Federal Transportation Officer Training Program: Basic ...Certificate of Origin (also called Customs Invoice): A form stating the contents of the shipment, its value, and its origin

Federal Transportation Officer Training Program: Basic (Level 1)

Freight, Cargo, and Household Goods

Session 5: International Shipments

Basic

http://transbasic.knowledgeportal.us/session5/

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Basic (Level 1) Session 5: International Shipments

What You Will Learn

This session will introduce you to the basics of international shipping, providing you an overview of:

Policies, regulations, andrequirements applicable togovernment shipments

Requirements to use U.S. flagcarriers

Planning for internationalshipments

Ways that the Department ofState (DoS) can assistshippers, and

An introduction to the vocabulary used in international shipping.

This session assumes students have a basic understanding of commercial shipping and can apply that knowledge to satisfy requirements for arranging export or import shipments for their agency.

Basic

http://transbasic.knowledgeportal.us/session5/p1/

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Session 5 Outline

What Is InternationalShipping?

What Policies, Regulations, andRequirements Apply toGovernment Shipments?

What Are the Requirements toUse U.S. Flag Carriers?

How Do I Plan for InternationalShipments?

How Can the U.S. Department of State Assist Shippers?

Glossary of Terms

Knowledge Review

Where to Go for More Information

Basic


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What Is International Shipping?

International shipping is the movement of cargo between or through two or more countries. All international shipments involve:

Export processes, or themovement of cargo fromone country to aconsignee in anothercountry.

Import processes, or theclearance and receptionof cargo into one country from another country.

Normally, export is from the U.S., and import is to the U.S. However, the federal government has worldwide operations. The description of the shipment and actions required depend on the transportation officer's vantage point and responsibility.

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What Policies, Regulations, and Requirements Apply to Government Shipments?

International shipping is governed and regulated at many levels, ranging from government-to-government agreements and international standards to public law to detailed implementing regulations.

Export requirements, use of specific shipping methods and carriers, and import clearance requirements are detailed in a multitude of guidance documents.

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What Policies, Regulations, and Requirements Apply to Government Shipments? (continued)

Public Law, Statues & Treaties: International Plant Protection Convention P.L. 96-465 Foreign Service Act (1980) P.L. 83-664 Cargo Preference Act P.L. 97-258 Anti Deficiency Act P.L. 96-623 Fly America et eq.

United States Code: 7 USC Chapter 109 Animal Health Protection 22 USC Foreign Relations & Intercourse 46 USC 55305 Cargoes Procured Furnished or Financed by the US Government 31 USC 1341 Limitations on Expending & Obligating Amounts 49 USC 40118 Government Financed Air Transportation

Implementing Regulations: 8 CFR 305 ISPM 15 Requirements State Department Regulations 22 CFR 1-199 Cargo Preference 46 CFR 381 Hazardous Materials 49 CFR 105-107 Transportation Management & Acquisition 41 CFR 102-117 Foreign Trade Regulations 15 CFR 30 Foreign Affairs Manual & Handbook Motor Carriers 49 CFR 300-399 Acquisition of Transportation 48 CFR 47 Transportation Payment & Audit 41 CFR 102-118

Basic

http://transbasic.knowledgeportal.us/session5/p5anopop

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Where can I find international shipping regulations?

The primary regulatory guides used for government shipping are:

Code of Federal Regulations(CFR) for TransportationManagement 41 CFR §102-117and 41 CFR §102-118

Cargo Preference 46 CFR §381

Acquisition of Transportation 48CFR 47

Fly America 48 CFR 47.4, and

Foreign Affairs Manual (FAM) 14FAM Logistics Management. TheFAM only applies to agenciesdesignated as Foreign Affairsagencies. Examples are activitieswithin the Department of StateForeign Service, Department of Commerce, Department of Agriculture, andthe Agency for International Development.

Department of Defense (DoD) international shipping is covered under Part 2 of

the Defense Transportation Regulation.

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What Are the Requirements to Use U.S. Flag Carriers?

A strategic goal of the federal government is to promote a healthy public transportation system that can meet the nation's defense and economic needs. Maintaining government traffic within that system is good business.

Public law prescribes the use of U.S. flag carriers for movement of government cargoes by sea and air.

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What are the U.S. flag requirements for ocean shipping?

To protect the U.S. shipping industry from unfair foreign competition and ensure the safety of government cargoes, Congress passed the Cargo Preference Act and the Military Cargo Preference Act.

The first requires that 100% ofall non-DOD governmentpersonal effects (and householdgoods) and not less than 50% ofall government supplies andequipment must be carried onU.S. flag vessels.

The latter requires that all DODshipments be transported onU.S. flag vessels.

These provisions apply to movement of material owned by or destined for government agencies, their contractors and subcontractors.

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Am I required to report to a federal agency when shipping internationally?

U.S. Department of Transportation, Maritime Administration (MARAD) requires the U.S. government, and its agencies, to report at least monthly all U.S. flag usage. 46 CFR §381.3 identifies the information requirements for reporting.

