Expeditors International of Washington, Inc. (EXPD) Earnings Call Transcript & Summary

[Audio Gap] Business Development Manager; and Jeff La Monica, U.S. Northern Border Manager. From the Canadian side of the border, we have Steve Bunda, Business Development Manager; and Cara Weese, Customs Brokerage Manager. We're going to launch a poll right now. And as I go through the agenda, please take a moment to respond to that. Today's talking points will include a market update, a review of Canada and U.S. border processes, updates on the CARM program, free trade agreements, cross-border transportation options, nonresident imported programs and other government agencies. So at this point, I'll turn it over to John to review the results of the poll and get started with the presentation. Thanks, John.

Thanks, Jess. Let everyone finish. So I can get a good feel of the audience here. It looks like both Canada and U.S. is going to win. So I'll go ahead and start. That's good. I expected a little bit more lock-sided for going into Canada, but good, it's almost even 66%. Okay, we go to the next slide, if you don't mind. We're talking both Canada and Mexico, imports and exports. You guys probably knew this, Canada is second only to Mexico, only by 1% tied with China as the largest trading partner with the United States. To me, the best part of that is the relationship we have and the balance of trade. So Mexico, which is pretty balanced, we import probably $360 billion -- sorry, we import $450 billion worth of goods, and we export $360 million. So it's relatively close. China, it's very lopsided. We're importing $560 billion and exporting only $200 billion. But Canada, it's almost on par. We are importing $420 billion and exporting about $400 billion. So they're a very good trade partner. They're neighbors, they're basically family. Next slide, please. Good. Take it down to the port. So this -- when we were preparing this presentation, we were gathering facts, I argued, I was blue in the face. That the southern border, specifically Port of Laredo was not the largest international port, which it has not been for 10 years. It's always been port of Detroit is the largest land port, but that's no longer the case. But combined, both the Detroit Port here on and Buffalo, we equal the southern borders volumes. And the volumes of trucks that come from Canada -- sorry from Mexico are about 10,000 trucks a day, which is crazy. From Canada to the United States, it's about 5,000 trucks, also the same 5,000 going back into Canada. We have 10,000 passenger cars that come through the port of Detroit every day across the Ambassador Bridge. But anyway, Canada is a big trade partner. Most of the commodities that add up to the volumes are petroleum and vehicles, but there's agriculture liquor, everything you could think of. Next slide. These are our Northern Border ports. You guys are probably familiar, there's 20 plus. The grayed out dots are not 24/7. The red dots are Port Huron, Detroit, Buffalo, which are the largest ports. We also, Expeditors has a presence in those ports, but we can clear remotely for any of the Northern Border ports. We're doing about 360,000 declarations a year, 30,000 a month. Northern Border specific to imports from Canada to the United States. U.S. Air Ocean, we do 3.2 million from all of our inland ports and our facilities in Detroit, Port Huron and Buffalo, again, we're over 24/7. We have 14 licensed brokers, 650 in the total U.S. and a brokerage staff of 65 in the northern border, 1,200 in the inland ports, inland offices. Okay. Next slide. Turn it over to Jeff, who'll go through the Northern Border process.

