W Coast Trade Symposium recap: E-commerce is THE hot topic

2017 w coast trade symp


CustomsNow attended CBP’s West Coast Trade Symposium last week in Phoenix.  The theme was “Looking Ahead Together: What’s Next for Trade?”  Generally, CBP stated that they would continue to focus on the Priority Trade Issues, as well as the Executive Orders issued by the Trump Administration in 2017.

CBP also intends to build on the foundation of ACE to perform smarter targeting of inbound cargo and will be working to reduce the amount of regulations as required (for every new regulation two must be eliminated.)

Finally, CBP is struggling to stay on top of the explosive growth in the number of small packages shipments driven by e-commerce.

E-commerce is clearly a pressing issue for CBP and here is why:

  • E-commerce sales were valued at $3.4B on Black Friday and are expected to exceed $500B annually by 2020
  • 52M small packages are shipped annually via express carriers
  • 130M small packages ship via air cargo
  • 275M small packages ship via the mail.  This compares to 100M in 2010, up 20% year over year
  • In a recent 5-day operation at JFK airport, CBP checked 3000 mail packages and seized over 1500 due to Intellectual Property Right (IPR), Agriculture, and illegal drugs reasons.  The operation was halted in just 3 days due to the sheer number of seizures.

CBP is just not staffed to handle and examine this volume of packages and they are trying to overcome this shortfall.  For instance, CBP will be piloting a program in Dallas whereby any small package shipments that need to be examined will have to be delivered to a Centralized Examination Station (CES) as opposed to CBP inspectors driving to the various air carrier facilities.

It was explained that most air and express carriers do a good job of prescreening their shipments to the US to ensure they are compliant with US laws and regulations.  Therefore, the criminals are turning to shipping via the mail since there is no prescreening performed at present.

The United States Postal Service is not required to provided CBP with advanced data that would allow CBP to target suspect shipments as they do with all other modes of transportation.  The STOP Act, which is working its way through congress, will address this deficiency.  The Global Direct Entry program is also helping the postal service to identify Trusted Traders for certain wholesalers so that CBP can concentrate on those shippers which are not in this program.

Another concern is that many of these packages fall under the $800 de minimis amount, also known as a Section 321 entry, and, therefore, do not have to be entered with CBP.  The intent of the de minimis rule is that a formal entry must still be made if “additional information, bonding or protection is required.”  Many shippers ignore this requirement and are therefore not declaring their drug shipments to the appropriate Partner Government Agency (PGA), specifically the FDA.

CBP is very concerned with the increase in small packages moving via the mail that contain Fentanyl, a very dangerous synthetic opioid and they shared this story.  Recently an Inspector brushed the lapel of his uniform to remove a substance.  He later overdosed on Fentanyl but, thankfully, survived. CBP is looking at utilizing spectrometers to examine small packages.  This would allow them to screen for illegal drugs without having to open the packages.

Incidentally, the only way, presently, to declare a Sec. 321 shipment to CBP is via the manifest.  E-commerce providers want the ability to declare them via ABI and CBP is investigating this option.  CustomsNow learned that the Trade Leadership Council is considering the creation of a new entry type code of ‘86’ for Sec. 321 shipments.  This way the appropriate PGAs can be declared and there will be no duties or fees due to CBP (in 2010 Congress estimated that if the de minimis amount was raised to $1,000 that would result in only $42M in lost revenue compared to the total amount of duties paid annually which was $37B in FY 2015.)

In addition to illicit drugs, CBP is focused on IPR infractions (“If you can make it, the criminals will fake it.”) It is estimated that companies involved with IPR employ 42M Americans and constitute 40% of our GDP.  Unfortunately, there were 32K IPR seizures last year with an estimated value of $461B.  86% of these shipments came from China and that number climbs to 88% when you add in Hong Kong.  Many of these shipments move as small parcel.


CBP clears up guidance for air split shipments


In CSMS #17-000279, US Customs has clarified the process for air split shipments:h

  • CBP regulations require that all cargo arriving on split conveyances be entered in the air manifest system. The carrier is required to manifest the air waybill, in accordance with the CAMIR, as a split with the data for each conveyance and any in-bond transaction to move the cargo to the same entry port.
  • Cargo moving on the same air waybill but not declared in the ACE air manifest system as a split, is not eligible for split entry processing. As such, one entry per conveyance is required. This applies to a single house air waybill split across multiple master air waybills.
  • ACE currently does not have an edit to enforce this policy. ABI filers can determine if a carrier’s air waybill was split by submitting a cargo manifest entry release query (CQ transaction). Split air waybills will have a part indicator A, B, C, etc. in the response message.
  • It is the filer’s responsibility to ensure that cargo on a single bill of lading, moving on multiple conveyances, and not declared as a split are entered separately.

Update on Port of LA’s paper workaround for paperless ACE air manifest cargo releases

seal_aceRecently, we discussed glitches in ACE that prevented carriers from seeing release messages for air cargo, even though the filers receive paperless releases in ACE.  To address the issue, the Port of Los Angeles announced a paper-based workaround, which was extended through July 31, 2015.

While the overall air manifest environment is improving in performance, technical issues remain.  Therefore, the Port of LA has extended the paper workaround until further notice, and has provided additional guidance for the trade.

For details, see Acting LAX Port Director Donald R. Kusser’s memo:   Notice to the Trade – July 29, 2015 Update


Update on Port of LA’s paper workaround for paperless ACE air manifest cargo releases

seal_aceIn our recent blog post, we discussed glitches in ACE that prevented carriers from seeing release messages for air cargo, even though the filers receive paperless releases in ACE.  To address the issue, the Port of Los Angeles announced a paper-based workaround.

