CUSTOMS BROKERS MUST PROJECT FUTURE ROLE, IMPACT OF EDI

CUSTOMS BROKERS MUST PROJECT FUTURE ROLE, IMPACT OF EDI

Accepting automation as an inevitable force is only the first step on the customs brokers and freight forwarders industry's road to the future.

Now the industry needs to project what that future will be, so it can figure out potential spending and personnel needs.Playing a key role in this activity is the National Customs Brokers & Forwarders Association of America (NCBFAA).

Richard Gardenier, president of M.E. Dey & Co. and current chairman of the NCBFAA's Computer Committee, says that the committee's next challenge is to investigate the role electronic data interchange plays and how it applies to the industry.

Part of the problem is with definitions. Many companies have computer- based communication systems. Experts call this edi, using lower case letters.

These systems are not standardized. Designed for a single business or other industry, they cannot reach across boundaries, as true EDI can. Standardized EDI is usually referred to in upper case letters.

Using EDI, edi systems can be made to communicate outside of their boundaries, experts in the technology said.

Finding out which systems are out there and how they work will take a lot of time and energy, Mr. Gardenier predicted.

That's what we just started on, and based upon the little investigation that I've been able to do, it's a giant problem. Everybody's got an edi system and they're specific to either the company or the industry. There isn't any one standard used throughout the United States that we can say let's shoot for this and get all the brokers on it.

EDI's computer-to-computer communication uses strictly standardized electronic versions of common business documents. One difficulty the brokerage/forwarding industry faces is that few electronic documents have been created that fit its needs.

Electronic documents are created by business committees composed of members of the industries that will be using them. Leading the committees is the American National Standards Institute's X12 group.

Mr. Gardenier noted that while ANSI X12 seems on its way to becoming a de facto national EDI standard, it doesn't support most of the forms that brokers and forwarders require.

Adding yet another acronym to the alphabet soup of automation nomenclature is the Port of New York and New Jersey's ACES (Automated Cargo Expediting System), which will provide standardized data protocols for both the intra- modal and intermodal movement of freight within the Port of New York.

EDI-standard messages and communications will be at the core of ACES, Port Authority officials say.

The Port Authority plans to award a contract for the creation and operation of the system to a vendor early in June. This will be followed by a period of testing and debugging prior to signing up users.

We have designed a port-wide system that initially will link steamship lines, terminal operators, and customs house brokers. In a later phase, after we have the system up and running, it will be extended to railroad and motor carriers, says Frank Caggiano, assistant director of the bi-state agency's Port Department.

But right now, the initial system that will be out this year will be concentrating on brokers. The ACES system will not interface with the U.S. Customs Service ABI system that the Port Authority feels is operating successfully on its own.

Many observers feel that the U.S. Customs Service should take a more active role in promulgating standards and protocols used for the formatting and transmission of data within the customs broker industry.

But Richard Bonner, special assistant to the director of automated commercial systems with U.S. Customs says that although customs works closely with individual carriers, carrier associations and with both local and national brokers' associations, You have to realize that in this country, the government does not try to dictate as much as in other countries.

In England, New Zealand, and Korea, for example, the government has its own customs system and the brokers go on line with that system and actually prepare their entries on it. We couldn't possibly do that because of our size.

Customs has begun to change tack, however. Recently it decided not only to back the globally oriented EDI For Administration, Commerce, and Trade standard, but to actually work on creating electronic documents designed for the format.

True EDI does not demand that users abandon existing computer systems. EDI can be added to existing computer systems for sums that can dip under $1,000.

This has been an important concern for Customs, which wanted to avoid alienating the companies it worked with.

Many brokers have developed automated systems for preparing entries at least a decade ago, Mr. Bonner said. Customs wanted to permit them to maintain the integrity of their systems.

All we did under ABI was put on top of that a requirement that when they send the data to us, they put it in a prescribed format. And when we send the data back to them we tell them it will come back in a prescribed format. But within their own systems they don't have to change anything.

So really ABI is a formatting and transmitting of entry data back and forth between brokers and importers and Customs. It is not an entry preparation system by any means. First of all, Customs does not prepare entries, only brokers and importers prepare entries. We only check the data.

Brokers and fowarders have said this is a gross oversimplification that vastly understates the impact of computerization.

New systems demand new behavior, business strategies, and capitol

investments, they said. At times it seems as if Customs has been insulated

from the reality of the business marketplace in making its decisions, they said.

In addition, although Customs may have said participation in ABI is voluntary, brokers who do not use the system are put at such a disadvantage they face a choice of participating or going out of business.