CBP Focusing on New Tech, Oversight of Online Marketplaces as E-Commerce Boom Continues, McAleenan Says

ATLANTA -- CBP is focused on the related goals of deploying new technologies and catching up with the massive growth in e-commerce as it moves toward the end of the decade, CBP Commissioner Kevin McAleenan said in opening remarks at the agency’s 2018 Trade Symposium Aug. 14. Beyond helping CBP confront the “seismic shift” in the supply chain over the past several years, new technologies will soon also smooth trade across land borders and improve the agency’s targeting efforts, McAleenan said.

With technologies like radio-frequency identification, facial recognition and multi-energy portals, “why can’t we just have [trucks] drive right through the World Trade Bridge in Laredo,” McAleenan said. “We’re going to be testing that,” he said. Improvements in X-ray technology can be put in CBP’s express consignment and mail facilities to improve detection of synthetic opioids. Advanced analytics capabilities and artificial intelligence will help CBP improve its models for identifying risk.

CBP can make “dramatic strides,” McAleenan said. “The technology is there; it’s about accessing it and delivering it within a concept of operations that works for us.” The trade community may see progress in the land border environment “very quickly,” and the technology and the “challenge we are going to present to industry on securing small parcels” is “going to bear fruit in the next fiscal year,” he said.

The push comes amid growth in e-commerce “that looks more like a rocket taking off than a plane,” McAleenan said. Small parcel shipments doubled between 2016 and 2017, and CBP doesn’t see the trend abating “in any way.” CBP also needs new legal and regulatory authorities and partnerships so it can oversee new parties in the supply chain -- e-marketplaces like Amazon and warehousing operations for third-party sellers -- as well as existing entities the agency hasn’t ever regulated like foreign shippers and manufacturers.

Blockchain “may also be part of the answer,” giving CBP the ability to determine product origin and whether the product came from a trusted supplier, supply chain and e-marketplace, McAleenan said. But some work will be required first before the data is usable. Currently, companies are looking at the technology from the perspective of “their ecosystem for their business model,” so one may use blockchain to ensure its provenance from the beginning of the supply chain while another may use it to add data that can ride along the blockchain and share more information about a shipment.

Working with CBP, the Department of Homeland Security’s Science and Technology Directorate is looking at setting an interoperability standard so CBP will be able to use the blockchain data. The interoperability problem is similar to that faced by CBP in the past when it sought to require passenger data from a multitude of different air carriers, with the agency seeking to “understand that data in a consistent way so our targeting system can handle it [and] so we can use it,” McAleenan said. As industry starts to adopt blockchain more broadly, the ability to understand “what they mean and apply data in our decision-making is going to require that interoperability standard.”

Meanwhile, CBP is making progress in another priority area: maintaining a “world class human capital pipeline” with new hires, McAleenan said. The agency has had success on Capitol Hill in making the case that investment in CBP personnel brings economic benefits: each additional CBP officer brings 33 new jobs, according to the agency’s calculations. This year, CBP is going to meet its goal for hiring 328 CBP officers, and next year is going to beat its goal of 375. CBP wants to get agricultural and trade specialists “on board as well” so hiring progresses as smoothly as it has for CBP officers, he said.