Wednesday, October 29, 2003

The Battle To Secure The Supply Chain

WASHINGTON, D.C. - When Congress passed the USA Patriot Act two years ago, it acted swiftly and broadly. The 342-page bill, which President George W. Bush signed into law on Oct. 26, 2001, modified 15 statutes, authorized hundreds of millions of dollars in new spending, and expanded the government's powers in the realms of surveillance, criminal justice, immigration, intelligence and trade sanctions, among other areas.

The process couldn't have been more different when it came to beefing up security for businesses shipping goods into and out of the country. Rather than going for heavy-handed legislation or rule-making, the government approached companies involved in shipping and brainstormed with them to develop a largely voluntary, self-regulating system of securing the supply chain.

The shipping community continues to debate the success of the foremost result of this brainstorming, a program known as the Customs-Trade Partnership Against Terrorism, or C-TPAT, run by U.S. Bureau of Customs and Border Protection.

Here's how C-TPAT works: Businesses--carriers, customs brokers, freight forwarders, importers and anyone else involved with shipping or logistics--sign a memorandum to get the C-TPAT process started. The next step is to conduct a self-assessment of supply chain security using C-TPAT guidelines on physical security, manifest procedures, education and training, and other topics. C-TPAT participants then submit a security questionnaire and profile to customs, develop a program and agree to future audits of security practices to check whether progress is taking place.

For the companies involved, the carrot part of the equation is a reduced number of inspections at borders, access to a list of other C-TPAT members, and an "assigned account manager" at the Customs bureau.

In terms of numbers, C-TPAT certainly seems to have been a hit. As of today, from a core group of "charter members" such as Motorola, Ford Motor, and Target , C-TPAT has 4,300 companies signed up. "[That number] indicates that because of C-TPAT," Customs Commissioner Robert C. Bonner testified in Congress recently, "trade is a lot safer from terrorist exploitation."

Full story at Forbes.com