The bad news for trucking firms bringing goods into Canada is that after January 11, they may face possible AMPS (Administrative Monetary Penalty System) fines and delays unless they have registered for the Canadian Border Services Agency (CBSA) eManifest program. Under the new rules, they must electronically transmit accurate cargo, equipment and driver data to the CBSA at least one hour before the truck arrives at the border crossing. In other words, the days of drivers handing over paper documents through a booth window to a Customs agent as the truck pulls in are over.
The good news is that the number of potential unregistered carriers is minuscule. Says Jennifer Fox, Toronto-based vice-president Customs, Canadian Trucking Alliance (CTA) and vice-president Customs and Compliance, Ontario Trucking Association (OTA) “We estimate that only about one per cent of Canadian truckers have not signed up.”
According to Fox, the CBSA has an estimated 30,000 carrier ID codes while the Canadian Trucking Association (CTA) has about 4,500 members. But not all of these firms handle cross-border shipments.
For other modes such as ship, air and rail, the rules are already in place. However, eManifest regulations for freight forwarders will be announced later in 2016.
Among over-the-road carriers, the most likely ones caught napping will be smaller players, especially those that only occasionally handle relevant shipments.
Says international trade consultant Carol Beaul of Toronto-based president Intelli Trade Inc., “The hardest part for these carriers is providing the CBSA with the proper information about miscellaneous shipments-such as last-minute back-haul opportunities that a truckload (TL) carrier may not normally handle. These may include LTL shipments bound for various receivers, personal goods, customs self-assessed (CSA) shipments, empty loads etc. The CBSA has different data requirements for each of these categories.”
Beaul and others suggest that carriers’ first priority, even before enrolling in the program, is that they must understand their obligations to the CBSA under eManifest and to update or upgrade their operations to meet the new demands.
Still, for the tiny minority of carriers caught short, all is not lost. The simplest solution is to engage a third-party service provider such as freight forwarders, logistics software developers such as Descartes, major courier companies including FedEx, UPS and Purolator to transmit the data electronically to the CBSA on their behalf.
But carriers must first register their firms and drivers with the CBSA. After such filings are checked and verified, firms can then send the required data by phone or fax to the service providers who in turn pass it on to the CBSA within the allotted time frame. For infrequent users that’s all that is necessary.
A second option enables carriers to transmit the data on their own directly to the CBSA through its free Web portal. Firms do not need any special software other than an Internet connection and a supported web browser. However, John Moccia, Fort Erie, Ont.-based compliance manager, Livingston International Inc. estimates that most employees may require 40 to 50 hours of training to become comfortable with the system. While the CBSA doesn’t offer any formal training for using the portal, it does offer useful instructional presentations.
Under the third option, carriers, typically high-volume players, can establish a direct EDI (electronic data interchange) link between their own internal IT systems with the CBSA’s network. However, setting up such a connection may require up to three months formal testing before it can be approved and implemented.
By complying with the eManifest rules, carriers can avoid AMPS-related fines and delays. According to Moccia, there are five different categories of fines. The most severe are the failure to submit pre-load/pre-arrival information for which the penalty rates for first-, second- and third-level infractions are $2,000, $4,000, and $8,000. As well, there are identical fines for failure to comply with a CBSA notification.
In addition, repeat offenders will also attract greater CBSA scrutiny for all their subsequent shipments, which may lead to secondary inspections causing future delays and possible denial of entry at border crossings.
The CBSA is not alone in introducing such a system. Most other customs authorities in the world have implemented or plan to implement similar electronic, time-specific reporting systems. The US version, ACE (Automated Commercial Environment), will be launched in 2016. Since the two systems, eManifest and ACE are compatible, Canadian carriers will be ACE-compliant more or less from Day One.
The global trend to require reporting of cargo- and carrier-related data electronically helps boost the efficiency and effectiveness of national border security. Such pre-arrival reports enable customs and other government officials to focus their limited resources on assessing higher risk shipments and carriers since staffs have more time to analyze carrier- and shipment-related data before goods arrive on their doorstep. As a result, they can determine more precisely which shipments require secondary inspections based on incomplete or suspicious information compared against the carriers’ or drivers’ past records or performance.
Carriers complying with the new rules come out ahead by earning CBSA “brownie points” that help avoid any delays by establishing a reputation for being good corporate citizens who transmit timely and accurate data.
Besides bringing peace of mind to trucking executives by satisfying a federal agency’s compliance mandate, the relevant data also represents a potential treasure trove of business intelligence that after proper analysis can help make operations more productive and profitable. After all, the data relates to the level of service involving shippers and receivers, not to mention the performance of drivers and equipment.
The pain of meeting the new standards may be enough to push smaller firms to abandon paper-based record keeping and embrace the digital world. Moccia explains that the eManifest Portal is simply a transmission channel and not a record management service. As a result to comply with the new regulations, relevant carriers and freight forwarders are required to maintain records for three years plus those for the current year. To do so, they must ensure that they print or download all their submitted documents.
This requirement may encourage carriers to introduce back-office document handling and storage software tools that simplify and accelerate finding shipment documents and sharing them with colleagues as well with customers and others. As a result, adoptees will no longer need to rifle through filing cabinets and storage boxes to find the required information.
Besides satisfying the eManifest requirements, the data delivers other benefits. Companies need such records for various types of financial, accounting and other types of audits. Since back-office process streamlining software enables carriers to store, access, share such data electronically, it can eliminate the hassles of dealing with paper files.
In fact, Moccia cites the eManifest system’s ability to issue periodic shipment status updates to carriers, customs brokers and others. For example, if a broker submits a release request to CBSA before a carrier files its eManifest, the agency will automatically send the carrier an eManifest notice about the submission. As well, if the CBSA decides to hold a shipment it will issue a notice to both the carrier and broker.
By eliminating such a shipment information “black hole”, eManifest makes it easier for all supply chain players to provide more timely and accurate responses to the perennial question “Where’s my stuff?’
Setting up electronic data management systems is just the beginning for carriers. They must also start looking at other software tools to analyze the data to increase efficiencies by identifying underperformers inside and outside the company as well as unnecessary and inefficient practices and processes that can be eliminated or improved..
Equally important, the eManifest demand for timely and accurate shipment data may start “cracking the whip” among transportation and logistics partners. Fox sees a growing trend among carriers to ‘delist’ shippers that are not ready when drivers show up in their yards. That list of concerns now includes ensuring that shippers provide the required cargo data accurately and on time. She says, “The carrier’s job is not simply to ‘load and go’. They also need to get the required shipment data as early as possible.”
The arrival of the so-called “single window” approach will be a transcendent moment [aka Holy Grail] for all those involved in moving goods across borders. Beaul defines it as one-stop shopping at the point of entry for satisfying all the regulatory needs of relevant government agencies. So far, eManifest comes up short since it does not deal with customs duties or final release to receivers.
To sum up, Moccia concludes, “eManifest is a major initiative, which modernizes and enhances the commercial reporting and arrival processes. While it improves CBSA’s risk assessment and targeting capabilities, it is not the complete solution involving the entire importing process.”