DC Velocity - March 2009

certified facility, it can be palletized or wrapped, and airlines will not have to reinspect it. However, industry sources said that TSA-authorized equipment needed to perform the tasks might not reach the facilities until March at the earliest. As a result, airlines faced at least a month of being the sole screener of the goods.

“I wouldn’t say people are just throwing up their hands. But I think there is some frustration with following programs that are not yet particularly well-defined,” says Judy Davis, senior manager, export compliance for Maxim Integrated Products, a Sunnyvale, Calif.-based manufacturer of integrated circuits that are used in consumer electronics products. Maxim, a heavy user of air freight, is working with its primary forwarding partner, James J. Boyle & Co., to build a certified cargo screening facility in San Bruno, Calif., outside of San Francisco.

Bad news for the bad guys

But, as industry innovators are fond of pointing out, for every problem there is progress. Magnus of Deringer says she has noticed “an increased hunger for compliance information” among electronics companies, adding that many, for the first time, have begun recruiting people to focus on compliance issues. She adds that compliance processes are even being integrated into the product design process, also a first for many companies.

Not surprisingly, technology will play a key role in importers and exporters’ compliance efforts. Last September, global trade solutions provider Management Dynamics Inc. introduced a software program that aggregates information on individuals and organizations that U.S. firms are prohibited from doing business with. Ty Bordner, vice president, solutions consulting for MDI, says the company culls information from 94 government lists, arranges the names and addresses in a uniform format, and maintains the list on a daily basis. The software uses what he calls “comparing algorithms” to minimize the potential for false positives. Bordner says MDI’s software has a false-positive rate of between 0.2 and 1. 2 percent; other programs, he contends, have false-positive rates of

between 5 and 10 percent.

Letting an export shipment slip into the hands of the bad guys can result in fines of up to $120,000, not to mention the incalculable damage associated with bad publicity, Bordner says. With so much at stake, companies are stepping up to

the plate.

“Five years ago, I would have said that U.S. companies had a significant compliance challenge,” he says. “But they are solving the problem by buying systems such as ours. Compliance is being taken more seriously than ever before.”