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Time to deal

This May, the biggest bang ringing in the ears of carriers and others came from the launch of the Automated Commercial Environment (ACE) at all border ports in the State of Michigan and in New York St...

This May, the biggest bang ringing in the ears of carriers and others came from the launch of the Automated Commercial Environment (ACE) at all border ports in the State of Michigan and in New York State. That gigantic step made ACE mandatory at all Canada-US customs ports.

Carriers and brokers must now begin filing an e-Manifest or electronic truck cargo information at least one hour before trucks reach a border crossing. That will require them to upgrade their IT systems and business processes or engage third-parties to it on their behalf to ensure the speedy passage of their trans-border shipments.

Since various ACE-compliance solutions are readily available, there is no real need for last-minute panic. To be ready on time, carriers need to focus on finding a suitable partner, cleaning up their data, and re-organizing their internal processes. By late July – after the grace period is over, US CBP over will start issuing stiff fines and turning back shipments of non-compliant carriers.

To recap – from carriers, CBP requires three types of data. These include equipment information – VIN numbers, registration and licence plate numbers for all tractors and trailers. The second is personnel information for drivers – passport or birth certificate or FAST registration numbers as well as proof of proper operating licences. Equally important, any passengers in the cab must also have proper ID. The third is basic cargo data – general description of the goods, number of units, total weight etc.

Although enforcement will be soft at the start, this is no time to dawdle. And waiting until the very last minute makes no sense. “That’s when you start losing control,” says James May, business development manager, CrimsonLogic (North America) Inc. in Richmond Hill, Ont., “because vendors, other service suppliers and CBP officials will be very busy. They may not be available to offer help when you need it most.”

Choosing the proper partners is equally important. “ACE is not just about transmitting data to CBP,” says Jackson Wood, Toronto-based corporate business manager for eCustoms, “since it also involves customs, immigration and other security issues, a service supplier needs to have some understanding of the relevant rules and regulations. If you cannot comply with them, it could lead to serious problems.”

However, compliance-for-compliance-sake attitude simply adds cost not value. “Carriers need to realize becoming ACE-compliant,” says Beth Enslow, Waterloo, Ont.-based senior vice-president, enterprise research Aberdeen Research, “is not just something they’re doing to satisfy the government. The process will help them share data with customers and other supply chain partners that will increase visibility and thereby decrease lead times and inventory.

“The pay off comes as it becomes a collaborative tool to make the supply chain more efficient.”

Essentially, there are three ways to deliver electronic data to CBP and become ACE-compliant. Low-volume carriers or others that don’t want to upgrade their IT systems or change their existing internal processes can fax information to a third-party service provider to convert paper-based data into the required electronic format, transmit it to CBP and send back the approval. At CrimsonLogic, the tool is called Fax-to-EDI, at ViaSafe, a division of Descartes Systems Group Inc., it is ACE Connect and at eCustoms, it is Fax N’ Go.

Next is a Web-based approach requiring users to input the data onscreen using templates, which does directly to CBP, which in turn sends back its acceptance. At CrimsonLogic, it’s their ACE Web service, at Descartes it’s ACE4TRUCKS and at eCustoms, it’s e-Manifest Gateway.

Finally, the most sophisticated method calls on an electronic search tool to extract the required data from various repositories drop it into a pre-defined file format and transmit it electronically. CrimsonLogic dubs its system ACE Integrator while Descartes uses the term ACE Preparer.

Another possible solution is to have customs brokers transmit the data to CBP on their behalf. This is one of the promised ACE efficiencies – as long as the required data is accurate and complete and received on time there is flexibility about who can send it. So theoretically it is possible for customs brokers to report to US CBP on behalf of carriers. But in reality, everything is rather quiet. “There has been a lot of talk,” says Carol Beaul, Toronto-based president, Intellitrade Inc. “But so far, not much is happening. Everyone is still thinking about how to make it work.”

Surprisingly, some shippers are starting to look seriously at getting involved. “They want to ensure that everything is done properly, accurately and on time,” says Robert Faucher, business development manager, eCustoms in Toronto, “either for their own trucks or if they use a number of smaller carriers. They simply want to eliminate any possibility that their shipments will be turned back.”

As with all new customs regulations, the official launch is followed by a 60-day “administrative tolerance” or grace period during which non-compliant firms will be subject to letters and lectures unless CBP agents consider the actions to be “egregious offences”. “During the grace period, CBP will send out letters,” says Intellitrade’s Carol Beaul. “But if you get a lot of them, they will start looking very carefully at every one of your shipments.”

The penalties for non-compliance are severe. These include imposing fines starting at US$5,000, sending off trucks for secondary inspections or turning back the load.

Veteran technology expert Ken Mark has covered supply chain-related advances in technology for more than two decades. He holds an MBA from York University.

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