THE BUSINESS CASE FOR USING E-COMMERCEDATA TO MANAGE PRODUCT ADMISSION AT
INTERNATIONAL BORDERS
Guidance for Government Agencies and Interested Supply Chain and Trade Companies

DECEMBER 2011
ITDS Product Information Committee

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

TABLE OF CONTENTSEXECUTIVE SUMMARY ........................................................................................................................................................................ 1
PURPOSE ................................................................................................................................................................................................... 5
THE CHALLENGE .................................................................................................................................................................................... 6
VALUE PROPOSITIONS .......................................................................................................................................................................... 8
OVERVIEW OF PILOTS......................................................................................................................................................................... 10TOY AND GAME PILOT........................................................................................................................................................................ 14
OVERVIEW ......................................................................................................................................................................................... 14
WHAT WE EVALUATED .................................................................................................................................................................. 14
HOW THE EVALUATIONS WERE PERFORMED.......................................................................................................................... 15
WHAT WE OBSERVED ..................................................................................................................................................................... 17
THE VALUE OF THE BENEFITS...................................................................................................................................................... 21
THE COST OF CREATING THE BENEFITS .................................................................................................................................... 26
THE COST-BENEFIT ANALYSIS ..................................................................................................................................................... 27
CONCLUSIONS .................................................................................................................................................................................. 33
HIGH-LEVEL NEXT STEPS .............................................................................................................................................................. 33
CUT FLOWER PILOT ............................................................................................................................................................................. 34
OVERVIEW ......................................................................................................................................................................................... 34
WHAT WE EVALUATED .................................................................................................................................................................. 36
HOW THE EVALUATIONS WERE PERFORMED.......................................................................................................................... 37
WHAT WE OBSERVED ..................................................................................................................................................................... 38
THE VALUE OF THE BENEFITS...................................................................................................................................................... 42
THE COST OF CREATING THE BENEFITS .................................................................................................................................... 47
THE COST-BENEFIT ANALYSIS ..................................................................................................................................................... 49
CONCLUSIONS .................................................................................................................................................................................. 54
HIGH-LEVEL NEXT STEPS .............................................................................................................................................................. 54
MEAT AND POULTRY PILOT .............................................................................................................................................................. 56
Page i

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSOVERVIEW ......................................................................................................................................................................................... 56
WHAT WE EVALUATED .................................................................................................................................................................. 57
HOW THE EVALUATIONS WERE PERFORMED.......................................................................................................................... 58
WHAT WE OBSERVED ..................................................................................................................................................................... 59
THE VALUE OF THE BENEFITS...................................................................................................................................................... 59
THE COST OF CREATING THE BENEFITS .................................................................................................................................... 62
THE COST-BENEFIT ANALYSIS ..................................................................................................................................................... 63
CONCLUSIONS .................................................................................................................................................................................. 69
HIGH-LEVEL NEXT STEPS .............................................................................................................................................................. 69
NEXT STEPS FOR THE BUSINESS CASE REPORT .......................................................................................................................... 70
ACKNOWLEDGEMENTS ...................................................................................................................................................................... 72
APPENDICES .......................................................................................................................................................................................... 73
Appendix A – PILOT WORKGROUP MEMBERS ............................................................................................................................ 73
Appendix B – LISTING OF ACRONYMS ......................................................................................................................................... 74
Appendix C – TOY AND GAME COST-BENEFIT ASSUMPTIONS .............................................................................................. 75
Appendix D – CUT FLOWER COST-BENEFIT ASSUMPTIONS ................................................................................................... 77
Appendix E – MEAT AND POULTRY COST-BENEFIT ASSUMPTIONS..................................................................................... 79
Appendix F – PHIS PRODUCT LIST DATA ELEMENT MAPPING TO GDSN CATALOG DATA ELEMENTS ...................... 81
Appendix G – OVERVIEW OF GLOBAL PRODUCT CLASSIFICATION AND IDENTIFICATION .......................................... 83
Appendix H – DETAILED EXAMPLE OF THE CUT FLOWER ABI PG RECORD SET .............................................................. 84
Appendix I – SUMMARY OF TRADE FEEDBACK ON PIC BUSINESS CASE REPORT ........................................................... 87

Page ii

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSEXECUTIVE SUMMARY
Economic realities are driving governments, importers, and brokers to look for new efficiencies in managing products atinternational borders. The search for solutions that effectively deliver product visibility – structured information that succinctly
and accurately identifies or characterizes incoming products – has remained a frustrating and elusive goal for governments. But
now it appears a strategic break-through is within reach, 15 years in the making as the product of maturing business-to-businesselectronic commerce functionality.
The PIC committee has conducted three pilot studies to validate the business case for using e-commerce information to improve
product visibility with three different product sets. The results of the pilot studies show that the use of global productidentification, global classification codes, and industry-standard e-commerce product catalogs in the United States (US) has
obvious mission benefits for participating government agencies (and thus US consumers), as well as definitive cost savings for thegovernment and the private sector. In short, the business cases show that:
The use of global trade item numbers (GTINs) can reduce the volume of consumer toy products subject to examination by theConsumer Product Safety Commission (CPSC) by 75 percent or more – a game-changing advantage for any resource-challenged
participating government agency (PGA). And when global product classification codes are used in combination with GTINs,
CPSC can expect the volume of products subject to examination to be reduced by another 5 percent, for a total reduction of 80
percent. The resulting decrease in number of toy product examinations could create an estimated $16.8 million in savings for toy
importers and $775,000 in cost savings for CPSC over five years. The estimated return on investment is over $8 for every dollar
invested. And these benefits can be accomplished using the new Customs and Border Protection (CBP) Automated Broker
Interface PG Record Set to be implemented in 2012.

Page 1

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

KEY FINDING: The use of GTINs can reduce the volume of consumer toy
products to be examined by 75 percent or more.
KEY BENEFIT: The decrease in toy product examinations could create an
estimated $16.8 million in savings for toy importers and $775,000 in costsavings for CPSC over 5 years.
The positive impact of global product classification codes was borne out further by the cut flower pilot study. Here CBP and the
USDA Animal Health Inspection Service (APHIS) expect the use of UNSPSC global flower codes to reduce the average timerequired to inspect incoming floral shipments by 50 percent, paring a typical two-hour inspection back to about a single hour.
Savings to CBP and the trade are estimated to be $2.7 million over 5 years, with implementation costs less than $350,000.
Estimated return on investment is about $7 for every dollar invested. The use of the global floral code allows critical admissions
processes to be automated at last – ensuring accurate sampling plans and import volume reports and speeding perishable cut
flowers and greenery on their way to florists and consumer outlets.

KEY FINDING: The use of global floral codes could reduce CBP inspection timeby 50 percent and ensure accurate sampling and import volume reporting.
KEY BENEFIT: Savings to CBP and the trade are estimated to be $2.7 million
over 5 years, with implementation costs under $350,000.
Finally, a third business case demonstrated the cost feasibility of using cloud-based, industry-standard product catalogs as PGA
sources of complex product classification information. The USDA Food Safety Inspection Service (FSIS) confirmed that thecomplex characteristics of minimally processed and fully processed meat and poultry products can be accurately
determined from product classification information downloaded from electronic product catalogs currently used to support
business-to-business e-commerce. FSIS can consume this cloud-based product information so that meat and poultry exporters
will not need to separately enter GTIN and product classification information about their exported products into

Page 2

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
government information systems. And exporters could save $1.6 million over five years by not having to resolve misdocumented shipments or to separately enter product information into the FSIS information system. Return on investment isestimated to be $5.6 for every dollar invested. Using the cloud service, FSIS product information automatically stays updated in
the background – keeping product descriptions and export certificates accurate, which help keep foreign markets open for US meatand poultry exports.

KEY FINDING: The complex characteristics of meat and poultry products can be
accurately determined from product classification information in industrystandard electronic product catalogs.
KEY BENEFIT: Exporters could save $1.6 million over five years by not having
to resolve mis-documented shipments or to enter product information into the FSIS
information system.
Details about each of the business case pilots are provided in the report. Because of the positive return on investment for all threebusiness cases, the Product Information Committee believes that all PGAs should carefully examine how e-commerce productidentification and classification codes could be used to improve product management at US borders. Interested PGAs and trade
sectors should proceed with implementation efforts using the new Automated Broker Interface PG Record Set to be implemented
in 2012 and share results with the ITDS and other PGAs.
The business case net value, that is, the value of the hard and soft benefit created minus the cost of implementation, for eachproduct pilot is summarized below in Figure 1.

Page 3

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
2,500,000

TOY AND GAMES PILOT

IMPLEMENTATION COST IN DOLLARS

2,000,000

1,500,000

15,691,000

12,109,500

1,000,000

8,700,000

5,461,500

CUT FLOWER PILOT

2,395,000
500,000

237,000

955,000

1,673,000

2,391,000

663,000

1,021,000

1,425,000

345MEAT AND POULTRY PILOT
0
0

128,000
1

365,000
2

6

TIMELINE IN YEARS WITH
BUBBLE REPRESENTING NET VALUE IN DOLLARS

Figure 1: Net Value Overview for Each Pilot Business Case

Page 4

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSPURPOSEThe purpose of this report is to examine the costs and benefits of using industry-standard e-commerce data and cloud-based
product catalogs to provide better product visibility to government agencies in order to support the efficient and effective
admission of products at international borders. This report describes pilot results obtained for three product sets – toys and games,
cut flowers, and meat and poultry. The scope of the pilots is intended to provide a high-level, order-of-magnitude evaluation of
the business case. These pilot assessments were unfunded projects performed by subject matter experts from government andindustry. Although the report’s contributors have confidence in the findings as presented, an exhaustive study using additional
resources to more precisely measure benefits and cost would likely provide a more precise or specific business case analysis.

Page 5

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

THE CHALLENGE
Imagine the responsibility of protecting millions of citizens in countries from unsafe consumer products. This is the mission
accepted by government agencies every day around the world as they screen product shipments arriving at their borders. They
must make prompt and well-informed decisions to admit or deny product entry to safeguard citizens while minimizing interferencewith legitimate cross-border product movement.
Although government inspectors have been traditionally challenged by the volume of imports, tightening government budgets
suggest that future government success may well depend on finding new strategies for managing the admissions process. To
address this interest, federal government agencies in the U.S. International Trade Data System (ITDS) created the Product
Information Committee (PIC) in 2009 to explore ways to create additional product visibility to improve the efficiency andeffectiveness of product admissions at international borders.
The Situation Today: Today government inspectors rely heavily on the Harmonized Tariff Schedule (HTS) codes and text-based
product descriptions when making admissions decisions. The HTS codes, used primarily to set tariff rates, often lack sufficient
product granularity to support reliable product jurisdiction and admissions decisions. Narrative product descriptions can be useful,
but have limitations – they are free-form text entries with non-standard abbreviations that require manual review and targeting.
These limits in product visibility may cause agencies to not fully screen an imported product that may be unsafe. More commonly,
it can unnecessarily delay the release and increase the cost of importing an otherwise low-risk product. In some cases, inspectors
take time to physically examine a container of products, only to realize the targeted product is not under their jurisdiction and that
other agencies should be conducting the examination. This can be due to misclassification by the broker under an inaccurate HTS
code, but equally due to an HTS code with broad jurisdictional review (e.g., HTS 870321, Passenger Vehicles of < 1,000cc, falls
under the jurisdiction of three US government agencies, the Department of Transportation, the Environmental Protection Agency,
and CPSC).
Government-Unique Standards are Expensive and Inefficient for Trade: Governments could respond by creating their own
new product classification and identification systems for use by suppliers and importers. However, government-unique code lists
are expensive to create and maintain and would be inefficient for importers to use. Each product would have to be mapped to theappropriate characterization code for that country, and that code would only be good for products entering one country. Additional

Page 6

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
inefficiencies could be created if multiple government agencies in the same country each promulgated their own governmentunique coding systems for the same products. A product entering one country would need to be mapped to one or moregovernment codes and if shipped to other countries would need to be mapped to different codes – not a scenario conducive toefficient international trade.
Create Product Visibility using Global e-Commerce Standards: Instead, the approach advocated by the ITDS Product
Information Committee is to have governments adopt the use of global product classification codes, global product identification
numbers, and cloud-based product information catalogs established by industry for efficient product trading and global supply
chain movement. This approach should be evaluated in such a way that its adoption complements and supports other CBP
initiatives such as entry simplification and the PGA record set. The value of using e-commerce standards can be summarized as
three value propositions, each with their own complementary benefits.

Page 7

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

VALUE PROPOSITIONS
The three basic value propositions were defined for the use of e-commerce data in the admission of products at international
borders in a committee report issued December 20101. In summary, these three factors are:
1. To reduce costs to importers of complying with government regulation, Government should use, whenever feasible,
industry-established and maintained global product classification standards to improve its ability to accurately determine
jurisdictional authority and assess the inherent level of risk in product admission.
Global product classification codes such as United Nations Standard Product and Service Codes (UNSPSC) provide“structured” product category codes that Participating Government Agency (PGA) computers can process to increase productvisibility beyond that provided by the Harmonized Tariff Schedule codes. These classification codes are in the public domain
and maintained through the use of a global voluntary-consensus standards process.2 Their use would improve government
targeting efficiency and reduce the number of cargo holds, which in turn reduces importer costs and minimizes disruptions in
product movement.
2. Government should allow the trade to use globally unique product identification numbers, known as GS1 Global
Trade Item Numbers (GTINs), which are already used by industry to identify the brand and model of products in the supply
chain, so that government agencies can also recognize the brand and model of imported products and release those known tobe low-risk, ideally in advance of arrival.
GTINs and Universal Product Codes (UPCs), a variation of GTINs, allow PGAs to consistently recognize products by
manufacturer and model and reuse previous admissions experience with that product to quickly release products known to be

1“Guidance for Using E-Commerce Data to Manage Product Admission at International Borders”. ITDS Product Information Committee, December 2010.
www.itds.gov
2
More information about global classification codes can be found in the first PIC report, “Leveraging e-Commerce Product Data for Smarter Cargo
Management”. ITDS Product Information Committee, April 2009. www.itds.gov

Page 8December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
low-risk or to hold or deny entry to products known to be high-risk or non-compliant. See Appendix G for an overview ofglobal identification and classification terms and concepts.
3. The government should use standards-based, electronic product catalogs to access authoritative, structured productclassification and descriptive information that can be used in computer-based screening to efficiently admit consumer-oriented,
finished goods.
Governments can become consumers of structured product information from industry-standard, electronic product catalogs
operating as a cloud-based service. With these catalogs, already in use by suppliers and retailers to support business-tobusiness e-commerce, government can efficiently access up-to-date, detailed product information published by the productowner and make better informed, prompt decisions about potentially high-risk products. It would be the hope that theprovision of a GTIN for products published in these catalogs will reduce or eliminate the need for other product data over time.

Page 9December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSOVERVIEW OF PILOTS
To gain practical insights to the benefits and costs of implementing these value propositions for products sets of common interest
to governments, the committee conducted three pilot studies. Pilot product sets were selected based on interest shown by different
PGAs and trade members with an interest in representing products that were related to government interests in public health,public safety, and pest management. A workgroup of interested PGA, trade, CBP, and standards representatives was created foreach of the three product sets (See Appendix A). The product sets and the role of government in product admission for each pilot
study were:
1. Toy and Game Products: The US Consumer Product Safety Commission is responsible for protecting the public against
unreasonable risks of injury from consumer products.
2. Cut Flower Products: US Customs and Border Protection is responsible for ensuring that all admissible imported cut
flowers and greenery are free of pests that may endanger native plants or the welfare of American agriculture. In conjunction
with the USDA Animal and Plant Health Inspection Service (APHIS) Plant Protection and Quarantine (PPQ) program, theinspection findings are used to make future risk assessments about fresh cut floral products, growers, other countries’ plant
protection programs, and what level of product inspection is necessary in accordance with product risk factors and trends in
inspection findings.
3. Meat and Poultry Products: The USDA FSIS is responsible for ensuring that all exported US meat and poultry products
are accurately documented to meet the public health regulatory requirements of the importing country.
Pilot Validation of Value Proposals: It is important to understand the differences in product risk factors, inspection
requirements, and industry use of e-commerce identification and classification codes for each pilot, as these differences affect thevalue of each pilot in validating the three value propositions. The fundamental differences in the pilots and their impact onvalidating the utility of the three value propositions are characterized in Table 1.

Page 10December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSPRODUCT SET CHARACTERISTICTOY AND GAMESPILOTCUT FLOWERSPILOTMEAT AND
POULTRY PILOTUTILITY OF GLOBAL CLASSIFICATION CODESUSEFULUSEFULUSEFULPRODUCT VISIBILITY PROVIDED BY HTS
CODES

LOW

LOW

LOW

(20 HTS codes for over1000 product types)(17 HTS codes for 200
flower and greenery
types)(130 HTS codes for
500 product types)

UTILITY OF GLOBAL PRODUCT IDENTIFICATIONVERY USEFULLIMITEDUSEFULREGULATORY INSPECTION REQUIREMENTSDISCRETIONARYINSPECTION OF
PRODUCT SAFETY

ALL SUBJECT TO
INSPECTION FOR
PESTS(About 0.5% of
shipments are
physically examined)(About 100% of
shipments are
physically examined)

ALL EXPORTS
REQUIRECERTIFICATION(100% of shipments
are documented)

HIGH

VERY MINIMALHIGHUSEFULUNNECESSARY

VERY USEFUL

MODERATE

NONE

MODERATE

INDUSTRY USE OF GTINs

UTILITY OF GLOBAL PRODUCT CATALOGSINDUSTRY USE OF PRODUCT CATALOGSLEVEL OF RISK FACTOR COMPLEXITY(69,948 GTINs
Published)(459 GTINs Published)(89,215 GTINs
Published)

COMPLEXSIMPLECOMPLEX(2 to 6 Factors)(2 Factors)(5 to 10 Factors)

Table 1: Product Set Characteristics by Pilot Product Set

The use of global product classification had value for all three pilots because HTS codes by themselves do not provide complete
product visibility. The use of GTINs also had value for all three product sets, but for different reasons. The strongest value wasfor toys, where inspections are discretionary and past admission history could be used by the PGA to minimize targeting of known
products. But GTINs are still useful for meat to “look-up” exported product attributes in product catalogs and for flowers to
distinguish products with different components that must be sampled as separate inspection units upon arrival to the US.

