13 ISF Filing Tips – Universal Cargo

In our last blog, What the ISF?!, we gave an overview of ISF filing.

ISF is required for every cargo shipment imported to the United States. If not done correctly, importers can face liquidated damage fees in $5,000 increments and cargo holds. Many shippers have found this out the hard way.

The last blog gets into all of that; in this blog, we’ll help you not to have to worry about liquidated damages and cargo holds for ISF problems.

Without any further delay, Universal Cargo presents to you 13 tips for filing your ISF smoothly:

This is the one tip that we shared in the last blog, but don’t worry; we have 12 new ISF tips in today’s blog to go with it.

The reason this tip is both here and in the previous blog is that timely filing of your ISF is so important. 24 hours before vessel departure message (VDM) is when you need to have your ISF filed by, but don’t wait that long.

Get your ISF completed at least 72 hours ahead instead of 24 hours. This way, if there is any missing information that you need to get from overseas agents or partners, you have time to collect the information and file your ISF completely and correctly.

There have been many shippers who have attempted to file their ISF too early to get it done and out of the way.

The problem is that if you file too early, your ISF cannot be matched to the Bill of Lading (B/L), and the result is the same as not filing at all.

There is a 60 day period during which an ISF can be filed. So make sure you don’t file more than 60 days prior to your shipment.

For most small to medium importers, who are shipping through the spot market of the international shipping industry, this shouldn’t be a problem. Because the international shipping industry is so volatile, freight rates are generally only good for about 30 days. It makes sense not to file your ISF until you’ve got your shipment set up.

The two most important things when it comes to ISF is timeliness and accuracy.

It’s too easy to enter incorrect information. Taking a moment to check that the information you’ve entered for your ISF is correct could save you a lot of time and money later.

Don’t let a clerical error come back to bite you on your ISF.

Here’s an area where some shippers have gotten into trouble.

If you realize you messed up on your ISF, information is wrong, or information has simply changed, do not delete the ISF you have filed.

At any time you can update the ISF you’ve filed. Always update a timely ISF rather than delete it and then file a late ISF.

Shippers have deleted timely ISFs in order to file an ISF with corrected or updated information, thinking they were doing the right thing, only to see a $5,000 liquidated damages claim.

We can’t reiterate enough that you can update your ISF at anytime; therefore, do not delete it. You can even update an ISF after arrival and the whole shipping process is completed if something like the buyer changes and you want the records to properly reflect that, although this is not required.

If for some reason your ISF is deleted or lost, you’ll want a record of your original filing so you can prove that you did originally file in a timely manner.

There was actually a bug in the computer systems that caused many ISF matches to be dropped. It was a small percentage of filed ISFs affected and the bug is supposed to be fixed, but if a computer glitch on the part of the ports or customs causes your ISF to be lost, deleted, or B/L match dropped, proving you filed a timely ISF will help you get a liquidated damages claim against you dropped.

Maintaining the record of original filing could also be helpful if you are at fault for your ISF being deleted or lost. There are mitigation guidelines for ISF liquidated damages claims that U.S. Customs and Border Protection (CBP) put into place. Showing that you did originally file timely might help you avoid paying $5,000 because of an ISF mistake you made later on.

If the ACE bug does drop your B/L match and you end up with a liquidated damages claim against you, you’ll still need to send a mitigation letter to the CBP. You’ll want your record of original filing in there.

The party who files ISF receives progress reports through their Automated Commercial Environment (ACE) portal.

Make sure you’re monitoring these reports. If someone else files your ISF, have them forward these reports to you.

You want to check for accuracy, make sure your ISF is matched to your B/L, and make sure there is no B/L match drops in ACE.

Remember, your ISF has to be matched to your B/L. If they are not matched, it’s like you have not filed an ISF at all.

There are different codes for different messages filers receive in regard to their ISFs.

