The Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary supply chain security program led by U.S. Customs and Border Protection (CBP). It is focused on improving the security of private companies’ supply chains with respect to terrorism. C-TPAT, and programs in other countries/regions modeled after it like Europe’s Authorized Economic Operator program, promise the applicant expedited clearance and fewer inspections in return for submitting to a review of internal controls by customs authorities.
But a survey conducted by American Shipper magazine shows “sixty percent of shippers said they are uncertain of the benefits of C-TPAT participation, see less benefit than anticipated, or no benefit at all. Just 11 percent said the program has delivered all that it promised… there’s consensus that C-TPAT is largely not delivering the benefits shippers expect.”
Apparently I had a conversation with one of those in the 11 percent category. I spoke with David Pritchett, the North American Customs Compliance Manager for Closure Systems International, which provides plastic and aluminum bottle caps and high-speed capping equipment systems.
David is a big believer in C-TPAT. He believes the two year process of getting their C-TPAT certification has made their facilities safer, in terms of fencing and other security measures. And their ability to protect their brand is therefore much higher. But he also sees real quantifiable benefits.
Closure Systems has two plants in Mexico that export into the US. When there is a holiday, only C-TPAT certified companies can have their goods cross the border. At the US/Mexico border that means their goods can cross between 8 am and 2 pm. Inventory in motion beats inventory at rest every time.
David pointed out that if they are fined because of errors in their Import Security Filing, a C-TPAT company pays half of what non-certified companies pay. So, instead of a $10,000 fine, for example, they would only pay $5,000. But in David’s view, companies with processes good enough to qualify for C-TPAT are the least likely to have to pay a fine.
Finally, they are experiencing fewer audits now that they are C-TPAT certified. There were 35 audits on a Mexican plant by Mexican customs prior to becoming certified. Once certified, the number of audits dropped down to 9, less than one quarter of the previous quantity.
C-TPAT is developing an export component. The advantages of this would be that when shipping to Europe from the US, the same sorts of speed and audit advantages would occur on the export side. David told me that based upon their history with C-TPAT, participating in this program will be a “no brainer.”