U.S. OEMs Face Big Fines With Canadian eManifest Enforcement

On Monday, January 11, 2016, the Canada Boarder Services Agency (CBSA) will begin to levy fines on truckers who fail to adhere to the requirements of its eManifest.

Currently, motor carriers represent a lot of goods being transported between the U.S. and Canada. In 2014, motor carriers transported 53.8%, or approximately $354.1 billion of the $658.2 billion in cargo, to and from Canada, with an additional 15.8% carried by rail, according to the U.S. Department of Transportation (USDOT), which compiles statistics on transport into and out of Canada. 

Source: Descartes

Source: Descartes

These guidelines, which apply to all carriers, freight forwarders, and importers, require the submission of pre-arrival data on the shipper, recipient, and type of goods so that the government agency can perform risk assessment. The new rules promise to change cross-board logistics in a number of ways:

  • Demand for electronic filing –The eManifest program generally calls for the transmission of required data elements to the CBSA by electronic methods.
  • Call for advance data – Information must be submitted within a specified timeframe, depending on the mode of transport (ocean, rail, air, or highway).

    Source: Descartes

    Source: Descartes

  • Streamlining transaction and filing options – In order to streamline the transition and ensure that goods are not delayed at the border, there are a number of filing options help to ensure compliance for all supply chain participants.

Although the standards were finalized last spring, compliance is mandatory next week. “Monday is the date when penalties will start hurting carriers’ pocket book,” Glenn Palanacki, product manager for North American Customs at Descartes Systems Group, told EBN in an interview. “We will no longer have the days of just showing up at the border with a truck.”

Penalties are scaled based on type, severity, and number of infractions.  “Immediate costs can range from $250 to 10,000,” Palanacki added.

Palanacki outlined the top 5 things electronics OEMs and their carriers need to understand about the Canadian eManifest:

  1. Educate – Ensuring that drivers are knowledgeable on eManifest procedures and why it matters has been challenging. Leading carriers are providing information to drivers that note that eManifest is enforceable at all commercial ports across the country. They are reminding operators that the regulation has a direct impact on drivers since it could lead to delays that may affect performance. Carriers are also ensuring that drivers know that an advance, electronic filing is temporarily not required for empty loads or in-transit shipments, but that this will change in the future.
  2. Partner – Many carriers know that on boarding with a technology provider that has solid industry knowledge is required to avoid fines and delays. Some eManifest scenarios are still being refined as the regulation matures. As a result, carriers need to rely on the knowledge of leading technology providers to help minimize potential penalties and assist with recordkeeping requirements.
  3. Enroll – Carriers must register with the CBSA to receive a carrier portal account. Enrolling is easy, but carriers still have many questions.  In addition, carriers will require a carrier code as well as a CBSA 'Shared Secret'.  Portions of these first two steps involve manual paperwork that is mailed via the postal service. Starting the process now, or providing additional information that was requested, cannot be delayed.
  4. Establish procedures – What to do and how to do it should not be determined as the one-hour filing window approaches.  Technology can be an 'experience aggregator' that incorporates the knowledge and shipment scenarios of others in a centralized framework.  In addition, traditional flow-charts, phone/text/email trees can be invaluable and can improve communication. Process manuals should include multiple driver types such as a chapter for Customs Self Assessment (CSA)-registered drivers. However, it is important that the information is provided in a digital, mobile-ready format.
  5. Optimize – Carriers can achieve excellence by looking beyond a regulatory imperative toward long-term success. They know that data is valuable. Reusing information by streaming it into other systems can help improve overall efficiency, maximize productivity and lead to an enduring competitive advantage as well as increase compliance rates. 

How well these new regulations will address security and safety remains to be seen. “The U.S. and Canada both are sometimes quiet about what they've been [assessing as risky] or about new threats from new areas of the world,” said Palanacki. “They don't publish too many statistics but they've had some positive feedback and some no loads (where trucks have been turned back). Of course, there are also nay sayers who look at the cost of these initiatives and question whether we have achieved transparency and whether it's worth the extra added cost to the supply chain.”

Let us know what you think about these new regulations in the comments section below.

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