Customs Update: What's going on at CBP?
(Published in the JOURNAL of COMMERCE OnLine Jan. 26, 2004)

To fans of the old television show, "The Honeymooners," the phrase "To the moon, Alice!" has a familiar ring. It is the statement used by Ralph Kramden when he became highly frustrated with the common-sense answers of his wife, Alice, to some of his more hare-brained schemes and ideas! While what Customs and Border Protection (CBP) is currently trying to do is anything but hare-brained, it does make one wonder what is going on.

The Department of Homeland Security in general and CBP in particular are under enormous pressure to secure our borders. It isn't just a matter of owing that security to the American public, it is also a matter that if CBP isn't able to come up with programs which work, Congress will, and that would be disastrous. Frankly, Congress has already shown how little it understands about trade and business and were it not for the myriad of trade associations and lobbyists who work Capitol Hill on these issues, we would have an even bigger mess on our hands.

C-TPAT should work for big AND small

Anyone who is an international trader knows the entire supply chain security system is based on the honesty of the person who prepares the documents. None of us really believes a terrorist is going to accurately manifest the guns, ammunition, toxin or other device he intends to smuggle into the U.S. and use to cause devastation. So, let's talk turkey! If CBP is serious about making the Customs-Trade Partnership Against Terrorism (C-TPAT) work, it should focus on working with industry to make that program work for the smaller companies.

It is understandable that CBP began its efforts by focusing on the "big" guys. After all, to get the program off the ground, you go to an audience you know will support your message. Large corporations are interested in security because they want to protect their brands, and rightly so. But do any of us believe a real threat exists with the big guys? No! Of course, any shipment can be compromised, but there are perhaps 1,000 large importers (to use CBP's figures). What about the other 399,000 importers in CBP's database? Undoubtedly there are small companies which are being innovative and so are able to take some steps towards a more secure supply chain, but the small- or mid-size buyer simply lacks the clout to mandate what its supplier is required to do. So, what is the solution?

Let's begin by discussing international efforts towards agreed-upon security standards, including standards for equipment, training and staffing. It's great that we have inspectors in foreign ports who look at manifest and intelligence information in selecting shipments to inspect, but does that really make any one feel safer? True, there is the occasional well-publicized illegal shipment which gets seized, and thank goodness that happens. But what about a bigger bang for the buck?

It is generally accepted that a smaller company can be more easily corrupted than a large one, then how about tackling real cargo security? As noted, smaller companies cannot rely on their buying clout to influence those with whom they do business, but they can take charge of who they use as service providers. What about making it worth their while? Some of the larger freight forwarders and 3PLs have talked in terms of forming consortiums and purchasing their own mobile scanners or similar systems for the purpose of x-raying all the cargo they transport.

We all agree that cargo security comes from being able to vouch for the contents of the container. Since that generally cannot be accomplished at the plant where the goods are made, why not set up a system which acknowledges that fact but allows cargo security at the next most logical point -- where it is stuffed in the container or, at least, comes into the custody of the forwarder? Given that a these x-ray systems cost approximately $1 million each, what these forwarders want in exchange for such a sizable investment is some assurance from CBP that when their cargo arrives at destination, it will be given expedited treatment. So far, the answer from CBP has been no.

This despite the fact these companies are willing and indeed want the foreign-based CBP inspectors to visit their facilities to confirm they have properly trained their personnel, are accurately operating the equipment and are timely reporting any anomalies. If CBP isn't prepared to make it worth their while to make such an investment, how can we say the supply chain is really more secure today than it was a year ago?

Sharing best practices a key

From the start of C-TPAT, Customs explained it went to the large companies first in order to take advantage of their ability to force multiply, i.e., use their clout to make things happen. If CBP is serious about the use of force multipliers and is equally interested in real supply chain security, then it is going to have to shift its focus and find more creative ways of dealing with the trade beyond the large multi-nationals. One of the stated benefits of C-TPAT membership is supposed to be the sharing of best practices. How about sharing with the public at large those best practices now being successfully used by small businesses so others can try to build on them? Does anyone really believe the so-called "smart" containers are compromise-proof?

It's enough to make a trader want to go to the moon!