VideoEvery year, ships from abroad deliver more than 7 million cargo containers to America's seaports. Framed in steel, standard oceangoing containers typically come in 20- and 40-foot lengths and can carry payloads weighing up to 60,000 pounds. They are each a model of logistical efficiency — and collectively a security nightmare for the U.S. Bureau of Customs and Border Protection.
Two years after the terrorist attacks of September 11, 2001, Customs views ocean cargo containers as prime vehicles for smuggling weapons of mass destruction (WMDs) into the United States. Accordingly, the bureau has stepped up inspections of incoming containers from 2 percent to 4 percent of the total. "We look at 100 percent of those that are high risk," says Jayson P. Ahern, assistant commissioner, office of field operations. But that still leaves millions of containers unscrutinized.
The nightmare extends to the land and air. Millions of shipments stream annually through the Canadian and Mexican borders via truck and rail; millions more arrive by plane. Clearly, making sure that WMDs or other terrorist weapons do not enter the country is too difficult a task for the government to handle alone. And the stakes couldn't be higher. The detection of a WMD in a container at a U.S. port would cause significant disruptions at the borders — and the detonation of such a device would be catastrophic, by any measure.
That's why in the months since 9/11, Customs has launched a number of antiterrorism programs that solicit the cooperation of foreign governments and U.S. businesses. The oft-stated goal is to "push the borders back," extending a zone of security to the places where imports originate. One such program is the Container Security Initiative (CSI), in which Customs officers are deployed in foreign ports to help identify and screen high-risk containers. Another is the 24-hour rule, which requires carriers to submit a detailed manifest to Customs 24 hours before cargo is loaded on a U.S.-bound ship. (That rule is being amended to include advance manifests for air, truck, and rail shipments.)
For importers, perhaps the most significant antiterrorism initiative is voluntary: the Customs-Trade Partnership Against Terrorism (C-TPAT). Companies that apply for C-TPAT certification must assess the security of their supply chains and harden any weak links. A C-TPAT member can expect fewer inspections and expedited processing at the border — in effect, a fast lane through Customs.
While the government's determination to push borders back will doubtless add costs and delays, some experts say they haven't seen much disruption of international supply chains so far. "I don't hear any major importers say that the 24-hour rule has put a severe crimp in their inventory systems," says C. Randal Mullett, director of government relations at CNF Inc., parent company of logistics service provider Menlo Worldwide. "The steamship companies say it has impacted them and their customers, but it hasn't been a disaster."
Meanwhile, those who have done the C-TPAT self-assessment say that in the process, they have identified ways to slash supply-chain costs, reduce theft, and eliminate unnecessary payments of duties and taxes. Also, being C-TPAT certified is a prerequisite for Customs's Importer Self-Assessment program, whose benefits include removal from Customs audit pools.
But the reason usually cited first for signing a C-TPAT memorandum of understanding is to be a good corporate citizen. "Some companies call up and say, 'We understand this will help us get through your clearance process quicker,' " comments Ahern. "We're not interested in a company that starts the dialogue off like that."
New Guidelines
Launched in November 2001, C-TPAT was initially open to major importers, brokers, and freight forwarders, then to terminal operators and carriers — collectively accounting for a significant percentage of vessel imports, says Ahern. The program builds on existing Customs-business partnerships to combat drug smuggling, including the Carrier Initiative Program and the Business Anti-Smuggling Coalition. Its seven charter members — BP America, DaimlerChrysler, Ford Motor, General Motors, Motorola, Sara Lee Branded Apparel, and Target — helped Customs develop security guidelines for international supply chains.
The aim was to set guidelines that would be effective but not cost-prohibitive. Consultants say that a company with good security practices can readily qualify for C-TPAT. To date, more than 3,800 companies have signed up for the program, says Ahern. "A lot of the companies had good supply-chain security initially," he notes. "We've learned from some of their best practices."
One such company is General Motors. Few companies were hit as hard by tightened security after 9/11 as the Big Three automakers were. About 88 percent of GM's imports travel via truck or rail, and in the wake of the attacks, shipments at the Canadian border that usually cleared Customs in as little as a few minutes languished up to "12 hours, 14 hours, 16 hours," says Kevin Smith, director of customs administration at GM.
"In many cases, in our just-in-time practices at our plants, they keep only four to eight hours of inventory at hand," says Smith. Consequently, GM assembly lines had to shut down until additional inspectors and National Guardsmen, aided by new screening technologies, cleared up the traffic jams. Today, GM's supply chain has returned more or less to normal, thanks to C-TPAT and the Free and Secure Trade (FAST) program for expediting truck shipments through Customs (see "Securing the Chain," at the end of this article).
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