Page 11

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSPGA subscription to industry-standard product catalogs could be highly useful for meat and possibly for toys, but not necessarily
for cut flowers. In the case of flowers, the two product risk factors (country of origin and type of flower) can be readily provided
in the entry record, so government use of an electronic catalog for cut flower products provides minimal advantage. However,meat and poultry and toy products have complex risk factors that cannot readily be provided in the entry record, so downloading
product characteristics from electronic catalogs could have high potential value to government when evaluating admission of theseproduct sets.
Benefit Characterization: Benefits were categorized as Hard, Soft, or Intangible. “Hard” benefits are tangible and measurable,
directly impact the real cost of performing an activity, and represent the primary business case for choosing to implement or not
implement a proposed value initiative. Examples of hard benefits are headcount reductions, legacy information system
retirements, reductions in fees paid, and one-time or recurring cost savings. “Soft” benefits indirectly impact the cost of
performing an activity, and have secondary value in shaping the primary business case for choosing to implement or not
implement a proposed value initiative. Examples of soft benefits are cost avoidance, productivity gains through increased
efficiencies, customer satisfaction, and strategic value. Finally, there are “Intangible” Benefits that cannot be readily quantified
financially, but may contribute real value nevertheless. Examples of these benefits are improved customer satisfaction orenhanced confidence in decision making. Because of their difficulty in being measured, intangible benefits are not included in the
cost-benefit analysis.
Limitations of the Pilot Results: These pilots were undertaken by interested PGAs and trade members to determine the likely
costs and benefits of using global classification and product identification to improve product visibility. The analyses presented inthis report provide a complete and reasonably detailed understanding of the business case for trade and government for these threepilots. However, it is important to note that these pilots were conducted by subject matter experts as unfunded projects.
Therefore, these pilots did not involve professional contracting support, rigorously detailed data collection methods, and an
exhaustive analysis of data collected. Nevertheless, the pilot members believe that the results reported provide reasonably
complete and accurate, order-of-magnitude business case results. After reviewing the results reported here, trade members or
PGAs may choose to fund more exhaustive business case pilots if they believe such investments are necessary and justified before
committing to an implementation effort.
The pilot reviews were conducted as “table-top” reviews as the pilot teams concluded that real-time product inspection would add
little or no value to the validation of the value propositions. The use of normal document review procedures provided sufficiently

Page 12

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
conclusive evidence of the potential value, and real-time inspections were intentionally not conducted because the pilot teams
sought to avoid creating unintentional jeopardy to participating trade partners in the event that pilot inspections delayed the normal
release of product shipments.
Extrapolation of Pilot Results: The sections that follow will provide an overview of each pilot, along with fundamental benefit
and cost estimates. These assessments provide a reliable order-of-magnitude estimate of utility for the use of e-commerce data andsystems for these product types at US borders. However, the extrapolation of projected benefits to other product sets and otherborders should be weighed in accordance with the degree of similarity between the pilot and the target product set in terms of risk
factors and the regulatory authority’s requirements and business processes.

Page 13

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

TOY AND GAME PILOTOVERVIEW
Product Set Scope: The pilot product set consisted of leisure, sports, and educational products intended for children. The HTS
codes for products in this target set are principally 9503.00 (Children’s Toys) but also included 9504.90 (Games), 3407.00(Modeling Pastes), and 8523.59 (Semiconductor Media).
Product Volume: In 2010, over 850,000 entry lines of toys and games with a declared entry value of $14.5 billion were imported
into the United States.
Government Role in Admission: The Consumer Product Safety Commission (CPSC) is responsible for protecting the publicagainst unreasonable risks of injury from consumer products as authorized by the Consumer Product Safety Act of 1972. In FY10,
the CPSC had a staff of 500 and an annual budget of nearly $120 million to carry out its mission.
Current PGA Inspection Process: CPSC accesses information on entries for incoming products in advance of their arrival at theport. Through document reviews, the CPSC investigator decides which products potentially present the highest risk to consumers
and target products for detention and examination. If a product fails to be cleared as a result of its examination, samples of the
product are collected for lab testing and a final determination is made by a subject matter expert as to its admissibility. Products
are usually held at the port until the final determination is made. However, product admission is generally on a “green-light, redlight” basis, i.e., by default toy shipments are admitted unless CPSC targets a specific product in a shipment for examination.

WHAT WE EVALUATED
To What Extent Can GTINs Improve Inspection Efficiency? The pilot team sought to evaluate the extent to which the use of
GTINs would allow previous admission decisions to be used when a product, previously evaluated, is presented in a new entry.
The ability to use a globally unique product identification number to recognize products previously evaluated would allow CPSC
to focus targeting efforts on products known to be of higher risk by prior examination or on potentially high-risk products forwhich there is no inspection history. By using GTINs, CPSC would be able to recognize low-risk products with a known

Page 14

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
inspection history and promptly release these products in accordance with previous admissions decisions that have shown theseproducts to be safe for consumers.
Can Global Classification Codes Improve Product Targeting? CPSC staff currently use, among other available information,
the HTS code and other narrative descriptions to screen incoming imports for products that may pose a risk to consumers.
However, products vary significantly by type (board games, toy sports equipment, electronic games, dolls, action figures, riding
toys, models, etc.) and targeted age group. Even with recent HTS code revisions to reflect three classes of targeted age groups,
product characterization for some HTS codes is still very general. The pilot sought to evaluate the descriptive value ofsupplementing the general descriptive value of the HTS code for toys with GS1 Global Product Classification (GPC) Codes, aneight-digit “brick” code denoting a product category (e.g., 10005133 for Board Games [Non Powered]), and eight-digit GPC brickattribute-value pairs that define specific traits for each product category (e.g., 20000045 [Consumer Lifestage] = 30011504[Younger than 3 Years]). (An overview of global classification brick and brick attribute terms and concepts is provided as
Appendix G.) By using global product classification codes, CPSC seeks to improve product targeting efficiency and increase theexamination yield, which is the ratio of non-compliant product findings to total inspections conducted.

HOW THE EVALUATIONS WERE PERFORMED
Shipping Reports Used to Determine the Level of Product GTIN Repetition in Entries: The trade partner, Hasbro, provided
product information for 30 containers shipped into the US. Containers were intentionally selected by Hasbro to provide a variety
of typical products and multiple products per container. All product information was provided from Hasbro’s shipping records
and their Master Product Data system, with the exception of the GPC brick attribute-value pairs, which had to be manually
determined for each product on the worksheet. To assess how commonly products repeat in entries over time, Hasbro was able tocreate reports from their shipment records that measured the number of times that products in the 30 pilot containers reoccurred inother entries during calendar year 2010. Because data was only readily available for a 12-month period, there was no way for thepilot team to measure seasonal product repetition across multiple years. Each additional year of GTIN admission history would be
expected to generate additional value as the historical base of product admission by GTIN becomes larger and larger.
Product Worksheets Used to Determine Value of Global Product Classification Codes: Because trade and government
production systems are not yet configured to capture and process classification codes and GTINs, a three-part worksheet wasdeveloped to evaluate the product classification codes. The product worksheets were then presented to three CPSC investigators at

Page 15

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
different locations and each was asked to record, given the product information on the sheet, whether in their judgment the product
MUST be Examined (a potentially high risk product that should be examined), PREFERRED to be Examined (a normal risk
product subject to document checks), or DID NOT NEED Examination (a low risk product for immediate release). Investigators
assumed that an average importer, not specifically Hasbro, was importing these products into commerce. Each investigator was
given a set of three worksheets. Investigators used the last three columns of each worksheet to record their judgments regarding
the need to exam each product. The first worksheet completed by the investigators was as follows:
USING HTS WITH INVOICE INFOBOL #CONTAINER #ENTRY LINENUMBERHJSCHKG113591400

TGHU926700

1

HTS CODE OF
PRODUCT(As Reported)HTS DESCRIPTIONPRODUCT NAME/DESCRIPTION (on Invoice)# CARTONS/ CASES

8543.70.9650

ELECTRICAL MACHINES TV PLUG INGAMES THAT DOES NOT KEEPSCORE OR HAVE COMPETITION.

PLA ALPHIE DATABOTS ASST

425

MUST BE
EXAMINED

PREFERRED
EXAMINATIONDID NOT NEED
EXAM

Table 2: Toy Worksheet with Standard Entry Product Data

After completing the first worksheet, investigators were then asked to complete a second worksheet that had the same information
as the first worksheet except that the GPC Code and Description was added to the sheet. The second worksheet had the following
appearance with the new GTIN and GPC code data columns highlighted:
USING HTS WITH GPC BRICK CODEBOL #HJSCHKG113591400

CONTAINER #TGHU926700

ENTRY LINENUMBER1

HTS CODE OF
PRODUCT

8543.70.9650

HTS DESCRIPTIONPRODUCT
NAME/DESCRIPTION(on Entry Line)

ELECTRICAL
MACHINES TV PLUG
PLA ALPHIE DATABOTSIN GAMES THAT DOESASST
NOT KEEP SCORE OR
HAVE COMPETITION.

GPC CLASSIFICATIONCODEGTIN # OF PRODUCT(NA = Not Available)

00653569558637

10005159

GPC CODE NAMEGPC CLASSIFICATION DESCRIPTION# CARTONS/ CASES

Developmental/
Educational Toys
Other

Includes any products that can be described or observed as adevelopmental or educational toy designed for learning throughrecreational activities, where the user of the schema is not able toclassify the products in existing bricks within the schema. Excludes
all currently classified non-powered and powered
Developmental/Educational Toys.

425

MUST BE
EXAMINED

PREFERRED
EXAMINATIONDID NOT NEED
EXAM

Table 3: Toy Worksheet with Entry Product Data and GPC Classification CodeFinally, investigators were provided with one more worksheet, this one with all the data on the second worksheet as well as the
GPC brick attribute value pairs that described additional features of products. The second and third worksheets were constructedto allow the pilot team to evaluate the value of the GPC codes alone and in combination with the GPC attribute-pairs. The thirdworksheet appeared as follows with the new GPC attribute-value column highlighted:

Page 16

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
USING HTS WITH GPC BRICK CODE AND DESCRIPTORSBOL #HJSCHKG113591400

CONTAINER #TGHU926700

ENTRY LINENUMBER1

HTS CODE OF
PRODUCT(As Reported)

8543.70.9650

HTS DESCRIPTIONELECTRICAL MACHINESTV PLUG IN GAMESTHAT DOES NOT KEEPSCORE OR HAVECOMPETITION.

PRODUCT
NAME/DESCRIPTION (onEntry Line)

PLA ALPHIE DATABOTSASSTGTIN # OF PRODUCT(NA = Not Available)

00653569558637

GPC CLASSIFICATION
CODE

10005159

GPC CODE NAMEGPC CLASSIFICATION DESCRIPTIONGPC DESCRIPTOR VALUES

Includes any products that can be described or observed
as a developmental or educational toy designed forlearning through recreational activities, where the user ofDevelopmental/
the schema is not able to classify the products in existing Consumer Lifestage = 3 Years and Up
Educational Toys Other
bricks within the schema. Excludes all currently classified
non-powered and powered Developmental/Educational
Toys.

# CARTONS/ CASESMUST BE
EXAMINED

PREFERRED
EXAMINATIONDID NOT NEED
EXAM

425

Table 4: Toy Worksheet with Entry Product Data, GPC Classification Information, and GPC Attribute-Value Pairs

Because investigators assessed products independently, investigator preferences and the changes in those preferences were
evaluated as independent result sets. Therefore, since there were 142 invoice lines across all 30 containers, and three investigators
independently designated their preference for each invoice line, the total number of investigator designations for each productinformation set is 426 (142 product lines X 3 investigator observation sets).

WHAT WE OBSERVED
Toy Products Commonly Repeat in Entries over Time: Reports provided by Hasbro show that carton-level products present in
the 30 pilot containers were offered for admission in 171 entries during the 12-month period March 2010 through February 2011.
In this sample, 68 percent of the different invoice-line products repeated at least once, and products that repeated on average
repeated 4.23 times in other entries from that same importer over a 12-month period.
If the amount of product repetition in this sample is a reasonable estimate of product repetition for major toy importers, then one
can expect to see product repetition in approximately 75 percent of the entry lines (288 / 388, where for 100 unique products, 32
percent of the unique products, or 32 entry lines of products, will not repeat [100 X 0.32 = 32], and 68 percent of the uniqueproducts, or 68 entry lines of products, occur for the first time to repeat later [100 X 0.68 = 68], and 288 entry lines of products
represent the repeating products [(1 X 0.68) X 4.23 = 288]. As CPSC builds its knowledge base of previous admissions
decisions, quickly three-quarters of all toy entries can be managed as a product with a known admissions history, andtargeting efforts can be focused on the remaining one-quarter of toy entries that have no admissions history or have no
GTIN. Table 5 shows the projections for toy product repetition at the line-entry level over a 12-month period at different entry
line volumes using the pilot results as a basis for estimation:

Page 17

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSTOTAL ENTRY
LINES OVER 12
MONTHS*

171
388
1,000
5,000
10,00050,000ENTRY LINE WITHUNIQUE INVOICE- ENTRY LINES OF ENTRY LINES OF
A PRODUCTLEVELPRODUCTS THAT PRODUCTS THATPREVIOUSLYPRODUCTS
DO NOT REPEAT
DO REPEATPRESENTED (4.23
PRESENT(32%)(68%)
PER REPEATINGPRODUCT)PILOT RESULTS
44
14PROJECTIONS
100
32
258
82
1,287
410
2,575
819
12,873
4,096

30

127

68
176
878
1,755
8,777

288
744
3,713
7,425
37,127*Total of non-repeating and repeating entry lines may not exactly equal total entry lines over
12 months due to rounding.

Table 5: Pilot Product Repetition and Projections of Product Repetition in Entries over 12-Months

Global Product Classification Significantly Improved Product Visibility for Toy Products: The level of desired examination
for the products in the containers selected by Hasbro, as determined by three CPSC investigators using the HTS code and narrative
product descriptions; the HTS and GPC Code; and the HTS, GPC Code, and GPC Brick Attribute value pairs is shown below in
Figure 2.

Page 18

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
250
237

197

200
178

163

Number of Products

162
150
127
121

100

67

50
26

0

HTS

HTS & GPC BRCKHIGH-RISKNORMAL-RISK

HTS, GPC BRCK & ATTRIBLOW-RISK

Figure 2: Product Risk Level Designation by CPSC Investigators Using HTS Only, HTS with GPC Brick, and HTS with GPC Brick and Attributes

Page 19

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
When CPSC investigators used the GPC code in addition to the HTS code to evaluate the level of inspection that an imported
product should have, the number of investigator designations at the EXAMINE AS HIGH RISK level dropped from 178 to
67, a decrease of 111. This decrease was a 62 percent reduction in the number of HIGH-RISK designations compared to using
the HTS code alone (111 of 178), and a 26 percent reduction in the number of all products subject to examination (111 of
426). Using these pilot results, similar projections for the reduction in high-risk product designations can be estimated for othernumbers of invoice-level toy products as shown in Table 6.

