ISF Benchmark Study: Achieving Compliance—Against All Odds
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ISF Benchmark Study: Achieving Compliance—Against All Odds

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ISF Benchmark Study: Achieving
Compliance—Against All Odds
Benchmark Report: 2009
Written By:
James Blaeser,
Publisher,
American Shipper
Beth Peterson,
President,
BPE
Sponsored by:
Published December 2009 Executive Summary
The Basics American Shipper, BPE, the International Compliance Professionals
Association (ICPA), the National Retail Federation (NRF), and the
American Association of Exporters and Importers (AAEI) conducted this
research initiative to follow up on our groundbreaking “ISF Benchmark
Study: From Concept to Compliance” published in May 2009. “From
Concept to Compliance” analyzed ISF readiness, costs and challenges
of more than 200 participants and has been read by many more.
The second ISF Benchmark Study—“Achieving ISF Compliance—
Against All Odds”—provides an assessment of U.S.-based importers
on their importer security filing (ISF) compliance efforts and their
i preparedness in advance of the Jan. 26, 2010 enforcement deadline.
In addition this study reviews the challenges involved in complying
with the ISF and explores the costs of compliance.
From Sept. 17 to Oct. 14, more than 200 companies importing goods
into the United States participated in this survey to understand the state
of ISF regulation compliance. Their responses to a 24-question survey
allow for a qualitative analysis, including:
• The state of ISF compliance.
• Costs associated with ISF compliance.
• Challenges importers face in becoming compliant.
• Best ...

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ISF Benchmark Study: Achieving Compliance—Against All Odds
Benchmark Report: 2009
Written By: James Blaeser, Publisher, American Shipper
Beth Peterson, President, BPE
Published December 2009
Sponsored by:
i
Executive Summary
The Basics
Winners
American Shipper, BPE, the International Compliance Professionals Association (ICPA), the National Retail Federation (NRF), and the American Association of Exporters and Importers (AAEI) conducted this research initiative to follo up on our roundreain “IF Benchmar tud From Concept to Compliance” pulished in a  “From Concept to Compliance” analed IF readiness, costs and challenes of more than  participants and has een read  man more
e second IF Benchmar tud—“Achievin IF Compliance— Aainst All dds”—provides an assessment of ased importers on their importer securit filin (IF) compliance efforts and their preparedness in advance of the an ,  enforcement deadline In addition this stud revies the challenes involved in complin ith the IF and explores the costs of compliance
From ept  to ct , more than  companies importin oods into the nited tates participated in this surve to understand the state of IF reulation compliance eir responses to a uestion surve allo for a ualitative analsis, includin
• e state of IF compliance
• Costs associated ith IF compliance
• Challenes importers face in ecomin compliant
• Best practices for IF compliance manaement
In each enchmarin exerciseAmerican Shipperaims to separate “inners” from the rest of the population ese inners are companies ho perform particularl ell the’re the “A” students in this class B separatin and comparin them ac to the stud averae e can investiate their ehavior and identif the est practices that other companies should imitate to attain the same performance level For the purposes of this stud, inners meet five e criteria
 Achieve compliance  the an ,  enforcement deadline
• ave a hih or ver hih level of confidence that their IF filins are timel, accurate and complete
• eep total cost of IF compliance elo  per ear
• Pa  or less per filin
• ae amendments to contracts and service areements to  incorporate IF compliance
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
Executive Summary
Level of Compliance Still Low
Cost of ISF Compliance
sin these measures inners account for rouhl  percent of the stud population Further examination demonstrates that inners follo these est practices
• se a roer to file IF
• ae measures to ensure their data is accurate
• se electronic data (advanced shipment notices or purchase orders) to create their filins
Fortto percent of surve respondents report the are filin IF for all of their ocean imports Compared to the  percent ho reported  percent compliance in the sprin  stud this is a noticeale increase, ut it’s still not enouh e deadline is onl months aa and more than half of the respondents are not completel compliant oever, nearl all of the respondents ( percent) express confidence that the ill e compliant  the an  enforcement deadline
is enchmarin initiative focused more on the cost of compliance than previous efforts Costs are not limited to filin fees ut have een roadl expanded to include costs in terms of technolo investments, staffin, delas, and more
In eneral, surve respondents demonstrate that their overall costs are aout hat the expected In terms of dollars the maorit of respon  dents estimate their costs ill e less than , per annum e scariest source of cost associated ith IF compliance appears to e delas e averae respondent reports that IF compliance is addin to das on to their ccle time ith respect to fees associated ith each filin, costs remained aout the same as the ere in the sprin enchmarin stud e averae respondent pas a little less than  per filin
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
ii
iii
Challenges
Methods ISF Creation
estraint is esired
urin  the ill of ladin (Bo) emered as the larest source of frustration to importers trin to achieve compliance Rouhl half of respondents sa the Bo is not reported to CBP at the time of IF filin alf report that the Bo is not accurate or availale e larest issue remains the lac of timel data ith  percent of respondents citin this as a prolem
urve respondents provided in a variet of as aout ho their IF filins are created, all of hich are nearl eual in popularit ome choose to uild their IF from advanced shipment notice (AN) data and file themselves thers elect to have their roer run the entire process It’s clear from this diverse set of ansers that the IF filin has not found a set of commonl areeale est practices ith no standard emerin, companies are strulin to leverae est practices for IF filin
It has ecome evident that CBP ill not liel dela the enforcement phase of IF Althouh more companies reported that the are filin IFs this stud identified a  percent drop in companies statin that the ill e ale to file  percent of their IFs  the an  dead  line iven the herculean effort on the part of the trade communit to tr to meet this deadline, e ure CBP to sho restraint  not issuin penalties to companies ho mae a est effort to compl
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
Table of Contents
Executive Summary.......................................................................................................................................................... i
Section I: Introduction..................................................................3.................................................................................. .
