WHAT YOU NEED TO KNOW ABOUT JAPAN’S NEW 24-HOUR RULE

While the expansion of the G6 Alliance should bode well for trade with Asia, another development may soon pose challenges to U.S. manufacturers shipping cargo to Japan. Under Japan’s 24-Hour Rule (JP24)—which goes into effect on March 1, 2014; its primary objective to interdict international terrorism—notice of all containerized freight bound for that nation must be transmitted to the Nippon Automated Cargo and Port Consolidated System (NACCS) at least 24 hours before cargo is loaded onto vessels.

Information to be filed with NACCS, the Japanese government agency responsible for the country’s import/export and customs clearance services, will encompass the type of cargo, names of trading parties, route, schedule and identification of the vessel and container. Obtaining this information in advance of vessel loading will afford NACCS time to determine whether the cargo should be allowed to enter Japan, explains Bryn Heimbeck, CEO of Trade Tech, a Bellevue, Wash.-based provider of software solutions for the international logistics industry.

Shippers and other entities that fail to comply with JP24 will face stiff penalties, including a fine of approximately $5,000 that must be remitted before cargo reaches Japanese ports. Offloading of cargo may be prohibited if the vessel on which it was shipped arrives in Japan prior to NACCS’ receipt of payment. Other penalties for noncompliance may also be imposed, including up to one year of jail time with hard labor.

Among other challenges to be posed by JP24, Heimbeck says, is the need for data to reach NVOCCs (non-vessel operating common carriers); in the case of companies that don’t use NVOCCs, data will have to be in the hands of carriers earlier than was required prior to JP24’s enactment. Exporters shipping from coastal points will experience more of a time crunch than those shipping from points inland, as the 24-hour cutoff will apply to the vessel sailing date rather than the intermodal cargo departure date.

“In essence, though, document generation will be advanced by several days,” Heimbeck notes. “Typically, bill of lading instructions are received, and bills of lading subsequently created, after vessels sail. However, JP24 will force this to happen before they hit the water.”

Moreover, the onus will be on shippers that use NVOCCs to ensure that these companies are transmitting information to NACCS within the required time frame. “If an NVOCC is not compliant in this regard, the cargo won’t move—pure and simple,” Heimbeck says.