The White House released a report titled  “NATIONAL STRATEGY FOR GLOBAL SUPPLY CHAIN SECURITY“details the U.S. Strategy for maintaining and strengthening supply chain security at home and abroad.

The United States Government, in collaboration with state, local, tribal, international and private sector stakeholders, has undertaken a number of efforts to strengthen the global supply chain. These efforts include implementation of legislative requirements1 and a number of strategic efforts with a specific security focus.2 This Strategy incorporates and builds upon those prior efforts.

International trade has been and continues to be a powerful engine of United States and global economic growth. In recent years, communications technology advances and trade barrier and production cost reductions have contributed to global capital market expansion and new economic opportunity. The global supply chain system that supports this trade is essential to the United States’ economy and is a critical global asset.
Through the National Strategy for Global Supply Chain Security (the Strategy), we articulate the United States Government’s policy to strengthen the global supply chain in order to protect the welfare and interests of the American people and secure our Nation’s economic prosperity. Our focus in this Strategy is the worldwide network of transportation, postal, and shipping pathways, assets, and infrastructures by which goods are moved from the point of manufacture until they reach an end consumer, as well as supporting communications infrastructure and systems.

The Strategy includes two goals:
Goal 1: Promote the Efficient and Secure Movement of Goods – The first goal of the Strategy is to promote the timely, efficient flow of legitimate commerce while protecting and securing the supply chain from exploitation, and reducing its vulnerability to disruption. To achieve this goal we will enhance the integrity of goods as they move through the global supply chain. We will also understand and resolve threats early in the process, and strengthen the security of physical infrastructures, conveyances and information assets, while seeking to maximize trade through modernizing supply chain infrastructures and processes.

Goal 2: Foster a Resilient Supply Chain – The second goal of the Strategy is to foster a global supply chain system that is prepared for, and can withstand, evolving threats and hazards and can recover rapidly from disruptions. To achieve this we will prioritize efforts to mitigate systemic vulnerabilities and refine plans to reconstitute the flow of commerce after disruptions.

Combination Sales, Inc. is a C-TPAT consulting firm.  In addition to C-TPAT CERTIFICATION assistance, Combination Sales offers a supply chain security program for ineligible companies called C-TPAT COMPLIANT.  For more information please contact Nick Platts at nick@combinationsales.com / (714) 673-4637, or Chris Svendsen at chris@combinationsales.com / (347) 741-8262.

1) Our company is too small to be C-TPAT Certified – The size of a company or the number of employees has no bearing on a company’s eligibility for C-TPAT Certification.  I’ve successfully assisted companies with as few as 3 employees.

2) My company is a customs bonded warehouse and we handle a lot of international cargo.  We must be eligible for C-TPAT Certification, right? – Not true.  The largest factor in determining eligibility for C-TPAT Certification is whether or not the company has influence on cargo prior to it entering the U.S. (influence at the foreign factory, foreign trucking, foreign agent, etc.)  Most Customs Bonded Warehouses have nothing to do with cargo prior to it entering the U.S.

3) If our company becomes C-TPAT Certified and then later loses the certification U.S. Customs treat us more harshly. – False.  A company that loses its certification either by choice or because of non-compliance loses the benefits of being C-TPAT Certified, but U.S. Customs won’t treat you any differently than any other non-C-TPAT Certified company.  If a company has lost its certification due to security violations they may have some trouble because of those violations, but they would have had those problems whether they were certified or not.

4) Our company is an importer and our customs broker told me that being C-TPAT Certified is creates a mountain of extra work and could cause us big problems with U.S. Customs. – Of all the eligible types of business entities U.S. Customs is most anxious to have importers become C-TPAT Certified because importers have a high level of influence over the foreign factory where the containers are loaded.  Maintaining a C-TPAT Security Program shouldn’t take more than 2 or 3 hours a month for most small importers.  The truth is that Non-C-TPAT Certified customs brokers are afraid of losing their importer clients who become C-TPAT Certified because certified companies are encouraged to only use other C-TPAT Certified companies in their supply chain whenever possible.  It’s also less work for the importer if they use only C-TPAT Certified customs brokers because the screening process is much less work.  Non-C-TPAT Certified customs brokers realize that there is a strong possibility that they may lose a good customer if the importer becomes certified.  This also applies to Non-CTPAT certified NVOCC’s.

