All posts by mitch

Customs Brokers- Good News

CBP is eliminating district permits effective 12/19/2022. Those brokers holding only district permits will be transitioned to national permits. Those already holding national permits will not be affected.

Here is some of the info posted on the CBP website in October followed by a link to the complete announcement:

Within the new national framework, district permits will be eliminated. All customs brokers currently operating with only a district permit will be automatically transitioned to a national permit before the Final Rule effective date. CBP has diligently designed a national permit transition process that will ensure no lapse in permit activity for customs brokers impacted by this process. Licensed customs brokers who already hold a national permit will not be affected.

https://www.cbp.gov/newsroom/national-media-release/cbp-publishes-modernized-customs-broker-regulations

Service Please

As all logistics professionals know, problem solving is a big part of the job. My clients are mostly small or medium sized firms working with minimal staffs, so I frequently assist them in resolving service issues. We’re in the middle of one right now, which prompted this post.

We engage with a variety of LSPs (Logistics Service Providers) including freight forwarders, carriers, integrators, and customs brokers. Most have automated systems for efficiency and cost control purposes. When looking for a status update or answer to a simple question these systems are fine. Self service can be frustrating, though, when the problem is not easily described and is of no use for more complex issues. Information is easier to get than action.

The ability/authority to solve problems is what defines great customer service. Reaching a human being in customer service requires patience and many times that person is simply reading from a script. If I haven’t been able to solve the problem on-line then I need someone with the ability and authority to resolve the issue.

LSPs, don’t force your clients to dump problems on their account rep or e mail the CEO. A few key people in customer service roles with the authority to fix problems on the spot will earn you a lot of customer loyalty.

CBP, Is this what you want?

The pass rate for the October, 2022 CBLE (Customs Broker License Exam) has been posted to the CBP website. The 11.1% rate is considerably lower than April, 2022 (39.6%) or October, 2021 (25%).

I often hear from recruiters looking for Licensed Customs Brokers so, apparently, there is demand. However, the difficulty of the CBLE, along with the stringent background investigation, present very big obstacles to anyone wishing to enter the profession. I doubt that there are any other licensing exams with pass rates this low, including the bar exam.

Pete Mento posted about this topic on LinkedIn in September and I completely agree with his thoughts.

Pass Rate Information

The October 26, 2022 CBLE resulted in a 11.1% pass rate prior to appeal decisions. 

The April 27, 2022 CBLE resulted in a 39.6% pass rate prior to appeal decisions.

CBP Background Checks

As noted in a previous post, CBP conducts intensive background checks for applicants who have passed the CBLE (Customs Broker License Exam). Here is a relevant question from the October 2022 exam.

Under what circumstances may a Customs broker employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice (former broker)?

A) A Customs broker may not employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice under any circumstances.

B) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice under all circumstances.

C) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice after receiving written permission from the Assistant Commissioner upon appropriate notification or petition.

D) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice if the hiring Customs broker never asked about and is unaware of such status.

E) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice if five (5) years has passed since the felon was released from prison and/or parole or five (5) years has passed since the former broker’s license was cancelled with prejudice.

Answer: C

Character Counts

Congratulations to all who passed the October 2022 CBLE (Customs Broker License Exam). Now be prepared for a background investigation. From CBP regulations:

§ 111.14 Investigation of the license applicant.

Cross Reference

Link to an amendment published at 87 FR 63314, Oct. 18, 2022.

(a) Referral of application for investigation. The port director will immediately refer an application for an individual, partnership, association, or corporation license to the special agent in charge or other entity designated by Headquarters for investigation and report.

(b) Scope of investigation. An investigation under this section will ascertain facts relevant to the question of whether the applicant is qualified and will cover, but need not be limited to:

(1) The accuracy of the statements made in the application;

(2) The business integrity of the applicant; and

(3) When the applicant is an individual (including a member of a partnership or an officer of an association or corporation), the character and reputation of the applicant.

