U.S. Customs plans to update CTPAT best practices, minimum-security requirements, and compliance certification | November 16, 2017 | The Supply Chain Xchange
U.S. Customs plans to update CTPAT best practices, minimum-security requirements, and compliance certification
The director of the cargo security program outlined current and planned updates at the Coalition of New England Companies for Trade's annual cargo symposium.
Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Editor at CSCMP's Supply Chain Quarterly. and Senior Editor of SCQ's sister publication, DC VELOCITY. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
The Customs Trade Partnership Against Terrorism, better known as CTPAT, has a new logo, a red, white, and blue globe made of interlocking puzzle pieces. It has new spelling, with no hyphen in its name or acronym anymore, and a new tag line: "Your Supply Chain's Strongest Link." But that's not all that's new with the cargo-security program, according to Liz Schmelzinger, director of CTPAT programs in U.S. Customs and Border Protection's (CBP's) Office of Field Operations.
CTPAT, established in 2001 to prevent terrorists from carrying out attacks on the United States via international transportation networks, is a voluntary public-private program with 11,000-plus members, including importers, exporters, surface carriers (ocean, highway, and rail), customs brokers, marine terminal operators, freight consolidators, and other entities that have a stake in cross-border cargo security. To be accepted as "CTPAT Partners," members work with CBP to identify security gaps and implement specific security measures and best practices; they must then undergo periodic audits to verify compliance. Partners are considered low-risk and are eligible for such benefits as fewer CBP cargo examinations and priority treatment at border crossings.
Schmelzinger outlined some recent developments and future plans at the 16th Annual Northeast Cargo Symposium held by the Coalition of New England Companies for Trade (CONECT) in Providence, R.I., earlier this month. She has asked her team to revamp CTPAT's best practices recommendations, shifting from a catalog of specific actions to a framework that could be adapted to companies of all sizes. About 30 percent of CTPAT members are small and medium-size companies with 70 employees or less, she said, noting that what would be achievable and affordable for a large company may not be for a smaller firm. "The notion of scalability will be critical to the best practices framework," she said.
The new framework, which is still in development, will include five elements:
1. Senior management support, including the participating organization's culture and management philosophy regarding security and compliance
2. Innovative application of technology, as appropriate for the company's size and resources
3. Documented processes, including consistency and continuity over time
4. Checks, balances, and auditing, including such areas as accountability and testing
5. Evidence of implementation; that is, proof that plans have been put into practice and are being maintained
Similar topics are covered by CBP's current best practices documents, but those largely consist of examples of specific practices and policies CBP auditors have seen during CTPAT assessments.
Among the other developments Schmelzinger discussed:
A working group that includes CBP headquarters and field staff, representatives of industry associations, and trade-compliance and cargo-security experts from private industry, is taking a fresh look at CTPAT's minimum security requirements under the SAFE Port Act of 2006, because "the legal mandate is the same, but the threats have changed," Schmelzinger said. For example, cybersecurity and terrorism financing were not widely considered a problem when the law was written. "We have to redefine the standards to reflect current reality," she said. Separately, CBP is working to make CTPAT's requirements clearer, less repetitious, and more specific to the transportation mode and the type of entity involved, such as carriers, freight forwarders, or importers, she said.
CBP plans to consolidate CTPAT (cargo security) and the Importer Self-Assessment (ISA) program (trade compliance) to create a certification that is more like the Authorized Economic Operator (AEO) programs in Europe and other parts of the world, which assess and certify companies based on their practices in both areas. The objective of bringing the U.S. standards closer to those of major trading partners, Schmelzinger said, is to enable U.S.-based trusted traders to benefit from the acceptance of their U.S. certifications by AEO programs in other countries. CBP's Commercial Customs Operations Advisory Committee issued recommendations for the combined program last year.
The Advanced Qualified Unlading Approval (AQUA) program, which allows CTPAT-member ocean carriers and terminals to begin unloading immediately on arrival, rather than wait for CBP officers to conduct an inspection and authorize unloading, has helped to speed unloading at a number of ports, a benefit that "trickles down to your supply chain," Schmelzinger said. Authorization is granted on a case-by-case basis, and CBP plans to automate the application and authorization process.
