ACE brings with it the promise of cost savings and efficiencies through easier transmission of required documents, the ability to make online payments, and faster disposition of cargo clearance decisions.
But as Customs and Border Protection and the trade community race to meet Obama administration deadlines for other government agencies to piggyback on the system, a steady stream of technical glitches is complicating many transactions—creating extra work for all sides and temporarily delaying some shipments. Any frustration on the part of customs brokers and importers, however, seems to be leavened by the understanding that CBP is working hard, and in a transparent and collaborative manner, to quickly make programming corrections and that the system overall is performing as advertised.
“I’m optimistic,” Robert Stein, vice president for Mohawk Global Trade Advisors in Syracuse N.Y., said. “This is like any other major growth curve. Once we get through the worst of it, we’ll look back and say, ‘That was difficult, but not as hard as we thought’” at the time.
ACE is designed to help CBP better manage the volume and complexity of international shipments and provide security. It offers a simplified process for reporting shipment data and communicating with federal agencies without using paper-based forms. And it will serve as the platform, or “Single Window,” through which information will be shared with other relevant agencies and businesses in a streamlined fashion so redundant filings to multiple agencies are no longer necessary.
An executive order from President Obama requires all agencies be on the ACE-supported International Trade Data System by the end of 2016. CBP officials have urged brokers for the past 18 months or more to upgrade their systems to interface with ACE and start filing so they can get up to speed before the legacy computer system is shut down. Many brokers already switched over to ACE. Small companies without the wherewithal to invest in software that communicates with ACE will have to file paper entries and take them to the local customs house—a tedious process that could make them non-competitive in an electronic world.
Importers and brokers have said that without the February postponement there would have been material impacts on supply chains.
Migration Deadlines. Mandatory use of ACE is now in effect for most entry summary information.
March 31 was the deadline for filing certain types of entry summaries—the post-arrival documents that provide more detail about the shipment for statistical and compliance purposes and on which duty calculations are based—in ACE.
The customs entry is the document that CBP uses to determine whether a shipment is admissible and can be removed from the port for commercial purposes.
In early April, CBP experienced several interruptions in processing entries in ACE and in electronic export declarations due to high-traffic levels, according to the agency and users.
Adoption rates have climbed significantly in recent weeks. As of April 28, more than 75 percent of all import shipments (about 81,000 out of 108,000 daily transactions) were being processed electronically through ACE and the system was successfully processing about 97 percent of entry summary documents, up from 42 percent for entries and 84 percent for entry summaries in March, according to CBP. Entry summary volume in ACE was only 46 percent at the beginning of 2015.
On May 28, CBP will require the most commonly filed entry types, as well as foreign trade zone entries and entry summaries, to be filed in ACE.
As of May 5, CBP had not announced dates this summer when some more specialized types of entries and entry summaries must be filed in ACE. Other agencies have yet to announce deadlines for filing relevant forms through ACE.
The Environmental Protection Agency, the National Highway Traffic Safety Administration, and the Agriculture Department’s Food Safety and Inspection Service will likely follow the FDA.
Currently, with some participating government agencies (PGAs), brokers and importers can transmit the entry for release to CBP via ACE and satisfy any agency requirements by filing a scanned paper document through CBP’s document imaging system.
The FDA had an electronic process under the old system, so filers can transmit FDA data and their cargo release entry through ACE. As an incentive to use ACE ahead of the final deadline, the agency is giving anyone who files in ACE priority processing over entries in ACS.
“When used appropriately, entry of info into ACE actually reduces release times” and there are fewer problems, Domenic Veneziano, director of the FDA’s import operations division, said at a recent meeting of CBP’s Commercial Customs Operations Advisory Committee (COAC) that provides industry recommendations to Customs on how to facilitate trade
Another 25 percent said they may be ready depending on what the mandatory date is and whether their customs broker will be ready from a systems standpoint, but 50 percent said they still do not feel ready. Much of their unease relates to the readiness of their brokers, some of whom have only transmitted test entries for FDA so far, she said.
And people are still worried about what will happen as volumes increase, Hoeger added.
Bugs And Ghosts. Customs brokers generally say that entry filing in ACE is relatively smooth and the system works well most of the time. But daily ACE outages and “ghosting” of data—information entered by brokers that isn’t visible to CBP officers—are causing headaches for filers, especially at land-border ports of entry where trucks can’t afford to be idle waiting for clearances.
The big increase in ACE usage taxed the system and caused it to crash for short periods. CBP has resolved some of the system slowdowns, increased monitoring of ACE systems performance to enhance response times and regularly issues trouble notices, but in late April the system was still going down almost every day, according to industry users.
Meanwhile, an undetermined software issue, possibly having to do with the electronic manifest, impacted ACE cargo releases that require FDA approval, according to Amy Magnus, director of customs affairs and compliance at A.N. Deringer.
An import agent may enter the shipment information through the Automated Broker Interface (ABI) and transmit it to ACE, but when the truck arrives at the primary inspection booth CBP officers or FDA agents can’t see the data on their screen. That forces the driver into a secondary inspection lane, while the broker has to cancel the entry and re-enter it in the ACS system because there isn’t time for troubleshooting when the truck is waiting to be released, said Magnus, who also sits on COAC.
