Two software vendors, Quickcode and Magaya, come together to apply artificial intelligence to the classification of imported goods under the Harmonized Tariff Schedule — but humans aren’t out of the loop. 

For importers today, it’s a huge challenge just keeping up with a flurry of ever-changing tariffs on just about every product imaginable. At the same time, they must undertake the everyday blocking and tackling that ensure compliance with U.S. Customs and Border Protection regulations on entry processing. 

Magaya Corporation helps out with a freight-management software program designed for logistics service providers. The tool covers multiple aspects of supply chain services, including rate management, a freight portal and a warehouse management system (WMS). 

Also central to the Magaya offering is the management of CBP compliance. Certified by Customs’ Automated Commercial Environment (ACE), it provides a single window for real-time visibility into all transactions, duties, fees and messages to and from the agency. 

Compliance depends on strict adherence to the Harmonized Tariff Schedule (HTS), which lists categories and applicable rates for every item imported into the U.S. for purposes of calculating duties, maintaining quotas and enforcing a slew of trade regulations. Each product is given a unique 10-digit code that identifies its characteristics. (The American HTS builds on the six-digit international Harmonized System code.) Entering the wrong number in a Customs entry can subject the importer to heavy fines and future scrutiny by CBP. 

Determining the right HTS code for a given product used to be done manually. Today, by necessity, it draws on the power of artificial intelligence. And for Magaya and its customers, that’s where Quickcode comes in. 

Quickcode is a provider of trade-compliance software that promises real-time visibility into tariff changes, product codes and regulatory risk. Its application programming interface (API), drawing on AI, integrates with Magaya’s Broker AI Assistant, embedding directly into the vendor’s Customs entry-processing workflow. Drawing on a combination of publicly available trade data, licensed data sets and proprietary data, the large language model (LLM) makes possible the accurate and efficient classification of goods under the HTS. 

Humans aren’t out of the loop completely; Quickcode insists that the tool combines the strengths of AI with human oversight. The intent, however, is to dramatically lessen the cognitive burden of staff, and time spent on onerous classification tasks. 

Aided by AI-generated recommendations, the technology slashes the time involved in researching HTS classifications by up to 90%, Quickcode says. That eliminates the need for additional hiring when work volumes surge, while allowing existing compliance professionals to focus on higher-value tasks. 

At the same time, though, it’s not the “black box” feared by newcomers to AI who insist on knowing the rationale behind the system’s output. The model supplements its classification decisions with source references, regulatory citations and supporting documentation. Included in the decision-making are HTS notes and updates, the online searchable database of Customs rulings known as CROSS, and explanatory notes to the HS system issued by the World Customs Organization. In the process, the system ensures that all classification decisions are ultimately human-controlled. 

Along with speed comes greater accuracy, for a complex process that leaves no room for error. Quickcode says the system maintains nearly 100% classification accuracy, by constantly updating itself. Trade professionals struggling to keep current with regulatory actions such as antidumping and countervailing duties need to ensure that they’re working from the latest data. 

The system works as follows: A request is made for HTS classification. Quickcode responds with its AI-assisted recommendation, which is then reviewed by the customs broker. The validated classification is then submitted to CBP. 

Magaya’s specialty is serving logistics service providers, but Quickcode says the AI-assisted classification software can be easily adapted to other businesses involved in global trade and logistics. “The ability to integrate with existing workflows makes the solution suitable for businesses of various sizes, from small importers to large multinational corporations,” it says. 

Sectors that stand to benefit from the tool, according to Quickcode, include retail, e-commerce, automotive, and freight forwarding. All involve a diverse range of imported raw materials, components and finished goods that require pinpoint classification without excessive processing time. 

Other regulatory processes that can be monitored and managed through the software include export control, tax classification and the automation of global trade documentation, Quickcode says. 

Matthew Fotouhi, Magaya’s chief technology officer for Customs compliance, says partnering with Quickcode has “revolutionized” how the vendor approaches classification. 

“By integrating their technology into our Broker AI Assistant, we’ve been able to drastically reduce the time it takes for our customers to classify products, while ensuring near-perfect accuracy,” Fotouhi says. “The transparency and real-time insights provided by Quickcode’s AI have been game-changers for our users, helping them to meet compliance requirements with ease.” 

Shannon Hynds, chief executive officer with Quickcode, called working with Magaya “a seamless experience. Their integration of our AI-assisted classification tool has empowered customs brokers and trade professionals to be more efficient and accurate. We’re excited to continue this partnership, knowing our technology is helping Magaya’s customers maintain compliance while driving significant operational efficiencies.” 

Resource Links:

Quickcode, https://quickcode.ai/

Magaya, https://www.magaya.com/