Executive Summary – All the Right Moves: Importers Turn to Self-Filing

The percentage of importer self-filing customs documents nearly doubled in 2016 from 2014 and 2015 levels, according to American Shipper and BPE Global’s annual Import Benchmark Study.   Importers always have difficult decisions to make when it comes to self-reliance vs. outsourcing. From producing a good (own factory vs. suppliers) to transportation (in-house fleet vs. contract carriers) to software (proprietary vs. off-the-shelf), the decisions are plentiful.
   That’s no different when it comes to trade compliance and the use of customs brokers. With new dynamics, like the mandatory implementation this year of the Automated Commercial Environment (ACE), possible new sweeping free trade agreements, the new drawback law and constantly changing regulatory regimes globally, a larger proportion of importers are turning to self-filing. Does this mark a trend, or a one-year blip?
   American Shipper and BPE Global’s annual Import Benchmark Study is based on responses from 149 qualified respondents to a 25-question survey between April 4 and May 23, 2016. Study results are shown in an aggregate form and segmented to draw meaningful comparisons within the industry and ultimately call out actionable best practices.

Self-filing On The Rise. In all the data collected and analyzed by American Shipper and BPE Global for this year’s report, one in particular stood out: the percentage of self-filers nearly doubled in 2016 from 2014 and 2015 levels. So how to explain this? Well, it’s likely there are multiple reasons.
   For one, importers in general are becoming more comfortable with tools and systems that let them self-file for some or all of their entries. Second, U.S. Customs and Border Protection’s changeover to the Automated Commercial Environment (ACE) single window this year placed some shippers in position where they might have been more prepared for ACE than their brokers, and so felt better served by filing themselves. Not since the 2012 version of this study have we seen self-filers represent such a large percentage of the overall respondent pool.
   This growth is worth taking note of. For one, the global trade management software marketplace is designed for companies that want to take a broader role in their import processes and wean themselves off a reliance on brokers. Second, further research this year shows that self-filers track a range of import metrics to a higher degree than the general respondent pool. In other words, self-filers are far more attuned to the performance of their import function than those that outsource.

The ACE Impact. ACE may, at this point, be a bad word in the import community, but there’s no denying its indelible impact on the way importers and their service providers operate. It also impacts the technology those companies use.
   An overwhelming percentage of large shipper respondents in this year’s study say they have an ACE account, compared to barely 60 percent of SMEs. This may go some way to explaining why self-filing is on the rise this year. Large importers, as previously mentioned, have several times the volume of entries as SMEs and are now in a position to track those entries directly via ACE.
There’s no better way for an importer to keep its finger on the pulse of its import activity than following it through ACE. The fact that 29 percent of SMEs have no ACE account and an additional 9 percent aren’t sure means they’re missing out on a way to monitor classification and duty exposure. The mere fact that companies don’t use ACE portal reporting shines a light on how little oversight some importers are willing to give their import programs.
   What’s problematic in both categories are those importers who don’t know whether their brokers file in ACE. Failure to find out the answer may result in an importer’s brokers not being able to obtain customs clearance once the mandatory switch over to ACE occurs.
   It’s also noteworthy that 32 percent of small shippers are uncertain of the ACE feature used most in daily operations. It would behoove importers that are uncertain about key facets of their compliance process to get a better understanding of how things are done.