Today, the Port of LA has updated its guidance by extending the paper workaround until June 24, 2015 and providing a paper Permit to Transfer form for carriers and filers to obtain manual signatures for in-bond cargo movements.

LAX Port Director Todd Hoffman’s revised memo:  ACE air manifest releases update.

**** UPDATE:  On June 24, LAX further extended the interim processing procedures until July 31, 2015.  June 24 Notice to Trade



Port of LA: Paper workaround for paperless ACE air manifest cargo releases

seal_aceOn June 7th, US Customs began processing air manifest transaction in ACE in real time.  With a technical rollout of this magnitude, there are bound to be glitches.  In this case, the sending of ‘1C’ messages is compromised — while filers of cargo releases receive paperless releases in ACE, carriers are not able to see the release messages.

While CBP is resolving the issue, Todd Hoffman, Port Director of Los Angeles International Airport, has announced a workaround for that port:

From now until June 19, 2015, CBP will allow carriers/CFS operators to accept a signed CF 3461 (DAD) by the broker without fear of penalty for entries that have generated a paperless release when transmitted thru ABI.  In addition, carriers/CFS operators are allowed to accept screen printouts of electronic ACE cargo entry (Simplified) releases submitted by the broker for the release of cargo.  The printout should have at a minimum the shipment ID and quantity being released as well as clear identification of who presented the release information.

For In-bond movements, carriers/CFS operators are allowed to accept the perforated/signed CF 7512 even if the ‘1C’ or ‘1D’ are not posted.

Mr. Hoffman’s memorandum of June 12, 2015:  ACE Air Manifest Releases



Breaking news: This weekend’s transition from Air AMS to ACE

seal_acePer US Customs’ CSMS #15-000323, on June 6, 2015, the Air Automated Manifest System (AMS) will go offline and on June 7, ACE will become the system of record for air manifests.

The facts regarding the outage window are detailed below:

  • Air Manifest: Air AMS will go offline at 3:00 PM EST, Saturday, June 6th and Air Manifests will be brought online in ACE by 5:00 AM EST, Sunday, June 7th.
  • ACS Entry/Entry Summary: ACS will go offline at 3:00 PM EST, Saturday, June 6th and will be brought back online no later than 5:00 PM EST, Saturday, June 6th.
  • During the June 6, 3:00 PM – 5:00 PM outage window, CBP will not process FTZ Admissions/e214s (All FZ and FT APP ID’s) or FDA Prior Notice WP transactions.
  • Air Inbond Transactions: Filers should not send QX/WX ABI inbond transactions after 3:00 PM EST, Saturday, June 6th.  After 3:00 PM June 6th, filers should wait until 5:00 AM EST, Sunday, June 7th to submit air inbond ABI requests via the new QP/WP transaction.
  • Air Manifest Query:  Filers should stop using the ABI IN transaction to query airway bills as of 3:00 PM EST, Saturday, June 6th.  Filers should use the ACE ABI CQ Query starting at 5:00 AM EST, Sunday, June 7th.
  • All messages transmitted after Saturday, June 6th at 3:00 PM EST will be held and processed once that component of the system is brought back online.

The CSMS also details the user support procedures for the transition.

ACE: Air manifest phase-in extended through June 6

seal_aceIn follow up to our recent post on this topic, following is an update from US Customs dispatched in CSMS #15-0000249:

UPDATE:  The deadline for ACE Air Manifest continues to be May 1st and CBP will continue routing trade manifest submissions to both ACE Air Manifest and the legacy AMS.  However, CBP is providing flexibility for the trade to test the system through June 6th when Air AMS will be phased out.

Accordingly, ABI Air Inbond filers will continue to use QX/WX to allow the air industry additional time to test the system.  The effective date for changing from QX/WX to QP/WP is June 7, 2015.

All ABI filers will continue to use the IN query to query Air Bills.  The CQ query for air manifests will be available on June 7, 2015.  Both of these changes are posted to CBP.gov/ACE and filers are encouraged to test in the Certification environment.

#ACEairmanifest #ACEcargorelease #ACEentrysummary

ACE: CBP webinar for air manifest filers on April 29

seal_aceStarting May 3, ACE will become the system of record for all air import manifests transmitted to US Customs, and the legacy AMS system will no longer be available for processing of air manifests.

On April 29, join other air manifest filers on US Customs’ webinar to discuss the ins and outs of the transition to ACE.   The webinar will also provide an opportunity for attendees to ask questions regarding air manifest changes deployed in ACE on January 3, 2015.

The free webinar runs from 3:00 – 4:00 PM ET.  To participate, log on at https://cbp.adobeconnect.com/acewebinar/ at the designated start time.  Although registration is not required, participation will be limited to the first 1,000 participants.


ACE will be mandatory sooner than expected

seal_aceUS Customs has accelerated the move to ACE, which will replace the current ACS for trade processing.  The agency has just published the following mandatory dates, which are earlier than previously proposed:

  • May 1, 2015:  Mandated use of Manifest — All electronic export and import manifest data must be transmitted via ACE
  • November 1, 2015:  Mandated use of Cargo Release — All data associated with the release of cargo, including PGA interactions, must be transmitted via ACE.
  • October 1, 2016:  Mandated use of ACE for all trade processing

(The previous deadline for Manifest and Cargo Release was December 31, 2015; for all ACE processing, December 31, 2016)