C-TPAT Survey - Be careful what you ask for...
C-TPAT survey gives members chance to sound offAre companies who participate in the Customs-Trade Partnership Against Terrorism really achieving tangible efficiencies by partnering with the U.S. government to secure their international supply chains?
That is the question Customs and Border Protection will attempt to answer when it electronically distributes a survey to thousands of companies on Dec. 1 designed to quantify the voluntary program’s return on investment and measure its performance.
One of the main challenges CBP faces is showing companies that extra efforts to bolster controls over their shipments and holding their suppliers accountable for implementing approved security measures are generating payoffs in the form of reduced inspections while meeting government goals for preventing terrorist attacks using shipping containers.
Importers and logistics providers have pushed the agency and the Department of Homeland Security to provide tangible evidence that the extra handling costs, delays and the inconvenience of adhering to the voluntary security program are paying off in enhanced security as well as indirect benefits from greater supply chain efficiency and visibility. The more companies that participate in C-TPAT, the more potential business partners that are available for those seeking minimum inspection levels for their shipments. Private-sector officials argue that providing data on the program’s benefits can help convince more companies that committing resources to make their facilities, and those of their suppliers and transport providers, secure results in business gains, and will help build further industry support for
C-TPAT.
But trying to quantify the effectiveness of government security programs has proven harder to measure than sales or production activities in the business world. At the heart of the problem is defining performance criteria that go beyond simply measuring industry compliance rates from a regulatory perspective, which does not necessarily equate to enhanced security.
CBP turned to the University of Virginia to help design and conduct the survey. CBP selected 24 C-TPAT members to work with the university on developing the data collection tool. Questions that are likely to be included in the survey are how much money a company has spent on implementing security measures, and whether companies have experienced a reduction in security exams and improved supply chain efficiency.
On Nov. 1 CBP completed the Web portal through which the survey will be distributed, and subsequently conducted a pilot Web survey with 15 companies in preparation for a full production run on Dec. 1, when more than 6,000 companies will receive a message telling them to access the survey.
Businesses will have six weeks to complete the voluntary survey and CBP hopes that the majority of companies will be interested in providing feedback.
CBP tentatively plans to issue a final report on the survey results by mid-spring, 2007.
Meanwhile CBP, in consultation with the National Customs Brokers and Forwarders Association of America, plans to wrap up the second -- and possibly final -- draft of C-TPAT security criteria for customs brokers by early December as it continues to shift from a model based on loose guidelines to one in which each industry sector has its own clearly established standards. The first draft of security standards for marine terminal operators is scheduled for completion about the same time. Once standards are issued for those two sectors, program officials will turn their attention to developing criteria for non-vessel-operating common carriers, freight forwarders and third-party logistics providers.
CBP already has upgraded security criteria for importers, ocean and highway carriers, railroads and foreign manufacturers in Mexico and Canada.
Teams of U.S. Customs security specialists will audit supply chains in Tunisia and Madagascar for the first time beginning in December to make sure that C-TPAT certified companies are following through on security controls and are eligible for the maximum reduction in inspection levels, Owen said. In 2006, CBP inspectors visited 16 countries, including Pakistan, Sri Lanka, Oman, Jordan, the UAE and Cambodia, for the first time.
Inspection teams will also conduct one more so-called “blitz” operation by the end of the year in the Philippines. The measure entails sending multiple inspection teams to verify many different supply chains in concentrated fashion during a single trip. CBP is finalizing the locations where it plans to conduct “blitz” operations in 2007, Owen said.
More than 3,500 companies (57.5 percent of the program’s membership) have been validated as meeting C-TPAT criteria in key trade lanes, up from 3,200 companies (52 percent) in mid-September, Owen said. CBP continues to maintain that it will complete validations on 65 percent of certified applicants by the end of the year and be at 100 percent coverage by sometime in 2007. As spelled out in the recently enacted SAFE Port Act, CBP will then begin revalidating companies through on-site audits of a second supply chain to make sure security standards are being met. CBP plans to revalidate companies every four years.
It seems the import-export industry did a good job meeting the Oct. 1 deadline for updating corporate security profiles via the new C-TPAT Web portal set up to automate communications between the agency and program members.
There are more than 6,000 companies that have been certified to join C-TPAT, and 93 percent fully completed or substantially updated their account information. CBP is working with the remaining companies to help them finish filing the information, but a few companies have not honored their commitment and will have their C-TPAT benefits suspended...any of my readers in this boat?
CBP has suspended or removed 185 companies from C-TPAT, up from 175 two months ago and 151 in June, for various types of security breaches. Trucking is the sector with the most problems, with 121 highway carriers (up from 115 at last report) having been sanctioned since the start of the program, usually for drug smuggling issues. So far, 216 companies have achieved Tier 3 status but the number of companies eligible for the most preferential customs clearance has tapered off...must be an over-all industry trend.
CBP has also begun developing requirements and standard operating procedures for a pilot project testing the feasibility, cost and benefits of using outside auditors to carry out validations of importers’ foreign suppliers and whether they have systems in place to maintain shipment integrity, CBP officials said. The SAFE Port Act signed into law by President Bush in October requires DHS to implement by mid-February a limited, one-year test to augment C-TPAT verification capabilities with third-party validators.