Thanks, John. So we're going to go through a quick little animation of the process to move freight from Canada into the United States. It's, I think, a little bit nice to see the visual on this and see how it works. So we can proceed on. We've got our truck and he's over at the exporter in Canada and the trucks being loaded up. And then the next thing that will occur is that the shipper has to give the commercial documents to the carrier. That's done either by handing the documents to the carrier or sending them to their dispatcher at that point in time. Next, the carrier is going to then assign a shipment control number and a port of entry [indiscernible] when they do that, that is the very beginning of the ACE eManifest process that the carrier must fulfill. Next, the carrier does file that eManifest with customs, with U.S. custom CBP. And the requirements for that, they are going to be that we have to have -- well, the carrier has to have the documents lodged with customs of 1 hour prior to their arrival at the border. And if it's an FDA commodity that they're moving, then they have to give at least 4 prior notice to CBP and FDA. Next, this is we're actually going to then receive the documents from carrier, and you'll see by the little icon that top down. That's a docs received icon. And the carrier provides -- the next thing is the carrier provides those documents to us at the border. Many brokers have different requirements, ours, we actually ask for a 2-hour window to file everything and that same 4 hour for FDA. But there are some out there who may be asked for a little bit more time. It just depends on their operation. But we're doing this because we have 1 hour requirements to have everything lodged to customs and FDA. We have 1 hour to lodge it with custom, we need that extra hour to actually process the actual transaction. So that's why here at Expeditors, we asked for 2. But again, it varies from broker to broker. Next. We'll see the trucks got a little movement now. And very next thing that we're going to have occur is that the carrier -- or excuse me, the broker creates the entry. And when we do that, we are actually lodging the information with CBP at that point in time. Next, this is where the carrier can actually now start proceeding to the border, the truck got there a little bit fast, but he will proceed to the border and U.S. customs after we've transmitted the information to them, this is where they perform their security screening, they will review the information from the broker, from the carrier and all the different government agencies will do all of their mandatory screen to determine whether or not that truck is going to have to be devanned, and intensive exam and so on. Next, you're going to see that the green light appears and the entry gets certified by customs. And this will actually allow for the carrier to actually get to the foot of the bridge and now proceed. So as soon as they get that entry from the broker, then they actually proceed to U.S. customs. So now you see the truck is on the U.S. side of the border, where the next thing that happens is, customs is going to actually arrive the truck. And if everything checks out, they're actually going to release the truck. And this is where all the different partnering government agencies will also have had their opportunity to indicate what they want to have done. For instance, if it's normal hours the FDA will most likely put it on a very fast FDA hold, then it will have an FDA may proceed as long as everything checks out. But if it's after hours, this is where customs will actually give the carrier a conditional release to move to final destination, and the FDA portion of the transaction may not be fully released at this point in time. So this is important for you and your carrier to work out a process so that you do know when the actual FDA release occurs after leaving the port. Next, the carrier move on to final destination or several other places, which John is going to elaborate on in a few moments. But that's point 11. And next after that, you'll see that between...

We'll lost Jeff. That's okay. I can take over. Once the goods are entered into the commerce of United States, it can proceed to destination, custom statements are paid, invoices issued to the customer and the goods -- you can go to the next slide. The goods are destined to the consignee or a distribution center, it doesn't really have to go to one specific location, there's tons of options, both on the northern side of the border in Canada and the U.S. side of the border beyond the clearance. So once it's entered into the commerce of the United States, [Indiscernible] throughout the United States [Indiscernible] the network that offer pick and pack, consolidation, BMI, vendor managed inventory, there's different transportation management options that are offered. So any of these things sound of interest, you guys can reach out to one of us after the seminar, and we can discuss further, but we have a 65 office network that offers tons of options beyond the clearance. Next slide. We need Jeff for this, and we lost Jeff. There's a few things that Jeff wanted to discuss, and he's the resident expert because he managed the operation, but since we lost him, I'll try to add a little bit.

John, why don't we just move on and then we can come back to Jeff's slide [Indiscernible] rejoin.

Yes, because I don't want to confuse everyone. This is the Jeff's slide as well. So like just said, we'll go back to -- when Jeff gets back online, he'll go to these two. One more slide and then we'll turn it over to Steve and Cara, talk to the Canadian process.

