Container ship heading into port

Streamlining trade with emerging tech

Blockchain and machine learning technologies could help ease larger cross-border criminal issues, according to industry experts and lawmakers.

At a meeting to discuss Customs and Border Protection's 21st Century Customs Framework, CBP Deputy Commissioner Robert Perez said the agency has started addressing technological changes impacting the shipping industry and customs processing. CBP is officially seeking comments on how to proceed with the plan -- dubbed 21CCF. The agency has identified six questions it wants public input on:

  • How can CBP ensure all parties in the modern supply chain are accounted for and held responsible?
  • How can CBP better utilize technology, big data, and predictive analytics to protect Americans and the U.S. economy?
  • Which technologies should CBP explore to improve trade facilitation and trade enforcement activities?
  • What data sharing options can improve efficiency and boost both trade enforcement and trade facilitation?
  • Which trade processes should be changed to improve the experience of importers, brokers, and other important actors in the supply chain, and increase overall efficiency.?
  • How can CBP ensure that the Automated Commercial Environment has a consistent stream of funding for enhancements and new functionalities?

CBP last tried to modernize trade processing systems in 1993 with the Customs Modernization Act. The volume and speed of trade and the precision of shipping logistics has changed things since then.

In 2018, Perez said, $2.6 trillion in imported goods entered the U.S, in 29 million trucks, railcars and shipping containers. Another 500 million shipments came in through the international mail system, with 130 million of those via express mail services. CBP is responsible for getting security and basic data and collecting fees on all of those shipments.

The skyrocketing volume of small packages is beginning to supplant more traditional large shipping containers. International vendors are eschewing larger shipping containers, shifting to sending small packages directly to consumers, Perez said.

Commercial companies, including shippers and product suppliers, talked with CBP officials at the 21CCF meeting about transformative technologies that could be brought to bear to address the changing environment.

Those companies all advised CBP that blockchain, artificial intelligence, commercial cloud and machine learning technologies should be critical parts of the agency's next-generation customs system.

"All of those have enormous potential," John Drake, executive director for supply chain policy at the U.S. Chamber of Commerce. Drake also advised CBP to keep its current Automated Customs Environment system – a cargo processing system that took 17 years to complete -- up to date, as well as not to overlook on-the-ground technologies in the mix.

"AI linked to machine learning," said Rick Ryan, senior research fellow at Pitney Bowes Inc., "can be deployed to streamline the process by identifying threats and prohibited items." The technologies, he said, could be particularly valuable in winnowing out packages used to ship counterfeit, dangerous goods, as well as drugs into the U.S. from overseas.

"Public distributed ledger systems can link manifests and invoices" using a secure data chain, providing opportunities for "real-time enforcement" against shippers of counterfeit products and money launderers, Sen. Bill Cassidy (R-La.), said at an event on the future of customs technology.

CBP has already begun piloting a blockchain-powered system to manage certain trade-agreement certifications. But outside observers cautioned that the agency must keep its policies as up to date as its technologies.

"Technology always outpaces regulations," said Craig Seelig, product manager at single shipping platform solutions provider Wisetech Global. CBP, he said, has struggled with electronic recording keeping regulations, as well as federal security concerns over commercial cloud-based solutions. "Keep that in mind moving forward," he said.

This article was first posted on FCW, a sibling site to GCN.

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at [email protected] or follow him on Twitter at @MRockwell4.


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