CBP and the Transportation Security Administration (TSA) have jointly conducted re-evaluations of cargo security practices and policies for 20 air carriers that are based overseas. By collaborating on a single audit and certification, as opposed to the separate processes that previously were required, the agencies are improving efficiency and reducing the administrative burden for both themselves and the carriers. A similar collaboration with the U.S. Coast Guard is "in the works," Schmelzinger said.
Schmelzinger was also asked about CBP's plans to extend CTPAT to exports. "We're not there yet," she said, adding that although it's still on CBP's agenda, there are "not enough resources right now" to make it a priority.
CSCMP EDGE attendees gathered Tuesday afternoon for an update and outlook on the truckload (TL) market, which is on the upswing following the longest down cycle in recorded history. Kevin Adamik of RXO (formerly Coyote Logistics), offered an overview of truckload market cycles, highlighting major trends from the recent freight recession and providing an update on where the TL cycle is now.
EDGE 2024, sponsored by the Council of Supply Chain Management Professionals (CSCMP), is taking place this week in Nashville.
Citing data from the Coyote Curve index (which measures year-over-year changes in spot market rates) and other sources, Adamik outlined the dynamics of the TL market. He explained that the last cycle—which lasted from about 2019 to 2024—was longer than the typical three to four-year market cycle, marked by volatile conditions spurred by the Covid-19 pandemic. That cycle is behind us now, he said, adding that the market has reached equilibrium and is headed toward an inflationary environment.
Adamik also told attendees that he expects the new TL cycle to be marked by far less volatility, with a return to more typical conditions. And he offered a slate of supply and demand trends to note as the industry moves into the new cycle.
Supply trends include:
Carrier operating authorities are declining;
Employment in the trucking industry is declining;
Private fleets have expanded, but the expansion has stopped;
Truckload orders are falling.
Demand trends include:
Consumer spending is stable, but is still more service-centric and less goods-intensive;
After a steep decline, imports are on the rise;
Freight volumes have been sluggish but are showing signs of life.
CSCMP EDGE runs through Wednesday, October 2, at Nashville’s Gaylord Opryland Hotel & Resort.
The relationship between shippers and third-party logistics services providers (3PLs) is at the core of successful supply chain management—so getting that relationship right is vital. A panel of industry experts from both sides of the aisle weighed in on what it takes to create strong 3PL/shipper partnerships on day two of the CSCMP EDGE conference, being held this week in Nashville.
Trust, empathy, and transparency ranked high on the list of key elements required for success in all aspects of the partnership, but there are some specifics for each step of the journey. The panel recommended a handful of actions that should take place early on, including:
Establish relationships.
For 3PLs, understand and get to the heart of the shipper’s data.
Also for 3PLs: Understand the shipper’s reason for outsourcing to a 3PL, along with the shipper’s ultimate goals.
Understand company cultures and be sure they align.
Nurture long-term relationships with good communication.
For shippers, be transparent so that the 3PL fully understands your business.
And there are also some “non-negotiables” when it comes to managing the relationship:
3PLs must demonstrate their commitment to engaging with the shipper’s personnel.
3PLs must also demonstrate their commitment to process discipline, continuous improvement, and innovation.
Shippers should ensure that they understand the 3PL’s demonstrated implementation capabilities—ask to visit established clients.
Trust—which takes longer to establish than both sides may expect.
EDGE 2024 is sponsored by the Council of Supply Chain Management Professionals (CSCMP) and runs through Wednesday, October 2, at the Gaylord Opryland Resort & Convention Center in Nashville.
While the Council of Supply Chain Management Professionals' 2024 EDGE Conference & Exhibition is coming to a close on Wednesday, October 2, in Nashville, Tennessee, mark your calendars for next year's premier supply chain event.
The 2025 conference will take place in National Harbor, Maryland. To register for next year's event—and take advantage of an early-bird discount of $600**—visit https://www.cscmpedge.org/website/62261/edge-2025/.
**EDGE EARLY BIRD Terms & Conditions: Promotion is for the EDGE 2025 conference in National Harbor, Maryland. Offer valid for Premier and Basic Members only. Offer excludes Student, Young Professional, Educator, and Corporate registration types. Offer limited to one per customer. Offer is not retroactive and may not be combined with other offers. Offer is nontransferable and may not be resold. Valid through October 31, 2024.
