ISF 10+2: How to Make it Add Up for You questions to: July 22, 2008 WEBCAST

questions to: Please write this down: Preparing your company for 10+2 readiness is strategic, not tactical… and you must convey this message to your company’s leadership if you intend to be successful in preparing your company for 10+2 compliance… If you remember just one thing…

questions to: Kevin Gavin Vice President, Supply Chain Management IES, Ltd. Joined IES, Ltd. after his role as President and CEO of SECTRA Work to expand IES to its current status as one of the leading providers of Ocean, Air and Truck AMS and Global Supply Chain Management Provides IES with technological and operational direction to guide the development of new products and services Background spans over 20 years servicing the International Trade Community

questions to: Founder & President of Global Data Mining Owner of Global Data Mining, and CUSTOMS Info More than 20 years of experience optimizing processes and helping customers turn unorganized data into information that managers and executives need to improve performance. Matt Gersper Founder and President Global Data Mining Author of “It’s Strategic, Not Tactical”

WEBCAST questions to: ISF 10+2: How to make it add up for you? This is the Third Webinar we have hosted on In the first two webinar’s we provided a detailed overview of the specific data required In this Webinar we will be providing a higher level corporate overview of what 10+2 means to the Import Community. After the Overview we will be hosting a question and answer panel with Kevin & Matt… time permitting… This is the Third Webinar we have hosted on In the first two webinar’s we provided a detailed overview of the specific data required In this Webinar we will be providing a higher level corporate overview of what 10+2 means to the Import Community. After the Overview we will be hosting a question and answer panel with Kevin & Matt… time permitting…

WEBCAST questions to: Filer (CHBs or Importers of Record) Must: 1. Know the Regulation 2. Identify a Software Solution 3 Determine the enterprise-wide data requirements 4. Enable the Importer of Record to Participate 5. Provide Professional Consulting

WEBCAST questions to: Tasks for Success Prepare to be an Expert Be a solution for your customers or your company Educate your customer/company by explaining how to organize their supply chain data to line up with ISF “10 + 2” Position yourself as the solution provider Deliver

WEBCAST questions to: ISF 10+2: How to make it add up for you? For maritime cargo that is destined to a U.S. port, the data elements listed on the next slide will be required to be transmitted 24 hours prior to loading the U.S. bound vessel This portion of the Security Filing will be required to be transmitted by the importer or its designated agent. Three methods will be supported. 1. ISF from the Importer or Record or Designated Agent 2. Combined Customs Entry and Security Filing Through the Broker 3. In bond Types IE, TE and IT will be supported through Ocean AMS as well as Freight Remaining on Board. These data elements are critical for CHBs/Importers of Record to supply CBP with the required information

WEBCAST questions to: The following 10 data elements were selected 1 1 Manufacturer name and address 2 2 Seller name and address 3 3 Container stuffing location 4 4 Consolidator name and address 5 5 Buyer name and address 6 6 Ship to name and address 7 7 Importer of record number 8 8 Consignee number 9 9 Country of origin of the goods 10 Commodity Harmonized Tariff Schedule #(6 digit)

WEBCAST questions to: Details Manufacturer (or supplier) name and address. The name and address of the entity that last manufactured, assembled, produced, or grew the commodity, or the name and address of the supplier of the finished goods in the country from which the goods are leaving. In the alternative, the name and address of the manufacturer (or supplier) that is currently required by the import laws, rules and regulations of the U.S. (i.e., entry procedures) may be provided (this is the information that is used to create the existing manufacturer identification (MID) number for entry purposes). 2. Seller name and address. The name and address of the last known entity by which the goods are sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the name and address of the owner of the goods must be provided. 3. Buyer name and address. The name and address of the last known entity to which the goods are sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the name and address of the owner of the goods must be provided. 4. Ship to name and address. The name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from customs custody.

