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Shap Talk

At the start of each year, The Journal of Commerce publishes its Review & Outlook supplement, which features essays from 200 industry leaders on what they see as the top issues for the year ahead.

Margie Shapiro was among the industry leaders invited to participate.  She wrote a piece for the Executive Commentary section of this special issue.

Executive Commentary
Samuel Shapiro & Company, Inc.
Margie Shapiro
President & Chief Executive Officer

The governmental pursuit of addressing the vulnerability of our country to terrorist attacks through supply chains, and through earlier visibility of cargo data, is a mainstay.  The increased pressure to tighten security will compel importers to somehow integrate their systems deep within their supply chain.

Administrative innovations, especially the Automated Commercial Environment and Periodic Monthly Statement (PMS) are further evidence of the Internet serving as Customs' business platform.  But I sense that this tool will be used for more than just enhanced communications.  I see it intertwined with supply-chain visibility; it is a means to Customs' renewed focus on admissibility issues, and to a continued focus on security.

China is the prominent force to be reckoned with.  But there are developments suggesting that other countries will begin to entrench on its exports - the safeguard provisions imposed; the effect of CAFTA; the proposed changes to the Generalized System of Preferences; enforcement international property rights; the sourcing possibilities from competitive countries in Southeast Asia and Eastern Europe; and China's recent decision to discontinue pegging its currency to the U.S. dollar, which could possibly (though unlikely) hinder China's booming export trade and economy.

In essence, there are two driving forces that will impact our industry in 2006: Customs' continued focus on cargo security and the growing trade imbalance that spreads to the less - and under-developed countries, as they try to compete with China.  Adding to Customs' workload is the recent realization that commercial compliance with import laws and regulations has largely been ignored since 9/11 and needs more attention.

As a consequence, importers will rely more on the broker/logistics provider as a "first line of defense" against the traditional classification, valuation, marking and admissibility issues that have been overshadowed by security.  And as trade expands, scrutiny will become a major factor in avoiding the traditional penalties that accrue to importing.  It remains to be seen whether some Customs operation that are so entwined in our homeland security efforts will be reassigned so that Customs can return to one of its founding missions.