Two months after the September 11 attacks, Customs and Border Protection struck a bargain with the trade community: Companies would secure their supply chains against possible terrorist incursion, and Customs would reward them for their efforts.
That bargain — the Customs-Trade Partnership Against Terrorism — became one of the building blocks in Customs’ supply chain security strategy.
As the program is about to turn 10, that bargain is alive and well. Some 2,000 C-TPAT participants attended training seminars this year, a sign of the program’s vitality, said Bradd Skinner, the program’s director.
“When you think of what’s taken place over the past 10 years, strong security measures, thoroughly examining and monitoring containers, risk assessment, screening partners, the consistent use of security seals … When you stop to think about it, it’s pretty good stuff,” Skinner said.
Former Commissioner Robert C. Bonner announced the program at the agency’s annual trade symposium in November 2001. In early 2002, the program got the C-TPAT name and started taking applications from importers.
Today, C-TPAT comprises some 10,000 importers, carriers, intermediaries and foreign manufacturers that accounted for 50 percent of U.S. imports by value in fiscal 2010. It’s not enough for Commissioner Alan Bersin. At last December’s trade symposium, Bersin said he wanted to quadruple the number of C-TPAT participants. It’s a tall order, Skinner said, but Customs will rise to the challenge in the best tradition of the agency.
How C-TPAT will reach 40,000 raises doubts among some. A recent report on U.S.-Mexico trade and security by the U.S. Chamber of Commerce called on Customs to expand C-TPAT to include third-party logistics providers and less-than-truckload motor carriers.
Skinner, however, said C-TPAT would not grow outward. “When we look at our existing sectors, we see there are still a lot of different companies out there that are eligible but not participating in the program,” Skinner said. “That’s going to be our focus, and we’re not looking to create new sectors overnight to meet this challenge. If down the road decisions are made to do that, so be it, but it’s not our current thinking.”
Outreach, he said, would be a big part of how Customs goes about meeting the Bersin goal. “There are companies that may be on the fence,” Skinner said. “They don’t know enough about the program. We need tell them that what we ask for is pretty much commonsense security practices.”
The benefits C-TPAT participants derive continue to be a nagging question, and in difficult economic times Skinner said some companies have opted out, or dropped a level in C-TPAT’s three-tiered benefits structure.
“It’s been hard on companies. Many have gone out of business. Some have stopped cross-border shipments. Others have said they cannot in good conscience maintain the security program to the extent that we would like, but they want to stay on good terms with us,” Skinner said. “Some companies drop out because they feel the cost-benefit is not there for them. That’s unfortunate for me, but it’s a company decision. We’re always open to folks coming back.”
C-TPAT doesn’t give companies immunity from Customs examinations, but the agency still can demonstrate that C-TPAT members have their goods inspected four times less than non-C-TPAT companies, Skinner said. When shipments are pulled aside for exams, C-TPAT cargo gets inspected first. Customs recently started notifying members of their head-of-line status as a C-TPAT benefit.
Kelby Woodard, a principal in consulting firm TradeInnovations, said some companies still inquire about C-TPAT, but many more want to know how to rise from Tier 2 to Tier 3 status, where companies have gone above and beyond Customs’ standards.
So many of the country’s imports enter by C-TPAT-secured supply chains that the program has become part of everyday business, said Woodard, a former supply chain security director for Target, one of the pioneer C-TPAT companies. “It’s the norm, where security is becoming part of a normal operation,” he said. “Customs is concerned about how we classify and how we determine value. Now they’re concerned about how we secure our shipments. “It becomes another part of compliance.”
A Tier 2 C-TPAT member is the norm, Woodard said. “If you’re going to get any kind of special treatment from Customs, you have to be breathing the rarified air in Tier 3. It’s a huge step from Tier 2 to Tier 3. Customs has continued to make Tier 3 a very high standard, and I think rightly so.”
There are Tier 2 companies that want to rise to Tier 3, and there are also Tier 3 companies that don’t see the benefits, and are moving down a level, Woodard said. Customs may expect Tier 3 companies importing goods from Mexico to have the ability to track shipments in real time, a defense against drug smuggling.
“Those are serious investments in technology,” Woodard said. “That’s when companies start reconsidering whether or not this all makes sense to them.”
At 10 years and going, a mature C-TPAT is still about supply chain security, but it’s not just an anti-terrorism program any more. Importers have more urgent problems than keeping weapons of mass destruction out of their containers, but C-TPAT practices give companies’ supply chains greater visibility. It helps prevent cargo theft.
“It’s a byproduct of a good security program that you have good visibility,” Woodard said. “We were driving that at Target before C-TPAT, because it’s good business. It provides for more efficient operations.”
Woodard agrees with Skinner that there are plenty of companies that haven’t heard the word. “We still run into lots of companies, when you start walking them through their supply chain, they really don’t know a lot of things that are going on,” he said. “When they open their eyes to exactly how it’s happening, there are all kinds of epiphanies.”
Contact R.G. Edmonson at email@example.com.