Shippers, regulators tap into technology to ferret out illicit imports

ORLANDO, Fla. — Data analytics and artificial intelligence have emerged as powerful tools in the fight against illicit imports. 

At the Council of Supply Chain Management Professionals’ Edge conference in Orlando, Florida, last week, a panel of technology and shipping experts centered their discussion on the vital significance of harnessing these cutting-edge capabilities to evaluate the risks associated with global supply chains and imports. 

Panelist Janet Labuda, head of compliance at Maersk Customs Services, has more than 25 years of working at or consulting on the practices of U.S. Customs and Border Protection, explained the necessity for AI and machine learning within supply chain validation processes.

“From my experience, every time you have a new regulation or legal requirement, there are companies out there that are going to do everything in their power to circumvent that law,” she said.

“Just before I left Customs we did an exercise called Operation Mirage. You can see it but it really isn’t there. … We did a scientific statistical sample of textile products coming out of China to ensure that the [product] valuation was correct. We went out to visit 180 companies that were importers of record. Fifty-five percent of them did not exist. They were bogus. Somebody back in China was orchestrating their transitions. … We asked one woman how she managed all of these import documents and she said they just used her name and gave her a penny per transaction. She was making about $10,000 a month and that’s when I knew I had to retire.”

In recent years, CBP has dealt with major risks like those presented by Operation Mirage. In 2017, CBP seized over 5 pounds of fentanyl through 1,300 noncompliant importers. It was a major win considering a lethal dose of fentanyl is only 2 milligrams. In 2010, CBP disrupted what could have caused untold fatalities, a potential terrorist attack involving ink cartridges set to detonate in small packages sent throughout the U.S. 

These situations showcase the importance of leveraging AI and import data to preemptively find risks within importers’ supply chains.

Labuda advised the audience that the regulatory body has and uses these data-driven technologies to question global shipper supply chains. 

“With Customs, you are guilty until proven innocent … so Maersk has decided to partner with Altana Technologies, [supply chain management software provider], to give our clients a tool to show they are doing their supplier due diligence,” Labuda said.

Lisa Robinson-Davis backed Labuda’s point, explaining that compliance is truly about showcasing the due diligence done to track global supply chains and how leveraging AI can help pinpoint where to allocate resources to remove risk.

“The urgency of ensuring that your entire supply chain is free from regulatory problems became imminent for us. Using AI has allowed us to understand regions of concern digitally and ask questions to our suppliers. … Now you are more targeted with the limited resources available to us to minimize risk,” she said.

They were joined on stage by their AI partner, Amy Morgan, vice president of trade compliance with Altana Technologies, who explained these were the specific use cases the company was created to fix.

“We are not just creating AI tools for the sake of creating AI. We are trying to solve these really hard problems. … AI-powered insights help customers take informed action, like seeking alternative suppliers, tracing their raw materials, identifying potential geographic concentrations and targeting risky supplier networks,” Morgan said.

In July, CPB awarded Altana a multiyear contract to help the agency prevent goods produced using forced labor from entering the U.S. 

Using Altana’s Atlas solution, CBP will integrate diverse data sources to efficiently screen goods to be sure they adhere to the Uyghur Forced Labor Prevention Act and will compile evidence for enforcement actions.

With tools like Altana’s solutions becoming more prevalent and utilized by regulatory agencies, panelists cautioned about the lack of supply chain due diligence.

“I always say it’s better to be on offense than defense. … Trade is only going to become more robust and I think using AI and analyzing your supply chain conditions will go a long way for facilitating legitimate trade,” said Labuda.

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