So this is the same animated great slide, as Jeff went through, but going the opposite direction. So I'm going to take you through the process from shipping into Canada from the United States. The same process as in the U.S., the shipper will load the trailer. And at this point in time, things happen 2 ways, either we get the invoice data sent to us electronically via [Indiscernible] Or we will get a paper invoice sent to us with the [first information], the estimated time of arrival of the driver and the port of entry. All of these elements actually have to be transmitted to CBSA so we normally get these all at this time so that we can start the process. Next slide, please. At the same time that we are receiving the documents, the carrier is starting to submit his eManifest information to CBSA. And at this time, we're actually taking a look at the documents as well, and we're putting in an event code in our system, which is [DXR]. We actually time stamp the date and time that we received the documents. And this is important so that we can do a lot of reporting on the back end for our importers and customers to show the time line and to make sure that we stick with our KPIs. We're also doing a verification of those documents, which we use [DXP]. So if you could go to the next. Justin? So once the [DXP] has been completed and we verified that we have all of the information we require to transmit a compliant invoice to CBSA on behalf or importer, we would then file the PARS. And when we do this, we also time stamp that within our system with a code of ENF. So this is entry file to CBSA, again the time stamp is date and time. Next slide. So once we've filed the entry, at this time, customs does perform their risk assessment. With Canada, it is a bit different. We use a system, which is called a single window. So within a single window, the information we're providing is going to CBSA and it's going to all of the other government departments all at the same time. So they're doing their risk assessments together. And then when we get notified that everything has been accepted by all parties and all government agencies, the carrier also gets a message within [ECI] filing to allow him to proceed to the border. Again, we also time stamp this in the system with the [Indiscernible] event code. You will see now the light has turned green, which means the truck driver can proceed. Next, perfect. The driver proceeds to the primary inspection booth, the PIL. And at this time, I just want to take note because I think, this is a really neat part of the animation. So the driver is still on the U.S. side. So Justin, if you could hit next, because right now, he has approval to proceed, this is where he stops. So he stops on the Canadian side at the PIL booth. And this is where actually the primary inspection officer does another risk assessment. So he's also doing anything for immigration. And even though the carrier and the broker has the okay to proceed, the driver is not released as of yet. So this officer at the PIL booth can decide at any point in time that he feels this truck should be offloaded or examined or pulled into secondary. Hopefully, that does not happen. And then Justin, if you could hit next. That driver will release based on what CBSA has decided, and he's free to proceed to the final destination. So off he goes at which point if we, Expeditors, move the freight then we do also have an event, DLV, which is delivery -- delivered, the goods are delivered. If we do not move the freight, unfortunately, we don't have visibility to that. So it's not an event that is captured within the system. At this point in time, Justin you can hit one more time. So at this point in time, the file is completed, and that is when we would do the final accounting. Today that is with [Cadex] in another month, that will be CARM.

Cara, if I can just jump in quickly with regards to the order process there. It's critical, and you know, of course, since you're managing the border from Blaine to Maine essentially. We want to receive the documentation as soon as possible so we can initiate our compliant checks. And another thing I wanted to mention, the Canadian release process at the border compared to the U.S. border release process is rather similar. One of the key differentiators is our border services officers in Canada, they wear many hats at the border. And it's not just security and risk assessment. They're also administering the multiple PGAs. So the other government agency requirements, and they play an important role in managing and enforcing Canada's immigration policies.

Yes. Good points for sure, Steven. Actually, today, we can submit a [Indiscernible] days in advance -- so the more upstream we get that information obviously is [Indiscernible] through CARM, it's actually 60. So the ability to take a look at that information upstream is always beneficial for a speedy release. And then like Steve said, all of the other government departments are all under the CBSA realm here in Canada. And so on this slide, one of those programs that I wanted to highlight was the single window initiative. So as we're transitioning new customers, and I know the customers that have been with us for a long time here in Canada are well aware that we were very ahead of the single window initiative program here in Canada, that's something that I'm very proud of. We decided to take a very upstream approach on this. So we worked with all of our customers to ensure that all of this single window codes for all of the other government departments and PGAs were linked to the parts ahead of time and ahead of getting to that order. So one of the unique things here in Canada is how Canada Consumer division actually hits, I would say, 80% of the parts that we see come into Canada. If they're going to a consumer then there are codes needed for that [Indiscernible] consumer division. So we do a lot of upstream work with our importers on those type of things to make sure that we have that locked into the database. We have a nice compliant database. And so when we are proceeding with that procedure that I showed you just earlier on the slide prior to this, everything goes rather smoothly. When you get a delay or you see any hiccup in the process, is normally when we don't have those things tied in a database, and unfortunately at that point in time, you're having to stop the shipment and ask questions. It's never a good thing for a broker to assume that they understand enough about the product to push those codes through themselves. There are certain codes within CFIA that are a one-to-one match. They're very easy to [Indiscernible] but this is always something I recommend should be a constant conversation between the importer and the broker to ensure those codes are accurate. As there are [Indiscernible] penalties with CBSA. There are also [Indiscernible] penalties tied to PGAs as well. The second thing is the CSA program, so this is custom self-assessment. One of the really unique things about Windsor, the Windsor Ambassador Bridge is that we have another tier to this program, which is a secure corridor. So those customers that are approved on the CSA program can actually go in and apply to be part of our secure corridor program. So CSA drivers still go into a booth. They scan, the officer physically scans the bar codes for the CSA driver, the importer of the goods. With the secured corridor, it's actually the bar codes are in the driver’s window, and they're using technology to not only scan those bar codes as he's driving up to the booth, but they're also scanning the driver himself. So they're doing all of those immigration, risk assessments, goods, all of that prior to even getting there. So it's actually amazing to watch, but there's an officer inside CBSA's office, and he's watching all of this on a screen before the driver even hits the PIL booth, he's hitting a button, which creates the light green and the driver actually continues to go straight through without a stop. It seems like maybe 4 minutes won't make much of a difference because that's probably what it takes with CSA. I would say, about 4 -- 2 to 4 minutes to get a release. But when you're talking just on time goods, that 4 minutes can make a big difference if you're 20 or 30 behind the truck in front of you. CBSA key initiative, CARM, I'll just go very quickly, although I'm sure it's a very hot topic. We are going live with CARM May 13. Steve and I to actually did a webinar last week on the CARM program. And if you didn't get the opportunity to join that, we are having another one this week. So I highly recommend. CBSA is going live May 13, as far as we have been told. And at that point in time, you will have to be part of the RPP program. You will have to have a bond and delegate authority to your broker in order for all of that to go through. EDI integration with customers and customs, EDI with our customers is ideal, both for compliance and when there are large entries, of course, for speed and time. And then global infrastructure with local expertise. We are always doing webinars, always doing training. And one of the things I really want to highlight here is the relationship I feel that we have developed with CBSA. Both Steve and I have done multiple tours with customers that we take to CBSA and we work with both the port directors and the chief and the superintendent so that we can actually go through this process of how it looks across the border, basically life of a truck. And then we talk about all of these new initiatives with the importers and CBSA collectively. So the CSA program, secure corridor, single window, et cetera. At the bottom of the slide, just a little highlight on Canada. So we do have offices in Calgary, Vancouver, Montreal, Toronto, Windsor. I sit in the Windsor branch and this branch is the one that's open 24/7, as Steve said, so we have a brokerage stop across Canada of 168, 68 of those actually sit in the Windsor office. The average tenure is 9 years. And I'd like to highlight that this actually went down, through COVID, we actually grew. And we grew enough that, that tenure started to go down a little bit and dipped because it was higher prior. We also have 8 licensed brokers within Canada and something we're very proud of is that we have new 91 CCS certified custom specialists. I can tell you that there's 91 today, but we have over 35 that are in the program right now doing their exam in October.

