Customs Tariff Changes a Welcome Relief for International TSPs
February 10, 2012 
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Note: This article is part of a series on changes to the 2012 400NG and International Tender. (To view the entire series of articles, click here.) Please note that these articles are not intended to cover every change made, so TSPs still need to read the tariffs prior to filing rates. Also, these posts are based on our own interpretation of the tariffs, and we cannot guarantee that our interpretation will always be shared by SDDC, the PPSOs, or GSA.
The random and expensive application of customs inspections has long been a problem faced by International TSPs. TSPs never knew when, or if, a shipment may be selected for a customs inspection, and they faced huge costs on those shipments with no relief from the financial burden for a process out of their control. For years, the industry has asked SDDC to review the customs language in the tariff, and revise it to make it more clear and equitable. It appears that with the release of some updated tariffs, there may finally be some welcome relief in the area of customs.
In November of last year, the International Association of Movers (IAM) sent a letter to the Commanding General of SDDC, Major General Kevin Leonard. The letter from IAM President Terry Head explained the challenges with customs faced by international TSPs, and asked him to allow random customs and agricultural inspections to be billed as pass through charges to the government.
Recently, Maj. Gen. Leonard responded with a letter and stated that he agreed “random inspections imposed after yearly DP3 rates are filed should be submitted and paid as a pass through charge.” He went on to specifically cite the example of Hawaii agricultural inspections as an example of a charge that would be paid by the government.
SDDC then had to translate the intent of that letter into tariff language, which was reflected in the recently released Change 2 of the 2012 International Tender and Change 4 of the 2011 International Tender. In the section of Item 223 which covers the services included in the transportation single factor rate (SFR), SDDC changed “Customs and agricultural inspection charges.” to “Known customs and agricultural inspection charges.”
In the portion of Item 223 that lists items not covered under the SFR, note 2 was modified to read, in part:
Agricultural and VACIS (Vehicle and Cargo Inspection System) inspections, dis-infestation, decontamination, fumigation, demurrage or other charges not the fault of the TSP and that are random and infrequent in nature such that it is impractical for any TSP to include these charges in their SFR.
While we have some concerns about the lack of clear definitions for the terms “Known” and “random and infrequent”, overall this appears to be a very positive change for the TSPs. While it does not give the TSP the ability to pass through the costs on all customs charges, it does protect the TSPs from those charges that are random in nature, and therefore “impractical” to build into their rates.
Do you think the tariff changes adequately protect TSPs from random customs charges? Use the comments below to share your opinion:
Related Posts
- Notice of Change on Billing Agricultural Inspection Charges - August 18th, 2006
- Change 2 Versions of 2012 400NG & International Tender Posted - February 8th, 2012
- DPS 2010 400NG Tariff and International Tender Posted - February 7th, 2010
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[...] year 2012, SDDC increased some baseline linehaul rates in the international tariff, and they made it easier to pass along the cost of random customs inspections. All of these changes should in theory, allow TSPs to move shipments more efficiently and at a [...]