Historically, the impediments to efficient international logistics have included such things as distance, currency, documentation, antiquated infrastructure and protectionist tariffs. Since Sept. 11, shippers can add to that list the fear that terrorists will take advantage of the high volume of shipments entering the United States to smuggle in chemical, biological or even nuclear weapons.

Potential terrorist threats have focused attention on the need for importers, carriers and government agencies to be sure that what's arriving on U.S. shores is both legitimate and safe. Shippers and carriers fully support the need to prevent such smuggling but are concerned that major restrictions on cargo movement could create enormous backlogs and impede the nation's economic recovery.

In an effort to provide security without compromising supply chain efficiency, the U.S. Customs Service has launched a new program called the Customs-Trade Partnership Against Terrorism, or C-TPAT.

C-TPAT is designed to encourage importers to improve security throughout their supply chains, all the way back to their overseas suppliers. To take part in the program, businesses must:

• Conduct a comprehensive self-assessment of supply chain security using guidelines developed by the Customs Service and the trade community. The guidelines cover procedures, facilities, personnel, education and training, access controls, manifest procedures and conveyances;
• Submit a completed supply chain security questionnaire to the Customs Service;
• Develop and implement a program to enhance security in accordance with C-TPAT guidelines; and
• Communicate those guidelines to other companies in the supply chain and work toward building them into the business relationship.

Customs will conduct a risk assessment of applicants within 30 to 60 days after receiving the supply chain security questionnaire. Companies that are accepted into the program will have to sign and consent to abide by a written agreement.

For those who meet all of the criteria, Customs promises expedited processing of imports into the United States. It will also offer dedicated commercial lanes at border crossings for participating companies in some areas, assign account managers to participating companies, extend eligibility for account-based processes such as monthly payments, and reduce the number of cargo inspections.

Although U.S. importers support C-TPAT in concept, they have voiced some concerns about it. Most important, perhaps, is the question of who will be responsible for ensuring the security of imported merchandise. According to John Durant, director of U.S. Customs' commercial rulings division, the onus for security rests on importers. "Importers will legally remain responsible for the foreseeable future," he said at the annual meeting of the Coalition for New England Companies for Trade (CONECT) in Newport, R.I., last month.

John Simpson, president of the American Association of Importers and Exporters, disagreed. "The critical information provider in the whole information process is going to be the [overseas] exporter if we're going to push our security border outward," he argued. He believes that it's not practical to hold importers such as retailers accountable because they work with so many suppliers and carriers, and smaller importers don't have the clout to impose security restrictions on overseas suppliers.

The new security initiative raises other concerns. Martin Ward, an attorney who specializes in customs issues, said he worried that C-TPAT could create new legal liabilities for exporters and importers. The Customs Service, however, maintains that it does not intend to create new liabilities, but it says it will hold shippers to the commitments they make when they sign up to participate in C-TPAT.

The plan also raises the issue of how the U.S. government or U.S. importers could impose restrictions on the flow of goods outside U.S. borders. Durant said he expected other nations to respond by demanding reciprocal rights in the United States.

The first companies to participate in the program include some of the nation's biggest importers: BP America, DaimlerChrysler, Ford Motor Co., General Motors Corp., Motorola Inc., Sara Lee Corp. and Target Stores. Another 200 importers with excellent trade compliance records were also invited to take part. Customs says it will soon open enrollment to a "broader spectrum" of the trade community.