GSA Office of Government-wide Policy Office of Asset and Transportation Management Federal Transportation Officer Training Session 4 - International Shipments

GSA Office of Government-wide Policy

Office of Asset and Transportation Management

Federal Transportation Officer Training

Session 4 - International Shipments



International Shipping

Presented by:

Angela LauvrayOffice of Logistics Operations (A/LM/OPS)1701 N. Ft. Myer Dr.Arlington, VA 22209703-875-6088



What You Will Learn

• Introduction to some of the regulations and requirements involved with international shipment of Government cargo

• Basics of shipping Internationally• Basics of US Flag requirements • Information sources and an introduction to

international transportation vocabulary

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• This lesson assumes the user has an understanding of commercial shipping and needs to know how that fits into the business processes used by civilian government agencies for making international shipments.

• For the purposes of this Shipping presentation, it is recommended that users read through the definitions (slide 26 through 47) to get a general sense of their meaning and use this as a general reference for other material and aspects of shipping presented herein.

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Definition: Cargo movement of U.S. government goods to foreign destinations. •Civilian government agencies have a different set of rules and business processes than goods moved by Department of Defense (military) methods.•Most Civilian government freight must be cleared by the U.S. Embassy upon entry into foreign countries

The State Department has a robust transportation capability for civilian agencies to accomplish their shipping requirements.

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Civilian - Military• Generally, civilian government entities use the

existing commercial infrastructure of vendors, forwarders, and their resources.

• Military transportation offices may use these same commercial resources or may use their own organic resources (i.e., military planes or ships).

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International ShippingPhases of International Shipping :

1. EXPORT: Requirements to move it out of the origin country

2. INTRANSIT: International laws regulating the commercial air or surface transportation service provider (TSP) while in transit, and

3. DESTINATION CLEARANCE: Requirements and Customs regulations to bring goods into the host country (import).

NOTE: The U.S. Government also handles import shipments into the U.S. which are regulated by U.S. Customs, the Department of Agriculture, etc., and are unique to each import circumstance and commodity.

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•

U.S. State Department Shipment Management• Government agencies may use their own resources to execute

international shipments, or use the services of an established government freight forwarder, like the Department of

• The State Department transportation offices manage personal effects and general cargo shipping to support U.S. Government abroad.

• The State Department has long established procedures for managing international logistics, to include: – A network of field offices (Despatch Agencies) and consolidated receiving point

(CRPs) warehouses to receive, stage, and export USG cargo to global embassy destinations

– A robust transportation management software system that provides world-wide intransit visibility

– The services of the State Department transportation network are available to support any U.S. Government funded transportation requirements

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Regulations Hierarchy

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Code of Federal Regulations (CFR)

• The U.S. Code is a codification of legislation, while the CFR serves as administrative law.

• The United States Code (U.S. Code) precedes the CFR and contains statutes enacted by Congress. The CFR contains regulations, which spell out in further detail how the executive branch will interpret the law. The two documents represent different stages in the legislative process.

• Every regulation in the CFR must have an "enabling statute," or statutory authority.

• Administrative law exists because the Congress often grants broad authority to executive branch agencies to interpret the statutes in the U.S. Code (and in un-codified statutes) which the agencies are entrusted with enforcing.



Shipping Regulations

• The Code of Federal Regulations (CFR) and the Foreign Affairs Manual (FAM) are the primary regulatory guides used for government shipping.

• In some instances government shipments are exempt from certain regulations that apply to commercial shipments – Export declarations

• In other cases, government shipments must follow regulations that do not apply to commercial shipments– American Flag carrier

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U.S. Government International Shipping Regulations

• Transportation Management: 41 CFR 102-117

• Transportation Payment & Audit: 41 CFR 102-118

• Acquisition of Transportation: 48 CFR 47

• Cargo Preference is regulated by: 46 CFR 381

• Fly America is implemented in: 48 CFR 47.4

• Foreign Affairs Manual: FAM (applies only to Foreign Affairs Agencies)

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Governing Regulations: U.S. Export

Following are laws and regulations which may apply to an export shipmentExemption from Export Declarations CFR 15, Para. 30

