COMPUTERS PROVE TO BE BOON, NOT BANE FOR CUSTOMS BROKERS

COMPUTERS PROVE TO BE BOON, NOT BANE FOR CUSTOMS BROKERS

Customs brokers saw signs of oncoming doom when the U.S. Customs Service began pushing for full-scale automation of international trade.

Instead, they have found increased profits and powerful tools that have enabled them to do battle successfully with larger competitors.Customs brokers traditionally have used computers for such financial tasks as accounts receivable, accounts payable and payroll preparation. Only in the last decade, however, have inexpensive hardware and software allowed even the smallest broker to computerize the heart of his operation.

For Paul C. Wegener, president of M.G. Maher & Co. of New Orleans and newly-elected president of the National Customs Brokers & Forwarders Association of America (NCBFAA), the importance of computers is easily defined.

Brokers will have to automate, innovate or evaporate, Mr. Wegener warned. His association plans to encourage our members strongly to start to use computers and EDI, he said.

Since 1979, NCBFAA has done a substantial amount of work on the U.S. Customs Service Automated Broker Interface (ABI), which allows brokers to transmit import entry data directly to customs by computer, he noted.

The NCBFAA formed a committee in 1979 to study how brokers most effectively could use the system. In 1981, brokers in Baltimore began conducting what Mr. Wegener characterized as very crude field tests. By 1984, brokers started transmitting live data between their computers and Customs Service computers in Virginia.

Five years ago when I became chairman of the NCBFAA's computer committee we were shooting for a goal of 50 percent of all customs transactions by computer in 1987. We finally made it by last December when more than half of all transactions were being performed in the ABI mode, going through the computer interface in the release of cargo. Our goal is to get at least 90 percent of all Customs transactions on the ABI by the end of 1988.

The pace is stepping up. Currently, as many as 15 to 20 new brokers a week are joining the system, Mr. Wegener said.

Brokers are signing up more rapidly now because the early signers - C.J. Tower, John V. Carr & Sons, F.W. Meyers & Co. - got large leads in multinational business, he said.

Although the 300 brokers now using ABI represent approximately 52 percent of total transactions, an additional 600 brokers will have to go online to reach the association's goal of having 90 percent of transactions conducted through ABI by the end of the year.

Many brokers feared ABI spelled their doom when the system was first proposed by the customs service, industry experts said. They feared that a high degree of automation in processing paperwork would make them expendable.

Such fears have been groundless. While there were approximately 990 licensed customs house brokers in 1980, the number now stands at 1,300.

Instead of replacing them, computerized systems have made the brokers more efficient and, therefore, more profitable, Mr. Wegener said. Small, inefficient brokers are not being put out of business anymore because now they're able to compete with the big guys.

While computerization has increased significantly the speed and efficiency of processing and transmitting documents, inputting the data manually is still considered a bottleneck by brokers. As a result, many see the use of inputting devices such as bar code scanners growing geometrically in the next three to five years.

Leonard M. Shayne, president of Leading Forwarders Inc., headquartered in New York, says that bar coding theory still lags behind Customs Service practice.

Although customs made a big push to have bar coding implemented by brokers in the sense of putting labels with the codes on the documents so that they could be read by customs people using the wands, in most areas, customs never has installed the bar code-reading apparatus.

He adds, however, that bar coding is in common use along the Canadian border. According to Mr. Shayne, shippers in Canada are routinely using bar coding, allowing U.S. Customs officials at the border to scan it.

Since they don't have to input the data, they don't make input mistakes which is always a possibility when you type it in, Mr. Shayne said.