CBP Posts Results of its C-TPAT Cost/Benefit Survey

CBP asked the University of Virginia to conduct a cost/benefit survey of C-TPAT partners to learn how C-TPAT program benefits relate to the cost of participation. In addition, CBP was interested in learning the partners' motivations for joining C-TPAT and an overall evaluation of the program.

Approximately 6,000 C-TPAT-certified companies were sent an invitation to participate in the production phase of the web-based survey (January - April 2007). The data collected from the web-based survey were then analyzed and summarized.

Motivations for joining. According to the report, for all businesses, reducing the time and cost of getting cargo released by CBP is the most important potential benefit, followed by reduced time and cost in CBP secondary cargo inspection lines.

For importers, the most important motivation to join C-TPAT is the reduction of disruptions to the supply chain. For non-importers, the majority indicated that their principle reason for joining C-TPAT was that their business partners required them to be C-TPAT certified.

Implementation and maintenance costs. According to the report, of all the potential C-TPAT implementation costs, improving or implementing physical security costs (doors, windows, electronic access, cameras, fences, gates, lighting, etc.) received the most mentions. It was also highest among all potential implementation costs with an average of $38,471.

Of all the maintenance cost items, maintaining physical security and in-house education, training, and awareness received the most mentions by all the businesses.

With respect to the average amount of money spent, maintaining the use of security personnel ($40,441) and salaries and expenses of personnel ($28,454) were the highest costs to maintain the C-TPAT program.

The results of the survey also indicated that the ease of implementing the C-TPAT program criteria was found across all business types.

Benefits of participation. Almost one-third (32.6%) of businesses said that the benefits of C-TPAT participation outweighed the costs, while nearly one-quarter (24.2%) of businesses said that the C-TPAT benefits and affiliated costs were about the same.

For all businesses, the major impacts of their C-TPAT participation have been in the field of workforce security, time to release cargo by CBP, time in CBP inspection lines, and predictability in moving goods.

More than one third (35.4%) of importers reported that their participation in C-TPAT has decreased their number of CBP inspections. Importers also stated that their participation in C-TPAT has increased their supply chain visibility and nearly one-quarter (24.3%) indicated that their participation in C-TPAT has increased their ability to predict lead-time. Nearly 3 out of 10 importers (28.9%) reported that their participation in C-TPAT has decreased the disruptions in their supply chain.

Almost half of the highway carriers (44.4%) said that their wait times at the border have remained the same, while 41.5% of highway carriers reported that their participation in C-TPAT has decreased their wait times at the borders.

Impact on supply risk. The vast majority (81.3%) of businesses that had a formal system in place for assessing and managing supply risk agreed or somewhat agreed that their businesses' ability to assess and manage supply risk has been strengthened as a result of joining C-TPAT.

Benefits vs. costs. More than half (56.8%) of businesses indicated that C-TPAT benefits outweighed the costs (32.6%) or the benefits and the costs were about the same (24.2%). Slightly more than one quarter (26.4%) reported that it was too early to compare the benefits and the costs.

While more than one-third (38.4%) of businesses indicated that their management was concerned about the potential impact on cost when their companies were considering joining C-TPAT, the vast majority of businesses indicated they have never considered leaving the C-TPAT program (91.5%) and that they would definitely (78.1%) or probably (18.1%) stay in the program.

(See ITT's Online Archives or 08/28/07 news, 07082810, for BP summary of August 16, 2007 COAC meeting at which CBP officials stated that the C-TPAT cost/benefit survey would be issued by the end of August 2007.

See ITT's Online Archives or 05/17/07 news, 07051705, for BP summary of the May 15, 2007 COAC meeting at which CBP stated that the C-TPAT cost/benefit survey was expected to be issued in summer 2007.)

C-TPAT Cost/Benefit survey (152 pp, dated August 2007) available at http://www.cbp.gov/linkhandler/cgov/import/commercial_enforcement/ctpat/ctpat_cost_survey.ctt/ctpat_cost_survey.pdf.