Shipping Solutions News
  March 2006
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In This Month's Newsletter:

Wood Packaging Certifications for Export and Import

Shipping Solutions Users Give High Marks to Top-Selling Export Software

Negotiating Ocean Marine Contracts

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Wood Packaging Certifications for Export and Import

By Catherine J. Petersen email | bio

“Keeping out the bugs” has become the worldwide mantra for exporters and importers. The bug that gained everyone’s attention in the United States was the Asian Long Horn Beetle, while other countries are concerned with the Pine Worm Nematode.

The U.S. Department of Agriculture (USDA) has taken the lead within the U.S. to ensure that all wood packaging materials (WPM) are free of infestation. To prove that wood is free from infestation, a growing number of countries require proof either with a signed certificate or labeled with a “Wood Packaging Material Mark.” (See below.)

Wood Packaging Material Mark

U.S. Exports

The list of countries requiring written statements and/or proof on the exterior of wood packaging fluctuates. You’ll find a country-by-country listing of requirements at the USDA website.

These countries subscribe to the International Plant Protection Convention (IPPC), an international treaty to secure action to prevent the spread and introduction of pests of plants and plant products, and to promote appropriate measures for their control. The International Standards for Phytosanitary Measures Guidelines for Regulating Wood Packaging Material in International Trade (ISPM15) is a standard on which many countries’ WPM regulations are based.

This regulation requires WPM used in international trade be treated in one of two approved methods:

  1. Heat treatment: Heat treated to achieve a minimum wood core temperature of 56° C for a minimum of 30 minutes. Visit the American Lumber Standard Committee’s website for more details.
  2. Fumigation treatment with methyl bromide. Visit the National Wood Pallet & Container Association’s website for more details.

Susan Korleski and Bob Cox of Westwind International, a Chicago-based freight forwarder and customs broker, advise:

[C]onsider the potential consequences of exporting non-treated solid wood packaged commodities into ISPM15 countries. If, for example, the foreign importing country chooses to stop the import process, they may refuse the import, require the freight be returned to origin, quarantine, or the packing and contents (e.g., packed crate) may be treated (fumigated or heat treated) before the import process, which can put the product at risk. In any case, final clearance and delivery will be delayed, and the goods could be damaged through the treatment process.

Ultimately, the customer suffers and the relationship between buyer and seller could be affected. Remember, alternatives to solid wood packaging include particleboard, plywood, oriented strand board, plastic skids, or even cardboard skids (made with specific weight limits).

U.S. Imports

All WPM entering or transiting through the U.S. are required to be either heat treated or fumigated with methyl bromide as described above. Paper certification (a treatment certificate) is not required, but all WPM must be marked with the approved international logo shown above to certify that it has been treated by one of the approved measures.

If you are a U.S. importer, remember that the U.S. Customs and Border Protection (CBP) is initiating Phase II of its Wood Packing Material Regulation on July 4, 2006, instead of February 1. As of that date, all WPM consisting of crates and pallets that are non-compliant with WPM requirements will be rejected through re-exportation from the United States.

All shipments containing pallets or crates in violation may be allowed entry only if the CBP Port Director determines that it is possible to separate the merchandise from the non-compliant WPM. All costs associated with the re-exportation of non-compliant WPM will be the responsibility of the importer or party of interest's importer. In cases where the identity of the importer is unknown or not available, the importing carrier may be held liable for expenses related to the costs of exportation of the non-compliant WPM and associated cargo.

Other Resources


Shipping Solutions Customers Give High Marks to Top-Selling Export Software

According to a recent survey of Shipping Solutions export documentation and compliance software customers, the typical Shipping Solutions user works for a U.S. manufacturing company that exports to Canada, the United Kingdom, and Mexico and uses Shipping Solutions software every day to save time filling out a variety of export forms including a commercial invoice, Shipper's Export Declaration (SED), NAFTA Certificate of Origin and a packing list.

According to this survey that was just completed in February 2006, 64.9% of survey respondants said the number one benefit of using Shipping Solutions software is the amount of time it saves them when completing their export documents. In addition, users said the software was easy to use, easy to install and maintain, and it saved their company money.

When asked to assess the overall quality of Shipping Solutions, 89.5% responded that the software was good or excellent, 93.1% of users thought Shipping Solutions met or exceeded their expectations, and 92.9% would recommend the software to other exporters.

Beyond just satisfication with the software, an overwhelming number of users were happy with Shipping Solutions' customer service. Exactly 75% of survey respondants said they contact Shipping Solutions customer service once or twice a year, and 97.7% of these people said they reached a customer service representative in a timely manner and 88.9% were able to get their issues resolved.


Negotiating Ocean Marine Contracts

By William J. Augello, Esq. email | bio

Negotiating ocean marine contracts requires a great deal of expertise and differs greatly from negotiating with other modes of carriage. However, there are a few issues and techniques that should be addressed during negotiations as these issues often result in disputes with carriers and substantial losses to cargo owners.

  1. Start with negotiating the rate and minimum volume commitment.
  2. After the rates are agreed upon, request that the carrier’s liability be increased to the Hague-Visby maximum limitation of 667 SDR’s per kilo, which is approximately double the Carriage of Goods by See Act’s (COGSA) maximum of $500 per package, or if not shipped in packages, $500 per customary freight unit. (The carrier is paying claims up to those limits for its customers from other nations when goods are destined to non-U.S. ports, so why shouldn’t U.S. importers and exporters have the benefit of these higher liability limits?)
  3. An alternative request is that your cargo be subject to the highest liability limit of any cargo carried on the same vessel as your goods. (As a result of different liability terms in treaties applying between different origin and destination nations, there usually are three or four different liability limits on cargo traveling in the same ship.)
  4. Request that whatever liability limits apply on your cargo while on the high seas, they not be extended to inland carriers. (This issue recently cost an Australian shipper over $1 million when dealing with an NVOCC. See the Norfolk Southern Ry. v. Kirby, U.S. Supreme Court decision Nov. 9, 2004, reported in "Supplement No. 1" to Transportation, Logistics and the Law.)
  5. Request a greater time within which to report loss or damage if your inspection procedures cannot be completed within three days, as required by ocean carriers’ bills of lading.
  6. Request the deletion of the clause that relieves the ocean carrier of liability for loss or damage if it results from the carrier’s negligent navigation or mismanagement of the ship. This is one of 17 defenses that ocean carriers have under their bills of lading. It is the most unconscionable defense in the law.
  7. Request that the ocean carrier’s responsibility for your goods continue for the entire period that it has custody of them rather than “tackle-to-tackle” as provided in COGSA.

The carrier’s willingness to make these changes in your contract will reveal how the carrier regards your business. Most ocean carriers utilize contracts of adhesion. In essence, this means take-it-or-leave-it. But if your business is important to the carrier and its balance of trade, it should make some of these concessions.

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