ACE (Automated Commercial Environment) and Canada Routings to the United States    May 10, 2016

ACE (Automated Commercial Environment), what is it?

ACE is meant to simplify the movement of goods across the border by facilitating the collection of commercial data, required for Customs and OGA entry processing, through a single “portal.” ACE is replacing the legacy ACS (Automated Commercial System) and ABI (Automated Broker Interface) systems in place today.

When will this go into effect?

Customs has been working to program and implement ACE for years and despite numerous delays in programming (and there are still quite a few challenges and bugs), they have moved forward with a staggered approach with some of the “go-live” dates still in the future. Effective March 31, 2016 however anything that requires Lacey Act, APHIS or DOT submissions has to be transmitted through the ACE portal. The next date is May 28, 2016 for all other entries not requiring FDA or USDA.

When containers enter the United States through a Canada Gateway (Prince Rupert, Vancouver, Halifax), how is the ACE entry process different?

When transmitting a Customs entry to US Customs, one of the requirements of the entry is to identify the importing conveyance (vessel, train, or truck identification) in to the Unites States to US Customs. When importing into the United States through a Canada gateway (Prince Rupert, Vancouver, Halifax) and railing to the final
destination in the United States (i.e. Chicago, Memphis, Columbus), the importing conveyance that must be transmitted to US Customs is the train number (not the ocean vessel), and the entry must include the train number, trip number, and rail bill number. If any of these are different, a separate entry is required.

Is this new?

Actually no. This regulation has always been in place, but simply never enforced. What we are now being told by US Customs is that with ACE in place, it will be enforced immediately.

Here’s an example: Let’s say you are importing auto parts from Qingdao to Chicago, via Prince Rupert, and on one ocean shipment (one ocean Bill of Lading) you have three containers. Prior to ACE, that would represent one entry to be processed and cleared prior to release in Chicago. With ACE, let’s assume these three containers get split and move by rail from Prince Rupert to Chicago on two trains (it is not uncommon). Even though these three containers were shipped to Prince Rupert on one vessel, and shipped against one House Bill of Lading through to Chicago, because the containers moved to Chicago on two different trains, US Customs will require that there be two entries processed – one for each train.

When will the Broker know if the containers are on different trains?

The broker will receive the IT number (unique to each container) and the rail bill number from the carrier on the arrival notice. However, the train numbers won’t be known until the broker queries the system after departure from the west coast discharge port. And with transits from Prince Rupert to Chicago (as an example) so quick, timing for this to be processed becomes compressed. Only at that point will the broker know whether multiple entries are required.

What does this mean for you?

It will require additional entries for sure if you are shipping multiple containers per Bill of Lading. It also will require your commercial documentation (Commercial Invoice and Packing List) to be specific to each container, which in many cases it has not been. And third, expect delays as the trade catches up to the requirements.

What will you need to do differently moving forward?

1. Identify shipments flowing through your supply chain that are routed to the United States on rail via Canada.
2. Talk with your broker.
3. Understand volume flows and where you are importing multiple containers on single Bills of Lading.
4.Make sure your commercial documentation reflects specifically what is in each container in the event a separate entry, per container, has to be processed. For many importers this will require immediate changes in how their suppliers create commercial documentation.
5. Consider shipping single containers per Bill of Lading, at least for the foreseeable future, to minimize risk of delays.

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