5) Having a C-TPAT Compliance program is less expensive than becoming certified and it’s  just as good as being C-TPAT Certified. – Wrong.  If a company is eligible for C-TPAT Certification, that is what they should pursue.  If they only go as far as being compliant without actually becoming certified they lose the benefits associated with being C-TPAT Certified.  Let me be clear; being C-TPAT Compliant is a good thing for companies that aren’t eligible for C-TPAT Certification (domestic trucking, customs bonded warehouse, draymen, most 3PL’s).  I have helped many non-eligible companies to implement a C-TPAT Compliant program, so I understand as well as anyone the positives and the negatives.  But if your company is eligible for certification (importers, NVOCC’s – International Freight Forwarders, Cross-Border Highway Carriers, Customs Brokers, some 3PL’s, some Foreign Manufacturers) you’ve already done 90% of what it takes to become C-TPAT Certified, so you may as well go the last mile and get the associated benefits.

6) Our company is an NVOCC (Non Vessel Operating Common Carrier), but we can’t get C-TPAT Certified because we don’t have a warehouse… we only process paperwork. – All NVOCC’s are eligible for C-TPAT Certification as long as they meet the other criteria.  Having a warehouse is not a determining factor for eligibility.  I have helped many NVOCC’s to obtain C-TPAT Certification, some with warehouses and some without.  Every NVOCC that we have set out to get certified has been successful in obtaining the certification.

7) I’ve been told that when you’re C-TPAT Certified CBP conducts surprise visits.   – I have never heard of CBP conducting a surprise visit for C-TPAT purposes.  Here’s how the process works: An agent visit to your facility is not required to be approved for C-TPAT Certification.  Companies are certified based on review of their security profile on the CBP Portal and review of supporting documentation and evidence of compliance that is also uploaded to the portal.  The Certification process usually takes 2 to 3 months.  It can happen in as little as one month (I had this happen once) or it can go longer than 4 months.  There are some waiting periods involved where the applicant can do little or nothing to hasten the process.  After Certification the CBP is supposed to conduct an on-site validation survey within one year.  It’s not unusual for it to take even longer than a year.  The CBP agent (Supply Chain Security Specialist – SCSS) makes an appointment with the company, usually 1 to 3 months in advance.

If you would like help with C-TPAT certification please contact Nick Platts at (714) 673-4637 or nick@combinationsales.com.

On November 12th, 2011 a new release of the C-TPAT web portal will be deployed. The new release adds many new functions for the trade including a rewrite of the “Validation Response” page. Also included is an adjusted scorecard which is viewable after the completion of the validation response process. More information about the new page and the response scorecard can be found at www.cbp.gov/CTPAT.

Some Key Points of the new release are:
• Response to trade feedback on the validation scorecard – give trade credit for response actions.
• Validation Response page rewritten to differentiate treatment of Actions Required and Recommendations for adjusted score.
• A partner is now asked if they implemented a recommendation or not. If not, credit for that recommendation is not added to the score

Also included in the new release is an Adjusted Scorecard
• Built off the Validation Scorecard.
• Returns partial points for Actions Required and Recommendations that are resolved in the Response Process.
• Returns full credit for all Best Practices.
• C‐TPAT CANNOT generate an adjusted score for previous responses.

Included is a new Response Page
• Recommendations are now treated differently than Actions Required. Partners are asked if they have implemented the recommendation? Yes or No details are required about the implementation or the lack thereof.
• Partners will now be asked to upload “Evidence of Implementation” to the Response page and criteria section.

For C-TPAT Certification assistance contact Nick Platts at (714) 673-4637 or nick@combinationsales.com

DOWNLOAD C-TPAT WEB PORTAL UPDATE EXPLANATION

In order to face the new threats and evolving hazards of today’s security environment, we must develop and maintain critical homeland security capabilities at all layers of our society. We all share the responsibility to build all-hazards preparedness and resiliency into our way of life. As outlined in the Quadrennial Homeland Security Review Report, this enterprise approach is composed of multiple partners whose roles and responsibilities are distributed and shared among a broad-based community with a common interest in the public safety and well-being of America and American society.

