CTPAT, CCSP, CSI, FAST, ISF and AEO; what do these collection of letters all have in common? Security; specifically they are all government-sponsored supply chain security programs. The Customs- Trade Partnership Against Terrorism (CTPAT), the Certified Cargo Screening Program (CCSP), the Container Security Initiative (CSI), the Free and Secure Trade (FAST) program, and the Importer Security Filing (ISF) are all United States governmental programs under the Department of Homeland Security’s Customs and Border Protection (CBP) and the Transportation Security Administration (TSA). The Authorized Economic Operator (AEO) program from the European Union also has a security element that closely mirrors some of these US-based programs. While this list is by no means all inclusive, these programs all possess a very similar goal in that they are designed to secure the supply chains, and while they aim to protect different parts of the supply chain, they all remain methods of protection. They all provide the means to consolidate companies’ programs under tighter security practices and improve the overall logistical security process. Thereby protecting the product from loss in transit and ensuring a dependable and timely delivery to the point of destination. For the practicality of this article, I will focus on two of these programs, CTPAT and CCSP. I choose these two programs because of their similarity in physical security requirements, and the stark differences in how they are administered.
Prior to September 11, 2001, the role of the U.S. Customs Service (Customs) had been to facilitate trade, collect revenue, enforce customs laws, interdict contraband and drugs, protect U.S. copyrights and trademarks, collect trade statistics, assist other agencies, and enforce export policies. As a result of the terrorist attacks of 9/11, however, Customs and the Department of Homeland Security (DHS) were merged into one agency, the U.S. Customs and Border Protection (CBP), whose joint priority was to prevent terrorists and terrorist weapons from entering the U.S. CTPAT originated as an idea in Customs shortly after the events of 9/11, when the need to protect the supply chains was seen as critical to insuring that commerce would not be stopped by another such terrorist event. While the supply chains were not directly attacked, they were used as a weapon system. The resulting suspension of aircraft and port operations for even a few days as a precaution required a long time for the trade lanes to fully recover. While it was not the practice at the time, Customs did not have the means to truly inspect all materials within the shipping lanes coming into the US, yet the thoughts of weapons of mass destruction or items of terror were feared to potentially be smuggled into the country. Customs needed help, and they devised a volunteer program for industry to help secure those supply chains by inspecting their own shipments and making sure that such materials were not being hidden with their legitimate shipments. C-TPAT was launched in November 2001 to help CBP achieve its twin goals of security and facilitation. The program has grown from seven founding companies in 2001 to well over 9000 today. Recognizing that it can promote the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain – importers, carriers, consolidators, licensed customs brokers and manufacturers –the CBP strategy relies on a multilayered approach that consists of five goals to:
- Ensure that C-TPAT partners improve the security of their supply chains pursuant to C-TPAT security criteria
- Provide incentives and benefits that expedite processing of C-TPAT shipments to C-TPAT partners
- Internationalize the core principles of C-TPAT through coordination and cooperation with the international community
- Support other CBP security and facilitation initiatives
- Improve administration of the C-TPAT program
The guiding principles for C-TPAT are voluntary participation, using jointly developed security criteria, best practices, and best implementation procedures. Customs further encouraged businesses to join with the hope of reduced numbers of inspections and speedier clearance of goods at the point of importation. Many would say these “benefits” are not real or that they have seen no reduction in the number of inspections, but I would argue that if you are seeing similar inspections on your imports today, you are indeed seeing an actual reduction, because the percentage of inspections has risen in the same time period 5 to 10 times the number of inspections prior to 2001. More importantly, the real benefits of this program go beyond what Customs can do for you, but what this program requires of you as a shipper to do, and how that can improve your shipping programs in general.
TSA, however, has had to take a different route; TSA was formed as a new Agency after 9/11 and had to start from scratch. Their first priority was to screen passengers at the airports to assure that people like those that conducted the hijackings that day could be stopped prior to gaining entrance to the aircraft. TSA was also formed under the Department of Homeland Security and has worked to consolidate and coordinate many preexisting programs in order to assure the safety of passengers and aircraft. TSA’s priority was first and foremost the protection of passengers using the supply chains and the CCSP program is being required by law. Specifically, the “Implementing Recommendations of the 9/11 Commission Act of 2007” was signed into law on August 3, 2007. This law required that all cargo shipped on passenger aircraft to be inspected at a 50 percent level by February of 2009, and that 100% of that same cargo be screened by August of 2010. Similar to the CTPAT program the constraints of this particular mode of transportation does not allow for efficient screening of materials at the point of loading onto the aircraft. The biggest difference is that TSA is mandated by law to make this screening occur, and CTPAT remains as fully voluntary and able to adjust to changing situations without the burden of the regulatory process. The TSA is also not going to be able to expand their capacity to screen without a great influx of resources; and this is not outlined in the law as it is published in the recently released Interim Final Ruling. The brunt of this screening must therefore be completed by industry, either the air carriers, the indirect air carriers (freight forwarders), third party screening companies, or finally the shipper/manufacturer may look to become certified to screen their own product. Given the limitations of space, timing, and product sensitivity, involvement in this program is less an option of participation, but more one of how. Since air carriage is generally reserved for urgent, sensitive or expensive products, the choice of joining the program must be balanced against the value of your product and the time-sensitive nature. Again, the value of joining this program is more tied to the protection of your product than the cost of having someone else conduct this service for you. In the message from Edward Kelly, former Branch Chief of the Cargo Branch of the TSA; there is no question in his mind of meeting the August 2010 deadline for implementing this program at the 100% level; unscreened materials will simply not be allowed on the airplane.
