Importers and exporters have to file up to 200 different forms to clear their shipments with the government. Many of these filings have to be completed on paper and then either hand delivered or faxed to the right department. In addition, shippers find that they often have to submit the same data to the Customs and Border Protection as well as 47 other agencies. But change is coming: The government is building a single electronic window so that shippers will only have to file information once.
The system is called the Automated Commercial Environment (ACE), but it hasn’t quite been implemented as planned. Congress passed a bill to begin work in 1994, with the expectation that it would be wrapped up in a matter of a few years. Over two decades later, government agencies are still not quite prepared to adopt the system, even as the Government Accountability Office has identified it as a project that has suffered serious cost overruns. (GAO estimates that its final cost will exceed $4 billion.)
ACE has been enormously difficult to implement. But once it’s ready, ACE is supposed to make it significantly easier for shippers and brokers to trade goods.
What will ACE do for shippers?
ACE will bring importing and exporting into the digital world. Instead of always relying on paper, fax machines, and original signatures, shippers will be able to use electronic submission processes to clear shipments.
Shippers currently use Automated Commercial System (ACS) to clear shipments with Customs. ACS is slated to be replaced by the ACE. Government agencies are on a staggered schedule to drop ACS and transition to ACE, with the first deadline set as March 31st, 2016; the National Highway Traffic Safety Administration and the Animal and Plant Health Inspection Service are the first two agencies to move to ACE. Most agencies will have to be moved to ACE in the summer of 2016, including the EPA, the DEA, and the CDC.
ACE will radically change the way products flow into the country. When fully implemented, ACE will make it easier to clear shipments. It promises to consolidate, automate, and modernize border processing by bringing all government processes through a single web portal, instead of having to send the same information to different agencies. Shippers will be able to use this portal to share trade data with government agencies, saving time and money for themselves and their brokers.
Shippers will also have greater control over their import and export activities. They can use the ACE web portal to see the work done by their brokers, the duty statements they’ve filed, and access to more reports over their processes.
Jayson Gispan, Director of Customs Brokerage Operations at Flexport, identifies two important benefits he’s already seen from using the new system: “First, ACE is making it much easier to process shipment splits. And second, instead of having to use a manual document submission to correct duty payments, we can now do it electronically.”
ACE implementation delays
March 31st is the first upcoming deadline for the adoption of ACE. Other “mandatory use dates” are May 28th, 2016, Summer 2016, and finally, October 2016. All government agencies are supposed to adopt ACE by the end of 2016; by then, ACS will be completely dropped.
That’s how it’s supposed to work in principle. In practice, the deadlines have been continually pushed back because government agencies have not been ready to adopt it.
We’re long past the initial deadline set by the government for agencies to adopt ACE. Instead of the end of March 2016, as it currently is, it was supposed to be the end of February 2016. And before that, it was supposed to be November 2015. There’s a chance that the March deadline will be pushed back once again.
The problem is that government agencies have not been ready. In spite of billions spent, in spite of the fact that the project was initiated two decades ago, and in spite of the multiple executive orders signed by the President to expedite the process, agencies have not been able to build software to integrate with the system.
The 48 government agencies have been individually tasked to adapt their systems to ACE. Certain agencies have been more ready than others. The Food and Drug Administration was supposed to be one of the first agencies to adopt ACE, but it’s gotten so far derailed that CBP no longer gives it a firm deadline to be integrated into the system.
This is a government project that doesn’t require action from shippers. So why should they care about its progress? The danger is that the system is not ready before ACS is dropped. ACE currently still has significant bugs that prevent shipments from being cleared. Jon Kent, spokesman for the National Customs Brokers and Forwarders Association of America, has already warned in the JOC that a non-functional ACE can cause significant interruptions to the flow of commerce. That would be in no one’s interest.
Given the continuous delays, we might expect the deadline to be moved back once more. But when completely ready, shippers will have an easier time dealing with filing.