State Department Regulations (To include Foreign Service Regulations) CFR 22

Export License CFR 22

Use of GBL's CFR 41, Para. 102 – 118

Coast Guard and DOT Regulations CFR 46

Federal Maritime Commission Regulations CFR 46, Para. 500 to End

Federal Acquisition Regulation System CFR 48

Use of Freight Forwarders (& Definition of Carriers): CFR 49

HAZMAT Regulations CFR 49

International Air Transportation Association Code, International Maritime Dangerous Goods Code

Public Law 88-205: Anti-deficiency

United States Flag Use and Exceptions (Ocean): Cargo Preference Act of 1954 and Merchant Marine Act of 1936

United States Flag Use and Waivers (Air): International Air Transportation Fair Competitive Act of 1974

Use of Commercial BL in Lieu of GBL Comptroller General's Circular Letter B-150556

Packing ISPM-15

Foreign Affairs Manual – For Foreign Affairs Agencies Only FAM



Governing Regulations: Transportation Service Provider

Following are laws and regulations which may apply to a Transportation Service Provider handling an export shipment for the U.S. Government

United States Flag Use and Exceptions (Ocean): Cargo Preference Act of 1954 and Merchant Marine Act of 1936

United States Flag Use and Waivers (Air International Air Transportation Fair Competitive Act of 1974

Exemption from Export Declarations CFR 15, Para. 30

Export License CFR 22

Coast Guard and DOT Regulations: CFR 46

Federal Maritime Commission Regulations CFR 46, Para. 500 to End

Use of Freight Forwarders (& Definition of Carriers): CFR 49

HAZMAT Regulations CFR 49; International Air Transportation Association Code, International Maritime Dangerous Goods Code

Use of Commercial BL in Lieu of GBL Comptroller General's Circular Letter B-150556



American Flag Requirements Cargo Preference Act

• Cargo Preference Act: 46 USC 55303 et. seq.– USG Personal Effects: 100% on US Flag carriers– USG Supplies & Equipment: 50% on US Flag carriers

• Military Cargo Preference Act: 10 USC 2631– 100 % on US Flag Vessels

• In accordance with Section 901 of the Merchant Marine Act of 1936, travel and transportation of effects shall be on ships registered under the laws of the U.S. where such ships are available, unless the “necessity of the mission” requires the use of a ship under a foreign flag.

• The Maritime Administration (DOT/MARAD) requires the USG to report US flag usage.

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American Flag RequirementsCargo Preference Act

• The Cargo Preference Act of 1954 applies to the following types of cargoes:1. Supplies owned by the U.S. Government and in the possession of:

The US Government

A contractor of the U.S. Government

subcontractor at any tier

2. Supplies for the use of the U.S. Government that are contracted for, and require subsequent delivery to a U.S. Government activity but are not owned by the U.S. Government at time of shipment

3. Supplies not owned by the U.S. Government at the time of shipment that are to be transported for distribution to foreign assistance programs, but only if these supplies are not acquired or contracted for with local currency funds.



American Flag Requirements Fly America Act

• Fly America (International Air Transportation Fair Competitive Practices Act of 1974), 49 USC 40118, applies to both government passengers and cargo to and from the US and between foreign points.

• Open skies agreements (i.e., exceptions) with EU, Australia, Japan, and Switzerland allow these nations’ carriers to carry USG passengers and freight.

• Exceptions:– no US flag carrier can provide needed transportation

– Cannot accomplish mission using USG carrier

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International Standard for Phytosanitary Measures No. 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.

• Penalties can include seizure of cargo or return to origin at the shipper’s expense.

NOTE: manufactured wood like plywood or OSB is exempt from ISPM-15.

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The Shipping Process

Cargo handled by the U.S. Government falls into two main categories: Personal Effects and General Cargo.

Personal Effects: Household goods and private vehicles owned by U.S. government personnel

General Cargo: Supplies and equipment shipped on behalf of the United States

Note: Applicability of regulations can be commodity driven.