The entire process adds lots of extra unpaid work for brokers. When a shipment gets hung up in the system, customs intermediaries begin troubleshooting by looking at their internal processes to make sure there is no error in the transmission. Next, they contact the local CBP office to see if there is a problem with the CBP or FDA systems that can be resolved, followed by contacting their ABI software vendor, and possibly even CBP’s ABI client representative.
At airports and seaports, an hour or two delay isn’t as critical because the entries are filed well in advance of the cargo’s physical arrival at the port, but at the northern and southern borders trucks are often 45 minutes away and lose money when idle waiting for clearance. Delays also contribute to drivers timing out on their federally mandated driving maximum of 11 hours per day, which lowers their earning potential.
The delays often aren’t noticeable because motor carriers have learned not to approach the land border with Canada or Mexico until they see in the system that CBP has officially released a shipment and it matches with the manifest filing.
Other quirky problems, such as messages that a cargo release has been suspended, are also undermining ACE efficiency at the moment.
“When we get 70 or 80 of these through no fault of our own it creates havoc for the filer and for CBP,” Magnus said. “The point is the system needs to be working reliably.”
In other cases, messages to the filer from the FDA system through ACE sometimes don’t come through the ABI pipeline for the filer to see.
“We’re dealing with complex systems [brokers’ software, CBP software for manifests, cargo release, interfaces with PGAs and the CBP document-imaging system]. All these systems are functioning simultaneously and there are instances that I could document for you where the communication between the systems doesn’t seem to work well. And I don’t know the cause, and I certainly don’t know the remedy,” Magnus said at the advisory committee meeting.
In general, the ACE rollout is making progress. “But we struggle day to day because there’s still so many ghosts in the machine that we’re constantly on the phone with Customs and the PGAs,” Mohawk’s Stein said. “We spend a lot of time trying to figure out how to transmit the data. Then once we learn, we spend time dealing with transactions that don’t process. Sometimes the bugs are in Customs’ system. Sometimes they are in our software. And sometimes, it’s difficult to differentiate.”
Software vendors are struggling because CBP’s requirements change so frequently that they can’t always keep up with the programming.
“In many cases they’ve done a remarkable job, but invariably with such a program there’s going to be wrinkles,” the logistics professional said. “I think this is the natural process of change. But the deadlines make it more difficult. There’s not time to map out programming needs carefully. The deadlines aren’t being set based on where Customs really is, but on an administration agenda.
“So everyone is rushing to meet the deadline and the programming is not being done in a logical, well-paced manner. It’s being done just to meet the deadlines,” Stein added.
“But now, we don’t know, for example, when FDA is going to be a mandatory filing in ACE. And whenever these bumps happen we revert back to ACS. So we need to know when it’s going to be mandatory,” she said.
Hoeger said the uncertainty about PGA requirements is slowing progress.
“Some brokers are frustrated by systems issues that prevent some entries from going through in ACE, and have to be rekeyed and retransmitted in ACS. This additional workload without compensation has caused some apparent reluctance by brokers to file the initial entry in ACE. Some brokers are also reportedly holding back on investing additional resources until FDA announces the mandatory date,” she said.
“Personally, I think this is dangerous and imprudent, and I would argue that there is an obligation on importers to put pressure on their broker to file sooner rather than later.”
Aside from the land border, some of the problems are being experienced by brokers who are new to the system versus others who started using ACE months ago and figured out how to deal with its nuances, Tom Gould, senior director of customs and international trade at Sandler, Travis & Rosenberg, said.
There have also been hiccups with the migration of the Census Bureau’s AESDirect into ACE. AESDirect is the web-based version of the Automated Export System through which shippers file export declarations. AESDirect filers were transferred to ACE in phases early this year and Gould said most users are happy with the increased speed of the functionality. Problems have more to do with the registration process for getting ACE reports than the actual system itself, he said. Many exporters waited until the last minute to sign up online for an ACE account and Census has a backlog of registrations for AES reports. The reports are helpful to exporters, because they can double check whether the information entered by their agents is accurate, audit shipments or analyze their compliance history.
CBP officials hear about the technical issues during lively conference calls with industry representatives.
Customs will have more resources—such as service desk personnel, client representatives, and technical support—to offer filers once it divests ACS later this year, Deborah Augustin, executive director of the ACE Business Office, said at the COAC meeting.
“We will staff that with resources who have technical, policy and operational knowledge so that we can resolve any issues that are identified with respect to keeping the cargo moving as expeditiously as possible,” she said.
Meanwhile, the FDA recognizes that there are some ongoing issues and is setting up a 24/7 call center to help brokers when an entry is hung up in the system, Veneziano said. The agency is also working to facilitate CBP-cleared shipments delivered to destination under a Customs transportation bond by providing any FDA clearance information to officers at the port of entry so the shipment doesn’t have to be redelivered to the port.
For brokers, switching back to ACS to get trucks down the road won’t be an option soon.
“My concern is that the problems be resolved before this is mandatory, because if we can’t back out and do it another way, then what?” Magnus said.
But she and other trade professionals credited CBP for carefully listening to industry feedback, working diligently to solve problems and taking a gentler approach on ACE deadlines when necessary.
“This is an enormously complex system and there are many parts that have to function together well. It’s a huge orchestration that has to be tuned,” she said. “It is an enormous undertaking and a huge achievement—when this whole thing works.”