Executive Committee, Board of Directors, Committees and Sub committees with motivated and dedicated volunteers. These devoted individuals take time out of, or fit it into, their already busy schedules to make sure that the NCBFAA is the “Voice of the Industry.” The full membership owes these hardworking colleagues a great deal of appreciation for their selfless efforts on behalf of our industry.
Why do companies join the NCBFAA? Because we continuously monitor the challenges confronting our industry with an eye to generating solutions that are shared with the membership via the Monday Morning eBriefing, the daily ACE summary, other publications and through our various meetings and conferences throughout the year.In 2010, then President Jeffrey Coppersmith, announced a goal of 1,000 total members (regular, affiliates or associates) by year end. When initially articulated, the goal seemed easy to accomplish; however, the loss of members due to acquisitions, economic difficulties, and the untimely passing of key employees, among other things, complicated the campaign, making member retention nearly as important as bringing in new members. Despite the unanticipated challenges, the NCBFAA’s efforts to reach the goal resulted in five years of steady membership increases that ultimately offset our losses and, at the end of 2015, we finally achieved President Coppersmith’s goal of 1,000 members. This is a significant milestone in the life of any Association but it is especially important to us. Because we rely so heavily on the input of our industry professionals, the larger that pool of members from which we can draw volunteers the more effective we can be in addressing the needs of our industry, whether regulatory, economic, technological, legislative, or legal.
For example, in the past year ACE has taken up most of our time and energy. Thanks to the NCBFAA, members have been kept up to date on the progress of CBP and the PGAs in this process. Subjects that the Association has also brought to our members is the SOLAS Container Weight Requirements, TSA and airfreight updates, the Ex Works program, the 111 Rewrite, Drawback updates, Reconciliation updates, C-TPAT for Brokers, and other FMC updates, NVOCC matters and export compliance matters.
Then NCBFAA Educational Institute (NEI) has added great value to our Association and to our members. The NEI G-TEC Conference was a major success. Also our Associated Presidents Network (APN) and our local associations add input and value to the membership.
Although I could continue on about the value of being a member of the Association but I would just be preaching to the choir. What is more important is that we talk to non-members every chance we can at local meetings throughout the year to keep increasing our numbers.
I would like to thank my committee for their input. I would also like to thank the Executive Committee, Board of Directors and members for their never ending support in growing our membership. A special thank you to barbara reilly and her Washington DC staff for their constant attention to growing our membership and more importantly retaining our existing members.
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