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November 17, 2008 

CBP Publishes Brochure Touting C-TPAT Benefits

U.S. Customs and Border Protection today published a PDF brochure explaining the benefits of the Customs-Trade Partnership Against Terrorism Program (C-TPAT). The document provides statistics showing that CBP has significantly increased its overall exam rates over the last several years and states that "C-TPAT importers are 4 to 6 times less likely to incur a security or compliance examination."

With respect to additional future benefits, the brochures states that:

  • Benefits must continue to be within the of control of both CBP and the C-TPAT program and have connectivity to current benefits;
  • Benefits must have realistic applications (e.g. 100% relief from examination or no payments of duty are not plausible);
  • C-TPAT will examine the Tier benefit structure in an effort to ensure that the program is addressing the needs of its current and future members as well as the needs of CBP.

I may be a contrarian, but so is Warren Buffet.

Personally, I find CBP’s brochure little more than cheesy marketing, with greatly exaggerated claims. What strikes me about the “Examination Rates 2002 to 2008” graph and supporting information is that where exams have significantly increased over the last several years is almost exclusively limited to rail. Ocean container exams, as a percent, appear to have decreased.

Remember that the benefits are only relative to non C-TPAT importers. CBP would like everyone to be in the program, but with more members, there is less relative benefit. If all shipments are special, then, relatively speaking, none of them are special.

But let’s look at some specifics.

Free and Secure Trade (FAST) lanes are supposedly available to C-TPAT members on land border crossings. Not so fast. It’s only available if the trucking company and its driver are both FAST certified. This is not always easy for an importer to control without paying a premium trucking rate. In addition, most FAST lanes are not that physically substantial and the line of trucks frequently extends well past where the privileged asphalt begins.

Stratified Exam Benefits supposedly allows a C-TPAT importer, with multiple containers, but with an exam required on just one item on a multi line entry, to pull all but the one container that has the item that CBP wants to examine. Unfortunately, most packing information I have seen does not always specify which cartons are in which containers, so this level of intelligence often known. Result: all containers must be held. Furthermore, many importers that do have this level of packing intelligence, in an attempt to reduce redistribution and sorting costs stateside, will stuff containers according to final retail location needs. This means that all of the one line of the entry that CBP wants to examine will be spread over multiple containers, nullifying any potential Stratified Exam Benefits.

Business Resumption Benefits allege that, should we ever have another border closure event, “C-TPAT status will be taken into consideration when CBP resumes the processing of shipments”. First, that’s not much of an assurance. Second, and more importantly, it’s practically impossible. On September 12, 2001, the line of trucks at Sarnia, Ontario extended more than 35 kilometers into Canada. How can the C-TPAT cargo even get close enough to receive special treatment? How can C-TPAT containers on ships at see off load when the non C-TPAT containers keep the vessel 200 miles out in international waters? Divert to Canada? With a 35 kilometer back-up at the land border? Can the Canadian ports handle the sudden increase in traffic? Can the foreign ports of loading receive C-TPAT containers when swamped with non C-TPAT containers that they can’t load?

Aside from this discussion of benefits, does C-TPAT actually do what it’s supposed to do? Does it really provide protection against terrorism? I think there are too many variables overseas for a C-TPAT importer to control, let alone for CBP to catch in a Validation. There is too much that can happen to a container between it stuffing location and when it’s received at the pier. I don’t think that we can plug all the holes when we don’t even know all the holes. To a terrorist bent on putting a dirty bomb in an ocean container, the C-TPAT container is the far more tempting target. First, it will supposedly receive less scrutiny. Second, the terrorist can score bonus points for succeeding against the very program that is supposed to prevent his actions. I believe there is far greater efficacy with other anti-terrorism programs such as the Container Security Initiative. Rather than wasting time and resources with C-TPAT, and trying to prevent all sorts of nefarious activity in an uncontrolled foreign countryside, we should be installing the equipment necessary to detect abnormalities in containers at the foreign piers.

Jim - You make a number of excellent points. While I know there are many C-TPAT skeptics in the U.S. importing community, very few of them have been willing to come out of the closet to express their concerns about the true value and utility of the C-TPAT program. The importing community needs to be more actively engaged with CBP to encourage them to add additional and tangible benefits for making the effort to participate in C-TPAT.

It would be hard to come out of the closet to tell your CFO, "That $350,000 we spent on C-TPAT didn't really get us anything", or worse, "About that container ship that blew up in Long Beach yesterday, it was one of our containers that held the bomb."

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