 nforcement nticipated....................................... ..................................................................................................
 tud ethodolo and Timeframe........... .............................................................................................................
 pothesis.............................................................................................................................................................. 
 ure Demoraphics......... ....................................................................................................................................
 inners................................................................................................................ ..........0........................................ Section II: Compliance Still Low.................................................................................................................. ................ Section III: Cost of ISF Compliance. ........................................................................................................................... Section IV: Challenges.................................................................................... ................................................9..............
Section V: ISF Creation.........2........................................................................................................................................ 
Section VI: Amendments................................... ..............................2.2...........................................................................
Section VII: Lessons from the Winners3...............2........................................................................ ................................ Section VIII: A Message to CBP................................................................................ .................................2..................
Section IX: How to Use This Study....................2......................................................................... .................................
Section X: Index ............................................................................................................................................................ 2 Section XI: About our Partners.................................................................................. ........92..........................................
 merican ssociation of ports  mporters ...................................................... .............................2.9........
 BP.......... .........................................................................................................................................................2.9....
 nternational Compliance Professionals ssociation CP................ .....................................03.............................
 ational Retail ederation R................03............................... ............................................................................
Section XII: About our Sponsors.................................................................................................................................. 3
 Descartes....................................................................3.......................................................................... ................
 nteration Point 3 ...................................................................................................................................................
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009
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2
iures
F I G U R E 1 :Purchased Products  Process.............................................................................................................  F I G U R E 2 :ndustr sements.... ................................................................................................................................ F I G U R E 3 : Compan ie in nnual ales.................................................................................................................  F I G U R E 4 :Compan ie—cean Bs Per ear9........................................................................ .............................. F I G U R E 5 :ob Titles.................................................................. ................................................................9................ F I G U R E 6 :Compliance ith anuar 2 200 Deadline................... ...................................................................... F I G U R E 7 :of cean B’s Currentl ilin Percentae . ......................................................................2.............. F I G U R E 8 :eel of Confidence ith  ilins ..................................................................................................3.... F I G U R E 9 : Creation............................................................................................................................................  F I G U R E 1 0 :nified ecurit ilins........................................................................................................................  F I G U R E 1 1 : Cost Proections............................................................................................................................  F I G U R E 1 2 :Total Cost of  Compliance..............................................................................................................  F I G U R E 1 3 :Cost per ........................................................................................................................................ F I G U R E 1 4 :Ccle Time Dela in Das....................................................................................................................  F I G U R E 1 5 :dditional Costs f ..................................................................................................................... .. F I G U R E 1 6 :Pain for  Compliance .................................................................................................................. F I G U R E 1 7 :Challenes to  Compliance................................................................ .........................................9...F I G U R E 1 8 :  Creation......2................................................................................................. .................................. F I G U R E 1 9 :Cause for mendments to ................................. ..........................................2.2................................ F I G U R E 2 0 : ilin ethod..................................................................23.............................................................. F I G U R E 2 1 :mendments to erice reements and Contracts................................ ..........23................................ F I G U R E 2 2 : mpression of CBP Reports................................................................................................................. 2 F I G U R E 2 3 :earned bout .2..................... ........................................................................................................ F I G U R E 2 4 :Contacted B CBP............ .................................................................................................2.................
F I G U R E 2 5 : mpression of CBP Reports........2....... ..................................................................................................
ISF Benchmark Study: Achieving Compliance—Against All Odds| Benchmark Report 2009