We'll start with motor carriers.
The motor carrier plays an essential role with respect to cargo identity because of its obligation to file e-manifests with CBP stating among other things, what cargo it is bringing into the United States or through the United States. In Mexico, for example, the carrier may not have civil liability for the cargo since the carrier may have picked up a sealed trailer or container. However, it does have the responsibility for an accurate e-manifest that it files with CBP. The discovery of un-manifested cargo or contraband poses significant consequences for U.S. Carriers, in addition to the exporter and U.S. Customs broker.
All U.S. Carriers involved in cross-border operations that take advantage of the CBP's FAST (Free and Secure Trade) lanes program are automatically and directly impacted if contraband is found in their equipment, a serious risk since in many cases U.S, carriers may contract a door-to-door shipment, one originating in Mexico with a final destination in the U.S. or Canada.
While these loads are assigned to U.S. motor carriers, they subcontract a Mexican carrier who may be partially or solely owned by the U.S. carrier to conduct the initial carriage from the Mexican origin to a drop lot on the Mexican side of the border. A drayage partner is then chosen by the carrier or broker to cross the load into the United States. Even though the U.S. carrier is subcontracting a Mexican carrier, it retains its responsibility for verifying the C-TPAT (Customs Trade Partnership Against Terrorism) status of the contracted carrier and the C-TPAT required security measures throughout the supply chain.
If contraband is discovered at the port-of-entry, the case will be assigned to an Immigrations and Customs Enforcement (ICE) agent to investigate the circumstances of the case. The U.S. carrier is at risk of losing its C-TPAT certification and FAST lane privileges, and the carrier's equipment and or freight may be seized if the carrier is found to be involved or at fault due to poor business partner verification of cargo and/or supply chain security measures. Finally, this can also and often does result in loss of the customer which can mean millions in lost revenue.
Next, let's look at vessel carriers.
Carriage by sea will also see a shift of legal responsibility from the standing 1936 Carriage of Goods by Sea Act (COGSA) to the new United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (Rotterdam Rules) to which the United States became a signatory in 2009.
The new rules when signed by the U.S. President with the "Advice and Consent" of the Senate, will change the vessel carrier's liability from its current responsibility for the cargo from the time it was laden onto the vessel at the departure port to its arrival at the destination port, the "tackle-to-tackle" mode, into a new single contract for door-to-door carriage.
In other words, the vessel carrier will have liability of cargo from stuffing into the container at the shipper's facilities to the U.S. destination where it is unloaded or transported in-bond. Simply put, the vessel carrier will be responsible for what's in the container from point of origin to destination including the entry of any illegal or falsely filed cargo into the United States. If illegal or incorrect cargo is discovered, the carrier and the shipper would have serious problems resulting in lost time, revenue and negative CBP consequences.