If I can just jump in here, I want to make [Indiscernible] specifically emphasize this point here is local expertise. For those of you folks that are not aware, but it is an acceptable practice to move customs work, entries processed offshore. And that's been acceptable by CBSA Canada Border Services Agency. So they are allowing entries to be processed in countries around the world. We do not participate in that program. All of our transactions are managed by local teams, basically at the port of entry into Canada. But we specifically don't offshore our work just to let you folks know. We've actually seen a bit of, I guess you can say an uptick on coming back to Canada because there has been some compliance issues with transactions being processed overseas, resulting in penalties and outages, and we're going to see some of that work come back home to Canada, just for the FYI for all.

Good point, Steve. And then I do want to answer this question live, if you don't mind. Amanda, do we know if there will be any change in the process from Detroit into Canada once the Gordie Howe Bridge is finished? That is such a great question. So the actual clearance process won't change. Amanda, but what will change is we will have more secured lanes. So I do think you'll see a speedier process into Canada. The secure corridor lane that I talked about in the CSA, the fast, those lanes, they will be more of those as well. So I would love to tell you exactly what that's going to look like. I can't wait to see that little gap close. It's so small and so close. But the actual process through the border will not change. That also the release process will change somewhat with CARM. And again, I don't have enough time to go through all of those points on this webinar. I do have to give my colleague, Steve time to speak through his slides here. But again, if you haven't joined one of those webinars, I would highly suggest that you sign up. So I will turn it over to you, Steve Bunda.