WEBCAST questions to: Details Container stuffing location. The name and address (or addresses) of the physical locations where the goods were stuffed into the container. For break bulk shipments, the name and address (or addresses) of the physical locations where the goods were made "ship ready" must be provided. 6. Consolidator (stuffer) name and address. The name and address of the party who stuffed the container or arranged for the stuffing of the container. For break bulk shipments, the name and address of the party who made the goods "ship ready" or the party who arranged for the goods to be made "ship ready" must be provided. 7. Importer of record number/FTZ applicant identification number. Internal Revenue Service (IRS) number, Employer Identification Number (EIN), Social Security Number (SSN), or CBP assigned number of the entity liable for payment of all duties and responsible for meeting all statutory and regulatory requirements incurred as a result of importation. For goods intended to be delivered to an FTZ, the IRS number, EIN, SSN, or CBP assigned number of the party filing the FTZ documentation with CBP must be provided. The importer of record number for importer purposes is the same as "importer number" on CBP Form 3461.

WEBCAST questions to: Details Consignee numbers. IRS number, EIN, SSN, or CBP assigned number of the individuals) or firms in the U.S. on whose account the merchandise is shipped. This element is the same as the "consignee number" on CBP Form Country of origin. Country of manufacture, production, or growth of the article, based upon the import laws, rules and regulations of the U.S. This element is the same as the "country of origin" on CBP Form HTS number at 6 digit level. Duty/statistical reporting number under which the article is classified in the HTS. The HTS number is required to be provided to the 6 digit level. The HTS number may be provided up to the 10 digit level. This element is the same as the "H.S. number" on CBP Form 3461 and can only be used for entry purposes if it is provided at the 10 digit level or greater.

WEBCAST questions to: Advantages Provide a globally accessible web application Provide a Parts Database Manage the Supply Chain Parties Integrate with Ocean AMS where required Include an EDI upload interface to importers of record Deliver a highly integrated system with EDI feed to CHB Platforms Closing the Loop on International Trade and turning the Black Hole into Inventory

WEBCAST questions to: ISF 10+2 Workflow Overview 1. WEB ISF AMS ISF Import CHB ISF 10+2 Carrier 315 EDI Container STOW Carrier 315 EDI Container STOW CBP AMS ISF 10+2

WEBCAST questions to: Next Steps Now is the time to prepare for 10+2 Start using it now Available branding with your name and logo Getting started and training Reduced Data Entry Enhanced Data Visibility

10+2 Readiness… It’s strategic, not tactical Matt Gersper Founder and President Global Data Mining “It’s Strategic, Not Tactical” WEBCAST questions to:

WEBCAST questions to: There are three kinds of companies as it relates to ISF 10+2 readiness Strategic Sourcing & Procurement Trade Compliance Trade Finance Global Logistics Corporate Risk Management Manufacturin g & Design Sales & Customer Service Function Enterprise- Wide Strategy BrokersForwarders 3PL’s Suppliers Best in class

WEBCAST questions to: There are three kinds of companies as it relates to ISF 10+2 readiness A. The companies that are heading full speed for a cliff and are not even aware of it… B. The companies that are heading full speed for a cliff and are at least aware of it… A. The 1st group will suffer mightily when 10+2 goes into effect B. The 2nd group has a chance to use this dramatic change in customs regulations to their business advantage… It’s critical that you get the 10+2 message to senior management and that they understand it and support an enterprise-wide strategy to prepare for it!!! K e y P o i n t

WEBCAST questions to: 10+2 Readiness… It’s strategic, not tactical Introduction Why is it important to you? It’s Strategic, not Tactical 10+2 Readiness Create your strategy now! Using data and technology to achieve new government requirements

WEBCAST questions to: Profits Eliminated!!Profits Realized!! Why is it important to you? 1. The purpose of the advance security filing requirement is to improve CBP’s risk assessment and targeting capabilities to help prevent terrorist weapons from entering the U.S. SECURITY COST 2. The Office of Management and Budget (OMB) has determined that the rule will cost industry from $390 million to $630 million per year. FINES/ STOP 3. “If the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default”. Collateral Benefits: Done properly… Optimizing business processes to meet these requirements in the most direct, effective manner possible can improve supply chain velocity and create competitive advantage!!! NOTE: VIEW IN SLIDE SHOW MODE!!