INVOICE-LEVEL PRODUCTS

HIGH-RISKDESIGNATIONSWITH HTS CODE

HIGH-RISKDESIGNATIONSWITH GPC CODEPILOT RESULTS
178

67

111
62%
26%

PROJECTIONS
418
2,089
4,178
20,892
41,784
0.42
42

157
786
1,573
7,864
15,728
0.16
16

261
1,303
2,606
13,02826,0560.62
62% of High-Risk Designations% of All Designations
1,000
5,000
10,00050,000100,000
1
100

REDUCTION
IN HIGH-RISKDESIGNATIONSWITH GPC CODE

Table 6: Pilot Reductions in High-Risk Product Designations and Projections Using GPC Codes

Although the use of GPC Brick attributes in combination with the GPC and HTS codes reduced the number of high-risk
designations by another 10 percent of all products subject to examination, the benefit projections for the toy pilot business cases
will be calculated on the use of the GPC code alone without the GPC brick attributes. The GPC code can be submitted as part of
the CBP entry using the PG record set, whereas the use of GPC brick attributes involves the use of global product catalogs as
described later in the meat and poultry pilot. Although the use of GPC Brick attributes adds additional product visibility andshould be considered for product sets where suppliers commonly publish product descriptions in global catalogs, only the use of
the GPC codes is assumed for the toy business cases presented in this report.
Page 20

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

THE VALUE OF THE BENEFITS
The business case benefits for the use of GTINs and GPC codes are defined below. The assumptions used to estimate government
and trade costs and benefits are summarized in Appendix C.
HARD BENEFITS – Improved Inspection Efficiency through GTIN Identification and Reuse of Admission History:
The results of the pilot suggest that about 75 percent of all line entries imported in one year by a major toy importer are productsthat have been previously presented for admission. Assuming that a major importer enters about 5,000 entry lines a year, the pilot
results suggest that about 1,290 unique products will be presented by this importer for entry. Of these, 32 percent or 413 entry
lines will not repeat again for the year. The remaining 68 percent of the unique products, or 877 products, will repeat again at least
one time as an entry line in another entry, and on average these products will repeat 4.23 times, or as 3,710 entry lines as shown in
Figure 3. These repeating entry lines represent products that have been previously presented for admission and require limited or
no further examination once reviewed.
ENTRY LINES BY HTSSUBJECT TO
EXAMINATION
5,000 X .005 = 25 EXAMSNONFIRST OPPORTUNITY TO
REPEATING
EXAMINE REPEATINGENTRY
ENTRY LINE (68%)
LINES (32%)
877
413

ENTRY LINES BY GTINPRESENTED FOR THE
FIRST TIME SUBJECT TO
EXAMINATION
1,290 X .005 = 6 EXAMSENTRY LINES REPEATING TWO
OR MORE TIMES
3,710

ENTRY LINES BY GTIN THATREPEAT AND DO NOTREQUIRE EXAMINATONONCE REVIEWED3,710 X .005 = 19 EXAMSAVOIDED

Figure 3: Estimated Annual Product Repetition for One Major Toy Importer

Page 21

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
When managing entry lines only by HTS code, all 5,000 entry lines have no admissions history and average examination rates will
result in about 25 examinations annually for one major importer. But when managing entry lines by GTIN, the government has
the opportunity to reuse the previous admission action as a default action for about 3,700 entry lines. Using the known productidentity of these repeating entry lines, the government no longer needs to target these products as unknown products, reducing thenumber of examinations for the importer by 19 over a one-year period [3710 entry lines X .005 rate of examination = 19
examinations]. The value of this benefit can be quantified as follows:
Trade savings due to a reduced number of examinations when managing products by GTIN for one major importer with 5,000
entry lines:


Reduction in number of examinations for one toy importer = 3,710 repeating entry lines X 0.005 [examination
frequency] = 19 examinations avoided by using GTINs X $1500 [importer cost per examination]) = $28,500.

TRADE FIVE-YEAR HARD BENEFIT FOR TEN IMPORTERS USE OF GTINS[recurring] = $1,425,000$28,500 X 10 [importers] X 5

Furthermore, the 75 percent frequency of toy product line repetition used in the business case models should prove to be aconservative estimate. The actual rate of line entry repetition will likely be higher for three reasons:
1) After the first year of implementation, the first occurrence of products presented in Year 1 will be products with known
admissions histories in all successive years, which will raise the percentage of repeating products in subsequent years forthat importer to about 90 percent;2) The benefit does not include entry lines presented by secondary importers such as Wal-Mart and Toys”R”Us that importthese same toy products that are identified with the same GTINs; and
3) The pilot results exclude year-to-year seasonal repetition of product shipments, which when included may further
increase the frequency of product repetition.
The benefits above could not be factored into the business case models presented here because of the limitations in the scope of thepilot data.

Page 22

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
HARD BENEFITS – Improvements in Targeting Efficiency Using Global Product Classification:
Improvements in product visibility through global product classification will create savings for importers due to a reduction in
examinations of products that only appear to be high risk when evaluated only in the context of the HTS code. For a major toy
importer with 5,000 entry line items a year that are not identified by GTIN, the CPSC must evaluate the product risk of all 5,000
entry lines by HTS code and description. But when the importer provides GPC codes for each entry line, the number of products
designated as potentially high-risk by investigators will decrease by about 1,300, which is 26% of all 5,000 products subject toexamination, in accordance with the pilot results.
For a major toy importer that identifies products by GTIN, the CPSC must only evaluate the 1,290 unique products that do nothave an admissions history when first presented. When the importer provides GPC codes for these 1,290 products, the number ofpotential high-risk products will decrease by 26%, or 335 products. With an average examination frequency of 0.5 %, the importer
can avoid 1 to 2 examinations (1.68) for the 335 entry lines downgraded from high-risk products through the use of the GPC code
as shown in Figure 4.
The business case scenarios will assume that major importers implement the use of both GTINs and GPC codes so that reductions
in examinations will not be double counted for the use of GTINs and then again for the use of GPC codes.
20 % OF ENTRY LINESSUBJECT TO
EXAMINATION WITH GTINAND GPC CODE
955 X .005 = 5 EXAMSPRODUCTS SUBJECT TONORMAL TARGETING AND
EXAMINATION
955

80 % OF ENTRY LINES NO
LONGER SUBJECT TO
EXAMINATION WITH GTINAND GPC CODE
4,045 X .005 = 19 EXAMSAVOIDEDREPEATING ENTRY LINES BY
GTIN WITH KNOWNADMISSIONS HISTORY
3,710

REDUCTION IN POTENTIAL
HIGH-RISK PRODUCTS USINGGPC CODES
335 X .005 = 1 EXAM AVOIDED

Figure 4: Estimated Reduction in Potentially High-Risk Products Using GPC Code in Combination with GTINs for One Major Toy Importer

Page 23

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Trade savings due to a reduced number of examinations using GPC Codes in combination with product identification by GTIN for
one major importer with 5,000 entry lines:


Reduction in number of potentially high risk entry line items is 413 non-repeating products + 877 first-time
occurrence products = 1,290 products with no admissions history X 0.26 [percentage reduction in high-risk products] =335 X 0.005 [examination frequency] = 1.68 examinations avoided X $1500 [importer cost / examination] = $2,520

TRADE FIVE-YEAR HARD BENEFITS FOR GPC USE IN COMBINATION WITH GTINS FOR TEN MAJOR
IMPORTERS: $ 2,520 [annual savings in reduced inspections for one importer] X 10 [number of importers] = $25,200 X 5[recurring] = $ 126,000
SOFT BENEFITS – Improved Inspection Efficiency through GTIN Identification and Reuse of Admission History:
The ability of the government to reuse admissions histories for those products identified by GTINs has a major impact on
government efficiency. Because known products are not held for document reviews to confirm their low-risk nature or examined
unnecessarily, the limited examination resources of government can be focused squarely on products not known to have beenpreviously examined or released. Products without an admissions history are those most likely to yield non-compliant products
and are the best target for improving CPSC inspection efficiency and safeguarding consumers. As established for hard trade
benefits above, a major importer that enters 5,000 entry lines in a year will have about 3,710 entry lines with a previous
admissions history.
Government cost avoidance due to reduced number of product examinations through the use of GTINs for one major importer:

Reduction in number of invoice lines requiring discovery or examination for one major importer = 3,710 entry lines
with known admissions history X 0.005 [examination frequency] = 19 examinations avoided X $69 [the PGA
Investigator Cost for one examination as 1.5 hr. X $463]) = $1,311

3

As of 2011, the pay rate of a CPSC investigator stationed in the US is estimated to be a grade 13 step 3 with an hourly rate of $35.17. With an average benefit
cost of 30%, the hourly salary and benefit of a typical CPSC investigator would be $45.72.

Page 24

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
GOVERNMENT FIVE-YEAR SOFT BENEFITS FOR USING GTINS WITH TEN IMPORTERS $1,311 X 10 [numberof importers] = $13,110 X 5 [recurring] = $65,550
SOFT BENEFITS – Improvements in Targeting Efficiency Using Global Product Classification:
For the government, the actual number of examinations performed by CPSC is not expected to decrease, but to shift to other lessvisible toy products or to other consumer product types where GTIN identification and GPC codes are not used. The benefit of the
improved targeting to the PGA will be an increase in product targeting efficiency, as the improved product visibility allows CPSC
to focus in on the truly high-risk products. The benefit of the improved targeting efficiency is calculated by the decrease in
examinations no longer performed as a result of the improvement in targeting through the use of the GPC codes. This number
constitutes a soft cost-avoidance benefit for the government, and is calculated as follows:
Government cost avoidance due to a reduced number of examinations using GPC codes (in combination with productidentification by GTIN) for one major importer with 5,000 entry lines:


Reduction in number of potentially high risk entry line items is 413 non-repeating products + 877 first-time
occurrence products = 1,290 products with no admissions history X 0.26 [percentage reduction in high-risk products] =335 X 0.005 [examination frequency] = 1.68 examinations avoided X $69 [the PGA Investigator Cost as1.5 hr. X $46])= $116

GOVERNMENT FIVE-YEAR SOFT BENEFITS FOR GPC USE IN COMBINATION WITH GTINS FOR TEN MAJOR
IMPORTERS: $116 X 10 [number of importers] = 1,160 X 5 [recurring] = $ 5,800
INTANGIBLE BENEFITS –– Improved Inspection Efficiency through Product Model Identification and Reuse of Admission
History:
Prompt, Paperless Release of Known Products: The government’s use of GTINs to recognize products with a known
inspection history and promptly release (or reject) these products in accordance with previous admissions decisions, ideally inadvance as paperless releases, creates a benefit for the trade. Advance knowledge of product release creates more predictableproduct delivery dates for importers and receivers. However, this benefit cannot be readily be assigned a dollar value. Therefore,

Page 25

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
although a true benefit, the advance knowledge of release will be considered an intangible benefit for the trade. Additional
analysis to estimate the dollar value of this benefit should be attempted as part of future live pilot implementation efforts.
Brand Name Protection: Other intangible benefits include the reduction of brand damage associated with a recall of a productalready in commerce. By removing non-compliant products more effectively at the ports, the trade can avoid recalls as noncompliant products have a higher probability of being discovered before they enter the domestic supply chain.
Improvements in Consumer Safety: Lastly, consumers will benefit from reductions in injuries and deaths that will result from a
dramatic improvement in product targeting efficiency by CPSC at time of importation. By providing CPSC with supplemental
information that improves product visibility at time of entry, the public, and particularly children in this instance, will experience
reduced exposure to health and safety hazards in consumer products, which will translate to lives saved.

THE COST OF CREATING THE BENEFITS
To create the benefits above, the government must revise its targeting procedures to incorporate the GPC product classification
codes and GTINs for product identification. This will require report revisions for investigators performing document checks andchanges in targeting programs. The estimated one-time cost of the report revisions is $250,000 and an estimate of revisingtargeting procedures and training investigators to use the revised reports is $250,000. Minimal changes in recurring costs will be
expected once revised targeting processes are in place.
GOVERNMENT COSTS:
The PGA cost of implementing new or revised targeting reports that incorporate global classification information and use GTINs
to consider past admission decisions for previously reviewed products are estimated as follows:

Page 26

One-time cost of PGA report revisions:$250,000

One-time cost of implementing revised targeting changes:$250,000

Recurring cost of PGA report maintenance:$20,000

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSPGA FIVE-YEAR COST: $ 250,000 [one-time report revision] + $250,000 [one-time targeting procedure revision] +$20,000 X 5 [recurring report maintenance] = $ 600,000.
Note that the benefits of this business case were calculated on the basis of using the GPC code without the GPC brick attributes, so
the cost of a government subscription to global product catalogs is not part of this business case.
TRADE COSTS:
To create the benefits above, importers will need to include the GPC code and GTIN number of product items in the CPSC PG
record set of the CBP entry. The GTIN of a product is readily known by product suppliers and would be passed to non-supplier
importers through electronic EDI messages that are already configured to include this data element. Through discussions with
software providers, the cost to brokers to update their entry software to support the PG record set that allows the GTIN and GPC
code to be added to the entry line record is included in the cost of normal software maintenance. Although the cost of thesechanges will vary for each importer and supplier, the pilot team estimates that the costs can be approximated as follows.


One-time cost of program changes to include GTINs and GPC codesin the entry record for one importer:$25,000

TRADE FIVE-YEAR COST FOR ONE IMPORTER: $25,000 X 10 [number of importers] = 250,000
Again, the benefits of this business case were calculated on the basis of using the GPC code without the GPC brick attributes, so
the cost of trade members publishing product GPC brick attributes is not part of this business case.

THE COST-BENEFIT ANALYSIS
Cost-benefit is summarized over five years for two implementation scenarios: The top ten major toy importers (about 58 % ofimport volume) implementing in Year 1 with an average of 49,900 line entries per importer a year; and the top 50 major toy

Page 27

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
suppliers (about 71 % of import volume) with the top 10 importers implementing the first year and 10 of the next 40 importers
implementing each year from the second year through the fifth year with an average of 12,200 line entries per importer a year4.
TOY BUSINESS CASE 1: CPSC AND TOP 10 TOY IMPORTERS IMPLEMENTING GTINs AND GLOBAL PRODUCT CODES
With the top ten toy importers providing GTINs and Global Product Classification Codes for each entry line number, after five
years the total benefit is $15.8 million, the total cost is $850,000, and the net value is $15.0 million with a strong 1792% return on
investment (ROI) as shown in Table 7.
% of INDUSTRY ADOPTION:

58 %FIVE-YEAR ROI :

5

1762%

PAYBACK IN:

YEAR 1TOTAL BENEFIT:$ 15,825,000

TOTAL COST

$ 850,000

TOTAL NET
VALUE

$ 14,975,000

TRADE:$ 15,130,000

TRADE:$ 250,000

TRADE$ 14,880,000

PGA:$ 695,000

PGA:$ 600,000

PGA$ 95,000ANNUAL ROI METRICS

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5

CASH INFLOW (BENEFIT)

3,165,000

3,165,000

3,165,000

3,165,000

3,165,000

CASH OUTFLOW (COST)

770,000

20,00020,00020,00020,000NET VALUE

2,395,000

3,145,000

3,145,000

3,145,000

3,145,000

CUM NET VALUE

2,395,000

5,540,000

8,685,000

11,830,000

14,975,000

SIMPLE ROI

311%

701%

1072%

1425%

1762%

Table 7: Business Case Metrics for Top 10 Toy and Game Importers Using GTINs and Global Product Codes

4
5

The average number of line entries for the top 10 and next 40 toy importers is based on actual 2010 import statistics and does not include express couriers.
Return on Investment is calculated as an arithmetic return in accordance withand expressed as a percentage.

Page 28

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
The payback period occurs in the first year with a steady return on investment across all years, with a return of $17.6 dollars forevery dollar invested by the end of 5 years as shown in Figure 5.
18,000,000

HARD AND SOFT BENEFITS
16,000,000

15,825,000

15,130,000

14,000,000

HARD BENEFITS

12,660,000
12,000,000

12,104,000

9,495,000

Dollars

10,000,000

9,078,000

8,000,000

6,330,000

6,000,000

6,052,000

4,000,000
3,165,000
3,026,000

TOTAL COST

2,000,000
770,000

790,000

810,000

830,000

850,000

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 50

Figure 5: Cumulative Cost and Benefits for Toy and Games Products for PGA and the Top Ten Toy Importers Over Five Years

Page 29

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
TOY BUSINESS CASE 2: CPSC AND TOP 50 TOY IMPORTERS IMPLEMENTING GTINs AND GLOBAL PRODUCT CODES
With the top 50 toy importers (representing about 71 percent of the total toy import volume) implementing the use of GTINs andGlobal Product Classification Codes for each entry line number (where 10 importers implement every year), after five years thetotal benefit is $17.5 million, the total cost is $ 1.8 million, and the net value is $15.7 million with an 848% return on investment
as shown in Table 8.
% of INDUSTRY ADOPTION:

71 %FIVE-YEAR ROI:

848%

PAYBACK IN:

YEAR 1TOTAL BENEFIT:$ 17,541,000

TOTAL COST

$ 1,850,000

TOTAL NET
VALUE

$ 15,691,000

TRADE:$ 16,765,000

TRADE:$ 1,250,000

TRADE$ 15,515,000

PGA:$ 775,000

PGA:$ 600,000

PGA$ 175,000

ANNUAL ROI METRICS

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5

CASH INFLOW (BENEFIT)

3,165,000

3,336,500

3,508,000

3,679,500

3,851,000

CASH OUTFLOW (COST)

770,000

270,000

270,000

270,000

270,000

NET VALUE

2,395,000

3,067,000

3,238,000

3,410,000

3,581,000

CUM NET VALUE

2,395,000

5,462,000

8,700,000

12,110,000

15,691,000

SIMPLE ROI

311%

525%

664%

766%

848%

Table 8: Business Case Metrics for Top 50 Toy and Game Importers Using GTINs and Global Product Codes

The payback period occurs in the first year with a steady return on investment through Year 5 as shown in Figure 6. The soft
benefits are those of the PGA through the cost avoidance created by conducting fewer examinations of products that have a known
admissions history or that are determined to be low-risk products through use of the GPC code.