MARAD also approves exceptions to foreign flag use, when non-availability of U.S. flag is determined.

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What are the U.S. flag requirements for air shipping?

The Fly America Act (CFR 49 §40118) requires that:

"A department, agency, or instrumentality of the United States Government shall take necessary steps to ensure that the transportation of passengers and property by air is provided by an air carrier holding a certificate…" (U.S. flag carrier)

However, foreign flag carriers may be used in some cases

"…does not preclude the transportation of passengers and property by a foreign air carrier if the transportation is provided under a bilateral or multilateral air transportation agreement to which the Government and the government of a foreign country are parties…"

There are currently several bilateral/multilateral "Open Skies Agreements" in effect that allow the U.S. government to transport passengers and property by a foreign air carrier.

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Additional Laws and Regulations

The following are additional laws and regulations which may apply to International Shipments

Commerce and Trade U.S. Code, Title 15

Foreign Relations and Intercourse U.S. Code, Title 22

Shipping U.S. Code, Title 46

Federal Acquisition Regulations System U.S. Code, Title 48

Packing Materials International Standard for Phytosanitary Measures (ISPM 15)

Foreign Affairs Manual—For Foreign Affairs Agencies Only

FAM

United States Flag Use and Exceptions Cargo Preference Act of 1954 and Merchant Marine Act of 1936

Use of Commercial Bill of Lading in Lieu of Government Bill of Lading

Comptroller General's Circular Letter B-150556

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What are some common documents used in international shipments?

There are several common documents used in international shipping. DOT Glossary of Shipping Terms provides the following definitions:

Shipper's Export Declaration: A joint Bureau of the Census' International Trade Administration form used for compiling U.S. exports. It is completed by a shipper and shows the value, weight, destination, etc., of export shipments as well as Schedule B commodity code.

Export License: A government-issued approval to export certain commodities; it must be obtained in advance of shipment.

Import Declaration: A form provided by the importer listing all goods entering a foreign country; normally used to calculate import duty on the merchandise.

Certificate of Origin (also called Customs Invoice): A form stating the contents of the shipment, its value, and its origin.

Phytosanitary Inspection Certificate: A certificate issued by the U.S. Department of Agriculture to satisfy import regulations of foreign countries; indicates that a U.S. shipment has been inspected and found free from harmful pests and plant diseases.

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How Do I Plan for International Shipments?

The process for international shipments is similar to the domestic shipment process, with a few added steps needed—Steps 4, 6, and 8.

1. Identify the cargo type,quantity/volume, and anyassociated special handlingrequirements.

2. Identify the origin anddestination of the cargo.

3. Identify when the cargo needsto be delivered.

4. Determine:

a. Any export restrictionsfrom the origin country, and

b. Destination country's import requirements (from forwarder orlocal embassy/consulate).

5. Determine potential modes, and the mode (or combination of modes) bestsuited to deliver the cargo on-time for the most reasonable cost.

6. Identify any special handling and packaging requirements specific to themode and country requirements.

7. Determine the forwarder or carrier options and best-value solution.

8. Determine documentation requirements (export declaration, certificate oforigin, etc.).

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How are international services acquired?

Two sets of processes are commonly used to arrange international shipments.

The shipper may arrange each service and segment movement separately under the DirectProcurement Method (DPM).

The entire movement may be turned over to a freight forwarder who will arrange each serviceunder an International Through Government Bill of Lading (ITGBL).

Under DPM, the shipper orders and pays each transportation provider separately. Under the ITGBL, one document is used to pay for all services rendered.

ITGBL (International Through Government Bill of Lading) is the term for a "door-to-door" shipment wherein all services of pre-move survey, pack-out, pick-up, transport, delivery out, unpacking, etc. are bundled together, using one forwarder to perform all services and generally billed on one paying document.

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How Can the U.S. Department of State Assist Shippers?

The U.S. Department of State (DoS) assists government agencies in two primary ways:

Providing transportationservices as an internationalfreight forwarder on a fee-for-service basis.

Assisting governmentshippers and consignees withcountry-specific assistancethrough the embassies,consulates, or other offices.

DoS has long-established processes and service provider networks that can provide world-wide assistance: transportation offices, field dispatch agent offices, and consolidated receiving points that receive, stage, and export government cargo to embassies and other global destinations.

The DoS Integrated Logistics Management System can be used to book and track shipments.

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How does the Department of Defense differ with regards to international shipments?

Worldwide military operations demand different shipping techniques. DOD uses a combination of commercial and military-owned assets.

In non-hostile situations, DOD tenders shipments to commercial industry.

Use of DOD-owned ships and planes for cargo is normally limited to supporting the movement of extremely hazardous material (e.g., ammunition) or over-size/outsize cargo to locations not readily served by commercial industry.

DOD business incentivizes Transportation Service Providers (TSPs) to participate in defense contingency readiness programs, such as the Civilian Reserve Air Fleetprogram and the Voluntary Intermodal Sealift Agreement, where TSPs agree to provide assets during a national defense crisis in exchange for priority access to peacetime DoD business.

