[Export Fumigation] Has Your Ship Come In?

Each day billions of dollars of goods are shipped from port to port around the world. The Panama Canal alone sees more than $270 billion worth of goods pass through its 48-mile-long waters each year — and that’s just 3 percent of the world’s total annual maritime commerce ($9 trillion).

A healthy percentage of those shipped items have the potential to harbor pests. Whether it’s wood, grain or even clothing, shipped items are one of the primary ways new pests cross borders.

Take, for example, the lowly stink bug (Halyomorpha halys). Until the mid-1990s, the stink bug was unknown on our continent. But around 1998, the stink bug snuck into some cargo leaving China, and made its way across U.S. borders. Less than two decades later, the stink bug has become a major agricultural and structural nuisance in many American states.

In an effort to prevent introductions of pest populations, nations around the world have become increasingly stringent about how cargo coming into their country is treated for pests. This, of course, means potential business for pest management professionals. After all, if you’re already performing structural fumigation work, then you have the equipment and the technical know-how. How much different can fumigating a shipping container be from fumigating a house, right?

Indeed, experts say, fumigating shipping containers can be a natural and lucrative add-on, but it’s not without peril. The shipping industry is complex and each country has unique requirements. Further, colorful geopolitical nuances can influence the business seemingly overnight. The experts agree: Do your homework, and start slow.

Three pest management professionals with experience in the export fumigation realm sat down at the National Pest Management Association’s 2014 PestWorld Conference in Orlando, Fla., to share their advice.
 

Who are the potential customers for export fumigton work?

Tom Walters, president, Orkin Midwest Division, Atlanta, Ga., and former board member of Copesan: Freight forwarders, exporters, shipping lines, trucking companies, food manufacturers and warehouses are all key potential clients. And you also need to develop a relationship with your local U.S. Department of Agriculture (USDA) regulatory folks, as they are very instrumental in helping to move that cargo out of the country and promoting U.S. trade.
 

What products typically get fumigated in this type of service?

Walters: The most common items fumigated for shipping include wood packaging material, wood furniture, logs, cotton, rice, tobacco and the like. Also vehicles, machinery, equipment and tractors are often fumigated because they are packaged in wood containers.

There are a lot of raw ingredients and food products that get fumigated on the way out of the country. They can be fumigated in bulk, such as in a cargo hold of a ship or in a container. Even relief aid, such as clothing, often is required to be fumigated for pests before the receiving nation will accept the shipment.
 

Wood products seem like a   natural fit for pmps. Are they?

Bryan Cooksey III, president and CEO, McCall Service, Jacksonville, Fla., and board member of Copesan Services: Where the money is today — and it can always change — is in timber and cellulose items; raw products going to China.

There are essentially three major areas of the United States that produce lumber that gets exported: the Northwest (Washington, Oregon); the Northeast (Minnesota, Wisconsin, Michigan, Pennsylvania and the New England states); and the Southeast, including Texas and Louisiana.

What they all have in common are pests. The Southern pine beetle causes a lot of problems in the Southeast, and the Rocky Mountain bark beetle impacts about 4 million acres in the Northwest.
 

How are the wood products fumigated for shipment?

Cooksey: The cheapest way to do it is to put the material in the biggest stack you can, cover it with a tarp and fumigate it. Different countries have different standards in terms of what fumigant you are using, and some require that samples of the lumber be pulled and sent to a lab to check for nematodes. If there are any nematodes present in the samples then you lose the whole load, so there’s a risk to the shipper that if you fumigate a very large load, the whole load could get rejected.

The other way to do it is to put the material in a container and fumigate the container. But you can only put a finite amount of weight in a container.

Walters: With wood products, there is an international standard and guidelines for wood packaging material being used in international trade, which is called the International Standards for Phytosanitary Measures (ISPM) No. 15. These standards were developed years ago and require either fumigation or heat treatment of all wood packaging. It is a worldwide initiative to prevent the spread of wood-destroying organisms. The standards involve a stamping process when the fumigation occurs, but there’s no way to really monitor the re-use of the same wood packaging material that was previously stamped, so there is some concern about whether that program is working as successful as it is intended to be.
 

Which countries represent the best opportunities?