Page 30

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
20,000,000

17,541,000

18,000,000

HARD AND SOFT BENEFITS
16,000,000

16,766,000
13,689,500

14,000,000

HARD BENEFITS
13,085,500
12,000,000

Dollars

10,010,000

10,000,000
9,569,000
8,000,000
6,501,500
6,000,000

4,000,000

6,215,500

3,165,000

TOTAL COST
3,026,000

2,000,000

770,000

1,040,000

1,310,000

1,580,000

1,850,000

0YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5Figure 6: Cumulative Cost and Benefit for Toy and Games Products for PGA and the Top 50 Toy Importers Over Five Years

Page 31

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Finally, the major components of each cost and benefit for the PGA and the top 50 toy importers over a five-year period are shownin Figure 7. The net value of the business case is $15.7 million at the end of 5 years with 8.5 dollars in benefits returned for every
dollar invested. The five-year ROI is not as high as in the first scenario, as 40 additional trade members incur implementation
costs and the average number of entry lines per importer is significantly lower for the top 50 importers than for the top 10
importers. Also noteworthy in this business case, are the intangible benefits including the protection of public health and lives that
could not be quantitatively calculated for inclusion in the business case numbers.
20,000,000
PGA SOFT BENEFITS FROMREDUCED EXAMINATIONUSING GTIN AND GPC
775,000

18,000,000

16,000,000
TRADE HARD SAVINGS FROMREDUCED EXAMINATIONUSING GPC IN ADDITION TO
GTINS1,390,000

14,000,000

DOLLARS

12,000,000

10,000,000

8,000,000

PGA RECURRING COSTS FORREPORT MAINTENANCE
100,000

TRADE HARD SAVINGS FROMREDUCED EXAMINATIONUSING GTIN
15,375,000

6,000,000
PGA ONE-TIME COST OFREPORT CREATION AND
BUSINESS PROCESS REVISION
500,000

4,000,000

TRADE ONE-TIME COST FOR 50
COMPANIES TO MAP GTINSAND GPC DATA TO ENTRY
1,250,000

2,000,0000
COST

BENEFITS

Figure 7: Components of Cost and Benefit for Toy and Games Products for PGA and the Top 50 Toy Importers Over Five Years

Page 32

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

CONCLUSIONS
The ability of GTINs and global product classification codes to reduce the volume of consumer products subject to CPSC
examination by 80 percent provides a break-through opportunity for efficient toy product management at US borders. For thisreason, the PIC members recommend that advancement of this business case be given the full support of the ITDS Board, CBP,and all interested PGAs, trade members, and trade associations.
The results of the toy and game pilot are particularly noteworthy because benefits of a similar scale will likely accrue for othertypes of consumer products if these products are also managed by government using GTINs and global product classification
codes. Although the range of benefits will vary in accordance with the frequency of product repetition, the frequency of PGA
product examination, and the utility of the HTS codes compared to the global product classification codes, this approach should be
evaluated by interested PGAs and trade members for the management of other consumer product sets such as electronics,
computers, public health products, food products, and alcoholic beverages.

HIGH-LEVEL NEXT STEPSGiven the high value projected for this business case, the pilot team recommends that CPSC and interested toy importers work
together to advance the use of this business case in the United States in accordance with the following next steps:
1. CPSC and interested toy importers should communicate their interest in adopting the proposed business case andcollaboratively develop estimated implementation timelines.
2. CPSC and interested toy importers, with support from ITDS, should review the GPC global product classification codes andbrick attributes and propose change requests that will improve the accuracy of product classification for toys and games.
3. CPSC should revise targeting procedures to use global product classification codes in their targeting systems and to recognize
products by GTIN to allow for reuse of a product’s admission history.
4. Importers should revise electronic entry submissions to include the PGA record set for CPSC and ensure that entry lines include
the GTIN and global product classification code for toy and game products whenever possible.

Page 33

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

CUT FLOWER PILOTOVERVIEW
Product Set Scope: The pilot product set consisted of cut flower products imported for distribution to florists, wholesalers, mass
markets, and retail grocery stores in the United States. The HTS codes used by the US for products covered by this pilot are all
fresh-cut flowers (0603) and fresh-cut foliage (0604) products as follows:
Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh,
dried, dyed, bleached, impregnated or otherwise prepared:

0603

Fresh:
0603.11.00

Roses
10

Sweetheart

30

Spray

60

Other

0603.12Carnations:0603.12.30 00

Miniature (spray) carnations

0603.12.70 00

Other0603.13.00

Orchids50

Dendrobium

60

Other

0603.14.00

Chrysanthemums
Chrysanthemums:
10

Pom Pom20

Other0603.19.00

Other
05

Page 34

Anthuriums

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
10

Alstroemeria

20

Gypsophila

30

Lilies40

Snapdragons

60

Other
Foliage, branches and other parts of plants, without flowers or flower buds, and grasses,
mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes,
fresh, dried, dyed, bleached, impregnated or otherwise prepared:

0604
0604.10.00 00

Mosses and lichens
Other:

0604.91.00

Fresh
80

Other

Table 9: HTS Codes Used for Tariff Assessment of Cut Floral Products

Product Volume: In 2010, 127,042 entries of cut flowers, composed of over 8 billion stems and valued at over $1.3 billion were
imported into the United States. The pilot focused on operations in the Miami airport, which is the entry point for nearly 90
percent of all imported floral products into the US.
Government Role in Admission: CBP and APHIS Plant Protection and Quarantine are jointly responsible for ensuring cut floral
products are admissible and do not include any live pests that threaten the welfare of the United States as authorized by the Plant
Protection Act. CBP is responsible for the clearance and inspection of cut flower products, while APHIS is responsible for pest
identification and establishing pest risk management and sampling procedures for all incoming products. In FY10, the CBP
Miami, Florida, office had a staff of 75 CBP Agriculture Specialists (CPBAS) and 6 technicians to carry out its agriculturalinspection mission.
Current PGA Inspection Process: As cut flower products arrive at points of entry, typically by air, CBP first verifies theeligibility of the product for admission. Some types of flowers are always prohibited, some are prohibited when imported fromcertain countries, and some are admitted with restrictions placed on their use or movement. Once eligibility for admission is
confirmed, CBP then checks the completeness of shipment documentation, and then inspects the product for pests in accordancewith policy guidance provided by APHIS. When CBP agriculture specialists arrive at the site of the inspection, they review the air

Page 35

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
waybills and invoices and compare those to the Sampling Breakdown Worksheet and the Cut Flower Data Sheet that are preparedby carrier personnel. Once verified as correct and that all required samples are available for inspection, the CBPAS conducts thepest inspection. If live pests are found, samples of that pest are transported to APHIS PPQ laboratories near the inspection site for
identification. If product is found to contain pests that are quarantine significant, the broker is issued an Emergency Action Noticeand must either fumigate, re-export, or destroy the shipment. If upon arrival, CBPAS finds that the reports have significant errors
or that the correct samples are not available, CBPAS will leave the inspection site and return later once notified that the carrier has
made the necessary corrections to present the correct product samples and an error-free Sampling Breakdown Worksheet and Cut
Flower Data Sheet.

WHAT WE EVALUATEDCan Global Classification Codes Automate Sampling Breakdown Worksheet Generation? Presently, the CBPAS manuallyreviews air waybills and invoices of incoming shipments to calculate the sampling units that are present in each load, the numberof boxes for each sampling unit, and the number of boxes that must be sampled. The number of documents to be reviewed for atypical entry ranges from 20 to hundreds of pages, with even higher volumes during holiday periods. In the case of the entry
analyzed in detail for the pilot, the number of air waybill and invoice documents numbered 49 pages. The time required for CBP
specialists while at the inspection site to validate the sampling breakdown worksheet prepared by the carrier is estimated by CBP
officials to take about 50 percent of the typical 2 hour inspection process. Therefore, if the use of global classification codes can
automate the generation of the sampling plan, the inspection time on-site could be reduced by 50 per cent, or typically one hour.
This could double the efficiency of the CBP inspection staff and speed the release of each floral shipment, particularly important
given the perishable nature of cut-flower products and their limited shelf life.
Can Global Classification Codes Automate Cut Flower Product Volume Reporting? The CBPAS also verifies carrier
calculations regarding total stems imported in each shipment by floral product type. For this report, specialists review a “Cut
Flower Data Sheet” and validate the number of stems reported by the carrier for each floral product type (e.g., mixed bouquets,
roses, and chrysanthemums). For this report, all stems in a mixed bouquet are reported as mixed bouquet stems, whereas for tariffassessment, all stems in a mixed bouquet are reported by component type (e.g., as either rose, chrysanthemum, or alstroemeria
stems). The time required for CBP specialists to verify the entries for the Cut Flower Data Sheet is included in the time requiredfor verification of the sampling plan, but the entries must later be keyed into a data entry screen by CBP technicians to transmit the
information to an APHIS product volume information management system. If the data entered on the Cut Flower Data Sheet canPage 36

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
be automatically calculated for each shipment, then that data could be transferred electronically from the entry system to the
APHIS system and eliminate the data entry labor and potential manual miscalculation of entries.

HOW THE EVALUATIONS WERE PERFORMED
Pilot Spreadsheet Used to Determine If Sample Breakdown Worksheet and Cut Flower Data Sheet Generation Possible:
An electronic Cut Flower Risk Assessment Spreadsheet was created by the pilot team to capture data from entries and allow for
the addition of a global classification code and product GTIN to determine if the two manually prepared documents could be
generated with the addition of these two data elements. The pilot spreadsheet was also used to ensure that the format of the PGA
data in the Automated Broker Interface allowed for the collection of all necessary data, including critical data relationships. The
pilot spreadsheet is not for use in a production system; rather the logic of the spreadsheet reports will be programmed as ACE or
PGA system reports that will provide the same or similar information as the pilot spreadsheet reports.
The pilot spreadsheet was tested using selected invoices to validate a method of collecting floral product entry data that permits
CBP and APHIS to create the three critical views of imported cut flower products:
1. Component flower type by stem number for tariff assessment;
2. Sampling unit (air waybill number by flower type by grower [MID#]) for the Sampling Breakdown Worksheet; and3. Flower Product by stem number for the Cut Flower Data Sheet.
The data used in the Cut Flower Risk Assessment Spreadsheet is shown in Table 10, where the yellow-highlighted columns
represent existing entry data, and the blue-highlighted columns represent the product classification and GTIN data added for eachfloral component of the shipment. Because no global floral product classification codes existed in advance of the pilot, the pilot
team worked with the United Nations Standard Product and Service Codes (UNSPSC) standards organization to establish global
floral codes that met the needs of the pilot. These codes were officially published by UNSPSC in November 2010, and used in theworksheet to represent the floral product type and floral component type.
To test the ability of the government to use the addition of the global classification code numbers, a complex shipment of flowers
imported into the US on a commercial flight was studied. The shipment included 169 invoice lines and 626,178 stems. The pilot

Page 37

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
team selected a commercial flight where all products in the shipment were imported by the same importer, Sunburst Farms, tofacilitate the data capture process, but the same data capture process could have been used for shipments consolidated from two or
more importers. Data was exported from the importer’s data entry process and loaded into the pilot team’s spreadsheet. Copies of
the invoices and air waybills were used to confirm imported data. The pilot team then added the appropriate UNSPSC
classification codes for each product and component, and assigned fictitious GTINs, useful in distinguishing different floral
products, using the same GTIN number allocation process that would be used by floral product suppliers. The automatedspreadsheet tariff assessment report, sampling breakdown report, and cut flower report were then compared to the corresponding
manually prepared reports for this flight that were provided in hard copy by the importer.
ENTRY/SHIPMENT #P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678
P9900945678

LINE

1
1
1

AIRBILL #307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746
307-34070746

HOUSE AIRWAY
BILL #
404150404150404150404150404150404150404150404150404150404150404150404150404150404150404150404151404151404151INVOICE #
19090
19090
19090
19090
19090
19090
19090
19090
19090
19090
19090
19090
19091
19092
19092
19928
19928
19928

MID#
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COFLCAS1234BOG
COSPELFL6655BOG
COSPELFL6655BOG
COSPELFL6655BOG

COMPONENT INVOICECOUNTRY
PRODUCT INVOICE DESCRIPTIONDESCRIPTIONHTSUS CODE
ORIGIN
DIANTHUSUS, OTHER THAN MINIATURE/SPRAYDIANTHUSUS, OTHER THAN MINIATURE/SPRAY
603127000
CO
DIANTHUSUS, OTHER THAN MINIATURE/SPRAYDIANTHUSUS, OTHER THAN MINIATURE/SPRAY
603127000
CO
DIANTHUSUS, OTHER THAN MINIATURE/SPRAYDIANTHUSUS, OTHER THAN MINIATURE/SPRAY
603127000
CO
DIANTHUSUS, OTHER THAN MINIATURE/SPRAYDIANTHUSUS, OTHER THAN MINIATURE/SPRAY
603127000
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
DELPHINIUMSDELPHINIUMS
603190060
CO
DELPHINIUMSDELPHINIUMS
603190060
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
DIANTHUSUS, OTHER THAN MINIATURE/SPRAYDIANTHUSUS, OTHER THAN MINIATURE/SPRAY
603127000
CO
ALSTROEMERIAS
ALSTROEMERIAS
603190010
CO
BQT ROSE COOL WATERROSE X-LONG
603110060
CO
BQT ROSE COOL WATERGYPSOPHILA
603190020
CO
BQT ROSE COOL WATERRUSCUS
604910080
CO

BOXES
1
58
38
6
14
2
11
36
9
8
11
2
1
40
124
2
0
0

TOTAL
STEMS
175
20300
11400
2400
1120
180
1100
6480
1800
2000
1650
400
160
22400
48608
144
12
12

PCT

86%
7%
7%

GTIN
00123450000031
00123450000031
00123450000031
00123450000031
00123450000032
00123450000032
00123450000032
00123450000032
00123450000032
00123450000032
00123450000033
00123450000033
00123450000032
00123450000031
00123450000032
00123450000001
00123450000001
00123450000001

PRODUCTUNSPSC CODE
10313200
10313200
10313200
10313200
10311700
10311700
10311700
10311700
10311700
10311700
10313100
10313100
10311700
10313200
10311700
10341500
10341500
10341500COMPONENTUNSPSC CODE
10313200
10313200
10313200
10313200
10311700
10311700
10311700
10311700
10311700
10311700
10313100
10313100
10311700
10313200
10311700
10300000
10314400
10326086

Table 10: Pilot Spreadsheet Sample Data Rows

WHAT WE OBSERVED
The results of the pilot spreadsheet reports exactly matched the results of the manually prepared reports for all three reports. The
only exception occurred in the Sampling Breakdown Worksheet, where the manually prepared report combined three bouquet
products into one sampling unit since the invoice product description for each bouquet were the same, but the automated reportconsidered each bouquet product to be a different sampling unit since the composition of the bouquet products detailed on each
invoice differed. With this explanation of the one variation in the automated sampling breakdown, the pilot team concluded thatthe results of the Tariff Assessment report, the Sampling Breakdown Report, and the Cut Flower Data Worksheet are all
accurate and complete and can be reliably automated through the use of global classification codes. A copy of theworksheet-generated reports are provided below.

Page 38

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
TARIFF ASSESSMENT REPORT:The tariff assessment report in Table 11 shows stem count by HTS code for all products in the shipment, which allows the correct
assessment rate to be applied to all products in the shipment.
HTSUS CODECOMPONENT FLOWER NAME
Total
603110060 ROSES
217,569
603190020 GYPSOPHILIAS
3,303
604910080 FERNS
1,620
LEATHERLEAF
15
LILY GRASS
13,040RUSCUS
10,042EUCALIPTUS
1,400
603190060 ASTERS
15,100CAMPANULAS
11,932
DELPHINIUMS
2,050
GERBERAS
28,188PALMA ROBELINA
31,124SOLIDAGOS
7,580
STATICES
7,208
603110030 SPRAY ROSES
21,738603123000 DIANTHUSUS, MINIATURE (SPRAY)
5,602
603127000 DIANTHUSUS, OTHER THAN MINIATURE/SPRAY
93,673603140010 DAISY POMPON CHRYSANTHEMUMS
36,506603140020 SPIDER CHRYSANTHEMUMS
2,594
603190010 ALSTROEMERIAS
128,488603190040 SNAPDRAGONS
4,114
Grand Total
642,886
Table 11: Pilot Spreadsheet Tariff Assessment Report showing Stem Number by HTS Code

Page 39

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSSAMPLING BREAKDOWN REPORT:
Explanation of the Sampling Breakdown Report: The Sampling Breakdown Report in Table 12 shows products for one ofthree air waybills in the shipment, where the sampling unit is determined by product type and invoicing party (e.g., farm or
distributor MID#), with the calculated risk rating and corresponding sampling rate instruction for the product determined by past
inspection findings that are translated into inspection policy and documented in the APHIS Cut Flowers and Greenery Import
Manual. For mixed products (e.g., bouquets) the report shows the sampling rate for each individual component, which istechnically an incomplete determination, as the highest sampling rate for any one component will apply to the entire box of themixed product. The final ACE program report will add in the program logic to determine which component rate prevails for thatentire box of mixed product and show only that sampling rate.
Determining the Sample Unit: When using the automated sampling breakdown report like that in the pilot spreadsheet, CBPAS
will use the Product Name column, shown aggregated by invoicing party (MID#), as the default sampling unit. Each of thespecific products identified by GTIN is assumed to be product of the same inspection unit (different GTIN numbers are assigned
when products differ by stem lengths or volume of the box (quarter or half). However, in the case of mixed products, where
GTINs identify products with different floral components (e.g., Leatherleaf greens used in place of Ruscus greens), these products
will be sampled as separate inspection units. CBP agricultural specialists make this same determination today by reviewing theinvoice descriptions of each mixed product to determine the components present in each product.