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The Shipping Process

Acquiring Shipping:• Direct Procurement Method (DPM):

– The Government arranges for the export packing, local transportation, ocean shipment, and other services involved in the shipment to destination port or post. Each of these individual segments, or services, are typically ordered and paid for separately.

• International Through Government Bill of Lading (ITGBL): – A complete origin to destination package of services for a door-to-door shipment

wherein all services (e.g., pack-out, pick-up, transport, delivery out, unpacking, etc.) are bundled together, using one forwarder to perform all services and generally paid on one billing document.

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Best Places to Find Country Specific Information

1. Contact the local Embassywww.state.gov

2. Contact your preferred freight forwarder and ask for assistance

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If you need Help…

US Department of State Transportation Resources:

http://www.state.gov/m/a/c8018.htmor

Email: [email protected] put in the subject line: International Shipping

Assistance

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TRANSPORTATION TERMINOLOGY

Transportation terminology is often confusing to those outside the industry. Following are some of the commonly used logistics terms used by the Department of State (DoS) in shipment management. Some terms are universal to the transportation industry and some are specific to DoS and other foreign affairs agencies. Additionally, the Department of Defense has terms specific to their logistics requirements.

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TRANSPORTATION TERMINOLOGYBOL A Bill of Lading is the contractual document by which services are

requested by DoS and procured from a handler. It is the authorizing document for payment and can be an Ocean bill of Lading, Airway bill, Government bill of lading, Work Order, etc.

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

BTA Bioterrorism Act is designed to protect the food and drug supply from terrorist intervention. This act applies to all food, including canned goods, being imported or offered for import into the U.S. for human or animal consumption. This regulation includes any consumables, including medications and alcohol/wine brought into the U.S. in a personal effects shipment.

Bulk Freight that is transported unpackaged and in large volumes in the hull of a ship. USAID and Agriculture arrange for bulk shipments of wheat and corn.



TRANSPORTATION TERMINOLOGYCAF (Currency Adjustment Factor)

A surcharge on freight charges by a carrier to offset foreign currency fluctuations.

Carrier A carrier is a company that operates its owned or leased equipment and issues a bill of lading.

CBP Customs and Border Protection The United States Bureau of Customs and Border Protection (CBP), known as U.S. Customs and Border Protection, is an agency of the United States Department of Homeland Security charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. trade laws. Its other primary mission is preventing terrorists and terrorist weapons from entering the United States.

CNS Consumables are an entitlement in an employee’s TA which authorizes a shipment of grocery items to augment local market products for specifically designated posts. CNS are available from various U.S. sources or overseas.



TRANSPORTATION TERMINOLOGYContainer Ships Cargo ships that carry break bulk loads in truck-size intermodal

containers.

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

CRP Receipt Notification

A system generated e-mail message that a supply item has been received at the CRP. Posts 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.

Cubic Feet or CUF

The cubic foot is an imperial and US customary (non-metric) unit of volume, used in the United States, Canada and the United Kingdom. It is defined as the volume of a cube with sides of one foot (0.3048 m) in length.


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TRANSPORTATION TERMINOLOGYDemurrage A separate freight charge, in addition to ordinary shipping costs, which is

imposed according to the terms of a carriage contract upon the person responsible for unreasonable delays in loading or unloading cargo. It is a penalty for exceeding free time (usually 72 hours) allowed for taking delivery of a shipment from the shipping or transporting company for delay in loading or unloading of a shipping vessel or for undue detention (usually over 48 hours) of the transportation equipment. This is also called a detention charge.

Destination This is the local agent for a door-to-door (ITGBL) shipment and the one that provides the receipt and delivery-out functions at the gaining or destination location.



TRANSPORTATION TERMINOLOGYDimensional weight

Dimensional weight calculates the volumetric weight for packages. Freight carriers utilize the greater of the actual weight or dimensional weight to calculate shipping charges. In the USA, domestic air shipments are calculated as Length times Width times Height in inches, divided by194. This is approximately 8.9 pounds to a cubic foot. For international freight, dimensional weight is calculated as Length times Width times Height in inches, divided by 166. This is approximately 10.4 pounds to a cubic foot

DOT The mission of the Department of Transportation (DOT) is to develop and coordinate policies that will provide an efficient and economical national transportation system, with due regard for need, the environment, and the national defense. The Department of Transportation includes the Federal Aviation Administration, the Federal Highway Administration, the Federal Motor Carrier Safety Administration, the Federal Railroad Administration, the National Highway Traffic Safety Administration, the Federal Transit Administration, the Maritime Administration, the Saint Lawrence Seaway Development Corporation, the Research and Innovative Technologies Administration, the Pipeline and Hazardous Materials Safety Administration, and the Surface Transportation Board.