WEBCAST questions to: 10+2 Readiness… It’s strategic, not tactical Introduction Why is it important to you? It’s Strategic, not Tactical 10+2 Readiness Create your strategy now! Using data and technology to achieve new government requirements

WEBCAST questions to: It’s Strategic, Not Tactical 1.It’s a change in the corporate business processes, and it’s beyond the scope of the trade compliance professional 2.Do you know who actual manufacturers of every item you purchase 3.Every part must be linked with a fully qualified Commodity HTSUS number. 4.You need to know that all the relevant data including items such as the container stuffing location were submitted. 5.You need a method to insure that your data has been submitted to Customs for every manufacture on a shipment along with the associated AMS data. 1.It’s a change in the corporate business processes, and it’s beyond the scope of the trade compliance professional 2.Do you know who actual manufacturers of every item you purchase 3.Every part must be linked with a fully qualified Commodity HTSUS number. 4.You need to know that all the relevant data including items such as the container stuffing location were submitted. 5.You need a method to insure that your data has been submitted to Customs for every manufacture on a shipment along with the associated AMS data.

WEBCAST questions to: Collaboration and Cooperation Data ElementSourceResponsible Party Manufacturer Name & AddressProcurement SourcingImporter Seller name & addressProcurement SourcingImporter Buyer name & addressProcurement SourcingImporter Ship to name & addressProcurement SourcingImporter Container Stuffing LocationSupplier/Forwarder Container (Stuffer) name & addressSupplier/Forwarder Importer of Record #Trade Compliance/ImportImporter Consignee #Trade Compliance/ImportImporter Country of OriginTrade Compliance/ImportImporter Commodity HTSUS #Trade Compliance/ImportImporter/Broker An effective solution to meet the very complicated 10+2 requirements will require a cross-functional, coordinated efforts including 3rd parties K e y P o i n t

It’s Strategic, Not Tactical Importers Suppliers Carriers Brokers Forwarders Create PO Create commercial invoice Create entry document at the end of the supply chain 1.MID 5.Buyer Info 6.Ship to Info 7.IOR Number 8.Consignee # 9.Country of Origin 10. US HTS Code Manage logistics of shipment Deliver the shipment Current Process An effective solution to meet the complicated 10+2 requirements will require a business process re-design Data NOT currently required for entry: 1. Manufacturer Info 2. Seller Info 3. Container Stuffing Info 4. Consolidator Info questions to:

Business Process Re-Design Importers SuppliersCarriersBrokersForwarders Create PO Create commercial invoice Automation of entry document at the end of the supply chain Manage logistics of shipment Deliver the shipment 1. Build out the new data requirements 2. Automatically link new data 3. Capture stuffing & consolidator info… 4. Report through security filing software to meet the CBP requirement – providing a lot more information a lot sooner in the supply chain questions to:

WEBCAST questions to: Data Strategy 1.What data is required? 2.What data currently exists? 3.Who “owns” the different data elements? 4.Where does the data reside today? 5.In what format? 6.Where should the data reside for the future solution? 7.How will it be validated? 8.How will it be integrated? 9.How will it be updated? 1.What data is required? 2.What data currently exists? 3.Who “owns” the different data elements? 4.Where does the data reside today? 5.In what format? 6.Where should the data reside for the future solution? 7.How will it be validated? 8.How will it be integrated? 9.How will it be updated? NOTE: VIEW IN SLIDE SHOW MODE!! Parts Master Merchandising ERP PO ERP Forwarder Data

WEBCAST questions to: Collaborative Assessment Assemble the team Recommend targeted strategies to achieve 10+2 objectives Identify required Resources –Internal –External Quantify Costs Quantify Opportunities Prepare ROI Assemble the team Recommend targeted strategies to achieve 10+2 objectives Identify required Resources –Internal –External Quantify Costs Quantify Opportunities Prepare ROI NOTE: VIEW IN SLIDE SHOW MODE!! Client’s project leader Department heads 3 rd party partners Data solutions Applications Forwarder/broker Process Optimization Model by GDM…

