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C-TPAT update:
Offers ROI and new benefits
The Customs-Trade Partnership against Terrorism (C-TPAT) program’s main goal is to decrease the possibility of terrorists sneaking people or weapons into a shipment so they can attack the United States or its trade lanes. The program must also offer significant return on investment and perceived benefits for participating companies.
In an effort to encourage participation, U.S. Customs and Border Protection (CBP) commissioned the University of Virginia at Charlottesville to conduct a survey to quantify the program’s return on investment. More than 1,100 companies participating in the C-TPAT program were surveyed. The results showed:
- 39 percent of companies experienced a reduction in inspections
- 29 percent increased their supply chain visibility because of the information they now collect about each shipment
- 42 percent said their wait times decreased
- some companies saw a reduction in pilferage
- some companies saw a reduction in insurance rates
CBP added a new benefit for C-TPAT membership effective
April 2007 and also plans for more changes throughout the
year. The new benefit allows importers to pick up partial shipments at the terminal when one of the containers is flagged for an inspection. The new procedure is designed to prevent importers from incurring unintended terminal storage fees for containers trapped under a CBP
hold order and applies only to a small amount of shipments.
The change is seen as a positive step to reduce regulatory side effects.
The partial release mechanism only applies to random inspections conducted on containers for trade compliance. Those containers must go to a Central Examination Station to remove and check their contents. The partial release of multiple containers under the same Customs entry does not apply to non-intrusive security inspections done on port facilities with large-scale technology. The C-TPAT importer must sign an agreement to keep the container intact at its property and to not breach the seal until CBP lifts the hold on the entire shipment. If necessary, the importer will also have to make the other containers available to CBP after the initial inspection.
Getting small and medium-sized businesses involved in C-TPAT, which is mostly dominated by large importers, is another program priority for 2007. Smaller companies are reluctant to join because they are concerned about the cost to implement CBP-approved security plans. A second priority is to expand C-TPAT membership access to third-party logistics providers, 4PLs, foreign terminal operators and foreign consolidators. CBP will design minimum security criteria to ensure those entities can push their security requirements down to their vendors.
CBP is also studying how to make C-TPAT an export security program. Many import security practices are the same as export practices and could be replicated in the program, according to one participant.
C-TPAT has accepted more than 6,780 companies and 4,060 of those have been certified through on-site visits to ensure their procedures are in place. The criteria set to be C-TPAT certified will not only improve your business processes but will help guard your business against cargo and property loss. Avalon Risk Management, Inc. strives to further protect your company by providing Cargo Insurance and Property and Casualty (P&C) Insurance.
Avalon works with multiple markets to provide coverage tailored to meet specialized cargo insurance needs. All policies provide basic All-Risk coverage for cargo in transit, including Free of Particular Average and With Average alternatives. Avalon goes beyond standard coverage forms to offer customized cargo policies, which can include, project shipments, break bulk and bulk cargo, warehouse storage, cargo legal liability and other special cargo clauses. To find out more, select our
Cargo brochure or
application.
Avalon’s Property and Casualty insurance program, referred to as the Transportation and Logistics Risk (TLR) program is package protection tailored to meet the needs of the logistics industry. Avalon works with multiple insurance markets, allowing us to design a program to best protect your operation, business assets and reduce litigation exposures for various liabilities. The TLR can be specialized to include general liability, commercial automobile, workers compensation and other coverage. For more information, view our
P&C brochure or
application.
For further information regarding P&C Insurance, contact Kim Beiswanger,
P&C Product Manager. Kim can be reached at her direct line:
847-700-8076 or at
kbeiswanger@avalonrisk.com. For further information regarding Cargo insurance, contact Andriana Davis, Cargo Product Manager. Andriana can be reached at her direct line: 847-700-8087 or at
adavis@avalonrisk.com. To view a directory of Avalon’s office locations, please
visit our Web site at
www.avalonrisk.com.
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