By Keith Norbury
Converting to an electronic system for filing customs documents will be a boon to freight forwarders, once all the kinks in the system are ironed out, says the Executive Director of Canadian International Freight Forwarders Association. “eManifest is going to bring transformational change to how freight forwarders do business in this country, on the in-bound,” Ruth Snowden said. “So if you’re an international freight forwarder and you’re doing in-bound de-consolidations, your business is going to change.”
The most significant change will be going from a paper system, in which documents are stamped by a customs officer, to a paperless system in which the documents are transmitted electronically to customers. Today, data is entered in an operating system that generates an advice note or 8000 series manifest, Snowden explained. “And you line up with that paper at customs and you get it stamped, and then you distribute it to a customs broker or an importer and the goods are cleared and delivered.” With eManifest, no paper will be required. Nor will someone have to make a trip to the customs office. “You won’t send someone to line up and get paper stamped,” Snowden said.
The third phase of the Canada Border Services Agency’s Advance Commercial Information program, “eManifest will require the electronic transmission of advance cargo and conveyance information from carriers for all highway and rail shipments,” says a posting on CBSA’s website. “In addition, the electronic transmission of advance secondary data will be required from freight forwarders and the electronic transmission of advance importer data will be required from importers or their brokers.”
It has been rolled out in phases, beginning with systems for highway carriers in 2011 and a target of July 2014 to “deploy electronic systems enabling importers to transmit advance trade data,” says CBSA. For freight forwarders the plan was to have in place systems by June 9 this year “to transmit advance house bill data to CBSA.” That “implementation milestone” was met, CBSA senior media spokesperson Emse Bailey said in an email message. It means that freight forwarders can now “transmit advance house bill data on consolidated commercial goods coming into Canada.” Compliance is voluntary until mandatory regulations come into effect. That is expected to happen in 2014.
To help freight forwarders prepare for eManifest, CIFFA has conducted a series of strategic business planning workshops, including two that sold out in Toronto. More workshops are planned for this fall. They include one tentatively scheduled for Halifax on Sept. 13, and confirmed dates in Toronto on Nov. 13, and Montreal on Nov. 21. The locations of the fall workshops have yet to be announced. Cost for each workshop is $190 for CIFFA members and $240 for non-members. Check the CIFFA website, ciffa.com, for updates.
“That’s what we do when these new programs come in,” Ms. Snowden said. “We take it upon ourselves to develop the training that the industry needs so that they can implement it, and get the benefit from it.” Nevertheless, CIFFA still has several concerns about eManifest that it has expressed to CBSA. Among those is the prospect that eManifest will require a freight forwarder to provide security data about an air shipment that is consigned from a foreign country to a freight forwarder without the freight forwarder’s knowledge. “Customs has been working on a premise that the eManifest for air freight will be on a prior-to-arrival basis as opposed to a pre-load basis,” Ms. Snowden said. “That means that cargo could be loaded on board an aircraft at a foreign airport and come to Canada without having the security data filed.” CIFFA is worried that such a situation unfairly exposes freight forwarders to expensive penalties and that it also creates a security gap. The association outlined those and other concerns in two letters this May to Bruna Rados, CBSA’s Director General.
“To allow cargo to be loaded onboard an aircraft bound for Canada without the freight forwarder or importer data available to CBSA for risk assessment does not contribute to the security of Canadians and seems counterproductive to the entire eManifest initiative,” CIFFA says. The letter also states: “It is not acceptable that a Canadian company could be held liable in this type of situation.” CIFFA is proposing “a pre-load timing requirement that prohibits an air carrier from loading cargo that does not have the freight forwarder and/or the importer eManifest data transmitted and matched.”
In an email to Ms. Rados, Canadian Sailings outlined that scenario and asked, “What is CBSA’s response to those concerns and to CIFFA’s proposed remedy?”
Ms. Esme, CBSA spokesperson, responded: “We can tell you CBSA is working closely with CIFFA to better understand these concerns and their potential impacts.” It’s not just CIFFA that is concerned about that.
“I personally don’t like the idea that freight be consigned to a freight forwarder because a freight forwarder doesn’t know what’s in that freight or container,” said Harmeet Kohli, a business professor at George Brown College who teaches classes on freight forwarding in the International Business Management Program. “It should be consigned to an actual importer or to the owner of the cargo, or the importer agent, or somebody who can bear some responsibility.” He outlined scenarios where a freight forwarder could be sanctioned under the Administrative Monetary Penalties System, or AMPS, or even be charged with attempting smuggling for problems with a shipment the freight forwarder didn’t even know was coming.
All in all, though, Mr. Kohli shared Ms. Snowden’s view that eManifest will be good for freight forwarders. “Yeah, it’s good but the thing is that all the players must understand compliance, timelines, and everything,” Mr. Kohli said. “It has teething problems but it will take time. Like (when) any new rule or act comes out, industry takes time to adjust.”
Lynn Wark, Vice-President of FedEx Trade Networks (Canada) Ltd., said the eManifest requirements for highway freight have resulted in significant changes in how goods are imported into Canada. However, his company’s IT employees are working closely with CBSA “to make sure that we are out in front of any of the regulatory changes.”
For example, FedEx Trade Networks has developed “a subscriber-access self-filing option” for eManifest that enables customer access at all times. “They can drive their own success by using some of our resources,” Mr. Wark said. So far, his company hasn’t encountered any major issues, such as with surprise third-party assignment of air cargo.
“It will be a great thing once it’s finally rolled out,” Mr. Wark said. “We support any efficiencies we can bring into the Canadian market.”
Ms. Snowden went so far as to call eManifest “wonderful” and pointed out that CIFFA has been “at the design table” working with CBSA since 2008 on refining the system.