Freight intermediaries concerned about Customs and Border Protection deadlines

In an “Open Letter” to logistics managers setting forth its perspective on the current status of the ACE/ITDS migration, the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) has urged Customs and Border Protection (CBP) to exercise caution as it approaches February 28, 2016, when it plans to replace the Automated Customs System (ACS) with the Automated Customs Environment (ACE).

In addition to accepting manifest, cargo release and entry summary data for all imported goods, ACE will be the single window by which 47 partner government agencies (PGA) involved in the importing and exporting process will receive data about cargo. A number of these PGAs have authority to place holds on cargo, and they will exercise that authority in the cargo release process.

“While we applaud the revised dates (from November 1 to February 28),” the letter notes, “NCBFAA remains very concerned about the continued reliance on a new date to shut off the older system. We are reminded of the catastrophe to trade occasioned by Australia’s launch of its own new system in 2005 that was driven by a similar approach.”

They are not alone in voicing this worry. In the recently-concluded 3PL Value Creation Summit,  staged by Armstrong & Associates, a prominent industry expert said this was one of the most significant issues to be faced next year.

“Unfortunately, a great many smaller forwarders are simply unprepared for this complexity,” said Sandra Scott, Senior Director of Compliance, SEKO LOGISTICS

The rollout of new technology is always fraught with uncertainty but when international commerce is concerned extra steps must be taken to minimize that uncertainty. The NCBFAA pointed to CBP’s recently released functionality allowing air carriers to file their import manifests with CBP in ACE.

“It did not work properly and created havoc with air shipments, resulting in an inability to move shipments, lost business for importers, and significant additional costs for everyone in the supply chain,” the NCBFAA said.

To avoid such a recurrence on an even larger scale with the switchover to ACE, the NCBFAA suggested that any final implementation date take into consideration – at a minimum – the following criteria:

•        The average time of release in ACE, from the time of data transmission to full cargo release by CBP, must be equal to or better than the average time of release in ACS today. It must not take ACE longer to perform these functions.
•        At minimum, the communications with all trade partners should not be affected when the transition to ACE occurs. Optimally it will be further facilitated in ACE.
•        Government exam reasons and results must clearly communicate who is requiring additional action, what actions are required to adjudicate the finding, what the results of the adjudication are, and what actions are required from the trade.
•        All data elements must be established, published, successfully tested and finalized a minimum of 90 days before any piece of functionality is required to be put in production. Functionality has already changed multiple times and as it continues to change, it is making software programming difficult and more expensive to finalize.
•        Any information collected at the time of cargo release (admissibility) must be for the purpose of establishing the risk of allowing the good to proceed into the U.S. commerce for health, safety, or other risks to the U.S. consumer.
•        Data requirements must not add costs to the supply chain in a way that places an artificial trade barrier to the effective flow of the import and export of goods.
•        A stable and available CBP and PGA testing and live operating environment is established for all automated interactions without the need for weekly “fixes” to address critical problems.
•        CBP and PGA software must be thoroughly tested for all issues including software coding problems, process flaws, and capacity, and pass at an industry-accepted level.
•        CBP and PGA personnel in the field that are required to interact with ACE must be thoroughly trained.

In conclusion, said the letter, CBP has too few trade technical resources available to support the ACE transition which in turn affects the trade’s ability to implement the system. In addition, the rollout schedule, instead of being driven by the completion of software functionality, is heavily influenced by arbitrary White House deadlines.

The PGAs are including new data elements and data submission requirements that transfer costs from the PGAs to brokers and importers.

Nonetheless, NCBFAA said it remains committed to a successful ACE system, supporting funding and a single window across all of the government for both import and export needs.

“While we move into an environment where global trade is increasing, a reliable, efficient and predictable process at the point of importation is critical,” the NCBFAA said. “We believe that ACE will answer those needs, and a reasonable adoption of the system will accomplish this.”