U.S. Customs and Border Protection recently completed the work needed to allow U.S.-based third-party logistics providers to participate as full partners in the Customs-Trade Partnership Against Terrorism. This came after industry members worked to bring logistics operators into the C-TPAT fold in the SAFE Port Act of 2006 and to have that law implemented in a way that covers those who enable the movement and security of modern supply chains.
That’s a critical development in supply chain security, and we encourage the participation of the commercial warehouse 3PL members who have become critical partners for shippers and carriers in the handling and moving of goods.
Since the law was passed, however, Customs has certified only five 3PLs and has rejected out of hand the applications of many well-established 3PLs that are the first to break the seal and unload much of the freight moving through distribution networks in the United States.
Although the law includes importers, customs brokers, forwarders, air, sea and land carriers, contract logistics providers and other entities in the international supply chain and intermodal transportation system, the agency has chosen to interpret and apply the law as narrowly as possible.
Because agency officials who have dealt with this matter now have the final say over who can or cannot participate in C-TPAT, there is little we can do beyond going back to Congress and asking for additional legislation that specifically instructs Customs to act in a certain way. In fact, we have done exactly that, meeting with committee staff and addressing the merits of a completely secure supply chain in this context.
But there is a greater issue here, and one of concern to all who work in the supply chain. We saw it in the highly politicized controversy over DP World’s 2006 attempt to expand its terminal operations into the United States. We saw it in the aggressive legislation on the food supply chain and consumer product safety that in its early drafts failed to recognize the proper legal role of third-party warehouses. And now we are seeing it in the development of regulation in the pharmaceutical supply chain.
Looking at the actions of regulatory policymakers, it’s apparent that regulation of the international supply chain in the U.S. too often is based on the assumption that workers involved in logistics are careless and must be restrained from harming the American public.
In fact, the top priority for those who manage supply chains is to source, secure and place the right product in the customer’s hand at the right time and the right price. The handling and delivery of bad products inevitably will put a company out of business. The supply chain is a small, tight trading community. The good will of regulatory agencies is critical to conduct our business, yet it seems every piece of recent legislation has behind it the perception that government must step in at every point to ensure the professionals in our industry are doing their jobs.
It’s guilty until proven innocent, in other words.
Our discussions with elected officials, staff and regulators in Washington usually start with explaining how the system has multiple checks to isolate and remove bad products. And if somehow such products enter the supply chain, as happened with lead paint in toys sourced from China, we show how our track-and-trace procedures allow the industry to help law enforcement identify the goods and their owners.
Given what I see as a hostility ingrained among too many regulators and policymakers toward our business, it’s imperative for each person in the supply chain community to help communicate clearly what we do to maintain a safe and secure supply chain. This isn’t entirely new: When I was CEO of the California Trucking Association, we had to first demonstrate our commitment to highway safety before we could advance any legislation on behalf of our members.
Those of us who work in the supply chain can borrow ideas from the truckers’ playbook and learn that we must take every chance we can to communicate and reinforce the public message that a safe and secure supply chain is our top priority. Perhaps then it will be easier to educate policymakers and regulators about how essential supply chain efficiency is to our ability to compete in global markets and create jobs.
Joel Anderson is president and CEO of the International Warehouse Logistics Association. Contact him at firstname.lastname@example.org.