Shippers Use Electronic Systems For Smoother Flow of International Trade
Jul 1, 1998 12:00 PM
By the year 2000, electronic information systems will transform the way shippers and carriers conduct trade in the international marketplace. Products will be exchanged more efficiently than ever before, said speakers at the International Intermodal Expo in Dallas.
"Consumer markets are looking for real-time information," said Tom Glasgow, president of Integrated Trade Systems, Lombard, Illinois. "Adaptability and flexibility are demanded." Glasgow was moderator for a two-part session entitled "Multimodal Information Systems for the 21st Century."
One electronic system that eliminates paperwork and saves time is being developed by the federal government. It is the Automated Export System (AES), an export information gathering and processing system developed through cooperative efforts between the US Customs Service, the Bureau of the Census, and other federal agencies. AES was discussed by Gerry Horner of the US Department of Commerce.
"You should not have to leave your office to export cargo from the country or import cargo into the country," Horner said.
By automating the export process, AES eliminates several paper documents - Shippers Export Declarations (SED), bills of lading, and air and sea manifests.
"The new system saves time and money," Horner said. "SED and paper manifests are major paper burdens for shippers and carriers. Trucking carriers that cross the Mexican border must show SEDs to the US Customs Service. Air and ocean carriers also must call shippers to make sure they get the SED on time so it can be turned over to customs authorities.
"All of this takes a lot of time, and time is money. Many shipping companies are spending a lot of money on messengers to get the paperwork to the port. It's so much easier to transmit the information directly to the government."
The United States is behind other countries in setting up a workable automated export system that is universally used, he added. Other countries mandate that all export information be automated. Currently, AES is a voluntary system in the United States. Automation Means Compliance
"As new companies become automated with AES, US Customs is finding that automation means compliance," Horner said. "AES has a front-end editing function that catches errors. For example, it highlights any unknown countries to which shippers are trying to export, any unknown carriers, and missing values, quantities, and commodities."
Using AES, the shipper transmits all the SED information prior to departure, in compliance with regulations, he said. The government responds, via AES, instantaneously. If the data is error-free, the shipper is notified that the data is accepted and is provided an internal transaction number.
"If a shipper has a fatal error - for example, if the company is trying to export to Iran or Iraq without proper notification - then a rejection message is sent by the government instantaneously," Horner said. "If other non-severe errors are transmitted by the shipper, the government will send warnings telling the shipper that errors should be corrected, but will accept the information."
Once the export data is accepted, the government sends the shipper a confirmation number that is noted on statements exempting the shipper from filing SEDs and bills of lading. AES Milestones
Horner listed AES milestones. The system first was implemented in July 1995 with ocean shipping participants in five ports: Baltimore, Maryland; Houston, Texas; Charleston, South Carolina; Norfolk, Virginia; and Los Angeles/Long Beach, California. After evaluations by an independent users group representing both trade and government and by the Census Bureau, AES expanded to all vessel ports on October 1, 1996.
In 1997, AES expanded further to receive air and overland commodity data transmitted by exporters and freight forwarders.
In November 1997, AES PASS was initiated. An enhancement of the system, PASS stands for Predeparture Authorized Special Status. It allows approved exporters to file on a post-departure basis.
"Authorized AES PASS exporters simply are required to submit two data elements prior to departure - the shipper identification number and a reference number," Horner said. "The reference number is an IOU. It allows the government to account for everything that leaves the country."
AES is available to exporters now, and uses software that is year-2000 compliant - the calendar function will work after the turn of the millennium. "The Customs Service is proposing to link AES into the umbrella system for international trade, and thus will link with the import side," he said.
The first step for shippers that want to enroll in AES is to send the government a letter of intent. For more information, phone the AES Team at 202-927-0280, or write: Customs Service; 1301 Constitution Ave, NW, Room 7331; Washington DC 20229. Internet address is http://www.customs.treas.gov.
Each year millions of adults in the United States and other countries are added to the number of people already using the Internet, said Browning Rockwell, president of Trade Compass, Washington DC. Intermodal businesses also should take advantage of Internet opportunities. Correct business decisions are more critical now because the world is moving faster.
"Global competition, margin pressures, customer expectations, customer-specific delivery dates, shorter cycle and load times, more frequent shipments, and the complexity of the supply chain are all making this decision process even more critical," Rockwell said. "We have to move rapidly from the traditional business model to the Internet model."
The Internet will be the strongest link in the supply chain, he said. It is an essential tool in the ongoing battle between competing companies to accomplish quicker order cycle times. In 1994, for example, a cycle time for orders was 124 median hours, and the average transit time was 57 hours. In 2000, the cycle time for orders will be 69 hours and the transit time will be 42 hours.
"By the year 2000, 56% of all global shipment transactions will be conducted by some form of electronic data interchange," Rockwell said. "As cargo moves faster to accommodate time-definite deliveries, shippers will have to provide information flow simultaneously with the physical product flow."
Rockwell and two other speakers discussed electronic products offered to the intermodal industry by their companies.
Trade Compass (www.tradecompass.com) offers a broad range of products to help companies in various trade transaction activities, Rockwell said. One product, Ocean Transit Analyzer, is a transit-time search engine and on-time performance analysis tool. It allows companies to examine point-to-point movements of ocean carriers that handle containers primarily.
The software also allows companies to analyze on-time performance rates.
"We provide businesses a comprehensive, integrated Internet site specifically designed for international commerce," Rockwell said.
Michael Baraz, vice-president and chief technology officer of Integrated Trade Systems (www.tradesolutions.com), demonstrated how TRADEsolutions, the company's software for making trade transactions, can save intermodal companies time and money.
Projecting computer images onto a screen, Baraz made a mock transaction with a fictitious supplier of kitchenware to have a shipment transported across the United States to Italy. Transportation was arranged by truck from San Francisco, California, to Jacksonville, Florida, and by ship from Jacksonville to Naples, Italy. The transaction was completed in 15 seconds.
TRADEsolutions automates the trading process with a collection of modules that integrate trading partner, product, order, and shipment information, Baraz said. The computer operator simply downloads or inputs the orders, then adds shipment information.
TRADEsolutions automatically generates all export forms and documents and tracks shipment status.
Tracking rail shipments electronically is the function of WebTrak, offered by Rail Delivery Services (RDS), La Mirada, California. WebTrak is an interactive Internet site that allows customers to check on the location of their products using their computers. The RDS web site is www.raildelivery.com.
"Our interactive database on the world wide web allows our customers to locate their freight and track it from origin to destination," said Judi Girard, CEO of RDS. WebTrak is tailored to customer needs, she said, and is a secure system. Users must have an identification code to access information. Freight is tracked by trailer or container, chassis, customer reference number, bill of lading, and RDS file numbers.
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