• Andrea Lillo

Tighter U.S. customs threaten supply chain

In the aftermath of Sept. 11, how products enter the country has affected many companies, which rely more and more on overseas sourcing to compete in today's marketplace. This was discussed at last week's NRF's "Dealing with U.S. Customs After September 11 — What Retailers need to know to protect their supply chain," conference. How the U.S. Customs Office was reviewing these procedures to prevent terrorist threats from entering the borders was addressed by several executives familiar with the subject.

Millions of containers enter the United States every day, said Betsy Durant, assistant commissioner, Office of Field Operations, U.S. Customs Service, along with thousands of trucks, making for a challenging environment. It would seem impossible to examine every truck and container coming into the States, as well as possibly making it financially devastating to companies waiting for shipments, so her office instead wants to work with those companies on deciding how to handle the situation. "We recognized immediately that we couldn't do it alone."

As a result, the U.S. Customs Office has created the Customs Trade Partnership Against Terrorism to work with companies to look at the entire supply chain and how to prevent threats from entering the country. Previously, the Customs office has had very formal risk management procedures, she said, where about 2 percent of all incoming cargo is examined.

"We know this is not without cost — to the government and the trade," she said. However, "These are the days of free trade and globalization — our economy depends on it."

Bill Villalon, president for the Americas, APL Logistics, added that companies have to develop contingency plans and be flexible, as well as look at sourcing patterns. For example, a shipment from Southeast Asia to New York might have 15 handoffs, he said.

Sam Banks, a former acting Customs commissioner who is now director of Customs work for Sandler & Travis Trade Advisory Services Inc., stressed that retailers should engage in partnership with the Customs office, even though it is voluntary, since they will be able, at this stage, to help craft the new policies.

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