Trucks haul over $1.1 billion worth of goods to and from the U.S.-Mexico border each day, according to the American Truckers Association. This takes more than 25,000 truck crossings both ways on the Southern border. Up north, Canada-U.S. truck crossings were at 5.9 million in 2018 (Bureau of Transportation Statistics), with up to 10,000 truck crossings each day at the Ambassador Bridge, the busiest crossing on the Northern border. Despite challenges, it is clear that cross border trucking remains strong in 2019 with the rapid rise of e-commerce.
Participants in cross-border trade include importers and exporters, customs brokers, authorized agents, carriers, and logistics providers. Many businesses take part in cross border trade to gain access to a bigger market, take advantage of fluctuating currencies and acquire new products. e-Commerce has also given customers better access to products and services outside their home countries, leading to a spike in demand for highway transport.
e-Commerce and Cross Border Trucking
The e-commerce boom in the U.S. has raised scrutiny of inbound parcel shipments and enforcement of existing data requirements. On January 1, Customs and Border Protection (CBP) enforced the requirement for highway carriers to submit advance electronic manifests for Section 321 shipments or goods valued at $800 or less. Section 321 shipments are considered an informal entry and can enter the country duty and tax free. The de minimis value of Section 321 shipments was raised from $200 to $800 in 2016 to make e-commerce shipment processing faster and less expensive for the government and trade participants.
More requirements mean higher risk of fines and penalties for truckers, however. Most trucking companies in the southern U.S. border rely on customs brokers to file eManifests. It is the responsibility of the carrier or their authorized agent (broker) to file the eManifest, and truckers also take the hit if they fail to comply with requirements. Fines can range from $5,000 for the first offense and up to $10,000 for subsequent violations.
Smaller operators can lose a week’s income or more for noncompliance, which can lead them to abandon cross border trade altogether. This can lead to less trucks available and more costly transport for importers, especially since the majority of Mexico to U.S. freight are in the border commercial zone.
In 2018, the huge demand for trucks to transport consumer goods strained the workforce and enforcement of the electronic logging device (ELD) rule limited the number of available trucks on the road. Retailers and logistics companies addressed the problem of driver shortage by hiring temporary workers during the holidays and other busy times.
Despite these issues, cross border trade continues between the U.S., Canada and Mexico. Industry analysts expect capacity to stay tight with economic growth, with freight volume estimated to increase 2.3 percent from 2019 to 2024. The American Trucking Association (ATA) CEO is focusing on the training of younger drivers in hopes of increasing the workforce and meeting growing demand. The ATA is also studying new methods to boost productivity and safety through technology while working to offset tariffs and regulations.
U.S. Cross Border Trucking: Requirements for Highway Carriers
For many years, U.S. Customs and Border Protection (CBP) in cooperation with other government agencies has enforced regulations for commercial highway carriers entering the country. The Department of Homeland Security has also published guidelines for commercial motor vehicles and drivers engaged in cross-border traffic in order to maintain border security while facilitating legal cross-border trade.
The guidelines are intended for the law enforcement community, but truck operators can also benefit from information on laws about commercial licenses, driver safety requirements and other topics. Fleet operators and drivers who fail to comply or provide required documentation may be in violation of the North American Free Trade Agreement (NAFTA) and other U.S. laws.
Low value shipments transported by highway carries do not require a formal entry, but are required to be manifested. High value shipments need the usual formal entry and accounting documentation by the broker as well as the carrier’s eManifest filing. All electronic data must be submitted to CBP via the Automated Commercial Environment (ACE), the primary system through which the government and trading community exchange information. ACE allows shipment data from traders to be shared easily with partner government agencies, reducing time-consuming and labor-intensive paperwork.
Digitization also helps improve data accuracy, transparency and accountability. For CBP officials, a central electronic data platform is a better way to target high-risk shipments and protect citizens from threats. Canada mirrors this customs process with their Advance Commercial Information (ACI) system for eManifests and electronic entry/entry summary processing.
The electronic manifest contains information about the cargo, conveyance and crew. It is the responsibility of the carrier (or their authorized agent/broker as is the case for many operators on the Southern U.S. border) to file the eManifest to Customs and pay fines due to violations or noncompliance.
The eManifest must be submitted in advance of the truck’s arrival, at least an hour for regular carriers or half an hour for carriers participating in a program like Fast and Secure Trade (FAST). This allows border agents to evaluate the cargo and determine admissibility. Most trucks cross the border at the primary lane without incident, but some may be directed to secondary processing if the paperwork is missing or incomplete or the shipment is regulated or high risk.
Everyone is aware of the cost of noncompliance and what it can do to the bottom line, especially for smaller truck operators. The mandatory use of electronic systems has forced many businesses to retire legacy systems and adopt new technology for connectivity, information exchange and compliance. Some have invested in in-house software development while others chose to work with an IT services provider to meet requirements.
GeTS Cross Border Trucking Solutions
Global eTrade Services (GeTS) provides advanced comprehensive solutions to help cross border highway carriers and fleet operators facilitate trade while optimizing compliance.
GeTS is a CBP-approved IT provider offering ACE Highway to streamline eManifest and electronic document submission to CBP. ACE Highway is available in English and Spanish, and low value shipments (Section 321) can be uploaded quickly into the portal. For subscribers who have activated both the ACE and ACI modules, the eManifest Conversion Tool is available for creating a mirrored eManifest for the return journey.
ACI Highway is the Canadian counterpart of ACE Highway. ACI Highway is an industry-leading eManifest filing solution that helps carriers meet CBSA requirements quickly and easily. ACI Highway is web-based and features unlimited data storage, template creation, bulk filing, and real-time notification alerts via mobile app, email and SMS.
Release Notification System
While not a strict requirement for highway carriers, the RNS tool is recommended to verify whether Customs has cleared the shipment before arriving in Canada. GeTS RNS WACM solution gives carriers a complete overview of activity based on their carrier code. It also combines the functionality of shipment status updates, arrivals, notices and Manifest Forwards. The application supports CSV upload feature and email or SMS alerts.
To learn more, visit our cross border trucking solutions page or contact us today.
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Contact GeTS today for more information on cross border trucking solutions!
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Global eTrade Services, Inc.(U.S.)
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