Here are some of the topics covered in the newly revised catalog:

• Preventing Terrorism & Enhancing Security
• Bombing Prevention
• General Physical Assessment Tools
• Hazardous Materials Transportation Security
• Mass Transit & Rail Security
• Nuclear Security
• Land Transportation
• Terrorism Prevention
• Securing & Managing our Borders
• Trade Facilitation
• Enforcing & Administering our Immigration Laws
• Safeguarding & Securing Cyberspace
• Cybersecurity assessment Tools
• Ensuring Resilience to Disasters
• Disaster Response Laws & Regulations

THE INQUIRY:

We are a non asset based 3 PL company working out of Canada. One our major U.S. customers is updating their records & have asked if we are C-TPAT certified. From the information that I have 3PL’s can not get certification. Is that correct?

MY REPLY:

Your company probably is not eligible for C-TPAT Certification for 2 reasons:

1) Except in the case of some manufacturers, having an office staffed in the U.S. is a requirement.

2) U.S. based 3PL’s are technically eligible for C-TPAT Certification, but from a practical standpoint very few qualify. This is because in order for a company to be eligible they must demonstrate that they have some level of influence over the cargo prior to it entering the U.S. Most U.S. 3PL’s are not involved in international shipments until they are already in the country.

The company that is asking you about C-TPAT certification is doing what they are required to do, which is to determine which of their business partners are C-TPAT Certified and which are not. Those that are not C-TPAT Certified are required to be “fully compliant” with all C-TPAT requirements even though they themselves are not eligible.  This is usually accomplished by requiring the non-C-TPAT certified company to complete a security questionnaire, and in some cases, do an on-site audit at the business partner’s office.

Jeff Platts – C-TPAT Consultant - jeff@combinationsales.com – 714-788-1531

• Important note: Importer Outreach from NVOCC’s – the NVOCC’s get credit for importers who become C-TPAT Certified because of the NVOCC’s outreach efforts.  You should keep track of this and notify your SCSS when an importer applies for C-TPAT.  CBP looks favorably on NVOCC’s that encourage their importer clients to become certified.

• It is okay for clients/vendors to provide other completed C-TPAT-style security questionnaires.  In other words, it is acceptable for your business partners to send you a copy of a security questionnaire they have completed for another C-TPAT Certified company.  It is not necessary for them to expend the effort to fill out your form.  As long as the information is being captured, that’s what really matters.

• In addition to 7-point container inspection checklists importers should request digital photos of the container/trailer as follows: 1) empty, 2) half-full, 3) full, 4) doors closed and sealed.  If the importer is getting these, the NVOCC should ask to be copied.

• You should have a copy of your ISF Progress Report available for your validation survey.

• Container/Trailer inspections should be done by 2 people with 2 different bosses whenever possible.  A manager should also be involved.

• Reference Checking – When screening potential employees a note should be written on the application at the location where references are located indicating who was talked to and the date.

• Companies should have an employee incentive program for active participation in the C-TPAT program.  This does not have to be monetary.  It can be as simple as recognizing an employee in a company meeting, a plaque, a Starbucks card, etc.

• Passwords – Individual users should be the only ones who know their passwords.  In other words passwords should not be created and assigned by an administrator, but rather the employee should be allowed to create it himself or herself.

• Companies should post a C-TPAT Photo ID statement near the visitor sign-in log explaining why it is necessary to show photo ID.

Jeff Platts – C-TPAT Consultant – 714-788-1531, jeff@combinationsales.com

Wednesday, March 30, 2011
7:00 AM to 5:00 PM – Registration
8:30 AM to 5:00 PM – General Session
Thursday, March 31, 2011
8:30 AM to 5:00 PM – Supply Chain Security Workshops
Location:
Manchester Grand Hyatt San Diego
One Market Place
San Diego, California, 92101
In New Orleans there will be one session:
Schedule:
Tuesday, June 7, 2011

4:00 PM to 8:00 PM – Registration
Wednesday, June 8, 2011

7:00 AM to 5:00 PM – Registration

8:30 AM to 5:00 PM – General Session
Thursday, June 9, 2011

8:30 AM to 5:00 PM – Supply Chain Security Workshops

Location: New Orleans Marriott 555 Canal Street, New Orleans, LA 70130
Expenses for lodging are the responsibility of the C-TPAT members. Please do not make reservations at the hotels until you have received confirmation of your attendance. Those members who successfully register for the first seminar will not be eligible to register for the second seminar.
These seminars are open to certified C-TPAT members only. Attendees should be individuals directly responsible for the implementation of the C-TPAT program throughout the organizations’ supply chain.
The agenda for both seminars will focus on facing the challenges of balancing security needs and economic efficiency in today’s environment. In addition to significant program updates, joint CBP/Trade presentations, panel discussions, and seminar workshops will be conducted.
This years C-TPAT Training seminars will include topics such as:
- Anatomy of a PIA
- Conducting a Supply Chain Security Risk Assessment
- Evidence of Implementation/Documentation
- Suspensions and Removals
- CBP Risk Indicators
- Developing a Security Training & Awareness Program
- Proactive Approaches to Security Breach Prevention