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What about packaging for international shipping?

Often you may see wood being used to package cargo for shipping.

For international shipping, there is a standard for wood packing products known as International Standard for Phytosanitary Measures No. 15 (ISPM-15). ISPM-15 is the global program requiring all wood packing products used in international shipping to be heat treated or fumigated with methyl bromide and marked accordingly, or face penalties for non-compliance.

A finding of non-compliance can result in penalties, such as seizure of cargo or return to origin at the shipper's expense.

For other packaging regulations, you may want to contact the U.S. Department of Transportation, U.S. Department of Energy, or the TSP.

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Glossary of Terms

The following terms are those frequently used in federal transportation; however, this is not an inclusive list of terms. You may want to refer to §102-117.25 and §102-118.35 for additional transportation definitions.

BOL (Bill of Lading) is the ordering document and binds the TSP to provide services for the shipper. The BOL is legally recognized as the TSP's receipt for the shipment and establishes its responsibility and liability while the shipment is in its care.

Break Bulk is freight (usually manufactured goods) transported in packages. Most embassy supplies are break bulk.

Bulk is freight that is transported unpackaged and in large volumes in the hull of a ship. The United States Agency for International Development (USAID) and Agriculture arrange for bulk shipments of wheat and corn.

CAF (Currency Adjustment Factor) is a surcharge paid to a TSP based on freight charges, which offsets foreign currency fluctuations.

CRP (Consolidated Receiving Point)is a warehouse where freight is received from multiple suppliers, consolidated into containers or trailers, and then shipped to another point.

CRP Receipt Notification is a system generated e-mail message that a supply item has been received at the CRP. Shippers should use this as notification of receipt of cargo by the U.S. government and make payment to the vendor in order to comply with Prompt Payment Act requirements.

DPM (Direct Procurement Method)is the method by which services are acquired to move cargo from origin to destination where each leg of the process (e.g., pack-out, pick-up, transport, delivery out, unpacking) is managed individually and the billing for services provided is done separately for each vendor/handler in a specific leg.

ISPM-15, International Standard for Phytosanitary Measures No. 15 is the global program requiring all wood packing or bracing products to be heat treated or fumigated with methyl bromide and marked accordingly when moved across international boundaries. Penalties apply for non-compliance. Manufactured wood like plywood or oriented strand board (OSB) are exempt.

ITGBL (International through government bill of lading)is the term for a "door-to-door" shipment wherein all services of pre-move survey, pack-out, pick-up, transport, delivery out, unpacking, etc. are bundled together, using one forwarder to perform all services and generally billed on one paying document.

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Knowledge Review

All U.S. government cargo for DoS, DOD, and other federal civil/foreign affairs agencies is handled identically, using the same rules and regulations.

A. True B. False

True: Incorrect. Civilian government agencies use a different set of rules and business processes than DOD for international movement of goods. One example is that most civilian cargo must be cleared into the destination country by the U.S. embassy upon arrival. The DOD cargo importation rules are based on government-to-government status of forces agreements.

False: Correct. Civilian government agencies use a different set of rules and business processes than DOD for international movement of goods. One example is that most civilian cargo must be cleared into the destination country by the U.S. embassy upon arrival. The DOD cargo importation rules are based on government-to-government status of forces agreements.

Basic

http://transbasic.knowledgeportal.us/session5/KC1ans

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Knowledge Review

What percentage of U.S. civilian agency supplies must move on U.S. flag carriers if transported by ocean?

A. 100% B. 37.2% C. 50% D. 75%

Answer: C

Correct. The American flag or U.S. carrier requirements for oversees shipping is identified in the Cargo Preference Act (46 USC 55303 et. seq.). This states that not less than 50% of U.S. government supplies and equipment belonging to civilian agencies must be transported on U.S flag vessels. Only DoD, in accordance with the Military Cargo Preference Act, must transport 100% of its cargo on U.S. flag vessels.

Incorrect: The American flag or U.S. carrier requirements for oversees shipping is identified in the Cargo Preference Act (46 USC 55303 et. seq.). This states that not less than 50% of U.S. government supplies and equipment belonging to civilian agencies must be transported on U.S flag vessels. Only DoD, in accordance with the Military Cargo Preference Act, must transport 100% of its cargo on U.S. flag vessels

Basic

http://transbasic.knowledgeportal.us/session5/KC2ans

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Where to Go for More Information

In addition to the sites identified in this session, you can find more information from the following:

U.S. Department of State,Office of LogisticsManagement.

U.S. Department ofTransportation, Maritime Administration (MARAD).

U.S. Department of Treasury, Office of Foreign Assets Control (OFAC)maintains a list of Specially Designated Nationals (SDNs). This is a list ofpersons and companies that the U.S. government is forbidden to use for avariety of reasons. OFAC Regulations for Exporters and Importers can befound here.

Basic


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Documents

Federal Transportation Officer Training Program: Basic ...Certificate of Origin (also called Customs Invoice): A form stating the contents of the shipment, its value, and its origin