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Time is not on their side

BCST Staff -- Home Textiles Today, February 17, 2003

The nation's home textiles importers are accepting the imposition of a U.S. Customs early-warning rule mostly in stride and, like the citizenry itself, seem prepared to absorb the costs — in real dollars, additional work and inconvenience — in the names of security and peace of mind.

That's not to say the requirement is without difficulty or that it's being embraced warmly by the trade.

The rule, which took full effect Feb. 2, requires shippers to provide U.S. Customs with detailed manifests of containers destined for the United States a minimum of 24 hours prior to their arrival at the port of embarkation.

Paperwork arriving late or containers arriving without the mandated information are threatened with being shunted aside or left behind to be individually inspected, either invasively or by X-ray.

Shippers that fail to meet the requirements are also subject to fines and other sanctions.

It's all in the name of homeland security.

Yet, the requirement also flies in the face of increasingly tighter production and delivery scheduling — and the continuing fine-tuning of just-in-time standards.

Those lofty goals, combined with the just as commonly found panic to get to market on time, often results in the practice of packing and loading a container only hours before a ship sails. No more.

"It's one more potential international delay, and the retailer isn't going to care whose fault it is when the goods don't show up," said Peter McCabe, executive vp of the Cumberland, MD-based Biederlack of America.

'Time and money'

Similar reactions prevailed. Some suppliers maintained the 24-hour rule will, over time, cost them thousands of dollars. Others said it is a necessary measure implemented in the interests of national security. Yet others said it is just another problem with being an importer in an industry that relies more and more on goods from overseas.

"It is causing a lot of problems for us right now in Hong Kong because sometimes we'll have last-minute shipments ready six hours before the ship leaves and they can't be included," offered Kurt Hamburger, president and managing director of the New York-based Lintex Linens/ Cobra Trading. "It costs me more money because these leftover containers have to stay in the yard until we have our next shipment, which sometimes might not be for another week, for example. I have to pay storage fees for these containers that get left behind."

According to Hamburger, offending containers that are left on the pier must be taken to a customs X-ray station. More extra costs are then incurred in taking the container to be X-rayed, about $200 per container, Hamburger said, and in having the actual X-ray performed, which is yet another $225. Over the course of a year, $100,000 in expenses may be added on.

Shay Auerbach, ceo of the Port Washington, NY-based The Northwest Co., wondered aloud who is responsible for added costs. Who picks up the tab for the extra work involved and the staff to support it, he asked, and does the rule ultimately affect the price of goods? Auerbach also noted that ocean freight costs are expected to increase by as much as 20 percent later this spring, with the cost of shipping a container potentially rising from a current level of $3,500 to as much as $4,200.

"At some point, that has to be factored into the unit price as well," Auerbach said.

More than 24

Amy Bell, executive vp and design director for Ashford Court of Richmond, VA, argued that the 24-hour rule was actually much more than its name suggested.

"It isn't just 24 hours. It backs you up and backs you up and backs you up," she said.

In order to deal with any possible delays, suppliers such as Elrene Home Fashions are moving up requirement dates by as much as five days.

Explained Steve Abramowitz, vp of global sourcing for the New York-based Elrene: "We started in December when the rule unofficially came into play before it became law in February. It was our practice period, so to speak, so that when it became law we'd be ready."

Dan Sullivan, import manager of Sugar Valley, GA-based Mohawk Home, said a two- to four-day delay was not "too big a deal by and large at this point. Besides, we always try to get our shipments in earlier than the deadlines."

If there are any positives to the rule, Loren Sweet of Brentwood Originals said they come through added security and that it affects all suppliers equally.

"My family and I live near a port in Long Beach, [CA], and I certainly don't want one of these ships blowing up near me," the president of the Carson, CA-based company said. "It's certainly worthwhile from a security standpoint."

'Keep us safe'

Jane Krolik, owner of Chateau X, said, "I don't care. Keep us safe, go through my place mats."

By and large, suppliers felt the rule was here to stay and must be dealt with accordingly. Barry Leonard, ceo of Glenoit Corp., argued that the only real change is in the paperwork. Jeff Hollander, president and coo of the Boca Raton, FL-based Hollander Home Fashions, said much of the rule is hinged on the phrase "reasonable care."

"Customs just wants us to do things in a organized, sensible manner," he argued. Use names that make sense to the customs inspector. You need to use reasonable care so the government can understand what you're bringing in."

Added Kenny Hines, president of Asheville, NC-based International Home Fashions, "It's just one more thing you have to manage, but I don't see it making any big change. It's one more level of complexity that means we have to get ahead of the game."

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