Bring your own green paint

Bring your own green paint

Boston's Freedom Trail is a symbolic way to understand the people and the events that shaped the birth of the United States. But one can actually follow a red line that runs down the middle of the sidewalk that connects the 16 historic sights that comprise the Freedom Trail; it is not just a concept, but an actual trail that can be followed.

It is undoubtedly a stretch to compare Customs and Border Protection's "green lane" to the Freedom Trail, but this is the point: Just as the Freedom Trail follows a physical, tangible path, so should the green lane.

By now, nearly everyone in the trade community believes that a tangible benefit of the Customs-Trade Partnership Against Terrorism is access to the green lane. Commissioner Robert Bonner and other senior Customs officials have spoken widely about the green lane's projected benefits, but the term remains ill-defined. The green lane is not defined in "Securing the Global Supply Chain," the Customs document that serves as the strategic plan for C-TPAT. The green lane's components - the Free and Secure Trade (FAST) program, smart containers, the use of Container Security Initiative ports and the recently adopted World Customs Organization framework for international cargo-security standards - are described, but an explanation of how it all works is missing. The definition and specifications of a smart container also remain unresolved.

The green lane is most commonly thought of as expedited processing of cargo when importers are C-TPAT-certified, the parties meet defined security standards, smart containers are used and the foreign port participates in Customs' Container Security Initiative. Under the mandatory C-TPAT procedures issued on March 25, C-TPAT member importers must certify that all parties throughout the extended supply chain comply with C-TPAT standards. In the strategic plan, Customs notes that non-C-TPAT members received three times as many compliance examinations as did members, and seven times as many targeted enforcement examinations. This data would presumably show a substantial shift in Customs examinations in the aggregate from certified to non-certified companies.

As a practical matter, I would expect that most of the companies that initially enrolled in C-TPAT had high rates of compliance, were considered low-risk importers by Customs and had experienced very low examination rates. The benefit to these companies would not be low examination rates - they already had them - but expedited processing. This would require a degree of integration with port operations, other government agencies and logistics providers that has not been part of the C-TPAT discussions. It is a discussion that Customs and most other regulatory agencies have been reluctant to have. It requires a discussion of how things work in the proverbial "real world." Customs and other government managers should "staple themselves to order" (in words from a well-known Harvard Business Review article first published in 1992) and see how a shipment actually is handled at the port of arrival. They would see that enrollment in the FAST program provides for expedited customs processing at the land border port, but the value is greatly diminished if the truck must wait in line at a congested port and there were no special processes to shepherd the cargo around the obstacles.

A collateral benefit of this approach would be to view port security as an integrated system rather than as the sum of activities of federal, state, and local agencies in carrying out their port-security missions.

Perhaps then a green stripe should be painted on the surface of the ocean terminal showing the path to be followed by the container from pier to terminal gate. The green line would bypass the traditional congestion points at the terminal. It also would ensure, for example, that chassis and drivers are available on a first-priority basis for C-TPAT-certified cargo.

It has been an improbability all along that the government would create a benefit for C-TPAT importers that goes beyond expedited customs processing. Regulatory agencies are not in the business of creating benefits for the private sector that reach beyond the regulatory process. They exist to regulate, not to create value.

Companies must take the initiative to work with regulators, ports, logistics providers and other partners in international trade to create the operational processes that will give the green lane real meaning. They need to work to define the operational parameters of the green lane.

I suggest that companies schedule a meeting with their C-TPAT account manager at the port where the company does its largest volume of imports. Be prepared to work out the details of the green lane process. And bring a bucket of green paint to the meeting.

Philip Spayd is director of Global Trade Systems Inc. He can be contacted at (781) 545 4462, or at Philip.Spayd@GlobalTradeSystems.com.