TRANSPORTATION TERMINOLOGYDPM Direct Procurement Method is the movement of cargo from origin to

destination where each leg of the process (e.g., pack-out, pick-up, transport, delivery out, unpacking, etc.) is managed individually (e.g., the non-ITGBL method of shipping by a DA or post) and the billing for services provided is done separately for each vendor/handler in a specific leg.

DPM Liability DPM: liability through DoS under the Military Personnel and Civilian Employees Claims Act of 1964, as amended. The maximum recovery allowed in most cases is the depreciated value, based on acquisition cost, of the lost or damaged item.

DTW Door-to-warehouse is a move wherein the origin services include pre-move survey, pack-out, and shipment via a forwarder to an intermediate warehouse point (usually a DA location) where the shipment is held pending a call forward to destination post. The use of this mode is dependent on the costs involved and shipping requirements. It could be used with either an ITGBL or a DPM move.



TRANSPORTATION TERMINOLOGYDunnage is the preparation of a product or commodity for proper storage and/or

transportation. It may entail blocking, bracing, cushioning, marking, sealing, strapping, weather proofing, wrapping, etc.

Enroute Notification

is a computer generated notification sent for each shipment as soon as the shipping details (e.g. Sail date, voyage, bill of lading number) are known. These messages are "one way" communications to the post to advise that the shipment is on its way. Typically, posts use this information to prepare customs clearance documentation and arrange for final delivery.

Export Packing For our purposes, export packing usually means the freight is packed in wooden boxes and banded.

FDA Food and Drug Administration The U.S. Food and Drug Administration (FDA) is an agency of the United States Department of Health and Human Services and is responsible for the safety regulation of most types of foods, dietary supplements, drugs, vaccines, biological medical products, blood products, medical devices, radiation-emitting devices, veterinary products, and cosmetics.



TRANSPORTATION TERMINOLOGYFEU means forty foot equivalent units, or the amount of freight that

would normally fit into a 40’ sea container. Carriers often describe the size of their container ships by the capacity of TEUs or FEUs.

Flat Rack Type of equipment that allows for odd or over sized freight to be stacked on conventional sea containers aboard a container vessel.

Freight Forwarder A company that arranges to pack, store, or move shipments using a carrier or NVOCC. Freight forwarders may or may not issue their own bill of lading, called a house bill.

FUR Shipment type furniture and is used to describe shipments of residential or office furniture procured through DoS contracts.

General Average If circumstances during a voyage causes the crew to jettison cargo or if the ship is damaged in some way (e.g. a fire) then all the customers who have freight aboard that ship must pay a portion of the loss based on the amount of cargo they have aboard that ship.



TRANSPORTATION TERMINOLOGYGeneral Order If U.S. Customs seizes a shipment at the air or sea port

because it has exceeded the free time (time freight can sit at a port without accruing storage charges), the shipment is turned over to a bonded storage company and held until it is cleared. The bonded company usually charges a steep storage rate, so you don’t want your shipments going into General Order.

Gross Weight This is the weight obtained by adding to the shipment net weight the weight of lift vans, outside shipping containers, and the weight of dunnage or bracing material used to secure articles in such vans or containers.

Harmonized Tariff This is a U.S. Customs reference that describes items and the amount of duty that must be paid to import them into the United States.




HAZ MAT (hazardous or dangerous goods)

A dangerous good is any solid, liquid, or gas that can harm people, other living organisms, property, or the environment. An equivalent term, used almost exclusively in the United States, is hazardous material (hazmat). Dangerous goods may be radioactive, flammable, explosive, toxic, corrosive, bio-hazardous, an oxidizer, an asphyxiate, a pathogen, an allergen, or may have other characteristics that render it hazardous in specific circumstances.

