Taking a lesson from supermarkets

  • March 26, 2014
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My grandparents used to tell me about an earlier time when preparing for a meal involved visits to several shops to assemble the necessary ingredients. While the dairy delivered milk and butter to one’s door, meats were purchased at a butcher shop and produce was sold at a stand or small neighborhood place where the owner knew your name.

The second half of the last century saw the rise of the supermarket, where all of the necessary food items for dinner were found under one large roof. In fact, a whole week’s worth of groceries and other products including milk and aspirin were available without ever having to shop anywhere else. While many of the more successful chains have sought to bring back some of the old feel of visiting specialty stores within their confines, it is clear that Americans have no intention of ever giving up the enormous convenience of single-source, one-stop grocery shopping.

But as supermarkets have expedited the process of food shopping in the U.S., our process of exporting and importing goods continues to be laborious and time-consuming. While technology has enabled faster grocery checkout (can you imagine anyone putting up with a supermarket that rings up groceries the old fashioned way?), businesses trying to move goods across our borders are forced to rely on a crude paper-based system of submitting data to multiple agencies via lengthy forms and through various channels. Given the days it can take just to do the paperwork on a single shipment, it’s no wonder that the U.S. is often considered a less desirable trading partner.

Recently, as President Obama flew across the country aboard Air Force One, he signed an executive order on streamlining the export and import process for America’s business. The order will reduce processing and approval times from days to minutes for businesses that export American-made goods and services by establishing December 2016 as the deadline for completing the International Trade Data System (ITDS). ITDS will allow businesses to electronically transmit, through a “single window,” the data required by the U.S. government to import or export cargo. This new electronic system promises to speed up the shipment of American-made goods to overseas destinations by eliminating often duplicative and burdensome paperwork.

Once fully implemented, the ITDS will dramatically reduce the time and expense for business to move the more than 50 million containers and US$3.8 trillion (2.7 trillion euros) worth of goods that cross American borders each year, according to the White House.

The most positive aspect of the executive order is that it establishes a deadline for completion, requiring relevant agencies to transition from paper-based to electronic data collection by a certain time. And unlike other government-funded portals (think HealthCare.gov), the development of ITDS calls for enhanced transparency by requiring public posting of its implementation plans and schedules. It also requires the government to seek advice and counsel from non-government stakeholders to determine the most efficient business processes in determining border management improvement. The Airforwarders Association participates on the Commercial Operations Advisory Committee, a primary stakeholder group in consultation to Customs and Border Protection (CBP) that has made numerous recommendations concerning this program.

The ITDS project was originally documented in 1993 and its backbone, the Automated Commercial Environment (ACE) portal has been under development for almost 14 years and has faced many development hurdles, delays and funding challenges. ACE would replace the old Automated Commercial System with its limited functionality and high maintenance costs. While the web-based ACE portal has seen significant development progress, some of its uses have been limited because software for retrieving data has not yet been perfected, or in some cases it has capacity limitations or is simply not useful to participating agencies.

Despite government funding challenges, CBP is pushing forward with plans for the full development of core trade processing capabilities in ACE. The agency has set October 2016 as the start date for the use of ACE and the departure from the present system. But with 48 federal agencies participating in ITDS, each varies in states of readiness with some fully prepared and others not. Clearly there is work to be done for these agencies to meet the presidential mandate.

The 2006 SAFE Port Act obliges that ITDS data requirements be compatible with the commitments of the U.S. as a member of the World Customs Organization and the World Trade Organization for the entry and movement of cargo. Aside from reducing costs for traders and leveraging advanced trade data, perhaps the biggest benefit is that ITDS can use international messaging standards to enhance security by stopping risky shipments from reaching our shores, effectively extending the security perimeter of U.S. border enforcement. Shared data with other countries helps Obama employ technology to not only expedite trade but to carry out the most crucial congressional mandate to keep our nation safe.

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