October CBLE Posted

The October 2022 CBLE (Customs Broker License Exam) and Answer Key have been posted to the CBP website. While recent pass rates have been a little higher, the exam remains quite challenging. If you have thought about sitting for the exam take a look at some previous versions:

https://www.cbp.gov/document/publications/past-customs-broker-license-examinations-answer-keys

Here is one of the easier questions from the October 2022 CBLE. What’s your answer?

39. Fish are caught by a Norwegian flagged vessel in international waters off the coast of Portugal. The fish are kept either whole or filleted on board. The fish is sent to Spain, where it is cut, seasoned, battered, pre-fried and frozen. The frozen fish is consolidated with other frozen foods into a container in Ireland and exported from the Port of Dublin to the US. What is the country of origin of the frozen fish?
A) Portugal
B) Spain
C) Norway
D) European Union
E) Ireland

LinkedIn Comment- Rate Shopping

Michael DeMarco 1st degree connection1stOwner and 3PL specializing in FTL | LTL | First and final Mile | Drayage | Project Cargo. With old fashioned customer service we help shippers and logistics companies keep their supply chains moving.

We have shippers telling us they send their quotes out to a min of 10 brokers but up to 20 pending what the need is. I personally find that crazy and a waste of their time. You need 3 good ones that is about it. We specialize in drayage, project cargo and other things that regular brokers don’t know how to handle. So with that said, find yourself a good LTL broker, a good FTL broker and a good project cargo or Intl freight handling broker and you are all set. We also do LTL and FTL really well but our niche is dray and project freight. Going out to 10-20 brokers is wasting your time and all of the brokers time just trying to find the cheapest cost. Cheap usually means bad service or slow service.like

Shawn Varner – Financial AdvisorAuthorFinancial Advisor Guiding Logistics and Supply Chain Professionals Coast to Coast to the Retirement They Deserve | Former Freight Broker for 10+ yrs

Agree, a very fine line!

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Licensed Customs Broker, International Logistics Consultant

Good post Mike. Rate shop at your peril. There is always going to be a lower rate out there but don’t expect great service. Having said that, it is a good business practice to get a couple of quotes for large, complicated, or first time moves.

CBLE Notification

If you sat for the October 2022 CBLE (Customs Broker License Exam) you should be receiving your results any day now. Here is some info from the CBP website about appeals.

CBLE Score Notification Letters and Appeal Due Dates

The bi-annual Customs Broker License Exam (CBLE) is administered on the fourth Wednesday of April and October.  Exam Results Letters are emailed to examinees within two weeks from the date of the exam. First Appeals are due no later than 60 days from the date the Exam Results Letters were sent. Second Appeals are due no later than 60 days from the date the First Appeal Results Letters were sent.

https://www.cbp.gov/trade/programs-administration/customs-brokers/how-appeal

Want a CBP Ruling?

HTSUS (Harmonized Tariff Schedule of the United States) classifications can be straightforward or not, as these two examples illustrate:

9506.62.4040 Footballs

9033.00.2000 Light-emitting diode (LED) backlights modules, the foregoing which are lighting sources that consist of one or more LEDs and one or more connectors and are mounted on a printed circuit or other similar substrate, and other passive components, whether or not combined with optical components or protective diodes, and used as backlights illumination for liquid crystal displays (LCDs)

A detailed classification includes HTS lookup, checking both chapter notes and GRI (General Rules of Interpretation), reviewing specs and/or other literature, and searching CROSS (Customs Rulings Online Search System). This is the procedural aspect of classification, but there is more. Most commodities require interpretation of the tariff language based on experience. In many cases subject matter experts need to be consulted. Finally, the process needs to be documented for future reference and parts lists updated.

I sometimes recommend a binding ruling to ensure accuracy in entries. Binding rulings provide uniformity across all ports of entry, and protect the importer from variations in interpretation from current and future CBP personnel. Rulings can be requested on valuation and country of origin as well as classification. The downside to obtaining a ruling is that you must follow it or be subject to penalties, although rulings can be appealed.

Rulings can be requested using the link shown here:

https://erulings.cbp.gov/s/

For help with binding rulings contact mitch@adhoclogistics.com.