Should Your Logistics Company be C-TPAT Certified?

What do you think of when you hear the phrase “government certification?”

Bureaucracy, paperwork, and seemingly meaningless rules? A necessary evil that detracts from your core business functions?

In some cases, this may be true. However, for logistics companies, establishing a formal relationship with the U.S. Customs and Border Protection by way of joining the Customs-Trade Partnership Against Terrorism can have plenty of benefits. Not just feel-good, helping-society types but real benefits that boost profitability and save your business from disaster.

C-TPAT certification is a little different than other types of federal compliance initiatives. First of all, participation is totally voluntary. Second, the requirements to get certified vary based on your business — which makes sense, because supply chain security needs can be much different from one logistics company to the next.

C-TPAT certification isn’t exactly simple to get, and the certification process might take months or years. But it might just be one of the best ways to secure your supply chain and get all the business benefits that come from that security.

Intro to C-TPAT Certification

C-TPAT was created in response to the terrorist attacks of Sept. 11, 2001, with the aim of helping keep importers’ supply chains safe from terrorism threats. It’s an initiative of U.S. Customs and Border Protection and is supported by The Department of Homeland Security.

Specific requirements vary, but all members have to do one thing: demonstrate that their supply chains are secure from the point of origin to the point of distribution.

Members include importers, carriers, brokers, and manufacturers. These companies must agree to ensure the integrity of their security practices, including making sure that their trading and supply chain partners follow those best practices, too.

If these partners can adequately demonstrate their security, they’re generally considered low risk and can get lots of benefits as a result, from preferred treatment at border crossings to fewer inspections. You might think of it as similar to a TSA pre-check; once you’ve made the efforts to prove that you’re secure beforehand, you can take advantage of a special fast lane.

The Dollar Value of C-TPAT Certification

There is no cash cost or fee to join C-TPAT. The real cost of certification comes with the amount of time and energy companies must spend to demonstrate their security. The CBP helps identify security gaps, and then suggests specific security measures and best practices for the company to implement.

The security topics are wide-ranging and include:

• Container Security – There are regulations stipulating how shipping containers should be sealed and stored for optimal security.
• Physical Access Controls – These guidelines include screening and managing who comes in and out of the facility, and keeping a secure record of those comings and goings.
• Personnel Security – Among other things, hiring at certified companies requires screenings and background checks, and proper procedures should be used when firing.
• Procedural Security – Partner companies must use clear documentation for all shipments and for the security procedures in place for those shipments.
• Physical Security – Partner companies must use physical barriers to protect their property. These include things like fences, gates, locks, secure building structure, and surveillance systems.
• Information Technology Security – All information must be secure digitally as well. That means required training staff on data security and use of secure passwords.

For more details on these minimum requirements, check out the full list.

These measures all sound great, in theory, but it’s hard — especially for smaller logistics companies — to justify spending so much time on documentation and combing through regulations for savings that may be mostly theoretical.

Especially if your company has not experienced any security threats or delays, and you feel like you have a simple, secure process, this certification can be a tough sell.

Here are a few ways to quantify the cash you may be able to save by becoming a C-TPAT partner.

Avoiding Disastrous Delays

What happens when one of your shipments misses a critical deadline? You may lose the goodwill of a key customer and all of the revenue they were bringing in — and future revenue. You can jeopardize your company’s own cash flow when you’re hit with rush fees. You spend lots of time and productivity scrambling and panicking to fix the problems.

C-TPAT partners may avoid some of these delays because they work directly with a supply chain specialist and develop working relationships with CBP members. C-TPAT partners also have access to training resources to make sure they’re up to date on new regulations and rules so they’re not caught by surprise.

In addition to avoiding penalties and delays that come from not complying with CBP rules, partner companies also enjoy quicker border crossings. That includes shorter wait times at the border and access to the Free and Secure Trade (FAST) lanes at the borders with Canada and Mexico. It also means fewer CBP inspections, plus the ability to skip ahead of non C-TPAT certified containers in the inspection line.

Here are just some of the benefits, according to this Inbound Logistics article:

Benefits to Logistics Companies:

• C-TPAT importers are four to six times less likely to incur a security or compliance examination, according to CBP.
• Certified partners receive front-of-the-line privileges for containers that are selected for an examination.
• Procedures for assessing and managing supply chain logistics are strengthened as a result of joining C-TPAT, according to a 2010 survey of C-TPAT members.

Benefits to Shippers:

• Shipments move more quickly through ports.
• Goods are more secure.
• Shippers are assured that subcontractors are also certified.
• Goods are less likely to be delayed or damaged as a result of Customs inspections.

Preventing Theft

If the security efforts your C-TPAT certification holds you accountable for prevent even one major theft or security breach, that could justify all the hours your company puts into compliance efforts.

Just because your security efforts have worked so far doesn’t mean they will in the future. #logistics #receptionistapp Click To Tweet

Besides the cash value of the goods that are actually stolen, a theft or security breach drains employee time and energy, can damage your client relationships, and can increase your insurance premiums.

Just because your current security efforts have worked so far doesn’t mean they will continue to work. Conforming to best practices that have been vetted by the government in partnership with hundreds of other companies like yours is the most likely way to be effective in the future.

Access to New Partnerships and Markets

C-TPAT companies may only add other companies that are C-TPAT compliant to their supply chain if they want to stay compliant themselves. Also, many domestic companies will only do business with C-TPAT certified importers.

Plenty of certifications are available for logistics companies, but this is the one that might make the difference as you market yourself as trustworthy and professional. Consider the value of any potential new business gained through this added certification to offset the costs of ramping up to compliance.

A Few More Considerations

That said, certain companies certainly benefit more than others from becoming C-TPAT compliant. It’s easier for bigger companies to dedicate resources toward compliance, and some companies’ shipments benefit much more from the perks of expedited border crossings.

Also from Inbound Logistics:

• 42 percent of surveyed C-TPAT members believe the benefits of participation outweigh the costs, with those holding certification the longest most likely to see benefits.
• Seven percent of surveyed C-TPAT members report dropping out of the program. Some critics say increasingly stringent requirements mean fewer shipments qualify, and smaller companies have a tough time complying. Less scrutiny could also make C-TPAT-certified assets a target for smugglers.
• C-TPAT does not exclude shipments from non-Customs inspections, such as USDA.

It’s true that companies can certainly take the initiative to beef up all the security components that C-TPAT requires (physical barriers, visitor management, data security, etc.) without getting the official certification, or at least gradually start taking steps in that direction before deciding to make a full commitment to partnership.

Ready to get Started With Physical Access Security?

If you want to start taking steps in the direction of security today, one simple place to start is with visitor management.

Compliance-friendly visitor management systems like The Receptionist have been designed around best practices for security, many of which are required by C-TPAT. That includes taking photos of all visitors, issuing ID badges, and keeping records in a visitor database. The Receptionist also lets users design custom check-in procedures for each type of visitor, collect information in custom fields, show safety videos, and much more.

If you want to check it out for yourself, we hope you try a 14-Day Trial of The Receptionist.