Thanks, Cara. And I know we have Jeff back on, and he'll be joining shortly. So I'm going to jump in here. I, too, am having a bit of an issue with video. So I'm going to just stay off camera for a moment, but I want to address a couple of customs key initiatives here. And it's very common to see many U.S. CBP initiatives makes their way north of the border to Canada, and a couple of the examples are ISF in the U.S. and in Canada, we have [eManifest] ACI. [Indiscernible] Portal in the U.S. and now Canada has its own. It's the CARM client portal, which does have similarities to the ACE portal. And lastly, forced labor, actually, here in Canada, it's forced and child labor. The Minister of Labor in collaboration with the Minister of Public Safety have mandated legislation to eliminate forced and child labor from Canadian supply chains. And this is known as the Supply Chain Act, which is actually formerly known as Bill S-211. The act in place January of this year require specific entities to provide reports detailing their efforts to prevent and mitigate forced and child labor in their supply chains. And really, the #1 question by importers we're receiving today is, do I have to report? And it's a bit of a difficult question for us to [Indiscernible] Canadian public companies and private separate organizations that meet the definition of an entity are required to prepare these reports actually by May 31 of this year, and entities [Indiscernible] in the Act include Canadian public and product businesses that meet certain size thresholds as well as entities that import goods into Canada and many U.S. companies that are involved in the importation up goods into Canada or that control another entity doing business in Canada will likely be considered "covered" under this standard. The entities that must file reports are a corporation or a trust, partnership or other unincorporated organizations that either are listed on the stock exchange in Canada or have a place of business in Canada or have assets in Canada and that meets at least 2 of the following conditions. And the conditions are at least $20 million in assets, generated at least $40 million in revenue and employees at least 250 employees. CBSA, Canada Border Services Agency is currently engaging with [Indiscernible], and they're actually sharing information and best practices and identifying suspected goods being processed by forced and child labor. Now for all of us, this is a new procedure, and it's a fair bit of detail required here in Canada. And to be honest, there hasn't been a ton or it's been quite limited information from the government departments on how to manage all of the reporting requirements. But here at Expeditors, we've been providing support to many of our clients. And if you have questions, on forced and child labor, by all means, please reach out to me directly, and I'll be happy to put you in contact with our team for guidance.

Hey, Steve, this is -- I'd like to maybe just segue in and talk just briefly about the U.S. side as well since it's the same topic. Forced labor, this is an area where we're dealing with it for a couple of years now, but it's really changed. Here in the states, that withhold release orders, they're still there. They're published on the web on the CBP website. But what we've seen is it's really not China exclusively anymore, right? As of January '24, stats actually show that the big ones out there, the big countries where customs is actually targeting, they range from Malaysia, Vietnam, Thailand, even Mexico then as well as China. It started in apparel. And it's still important. It's an area of focus, but electronics is actually the #1, those trade lanes, those types of commodities, those are being targeted as the #1 area right now. Electronics, followed by apparel, industrial machines, agriculture, mass merchandisers, merchandisers. Just yesterday, I saw one on gloves for working -- work gloves. And just recently, there was a piece of electronic some sort of -- some part in a vehicle that was targeted for forced labor. And if custom starts getting into the automotive sector, that's going to be huge. So I just really wanted to throw a few numbers in there. So I could catch up on my presentation since you're talking about this. So thank you.

All right, Jeff, thanks for that input. But yes, as you mentioned, it seems to be a bit more prevalent state side in the U.S., but sure enough Canada is looking at it a lot closer, hence, all this request for information to assure that the Canadian supply chains are free of force and child labor. So next slide, nonresident importer program. And this is really another initiative by Canadian customs known as the nonresident importer program. or the NRI program. And for those of you who are not familiar with it, it allows for foreign companies to access and take advantage of the Canadian marketplace without the need for physical presence here in Canada. Therefore, no bricks, mortar, staffing, warehouse, et cetera. We've seen its growth in the e-com marketplace, and it's very popular with the big box stores here in Canada, like the Canadian Tire, Walmart, Home Depot. And many Canadian companies would prefer their goods be directly delivered to their door distribution facility for a single price. So in most cases, the goods are shipped to the customer, DDP, incoterm, delivered duty pay, where the nonresident is responsible to get the goods to the customer's door. It really takes the burden of importing off the Canadian purchaser. And allows the U.S. exporter to sell to Canada on a delivered price basis. This then makes the ordering process for Canada, more transparent and stable to your Canadian customer. And important to note here is, as a nonresident importer, you can take advantage of the other trade agreements Canada has aligned with. It's not just USMCA or CUSMA, but also the CETA program, Canada European trade agreement and the CPTPP, which is the Trans-Pacific partnership program. And as a best practice, we're actually working with a few nonresident importers in the U.S. today where products destined to Canada move into a U.S. free trade zone. So the product comes in from overseas, into the U.S. and goes into a FTZ and subsequently shipped to Canada from the FTZ and the nonresident importer is taking advantage of the specific trade agreement with Canada. So to put it in perspective, if you're supplying Canada, let's say, footwear or clothing, and that's the highest rate of duty into Canada at 18%. And the origin of the goods is Vietnam, if that product moves from Vietnam into a U.S. FTZ and under customs control moves to Canada, you can still claim the preferential tariff. So 18 points on [landed price]. The whole key of these agreements that Canada has been placed on countries around the world is this transshipment clause. Technically, it can't go to another country where they're not entitled to that [preferential tariff]. But here, the goods don't enter the commerce of the U.S. They're in under customs control, and they are removed from the FTZ customs control, I believe it's a 75-12. Jeff, correct me if I'm wrong there. The goods move to Canada and then take advantage of the preferential tariff. So if you have any questions with regards to the nonresident program, please reach out. And also, I wanted to mention regards to FTZ, we will be hosting a free trade zone webinar on June 5. So if you're interested in learning more, please register and that can be done through the QR code, and I believe that is on the last slide, if I'm not mistaken, of the presentation. At this point...

