subject: cbsa examinations of marine containers...port of vancouver* at the port of vancouver, 24...

August 11, 2016 Canada Border Services Agency Ottawa, Ontario Megan Imrie Director General, Programs Branch By email to: [email protected] Lisa Janes A/ Director General, Operations Branch By email to: [email protected]

Subject: CBSA Examinations of Marine Containers Dear Ms. Imrie and Ms. Janes; Since June 2009 the Canadian International Freight Forwarders Association (CIFFA) has engaged with the Canada Border Services Agency on the subject of examinations in the marine mode. And, while we have from time to time seen some small improvement, such as in handling the testing and fumigation of containers before examination, overall the process remains severely flawed. We are writing today to bring to your attention the current state of container examinations at major ports across the country and most particularly at the Port of Vancouver and to ask the Agency to take immediate steps to ameliorate the situation in both the short and long terms. Lack of leadership by the Canada Border Services Agency in addressing this long-standing and persistent problem has resulted in considerable cost to Canadian traders. There is no accountability or transparency anywhere through-out the process and Canadian importers are paying the price. I should rephrase. Canadian consumers are paying the price as the cost of the delays, the cost of lost sales, the cost of physical examinations are passed on to every Canadian who purchases an imported good from a retailer in Canada. Additionally, Canadian manufacturers and exporters who rely on imported components are paying the price as they and their suppliers struggle to deal with these extremely high and unexpected costs and delays. The consequences of the CBSA’s approach to container examinations are considerable. In Appendix B you will find a sampling of emails received at our office from importers and members detailing some of their personal experiences.

mailto:[email protected]


Costing Model Notwithstanding the CBSA’s oft quoted and misleading statement “The CBSA does not charge for examinations”, current regulations and policies are specifically and solely responsible for today’s costing model. Appendix A contains some evidence of the costs borne by individual importers. Even more shocking is the fact that the vast majority of these containers are compliant and are released after examination1. Canada’s small and medium sized importers – the businesses that drive our GDP – individually are bearing the cost of security for all Canadians. As we wrote in our letter of June 2013, the costing model is broken, penalizes compliant importers and must be changed. CIFFA has gathered the data in Appendix A from its member firms, the international freight forwarders who arrange the movement of hundreds of thousands of containers into and out of Canada’s ports. This is not an exhaustive list. It is a sampling of costs for some containers called in the month of June at all ports in Canada, as our members found the time and administrative resources to share their data with us. Examination costs have risen inexorably year after year and by any estimation container examinations are driving millions of dollars of additional cost to individual traders and the supply chain. In order to fully understand the cost to individual Canadian companies of the CBSA’s current costing model, the Agency is urged to:

Take these data and to extrapolate the costs for all containers examined during a

twelve month period so that the Agency fully understands the costs to Canadians of its

policies and actions.

To share those costs with Canadians and the importing community so that it can be

prepared to pay those costs. [At least until the costing model is changed].

Take steps to explore other costing options and urgently implement a new costing

model.

Accountability and Transparency While there are delays and operational issues at all ports, as you are undoubtedly aware, the situation at the Port of Vancouver has been particularly problematic since the early spring. We fully understand that there have been extenuating factors such as the Progressive Examination

1 The CBSA does not release statistics on the number of containers examined, the number of contraventions or the number of criminal investigations arising from container examinations, so it is impossible to perform any kind of cost/ benefit analysis of container examination policies.

Model (PEM) project which was conducted at Vancouver during May and June and the ongoing rail improvement activity at GCT Deltaport. Nothing, however, can justify the costs to Canada’s importers attributable to delays which persist at Vancouver. In our eBulletin of June 24th we announced the end of the PEM project and our expectation that examination delays would return to ‘normal’ within a week or two. This week, some seven weeks later, the association has received correspondence from its members that delays at Port of Vancouver are in some instances now more than six weeks. While the CBSA is reviewing its container examination policies in their entirety, there are several actions that should be taken immediately by the CBSA to drive accountability and to improve the process. These include but are not limited to: Within the CBSA

Adequate resourcing by the CBSA to ensure that it has the human resources available

to examine containers which have been identified for exam. We have received several

examples, particularly at the Port of Montreal, where containers have been called for

exam before a long weekend or Christmas and not examined until days and sometimes

weeks after the holiday. A contributing factor appears to be availability of officer(s).

