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Ty Bordner, senior vice president of marketing and business development with Amber Road, explains how automation and digitization are causing a major change in the way that customs filings are carried out.
SCB: You’ve described what you call a “game-changing paradigm,” referring to the relatively small number of companies that file their own documents with U.S. Customs. Why is that the case?
Bordner: The number of companies in the U.S. that that do self filing, not using a third party, is less than 5 percent today. Why is it so small? First of all, the U.S. is fairly complex with regard to Customs and other government agency regulations. In addition, the process today is still largely manual, with customs brokers effectively retyping transactional data. They get commercial invoice data on documents, packing lists and bills of lading, and they key that data in. The reason that hasn’t been done in-house is that you need to hire people to do the job. There’s not really a value equation there.
SCB: However, things are changing. You’re suggesting technology as a possible solution. What is that solution?
Bordner: The key is automation of the customs entry transaction. Meaning I don't need people to key the in data off commercial invoices, packing lists and bills of lading. I can get those data records in an electronic form from systems where they already exist. But even when you combine commercial invoice, ASN and P.O. data to build the customs entry, you still don't have everything. There are elements related to master data and product information that need to be part of that customs transaction. So even though you don’t have to rekey transactional data, you need to pull from multiple sources to create the customs entry transaction.
SCB: This seems far broader than electronic date interchange (EDI), which involve message formats for specific documents.
Bordner: It is way broader than that, but it’s leveraging EDI transactions that exist today, such as ASN and shipment data.
SCB: Are you suggesting that this eliminates the need for customs brokers altogether, or do they do other important things on behalf of the shipper?
Bordner: Here’s my take on it, using autonomous vehicles as an example. You ask people when they think autonomous vehicles will become ubiquitous. Some say five years, others 10, 20 or even longer. Nobody argues that it's going to happen; it's just a question of when. By the same token, one day the act of keying and filing work by a broker or a forwarder won’t be needed. Now they do other things, and are evolving just like anybody else. The value-added services they provide can still exist and provide value, but having people key data in to do this work will ultimately not be required.
SCB: Many foreign customs agencies still insist on paper documents.
Bordner: Certainly there are some countries today that are still paper-based, but there aren’t so many of those left, and there are sophisticated countries that have a high degree of electronic customs declarations. Related to this is the concept of a single window for the filing of import documentation and data with multiple government agencies. It’s extremely important, and may accelerate this paradigm. It cries out for a digital solution that can take existing transactional data records and combine them with master data to automate the buildup of the transaction, and then submit it through the single window. The filing is key.
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