Page 40

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
AIRBILL #307-34070746

HOUSE AIRWAYMID#
BILL #
404150 COFLCAS1234BOG

404151PRODUCT NAMEGTINCOMPONENT FLOWER NAMEINSPECTION INSTRUCTIONSALSTROEMERIAS
00123450000032 ALSTROEMERIASAT LEAST 1 BOX INSPECTING 100%
DELPHINIUMS
00123450000033 DELPHINIUMSAT LEAST 1 BOX INSPECTING 100%
DIANTHUSUS, OTHER THAN 00123450000031
MINIATURE/SPRAYDIANTHUSUS, OTHER THAN MINIATURE/SPRAY
AT LEAST 1 BOX INSPECTING 100%COSPELFL6655BOG
BOUQUETS OF ROSES
00123450000001 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000002 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000003 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000004 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000005 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000006 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000007 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000008 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000009 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000010 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000011 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%
LEATHERLEAF
AT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
00123450000012 GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
COFLCAS4466BOG
ALSTROEMERIAS
00123450000032 ALSTROEMERIASAT LEAST 1 BOX INSPECTING 100%00123450000038 ALSTROEMERIASAT LEAST 1 BOX INSPECTING 100%
BOUQUETS OF MIXED FLOWERS
00123450000035 EUCALIPTUS
AT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
00123450000036 FERNSAT LEAST 1 BOX INSPECTING 100%GYPSOPHILIASAT LEAST 1 BOX INSPECTING 100%ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
RUSCUS
AT LEAST 1 BOX INSPECTING 25 to 50% if FBEs > 50 OR 100% IF FBEs <= 50
ROSES00123450000034 ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM
00123450000037 ROSESRELEASE UNDER NATIONAL FLOWER OF THE DAY PROGRAM

Sum of BOXES Sum of TOTAL STEMS
205
61448
13
2050
143
56675
0
12
2
144
0
12
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
6
1
72
0
6
0
15
0
15
1
90
0
36
3
432
0
36
94
17140
126
24696
0
1400
70
8400
0
2800
0
1620
0
810
18
2430
0
1620
54
10600
536
96480

Table 12: Pilot Spreadsheet Sampling Breakdown Report Showing Number of Cartons and Sampling Rate for each Sample Unit

Page 41

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
CUT FLOWER WORKSHEETThe Cut Flower Data Sheet shown in Table 13 reports all products in the shipment by stem number, so that a mixed product suchas a rose bouquet is reported by the total number of stems present in that bouquet. For example, in this report a rose bouquet
product is reported to have 1,548 stems, even though it is composed of 1,236 rose stems, 156 chrysanthemum stems, and 156
alstroemeria stems.
PRODUCT NAMEBOUQUETS OF ROSESBOUQUETS OF MIXED FLOWERSCOUNTRY ORIGIN
CO
CO
EC
ROSES
CO
GERBERASCOASTERSCO
SNAPDRAGONSCOALSTROEMERIASCO
DELPHINIUMSCOSPRAY ROSESCOSTATICESCOSOLIDAGOSCODIANTHUSUS, OTHER THAN MINIATURE/SPRAY CO
Grand Total

Total
1,548
238,250
2,376
190,035
3,320
1,900
1,950
103,284
2,050
4,680
4,568
7,000
81,925642,886

Table 13: Cut Flower Data Sheet Showing Products by Total Stem Number

THE VALUE OF THE BENEFITSBusiness case benefit is generated when broker software incorporates the use of global cut flower classification codes for the typeof product (e.g., rose bouquet) for mixed products and for unmixed products (e.g., alstroemeria), which allows CBP to generate as
ACE reports the Sampling Breakdown Worksheet and Cut Flower Data Sheet from entry data filed by the importer. Also of value,
but not a requirement for the business case, is for importers to identify products by GTIN in order to assist CBP agriculture

Page 42

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
specialists in validating which mixed products belong to which sampling units and to identify specific boxes of products associatedwith each sample unit.
The industry practice of consolidating products from different importers onto one flight at the country of origin adds importance tothe value of rapid and broad industry adoption. CBP evaluates all products of the same floral type from the same farm (MID#) as
one sampling unit when arriving on the same flight, regardless of importer. Therefore, the optimal business case is for allimporters with product on a given flight to be filing entries with the global product codes so that all products on that flight can beevaluated with ACE-generated reports. Fortunately, floral importers tend to use entry software provided by a limited number ofcompanies, and once these software companies revise their entry software to support global product codes, all importers using thatbrand of entry software could easily implement the use of global product codes.
Benefits below are summarized over 5 years for 10 major cut flower importers. The assumptions used to estimate government andtrade costs and benefits are summarized in Appendix D.
NO HARD BENEFITS – Increased Inspection Efficiency Diverted to Other Inspection Activities
By decreasing the average cut flower inspection time by 50%, government will become dramatically more efficient, but hard costsavings are not expected for the government or trade. Instead, time saved by CBPAS will be diverted to other inspection activities,
given the large volume and variety of agricultural products available for inspection every day. Similarly, carrier and trade staff
time savings are expected from the decreased inspection times, but this time will likely be diverted into other carrier and trade
tasks. One possible effect will be a decrease in overtime work for CBPAS, carrier, and trade employees, but no metrics exist to
calculate this decrease with sufficient certainty to include in the business case.
SOFT BENEFITS – Increased Government Efficiency at Inspection Site Using System-Generated Sampling and Cut Flower Data
Reports:
Automation of the Sampling Breakdown Report: Miami CBP managers estimate that the CBP agriculture specialist process ofreviewing documents to verify the manually prepared Sampling Breakdown Worksheet and Cut Flower Data Sheet takes
approximately 1 to 2 hours for each shipment inspection, depending on the size of the shipment and any discrepancies
encountered. If an average of 1 hour is saved per inspection by CBP specialists using Sampling Breakdown Reports generated
from entry data, CBP could reduce inspection time by 2,080 hours in Miami for 10 importers, assuming on average that each
Page 43

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
major importer has 4 entries a week, which in aggregate would equal about 2,080 [4 X 10 X 52] cut flower inspections each year.
This reduction in inspection time, equal to one full-time staff position, is calculated as cost avoidance, as increases in specialist
efficiency will be reinvested in the inspection of other agricultural products.
Annual Cost Avoidance with 10 Importers adopting = 40 hours saved/week X 52 = 2,080 hours at $436 = $ 89,440

Automation of the Cut Flower Data Sheet: Presently carrier employees manually prepare the Cut Flower Data Sheet and the
CBP agriculture specialists verify the accuracy of the report and enter the worksheet data into the APHIS Agriculture Quarantine
Activity System (AQAS), a USDA information system. However, if the entry information filed by the importer includes the
product classification codes, then the CBP system could calculate the cut flower datasheet information and electronically transmit
that information to AQAS. As a result, CBP will no longer need to enter the cut flower data from the data sheet into AQAS.
Miami managers estimate that presently it takes an average of 5 minutes to enter data from each data sheet into the APHIS system,and there are on average 42 cut flower data sheets (varying from 40 to 50) to be entered every week day. Presently, the entry of
cut flower data is performed by CBP technicians in conjunction with other duties. With the automated generation andtransmission of the cut flower data between the CBP information system and the AQAS system, the use of these technicians for
cut flower data entry could be eliminated and all time saved could be used for other duties. Accordingly, the savings in time arecalculated as cost avoidance, as technician Cut Flower Data Sheet entry time will be diverted to other CBP activities.


Annual Cost Avoidance for 10 importers = 5 minutes X 40 data sheets per week [4 data sheets X 10 importers] = 3.33
hours saved weekly X 52 weeks= 173 hours annually at average technician cost $297 = $5,017

SOFT BENEFITS – Increased Trade Efficiency Using System-Generated Sampling and Cut Flower Data Reports:
If carriers can be provided access to the CBP reports, or if the carriers can access the same data that importers provide to CBP,
then carriers could generate the sampling breakdown reports and would no longer need to manually prepare them. The averagetime to prepare the sampling report by carrier staff for one flight is assumed to be 1 hour, the same as for a CBP agriculture
6

As of 2011, the pay rate of a GS-11 step 5 Federal government employee stationed in Miami, FL, is $32.98. With an average benefit cost of 30%, the hourlysalary and benefit of a typical CBPAS would be $42.87.
7
As of 2011, the pay rate of a GS-7 step 5 Federal government employee stationed in Miami, FL, is $22.29. With an average benefit cost of 30%, the hourlysalary and benefit of a typical CBP technician would be $28.98.

Page 44

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
specialist to perform the same task. Additionally, the decrease in average inspection time from 2 hours to 1 hour also frees up
carrier personnel for other duties, providing additional cost avoidance for the trade. The benefit to carriers is estimated as follows:

Annual Cost Avoidance for Eliminating Manual Sample Breakdown and Cut Flower Data Sheet for10 Importers = 1
hour X 40 inspections per week = 40 hours saved weekly X 52 weeks= 2,080 hours at $12 [Carrier Hourly Wage] =$24,960Annual Cost Avoidance for Reduced On-Site Inspection time for Carrier Personnel for 10 Importers = 1 hour X 40
inspections per week = 40 hours saved weekly X 52 weeks= 2,080 hours at $12 [Carrier Hourly Wage] = $24,960

TRADE FIVE-YEAR SOFT BENEFIT FOR 10 IMPORTERS: $ 24,960 [trade annual cost avoidance with elimination ofmanual report preparation for 10 importers] + $ 24,960 [carrier annual cost avoidance with decrease in average inspectiontime] X 5 = $ 249,600
INTANGIBLE BENEFITS – Increased Trade Efficiency Using System-Generated Sampling and Cut Flower Data Reports:
Possible Reduction in Overtime Inspection Fee Charges: Because the cost of the inspections is funded by appropriations andnot billed directly to trade, there is no hard cost savings to the trade for the reduction in time spent by CBP agriculture specialists
at the inspection site. The trade is only charged inspection fees when the specialist has exceeded his or her 8 hour tour for the day;then the trade is charged an hourly fee that is twice the hourly wage of the specialist performing the inspection. However, it isdifficult to quantify this potential savings to the trade, since there is no reliable way to predict when inspections would be
conducted on overtime. Although this reduction in inspection time will no doubt result in reduced inspection fees to the trade, nohard benefits could be reliably calculated and this benefit is left as an intangible benefit for trade and is not included in the costbenefit analysis.
Faster Release of Perishable Products into the Supply Chain: The trade will also benefit from faster release of products if theaverage inspection time changes from 2 hours to 1 hour. The value of the 1-hour faster release time incrementally extends theshelf life of perishable flowers for that one inspection. But as CBPAS staff move from one inspection to the next during the work
day without having to manually prepare the sampling breakdown reports, the last inspection queued for the day will be started
hours earlier. Although this incremental improvement in release time, when multiplied by the number of entries released each

Page 45

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
year, is real, the pilot team could not measure or estimate this improvement with reliability, so it is recognized here as anintangible benefit but is not included in the cost benefit analysis.
Improved Granularity and Confidence in Industry Import Volume Metrics: An intangible benefit of automating the data
generation and capture of the cut flower data sheet is the improved data accuracy and confidence in reporting the volume and typeof cut flower imports. Both the trade and the government are totally dependent on the numbers generated by this process tounderstand the nature of cut flower imports entering the US. Therefore, any enhancements that improve the accuracy of and user
confidence in these cut flower data numbers is significant, as there are no other data sets that can be used to cross-check thesenumbers.
The Impact of Air Waybills on Sampling Efficiency: Presently, sampling units are constrained to products listed on the sameair waybill. This means that even if the same product from the same farm is listed on two different air waybills in the same entry,
this product is sampled twice as two different samples, one for each waybill. This practice is a necessity with the current manual
generation of the sampling breakdown report, since the only source of data for the current process is the hard-copy air waybills andinvoices. Yet the assignment of product to one or more air waybills has no correlation to pest risk management.
But when the Sampling Breakdown Worksheet is generated using entry data provided by the importer at the time of importation,
new business processes may be possible to improve sampling efficiency. APHIS PPQ may wish to revise its sampling procedures
for automated sampling plans to eliminate the use of the air waybill as a factor in sample unit construction, which would likely
reduce the number of sampling units and further increase inspection efficiency without significantly increasing admission risk. In
the case of the pilot entry, the shipment consisted of 39 sample inspection units when including the air waybills in the inspection
unit construction, but 36 using only the farm (MID#) and product type. Seemingly minor efficiencies for a single entry could
become significant when multiplied by the approximately 127,000 entry inspections conducted every year. Given that additional
research and policy analysis is needed to confirm the potential benefit of this change, this impact is considered an intangible
benefit and is not included in the business case cost-benefit analysis.

Page 46

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

THE COST OF CREATING THE BENEFITSGOVERNMENT COSTS:
Two new reports will need to be created for CBP Agricultural Specialists in the ACE system. The one-time cost for programming
the Sampling Breakdown Worksheet and the Cut Flower Data Sheet data is estimated to be $250,000, with a recurring annual costof $1,000 per report. The generation and transmission of the cut flower worksheet data would be implemented using web services
as part of the ACE-PGA Interoperability Web Service to share the data with APHIS. The CBP cost of creating the web service todeliver this data to the APHIS AQAS is considered to be part of the cost of programming the new ACE report. Additional
programming will be needed by the AQAS to import the data, estimated to be about $50,000. Additional one-time training costs
for implementing a new business procedure for a 2 hour training program with an estimated training material development cost of$25,000 is $35,320 [2 hr. X $43 x 120 inspectors = $10,320 + 25,000 training material development].


One-time cost of programming two new reports:$250,000

One-time cost of programming AQAS Web Service:$50,000

Annual recurring cost of maintaining two new reports:$2,000

One-time training costs to implement new business process:$35,320PGA FIVE-YEAR COST: $ 250,000 [one-time programming] + 50,000 [one-time AQAS web service] + (2,000 X 5[recurring maintenance] + 35,320 [one-time training] = $ 345,320
TRADE COSTS:
Importers currently enter an identity code for each product and product component of a mixed flower product in an entry. Broker
software will map these codes to the global UNSPSC code and place that value in the PGA record set. Additionally, as an industry
best practice, importers should provide a GTIN in place of the stock-keeping unit (SKU) to identify each different product theyship in the supply chain. CBP has proposed a draft Automated Broker Interface record to the trade to allow for this product data to
be electronically transmitted to CBP and APHIS PPQ personnel. An example of the draft PGA record set for cut flowers with thePage 47

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
locations highlighted for the classification codes (preceded by UNS) and GTIN numbers (preceded by SRV) is shown in Table 14.
A detailed example of the cut flower PG record is provided as Appendix H.

1 0 3 4 1 5 0 0

P OM

P OM

C H R Y S A N T H E MUMS ,1 2 3 4 5 6 7 8 970

P G 0 2 P U N S

W I T H1 0 1 2 3 4 5 0 0 0 0 1 9 1

1 2 3 4 5 6 7 8 9

60

S R V

1 2 3 4 5 6 7 8 950

B O UQ U E T

P G 0 1 0 0 1 A P

1 2 3 4 5 6 7 8 940

RO S E

1 2 3 4 5 6 7 8 9

30

O I

20

10

1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9
H 5 0 0 2 CO 6 0 3 1 1 0 0 6 0

1

A L S T RO E ME R I A

1 3 0 . 0 0 0 - 0 0 0

P G 2 6 5 0 0 0 0 0 0 0 0 0 1 2 6 B X
P G 2 6 6 0 0 0 0 0 0 0 0 0 1 0 0 NO
P G 0 2 C U N S
P G 0 41 0 3 0 0 0 0 0

RO S E S

0 0 0 0 0 1 0 0 0 0 0 0 NO

H 5 0 0 2 CO 6 0 3 1 2 7 0 0 0
O I

RO S EB O UQ U E T

P G 0 1 0 0 1 A P

S R V

P G 0 2 P U N S

1 0 3 4 1 5 0 0

P G 0 2 C U N S

1 0 3 1 2 7 0 0

P G 0 4

P OM

P OM

W I T H

P OM

P OM

1 0 1 2 3 4 5 0 0 0 0 1 9 1

C H R Y S A N T H E MUMS ,A L S T RO E ME R I A

1 3 0 . 0 0 0 - 0 0 0

C H R Y S A N T H E MUMS

0 0 0 0 0 0 2 0 0 0 0 0 NO

H 5 0 0 2 CO 6 0 3 1 9 0 0 1 0
O I

RO S EB O UQ U E T

P G 0 1 0 0 1 A P

S R V

P G 0 2 P U N S

1 0 3 4 1 5 0 0

P G 0 2 C U N S

1 0 3 1 1 7 0 0

P G 0 4W I T HP OM

1 0 1 2 3 4 5 0 0 0 0 1 9 1

A L S T RO E ME R I A

P OM

C H R Y S A N T H E MUMS ,A L S T RO E ME R I A

1 3 0 . 0 0 0 - 0 0 0

0 0 0 0 0 0 0 6 0 0 0 0 NO

Table 14: Example of the Revised ABI PGA Record for a Mixed Product with the Global Product Classification and GTIN Data Highlighted

Discussions with software firms that support entry filers in this business sector indicate that the one-time cost to the trade for
upgrading to entry software that can support the PGA record set will be incurred by brokers through the normal software
maintenance process. Software updates related to CBP system changes are typically provided at no additional charge to brokers
that have software maintenance agreements in place with the software vendors, and major brokers purchase these software
maintenance agreements as a normal cost of business. Accordingly, there is no additional cost to the trade for receiving the
updates to the entry software that can support the PGA record set. Other industry segments may differ in software maintenancepractices.