There will be no registration fee for this seminar; however space is limited to 1,200 participants in San Diego and 600 participants in New Orleans.
C-TPAT Training Seminar Registration for both conferences will be conducted via an on-line registration process beginning January 5, 2011. Registration will open at 12:00 Noon Eastern Standard Time (9:00 AM Pacific Standard Time). Each company will be required to pick one seminar only for two participants.
You must have your C-TPAT account number to register. If you do not have it immediately available, you will not be able to register in a timely manner!
Attendees will be selected based on certified membership status and on a first come first served basis. Tier 3 members will be given preference for the event they choose.  Attendance is limited to a maximum of two (2) persons per C-TPAT certified account. At least one person registering to attend must be a designated point of contact (POC) listed in the company’s C-TPAT Portal account. At time of registration, members will be required to provide identifying information exactly as it appears in the C-TPAT Portal account. Identifying information will include: company name, C-TPAT account number, and POC email addresses. Information not accurately matching the information contained in the C-TPAT Portal may delay registration processing.

• At the time of the survey, C-TPAT had 8,166 business partners. For the purpose of the study, these C-TPAT business partners were grouped into Importers (3,822); Carriers (2,270), including U.S/Canada Highway Carriers, U.S/Mexico Highway Carriers, Rail Carriers, Sea Carriers, and Air Carriers; Service Providers (1,400), including U.S. Marine Port Authority and Terminal Operators, U.S. Air Freight Consolidators, Ocean Transportation Intermediaries or Non- Vessel Operating Common Carriers (NVOCC), and Licensed U.S. Customs Brokers; and, finally, Foreign Manufacturers (674).
• Of the 8,166 companies participating in CTPAT, a total of 3,901 businesses, nearly half (47.8%), responded to the 2010 survey. This represents a substantial improvement over the 29.4 percent response rate obtained for the 2007 survey
• The response distribution by business type is fairly close to that of the 2010 C-TPAT business partner population. Specifically, 39.2 percent of respondents to the 2010 survey are importers, 29.5 percent are carriers, 19.5 percent are service providers, and 11.8 percent are foreign manufacturers. The larger absolute numbers of responses from Service Providers and Foreign Manufacturers in the 2010 Survey are particularly welcome, in that they substantially increase CBP’s confidence in the statistical inferences that can be drawn about these types of businesses.
• Respondents who completed the survey were asked to indicate their company’s annual revenue. For nearly three-quarters (74.9) of the responding companies, the annual revenue reported was less than 100 million dollars. For nearly half (44.1%) of the responding companies, the annual revenue reported wasless than 10 million dollars.

Tangible Benefits for all Businesses

• Overall, the greatest C-TPAT impacts on business have included improvements in the field of workforce security, decreased time to release cargo by CBP, reduced time in CBP inspection lines, and increased predictability in moving goods. Importers identified an additional impact related to a decrease in disruptions to the supply chain. For the majority of non-Importers, C-TPAT had a imited impact on their number of customers and sales revenues. For Highway Carriers, the major C-TPAT impact has been the decrease of their wait times at the borders.

Intangible Benefits of the C-TPAT Program

• Of all the potential intangible benefits, “increases security awareness” and “enhances security in supply chain” had the highest mean ratings (3.76 and 3.75 respectively on a 4 point scale). In each of these cases, roughly three quarters of all businesses considered them to be very important benefits. • Other intangible benefits from the C-TPAT program included “demonstrating corporate citizenship” and, “improving risk management procedures and systems”. For Importers, the most important potential benefits included “assignment of a C-TPAT Supply Chain Security Specialist to help your company validate and enhance security throughout your supply chain” and “self-policing and selfmonitoring of security activities through the Importer Self-Assessment program.”