But trying to quantify the effectiveness of government security programs has proven harder to measure than sales or production activities in the business world. At the heart of the problem is defining performance criteria that go beyond simply measuring industry compliance rates from a regulatory perspective, which does not necessarily equate to enhanced security.
CBP turned to the University of Virginia to help design and conduct the survey. CBP selected 24 C-TPAT members to work with the university on developing the data collection tool. Questions that are likely to be included in the survey are how much money a company has spent on implementing security measures, and whether companies have experienced a reduction in security exams and improved supply chain efficiency.
On Nov. 1 CBP completed the Web portal through which the survey will be distributed, and subsequently conducted a pilot Web survey with 15 companies in preparation for a full production run on Dec. 1, when more than 6,000 companies will receive a message telling them to access the survey.
Businesses will have six weeks to complete the voluntary survey and CBP hopes that the majority of companies will be interested in providing feedback.
CBP tentatively plans to issue a final report on the survey results by mid-spring, 2007.
Meanwhile CBP, in consultation with the National Customs Brokers and Forwarders Association of America, plans to wrap up the second -- and possibly final -- draft of C-TPAT security criteria for customs brokers by early December as it continues to shift from a model based on loose guidelines to one in which each industry sector has its own clearly established standards. The first draft of security standards for marine terminal operators is scheduled for completion about the same time. Once standards are issued for those two sectors, program officials will turn their attention to developing criteria for non-vessel-operating common carriers, freight forwarders and third-party logistics providers.
CBP already has upgraded security criteria for importers, ocean and highway carriers, railroads and foreign manufacturers in Mexico and Canada.
Teams of U.S. Customs security specialists will audit supply chains in Tunisia and Madagascar for the first time beginning in December to make sure that C-TPAT certified companies are following through on security controls and are eligible for the maximum reduction in inspection levels, Owen said. In 2006, CBP inspectors visited 16 countries, including Pakistan, Sri Lanka, Oman, Jordan, the UAE and Cambodia, for the first time.
Inspection teams will also conduct one more so-called “blitz” operation by the end of the year in the Philippines. The measure entails sending multiple inspection teams to verify many different supply chains in concentrated fashion during a single trip. CBP is finalizing the locations where it plans to conduct “blitz” operations in 2007, Owen said.
More than 3,500 companies (57.5 percent of the program’s membership) have been validated as meeting C-TPAT criteria in key trade lanes, up from 3,200 companies (52 percent) in mid-September, Owen said. CBP continues to maintain that it will complete validations on 65 percent of certified applicants by the end of the year and be at 100 percent coverage by sometime in 2007. As spelled out in the recently enacted SAFE Port Act, CBP will then begin revalidating companies through on-site audits of a second supply chain to make sure security standards are being met. CBP plans to revalidate companies every four years.
It seems the import-export industry did a good job meeting the Oct. 1 deadline for updating corporate security profiles via the new C-TPAT Web portal set up to automate communications between the agency and program members.
There are more than 6,000 companies that have been certified to join C-TPAT, and 93 percent fully completed or substantially updated their account information. CBP is working with the remaining companies to help them finish filing the information, but a few companies have not honored their commitment and will have their C-TPAT benefits suspended...any of my readers in this boat?
CBP has suspended or removed 185 companies from C-TPAT, up from 175 two months ago and 151 in June, for various types of security breaches. Trucking is the sector with the most problems, with 121 highway carriers (up from 115 at last report) having been sanctioned since the start of the program, usually for drug smuggling issues. So far, 216 companies have achieved Tier 3 status but the number of companies eligible for the most preferential customs clearance has tapered off...must be an over-all industry trend.
CBP has also begun developing requirements and standard operating procedures for a pilot project testing the feasibility, cost and benefits of using outside auditors to carry out validations of importers’ foreign suppliers and whether they have systems in place to maintain shipment integrity, CBP officials said. The SAFE Port Act signed into law by President Bush in October requires DHS to implement by mid-February a limited, one-year test to augment C-TPAT verification capabilities with third-party validators.
CBP officials contend that subcontracting supply chain inspections could be used in areas such as China where government regulators lack access, not as a way of supplementing C-TPAT resources to speed up validations. Owens said the C-TPAT program has reached its manpower goal of 156 specialists and will soon be able to process new entrants without a backlog.
Under the voluntary pilot test, C-TPAT members can opt to pay for certified inspection services to review their overseas security processes and facilities.
There are 335 C-TPAT importers that source 75 percent or more of their merchandise from China and 59 of those procure 100 percent of their products from that country...this is a clear indication of the potential universe of companies that may be willing to pay for third-party inspection services. Exel / DHL should pursue this market...
C-TPAT companies are grouped in three tiers based on whether they have been through the validation process and the level of security best practices they implement. Companies that go the extra mile beyond the minimum-security criteria are granted Tier 3 status, entitling them to very infrequent cargo exams.
CBP will include a conflict-of-interest clause to keep importers from validating their own work through the use of affiliated companies.
As C-TPAT matures, more business opportunities will present themselves...will you be ready to capitalize on the opportunities?
posted by Michael J. Stolarczyk at 23:15
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