Page 48

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

THE COST-BENEFIT ANALYSIS
Cost-benefit is summarized over five years for two implementation scenarios: Ten major floral importers (about 20 % of import
volume); and fifty major floral importers (about 95 % of import volume).
CUT FLOWER BUSINESS CASE 1: CBP AND TOP 10 FLORAL IMPORTERS IMPLEMENTING GLOBAL PRODUCT CODES
With ten major importers using the PGA record set to provide global classification codes, after five years the total cost is$345,000, the total benefit is $720,000,and the net value is $375,000 with a 109% return on investment as shown in Table 15.
% of INDUSTRY ADOPTION:

20 %FIVE-YEAR ROI :

8

109%

PAYBACK IN:

YEAR 3TOTAL BENEFIT:$ 720,000

TOTAL COST

$ 345,000

TOTAL NET
VALUE

$ 375,000

TRADE:$ 250,000

TRADE:$0

TRADE$ 250,000

PGA:$ 470,000

PGA:$ 345,000

PGA$ 125,000

ANNUAL ROI METRICS

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5

CASH INFLOW (BENEFIT)

144,000

144,000

144,000

144,000

144,000

CASH OUTFLOW (COST)

337,000

2,000

2,000

2,000

2,000

NET VALUE(193,000)

142,000

142,000

142,000

142,000

CUM NET VALUE(193,000)(51,000)

91,000233,000

375,000

SIMPLE ROI

-57%

-15%

27%

68%

109%

Table 15: Business Case Metrics for 10 Major Cut Flower Importers Using Global Flower Codes

8

Return on Investment is calculated as an arithmetic return in accordance with

Page 49and expressed as a percentage.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
With ten major importers, it takes about three years to recover the cost of implementation, with the five year soft benefit reaching
about $720,000, and with flat costs at $345,000 as shown in Figure 8. There is no significant trade cost for implementation and all
PGA costs are recovered directly by the PGA in the fourth year through increased inspection efficiency. There is no hard benefit,
as all time savings are diverted to other duties and the business case assumes no change in inspection fee charges to trade.
800,000

NO HARD BENEFITS

720,000

TOTAL SOFT BENEFITS

700,000

576,000

600,000

PGA SOFT BENEFITS
500,000

470,000

Dollars

432,000
376,000

400,000
337,000

339,000

343,000

288,000

300,000

345,000

341,000

TOTAL COST

282,000
200,000
188,000

144,000
100,000
94,0000
YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5Figure 8: Cumulative Cost and Benefit for Cut Flower Products for PGA and Ten Major Importers Over Five Years

Page 50

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
CUT FLOWER BUSINESS CASE 2: CBP AND TOP 50 FLORAL IMPORTERS IMPLEMENTING GLOBAL PRODUCT CODES
With 50 major importers adopting the use of global product classification, with 10 of these importers implementing in the firstyear, 20 adopting in the second year, and 20 more in the third year, after five years the total benefit is $2.7 million, the total cost is$345,000, and the net value is $2.4 million with a 693% return on investment as shown in Table 16.
INDUSTRY ADOPTION:

95 %FIVE-YEAR ROI:

693%

PAYBACK IN:

YEAR 2TOTAL BENEFIT:$ 2,736,000

TOTAL COST

$ 345,000

TOTAL NET
VALUE

$ 2,391,000

TRADE:$ 950,000

TRADE:$0

TRADE$ 950,000

PGA:$ 1,786,000

PGA:$ 345,000

PGA$ 1,441,000

ANNUAL ROI METRICS

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5

CASH INFLOW (BENEFIT)

144,000

432,000

720,000

720,000

720,000

CASH OUTFLOW (COST)

337,000

2,000

2,000

2,000

2,000

NET VALUE(193,000)

430,000

718,000

718,000

718,000

CUM NET VALUE(193,000)

237,000

955,000

1,673,000

2,391,000

SIMPLE ROI

-57%

70%

280%

488%

693%

Table 16: Business Case Metrics for 50 Major Cut Flower Importers Using Global Flower Codes

The five year cost remains at $345,000 because there are no significant implementation costs for the importers. Full PGA cost
recovery through increased inspection efficiency happens near the start of the third year as shown in Figure 9. No hard benefit isassumed for the trade or the PGA, although a reduction in overtime inspection fees charged to the trade is likely.

Page 51

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
3,000,000
2,736,000

NO HARD BENEFITSTOTAL SOFT BENEFIT

2,500,000

2,016,000
2,000,000

Dollars

1,786,000

1,500,000

1,316,000

1,296,000

1,000,000

PGA SOFT BENEFIT

846,000

576,000

TOTAL COST
500,000

337,000

341,000

343,000

345,000

YEAR 4

YEAR 5376,000

144,000
0

339,000

94,000YEAR 1YEAR 2

YEAR 3Figure 9: Cumulative Cost and Benefit for Cut Flower Products for PGA and 50 Major Importers Over Five Years

Page 52

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Finally, the major components of each cost and benefit for the PGA and 50 major importers at the end of a five-year period areshown in Figure 10.
3,000,000

2,500,000

DOLLARS2,000,000

PGA SOFT BENEFITS OF
REDUCED INSPECTION TIME
1,786,000

1,500,000

1,000,000
PGA RECURRING COST OFREPORT MAINTENANCE
10,000500,000
PGA ONE-TIME COST OFREPORT AND WEB SERVICECREATION
335,000

TRADE SOFT BENEFITS OF
REDUCED INSPECTION TIME
950,000

0

COST

BENEFITS

Figure 10: Components of Cost and Benefit for Cut Flower Products for PGA and 50 Major Importers Over Five Years

Page 53

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

CONCLUSIONS
The ability to use global flower classification codes to automate time-consuming manual processes and reduce inspection times on
average by 50 percent is a compelling reason to proceed with the advancement of this business case. For this reason, the PIC
members recommend that the advancement of this business case be given the full support of the ITDS Board, CBP, APHIS, andinterested trade members and trade associations.

HIGH-LEVEL NEXT STEPSGiven the positive value projected for this business case, the pilot team recommends that CBP, APHIS, and interested cut flower
importers work together to advance the use of this business case in the United States in accordance with the following steps:
1. The government and interested cut flower importers and trade associations should communicate their interest in adopting the
proposed business case and provide estimated implementation timelines.
2. Importers should be encouraged to file entry and entry summary data prior to the arrival of the flight in the US. While not a
regulatory requirement, the pre-filing of this information will allow CBP to generate the reports in advance of arrival at theinspection site. The “auto-generation” of the sampling plan report is a key benefit.
3. APHIS PPQ and interested importers, with support from ITDS, should review the UNSPSC global product classification codesand propose change requests that will improve the completeness and accuracy of product classification for cut flowers andgreenery.
4. CBP and APHIS should create ACE reports to generate the Sampling Breakdown Report and the Cut Flower Data Sheet andtrain CBPAS in their use.
5. Software providers should revise electronic entry software to support the inclusion of the PGA record set for CBP and APHIS
PPQ.
6. Importers should use the updated entry software to generate each PGA record set product line that provides the global productclassification code and, as a recommended practice, the product GTIN for each imported product.

Page 54

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Note that in cut flowers, there is a need to quickly promote universal adoption by importers, given that multiple importers
normally consolidate shipments onto one flight and that the business case objectives are best accomplished when all products on asingle flight are included in the CBP-generated sampling plans and cut flower datasheet reports. However, the common use of
only a few software entry systems across the cut flower industry will promote universal adoption, in that once these software entry
systems have been modified to support the PG record set, all importers or brokers using one of these entry systems will be able togenerate the PG record set.

Page 55

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

MEAT AND POULTRY PILOTOVERVIEW
Product Set Scope: The pilot product set consisted of meat and poultry products typically exported by US suppliers and traders.
These products are meats and edible meat offal that have an HTS code from Chapter 2 and processed products with codes from
Chapter 16 of the Harmonized Tariff Schedule.
Product Volume: In 2010, about 236,000 export certificates were issued by USDA Food Safety and Inspection Service (FSIS)
for US export shipments of meat and poultry valued at over $12.9 billion.
Government Role in Admission: The FSIS is the competent US authority for certifying that US meat, poultry, and processed egg
products exported to other countries meet all of the importing country’s public health requirements. FSIS does so by issuing an
Export Health Certificate for each exported shipment of meat, poultry or processed egg products. FSIS is required by law tocertify the wholesomeness and condition of all exported red meat products and optionally for all exported poultry products, andgenerally accomplishes this through inspection activities required to enable the U.S. mark of inspection. FSIS is in the process of
implementing a new information system, the Public Health Information System (PHIS), to manage the domestic and importinspection and export certificate documentation process. Product suppliers use a secure Internet data entry screen to enter 21
product characteristics for each exported product produced at a production location. In FY10, the FSIS had a staff of about 6,500
personnel located in establishments across the country capable of issuing export certificates.
FSIS will issue an Export Certificate of Wholesomeness for all shipments of meat, poultry, and egg products that were produced
under federal inspection and comply with U.S. laws and regulations. Many countries accept U.S. meat, poultry and processed egg
products produced in federally inspected establishments without additional certification requirements. However, some countries
define additional requirements that imported products must meet, including pre-approval of the slaughter, processing and/or
storage establishments, and food safety and animal health restrictions on the type of product and how it is produced and labeled,which are published in the export library on the FSIS website. When applying for export certification, U.S. exporters are
responsible for ensuring the product is in compliance with the requirements of the importing country.

Page 56

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
FSIS inspection personnel verify that all foreign country requirements are satisfied prior to signing the export certificates.
Currently, this process is manual, from familiarization of the foreign country’s requirements to ensuring product compliance prior
to signing the official certificate.

WHAT WE EVALUATED
The pilot evaluated the potential value of using an electronic, global product catalog compliant with GS1 Global Data
Synchronization Network (GDSN) standards to access detailed information about commercial meat and poultry products. One
pilot objective was to determine if the attributes that FSIS needs to describe exported products in the PHIS system could be
populated electronically from the global product catalog. The second pilot objective was to evaluate all the information
technology issues involved in creating a data flow between the global product catalog and the PHIS. An overview of the GDSN
catalog and PHIS is shown in Figure 11.
PHIS

GDSN Catalog

Figure 11: The Relationship between the Product Catalog and the PHIS Data Tables

Page 57

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
If successful, the ability to populate the PHIS product data tables from the GDSN catalog will:

Create time efficiencies for suppliers of exported meat products; andImprove the accuracy of the government’s PHIS system in documenting the compliance of exported products.

Exporters of meat and poultry products will be able to access the PHIS system and enter information using web-based screens to
identify 21 characteristics of each product that they export. Once established, the exporters need to keep the productcharacteristics updated to reflect changes in existing product descriptions, add new products, and delete products when no longer
produced. If the PHIS product characteristics exist or can be deduced from data in the GDSN catalog, the PHIS could receive andautomatically create and delete product entries in PHIS and populate the product’s characteristics using product information in the
GDSN catalog. If successful, meat and poultry product suppliers that publish their product data in GDSN catalogs will not need touse PHIS data entry screens to enter product characterizations in the PHIS. Additionally, the GDSN catalog data subscription
process will ensure that all product characterizations are automatically updated in the PHIS whenever product updates are
published to the industry-standard catalog.

HOW THE EVALUATIONS WERE PERFORMED
A pilot was conducted by FSIS with a GDSN product catalog service to evaluate the feasibility of using data from the catalog to
populate the PHIS product data tables. A competitive contract award was made by FSIS to GS1 US, to evaluate the government’s
potential use of 1SYNC, a GDSN-compliant product catalog based in the US. A team of FSIS, GS1 US, 1SYNC, and Tyson
Foods – a major poultry supplier – was assembled to evaluate the fit of product information available in the catalog with theinformational needs of the PHIS. The results of the team’s findings were documented in a GS1 US report issued to FSIS in March
2011.99“USDA Food Safety Inspection Service Global Data Synchronization Network Pilot Findings and Recommendations”. GS1 US, March 2011. www.itds.gov

Page 58

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

WHAT WE OBSERVED
The results of the mapping review of the 21 static PHIS product table data elements to the GDSN product data elements for meatproducts determined the following:Eighteen of the 21 PHIS static product data elements (86 %) can be provided by or deduced from the GDSN catalog;Each of the three unmatched static PHIS data elements (second species, third species, anatomical component) can be added to
the GDSN catalog through a change request process, which will allow all 21 of the static PHIS elements (100 %) to be
populated by the catalog;

No information technology or security obstacles were identified for the downloading of product information from the industrystandard product catalog to the PHIS, as only standard Internet protocols are used.

The full list of PHIS Product List data elements and their mapping to GDSN catalog data elements is provided in Appendix F.

THE VALUE OF THE BENEFITS
Benefits are created by the efficiency of the data synchronization process used by the catalogs and by the accuracy of the productdata, which will improve the accuracy of the export certificates. Benefits are summarized over 5 years for 5 major US suppliers ofexported meat and poultry products. The assumptions used to estimate government and trade costs and benefits are summarized inAppendix E.
HARD BENEFITS – Cost Savings Due to Improvements in Export Certificate Documentation:
Improved data accuracy represents the greatest motivation for adopting catalog data synchronization, yet estimating an annual
quantitative benefit is a challenge. Although electronic product catalog systems are not error-free, they provide higher quality data
than “one-off” data sets maintained manually and independently of the supplier’s master product data system. The cost ofexporting ineligible product or resolution of documentation errors caused by missing or inaccurate product information in one-off
data sets can represent thousands of dollars in losses to exporters for a single shipment and in some cases the commercial value ofthe entire shipment may be lost when products are refused and alternate markets cannot be found. In worst case scenarios, theshipment of ineligible products can result in the closure of an entire target market to US exports with potential industry impact ofPage 59

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
millions of dollars in lost export opportunities. In one past example, the shipment of bone-in product to a country that restricted
US meat imports to boneless products only resulted in a temporary ban on imported US red-meat products. To estimate costsavings due to improvements in product information accuracy, the business case will assume that the average cost of resolving a
mis-documented shipment is $5,000 per shipment, and that a major exporter has 3 shipments each year that have documentation
issues that could be eliminated with accurate product data.
Annual cost savings for trade of eliminating export certificate errors caused by erroneous product characterization
for five major exporters:

3 [average number of mis-documented shipments per year per exporter] X $5,000 [average cost to remediate tradeissue] = $15,000 X 5 [number of exporters] = $ 75,000

FIVE YEAR HARD BENEFIT FOR FIVE EXPORTERS: $75,000 X 5 [recurring] = $ 375,000
SOFT BENEFITS - Efficiencies Created by Data Synchronization with the Electronic Catalog
The efficiency of the data synchronization process allows the government to automatically keep PHIS product information inagreement with the supplier’s product information in the electronic catalog. The benefit of this efficiency falls primarily to the
supplier, who is the party responsible for populating product information in the PHIS system. The supplier participating in thepilot study, Tyson Foods, has about 100 products that are typically exported, and the time required to manually enter and validate
product data for one product in the PHIS product table is estimated to require 30 minutes. Additionally the PHIS product data
must be reviewed and validated during the year by suppliers and this process would require an additional 15 minutes throughout
the year for each product. Finally, the current PHIS data model requires products to be entered for each production location, so
information about the same product produced at three plant locations must be entered three times, once for each plant location. If
the average cost of the supplier employee is $25 an hour, then the five-year cost-avoidance benefit for five major suppliers will be:
Annual Cost Avoidance for trade of one-time entry of PHIS product data for five major suppliers:Page 60

0.5 Hour [average entry time] X 100 [average # of products] X 3 [average number of production locations] X$25/Hour [average hourly wage] = $ 3,750 X 5 [number of exporters] = $ 18,750

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Annual Cost Avoidance for trade of avoiding the recurring cost of maintaining PHIS product data for five major suppliers:

0.25 Hour [average entry time] X 100 [average # of products] X 3 [average number of production locations] X$25/Hour [average hourly wage] = $ 1,875 X 5 [number of exporters] = $ 9,375

TRADE FIVE YEAR SOFT BENEFIT FOR FIVE EXPORTERS: $18,750 [one-time] + ($9,375 X 5 [recurring]) =$65,625
If the average time for FSIS to research and correct one trade document error is 3 hours of staff time, and the average hourly wage
for an FSIS specialist is $5810 an hour, then the five-year cost-avoidance benefit for the PGA for five major suppliers will be:
Annual Cost Avoidance for PGA of not having to issue corrected trade documentation:


3 Hours [average time to correct trade documents] X $58/Hour [average hourly wage] = $174 X 3 [average # of
documents to correct] = $522 X 5 [number of exporters] = $ 2,610

PGA FIVE YEAR SOFT BENEFIT FOR FIVE EXPORTERS: $2,610 X 5 [recurring] = $13,050
INTANGIBLE BENEFITS
Leveraging Product Catalog Information to Improve Targeting of US Meat and Poultry Imports: While the scope of thisbusiness case is focused on using product catalog information for exported US meat and poultry products, the use of global
product classification codes and related product catalog information on imported meat, poultry, and egg products will similarly
help to ensure entries are subjected to the required regulatory inspection. FSIS currently relies on the HTS codes and othernarrative descriptions, which is often insufficient to determine jurisdiction. The same PHIS data elements leveraged in the export
pilot can also be used to improve the targeting efficiency of FSIS regulated imported products.

10

As of 2011, the pay rate of a GS-13 step 5 FSIS veterinarian stationed in the US is $44.43. With an average benefit cost of 30%, the hourly salary and benefitof a typical FSIS veterinarian with authority to correct documentation would be $57.76.

