University Report Says Cost, Lack of Perceived Benefits, Outweigh Pressures to Join C-TPAT

The report examines various institutional, legal, and policy arrangements that have been established in the U.S. and abroad to enhance worldwide port and supply chain security, including the Customs-Trade Partnership Against Terrorism (C-TPAT) program. Highlights of the C-TPAT portion of the report include the following:

Widely Varying Reviews of C-TPAT

The report states that the decision to look closely at the C-TPAT security initiative was a result of its widely varying and highly contentious reviews. The report notes that most government reports and Web sites present C-TPAT as the U.S.' foremost and most comprehensive anti-terror initiative while industry respondents believe that it is not operating efficiently. In fact, most private-sector representatives feel that C-TPAT is an inadequately funded and managed program that requires costly, if not cost-prohibitive, security measures.

Most prevalent criticisms of C-TPAT. The report lists the following as the most prevalent criticisms of C-TPAT:

CBP has not concretely defined member benefits;

There is inconsistency in the steps of the certification process at which participating firms are granted benefits;

The validation process for firms is not comprehensive; and

CBP does not have the personnel necessary to complete the validations in a timely manner.

Poll of NITL shippers. According to the report, forty-four companies responded to a February 2006 National Industrial Transportation League (NITL) survey with 80 percent stating they were C-TPAT members. Responses centered on the lack of resources provided to fund the program; the need for increased knowledge and skill of C-TPAT enforcers and validators; as well as a call for program flexibility in order to accommodate different types of firms.

The overall sentiments about C-TPAT, as reflected by the respondents' answers to questions and their supplementary comments are as follows:

Idea behind C-TPAT is good, but Congress is ill-equipped to manage or regulate it. The idea behind C-TPAT is good and, with work, it could achieve the balance of facilitating trade growth while simultaneously strengthening supply-chain security. However, Congress is ill-equipped to effectively monitor or regulate any import-related processes as it lacks the necessary understanding of the international supply chain.

CBP is slow, highly bureaucratic in validation of C-TPAT participants, etc.CBP is slow and highly bureaucratic and officials are often poorly trained, particularly in validation of C-TPAT participants. The bureaucracy makes for a confusing and habitually inefficient process.

C-TPAT must be made mandatory or firms must realize advertised benefits.C-TPAT is a good first step but, in order to reach its potential, must either be made a mandatory initiative or firms must actually realize the benefits advertised.

C-TPAT is virtually useless without foreign participation.As with many U.S. initiatives that are wholly applicable to the international community, C-TPAT must be extended to foreign governments and international industry participants as it is virtually useless without foreign participation.

Pressures to Join C-TPAT Do Not Outweigh the Costs & Perceived Benefits

The report concludes that overall, firms at all levels of the supply chain acknowledge and support the need for an industry-wide security initiative. To date, however, industry pressures to join C-TPAT do not outweigh the perceived lack of advantages to participating in the program or the costs a firm must bear in order to be validated.

According to the report, much work remains to be done to include the opinions and suggestions of private-sector participants in the future planning stages of C-TPAT, as well as to create avenues through which the international trade community can participate.

(See ITT's Online Archives or 10/10/06 news, 06101005, for Part IV of BP summary of the conference version of the "SAFE Port Act" which contains information on its C-TPAT provisions and links to earlier parts of the summary.)

Port and Supply-Chain Security Initiatives in the U.S. and Abroad Report, 2006, available at http://www.utexas.edu/lbj/pubs/pdf/prp_150.pdf