Participation in CBP's Type 86 Pilot Growing Exponentially Weeks After Launch, Agency Officials Say

RANCHO MIRAGE, Calif. -- CBP is seeing exponential growth in filing under its entry Type 86 pilot for de minimis shipments, spurred by the benefit of electronic release for the traditional air mode, said Jim Swanson, CBP director-cargo and security controls. And while the bulk of filing has been in the air environment, Swanson expects to see participation in the ocean and truck modes to rise as well once filers see they are able to clear cargo more quickly, he said at the Western Cargo Conference on Oct. 11.

Just 13 days into the pilot test, which began Sept. 28, CBP had more than 10,000 submissions using the new entry type, said John Leonard, CBP executive director-trade policy and programs. CBP was “really excited on the first day of the pilot, when there were six submissions,” but the next day CBP had 106 and the number of filings has “almost doubled” each day, Swanson said.

Prior to launch, CBP deployed additional, dedicated servers for Type 86 entries so that it could keep up with the increased volume, said Debbie Carriero, acting director of CBP’s cargo control and release division. Those dedicated servers mean that any slowdown as a result of Type 86 filings will not affect regular entry transactions, and any issues from the pilot won’t take down the whole system. There are “specific queues” for Type 86, so if there is a problem, we can shut off the queues and not affect regular transactions,” Carriero said.

The distribution of Type 86 entries has generally been around 65 percent or 70 percent products with partner government agency (PGA) requirements, and 30 percent to 35 percent non-PGA entries, Swanson said. “People are using it in the way we intended it.”

Most entries have been in the traditional air mode, with filers taking advantage of new electronic release capabilities for de minimis shipments that were previously available only to air express filers, Swanson said. While previously air filers had to generate spreadsheets of the house bills of lading in a shipment and deliver them to the ports, then wait days until CBP gets the chance to look at it, Type 86 air filers are now seeing their entries released without being held in sight. CBP has only had a “few ocean and a few truck, but we expect to see more when people see they are able to clear cargo quickly,” he said.

But before that happens, CBP needs to clear up some ambiguity around power of attorney and importer security filing (ISF) requirements for brokers filing Type 86, said Vince Iacopella of Alba Wheels Up. With “exponentially more consignees” in the ocean mode, it’s not workable to get powers of attorney from each buyer. Nor is it to get importer security filings at the lowest level, he said.

CBP may need to clarify power of attorney requirements for Type 86 entries, CBP’s Leonard acknowledged. For now, CBP’s intent is to include the nominal consignee under the definition for consignee in CBP’s Federal Register notice that announced the pilot, Swanson said. E-commerce customers are “your grandmother, your niece,” and CBP shouldn’t put any burden on them for compliance with a power of attorney requirement, Leonard said.

As for ISF, CBP is having “additional discussions internally” to clarify ISF requirements for Type 86 transactions. Right now, the “language seems to apply that each individual shipment needs its own ISF,” but CBP is “going to continue discussions around it to get clarification,” Swanson said, adding that the pilot is “just starting up.”

And while CBP does require an importer of record number on Type 86 entries with PGA requirements, that doesn’t mean that CBP is going to be enforcing minor violations of data requirements, Swanson said. Instead, brokers have the responsibility not to make errors when filing, and CBP will be going after “parties who knowingly or improperly file false information to gain release,” Swanson said. Moving forward, CBP will be in discussions with PGAs to make sure that they really need IOR numbers on Type 86 entries of goods they regulate, and may tweak that requirement as the pilot continues, Carriero said.

Nonetheless, whether there’s any increased CBP liability for brokers acting as IOR on Type 86 shipments may be those brokers’ least concern, said Amy Magnus of A.N. Deringer. “Customs isn’t always my biggest fear,” Magnus said. “I tend sometimes to be even more afraid of the PGAs, particularly when it comes to the possibility of the broker acting as an importer of record, then discovering that the goods that we facilitated release for are something the [Food and Drug Administration] or another PGA would be very concerned about,” she said.