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  • Customs implementation delay could help freight forwarders achieve needed changes

    Posted on: July 11th, 2017

    By Alex Binkley

    A delay by Canada Border Services Agency in the implementation of an electronic tracking system for freight forwarders handling imports and exports gives Canadian International Freight Forwarders Association more time to help the Agency get the process right.

    After several years of working on the implementation of its e-Manifest system, which is aimed at expediting the movement of freight through customs facilities at land borders as well as ports and airports, CBSA announced May 23 a year-long pause in implementation as it tried to fix its operational problems.

    “We are working with CBSA to help it understand all our issues,” said Paul Hughes, National Manager of Customs for Montreal-based Agility Logistics and Chairman of the National Customs Committee at CIFFA. “We have 14 or 15 operational and policy issues that need to be addressed. We have weekly conference calls with CBSA on them.” They’re in addition to periodic meetings in Ottawa to explain how the relationship between forwarders and the shipping business is fundamentally different from those with other players in the transportation, warehousing and freight terminal community.

    The forwarders work with what’s called an electronic house bill (eHBL) on freight shipments they’re handling for their customers. The numbers that forwarders are to assign to each shipment, called Cargo Control Numbers (CCN), are different from those that carriers use in moving imports to warehouses where their arrival is reported by the warehouse to CBSA. Before the implementation of eHBL, the warehouse would report the cargo arrival to CBSA based on the carriers’ CCN, which was used for its release to the customer.

    Under eHBL implementation, the release of goods at these primary warehouses is now linked to the freight forwarder’s carrier CCN, Hughes explained. “As there is no business relationship between these warehouses and forwarders, there have been significant issues with releasing goods from the primary warehouse.”

    CBSA has come to realize how eHBL “doesn’t create the required cross reference between the forwarders’ codes with the shipment identification codes that carriers and their partners use which makes the forwarding business even more complicated. And it has also caused significant problems for customs officials monitoring shipments for duties and inspections.” The problems with the e-Manifest system have bedeviled the freight transportation industry for years. The system is far from the seamless goal originally envisaged, Hughes said.

    The Canadian Trucking Alliance and 14 supply chain partners recently went public with complaints about delays “and other challenges bringing goods into Canada from the U.S. because of recurring CBSA system degradation issues.” They plan to form a coalition to press the government to provide more funding and staff to CBSA. “The coalition believes many of these issues can be resolved by investing capital in CBSA’s IT systems and additional staffing,” said CTA President Stephen Laskowski. “While we all understand that a funding infusion is not an insignificant step, our recent experiences show that the economic consequences of not making this investment are much greater.”

    Hughes understands their frustration but said, “Over and above the system degradation issues which affect everyone, the problems facing forwarders are of a different magnitude and specific to their business. Forwarders deal with marine, air, truck and rail shipments and the current system is a recipe for confusion between forwarders and their customers.”

    CBSA’s delay in implementing eManifest will enable the Agency to spend at least another year testing and implementing the process without any financial penalties for non-compliance regarding pre-arrival submission of house bills. In the meantime, CIFFA recommends forwarders to either continue to transmit eHBLS or revert to the previous system of submitting electronic pre-arrival supplementary data for air and marine shipments and presenting paper house bills post arrival. Hughes welcomed CBSA’s offer to assist forwarders with online resources and dedicated client support service centres. “They will help forwarders to become more familiar with the system.” That still leaves the challenge of reducing paperwork as forwarders currently face delays of up to a week in processing paper re-manifests and ensuring CBSA understands the freight forwarders’ role, he said.

    In advisories to its members about the e-Manifest delay, CIFFA said forwarders should wait until CBSA’s interim process is complete before changing their shipping procedures. “Now at least we know the new time frames, and forwarders can choose an implementation schedule that best suits them.” It said CBSA has staff working on the gaps in its eHBL system. “There are so many holes in this system and the work-arounds are so cumbersome” that there’s not enough staff to fix all the gaps. “CBSA is working on many work-arounds, band-aids and fixes — some policy-related, some systems-related, and all designed to help get the eHBL program back on track. It is going to take quite a while.”