Honoring supply chain professionals and companies for their contributions to the industry is a tradition at the Council of Supply Chain Management Professionals annual EDGE Conference. The following are some of the recognitions given out this year.
The 2024 Distinguished Service Award was presented to Heather Sheehan, owner of Crispy Concepts LLC, instructor with Penn State University, and board member and adjunct faculty member with the University of Denver’s Transportation & Supply Chain Institute.
Sheehan, along with Roger Penske, chairman of Penske Corp., were inducted into CSCMP’s Supply Chain Hall of Fame.
Travis Kupla, Ph.D, of the University of Arkansas, won the Doctoral Dissertation Award for his paper “How Supply Chains Respond to Disruptions: Three Essays on Responses to Operational, Geopolitical, and Natural Disaster Disruptions.”
The Bernard J. La Londe Best Paper Award was given to Matias G. Enz from the University of Missouri-Saint Louis, and Douglas M. Lambert from The Ohio State University for their paper “A Supply Chain Management Framework for Services.”
Wenting Li and Dr. Yimin Wang of Arizona State received the E. Grosvenor Plowman Award for their research paper, “A Procurement Advantage In Disruptive Times: New Perspectives On ESG Strategy And Firm Performance.”
The Teaching Innovation Award was given to Dr. Shane Schvaneveldt of Weber State University for his paper, “A Lean 5S Experiential Learning Game for Logistics and Supply Chain Management.”
To see a full list of honorees, please visit cscmp.org and click on the tab "Academia & Awards."
Supply chains today are facing an onslaught of disruption and change from geopolitical events to technological advances to economic shifts. Supply chain partners that successfully navigate those changes together will seize a competitive advantage that will win them market share and increase profits.
The “2025 Third-Party Logistics Study,” spearheaded by Dr. C. John Langley of Penn State University and developed in collaboration withNTT DATAand Penske Logistics highlights the crucial role that change management plays in the relationship between third-party logistics providers (3PLs) and their customers. Unveiled today at the Council of Supply Chain Management Professionals (CSCMP) EDGE conference, the study delves into the dynamic nature of relationships between shippers (companies that manufacture goods or provide services) and third-party logistics providers.
“While users and providers of 3PL services continue to report successful relationships, they find themselves having to deal with an increasingly wide range of challenges,” said Dr. C. John Langley, Professor, Supply Chain & Information Systems, Penn State University. “While examples include economic concerns, geopolitical unrest, and changing markets for supply chain services, they also are taking advantage of change management processes to benefit from new and improved capabilities such as artificial intelligence (AI) and direct-to-customer proficiencies.”
The survey found that both shippers (61%) and 3PLs (73%) agree that supply chain change management is vital. Respondents from both groups indicated that the top factors that are driving the need to change their operations were shifting customer demands, economic factors, and technological advancements. In particular, both shippers and 3PLs believe that improvement and change is needed in supply chain visibility, with 69% of shippers and 68% of 3PLs citing it as an area of concern.
AI as change agent
One technological advance that is enabling change in supply chain operations, according to survey respondents, is AI. Both shippers and 3PLs agree that AI can be pivotal in automating data analysis, identifying patterns, solving problems, and automating repetitive tasks. Top implementation areas for AI cited by respondents include supply planning and demand forecasting (33% of shippers and 19% of 3PLs) and transportation and route optimization (27% of shippers and 22% of 3PLs).
The e-commerce effect continues
Omnichannel retailing and e-commerce continue to exert pressure on supply chain operations for shippers and their third-party logistics partners. Both shippers and 3PLs view delivery speed and visibility as strong areas of differentiation. According to the study, 48% of shippers and 53% of 3PLs reported that customers routinely expect deliveries in less than two days, and 27% of shippers and 26% of 3PLs noted that there are three-day or less delivery expectations. Shippers (44%) and 3PLs (38%) are willing to absorb a small percentage of the costs related to shipping speeds.
The Annual 3PL Study surveys 3PL providers and users of 3PL services to understand the current state of 3PLs and how 3PL relationships are evolving with their customers. The 2025 study and past versions are available for download at www.3PLStudy.com.