Training and communications with officers at every port on the impacts of container

examinations and their costs.

Review of targeting versus random examinations and the consequences of calling

containers for examination where there are inadequate resources available to conduct

the examinations.

Implement a requirement for CBSA officers to sign examination time sheets and to

provide evidence that the examination has taken place. [For example, a CBSA stamp on

a time sheet which could then be shared with the steamship line and on through the

chain to the forwarder, customs broker, and finally to the poor importer – or exporter

for that matter - who must pay the bill. Today, there is no accountability by the Agency

for delays in the examination of cargo – its officers do not seem to equate time with

cost. And today there is no physical evidence that the CBSA has examined a container

other than a bill from the CEF which is sent to the steamship line.

At Container Examination Facilities (CEF)

Implement service level agreements with CEF operators to hold them accountable for

the timely pick-up and return of containers from the port.

Require all CEF operators to publish rate sheets for container pick-up & return and de-

vanning, backed up by time sheets.

Implement service level agreements and time sheet with all CEF operators for

container examinations including time permitted for de-vanning and re-loading of the

container itself.

Implement a requirement for photos of all containers that are de-vanned fully or

partially and re-loaded. Share those photos with the importer (or his representative) to

be used in cases of claims for damage and delay. [Damages caused by the CEF are quite

common and claims handling is a nightmare due to lack of evidence, photos and

accountability.]

At Terminal Operations

Implement service level agreements with all terminal operators mandating the

requirement for identified containers to be presented to the CBSA within a reasonable

time. [For example, terminal operators should be required to make the container

available to the CBSA for examination within 24 hours of vessel discharge. Today,

particularly at the Port of Vancouver, containers are buried in the stacks and are not

presented to the CBSA for four, five and most recently + six weeks after vessel

discharge. This is completely unacceptable.]

Prohibit terminal operators from charging on dock storage or detention for containers

which it is unable to provide to the CBSA within the agreed service level (i.e. 24hours).

[Today, terminal operators have no incentive to locate identified containers or present

them to the CBSA for delivery to the CEF as the terminal charges storage / demurrage

for containers sitting on its dock for any reason at rates of $150 - $200 per container

per day. Terminal operators are profiting from their own inefficiencies to the detriment

of Canada’s traders]

Prohibit steamship lines from charging equipment detention or demurrage on

containers which have been called for examination.

Require terminal operators to allow containers identified for examination to have

special access to reservations at the gate for CEF transfers and returns and prohibit the

terminal from charging for those reservations.

There are other ramifications of the current container policies on international freight

forwarders, which range from possible container abandonment to capital financing and credit

issues. Oh behalf of the 250 global logistics service provider firms represented by the Canadian

International Freight Forwarders Association and on behalf of their customers, the thousands of

Canada’s traders who bear the burden of these unreasonable container examination costs and

delays, we urge the Canada Border Services Agency to act immediately to remediate the current

situation.

Sincerely;

CIFFA

H. Ruth Snowden

Executive Director

Copy:

Johny Presad, CBSA , [email protected] Joseph Chayeski, CBSA, [email protected] CIFFA National board of Directors CIFFA eBulletin www.ciffa.com



http://www.ciffa.com/

Appendix A We have taken the data as presented and attach here the raw Excel spreadsheets. These include examples sent by our members for all types of exams. It should also be noted that our data is taken for containers called for exam in June and may include some commercial exams, with costs less than $200.00. Also, there are several examples in the Vancouver reports which are for LSI only exams. The longest delays at the Port of Vancouver have occurred since our study closed – and so these charges do not reflect storage and demurrage charges of five, six and seven weeks which have been assessed during the past several weeks.

