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American Shipper

China finally opens door to C-TPAT audits, Basham says

China finally opens door to C-TPAT audits, Basham says

China, after many years of rebuffing U.S. requests, has agreed for the first time to allow U.S. inspectors in the country to verify security compliance of manufacturers and logistics providers whose customers participate in the Customs-Trade Partnership Against Terrorism, Ralph Basham, Customs and Border Protection commissioner, revealed Friday.

   Speaking at the Pacific Coast Council of Customs Brokers and Freight Forwarders Associations’ Western Cargo Conference in Denver, Basham said he received a call from Minister of Customs Mu Xinsheng on Thursday offering to sign a memorandum of cooperation regarding the on-site visits for the supply chain security program.

   China is the only country that has refused to allow access to U.S. Customs teams seeking to validate that foreign suppliers are following security plans submitted by their U.S. import customers and approved by CBP. Under C-TPAT, companies that take steps to meet minimum security criteria for their particular industry sector are potentially subject to fewer time-consuming inspections and receive a handful of other trade facilitation benefits, such as front-of-the-line privileges for containers that are selected for automated imaging at the port.

   At Congress' direction, CBP recently implemented a one-year pilot program for using third-party auditors in the C-TPAT program. Congress viewed the use of private parties as a way to reduce the backlog of validations so companies could more quickly realize the benefit of reduced cargo delays. But CBP, which never favored the outsourcing concept, opted to limit the pilot to China because that was the only country in which it could not validate whether companies were following security plans.

   CBP in July certified 10 companies to conduct third-party security validations, but only a handful of companies have taken advantage of the program so far in part because they have to pay the vendor for what is normally a free government service.

   Details of the cooperation between China and U.S. Customs are still pending, and it is not clear if CBP specialists will have the freedom to visit Chinese companies on their own or will conduct joint validations with China Customs.

   Three weeks ago Todd Owen, executive director of cargo and conveyance security at CBP, said China was still resisting the idea of tagging along with CBP officers during field visits.

   Some industry officials believe the dispute was more about China controlling the process rather than about sharing information on companies that might have lax security standards.

   The news raises questions about the viability of the pilot program, because if CBP is allowed to conduct inspections importers would likely lose any incentive to contract for outsourced validations.

   Basham also provided updates on the status of several other security programs. The proposed “10+2 regulation, under which importers and ocean carriers would be responsible for submitting a dozen sets of information about the origin and destination of their cargo prior to vessel lading overseas, will likely not see the light of day this year. Basham said he was “hopeful” the notice of proposed rulemaking will be issued early next year. It will be followed by a 60-day comment period.

   Department of Homeland Security officials previously raised expectations that the proposed rulemaking would be published last June and after that date slipped, in October. The department wants the additional information to improve the database on which it bases its security targeting of containers for inspection. Importers are watching the rulemaking very closely because it could significantly change how they do business in terms of how much data on their suppliers and consignees they must collect and electronically submit. Many small businesses complain that they do not have the resources to track down some of the data in a timely way.

   Basham said his agency expects to produce a requirements document for a container security device by mid November. CBP has said a device that can signal tampering during transit could enhance security might be an additional step C-TPAT members could incorporate to receive even faster security clearances for their shipments. But CBP officials contend that no vendor has yet to develop a device that reliably and accurately issues alarms of door breaches. To help device makers, the agency is now developing a set of specifications it wants met before it will certify any device.

   The commissioner also clearly stated that the Department of Homeland Security hopes that its trial demonstration of 100 percent imaging of containers at three small foreign ports and strengthening of other ongoing security programs will remove the need to go forward with a comprehensive regime for inspecting every container overseas before it enters the United States — something that homeland security officials have hinted at accomplishing following recent passage of a law requiring all containers to be inspected by automated means within five years.

   CBP announced Friday that the Secure Freight pilot checking for nuclear and radiological materials in containers is now fully operational at Port Cortes, Honduras; Port Qasim, Pakistan; and Southampton in the United Kingdom after being gradually phased in since last April.

   “We hope this will be an occasion to reopen a dialogue with Congress” on 100 percent scanning, he said.

   Meanwhile, Basham said the agency empathizes with traders along the southern and northern borders who are experiencing longer wait times in recent months to enter their cargo. At some land ports of entry wait times can exceed three hours during peak hours. Deputy Commissioner Jason Ahern recently directed much of the blame for the delays to outdated infrastructure at land ports that has difficulty accommodating the huge volume of travelers and commercial traffic. Basham reiterated that the agency is trying to work with the General Services Administration to upgrade and expand port facilities, while making sure all booths are properly staffed.

   Long-term solutions will require strong public-private coalitions to build necessary improvements, such as access lanes and feeder roads, Basham said. He placed the total price tag to improve existing land border facilities, some of which are 40 years old and were functionally obsolete by the time they were built, at $5 billion.

   Future facility planning needs to account for a potential doubling or tripling of people and cargo, he added.

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