Sorry, Steve, I'm going to jump in because we actually did a poll for the CARM registration. So 59 out of 106 people, so 56% have both registered and delegated authority, so that's good. 37% have not registered at all. So if you're importing into Canada and you have not registered at all, I highly encourage you to do that today or reach out to Steve or myself after the presentation, and we can definitely help if that's needed. And then 8% have not delegated authority. Again, I want to iterate that you must delegate the [Indiscernible] in order -- for the broker to act on your behalf for release come May 13.

Thanks, Cara. But again, I see the 73 -- 37% have not registered. If you...

There's another question. I don't know if you guys want to answer it now regarding that. It is -- the question is from Ryan, if I have delegated authority with FedEx ground, do I also need to delegate...

Do I also delegate authority to [Indiscernible] brokers we work with? So the answer is yes. So Ryan, within the portal, you can give an invitation to multiple brokers and when you would do that, there should be a [Indiscernible] on the right-hand side within the portal, and it will ask you to maintain your third-party requests. And within that section, you will add all of the brokers you want to work on your behalf. Sorry, Steve, there's one more question. I can as well answer if you like. Why would you wait on getting an RPP bond? Are companies are putting them in place prior to May 13? So absolutely, companies are putting them in place prior to May 13. So as I said earlier, I believe fully that we are as prepared as we can be here at Expeditors. And we've been working with our importers for quite some time to get them all up and running with their bonds. Their RPP status, of course, and then in the CARM portal. Unfortunately, because there's such a high demand right now, the bonds are getting completed, but they end on CBSA where they actually put them in the system is taking much longer. So CBSA has given a 180-day grace period for the bonds to be up and running only if you're registered in the portal. So that registration piece is very important. If you're not registered in the portal, I want to explain a bit what will happen or transpire with Cargo live. And I'll just take 2 seconds, Steve, if that's okay. But I think it's important to highlight that your shipment will still move across the border. But when it comes to the accounting piece, it will basically spin in the system. So there will be nothing to match up the accounting piece within the CARM portal. And that could lead to, unfortunately, some very high penalties and interest as things go on.