Page 61

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Protecting Valuable Foreign Markets for US Suppliers: In worst case scenarios, shipment of ineligible meat and poultry
products can close an entire foreign target market to US exports with potential industry impact of millions of dollars in lost export
opportunities. Although accurate product characterization through the use of industry-standard product catalogs will strengthen
US efforts to detect and prevent ineligible product shipments, there was no precise method for quantifying this benefit, so it is left
as an intangible benefit for this business case.

THE COST OF CREATING THE BENEFITS
To be able to update the PHIS Product List data with product information in the GDSN catalog, suppliers must first publish theirdata into the catalog and then FSIS must download the product catalog data and load it into the PHIS Product List. Many major
meat and poultry suppliers in the US are already publishing product data into GDSN catalogs. Since companies undertake thepublication process for trading partner e-commerce efficiencies, the benefits resulting from the government’s use of this data areserendipitous; therefore the supplier’s cost of publication is not truly a cost associated with this process, as suppliers will publish
product data independently of whether the government utilizes this information.
GOVERNMENT COSTS:
The government’s cost of subscribing to a GDSN product catalog and mapping the data into its information system is a cost
generated solely to support the creation of this value. Although the cost of subscription to the catalog can be shared with other
USDA agencies that have an interest in other catalog information such as product nutritional information, no cost sharing isassumed here. This cost of government implementation is estimated as:One-time cost of FSIS programming changes to map data:$50,000

Recurring Cost of PGA access to product catalogs$40,000

PGA FIVE-YEAR COST FOR CATALOG ACCESS: $50,000 [one-time] + ($40,000 X 5 [recurring]) = $ 250,000

Page 62

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
TRADE COSTS:
A review of the 1SYNC catalog shows that all of the top 10 US meat and poultry suppliers and about 75 percent of the top 25
suppliers are publishing product data for their trading partners. Since there is no additional cost to suppliers for allowing
governments to download their product data and the trade is not expected to publish product data to a GDSN catalog only forgovernment use, the trade’s recurring cost of publishing product information for government use is assumed to be zero. However,
the trade may need to incur the one-time cost of populating the values for their GPC brick attributes to the GDSN product catalog
for their exported products if they have not already done so. The average cost of entering the brick attribute information to the
GDSN product catalog will vary by company, but is estimated to be a one-time cost of $250 [0.1 hour per product * 100 products* $25 = $250].


One-time Cost of Trade publishing the GPC Attributes to GDSN

$250

TRADE COST FOR FIVE EXPORTERS TO PROVIDE BRICK ATTRIBUTE DATA: $ 250 [one-time cost of enteringdata] X 5 [number of exporters] = $ 1,250

THE COST-BENEFIT ANALYSIS
Cost-benefit is summarized over five years for two implementation scenarios: Six major meat exporters (roughly about 50 % ofexport volume); and 25 major exporters (roughly about 90 % of export volume) with five of these suppliers implementing every
year.
Six major meat exporters (roughly about 50 % of export volume) implementing in Year 1 with an average of 6 problem loads perexporter per year; and the top 25 meat exporters (about 90 % of export volume) with the top 6 exporters implementing the firstyear and 5 of the next 19 exporters implementing each year from the second year through the fifth year with an average of 2
problem loads per exporter per year.
MEAT AND POULTRY BUSINESS CASE 1: FSIS AND TOP 6 MEAT EXPORTERS USING GLOBAL PRODUCT CATALOG
With six major exporters publishing GPC brick attributes to a GDSN product catalog and PHIS synchronizing that data into the
PHIS product table, after five years the total benefit is $1,013,000, the total cost is $251,000, and the net value is $761,000 with aPage 63

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
300% return on investment as shown in Table 17. Cost and benefit distribution is asymmetric, as most of the quantifiable benefit
falls to the trade, while most of the cost falls to the PGA. However, the intangible mission delivery benefits for the PGA provide
compelling rationale for adoption beyond the immediate benefits defined for the export process.
% of INDUSTRY ADOPTION:

50 %

ROI :

11

302%

PAYBACK IN:

YEAR 1TOTAL BENEFIT:$ 1,013,000

TOTAL COST

$ 251,000

TOTAL NET
VALUE

$ 761,000

TRADE:$ 979,000

TRADE:$2,000

TRADE$ 977,000

PGA:$ 31,000

PGA:$ 250,000

PGA$ (219,000)

ANNUAL ROI METRICS

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5

CASH INFLOW (BENEFIT)

221,000

198,000

198,000

198,000

198,000

CASH OUTFLOW (COST)

92,00040,00040,00040,00040,000NET VALUE

129,000

158,000

158,000

158,000

158,000

CUM NET VALUE

129,000

287,000

445,000

603,000

761,000

SIMPLE ROI

140%

217%

259%

284%

302%

Table 17: Business Case Metrics for 5 Major Meat Exporters Using Product Catalogs to Publish Product Data to FSIS

The hard and soft benefits along with the cost are graphically presented across five years in Figure 12, showing that hard benefit
payback occurs in Year 1.

11

Return on Investment is calculated as an arithmetic return in accordance with

Page 64and expressed as a percentage.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
1,200,000

HARD AND SOFT BENEFIT

1,013,000

1,000,000

900,000

815,000

800,000

HARD BENEFIT

Dollars

720,000
617,000
600,000

540,000
419,000
400,000
360,000
221,000
252,000

200,000
212,000

180,000
92,000172,000

TOTAL COST

132,000

0
YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5Figure 12: Cumulative Cost and Benefit for Meat and Poultry Export Products for PGA and Top 6 Exporters Over Five Years

Page 65

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
MEAT AND POULTRY BUSINESS CASE 2: FSIS AND TOP 25 MEAT EXPORTERS USING GLOBAL PRODUCT CATALOG
With the top 25 suppliers publishing GPC brick attributes to a GDSN product catalog and PHIS synchronizing that data into the
PHIS product table, after five years the total benefit is $1.7 million, the total cost is $256,000, and the net value is $1.4 million
with an estimated 560 % return on investment as shown in Table 18.
INDUSTRY ADOPTION:

90 %

ROI:

557%

PAYBACK IN:

YEAR 1TOTAL BENEFIT:$ 1,681,000

TOTAL COST

$ 256,000

TOTAL NET
VALUE

$ 1,425,000

TRADE:$ 1,633,000

TRADE:$6,000

TRADE$ 1,627,000

PGA:$ 48,000

PGA:$ 250,000

PGA$ (202,000)

ANNUAL ROI METRICS

YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5

CASH INFLOW (BENEFIT)

220,000

278,000

339,000

399,000

445,000

CASH OUTFLOW (COST)

92,00041,00041,00041,00041,000NET VALUE

128,000

237,000

298,000

358,000

404,000

CUM NET VALUE

128,000

365,000

663,000

1,021,000

1,425,000

SIMPLE ROI

139%

274%

381%

475%

557%

Table 18: Business Case Metrics for Top 25 Meat Exporters Using Product Catalogs to Publish Product Data to FSIS

Hard benefit payback occurs for the trade in early the first year, but the PGA must recover its cost of investment throughintangible benefits of mission effectiveness in protecting foreign markets for US suppliers and the future leveraging of productcatalog information to improve targeting efficiency of US meat and poultry imports. The hard and soft benefits along with cost aregraphically presented across five years in Table 18.

Page 66

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
1,800,000

1,681,000

1,600,000

HARD AND SOFT BENEFIT
1,400,000
1,390,000
1,236,000

1,200,000

HARD BENEFIT
1,000,000

Dollars

1,020,000
837,000
800,000

690,000

600,000

498,000
400,000

410,000
220,000

200,000
180,000
92,000133,000

174,000

215,000

TOTAL COST

256,000

0
YEAR 1YEAR 2

YEAR 3

YEAR 4

YEAR 5Figure 13: Cumulative Cost and Benefit for Meat and Poultry Export Products for PGA and Top 25 Exporters Over Five Years

Page 67

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
Finally, the major components of each cost and benefit for the PGA and the top 25 exporters over a five-year period are shown in
Figure 14.
1,800,000

PGA RECURRING SOFT
BENEFITS FOR NOT HAVING TO
CORRECT MISDOCUMENTED
SHIPMENTS
48,0001,600,000

TRADE RECURRING SOFT
BENEFITS FOR NOT HAVING TOUPDATE PRODUCT DATA IN
PHIS
148,000

1,400,000

1,200,000

TRADE ONE-TIME SOFT
BENEFITS FOR NOT HAVING TO
ENTER PRODUCT DATA INTO
PHIS
95,000

DOLLARS

1,000,000

800,000
TRADE ONE-TIME COST FOR 25
IMPORTERS TO PUBLISHATTRIBUTES TO CATALOG
6,000

600,000

TRADE RECURRING HARD
BENEFITS FROM RESOLVINGMISDOCUMENTED SHIPMENTS
1,390,000

PGA ONE-TIME COST OF
INTEGRATING CATALOG
50,000400,000

PGA RECURRING COST OF
CATALOG ACCESS
200,000

200,000

0
COST

BENEFITS

Figure 14: Components of Cost and Benefit for Meat and Poultry Export Products for PGA and Top 25 Exporters Over Five Years

Page 68

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

CONCLUSIONSThe estimated 560 percent return on investment, the moderate implementation costs, and the practical experience gained bygovernment in establishing the first government-to-business use of a global product catalog to improve product management atinternational borders is a potent reason to proceed with the advancement of this business case. For this reason, the PIC members
recommend that this business case be given the full support of the ITDS Board, FSIS, and interested trade members andassociations.

HIGH-LEVEL NEXT STEPSGiven the projected efficiencies for this business case, the pilot team recommends that FSIS and interested meat and poultry
exporters work together to advance the use of this business case in the United States in accordance with the following next steps:
1. FSIS and interested exporters should communicate their interest in adopting the proposed business case and provide estimatedimplementation timelines.
2. FSIS, with support from interested exporters, should propose change requests regarding the GPC codes and brick attributes thatwill allow all PHIS static product characteristics to be deduced from published product information in electronic catalogs.
3. FSIS should revise PHIS to support data synchronization with industry-standard, electronic product catalogs and allow the
population of PHIS product attributes from electronic product catalog data.
4. Exporters should expand the publication of product information in electronic catalogs to include GPC brick attribute values andensure that all exported products are published by target market in a GDSN-compliant catalog.

Page 69

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

NEXT STEPS FOR THE BUSINESS CASE REPORT
It is clear from the analyses of the pilot studies conducted that the use of e-commerce data will provide value to the government
and the private sector. The PIC recommends the following next steps over the coming months to continue the review of thesebusiness cases and to raise awareness of potential efficiencies to PGAs, trade communities, and interested national governments:

Page 70Present the final draft business case report to the ITDS Board of Directors – the Board should review and if acceptable,
forward to the trade for comment.



Present the draft report to the ITDS Committee of the Trade Support Network. A conference call should be set up toreview the report and answer questions and record comments.



Present the draft report to the entire Trade Support Network (TSN). The ACE TSN exists to provide private sector
comment from all industry sectors.



Amend the draft report as appropriate after a 45-day comment period to include PGA and trade comments andcorrections.



Approve the final report by the ITDS Board of Directors – the Board should approve the findings and add comments asappropriate.

Publish the final report by posting it on the ITDS web site and issuing a press release regarding its availability.



Present the final report to the Border Interagency Executive Council (BIEC). The use of e-commerce data to improvetargeting efficiency and generate cost savings for the trade should be of value to the BIEC, which was formed to improve
interagency coordination on matters relating to import safety and coordinate priorities for enhancing import safety and tradeenforcement.



Present the final report to CBP for possible inclusion in ACE cargo release requirements.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

Page 71

Brief interested trade groups and associations on the content of the final report when requested.



Brief the Information Management Subcommittee of the World Customs Organization Permanent TechnicalCommittee on the content of the final report for the consideration of all interested delegates.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

ACKNOWLEDGEMENTS
The ITDS Product Information Committee Chair gratefully acknowledges the following people for the knowledge they shared andthe key contributions they made in the drafting of this business case report.
Stephen Arens, GS1 US
Robert Berczik, USDA-FSISJohn Blachere, CPSC
Kenneth Bray, Hasbro
Christine Boldt, AFIF
Elsa Cardoso, CBP
Linda Cullen, CBP
Michael Diblasi, CBP
Lance Esposito, 1SYNC
Susan Dyszel, CBP
Michael Feil, USDA-AMS
Candace Funk, USDA-APHISHenry Glogowski, CPSC
Breanna Gray, CBP
Debra Izzo, Hasbro
John Kyranos, CBPCornelia Mueller, APHISLouis Samenfink, ITDS
Mary Stanley, USDA-FSIS
Kenneth Stockman, IBM
Lela Tripp, Tyson Foods
Douglas Bailey, PIC Chair, USDA-AMS
Max Castillo, PIC Co-Chair, HHS-FDA

Page 72

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDICESAPPENDIX A – PILOT WORKGROUP MEMBERS
The following people served on the PIC pilot workgroups and made key contributions to the establishment and analysis of eachpilot business case and the drafting of the pilot report sections:TOY AND GAME PILOTWORKGROUPCUT FLOWER PILOTWORKGROUPMEAT AND POULTRY PILOTWORKGROUPJohn Blachere, CPSCHenry Glogowski, CPSC
Jim Joholske, CPSC
Carol Cave, CPSC
Kenneth Bray, Hasbro
Debra Izzo, Hasbro
Susan Dyszel, CBPJohn Kyranos, CBP
Kenneth Stockman, IBM
Alan Garton, GS1 US
Stephen Arens, GS1 USLouis Samenfink, ITDS
Douglas Bailey, ITDS

Linda Cullen, CBP
Elsa Cardoso, CBP
Michael Diblasi, CBP
Candace Funk, APHISCornelia Mueller, APHIS
Christine Boldt, Association ofFloral Importers of Florida
Ted Haas, UNSPSC
Susan Dyszel, CBPJohn Kyranos, CBP
Kenneth Stockman, IBM
Alan Garton, GS1 US
Stephen Arens, GS1 USLouis Samenfink, ITDS
Douglas Bailey, ITDS

Lance Esposito, 1SYNC
Donna Yeksigian, 1SYNC
Mary Stanley, FSIS
Robert Berczik, FSIS
Rita Kishore, FSIS
Charmaine McGee, FSIS
Susan Dyszel, CBP
Kenneth Stockman, IBM
Lela Tripp, Tyson Foods
Douglas Bailey, ITDS

Page 73

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX B – LISTING OF ACRONYMS
ABI ----------------- Automated Broker Interface
ACE ---------------- Automated Commercial Environment
AFIF --------------- Association of Floral Importers of Florida
APHIS ------------- Animal and Plant Health Inspection Service
AQAS -------------- Agriculture Quarantine Activity System
CBP ---------------- Customs and Border Protection
CBPAS ------------ Customs and Border Protection Agriculture Specialist
CPSC -------------- Consumer Product Safety Commission
EDI ----------------- Electronic Data Interchange
EPA ---------------- Environmental Protection Agency
FSIS ---------------- Food Safety Inspection Service
HTS ---------------- Harmonized Tariff Schedule
GDSN -------------- Global Data Synchronization Network
GPC ---------------- Global Product Classification
GTIN --------------- Global Trade Item Number
ITDS --------------- International Trade Data System
MID# -------------- Manufacturer’s Identification Number
PGA ---------------- Participating Government Agency
PHIS --------------- Public Health Information System
PIC ----------------- Product Information Committee
PPQ ---------------- Plant Protection and Quarantine
SKU ---------------- Stock Keeping Unit
UNSPSC ---------- United Nations Standard Products and Services Code
UPC ---------------- Universal Product CodeUSDA -------------- United States Department of Agriculture

Page 74

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX C – TOY AND GAME COST-BENEFIT ASSUMPTIONS
The assumptions used to develop cost and benefit estimates for the business case for toy and game products are summarized
below:

Page 75



A top 10 toy importer files on average 49,900 entry invoice lines in a year and a top 50 toy importer files on average
12,200 entry lines in a year.

The average examination frequency of toy products reviewed by the government is one-half of one percent (0.5percent).



The average cost for an importer to have a product examined by CPSC is $1500, including transport to the examination
site, devanning, and repacking the container.



The average hourly wage, including salary and benefits, for a government toy inspector is $46.00 an hour.



The average time required for a government inspector to examine a toy product is 1.5 hours, including travel time anddocumentation of results.



The one-time government cost to revise targeting reports to use global classification codes and GTINs is $250,000.

The one-time government cost to revise targeting business processes to use global classification codes and GTINs,
including training of inspectors, is $250,000.

The importer cost to update their Automated Broker Interface software to support the generation of the ABI PGA
record set is an existing cost and considered to be zero for this business case, as trade-wide changes to the CBP entry
record are released by the software providers through normal software maintenance contracts already in place withbrokers.



The average one-time cost of program changes for an importer to include GTINs and GPC brick codes in the entry
record is $25,000.

DRAFT FOR TRADE COMMENT

September 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

Page 76

The increase in low-risk products eligible for paperless release has intangible value to importers.



The revised targeting reports and procedures have the same recurring maintenance costs as existing reports andtargeting business processes.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX D – CUT FLOWER COST-BENEFIT ASSUMPTIONS
The assumptions used to develop cost and benefit estimates for the business case for cut flower products are summarized below:

Page 77

A major importer averages about 4 inspections a week, with higher numbers of inspections during the 7 weeks ofholiday seasons. An inspection represents one site visit by CBPAS to inspect all entries consolidated by multiple
importers onto one incoming flight.



