What Importers and Customs Brokers Need to Know About APIs

Editor’s note: This guide was contributed by Matthew Fotouhi, Chief Technology Officer, Customs Compliance at Magaya. Matthew founded ACELYNK in 2011 and built the industry-leading platform for Customs compliance. Acquired by Magaya in 2020, ACELYNK adds powerful ACE/ABI capabilities to the Magaya Ecosystem.

For many years, the status quo was that licensed customs brokers would receive shipping documents via fax and email from the importer, and then manually enter pertinent data into a software form, which electronically submits the form to CBP. All of this manual back-and-forth often resulted in delayed shipments, allowed errors or omissions to slip by, plus it was a tedious, and inefficient bureaucratic process.  

The next generation of filing took advantage of EDI (Electronic Data Interchange), which minimized the need for the manual data entry process. While that’s certainly an improvement over fax and email, there are still notable disadvantages with the EDI process, as we detail below. 

Fast forward to the present, when modern API technology makes filing and monitoring responses from CBP more efficient than ever. If you’re still relying on EDI or worse, totally manual filings, then it’s time you add one more acronym to your vocabulary – and learn about the benefits of APIs for customs filings. 

Key Takeaways

• An API (Application Programming Interface) is a way for two separate applications to exchange their native data with each other in real-time.
• EDI (Electronic Data Interchange), on the other hand, is an older method of digital communication that requires parties to use a standard electronic format.
• Nearly all ACE filing functions can be performed through the Magaya API suite, including ISF, 3461, 7501, AES, 7512/Inbond, e214/FTZ as well as queries such as manifest, HTS, Ad/CV, and many others.

What is an API and how is it used in customs compliance?

An API (Application Programming Interface) is a way for two separate applications to exchange their native data with each other in real-time. For example, when you use Facebook to send an instant message, an API is being used to send the message from Facebook to Instant Messenger. 

As with any form of digital communication, one application will initiate the call by sending a request for an action to be taken. API calls can be synchronous, whereby feedback from the calling application is received, or asynchronous whereby immediate feedback is not required.

APIs offer flexible file formats that are faster to code and execute and can work as user-friendly plug-ins that can be implemented within or alongside any application. For instance, an API would allow a purchasing agent using in-house software to click a button and instantly see the list of Harmonized Tariff Codes that could provide a range of possible duties and fees. Another example would be a warehouse manager getting notified of shipment arrival, initiating a Permit To Transfer, receiving authorization, and sending delivery instructions all in less than a minute, and all from within his WMS.

What is EDI and how is it used in supply chain management?  

EDI (Electronic Data Interchange), on the other hand, is an older method of digital communication that requires parties to use a standard electronic format. Common supply chain examples include purchase orders (EDI 850), payment confirmations (EDI 820), and invoices (EDI 810). 

What are the advantages of API compared to EDI for customs compliance?

• Adaptability: With an API, programmers can create their own unique file format that addresses the specific needs of their application. This means that any specialized data served by third parties can easily be incorporated into any application. Plus, it no longer requires the unnecessary data elements that may come along with the EDI file format.
• Real-Time Data: Inherently a batch process, EDI is not a real-time data exchange. The import market moves fast. Expectations for speed are higher than ever. Real-time APIs get the data where it needs to go faster so that shipments can, in turn, be expedited more efficiently.
• Speed: EDI requires an independent process to collect the required data, build a file, and place the file on a server to be picked up and transmitted to an external server. The reverse of this process will have to occur on the other side to read and parse the data file and update the pertinent data tables. This can be a slow process.
• Reliability: EDI has stringent data and format requirements that prolong the development and implementation process and make it prone to technical issues that can be difficult to pinpoint and correct. 

How does Magaya use APIs to make customs compliance easier? 

Magaya has developed a suite of APIs enabling real-time data exchange with U.S. Customs to expedite the clearance process on high-volume import and export operations. These APIs allow external applications to communicate with the ACE system automatically through Magaya Customs Compliance. 

For example, the Magaya Customs Compliance AES API allows any external system, such as an ERP, TMS, WMS, e-commerce platform, or even homegrown software, to integrate the submission of export declarations within its application.

Nearly all ACE filing functions can be performed through the Magaya API suite, including ISF, 3461, 7501, AES, 7512/Inbond, e214/FTZ as well as queries such as manifest, HTS, Ad/CV, and many others.

That means that you can continue to use the productivity software you’re used to while also taking your compliance workflows to a whole new level of efficiency and automation.