U.S. Firms Feel the Pinch of Tighter Border Security; Delays Could Hurt the Economy, Businesses Say


U.S. companies are becoming increasingly unhappy—and vocal—about the campaign to secure America’s borders because foreign buyers, as well as shipments, are being blocked by red tape in attempting to obtain visas for employees to arrive to the U.S. for business purposes.

Measuring the fiscal fallout from the war against terrorism is difficult because it cuts across a broad swath of industries and has varying effects depending on a company’s size, its dependence on foreign markets and its place in the global supply chain. But anecdotal evidence suggests that the Homeland Security effort is adding a huge amount of expense and uncertainty to a struggling U.S. economy.

Indeed, executives say security efforts are strangling legitimate global commerce and costing tens of millions of dollars in lost business, extra handling and storage fees and increased paperwork. Beyond the short-term losses, firms fear that the U.S. is imperiling its economic recovery and future competitiveness by encouraging frustrated foreign customers to do business with more amenable rivals, according to the Los Angeles Times.

The problem could get worse, traders warn, if the U.S. implements proposed “advance electronic notification” rules for imports and exports. That’s because these regulations could severely restrict the operation of overnight air cargo services and companies dependent on “just-in-time” delivery for their manufacturing lines and retail stores.

U.S. business leaders insist that their intent is not to undermine legitimate efforts to protect American citizens. But they say the government has gone overboard in its rush to shore up its borders, creating red tape that is overwhelming a Homeland Security apparatus that is ill-prepared to cope.

“The only way to get to zero risk is to not let anything in, and that makes no sense in a globalized world,” William Reinsch, a former Commerce Department official who heads the Washington-based business group National Foreign Trade Council, told the Times. “You have to balance and minimize your risk. We’re concerned that this has tilted too far.”

U.S. officials say they are working to minimize the negative effects of the anti-terrorism campaign on business. But when the country is on high alert for possible terrorist attacks, keeping America’s borders secure is their top priority.

“The goal is not to impede U.S. business or the advance of science, but the priority is national security,” Stuart Patt, a spokesman for the State Department’s consular affairs bureau, told the Times. “Unfortunately, there is going to be some inconvenience to other sectors…. That’s just the world we live in.”

The most serious business complaints arise from tighter controls on foreigners entering the U.S. Since the Sept. 11 attacks, the U.S. has revamped the visa process, dramatically increasing the number of applications receiving special screening by the State Department, FBI and CIA.

For U.S. multinationals accustomed to moving people and products around the world, getting a visa for a foreign customer or employee has become a huge headache. Routine visa applications that used to take fewer than 10 days to process now take up to six months to wend their way through the system, according to U.S. companies. Late last year, the State Department acknowledged that it had a backlog of at least 20,000 visa applications, though it now says it has worked through most of those cases, according to the article.

Looming are new U.S. Customs Service regulations that would require advance notification on all cargo entering and leaving the U.S. One tentative proposal would require U.S.-bound air carriers to provide cargo data eight hours before loading up a regular flight and four hours before loading up a plane operated by a courier service such as FedEx. Federal officials want that information in advance so they can stop a suspicious shipment before it reaches the U.S.

But John Simpson, president of the American Assn. of Exporters and Importers, said in the article that such a pre-notification requirement would be devastating for an express cargo industry that has built its business around last-minute shipping and overnight deliveries.

“If Customs imposes a preloading reporting requirement that prevents the air couriers from engaging in their quick handoff at the hub and spoke, they are out of the overnight business,” he said.

John Considine, director of cargo verification for Customs, said that the advance notification rules are still on the drawing board and that his agency is soliciting comments from trade groups to ensure the “smooth introduction of the new procedures.” Customs already has imposed a 24-hour advance notification for ocean shippers.

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