In transportation, the role of the freight forwarder is to ensure that internationally traded goods move from point of origin to point of destination — and arrive at the right place, at the right time, in good condition and at the most economic cost. On November 7, 2016, as part of the eManifest initiative, it became mandatory for freight forwarders to use the electronic house bill (eHBL) to submit supplementary cargo and conveyance data to the Canada Border Service Agency (CBSA) for goods being imported to or transitioning through Canada. By simplifying current complex and multi-layered inbound paper processes, the eHBL shifts the community toward the paperless movement of goods and helps freight forwarders better support the smooth flow of international trade.

Transmitting Shipment Details Goes Digital

eManifest is the third phase of the Canada Border Services Agency’s (CBSA) larger Advance Commercial Information (ACI) program. Designed to balance security with international trade, the program requires the electronic transmission of the who, what, when and where of a shipment to the CBSA for validation within a specific timeframe, which varies depending on the mode of transport.

The first phase of the ACI program began in 2004 with ocean carriers; the second phase began in 2006 with air; and the third phase — eManifest — began in 2010 with highway and rail and has been in full effect since January 11, 2016. The focus has now turned to freight forwarders who coordinate the shipment of goods (via air, ocean, rail and/or highway) from one place to another using one or multiple carriers. When fully implemented, eManifest will also require importers to electronically transmit data to the CBSA.

Compliance for Freight Forwarders Moves Ahead

The phased deployment of eManifest reflects the evolution of the regulation by mode of transport and by party. Key dates for freight forwarders include:

  • November 7, 2016 to January 10, 2017: Freight forwarders are in a transition period during which penalties for non-compliance will not be issued by the CBSA.
  • January 11, 2017 to July 11, 2017: Freight forwarders deemed to be non-compliant will be issued zero-rated (i.e., non-monetary) penalties under the CBSA’s Administrative Monetary Penalty System (AMPS).
  • July 12, 2017 and onward: Financial AMPS penalties will apply to non-compliance.

Freight forwarders can submit eHBL data using Electronic Data Interchange (Edi) or the CBSA's eManifest Portal.

Enabling Added Communication Between Parties

As part of eManifest, the CBSA has launched deconsolidation notices, or D-Notices, to enhance the reporting mechanism and communications between shipment parties. Carriers, freight forwarders, customs brokers, and warehouse operators will be able to view shipment milestones for a particular movement if they are a party on the manifest using ‘Completeness Notices’, ‘Arrival Notices’ and ‘Status Notices’. This new mechanism of two-way communication will eventually replace the Release Notification System (RNS) platform.

Assessing Shipment Risks

While the CBSA does not publish an exhaustive list of the exact criteria used for risk assessment, a shipment may be selected for further inspection if, for example, it:

  • Contains a 4-digit dangerous goods code
  • Is missing mandatory or conditional information
  • Includes cargo details that are not adequately descriptive
  • Lists a Harmonized System (HS) code(s) for a regulated product (e.g., types of pharmaceuticals)
  • Includes multiple cargo or conveyance amendments
  • Is an unusually high or low weight for the cargo listed

With the eBHL, this type of information is provided in advance of shipments arriving at the border, so the government can better prepare and flag potential risks.

Penalties for Non-Compliance

The CBSA will assess penalties based on the type, severity, and frequency of the infraction. Freight forwarders may face penalties for:

  • Providing information that is incomplete, inaccurate, or false
  • Failing to send the required information within designated, mode-specific timeframes
  • Failing to notify the CBSA when data has changed

While a first offense could range from a warning to hundreds of dollars, repeat offenses could mean fines in the thousands of dollars and up to $10K. In addition, several penalties may be issued per shipment if multiple trade partners have failed to comply with their respective requirements.

While the supply chain industry is accustomed to regulatory change, eManifest is particularly complex with respect to surface transportation — a large volume of which is handled by freight forwarders. Prior to introducing eManifest, the CBSA had not defined the freight forwarder as a formal trade participant; however, forwarders represent millions of shipments annually and are a vital partner in the new electronic reporting environment.

Glenn Palanacki is Product Manager, North American Customs at Descartes. Over the past 12 years, Glenn has been involved in software development in global supply chain solutions, and has grown to become the Product Manager for an Enterprise Resource Planning (ERP) customs compliance application. For more information on the topic discussed in this article, read the blog post “The CBSA eManifest Initiative for Forwarders, D-Notices & More” or visit Descartes’ eManifest Resource Centre.