Cooksey: In the past we just subcontracted out fumigation work, but a few years ago we started seeing more news about port expansions. And even if you are in the middle of the country with no port nearby, you still have opportunities for cargo that’s going to the ports via railroad.

We said let’s go out and try and get the business and figure out where it is. A better way might have been to identify the need and the market, and understand the long-term view of what you are trying to achieve, and then align your resources to meet that need.

Nonetheless, when we decided to just jump in, we found two countries of high interest: India and China. The population growth in India is forecasted to surpass China by 2030. After looking at it, what we found out is that India imports a lot of stuff. You see a lot of pulp, cellulose, paper and timber going in that require fumigation.

With regard to China, the United States is China’s leading source of imported forest products, and yet China is the second biggest supplier to us. They like our raw commodities because they have very cheap labor in the sawmills. So they would rather bring the lumber in from us, bring in the sawdust, create plywood and furniture and then ship it back to us. Logs and pulp are the commodities that are growing the most in terms of being imported by China. So that’s where the money is, so to speak, because all of that needs to be fumigated.

Anne Bookout, vice president and general counsel, Royal Pest Solutions, New Castle, Del.: There is an ever-evolving nature to the export fumigation business. The hot products right now are logs shipping to China. Take note, though, that China is no longer accepting softwood logs from South Carolina or Virginia, and you can no longer use sulfuryl fluoride as an alternate fumigant. The Chinese will accept hardwood logs from South Carolina and Virginia, but methyl bromide is the only fumigant that can be used.

Walters: Australia is a close, key trading partner of the United States and receives a lot of exports from us. They have a counterpart to the USDA, called the Department of Agriculture, Fisheries and Forestry. They have very strict import requirements, specifically regarding timber and wood products, which are considered biosecurity threats. Australia has a very strict requirement on fumigation—it is mandatory for all wood products. They have very specific requirements for the certificate.

Incidentally, Australia is currently working closely with some key trading partners, like the United States, on electronic documentation, which is a hot topic right now. There have been situations where certificates have been counterfeited and copied, and so there is probably a very broad need to produce an electronic certificate of some type that puts a verification on the certificate.
 

What are the regulatory requirements in this work?

Walters: Every country that is open to receiving U.S. exports has their own country-specific requirements. They are all a little bit different. Just like USDA here domestically, these countries specify fumigation treatment schedules, the type of fumigant, the exposure time, the concentration, etc. They also specify specific documentation and certificates, as well as security seals that have to remain in place until that cargo arrives at its destination. And most of the time the fumigation must be done within a prescribed time frame, typically within 15 days of loading the cargo. That documentation is required to go along with the cargo. If you don’t meet those, it’s very possible that those shipments will be rejected.

There is no international standard right now for fumigation certificates, they mostly all contain some similar basic information, but each country has some very specific requirements that must be met. If you don’t meet those, it is very possible that the cargo when it reaches its final destination could be rejected. So it is very important that the certificates are filled out properly.
 

So how do you find out about a particular country’s specific requirements?

Bookout: My very strong advice is to tell the client to get an import permit/certificate. You will see that this a very complex area and that there is no one source that will tell you exactly what has to be treated, in what way, to go to a particular country. So the best protection for your client is to obtain an import permit. The import permit is something issued by the destination country and it specifies what a particular country will accept under what conditions. The import permit is the best protection of all.
 

How do you obtain import permits/certificates?

Bookout: If you are dealing with a client who does a large volume of business internationally, they will likely send you a copy of their import permit. But if you are working with someone who operates on a smaller scale or rarely exports internationally, they likely won’t do that. Without the IP, you as the PCO are purporting to be the expert on what the treatment needs to be and in this environment, I think that’s too risky.

The best resource is the USDA’s Phytosanitary Certificate Issuance and Tracking System (PCIT), which can be found at https://pcit.aphis.usda.gov/pcit/

The PCIT is a database of export requirements that can be searched via a variety of parameters, especially by the country and the commodity type. Be aware that, for commodities, for example, you have to know the botanical name. So if you are entering “maple,” you have to know that its botanical name is Acer and select that in the database. Similarly, the pest organisms are listed by their scientific name, so you have to know the scientific name of the pest you are targeting. For example, the one I deal with the most, the Chilean false spider mite, I have to know it’s the Brevipalpus chilensis in order to get the system to let me know what I want to know.
 

