As the threat of terrorism builds and new alerts are issued, U.S. companies again must ask themselves how best to improve the efficiency, performance and performance within their global trade strategies.
Although the U.S. government has created several critical measures for border security and international global supply chain compliance, companies must address this issue aggressively and develop their own plan —from mapping cargo flow and identifying business partners, to conducting threat and vulnerability assessments. All of these steps are outlined in U.S. Customs and Border Protection’s “5 Step Risk Assessment Process” for managing an effective program within the Customs-Trade Partnership Against Terrorism.
There are several issues to consider when implementing an effective and secure trade plan, including tracking every partner; potential threats and aspects of each shipment; container handling; employee background checks; and information technology security measures. This may seem overwhelming, but by following the advice and tips below, you will have the tools you need to plan, execute and monitor a successful global trade strategy.
First, it’s important to gather the right information and turn it into intelligence. This can be done in a variety of ways: sending questionnaires to the manufacturing plants; hiring a consultant who can work with the plants in gathering the information; or visiting the plant and gathering and auditing the information on site. Collecting certain information will help determine the areas of risk with partners and create proper actions to mitigate potential security hazards.
Here is a sample question: Do you inspect all incoming and outgoing containers to make sure they haven’t been tampered with? If the response is “No,” then that’s a serious risk. If that’s the case, make sure you create a follow-up plan to ensure the plant fixes this loophole so the supply chain is secure.
Companies already complying with C-TPAT can gather information from partners once and apply that information, where applicable, for each country to adapt to minimum-security requirements for mutual recognition. Supply chain managers can take advantage of economies of scale, with many commonalities existing between security programs from various countries such as with C-TPAT and its European equivalent, the Authorised Economic Operator program, as well as with programs in Jordan, South Korea and Japan, to name a few. Each country has its own site, which can be accessed at www.cbp.gov.
The biggest challenge in collecting the right information is dealing with all the suppliers, languages and geographies. With the proper use of technology, companies can automate the process to make it more efficient and to help keep costs down. There are software solutions, for example, that can evaluate responses and help you create a plan to make sure risks are mitigated. Other specialized software programs can help review the information you gather and scan for patterns to identify risk.
If you’re not sure where to start, you can follow the CBP’s minimum-security criteria, which include the following:
- Choosing a secure business partner: All foreign manufacturers and partners must demonstrate C-TPAT security criteria via written/electronic confirmation.
- Container and trailer security and inspection: All containers and trailers require security and inspection procedures, including ensuring proper sealing, reliability of locking mechanisms and doors; and reporting and resolving unauthorized entry into the equipment or its storage areas.
- Personnel security: Implement an employee identification system, as well as regular, detailed background checks for new and current employees.
- Secured procedures: Make sure security measures and procedures are in place to track and manage cargo transportation, handling and storage.
- Documentation control: All cargo documents must be legible and accurate. Outgoing and incoming cargo also must be verified against purchase and delivery orders, and all drivers must be identified positively.
- Facility security: All cargo and storage facilities must have physical barriers and deterrents, including fencing, gates, secured parking, alarm systems, proper light, locking systems and video surveillance.
- Information technology security: Create and implement IT security procedures and policies, such as password protection and employee training.
- Security training and threat awareness: Create a threat-awareness program for employees so they can identify possible threats posed by terrorists and contraband smugglers.
For each one of these criteria, assess and identify your risks and plan accordingly. Go as deep as you possibly, and comfortably, can on each question you ask so your program will provide the anticipated level of security to address your company’s specific needs. And don’t skip a single rule or step in the process.
Mitigating a region’s risk also should be part of your plan. For example, you may have a safe and secure partner, but the company may be operating in a high-risk area such as Afghanistan. Be aware of the partners you’re dealing with and make sure they’re not from an embargoed country or on the restricted list, or that you’re not buying something you shouldn’t. Security measures such as denied-party screening can provide an added layer of security on top of the C-TPAT list, and can help to ensure safety and compliance.
Once you get the basics down, designing a plan is the easy part. In optimizing your supply chain performance and alleviating risk, it’s critical to re-evaluate the necessary requirements and your plan, including the information gathered, at least every two years. Depending on the goods, countries and commodities you’re dealing with, you may even want to re-evaluate annually.
This not only will save your company from a potential security breach or disaster, but also improve your cargo flow and even your bottom line.
To stay current on global import and export requirements, visit Customs’ C-TPAT guidelines page.
Anand Raghavendran is chief operating officer of logistics technology provider Netwin Solutions in Irvine, Calif. He has more than 15 years of experience in the supply chain industry, working with companies such as Mitsubishi, Target and Mattel.