Total reported

Total number of containers reported: 84

Highest cost: $7,373.11

Lowest Cost: $146.73

Average Cost: $2,028.26

Port of Vancouver* At the Port of Vancouver, 24 containers incurred costs of $2000 or more and of those, 13 charges were over $3,000.*





Port of Montreal





Port of Toronto (Not a FPOA Port)*

These may be allocated in error to Toronto as the costs seem really high for commercial exams. But then again, with no competition and only one CEF for full container commercial examinations in Toronto these might be under the correct port listing. Worth looking at for sure. [Note: Looking again at the Toronto data, there is one container number with two lines of charges. Possibly this importer was charged examination at FPOA and a commercial exam at Toronto. That might explain the anomaly].We have been advised of three or four recent examples of containers called for examination twice.



Lowest Cost: $1,183.65


Halifax, Prince Rupert and Port 701





Ports Not Identified*

There is a container here reported by Bridge Imports which was assessed a cost of $7,000. Because it was not via a CIFFA member and because no back-up was received we listed as no port name. However, from the email it appears to be a Vancouver examination at $7,000 and should maybe be allocated to Vancouver.





Port 395, Tremont Terminal, Montreal (Not included in data above)

Finally, CIFFA received examination cost data from an importer who did not use a freight forwarder and who reported that in June, of a total of 40 containers on 4 bills of lading / CCNs, 37 containers were examined at a cost of $205 each plus a $100 paying fee by the steamship line per bill of lading for a total cost of $7985.00. Exactly the same thing occurred in February 2016.


Exam cost: 205.00

Admin Fee per BL: 100.00

Average Cost: 215.81

Appendix B Following is a sampling of emails received by CIFFA during the past few weeks. They paint a terrible picture of the impacts of the Canada Border Services Agency’s policies regarding container examination. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Email received August 10, 2016 Hi Ruth I hope you enjoying the summer so far. We have some concerns over the lengthy delays we have been seeing with CBSA customs exams in Vancouver. We are seeing containers get held for 6-8 weeks. There are increased amount of inspections being done causing a back log. During summer holidays we know that in the past CBSA used students to assist to keep some fluidity, but recently we have heard that CBSA front line officers have been mandated to carry side arms. We assume that students are not qualified to handle side arms and therefore cannot be used to fill in for short staffed situations (just a theory on our side). Regardless, the length of time to get containers turned around is increasing to unacceptable periods of time. The cost of tying up our customers product, the detention invoice we need to contented with, the time taken for follow up are all costly factors on our side. We acknowledge that port security is a very important factor but we ask for assistance from CIFFA to address the delays with CBSA and push for action in resolving. DP ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Email received August 8, 2016 I would like to share with you that not only are the costs extreme, the current dwell / waiting time for containers to be inspected at Vancouver Port are approx. 3 weeks. HMM shared with Teresa that containers pulled for exam on Aug 4, but the vessel arrived at Port on July 13. Scary. Not sure if this is worth mentioning to CIFFA. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Email received July 26, 2016 Hello Sir, Initially I would love to thank CIFFA and you Mr Snowden for the effort and the hard work that you put throughout the years to make importing and exporting into Canada much reliable and more easier. I read your email to CBSA regarding Marine Container Examination in June 2013, I totally agree with you specially with the huge inspection fees that small to medium companies have to pay.

Just today, because of my unfortunate luck, my container have been fully examined, I will paying around 7000 CAD after 550 CAD payed before. This is a friends business and it's our first container, can you please tell me if there is a way I can lower the associated fees? Hoping to hear back from you and seeing you personally and see how can I help building better Canada. Your's sincerely, Hassan Nahhal. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Email received July 19, 2016 So we understand this implication with some carriers after the first 3 days you could face USD150.00 / day until container is unloaded and returned empty. So probably in excess of 21 days demurrage/detention. Consignees are facing CAD4000.00 plus the cost of the examination with is on average 3000.00. The CBSA are adding CAD7000.00 to the cost of containerized goods entering Canada. Welcome to Canada. The CBSA has become the best marketing tool for the Port of Seattle. GM