Most container fumigation happens at a port. What are the logistics of working in that environment?

Walters: Because most of the exports are flowing through our ports, which are typically in and around major cities like Los Angeles, Seattle, Tacoma, Philadelphia, New Orleans, Miami…you name it, there are a number of challenges that you will face there just by the nature of it being a major city and the logistics. For example, air permitting is becoming more of an issue. It’s been an issue for some time out in California and it’s now an issue on the East Coast. The release of fumigants, particularly methyl bromide, has required air permitting in some locations.

Buffer zones are another key component to any good fumigation plan and because the ports are located in some highly densely populated cities, you have to be sure that buffer zones are in place and that you have a good fumigation management plan that avoids any downwind exposure of fumigants to bystanders, workers and the general public in those areas.

There are also a number of initiatives put in place since September 11th to increase the security of our ports and the transit of materials coming into this country. One of the new laws in the wake of 9/11 was the Maritime Transportation Security Act (MTSA). It’s a major piece of legislation that really changed the way the maritime community operates.
 

So how do these port security measures impact fumigators?

Walters: Well, when you go to work at a port there are now security measures in place to button up the port and restrict the folks coming in and out of ports. Part of that is the Transportation Worker Identification Credential, i.e., the TWIC card. In order to do a fumigation job at a secure port, your team members would need TWIC cards.

Getting a TWIC card is a process. Don’t think that tomorrow you can just run out and get one. There is an application process that requires an FBI background check, and a security assessment by TSA. The wait period could be as long as six to eight weeks and the price, depending on where you are, ranges from $200 to $300. If someone on your team has any kind of arrest in their prior life, that could come back to haunt them and hold things up.
 

How do you address the environmental issues associated with container fumigation?

Bookout: My advice is to do your research. It doesn’t matter where you are in the country, how much fumigation you do and what fumigation techniques and chemistry you use, you’d better make sure you know the lay of the land in your area regarding fumigating items for shipping.

The fact is that you probably need to get an environmental attorney; nobody wants to hear that, but I would not use your business attorney.

This is a highly specialized area, with so much jargon to it; it can be overwhelming. You may also need to work with an environmental engineer.

Further, be prepared to educate your local regulatory professionals. For 20 years, we were told, “You don’t need a permit for fumigation, nah, go away.” Then the Environmental Protection Agency did a 180-degree turn. And now the states have jumped on board. For example, the professionals who do air permitting probably know nothing about fumigation and you are going to have to make sure they understand how you operate because the Clean Air Act targeted utility companies, chemical manufacturing facilities — places that emit pollutants 24 hours a day, seven days a week. And that is a huge difference from what we do.
 

What are some of the other potential pitfalls of export fumigation work?

Walters: If you are considering doing business in exports, be aware that the laws and regulations are changing constantly.

Bookout: Methyl bromide is a very hot topic right now and if you’re using that fumigant I would highly recommend that you consult an environmental attorney and engineer to help you out with that one. Exercise extreme caution.

The Clean Air Act in the 1990s created a list of chemicals classified as Hazardous Air Pollutants (HAPS). Methyl bromide is a HAP and phosphine is a HAP, so watch out and check threshold amounts and check on ag exemptions. Sulfuryl fluoride, so far, is safe from air permits, but stay tuned. A lot of the regulations vary from state to state and it’s complicated. Go in with eyes open and do your due diligence.

Cooksey: There are many dynamics which can affect the shipping business and that can trickle down to your fumigation work: For one thing the currency exchanges between countries. What is it that makes people want to export to China? It’s the dollar. Follow the dollar and you’ll find your answers.

It’s a very interesting clientele when you are playing with the middlemen of middlemen. Sometimes business happens because somebody married the daughter of the person who controls the permitting process, which controls what goods come and go through that particular country. Sometimes it’s based on regulatory issues. If regulators start tightening down one particular part of the country, then the shippers start going to the other part of the country that is not receiving as much attention from the regulators.

My point is that it’s a very fickle customer base, so you want to make sure you keep filling your funnel with customers so that if you run into problems with one shipper, you have a back-up plan if you want to make this a continual source of revenue. It is not like the residential and commercial renewable contracts that you may be used to in the pest management business.

About the author: Steve Smith is a Cincinnati-based freelance writer.