ISF Benchmark Study

ISF Benchmark Study From concept to compliance

Executive Summary

      American Shipper, BPE and the International Compliance Professionals Association (ICPA) designed this research initiative to understand the state of Importer Security Filing (ISF) compliance, the impact this rule has (and will have) on the supply chain, the challenges that companies are facing in their attempts to comply with the ISF Interim Final Rule and the best practices importers can leverage to comply with ' and ideally benefits from ' ISF compliance.
      From March 26 to April 10, more than 220 companies importing goods into the United States participated in this survey to understand the state of ISF regulation compliance. Their responses to a 23-question survey allow for a qualitative analysis of:
      ' The status of ISF compliance.
      ' Challenges importers face in becoming compliant.
      ' Impact of ISF compliance including costs.
      ' Best practices for ISF compliance management.


Winners. In each of American Shipper's benchmarking studies the overarching goal is to provide readers with clear, actionable information and advice on how successful organizations manage the challenge at hand. To bring this information to the surface we separate out respondents that are using best practices and seeing positive results in an effort to compare these 'winners' against everyone else. In the context of this study on ISF compliance 'winners' meet four criteria.
      Winners will:
      ' File ISF for 100 percent of their U.S. imports by the Jan. 26, 2010 deadline. Eighty-three percent of respondents currently meet this measure of success.
      ' Pay $50 or less in fees per ISF filing. More than 70 percent fall into this category.
      ' Express a high level of confidence in the accuracy, completeness and timeliness of their ISF filings. Twenty-six percent express a high level of confidence while 11 percent report a very high level of confidence.
      ' Amend their service agreements to incorporate ISF compliance. Only 36 percent of survey respondents meet this requirement.
      In short, winners demonstrate the ability to satisfy ISF compliance requirements while keeping costs down and incorporating the new regulations into their business processes.


CBP Outreach Doesn't Reach Far Enough. A regulation such as ISF requires lots of information, technical clarity and training and this will continue for quite some time. While U.S. Customs and Border Protection's efforts to date are admirable, they haven't reached enough companies to ensure ISF's successful implementation. The industry's fear is that CBP will resort to enforcement activities to get companies' attention. Enforcement is scheduled for Jan. 26, 2010.
      To summarize, the survey clearly identifies that companies filing ISFs today have a much higher chance of increased confidence in meeting the enforcement deadline, however the majority of companies are still struggling to come up to speed on ISF.
      CBP has made it clear it will contact companies that are not filing ISFs. The enormity of this undertaking can be gauged by the fact that only 6 percent of survey participants have been contacted, although less than one-third of participants are actually filing all of their ISFs.


Long Way To Go. As of April 10, only 28 percent of survey participants were filing 100 percent of ISFs for their imports. In fact, 19 percent of participants were not filing at all. Most survey participants were filing somewhere in the middle.
Winners report they are twice as likely to file ISFs for all of their ocean imports. The study average was about four times more likely than winners to be filing no ISFs at this time.
Only 37 percent of respondents have a high or very high degree of confidence that their ISF filings are timely, complete and accurate.


Size Matters. The survey identifies that smaller companies have a higher confidence level in the timeliness, accuracy and completeness of their filings, but they're less certain about their ability to meet the 2010 deadline. Conversely, large companies are less satisfied (and in some cases completely dissatisfied) with their current ISF filing, yet they're considerably more certain in their ability to meet the 2010 deadline.


D-Day 2010. When asked if companies anticipate being able to file their ISFs by the Jan. 26, 2010 deadline, 83 percent of survey participants said they anticipate being able to meet that deadline. This may seem like a healthy percentage but consider the penalties for 17 percent of U.S. inbound ocean shipments. The financial loss would be staggering.


$30 Ain't What It Used To Be. Retailers appear to be far more successful in limiting ' or eliminating ' the hard costs associated with filing ISFs. The study suggests the average fee per ISF is about $30. About half of retailers are filing ISFs for less than $25 with 8 percent reporting no cost associated with filing. Third-party logistics providers, forwarders and other intermediaries seemed less capable of limiting the costs with more than half paying $25 to $100 per filing.


More Time, Filings Needed. Regardless of company size, industry, or exposure to the ISF Interim Final Rule, most companies are nowhere close to filing all of their ISFs. And we haven't even begun to measure what it takes to ensure the timeliness, accuracy and completeness. The exposure to liquidated damages to all companies is immense. We need more time and the opportunity to test more transactions to adequately determine the feasibility and actual costs of ISF compliance.
Register and download the report at AmericanShipper.com/ISF