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ eMail received July 15, 2016 As per CBSA officer, it currently takes about 21 days to have containers delivered to exam center from vessel arrives Vancouver. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ email received July 14, 2016

To: BAKRI Brahim - MTL; CDA Detention-Demurrage Cc: [email protected]; [email protected]; CDA Imports

Subject: URGENT RESPONSE REQUIRED: Container#ECMU1811170 & B/L#BRT0162152

Port and Arrival: Vancouver Date of Arrival: June 22nd 2016 Cargo Control Number: BRT0162152 Consignee: Fadi Ayache To All Parties My name is Fadi Ayache and I have spent the past few weeks emailing, calling and praying

for some information in regards to my shipment which is currently being held by Customs

for inspection since June 22nd 2016 @ a cost of $160 USD per/day. During these last few

weeks severe demurrage charges have collected of which far exceed the amount of the

entire product and International shipping combined. It has reached a point so unimaginable

that by the time it clears customs it could be upwards of $4000 plus. I have continued to



call your offices with either no response or the repetitive answer that simply the shipment is

still being held. I have been prepared from day one to purchase the shipment, forward the

shipment from overseas, pay any related (reasonable by any standard) fees, forward the

products to my location and receive the shipment. This major delay in the inspection and

release of my shipment has caused severe stress and combined with no confirmations or

estimated wait times... I cannot be expected to be calm. My shipment arrived June 22nd

2016 of personal effects for the renovation of my parents retirement residence. I was simply

attempting to provide a gift in which would remind them of the architecture from their

country of Birth, Lebanon. In no means was this product going to be re-sold or generate any

revenue at all. I cannot bare the thought of forfeiting my shipment but that is

underwhelming compared to the thought of paying so much for something which has gone

out of control. The congestion at your ports should not be an independent importers worst

nightmare. The penalties seem to be directed one way when the cause of the issue is simply

that the CBSA has yet to inspect. Gaining from collecting these funds and the fact that

revenue can be generated from a person without prejudice is simply wrong; extortion. What

stops these demurrage fees from going to $5000...$10,000 or even more. I do not feel I

have any protection from this outcome and this is not how a CUSTOMER should ever feel no

matter the service provider.

I have repeatedly requested for information regarding this shipment and have also pleaded

for a lower amount to be considered in terms of demurrage and inspection. I only wish to be

able to bring this project to fruition and present this gift. I am at the point right now where I

cannot see another outcome rather than abandoning this shipment and the hopes of my

parents. Mr. Oumersouk told me a week ago that he would bring my file to the attention of

the General Manager of CDA Detention-Demurrage. I have not received an email or phone

call from anyone. I understand I must wait until the Demurrage department receives the

payment amounts from Customs, but a little more information and assistance in helping me

throughout this process would be greatly appreciated. Selectively answering the questions

in my email leaves huge unknowns and the repeated no replies from voice mails I have left

is simply astounding. I would hope when a customer has an issue, a part of your roles and

responsibilities is to actually do something for him. Not simply check a website to see if it

has been released. In conclusion, I need someone to tell me if I will be considered or granted a lower amount

once final fees are calculated. I would like to know if there is any idea of an ETA for

inspection. I would like to know how long this process usually takes and lastly I would like

to know why my questions/messages are left unanswered. Please help me collect my

shipment and be on my way. I hope you can understand my frustration, my pain and my

eagerness to simply move past this issue and hopefully with the outcome I deserve. I thank you for your time and any considerations you can provide. Fadi Ayache Canadian Citizen. Customer. Son. ++++++++++++++++++++++++++++++++++++++++++++++++++

Appendix C

1. eBulletin June 24, 2016

CIFFA eBulletin

June 24 2016.msg

2. CIFFA Submission to the CBSA on Container Examinations June 2013

http://www.ciffa.com/advocacyblog/ciffa-submission-to-cbsa-on-marine-container-examinations-june-2013/



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