WEBCAST questions to: Project Strategy NOTE: VIEW IN SLIDE SHOW MODE!! Client’s project leader Department heads 3 rd party partners Data solutions Applications Forwarder/broker Create a plan to meet the 10+2 requirements in the most direct, effective manner possible… Visibility Measurability Control People Applications Data

WEBCAST questions to: Executive Presentation Prepare and deliver an executive presentation … With an ROI analysis for recommended projects… Define opportunities identified… Define baseline and expectations of improvement. Prepare and deliver an executive presentation … With an ROI analysis for recommended projects… Define opportunities identified… Define baseline and expectations of improvement. NOTE: VIEW IN SLIDE SHOW MODE!! It’s critical that the message is communicated to senior management and that they understand it and support an enterprise-wide strategy to prepare for it!!! It’s critical that the message is communicated to senior management and that they understand it and support an enterprise-wide strategy to prepare for it!!!

WEBCAST questions to: 10+2 Readiness… It’s strategic, not tactical Introduction Why is it important to you? It’s Strategic, not Tactical 10+2 Readiness Create your strategy now! Using data and technology to achieve new government requirements

Bringing the Data Together PO ERP Buyer Name (10+2) Buyer Address (10+2) Ship to Name (10+2) Ship to Address (10+2) IOR Number (10+2) Consignee Number (10+2) Item Number 10+2 data elements should be gathered at time of PO and forwarded to the Importer Security Filing system Material Group Product Hierarchy Item Number Item Description Manufacturer Name (10+2) Manufacturer Address (10+2) Seller Name (10+2) Seller Address (10+2) Merchandising ERP Link by Item # Item Number US HTS (10+2) US HTS Descriptions US Ruling Number US Ruling Date Country of Origin (10+2) Parts Master Link by Item # New Data Item Number Container Stuffing Location (10+2) Consolidator Name (10+2) Consolidator Address (10+2) Link by Item # With this data, now the importer or it’s agent can transmit the ISF no later than 24 hours prior to loading the US bound vessel.

WEBCAST questions to: ISF 10+2 Integration with Existing Systems Existing Importer System + 3 rd Party Logistics AMS 10+2 Import CHB 10+2 CBP AMS Data feed from Importer or third party logistics provider 2. Importer of Record or Authorized Agents upload ISF information 3. CHBs or Importers verify compliance prior to filing with CBP 4. Match of the ISF with Ocean AMS filing 5. The Accepted message triggers automated download of data to IES Import/CHB Systems 6. US Customs Entry is filed by US Customs Broker.

WEBCAST questions to: 10+2 Readiness… It’s strategic, not tactical Introduction Why is it important to you? It’s Strategic, not Tactical 10+2 Readiness Create your strategy now! Using data and technology to achieve new government requirements

WEBCAST questions to: Create Your Strategy Now! Create a 10+2 Readiness Strategy now although this is a very complex challenge for importers. You can provide leadership… create an enterprise-wide solution… and save your company lots of money by creating a plan to meet the 10+2 requirements in the most direct, effective manner possible. Avoid Delays Improve Compliance Reduce Expenses This is going to take some timeCreate a plan now Q2-08Q1-08Q3-08Q4-08

WEBCAST questions to: Create Your Strategy Now! Avoid Delays Improve Compliance Reduce Expenses This is going to take some timeCreate a plan now Q4-08Q3-08Q1-09Q2-09 Collateral Benefits… Additional trade data can: Improve supply chain planning Improved supply chain speed Reduced inventory requirements Improved visibility and controls Competitive advantage

WEBCAST questions to: Preparing your company for 10+2 readiness is strategic, not tactical… and you must convey this message to your company’s leadership if you intend to be successful in preparing your company for 10+2 compliance… Did you write this down?