To this point, I have explained a bit of the origin and some of the differences of these to programs, but it is truly the similarities that will make the benefit of both of these programs of benefit to companies. The similarity allows you to implement many of the principles one time, and to reap the benefits across multiple programs, as well as the general improvement of your supply chain operations. So what is required of the program? There are seven basic areas that the principles of supply chain security must be addressed: Personnel Security, Physical Access Control, Container/Vehicle Security, Security Training/Threat Awareness, Physical Security, Procedural Security, and Information Technology Security.
- Personnel security is important, because you want to be sure who you have working for you and if there are any weak links that could infiltrate your operations. While background checks on personnel are an issue in some parts of the world, it is important to try to realize that failing to confirm the identity of your employees correctly is an important step in securing your supply chain.
- Physical access control is the process by which you make sure that only authorized personnel gain access to your facility and at various levels of access control. This second part is important as well, for your entire site employee roster does not need to have access to every aspect of your facility. Your finance clerk does not necessarily need to see how your loading dock operations work.
- Container/vehicle security has to do with making sure that the ocean container you use or the truck that moves your material to the airport is appropriate to the task, and the vehicle operator is checked to be sure a complete and safe chain of custody is maintained on your shipment.
- Security Training/Threat Awareness issues allow you to train your employees on the methods to inspect cargo and how to identify a threat. The need for general awareness training provides you the means to educate your company management team, as their support and commitment to these programs will be important in the eyes of your fellow employees and the government agencies involved in implementing them.
- The Physical Security requirements are the basics of any security program, items that come to mind when you envision a secure facility; gates, fences, locks, closed circuit television cameras and other items that safeguard facilities the world over. The items listed here are the first step in making sure that the point of origin of your shipments can be protected before you even start to ship it. Procedural security is the process by which
- You systemically manage your material and the checks and precautions you build into your local operating procedures. This may include a checklist of things to do or check for to assure that the shipment has not been compromised or that your products tampered with.
- Information technology security is important in the world today, as nearly all information related to most shipments is managed via networked systems. The protection of this information and data is critical to making sure that the shipment instructions and manifests are not divulged. Knowledge of shipping dates and times would assist someone in targeting and compromising a shipment.
While all of these parameters are at the basis of these two programs, if you think about it, they are the same factors that play into the protection of your products in a large way. This point is central to my original premise, in that participation in these programs is good if viewed separately, but putting the various parts of these programs in place will actually help you to improve the security and logistical operational control of your supply chains as well. While not a major part of this article, the growing problem of cargo theft is also improved by use of these parameters, and an additional benefit in participating that no governmental agency can claim. The perception that these programs are independent is flawed, for integration of these programs reduces the work to implement all of them and they inherently improve the protection of your products in transit through improved practices and better protection methods and tools. Improved coordination of these programs and all the other supply chain security initiatives is central to the security of the supply chains, the products that move within them, and the people traveling as part of the system.
These programs are not put in place as a barrier to shipping, they are meant to protect both the supply chain and the passengers that travel within them. Their components are not overly burdensome, but they are not implemented without some effort. The good news is that these programs and others like them have benefits to your supply chain and logistical systems beyond those listed by the agencies endorsing them. Involvement will certainly ensure that the movement of your product is not delayed unnecessarily due to poorly planned and secured shipments. I would further propose that these programs have many benefits that cannot be measured by those provided by any government agency. They raise awareness of the product in transit and force you to gain better control of the people and processes that manage the shipments from origin to destination. Inclusion in these programs requires that you work with companies also engaged in them, providing you with even higher levels of assurance that they will manage your products without hindering the movement and speed of delivery. The general thought is that companies participating in these programs are safe to move with, as they have been vetted and proven they can manage the shipments in a secure manner.
The gains found here ripple throughout the supply chain process, with shippers, transporters, and government agencies all benefiting from mass participation in these programs, and real efforts here are a benefit to everyone. The trade lanes are protected insuring that commerce continues to flow, your product is protecting and delivered quickly and safely reducing you cost due to delay and lost/damaged product, and passengers are safeguarded against some manipulation of the supply chains. Security is not always fun, but in an uncertain world it is needed, and these programs help secure an essential part of the global economy.
Brad has worked in the pharmaceutical industry for over 18 years. His current responsibilities include the Global Logistics Security program development and implementation for Pfizer, establishing standards and oversight of the movement of materials in over 130 countries around the world and with a multitude of third party logistics providers. He has established the Customs-Trade Partnership Against Terrorism (C-TPAT) program in two major pharmaceutical companies; being one of the first in this industry to recommend the program to management and to submit an application for participation (both of these companies were ultimately granted the highest level of Tier 3 Validation Status). Brad has also worked in other areas of Customs Compliance, including import / export operations establishing the Importer Self Assessment Program, and managing nine active Foreign Trade Zones at his previous employer. Prior to working in the pharmaceutical industry, Brad served in the Army, and has a Masters Degree in Engineering Management from the University of Pennsylvania and an undergraduate degree from the United States Military Academy at West Point.