AES Pilot Program Fills Border Information Gap

By Staff -- Logistics Management, 2/1/1999

A pilot program now under way in Laredo, Texas, is extending the Automated Export System (AES) to include trade with Mexico. If all goes as planned, exporters will benefit as they gain access to information that was previously unavailable.

AES is a joint program of the U.S. Customs Service, the Bureau of the Census, and other federal agencies. It allows paperless filing and management of export data that shippers and carriers submit to the federal government.

The main goals of AES are to automate submission and processing of the Shippers Export Declaration (SED), and to improve the accuracy of trade data collected from SEDs. Currently, 50 percent of the 500,000 SEDs processed by hand each month are incomplete or incorrect, says Harvey Monk, head of the U.S. Census Bureau's foreign trade office. Because AES notifies the filer of missing or incorrect data, that situation should greatly improve, he adds.

The AES pilot in Laredo will do all that and more, thanks in large part to the efforts of Roadway Express and the Association of Laredo Forwarding Agents. In 1997, Roadway and the association approached U.S. Customs with a proposal to implement AES for exports to Mexico. They also suggested that AES could verify when a shipment had actually crossed the border. That would eliminate the information "blackout" that exists while trailers are in the custody of local shuttle drivers who move them back and forth across the border.

Working together, Roadway, the forwarding agents, U.S. Customs, and the Bureau of the Census were able to launch the pilot program just one year later. Here's how it works:

1. Roadway delivers a shipment and the accompanying documents from its Laredo terminal to the U.S. forwarding agent's warehouse in Laredo.

2. The forwarding agent inspects the goods for compliance with Mexican laws and prepares additional documentation. Meanwhile, the Mexican customs broker pays duties and taxes, then releases the pedimento (import declaration) and other documents to the forwarding agent.

3. When the shipment is ready to cross the border, the forwarding agent transmits AES export data and Mexican import data to the forwarders association's service center in Laredo. The center manages electronic transmission of shipment information for the group's members.

4. The forwarders association transmits validated data to the AES Service Center in Washington, D.C. It also transmits Mexican import data to its sister organization in Mexico, the Nuevo Laredo Customs Brokers Association. The brokers transmit that information to the customs broker and to customs officials in Mexico.

5. AES OKs the electronic SED and transmits a unique AES export authorization number to the forwarders association, which passes it on to Roadway and the forwarding agent.

6. A local drayage driver picks up the freight and documents, which include the AES authorization number and a statement that the SED has been filed electronically.

7. A U.S. customs agent at the border accepts the documents, then sends the driver on to Mexican customs. The agent enters the AES number in a computer, alerting the AES center in Washington that the shipment has left U.S. territory.

8. The driver clears Mexican customs and delivers the trailer to Roadway's Nuevo Laredo terminal. Arrival confirmation is posted on Roadway's tracking system.

Before the pilot project was launched, carriers and their customers had no direct access to shipment-status information between Steps 1 and 8, says Sandra Scott, Roadway's international trade and customs advocate.

Access to that information is important for shippers, forwarding agents, and customs brokers, believes Francisco Márquez of the Nuevo Laredo Customs Brokers Association. With that knowledge, he says, all parties involved in the export process will be able to track merchandise every step of the way--a capability that's vital to the efficiency and growth of U.S.-Mexico trade.