Taking the high road to C-TPAT (page 2)
-- Logistics Management, 9/1/2005
Page 2 of 4
Companies that are not C-TPAT members or BASC-certified have a one-in-five chance of their containers being pulled aside for inspection, says Dan Hastings Jr. of Daniel B. Hastings, Inc., Carrier Mexico's customs broker at Laredo. That would result in a much longer delay than they might encounter waiting in line to cross the border. If CBP inspectors invoke the highest level of examination, a shipment might be sidelined for weeks. When C-TPAT-compliant, by contrast, Carrier Mexico can expect its loads to be electronically processed at Laredo in as few as 15 seconds, notes Javier Guzmán, general manager of Monterrey operations for Ryder de Mexico, Carrier Mexico's third-party logistics partner.
But there's much more at stake than quicker border crossings. Carrier Corp. is committed to an uninterrupted flow of goods to customers, and one way to keep orders moving is to prove to CBP that the company can be trusted when it comes to security. "If there's some contingency—God forbid—you're going to have a much easier time getting cargo through if you're a C-TPAT member," says Rodarte. "When the Homeland Security alert level changes to orange, there's a much greater level of inspection. We haven't even seen what happens when it goes to red."
Carrier's commitment to cargo security will produce other business benefits. "Moving goods is moving inventory, and moving inventory improves the balance sheet of any company," observes Armando Beltrán, general director of Mexico operations for Schneider International, Carrier's primary truckload service provider.
Perhaps the biggest gains will come from implementing sound risk management practices. C-TPAT and BASC membership both confer cost and efficiency benefits by tightening up internal processes and accountability companywide. "That means better service to their customers, and they will have fewer claims and shortages," notes Beltrán.
Once Rodarte recognized C-TPAT's strategic benefits, he lost no time in seeking resources to support his plan to gain membership. It was not a hard sell; Carrier Mexico's operations director quickly gave his blessing, and approval came from as far up the line as Carrier Corp.'s chief operating officer. In 2004, Rodarte began investigating what it would take to win C-TPAT certification. He soon learned that his objective would be tough to achieve. "It's not something you can do just by downloading a few guides from the Internet and getting it up and running in a week," he says. "It has to be part of what we do all the time."
Carrier Mexico's adherence to ISO 9000, which requires companies to develop, document, and implement standardized quality-control processes across an organization, has provided a template for meeting BASC and C-TPAT guidelines. That's because the two security programs also emphasize repeatable processes with clear controls, not just one-off instances of compliance. For example, it's not enough to be able to verify that an outbound container has been sealed; there must also be a consistently applied process for identifying and recording what type of seal it is and who has access to it. Similarly, access to loading docks is under scrutiny. Are loaders authorized to be there? Can the shipper prove it? What controls are used to exclude unauthorized personnel?
Because C-TPAT's requirements are so complex, Rodarte worried about getting everything right the first time around, and about the potential cost if the company should fail the audit and have to start over. It was customs broker Dan Hastings who suggested that Carrier Mexico apply for BASC certification. Since many of the points raised in a BASC audit also come up in the C-TPAT inspection, it could help ensure a C-TPAT "win." (BASC was one of the models for C-TPAT.)
According to John Adams, executive director of the Laredo Development Foundation, which houses the original BASC chapter, a BASC certification audit costs $400, and annual renewal costs $200. Rodarte does not disclose his company's total spending on compliance, but calls the BASC certification fees "a bargain"—and money well spent when compared to the resulting improvements in ease of transportation and customer satisfaction. Continued...
View All Blogs