Many shippers think when they get their message with the 3Z code that they are all set. That is not the case. The 3Z message is only a confirmation that you have filed. It does not mean that your ISF has a B/L match. Again, your ISF has to be matched up to your bill of lading.

A 3Z message does not mean that you are all set. An S1 message is the one that says you have a B/L match.

Don’t ever get into the mindset of, “Well, I missed the ISF deadline; I might as well not file at all.”

A late ISF is always better than no ISF.

Remember those mitigation guidelines? If you don’t bother to file your ISF at all, you’re in trouble. Ports can see that you are at least making an attempt when you file late. They can also see your history. If you’ve always filed your ISF on time and are just late on this one, you have a good chance at avoiding a liquidated damages claim.

Even if you have a history of not filing or filing late, still file that ISF even though you’ve missed the deadline. Then, at least, the ports can see that you are trying to get into compliance.

Liquidated damages are focused on shipments with no ISF filings. The two other areas of focus are “significantly late” and repeat violators. That means the earlier you get that late ISF filed, the better your chances of avoiding liquidated damages are.

Shippers hear the word flexible and think Flexible Filing Options must give more leeway and be a better option. Don’t let the name mislead you. Flexible Filing Options is almost never a better way to go about filing your ISF.

As Craig Clark, former CBP ISF Program Manager, said, “Flexible Filing is not so flexible.”

Flexible Filing actually creates more steps for a shipper filing ISF and can easily lead to non compliance with the policy.

With Flexible Filing, you must update ISF 24 hours prior to arrival and can’t adjust during that last day as you normally can with ISF. Yeah, that’s less flexibility with Flexible Filing.

Also, you must update Flexible Filing to Compliant Transaction (CT) before that 24 hour period or you are subject to liquidated damage claims even if all information in your ISF is correct.

Flexible Filing is a hassle and can lead to problems with your ISF. Avoid it.

If you’re a one and done U.S. importer, this is not for you.

If you’re a shipper who imports again and again, a continuous bond keeps you from having to lock up a $5,000 bond on every shipment.

Customs continuous entry bonds cover ISF and customs entry. The same bond is used over and over again on your import shipments instead of individual bonds per shipment.

The shipper is ultimately responsible for ISF, so you have to make sure you take control of the process. Don’t wait for ISF information to come or be submitted by a foreign agent or business partner. 

Angel Choi, Universal Cargo’s Inside Sales Manager points out how U.S. importers doing CIF shipments get into ISF trouble:

“A lot of CIF shipments run into late ISF filing problems as foreign suppliers aren’t aware or familiar with US customs regulation and provide ISF forms to importers last minute or after vessel departure. This can be avoided if importers take control of the freight arrangement and use a US shipping company who handles ISF filing to handle the freight, as automatically the shipping company has ISF data as soon as booking is created.”

That leads directly into our next tip.

Angel Choi spoke of using a shipping company who handles ISF filing to take care of your cargo importing. That would include freight forwarders like Universal Cargo. When you ship through UC, we make sure your ISF is taken care of on shipments. We work hard to make sure all aspects of your international shipping are taken care of.

If the only area of your international shipping you want help on is customs issues, you could go to a customs broker and have them handle your ISF filing for you,

Obviously, filing ISF correctly is important. Failure to file or improperly filing can lead to $5,000 to $10,000 lost per shipment.

It’s a good idea to have someone filing for you who really knows what they’re doing.

Here’s a bit of information that not many shippers know.

Customs-Trade Partnership Against Terrorism (C-TPAT) importers get an automatic mitigation reduction of 50% on liquidated damage amounts.

That’s a big advantage for C-TPAT shippers when it comes to ISF.

C-TPAT shippers are more likely to avoid ISF problems altogether, will be seen more favorably by the ports and CBP for mitigation, and automatically will get fined significantly less than other shippers facing liquidated damages claims.

So get C-TPAT validated or work with a shipping company, like Universal Cargo, that is.

Source: UC Blog