In recent days, our company has had the opportunity to take a close look at a trending certification program that for many businesses is not only becoming a best practice but an essential piece of its corporate governance. I’m referring to C-TPAT, a voluntary partnership between established corporations importing into the United States and the U.S. Government throughout the Customs and Border Protection (CBP) agency. We have learned a lot over the last month, and for a company like ours, this type of Government-Business partnership is worth talking about. Why? Well, because C-TPAT is all about supply chain optimization!

C-TPAT is a program created by the Department of Homeland Security in 2002 to minimize risks and threats on cargo moving through or entering the United States. C-TPAT stands for Customs Trade Partnership Against Terrorism, and it was created as a direct response to the ever increasing complexities on maintaining cargos secure and compliant. The reality is that these complexities were (and still are) nothing more than a wide variety of risks that became too frequent and feasible that could no longer be ignored.

On one hand companies (importers) suffered from product tampering and contamination, drug (and people) smuggling, supply disruption, theft, and so on…and not only that, even if their cargo was clean they still had to face long waiting hours at the borders in order to clear it, which resulted in storage fees, penalties, overcharges but most importantly production delays and supply chain disruption. On the other hand you had CBP, the government, whose problems were different, screening every shipment and cargo was not only inefficient but costly as well. So what happened? Both the government and importers started to understand that some sort of collaboration between them had to exist if they ever wanted to fix this situation for their mutual benefit. The solution came about and CTPAT was born; one of the most comprehensive strategic partnerships between businesses and the government created so far.

CTPAT presented the basic argument of letting suppliers to self-assess their supply chain, evaluate their suppliers and resolve their internal security issues by following and complying with a standardized set of requirements and regulations and proposing their own solutions. Based on their supply chain risk and the company’s plan to mitigate CBP would review and admit them as a member of the C-TPAT program. Initially the company would be welcomed as at Tier I but after some time and the depending on a second validation of their risk level and controls, the company would be eligible to a higher Tier II or Tier III status that would grant them even more benefits. Depending on the tier these benefits would potentially allow the applicant to become a trusted importer, thus expediting cargo screenings, minimizing audits and reviews, reducing costs associated with these practices and aligning resources to join other global programs.

So what are the advantages to C-TPAT? Well, the answer is twofold, for one is a voluntary compliance program that grants the many benefits previously discussed, and two, it has global reciprocity, which means that certified C-TPAT companies are also recognized and eligible for the AEO programs of the European Union, Australia and Japan as well as the Singapore Customs Secure Trade Partership program, to name a few.

So what does an importer need to do to achieve such a reputable certification? Well, among other things and many forms to fill out, the applicant would have to follow the C-TPAT recipe, which is properly referred to as the “5 Step Supply Chain Security Risk Assessment Process” and consists of the following:

1. Mapping Cargo and Business Partners.
2. Conducting a Threat Assessment.
3. Conducting a Security Vulnerability Assessment.
4. Preparing an action Plan to address vulnerabilities.
5. Documenting How the Security Risk Assessment is Conducted.

Each one of these steps is a key constituent of the risk assessment process for the C-TPAT program. While you may not know how to conduct this five step assessment, there are many companies out there now who specialize if conducting it for you, and bring your company into the program.

While there is a set of tangible benefits of being C-TPAT certified (at any tier) it also requires a major commitment on maintaining a compliant and closely regulated supply chain, from suppliers and brokers, to consolidators and distributors. C-TPAT has truly become one of the best regarded certifications for global supply chain and is an element of corporate social responsibility and citizenship, it is the quintessential strategic partnership between a business and the government and is just a great definition of a best practice.
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Diego De la Garza

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