Okay. Maybe we can move to the Canadian trade updates on CARM. The next one up, I think we've addressed this here. Again, Cara addressed the previous slide, how important it is to register under the program. But what I wanted to do is really identify some key points here, some takeaways on the CARM program. And these questions are really based on questions and concerns that we've received over the past weeks. Number one, it's a mandatory requirement for both resident and nonresident importers. And for those of you that have not registered as of yet, well, you need to and you need to, I would say, quickly. Because let's not forget, CBSA has confirmed that there is a blackout period between April 26 to May 13. And this is when CBSA will be transitioning from the existing customs commercial system to the new CARM platform. And let's not forget, the CARM client portal will not be available or accessible during this period. No longer can an importer use the customs brokers bond. So importers today piggyback off their customs broker bond. In some cases, this will no longer be available. Key component of the program itself as all importers need to have the adequate security bonds in place with Canadian customs. And Cara did mention about this transition or grace period, we can call it 180, but the key there is you do need to be registered on the CARM client portal. And really, this was implemented to mitigate any potential delays or potential congestion at ports of entries as Canada Border Services Agency have identified there'll be many importers without bonds in place for May 13. Delegation of authority to the customs broker is critical. As you've noticed in the poll, we have some that have not delegated already. If you don't delegate authority, it's going to be a challenge to pay your monthly SOA because there's no connection between the 2 there. I also wanted to mention CARM client registration checklist. The registration process itself is rather simple and should only take 15, 20 minutes online to register, and we've prepared a registration checklist as one needs specific historical import details when registering on the CARM client portal. So it's important to have these details on hand, and it just makes the application process similar. Register as BAM, a business account manager. When you register on the CARM client portal, that person registered by default becomes the business account manager for the CARM client. And in turn, the BAM can delegate another employee or employees as an account manager within their organization. And that's usually done by the finance group, the ones that are paying the statement of account on a monthly basis. So the last option that I wanted to mention is the payment mode, identify payment options within the CARM client portal. So when you're registering on the CARM client portal, there's really 2 common payment options, and they're as follows: one is electronic funds transfer, where the importer essentially pushes the funds to CBSA on a monthly basis. Much like you're paying your credit card or utilities bill online. And the other one is PAD, and that's a preauthorized debit. And that's similar to the U.S. ACH program, where CBSA pulls the funds from the importers account. So that's in place. We had some hiccups on that program, but it is working well now, and we're starting to see more importers, especially nonresidents or importers based in the U.S. who are familiar with the [Indiscernible], the ACH program state side. So these have been really the key concerns and inquiries to the registration process on the CARM client portal. And there's a great deal of information here. So if you require any support whatsoever, please reach out to myself or to Cara directly and we'll be happy to support in the registration process. Thank you. We do have one question here. I'll just answer it. Do you have the CARM registration checklist available? Yes, that will be sent out with the presentation also.

Steve, there's one more question, I can read it if you'd like to answer it. Can I add a second business number to my CARM registration, I have not been able to find a way.

Can I add a second number to my CARM? Well, basically, each 9-digit BAM requires a separate registration. I hope that answers the question.

Yes. You can add multiple RMs, right? But not -- I believe an additional unique number needs its own portal.

Right. Right.

I think that's it for questions for us, Steve.

Yes, appears to be...

Sorry, Sandy Lind has her hand raised. So I'm not sure if we've already answered that or -- all right. Justin, I think we'll turn it back to you.

