Simplified Entry

Is it the new Immediate Delivery?

Anyone that knows me knows that I like to play a little devil’s advocate.  Here I go again.

Simplified Entry has me scratching my head.  Pull up a CBP form 3461.  What’s it say near the top?  “ENTRY/IMMEDIATE DELIVERY”.  Ever wonder what Immediate Delivery is?

Long ago, shipments arriving in the U.S. required the full Customs entry and duties paid before the cargo would be released into the commerce of the U.S.  Obviously, this slowed things down a bit, as Customs had to review the entry documentation in detail.  But what about perishables?  Like bananas?

The Immediate Delivery process came about for fruits and vegetables arriving from contiguous countries – Canada and Mexico.  Before the days of the airplane, perishables weren’t shipped from anywhere else.  Immediate Delivery provided for the filing of just some basic information, and required posting a bond to guarantee the filing the actual entry and pay the duties within ten days.  It also allowed the importer to examine his goods, removing and disposing of any that were of no commercial value – which had perished – before filing the final entry.  The Immediate Delivery application and permit was the form 3461, and the actual entry was the form 7501.

Over time, and with the arrival of air freight, Immediate Delivery was made available to nearly all classes of goods.  It expedited commerce, and it afforded Customs the luxury of more time to examine the entry documents in greater detail, and to ask picky questions, long after the actual importation, what is now known as the liquidation period.

Customs brokers (they used to be called customhouse brokers, and at cocktail parties, everyone assumed they worked in real estate) would typically prepare the 3461, then on the old green form, about 4″ high x 8″ wide.  (Does anyone have an image of one of these?  I’m really showing my age here.  This was pre-ABI, before William von Raab decreed that customs brokers, “automate or die”.)  Anyway, customs brokers would typically prepare and file the 3461, and obtain cargo release from Customs.  Then they would prepare and file the 7501 with a check for the duties, within ten days.  It was a two step process, inefficient by today’s standards, but when the forms had to be hand-typed (does anyone remember typewriters?), it did allow for faster release of cargo on 3461 information only.

With automation came efficiencies.  Now a lot of the data that used to be hand typed could automatically populate the fields on a computer screen.  Customs brokers quickly learned that they could more efficiently put all the data for the 3461 and the 7501 in up front, then transmit both forms simultaneously, so they wouldn’t have to touch the file a second time for the 7501.  And that is where we are today, leaving new brokerage employees to wonder why we have two forms.

Now along comes Simplified Entry, supposedly to expedite cargo release, just like the old Immediate Delivery back in the typewriter days.  But with the efficiencies of automation and the ability to receive data electronically from overseas, any customs broker worth his salt is getting the cargo released, with both 3461 and 7501, prior to the cargo being made available by the carrier – heck, even prior to the carrier arriving in the U.S.!  So what is the point of Simplified Entry?

Maybe if we looked at the supposed benefits of Simplified Entry:

  • Streamlined data submission – only 12 required data elements.  Why not just reduce the required data elements on the 3461.  But as I said above, customs brokers striving for efficiencies will want to input all data, including the 7501 data, at the same time.  So no streamlining happening here.
  • Filer can update the data.  Can’t we do that for the 3461 now?
  • It can be filed earlier in the import process, allowing Customs to identify potential risks earlier.  We can already file the 3461 earlier in the process; Customs just won’t issue a release until five days from arrival on ocean, or “wheels up” at origin for air.  So if earlier release is supposed to be a benefit, just release the 3461 earlier in the process.  Besides, this is really only a benefit for Customs, because if the 3461 is filed earlier, with or without earlier release, Customs is getting their targeting data earlier in the process.
  • Reduces transaction costs by requesting filing data once.  Huh?  With Simplified Entry, a 7501 must still be filed, just like when we filed the old 3461 in advance.  And as I’ve already said, efficiencies today demand that customs brokers already file data once by simultaneously transmitting 3461 and 7501.
  • Greater predictability, allowing importers to make logistical arrangements in advance of arrival.  Like I said, any customs broker worth his salt is already getting cargo release in advance of arrival.  If this really is important, then just allow for cargo release earlier than five days out for ocean and “wheels up” for air.
  • Reduces “exceptions” needing special processing after arrival.  Huh?  With less information than on the current 3461?
  • Expedites data submission and cargo release decision.  I believe I’ve already addressed this one.

OK, let’s look at the Simplified Entry data elements:

  • Required:
    • Importer of record number.  That’s the EIN.  Already on the 3461.
    • Buyer name and address.  Assuming the ultimate consignee, already on the 3461.
    • Buyer EIN.  Assuming the ultimate consignee, already on the 3461.
    • Seller name and address.  Potentially new, as the 3461 currently only has a manufacturer’s/seller’s identification number, which has long been problematic.  So why not just expand this on the 3461?
    • HTS 10-digit number.  Already on the 3461.
    • Country of origin.  Already on the 3461.
    • Bill of lading/house airway bill number.  Already on the 3461.
    • Bill of lading issuer code.  Assuming the SCAC, already on the 3461.
    • Entry number.  Already on the 3461.
    • Entry type.  Already on the 3461.
    • Estimated shipment value.  Already on 3461.
  • Optional:
    • Ship to party name and address.  For ocean, already on the Importer Security Filing.
    • Consolidator name and address.  For ocean, already on the Importer Security Filing.
    • Container stuffing location.  For ocean, already on the Importer Security Filing.  For air, not applicable.

Simplified entry may provide benefits to CBP, but what’s in it for the trade?

Oh, wait.  To participate, the importer and the broker must be members of C-TPAT.  Aha!  Simplified Entry is yet another benefit whose existence is not measurable and thus questionable, and yet another way for Customs to sell C-TPAT.

So, Simplified Entry is the new Immediate Delivery, which really isn’t necessary in this millennium.  And C-TPAT is the new BASC, which is a topic for another blog post.  And your tax dollars are hard at work.

Gorilla image by Steven Straiton.  Selectric II typewriter image by Etan J. Tal.

1 comment to Simplified Entry

  • Jane Taeger

    Great article on simplified entry. Even though the program is starting with air, the ultimate goal will be to replace the separate ISF filing for ocean shipments. Hardly anyone is doing the combined ISF/entry filing – something like less than 1% of ISF’s. We’ll see.

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