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More C-TPAT Participants Say Benefits Outweigh Costs

09/27/10

Source: World Trade Interactive
Related Topics: International Trade Government Agencies

U.S. Customs and Border Protection has released the results of its most recent survey of participants in the Customs-Trade Partnership Against Terrorism. According to CBP, 42.1% of survey respondents said the benefits of C-TPAT participation outweigh the costs, an approximately ten percentage point improvement since a similar survey in 2007. Satisfaction with the program’s benefits increased according to the length of a company’s participation as well as its size. Businesses also said participation offers a number of tangible and intangible benefits, including strengthening those supply chain security procedures they had in place before joining. Additional findings of the report include the following.

Participants. At the time of the survey C-TPAT had 8,166 business partners, including 3,822 importers, 2,270 carriers (rail, sea and air), 1,400 service providers (including customs brokers, ocean transportation intermediaries, marine terminal operators and air freight consolidators), and 674 foreign manufacturers. CBP announced this week that total membership has now exceeded 10,000.

Benefits. The greatest tangible benefits of C-TPAT have included improvements in the field of workforce security, decreased time to release cargo by CBP, reduced time in CBP inspection lines and increased predictability in moving goods. Importers also identified a decrease in disruptions to the supply chain. For the majority of non-importers, C-TPAT has had a limited impact on their number of customers and sales revenues. For highway carriers, the major impact has been a decline in their wait times at the borders, although two-thirds said they did not know if they had received front-of-the-line privileges and 20% said they received such benefits “hardly ever” or “less than half the time.”

Of all the potential intangible benefits, increased security awareness and enhanced security in the supply chain were the highest rated, with about 75% of respondents considering these to be very important benefits. Other intangible benefits include demonstrating corporate citizenship and improving risk management procedures and systems. For importers, the most important potential benefits included the assignment of a C-TPAT supply chain security specialist to help them validate and enhance security. Nearly all of those that had contacted their SCSS in the past 12 months said they trusted their SCSS “very much” and got what they needed all or most of the time. Importers also liked the ability to police and monitor their own security activities through the Importer Self-Assessment program.

Costs. Across all businesses, improving or implementing physical security costs received the most mentions of all the potential C-TPAT implementation costs, while maintaining physical security and cargo security were the most frequently mentioned maintenance cost items. For importers, additional important costs were associated with developing a new supplier security evaluation survey process and educating foreign suppliers, manufacturers or vendors about security requirements.

Risk Management. Only about 52% of all businesses reported that they had a formal system for assessing and managing supply chain risk in place before joining C-TPAT. Of those 87.6% agreed or somewhat agreed that their ability to assess and manage supply chain risk has been strengthened as a result of joining C-TPAT. Overall, the 2010 survey showed both a higher proportion of companies reporting pre-C-TPAT risk management and contingency planning systems and a higher level of satisfaction with improvements in those systems attributed to C-TPAT membership.

Global Harmonization. Among respondents that have offices in other parts of the world, 67.9% are aware of other security programs operating in those foreign countries but only 8.6% considered a lack of mutual recognition or harmonization to be a serious problem. Satisfaction with the progress CBP is making in strengthening harmonization and establishing mutual recognition between the security programs of different countries was good overall.

Evaluation. Overall, 42.1% of businesses reported that the benefits of C-TPAT participation outweighed the costs, 25% said the costs and benefits were about the same, 14.9% said the costs outweighed the benefits and 18.0% reported that it was too early to tell.

Perceptions of net benefits increased in a linear fashion with years in C-TPAT, ranging from 30.2% among companies certified less than one year to 47.7% among companies certified more than five years. There was similar increase in relation to company size, ranging from 36.5% for companies with less than $10 million in annual revenues to 55.7% for companies with more than $10 billion in annual revenues.
 

For more information, visit http://www.strtrade.com/wti/2010/september/27/ctpat_survey.pdf





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