HHE Household Effects, also synonymous with Personal Effects (PE).

Hidden Damage When the contents of a shipment are damaged, but there is no indication of damage or rough treatment on the outside of the container, we call it hidden damage. Hidden damage is almost always a result of poor packing or poor bracing of the contents in a container or trailer.




High Cube Container Usually refers to a 40’ sea container that has a height greater than standard containers and therefore holds more cube than a standard container. Realistically 2,000 CUFT can be loaded into a 40’ and probably 2,200 into a high cube. High cubes are often used for shipments when the freight exceeds the capacity of the 40 and using a high cube will be less expensive than using a separate 20’ container to meet the need.

Inducement When a customer has a large volume of freight going to a port where a particular ocean carrier does not normally call, and the carrier agrees to call that port based on the revenue received from the decision.

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.

ITGBL Liability replacement for losses or damage up to the maximum liability of $8.50 times the net weight of the shipment up to shipment weight maximums.

JIT (Just in time)

A term to describe getting an item to a destination exactly when it is needed, thus eliminating the need for inventory and storage.

Land Bridge (also referred to as mini land bride) means transportation from one seaport to another by railway across continents instead of by ocean ship. The rail mode is considered an extension of the ship’s voyage over in land instead of on water.




LAY A layette shipment consists of clothing, blankets, crib, baby chair, playpen, car seat, etc., directly related to the care and feeding of a child. Foodstuffs, with the exception of milk, formula, and commercial baby food, may not be shipped under this provision.

Letter of Agreement (LOA)

Similar to a tender of service, except on a far smaller scale, and usually for a very short period of time.

Light Load A cost effective load for a standard 20’ sea container may be anywhere between 800 to 1000 cuft. When the freight being containerized is less than 800 cuft, we refer to it as a “light” load. Since most containers are priced on a flat rate, the more freight we can get into a container, the lower the cost per cube or pound. Light loads may be used when small amounts of freight have accumulated for longer than 30 days. Light loads differ from LCL (less than container load) shipments because LCL shipments are export packed and usually not containerized.




MARAD The Maritime Administration (MARAD) is the agency within the U.S. Department of Transportation dealing with waterborne transportation. The Maritime Administration works in many areas involving ships and shipping, shipbuilding, port operations, vessel operations, national security, environment, and safety. For shippers like DoS, MARAD monitors use of American Flag vessels for shipping in accordance with Section 901 of the Merchant Marine Act of 1936: travel and transportation of effects shall be on ships registered under the laws of the U.S. where such ships are available, unless the “necessity of the mission” requires the use of a ship under a foreign flag.

Mode indicates if the shipment is going by air, sea, rail, or truck. Surface may also be referred to as a mode. When more than one mode is used (e.g. truck and ship), the shipment is referred to as intermodal.

Net Weight

This weight is a total of actual effects plus cartons, barrels, fiber drums, crates and boxes, as well the necessary wrapping and cushioning material, used to pack small or fragile articles for shipment or storages.




NVOCC: (Non Vessel Operating Common Carrier)

This type of company does not lease or own its own equipment, but uses the equipment of a carrier. The NVOCC issues its own bill of lading, often called a house bill. NVOCC’s (or NVO’s as they are often called) will consolidate the shipments of multiple customers into a sea container and then pass back part of the container discount to the customer. If you have a shipment that is less than a container load (LCL), this method can save you money over the LCL cost or light load cost.

OFV Shipment type Official Vehicle and designates a government owned vehicle as a supply shipment to destination.

ORIGIN AGENT This is the local agent for an ITGBL forwarder and the one that provides the pre-move survey and pack out functions from the losing post/location.

OTO One-Time-Only is a shipment movement with a specifically negotiated cost, generally done on a case-by-case basis because negotiated rates do not exist.




Panamax A term used to describe the size of ship that will fit through the Panama Canal.

PBO Packed by Owner is not allowed either for ITGBL or DPM effects shipments because of the liability involved.

