CBP Proposes Rule for Electronic Rail Cargo Export Data

On Jan. 13, 2025, the US Customs and Border Protection (CBP) proposed a new rule that requires the electronic submission of export manifest data for rail cargo via the Automated Commercial Environment (ACE) system. This initiative aims to enable CBP to address important cargo security concerns and streamline operations related to the export of rail cargo.

This regulation, detailed in Docket No. USCBP-2024-0030, affects all parties involved in US rail exports. The document has a comment period ending in 60 days on March 14, 2025. While the rule primarily applies to the United States, its impact extends to neighboring countries, especially Canada and Mexico.

The CBP states that the main reason behind the ACE proposal is insufficiency of current regulations to adequately capture cargo data for rail shipments leaving the United States. With the rule proposed, data gaps will significantly reduce.

The new proposed rule extends ACE’s capabilities to outbound shipments by mandating electronic submission of export manifest data for rail cargo. This means that before cargo is exported by rail, relevant parties, including rail carriers, Non-Vessel Operating Common Carriers (NVOCCs), and US Principal Party in Interest (USPPI), must electronically transmit details about the shipment to CBP.

By submitting manifest data before loading, CBP will have more time to identify potentially high-risk shipments, facilitating timely inspections and reducing the chances of illicit or unsafe goods leaving the country. This also ensures compliance with US export laws, streamlining enforcement actions. For rail carriers, the electronic filing system means a reduction in paperwork and potential delays. This process is expected to cut operational costs for the trade community, federal agencies, and CBP alike, while improving the speed and accuracy of export processing. It will also benefit the trade community by reducing potential disruptions in the supply chain. 

By addressing high-risk shipments early in the process, CBP can prevent delays that typically arise from last-minute checks or inaccurate documentation. This improved flow of goods is particularly crucial in a globalized economy where efficiency is paramount.

Key Data Requirements for the Test

For participants in the ACE Export Manifest for Rail Cargo test, several data elements will need to be submitted. These include basic shipment details such as the mode of transportation, port of departure, and cargo weight, as well as specific details such as whether hazardous materials are involved. Rail carriers will need to report whether cargo is empty, the shipment’s weight, and other logistics details like rail car numbers and container information. Additional data elements, such as the US Shipper’s name, consignee information, and any related bills of lading, will help create a comprehensive record of each shipment. Some of this information, such as hazardous materials codes or in-bond numbers, will be conditional based on the nature of the shipment.

Potential Costs and Compliance Challenges

The rule also introduces some compliance costs and operational adjustments for industry participants:

• Implementation Costs. Rail carriers and other involved parties will need to invest in the infrastructure and systems necessary to transmit data electronically through the ACE system. This may require new software or IT upgrades, as well as staff training.

• Data Transmission and Availability. The rule mandates that data be submitted in a timely manner, and the parties involved will need to ensure that staff are available 24/7 to respond to any CBP inquiries. This could add logistical challenges for some companies, particularly those with more limited resources.

• Liquidated Damages. The CBP is authorized to assess liquidated damages for violations, with penalties from US$5,000 up to US$100,000 per export departure. This is a significant compliance risk for parties involved in the export process, especially as any errors or omissions in data transmission could lead to substantial fines.

• Additional Examinations and Delays. While the rule is designed to improve efficiency, the shift to electronic manifests may lead to additional cargo examinations by CBP, which could delay shipments if further scrutiny is required. These delays could impose financial costs, particularly in the case of time-sensitive cargo.

Test and Future Expansion

The ACE Export Manifest for Rail Cargo test will begin with selected participants and is expected to gather insights into how this system can be scaled and refined. Participants will have to meet the submission deadline of submitting manifest data at least 2 hours before the cargo is loaded, providing CBP ample time to perform risk assessments.

As the program expands, there may be future enhancements, such as additional data requirements or system adjustments to accommodate changes in US export regulations or operational needs.

Kim Calicott, Chair of the Transportation Committee, National Customs Brokers and Forwarders Association of America, highlighted that the proposed rule will impact Non-Vessel-Operating Common Carrier (NVOCC) shipments booked with ocean carriers and transported by rail to Canadian or Mexican seaports for export. She emphasized that this Notice of Proposed Rulemaking (NPRM) offers NVOCCs a chance to evaluate the proposed requirements to ensure their feasibility for this specific scenario. Calicott also noted that this rulemaking could offer valuable insights for similar upcoming regulations from CBP for air and sea transport. Her organization plans to submit formal comments to represent members’ interests, she said to FreightWaves.