All right. Well, this is Jeff again, and I'm very sorry for my video issues earlier, but I think that there are a lot of good questions related to the Canadian CARM process that's going to be moving forward here soon. So I'm just going to get back on track, but it will be a little bit quicker than I had thought, maybe I would be able to do speak to. But going back to the U.S. imports from Canada, there are 3 things that I would like to always remind people when I have a seminar, and that is that there's the uniqueness between Canada and the United States is that there are a lot of returns, a lot of return programs for goods coming from Canada back to the states. So the [Indiscernible] provision that used to only before U.S. made goods to return to the United States was expanded several years ago to allow for countries of origin for the rest of the world. As long as they have been increased in condition or value, they're being imported by the same company that exported them to Canada, in this case and that the goods were imported for within 3 years or less, and they're being returned. It's just important that in order to follow these [Indiscernible] procedures, you've got to do it very -- you got to follow it very closely because this is an area of focus for U.S. customs, and it's going to be required that you have the forms that are necessary for the support which are foreign shipper's declaration and importer's declaration. And then for U.S. goods returns, you've also got to have a manufacturer's affidavit and they really prefer that you also include end-use letter. So I just really wanted to hit home on that. Of course, anybody who has any questions, you can contact me after the seminar is over. The next thing is the ACE eManifest. I just like to point out here that, don't forget, this program has been around since 2007, but we still get a fair share of customers who actually will use company vehicles or private vehicles to import goods through the commercial lanes at U.S. customs. That cannot happen. In order to do that, you've got to get a onetime exemption from the ports that you're crossing into here in the United States. So if you have any plans or anything on the horizon, make sure to contact your customs broker because you do have to write a letter to customs to get permission to do that. It's a onetime exemption from the regulatory laws which govern commercial traffic and the conveyance that bring goods into the United States. We're going to skip to the next slide because I do want to give a few updates on some things that are going on in the industry. So we'll skip over the ACH. Steve had a great job explaining how it works in Canada. It's the same here with having a debit and credit program. But some of the things that recently occurred where the USDA organic was kicked off. This was launched on the 19th. It had a very soft implementation, and it's going to be a -- it's going to be an ongoing soft rollout, which means that they're doing informed compliance. So there's a lot of wiggle room right now. So if you aren't up to snuff on how you need to import products that are labeled with an organic seal or the word organic on them, this is something you want to check with your broker on because while it is a soft implementation, they will start tightening up soon. They really over flagged the number of tariff numbers the USDA that is. They've flagged 6,000-plus tariff numbers. So it's -- they are supposed to be rolling back the number of [Indiscernible] numbers, so it will only include food product and then they'll have a second tier that they'll sort of roll out later in the year that impact other things like apparel. But organic is only been a few weeks that we've been dealing with it. And if you have any questions on this, this is something you definitely want to check in with your broker. The next one is Consumer Product Safety Commission there's going to actually be a seminar on June 12, and this is a very important far-reaching PGA that's going to impact just a ton of customers. There's going to be a specific seminar dedicated to this. So I'm just going to say that you really want to attend this because they're flagging a ton of tariff numbers here well. The program is very dynamic. There's a pilot that's going on right now, and they're still accepting customers, importers to the pilot program. So if you do have imports that are governed by consumer product safety, this is something that if you can get in on the front end and be part of the pilot you can team up with your broker and still get into that pilot. There's still room. So please check into that again for the June 12 seminar. A couple of other things. De minimis, Section 321 Entry type 86. There is going to be a lot more scrutiny put on this program. In 2023, there were over 1 billion Section 321 or entry type 86 imports. And if you go back just 8 short years ago, instead of 1 billion, there were only 100 million. So this industry of e-commerce has really changed the way that Section 321 de minimis has been reviewed and there's going to be more scrutiny to ensure that everything that should be declared as a formal entry is de minimis, as you probably know, it's for goods that are $800 or less. There's no entry required. The import is made on eManifest. If there is an 86 entry type, it doesn't have to have a bond, a surety bond for us to, as a broker file the entry for you. But Congress is really looking at this along with customs and there's 2 bills that are in place that they're trying to prohibit China from being involved in the de minimis program and they want to make sure that there's in [Indiscernible] and so there's going to be sweeping changes that are coming. But there are 2 current X in Congress right now to try to make changes. The other thing that I wanted to also touch on is that it's [Indiscernible]. We all love them. They're terrible. And so customs knows that they're terrible. So they're looking for a replacement on MID numbers. They are looking to move towards a global business identifier. And due to the time, I really can't get into this right now, but just understand that they are going out to the industry to see what types of programs are out there that the industry uses and they will actually listen to what the industry has to say. Right now, they're looking at 3 different replacements for [Indiscernible] and those are [Indiscernible]. So that's pretty widely known. There's another one called a GS1, which is a global [Indiscernible] number. it's used with bar coding and things of that nature. And then there's lastly [LEI] number, which is a legal entity number mostly used in Europe, but customs is looking at all these for replacements of the [Indiscernible]. So I just wanted to touch on that. There's going to be more to come over 2,000 towards '25. So keep your ears open for that. And then there's going to be a continuation of Phase 7 of the Lacey Act that's going to be rolling out here soon. it's going to look after all the remaining and harmonized tariff numbers that are not enforced yet, and the focus on those are going to be things that are composites. They're looking at [Indiscernible] as a big one, a big commodity that might get impacted by Phase 7. And then Phase 8 will be the end phase for Lacey, which everything that's still left that's a composite article like paper, books, things of that nature, those will all start being enforced. So a lot of partnering government agency action going on right now. There's also in 2000 -- July [ '25 ] there's going to be a modernization of Cosmetics Regulation Act. It's just very, very active everyone and just really keep an eye on your federal register, make sure that you're keeping your ear to the ground and you're working with Expeditors hopefully, to actually get our news flashes and things of that nature where we can continue to fill you in on these new PGAs as they become [Indiscernible]. So sorry for the whirlwind here at the end. But hopefully, you've got at least a note or two on some of the things that are going on here in the United States and had some good markup dates.

And lastly, the Gordie Howe Bridge for those of you that are curious. It's a secondary bridge to the Ambassador Bridge. It should be complete by summer 2025.

Thanks, guys. It doesn't look like we have any questions that haven't been answered in the Q&A box. So that will wrap up our webinar for today. Thank you, Cara, Jeff, John and Steve. Just a reminder to all, we will submit a survey for you to complete by the end of the day. Completing that will give you an opportunity to download a copy of the presentation. So thank you again for joining us, and we hope everyone has a wonderful day.

Thanks, Jess. Thanks, everyone. Have a great day.

Thank you.

Bye.