Effective Jan. 1, the U.S. government will refuse to clear international mail parcel shipments if electronic documentation allowing U.S. Customs officials to check for illegal opioids isn’t transmitted in advance of the shipment’s arrival. Despite having more than two years to prepare, the international postal supply chain will likely miss the deadline.
It is still unclear what level of information Customs and Border Protection (CBP), the federal agency responsible for clearing goods into U.S. commerce, will require of international posts that originate the shipments. The U.S. Postal Service (USPS), which accepts parcels and mail from foreign posts and moves them into the U.S., is not clear on the compliance requirements from CBP. There has also been little guidance on how to handle the undetermined number of shipments that may be refused entry for failing to either provide the required data or transmitting the data electronically in advance of the shipment’s arrival.
The compliance deadline was established in October 2018 when Congress passed the Synthetic Trafficking and Overdose Protection (STOP) Act designed to stem the flow of opioids and other contraband shipped into the U.S. through the mail. The act actually had two deadlines. The first required that by October 2019 all U.S. inbound parcels and mail originating in China from China Post, and 70% traffic from the rest of the world, contain advanced electronic data (AED) when tendered to USPS and, in turn, submitted to CBP. Neither of the two initial deadlines were hit.
The STOP Act took specific aim at China because it accounts for about three-fourths of all inbound parcel traffic into the U.S. and, according to a 2019 U.S. Drug Enforcement Administration (DEA) report, remains the primary source of the dangerous opioid fentanyl trafficked through international mail and parcel consignments. An estimated 128 Americans per day died of opioid overdoses in 2018, according to the USPS’ Office of Inspector General (OIG), which published a report Sept. 30 on the status of compliance efforts. USPS and CBP did not respond to requests for comment.
Ironically, the OIG report found that China had achieved a high compliance rate since the law took effect. The report did not disclose specific levels. However, as of March, posts in 135 countries and territories were unable to send advanced electronic information to USPS — and few will be able to hit the 100% threshold by Jan. 1, the OIG report found.
For most noncompliant posts, the AED challenge is to turn what are often manual, paper-based processes — such as handwritten customs declaration forms — into electronic messages, according to the OIG report. International posts “must collect all the required information from business and retail shippers, transform it into the correct format and transmit it in a timely and reliable way,” the report concluded. “These messages are not transmitted along one single integrated IT network. Instead, multiple partners with different technical capabilities must interface with each other. As a result, AED messages are prone to errors such as invalid formats and transmission failures.”
The 2018 law states that the technical requirements for compliance be “comparable” to standards applied to commercial traffic. However, the STOP Act does not define those standards, nor does it set minimum requirements for compliance, the OIG report said. As of the end of September, CBP had not drafted compliance regulations.
Under the act, CBP can exempt an international postal agency from the 100% requirement if it rules the agency doesn’t have the wherewithal to apply, if its parcel volumes are relatively small and if the shipments don’t pose a high level of risk.
But perhaps the most vexing language focuses on how to dispense with shipments that are refused entry into the U.S. The law requires USPS, in conjunction with CBP, to take “remedial action,” which could include seizing the offending parcels, destroying them or sending them back to the originating country. Forcing the return of millions of parcels could result in a massive logjam at entry points, especially with so much airline bellyhold capacity taken off line due to travel restrictions spawned by the COVID-19 pandemic, industry experts said. Historically, the bulk of international mail and parcel traffic has moved in the bellies of passenger aircraft.
Parcel holding centers at Customs entry points were never designed to store such a potentially large volume of rejected parcels, said Kate Muth, executive director of the International Mailers Advisory Group, which represents mostly shippers and mailers of U.S. outbound traffic.
Hurricane Commerce, an IT provider that specializes in cross-border e-commerce trade data and compliance technology, warned in a Nov. 16 communique that, unless the situation changes, hundreds of millions of parcels will be denied entry into the U.S. and may be returned to their origins. “This kind of volume will not only create immense logistical challenges but will also have a serious impact on air cargo capacity,” said Hurricane Commerce CEO Martyn Noble.
Earlier this year, Hurricane Commerce launched a product called Zephyr, which it said allows bulk clearance facilities to check the accuracy of data and to receive additional pertinent or missing information all under one “quick-check” function. Zephyr can process over 700 million requests a day and can provide for real-time feedback with response times of 100 milliseconds, the company said.
In the world outside the postal realm, providing advanced electronic shipment data is nothing new. The Trade Act of 2002, passed after the Sept. 11, 2001, terrorist attacks, required shipment data to be submitted electronically and in advance to CBP so it could balance elevated security concerns with the need to maintain commercial fluidity. Commercial carriers, freight forwarders and parcel consolidators have the capability to manage the process, according to an air cargo industry executive who asked not to be identified. “It is going to be up to them and their shippers to provide the data accurately” and in a timely manner, especially as e-commerce shipment consolidations, which have taken off in this exceptional year, continue to grow, the executive said.
AED is also not unique to the U.S. Several pioneering postal systems began exchanging AEDs as far back as the 1990s, the USPS OIG report noted. In addition, new global postal regulations developed by the Universal Postal Union (UPU), a United Nations agency that facilitates postal regulations and operations, require all posts to send AEDs to accompany cross-border packages as of this January. Effective March 15, all non-European Union postal systems sending merchandise into EU countries must submit AEDs before goods are loaded into planes.
There is cause for optimism, the OIG report noted. The UPU, U.S. and EU requirements will push international posts to accelerate AED compliance. USPS and other international posts are helping less-advanced nations by providing technical and financial support. New technology — such as that being offered by Hurricane Commerce — will foster speed and efficiency.
A year from now, the 13 international posts — excluding China Post — that are responsible for about half the parcels sent to the U.S. will have much of their packages submitted with accompanying AED, the OIG report predicted.
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