Highway Carriers

• A majority of Highway Carriers reported receiving a “large” or “moderate” benefit from the FAST program, but almost sixteen percent said they did not know whether they benefited from this program or not.
• Highway Carriers were asked how often they received front-of-the-line privileges. Twothirds of the respondents said they did not know whether they received this benefit or not, and another fifth said they received it “hardly ever” or less than half the time.”

Costs to Implement the C-TPAT Program

• Across all businesses, “improving or implementing physical security costs (doors, windows, electronic access, cameras, fences, gates, lighting, etc.) received the most mentions of all the potential C-TPAT implementation costs. For Importers, additional important costs were associated with “developing a new supplier security evaluation survey process” and “educating foreign suppliers, manufacturers, or vendors about security requirements.”
• Of all the maintenance cost items, “maintaining the physical security” and “maintaining cargo security” were the most frequently mentioned by all the businesses. These two items were mentioned respectively by 67.0 percent and 61.7 percent of all businesses. Next on the list of maintenance cost items is “maintaining in-house education, training, and awareness” which is mentioned by 56.9 percent of businesses.
• The 2007 survey included questions asking for detailed information about expenditures and dollar values. In the 2010 survey, these questions were deferred to a more detailed survey conducted with a small sub-sample of C-TPAT members as part of the effort to streamline the primary survey instrument. The results of the more in-depth survey will be made available later in 2010.

Revalidation

• The vast majority (90.7) of respondents that had participated in a revalidation judged it to be either “exactly what I expected” (32.2%) or “close to what I expected” (58.5%). Only 2.0 percent of respondents judged it to be “not at all what I expected”.

• Satisfaction with the recommendations received from C-TPAT during the revalidation procedure were favorable as well with 54.7 percent of respondents “very satisfied” with these recommendations, 38.7 percent “somewhat satisfied” and only 1.3 percent “very unsatisfied.”

Risk Management

• Overall, more than one-half (52.2%) of all businesses reported that they had a formal system in place for assessing and managing supply risk before joining C-TPAT and nearly half (47.8%) of businesses did not report having one in place.

• Of the businesses that had a formal system in place for assessing and managing supply risk, 87.6 percent agreed (59.9%) or somewhat agreed (27.7%) that their businesses’ ability to assess and manage supply risk has been strengthened as a result of joining C-TPAT.

• Overall, the 2010 survey showed both a higher proportion of companies reporting pre-CTPAT risk management and contingency planning systems and a higher level of satisfaction with improvements in those systems attributed to C-TPAT membership.

Use of High-Security Seals
• Relatively new members of C-TPAT (those certified within the last three years) were also asked whether they used high-security seals (ISO 17712) prior to the implementation of CTPAT security criteria. They were split quite evenly in terms of usage of high-security seals (ISO 17712) with slightly more than half (51.4%) using them prior to C-TPAT and the remainder (48.6%) not using them prior to CTPAT.

Global Harmonization
• This section of the report analyses respondent perceptions of how C-TPAT coordinates with security programs in other parts of the world (an issue not addressed in the 2007 survey). A total of 38.6% of the sample have offices in other parts of the world.
• Among these companies with offices in other parts of the world, more than two-thirds (67.9%) are aware of other security programs operating in those foreign countries. Only 8.6 percent of these companies considered a lack of mutual recognition or harmonization to be a “serious problem,” while an additional 33.9 percent considered it “somewhat of a problem.”

• Satisfaction with the progress C-TPAT is making in strengthening harmonization and establishing mutual recognition between the security programs of different countries was good overall, with 84.1 percent of those companies for which global harmonization is a pertinent issue rating those efforts as either, “good,” “very good” or “excellent.”

C-TPAT (Customs-Trade Partnership Against Terrorism) is a voluntary program administered by U.S. Customs and Border Protection. C-TPAT Certified companies must have fully documented processes and procedures and must demonstrate that they are actively complying with all C-TPAT requirements in their day-to-day business operations.

C-TPAT Certified companies are required to use other C-TPAT Certified companies as their business partners whenever possible. They are also allowed to use C-TPAT Compliant companies, which are companies that are in full compliance with all C-TPAT requirements, but are not certified by U.S. Customs.

Olympic Frieight’s web site is http://www.pathfinder-logistics.com/. They can be reached by telephone at 707-528-1487.

Customs-Trade Partnership Against Terrorism – 2010 Partner Survey