Exporters Can Avoid $100 Filing Fee for SEDs with Shipping Solutions 2000 Export Software

November 2002

Office automation is such old hat that many rarely give it a second thought. But some Maryland exporters and their agents are so far behind the automation curve that a group of ocean carriers has decided to penalize them for not using the federal government’s automated export system.

As of Nov. 1, exporters and freight forwarders who submit shipper export declarations, or SEDs, to ocean carriers on paper can be charged $100 per declaration. The itemized shipment information listed on every SED is collected by both the U.S. Customs Service, which looks for illegal trade activity, and the U.S. Census Bureau, which compiles trade statistics.

The surcharge is part of an agreement struck in August by Census and several ocean carriers — including Mediterranean Shipping Co., Hapag-Lloyd Inc., P&O Nedlloyd and Maersk Sealand, which all call on the Port of Baltimore. It is designed to relieve carriers of the responsibility of handling paper SEDs, which they must submit to the federal government.

The fee is designed to motivate exporters “to move everyone into an electronic environment,” said Paul F. Connor Jr., an export representative with John S. Connor Inc., a Baltimore freight forwarder that has adopted the government’s automated export system.

But in Maryland, that hasn’t happened yet.

The carriers’ export surcharge “is going to knock all the [small] brokers out of the export business,” said Darcel Heath, office manager with Jagro Customs Brokers and International Freight Forwarders in Baltimore. “A lot of the smaller boutique brokers can do a full range of work, but forcing [them] to an automated system is going to cause a big mess.”

Exporters haven’t been given nearly enough time — only six weeks — to comply with the carriers’ new rules, said Geoffrey C. Powell, president of the Baltimore Customs Brokers & Forwarders Association. As a result, the surcharge could cost U.S. exporters and agents $45 million a month.

“To force the trade to do this right now and not give them enough time to do it isn’t the right way to go,” Powell said. “It’s just sending another cost to the shipper, which, with the dollar being strong, only makes U.S. products that much more difficult to export.”

Moreover, he said, the surcharge is incompatible with laws already on the books, which require paper SEDs to be issued in certain transactions such as shipments moving in bond through the U.S. He called the $100 fee “far out of proportion” to the real cost of defraying carriers’ filing charges.

But federal officials and ocean carriers aren’t buying any excuses.

“They’ve had plenty of time” to become automated, said Peter Baish, director of outbound programs for Customs. The federal automated export system has been implemented at the Port of Baltimore since 1995.

In the course of faxing the declarations back and forth, from exporter to forwarder to carrier and then to Customs or Census, “the SEDs looked like people cleaned their shoes with them and we were missing data,” Baish said.

Paper SEDs “have a high rate of inaccuracy,” said Judy Derenzo, manager of export documentation with Hapag Lloyd in Piscataway, N.J. “AES [automated export system] is so much simpler.”

“They’ve been doing it this way for 10 years and they don’t want to change,” said C. Harvey Monk Jr., chief of Census’ foreign trade division. “They didn’t see a need to change.”

But there is evidence that some exporters are getting the message loud and clear.

“We’ve been using [SED] hard copy or fax copy a long time,” said Belinda Richardson, export manager with Export Container Lines, a four-person freight forwarding operating in Bel Air. But now, Richardson said she’s scrambling to obtain an AES account — lest her company face $500 a day in SED fees, based on the current volume of exports.

“You don’t want to pass that [cost] on to your shipper,” she said.

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