Industry Pressure Mounts for Delay of Nov. 1 ACE Deadline

Industry pressure is growing for CBP to soften its deadline for Automated Commercial Environment entry summary and cargo release, as concerns grow over the readiness of the trade community for Nov. 1. On the heels of a letter from Trade Support Network leadership asking CBP to delay ACE requirements for some capabilities, other industry groups, including the Advisory Committee on Commercial Operations (COAC), are considering their own courses of action, with some already coming out in favor of a delay.

Hatched at its recent conference at the end of June, the TSN letter requested that CBP require use of ACE only for capabilities that have been in production and testing for six months (see 1506300016). It cited recent statistics from CBP that show just 5 percent of cargo releases are processed via ACE (here), noting that successful implementation would require not only bringing that number up to 100 percent, but also extensive testing, training and the development of new policies and procedures.

The COAC will “likely” make its own recommendation on the ACE deadline at a meeting scheduled for July 29, said COAC co-chair Julie Ann Parks. At its most recent meeting in April, the COAC recommended CBP consider a delay if “periodic assessments” by CBP reveal a lack of trade readiness (see 1504240022). The new recommendation will be “slightly different” from the position advocated by the TSN, and should be out by around July 22, said Mark Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders Association.

The changes requested by Trade Support Network leadership would mark a major shift in CBP’s plan to shut off the Automated Commercial System on Nov. 1. Under the TSN's suggested approach, CBP would require filing in ACE only for entry types and partner government agency requirements that have been available for the six month period, said Elizabeth Connell, vice president-product management at Integration Point, a software developer. But ACS would remain online as a “fallback” for entry types and PGA requirements that have not undergone adequate testing, she said. The a plan would be to “use Nov. 1 as a guideline,” but “not shut down ACS until we’ve had six months to work out kinks,” said Connell. CBP was unable to immediately comment.

That approach would be similar to CBP’s successful rollout of ACE ocean and rail manifest in September 2012, where the trade community had six to eight months of live filing before the legacy system was shut off and filing in ACE was required (see 12100212), said Connell. That gave CBP the ability to take software developers and service providers over to ACE in a “transitional mode,” allowing some developers to lead the way but giving everyone else a slow transition so CBP could “support everybody as they made the jump,” she said. “It would balance resources much better.”

The rocky deployment of ACE air manifest, on the other hand, has been a cause for concern. Partially delayed by CBP from its original May 1 deadline due to a lack of testing by industry (see 1504300015), issues nonetheless caused some members of the L.A. broker association to lose “tens of thousands of dollars in storage” for delays caused by customs processing issues that were not their fault, said Hirzel. The L.A. association does not have an official position on the approach advocated by the TSN, he said. The National Customs Brokers & Forwarders Association of America did not respond to a request for comment on whether it is in favor of a delay.

Despite the problems it caused, the air manifest transition was representative of any major IT rollout in any industry, said Mike Mullen, executive director of the Express Association of America. “No matter how brilliant your programmers are, you’re never going to know exactly how a new system is going to work, and what the issues are with it, until you put it out there into the operational production environment, and you start trying to make it work in the real world,” said Mullen.

Difficulties with air manifest could be dwarfed on Nov. 1 by the magnitude of issues brought on by the cargo release transition. “Customs worked hard to resolve those problems, but that was just one module,” said Gary Ryan, president of Airport Brokers Corp. and vice president of the Customs Brokers & International Freight Forwarders Association of Washington State. “Here we’re talking way more customs entries, way more inputs,” and “way more reports” moving from ACS to ACE, he said, adding that the Washington State broker association is in favor of the TSN letter asking for additional time.

Indeed, many issues are already surfacing due to the short turnaround between when CBP and the PGAs are making their requirements available, and when ACS will be turned off on Nov. 1, said Ryan. Larger brokers that have their own operational software are “running into problems” with making the required changes, and “don’t think they’ll have everything set and ready to go by Nov. 1.” Smaller and medium-sized brokers that buy complete entry packages from software vendors are seeing those vendors struggle with constant changes to CBP and PGA requirements as beta testing continues. Some brokers are faced with the difficult choice of whether to switch software vendors if they think their current one won’t be ready in time, said Ryan. And many others are contending with the difficult situation of having to find a new ABI vendor after their old developer decided not to program for ACE, he said.

The unique situation faced by the express industry has prompted the EAA to come out in favor of an outright delay of the Nov. 1 deadline until sometime in early 2016, said Mullen. CBP’s current plans would see the transition take place at “the peak of the express industry shipping season,” he said. The volume of shipments handled by express carriers from Nov. 1 through mid-December is roughly double normal volumes, he said. “That makes it particularly difficult to make what’s going to be a pretty fundamental change in the way industry submits entries to the government around that time,” said Mullen.

A key indicator of ACE readiness across industry and government will be the upcoming pilots of PGA message sets scheduled to begin in July and August, said Mullen. “If these pilots go incredibly well and everything works perfectly, we’d still favor a shift to about Feb. 1, but then you could be even more comfortable with that date,” he said. “I think these pilot projects are going to tell us a lot, and by Sept. 1 we’re going to be in a better position to know what’s feasible by November.”

Should adjustments be required, CBP needs to be careful not take its foot off the pedal too early, say some. Ryan of the Washington State broker association worries that software developers could slow their work on ACE if CBP delays its implementation date or announces a grace period. “In one way we kind of like to have the deadline so that we all have the software package available to use and start testing,” he said.

A lack of incentive could also slow the work of the PGAs in developing their ACE requirements, said Mullen. “The big reason why you don’t want the government to back off the Nov. 1 date, at least not too soon, is that it’s an action-forcing event for the other government agencies, and that’s a necessary thing to have in place,” he said. “You have to give people something or they have nothing to work toward,” said Mullen. “But I think it’s also important to have a contingency plan if it starts to look like that deadline might be challenging.”