As March draws to a close, the U.S. Automated Export System Direct (AESDirect) Electronic Export Information (EEI) filing system is being transitioned from the U.S. Census Bureau to the Customs and Boarder Protection's (CPB) Automated Commercial Environment (ACE). The logistics industry is looking carefully about how the new rules change the way business must be done.
"For quite a while, we've heard grumblings about ACE and what it means for both imports into and exports out of the United States," Rob Pedersen, director of customs compliance and government solutions at Descartes told EBN in an interview. "I like to describe ACE as an umbrella service/solution that creates a single window to all customs filings. All of that data goes into the ACE umbrella system regardless of whether a company uses a third party like Descartes, are a large OEM that has built its own system and communicates directly to government, or those with small, focused businesses."
The first shifts that became the ACE initiative came out of the Trade Act of 2002, a congressional action taken in the wake of the 9/11 terrorist attacks. "The U.S. government to that point had done a pretty bad job among government agencies of sharing data, including information about the supply chain," Pedersen said. "All the information was very siloed."
Since then, there's been a lot of talk, but less movement toward real implementation. "My first contact with ACE was in 2004, when I was told it was coming down the pipeline, and 12 years later its still coming down the pipe," Gabriel Rodriguez, president of A Customs Brokerage, a customs broker and freight forwarder told EBN. "The last ten years were frustrating because we really didn't understand what it was and how it was going to work."
While most agree that a single throat to choke when it comes to this type of information, many remain skeptical that the road to consolidated data will be smooth. "This is a tremendous undertaking and it is a significant change to the way that U.S. brokerage houses and export brokers have done business," Pederson said. "There is value for the tax payer for having a single window but there is cost for exporter and importer because they have to retool business systems to accommodate these changes."
For the last several weeks, organizations using the AESdirect have been moved in groups over to the new ACE portal. The CPB anticipates that the migration will be done in April. "There are approximately 900,000 electronic exports filed to AES direct every month," Pederson explained. "That's nearly 12 million filings per year, and it peaks toward the holidays."
In the new system, organizations are asked to provide new data points than in the post. "The collection of that data is currently not part of their business process," said Pederson. "It does require some investment, but at the end of the day most folks will find that data is easier to collect with the knowledge that there are significant penalties to not collecting it."
Pederson offered some key takeaways about the changes:
- This does impact all importers and exporters across the board. "While they may not require new documentation right off the bat, the information they need to provide to a freight forwarder like DHL or UPS may take a slightly different form or be presented in slightly different ways," Pederson added.
- Electronics makers that work with customs house brokers or third party service providers should make sure their partners are aware of the changes. "The CBP has done some outreach on this, but there are still some gaps in trade knowledge of time line and exact nature of changes," said Pederson.
- It's important to make sure that all software applications are up to date and include the necessary changes. "Our understanding was that we would have to do customs paperwork in the portal, but we didn't understand that the portal interacts with software and the software vendors have to adapt," said Rodriguez. "We've been gearing up for it. We are as ready as we can be."
- There will be challenges that arise from the new system, but they can be overcome. "A lot of these changes hit 99% of the examples, but it's that one percent hat keeps containers sitting on the doc for weeks at a time," Pederson said.
Take a look at the infographic below from Descartes for more details about the initiative. Then take a moment to share your experiences in the comments section below.
— Hailey Lynne McKeefry, Editor in Chief, EBN