Congress should get involved in C-TPAT now

By James Aaron Cooke, Executive Editor -- Logistics Management, 5/1/2005

Federal, state and local governments have to operate in the "sunshine," meaning that they must make laws and regulations in public session. They also must provide a forum for the public to comment on and propose changes to rules and regulations under consideration.

I raise this subject because U.S. Customs and Border Protection crafted the latest Customs-Trade Partnership Against Terrorism (C-TPAT) membership requirements in the "dark." Although a number of industry groups were asked for their suggestions, no formal public hearings were held where all stakeholders could comment on changes to the program. The proposed modifications, moreover, were never published in the Federal Register.

Customs officials maintain that public hearings and notifications were not required because C-TPAT is a voluntary program, and thus is not subject to those procedures.

For the record, Customs started C-TPAT as a voluntary program after the terrorist attacks of Sept. 11, 2001. The program's aim is to work with the international trade community to safeguard the nation's borders. But although C-TPAT is technically "voluntary," it has taken on the trappings of a mandate. Importers now "must" meet mandatory minimum standards if they are to remain or become C-TPAT members. The incentive for doing so: faster processing of their import shipments.

And that's the problem. If a government agency is going to give preferential treatment to one group, the criteria and the reasons for doing so should be clearly defined by law, and the public should have the chance to comment on those procedures.

To be fair, it should be noted that Customs works with an advisory group from the trade community. But its members mostly represent large shippers, forwarders, and carriers—folks who already have connections in the nation's capital.

"This process shuts out the small and medium-sized importer," says Phil Spayd, director at the consulting firm Global Trade Systems Inc. in North Attleboro, Mass., and a former high-ranking Customs official. "They (Customs) have to go after the largest importers and in doing that—in tailoring a program aimed at large importers who have the [resources] to do C-TPAT—where does that leave the small and medium-sized importer?"

Here's another question: If a company can't afford the costs or doesn't have the capabilities to comply with C-TPAT (and therefore its shipments will end up in the slow lane), should it be penalized for not participating in a "voluntary" program that has never been sanctioned by Congress?

Before Customs goes any farther with C-TPAT and establishes "green lanes" for expedited treatment of members' shipments, federal lawmakers need to ensure fairness for all shippers. Congress should impose a moratorium on the new C-TPAT measures and hold hearings on their potential impact on all importers. Lawmakers also need to examine whether the new requirements are prejudicial against small and medium-sized companies and thus hinder trade. In addition, Congress should ask the General Accounting Office (GAO) to undertake a cost-benefit analysis of C-TPAT.

Government should not favor one group over another. Congress must get involved to protect the interests of all shippers and ensure that if there's going to be a C-TPAT program—especially a mandatory one—the rules are made in the open.

James Aaron Cooke, Executive Editor

Comments? E-mail me at jcooke@reedbusiness.com