PE Personal Effects is the general term to describe an employee’s personal possessions which may include UAB, HHE, CNS, LAY, or POV. Also know as household effects (HHE).

POC Point-of-Contact is a designated person or entity to be contacted in reference to a problem or issue.

POV Privately Owned Vehicle is the vehicle owned by an employee which is authorized by a Travel Order for shipment at USG expense. Only one vehicle is authorized for shipment at government expense per 14FAM.

Project Rate

A project rate is similar to a service agreement except it usually involves lower volumes of freight over a shorter period of time and requires only an estimated or projected number of containers without a contractual guaranteed minimum.




RDD Required Delivery Date is the date or transit days by which a forwarder must move a shipment from origin to destination without incurring a monetary penalty.

Ready to Ship Notification

This is a computer generated e-mail message that informs posts that supplies have been consolidated or a shipment of personal effects and/or supplies has is preparing to ship at the earliest practical moment. No action is required on the post's part for the shipment to occur.

Reefer Term used to describe a container that is refrigerated. The refrigeration unit protrudes into the freight area of the container, lessening the cargo capacity. Because of that restriction, these can sometimes be used for light loads of dry cargo for less money than using a standard dry container.

Ro-Ro Vessel: (Roll on, Roll off)

This is a ship that is built like a large parking garage. Trucks literally drive the freight onto the ship. Ro Ro vessels are very flexible for loading and unloading cargo, and are especially useful for oversized cargo and vehicles.




Routing The path freight takes from the point of origin to the destination.

SDN (Specially Designated Nationals)

A list of persons and companies that the U.S. Government is forbidden to use for transportation. The list is maintained by the Office of Foreign Assets Control (OFAC).

Service Agreement

agreement or Contract: If a 3PL agrees to ship a large number of containers per year with a carrier, the carrier will provide a discounted rate to the 3PL. The 3PL then passes part of that discount to the customer.

SIT Storage-in-Transit is temporary storage initiated by a forwarder during a shipment move. SIT may occur at any point in a move and is billed as a separate item from other move costs.

Slot Charter When a carrier charters part of a ship belonging to another carrier, it’s called a slot charter. Slot charters predated code-share flights in the aviation industry, but just like with code shares, if an American carrier charters part of the foreign vessel, that freight is considered to be on an American flag carrier for purposes of complying with the American Flag laws.




SOW Statement of Work is the packing and shipping requirements of a tender of service (TOS) or contract. The forwarder must meet these terms and conditions in order to be in compliance with the Tender/contract and receive payment for services rendered.

Tender of Service (TOS)

A rate and service agreement under 41 CFR for the purchase of transportation services. The agreement does not become a contract until a government bill of lading or other paying document is issued to move a shipment. Most tenders are re-competed every 6 months or every year, depending on the circumstances.

TEU means twenty foot equivalent units, or the amount of freight that would normally fit into a 20’ sea container. Carriers often describe the size of their container ships by the capacity of TEUs or FEUs.

Through Bill of Lading

Usually referred to as a Thru Bill. When a shipment is paid all the way to the inland destination city, we say that it is on a thru bill.




TSP Transportation Service Provider which is the general term to describe the commercial entity providing requested logistics services.

WTD Warehouse-to-door is an export packed shipment that a forwarder/handler receives from a warehouse facility and transports to a residence for delivery and unpacking.



INTERNATIONAL SHIPPING LESSON REVIEW

• All USG cargo for DoS, DOD, and other civil/foreign affairs agencies is handled identically, using the same rules and regulations?

True or False

• What percentage of USG supplies must move on US flag carriers?1. 1002. 37.23. 504. 75

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• What statistics do agencies have to report to MARAD?

• What is the hierarchical order for the following laws or regulations?A. Code of Federal Regulations: Transportation Management 41 CFR B. Public Law 88-205C. Agency Specific RegulationsD. United States Code

• Are there any USG established freight forwarders? If so, who?

INTERNATIONAL SHIPPING LESSON REVIEW

Documents

GSA Office of Government-wide Policy Office of Asset and Transportation Management Federal Transportation Officer Training Session 4 - International Shipments