The average time for a CBP agriculture specialist to review the trade documentation at the inspection site to validate
the Sampling Breakdown Worksheet and Cut Flower Data Sheet is 1 hour.



The average time for a CBP agriculture specialist to conduct a cut flower inspection, including validation of the
Sampling Breakdown Worksheet and Cut Flower Data Sheet, is 2 hours.



The average time for a carrier employee to prepare the Sampling Breakdown Worksheet and Cut Flower Data Sheet is
1 hour.



The average time for a CBP technician to enter the cut flower data from the Cut Flower Data Sheet into the APHIS
information system 5 minutes and there are an average of 42 cut flower data sheets to be entered every business day.



The cost to the trade for inspections ranges from no charge for inspections conducted during regular hours for a
specialist, to double the hourly salary of the CBPAS conducting the inspection when that inspector works outside of hisor her regular hours.



The average hourly wage, including salary and benefits, for a government cut flower inspector is $43 an hour.



The average hourly wage, including salary and benefits, for a government data entry technician is $29 an hour.



The average hourly wage, including salary and benefits, for a carrier employee is $12 an hour.

The one-time government cost to create an ACE report to generate the Sampling Breakdown Worksheet or the Cut
Flower Data Sheet data is $250,000 each.
December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

Page 78

The cost of creating a web service to share cut flower data with the APHIS AQAS system is included in the cost of
creating the ACE report.



The recurring government cost to maintain an ACE report is $1,000 a year.

The one-time government cost to revise targeting business processes to use the ACE-generated reports, including
training of inspectors, is $50,000.

The importer cost to update their Automated Broker Interface software to support the generation of the ABI PGA
record set is zero, as trade-wide changes to the CBP entry record are released by the software providers through normal
software maintenance contracts already in place with brokers.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX E – MEAT AND POULTRY COST-BENEFIT ASSUMPTIONS
The assumptions used to develop cost and benefit estimates for the business case of using a global product catalog for meat andpoultry products are summarized below:

Page 79



A typical major exporter has about 100 (possibly ranging from 100 to 300) products (including product styles andpackaging variations) depending in part on the number of commodities (e.g., beef, pork, chicken, turkey) exported.



Average number of production locations for a product is three.

The average time for a supplier to enter all 21 PHIS product characteristics for one product using the PHIS web
interface is about 30 minutes.



The average time for a supplier to review and validate PHIS product characteristics for one product during the year isabout 15 minutes.



The average hourly salary and benefit cost of a supplier employee that maintains product data is $25.

The average cost of publishing product data, particularly the brick attributes, to the GDSN product catalog will vary bycompany, but is estimated to be a one-time cost of $250. (Typically, suppliers will review each product GTIN to
determine the attribute values and then populate the values, taking 6 [5 to 7] minutes per GTIN to populate – 6 min X
100 products / 60 X $25 = $250.)

The average cost savings to trade by eliminating incorrect export documentation per shipment is $5,000.

The average number of shipments with documentation issues that could be avoided by using catalog product data
during one year for one of the top 6 exporters is six and for one of the next 19 top exporters is two.



The average cost to FSIS to correct one trade document is 3 hours of staff time at $58/hour, or $174.

The one-time cost of FSIS programming changes to map GDSN data into the PHIS product table is $50,000.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSPage 80

The annual cost of FSIS accessing a GDSN product catalog is $40,000.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX F – PHIS PRODUCT LIST DATA ELEMENT MAPPING TO GDSN CATALOG DATAELEMENTSPHIS Product List
Data Element

Page 81TYPE

MATCH?

GDSN Catalog Data Element

Producing CodeSTATIC

YES

Global Trade Item Number

Product as Labeled

STATIC

YES

Trade Item Description

Date Effective

STATIC

YES

Effective Date

Production Facility

STATIC

YES

Production Facility GLNFirst Species

STATICYES

Map from GPC Brick Code

Second Species

STATICYES(w/ CR)No matching GDSN attribute

Third Species

STATICYES(w/ CR)No matching GDSN attribute

Finished ProductCategory

STATICYES

Map based on GPC brick and brick descriptors

Product Cut

STATICYES

GPC Brick Attribute Product Cut

Boneless ClaimSTATICYES

GPC Brick Attribute Boneless Claim

Level of Cooking

STATICYES

GPC Brick Attribute Level of Cooking

Mechanical
Processing

STATICYES

GPC Brick Attribute Mechanical Processing

Meat Form

STATICYES

GPC Brick Attribute Meat Form

Meat ShapeSTATICYES

GPC Brick Attribute Meat Shape

Non-Thermal
Preservation

STATICYES

GPC Brick Attribute Non-Thermal Preservation

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

Page 82

Primary Additive

STATICYES

GPC Brick Attribute Primary Additive

Refrigeration StateSTATICYES

GPC Brick Attribute Refrigeration State

AnatomicalComponent

STATICYES(w/ CR)

Map from GPC Brick Attribute, Meat Cut, and Meat
Form (with change request for missing form values)

Standard ProductPackage Weight

STATIC

YES

netWeight

Product Weight UOMSTATIC

YES

netWeight UoM

Package TypeSTATIC

YES

packagingTypeCode

Export Verification

PROCESS

N/A

Process data element; must be updated once a
product has gone through the USDA export
verification process

Maturity

TRANSACTIONAL

N/AMaturity of animals

Country of Slaughter

TRANSACTIONAL

N/ACountry where animals are slaughtered forprocessing

Country of Origin

TRANSACTIONAL

N/ACountry where animals are born

Foreign Processing
Country

TRANSACTIONAL

N/ACountry where animals are processed if not the USA

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX G – OVERVIEW OF GLOBAL PRODUCT CLASSIFICATION AND IDENTIFICATION
GS1

Global Trade Item Number® (GTIN)

GS1 is the not-for-profit organization that manages andpromotes the use of the GS1 standards which are used
globally to identify products and locations in a standardized
format.

A globally unique 8, 12, 13, or 14-digit number thatuniquely identifies products based on the GS1 Standards.
A GTIN is composed of a unique company identifier, an
item reference number and a check digit. The Universal
Product Code (UPC) is a 12-digit GTIN used at the retail
item level for point-of-sale product scanning.

GS1 Global Product Classification (GPC)
GS1 Global Product Classification (GPC) provides aclassification system that gives buyers and sellers acommon language for grouping products in the same way,
everywhere in the world. The foundation of GPC is called a"Brick;" GPC bricks define categories of similar products.
Bricks can be further characterized by detailed Brick
Attributes as shown below:

GS1 Global Data Synchronization Network ® (GDSN)The GS1 Global Data Synchronization Network is a secure,global network that uses industry standards to enablesuppliers to share and continuously update the productinformation used by their customers to accurately order andship products through the supply chain.
United Nations Standard Products and Services Code®
(UNSPSC®)The United Nations Standard Products and Services Code®
(UNSPSC®) provides an open, global, multi-sector
standard for efficient, accurate classification of products
and services. UNSPSC utilizes a four level classification
hierarchy of Segment, Family, Class and Commodity.

Page 83

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX H – DETAILED EXAMPLE OF THE CUT FLOWER ABI PG RECORD SETREPLACES MANUALGENERATION OF
SAMPLING BREAKDOWN /CUT FLOWER DATA SHEETPGA:

Customs and Border Protection Agriculture
Specialists and the Animal and Plant HealthInspection Service

PRODUCT:ADMISSIBLE CUT FLOWERS AND GREENERY

BUSINESS CASE:

Imported cut floral products are subject to inspection for live pests by CBP Agriculture Specialists (CBPAS)
before entering the domestic supply chain.

CBP/APHIS

By reporting the non-mixed products and components of the mixed products using global classification
SHIPMENT
codes in advance of arrival, the tariff rates can be accurately calculated and the Sampling Breakdown
CHARACTERISTICS: Worksheet and the Cut Flower Data Sheet can be generated as a report by the CBPAS, reducing the timerequired for inspection of the product upon arrival.
The example shows an entry for 126 boxes of rose bouquets with rose, pom-pom chrysanthemum, andalstroemeria blooms and 525 boxes of snapdragons. The PGA records for each of the four HTS codes are
REMARKS:
shown to illustrate how global classification codes are used to indicate how to report the type and number ofboxes for each product and the type of flower and number of stems for each product component.
PGA RECORD SET OVERVIEW:
The essential purpose of each PGA record for the shipment is described below:
PG
Description
RecordH
Provides the HTS code of the product or component.
OI
Provides the commercial description of the product.
PG01
Designates APHIS as the recipient, provides the product’s commercial global trade item number (SRV =10123450000191) and provides the intended use code for products intended for consumer use as a non-food product after
repackaging (130.000-000). CPBAS will use the information in the PGA record set to clear cut flower shipments on
APHIS’ behalf.
PG02
Indicates whether the records that immediately follow describe the product (P) or one of its components (C) and provides
the global classification code of the product or component (UNS 8-digit code for bouquet type at the product level orPage 84

DRAFT FOR TRADE COMMENT

September 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

PG04

PG26

Page 85flower type at the component level). For components, provide a PG02 record showing the global classification code at
the product level (rose bouquet = 10341500) and a second PG02 record immediately after the first showing the globalclassification code of the component (pom-pom chrysanthemum = 10312700).
Provides the number of stems present in each unmixed product or component of a mixed product with two decimal places(e.g., Snapdragon stems total 52,500.00 and alstroemeria stems in bouquets total 600.00). NOTE: Report number ofstems at the component level and NOT at the product level when components are present. Otherwise the stems will be
double-counted.
Provides the packaging information at the product level with two decimal places. In the case of the first line item
(PG01001), PG26 at level 6 (PG266) represents the amount of product in the smallest container, the box (100.00 stems),
and the PG26 at level 5 (PG265) represents the total number of boxes in the entry for that product (126.00 boxes). NOTE:
Report packaging always at the product level and NEVER at the component level.

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERSPGA RECORD SET EXAMPLE:
The PGA records and values for each record that describe the shipment are detailed below:
P OM

C H R Y S A N T H E MUMS ,1 2 3 4 5 6 7 8 9

A L S T RO E ME R I A

1 3 0 . 0 0 0 - 0 0 0

P G 2 6 5 0 0 0 0 0 0 0 1 2 6 0 0 B X
P G 2 6 6 0 0 0 0 0 0 0 1 0 0 0 0 NO
P G 0 2 C U N S
P G 0 41 0 3 0 0 0 0 0

RO S E S

0 0 0 0 0 1 0 0 0 0 0 0 NO

H 5 0 0 2 CO 6 0 3 1 2 7 0 0 0
O I

RO S EB O UQ U E T

P G 0 1 0 0 1 A P

S R V

P G 0 2 P U N S

1 0 3 4 1 5 0 0

P G 0 2 C U N S

1 0 3 1 2 7 0 0

P G 0 4

P OM

P OM

W I T H

P OM

P OM

1 0 1 2 3 4 5 0 0 0 0 1 9 1

C H R Y S A N T H E MUMS ,A L S T RO E ME R I A

1 3 0 . 0 0 0 - 0 0 0

C H R Y S A N T H E MUMS

0 0 0 0 0 0 2 0 0 0 0 0 NO

H 5 0 0 2 CO 6 0 3 1 9 0 0 1 0
O I

RO S EB O UQ U E T

P G 0 1 0 0 1 A P

S R V

P G 0 2 P U N S

1 0 3 4 1 5 0 0

P G 0 2 C U N S

1 0 3 1 1 7 0 0

P G 0 4W I T HP OM

1 0 1 2 3 4 5 0 0 0 0 1 9 1

P OM

C H R Y S A N T H E MUMS ,A L S T RO E ME R I A

1 3 0 . 0 0 0 - 0 0 0

A L S T RO E ME R I A

0 0 0 0 0 0 0 6 0 0 0 0 NO

H 5 0 0 2 CO 6 0 3 1 9 0 0 4 0
O I

S N A P D R A GO N S

P G 0 1 0 0 1 A P

S R V

P G 0 2 P U N S

1 0 3 1 6 7 0 0

P G 0 41 0 1 2 3 4 5 0 0 9 9 9 9 9

1 3 0 . 0 0 0 - 0 0 0

S N A P D R A GO N S

0 0 0 0 0 5 2 5 0 0 0 0 NO

P G 2 6 5 0 0 0 0 0 0 0 5 2 5 0 0 B X
P G 2 6 6 0 0 0 0 0 0 0 1 0 0 0 0 NO

CONTACT INFORMATION:RESPONSIBLE PROGRAM
CBPAS
APHIS

Page 86

Contact Office
APTL
PPQ QPAS

Phone Number(202) 344-1307(301) 734-8295

December 201180

1 0 3 4 1 5 0 0

P OM

1 2 3 4 5 6 7 8 970

P G 0 2 P U N S

W I T H1 0 1 2 3 4 5 0 0 0 0 1 9 1

1 2 3 4 5 6 7 8 9

60

S R V

1 2 3 4 5 6 7 8 950

B O UQ U E T

P G 0 1 0 0 1 A P

1 2 3 4 5 6 7 8 940

RO S E

1 2 3 4 5 6 7 8 9

30

O I

20

10

1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9
H 5 0 0 2 CO 6 0 3 1 1 0 0 6 0

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS

APPENDIX I – SUMMARY OF TRADE FEEDBACK ON PIC BUSINESS CASE REPORT
1) Comment: Consider using preferred partner programs such as the C-TPAT and ISA to “shrink the size of the haystack” rather
than the global product identification and classification codes proposed in the PIC reports.
Response: C-TPAT and ISA can provide some assurance about the parties to the transaction but do not provide commodityspecific information that the global product identification and classification codes do. In terms of risk assessment and risk
management, the two concepts complement each other and both could be used to “shrink the haystack” and “find the needle.”2) Comment: Initiatives that improve data for risk assessment should come from Congress rather than from voluntary industry
initiatives.
Response: Congress, as the ultimate authority, will periodically provide direction thru legislation, but there is also value involuntary, collaborative government-trade initiatives that validate new approaches for improving government efficiency.
3) Comment: Although companies use global product information for their general business, no companies are using thisinformation for import purposes and a process would need to be created to support the use of this information in theadmissions process.
Response: The PIC recommendations are proposing for the first time that the product information available in generalbusiness transaction systems be used by government in the import process. A smart and efficient supply chain is one where allentities are well informed about the identity and characteristics of the products and parties involved in each shipment.
4) Comment: PIC e-commerce data is typically not used by companies to describe raw materials.
Response: This is an accurate observation noted previously in the PIC reports. However, the fact that e-commerce data is not
used universally to identify all products in trade does not diminish its utility for the finished products that it is used for.
Efficiency gains made by the government in the admission of finished products will ultimately benefit all importers.

Page 87

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
5) Comment: Which is the right system to support the PIC e-commerce data, the Automated Broker Interface (ABI) or theAutomated Commercial Environment (ACE)?
Response: The PGA message set is being built for ACE but will use the existing ABI pathway. The Product Information
Committee has worked extensively with ITDS and CBP to ensure that ACE will fully support the use of e-commerce data
electronically submitted by the trade.
6) Comment: Business case estimates are based on a small sample that may not be representative of all trade.
Response: This is an accurate observation, and the limitations on the extrapolation of business case results to other productsets were carefully noted in the report. All trade and government parties are encouraged to evaluate their own business caseusing the best information available before committing to an implementation plan.
7) Comment: One trade association summarized member survey results regarding the use of e-commerce data with threeobservations; The trade community is open to the idea of using PIC; U.S. government agencies must demonstrate acommitment to reduce data submissions, clearance times and costs to induce importers to adopt PIC; and U.S. government
agencies must promise to use PIC data only for admissibility.
Response: The PIC agrees that government efficiencies created through the use of e-commerce data need to create acompelling, high-value business case for trade in order to promote broad-scale adoption. The design of the PGA record set
ensures that PIC e-commerce data is delivered only to the specified PGA that needs it for product admission.
8) Comment: The PIC recommendations distract PGAs and the trade community from the primary goal of ITDS - to minimize
the number of data elements submitted to the government for admissibility decisions, which are authorized for collection either
by statute or regulation.
Response: ITDS seeks to implement a single window approach for trade in order to improve government and trade efficiency
and minimize unnecessary disruptions to product flow. The PIC recommendations enable these objectives through thestrategic use of two data elements defined in the World Customs Organization data model and which, if fully adopted, could
reduce the total number of data elements reported.

Page 88

December 2011

BUSINESS CASE FOR USING E-COMMERCE PRODUCT DATA AT INTERNATIONAL BORDERS
9) Comment: In the era of increasing globalization, government and the trade should be looking more to global standards andprograms for increased harmonization.
Response: All e-commerce data elements proposed by the PIC are global standards in the public domain that are actively usedby global trading companies throughout the world.
10) Comment: Implementation of PIC recommendations may divert precious resources from critical automation projects, like thecargo release function of the ACE.
Response: The PIC recommendations are designed to complement automation projects underway or planned and to enhancethe overall efficiency of cargo release functions.
11) Comment: Could the GTIN for individual products be used as a reference to detailed product information in a catalog thatgovernment agencies could use to address specific risk criteria related to the admissions decision? If so, it seems that eachparticipating agency would then need only that GTIN and no other product data.
Response: Yes, the use of industry-standard product catalogs and product classification attributes would provide thiscapability as described in the report’s meat and poultry business case. The provision of a GTIN for products published in thesecatalogs should reduce or eliminate the need for other transactional product data, since government can download information
about the product’s risk factors, including pictures of the product, from the catalog.

Page 89

December 2011