APL Logistics Executive: C-TPAT Must Succeed - Or World Trade Faces the Consequences

June 1, 2003
LOS ANGELES, California, - The Customs-Trade Partnership Against Terrorism (C-TPAT) must be effective or much more costly measures could result, warned

LOS ANGELES, California, - The Customs-Trade Partnership Against Terrorism (C-TPAT) must be effective or much more costly measures could result, warned an APL Logistics executive today.

"We must all work together to make sure C-TPAT succeeds," said Chris Corrado, vice-president of customer service for global supply chain management company APL Logistics, at a seminar on freight security organized by the National Industrial Transportation League (NITL) and World Trade magazine. "The alternatives would be highly detrimental to the flow of international trade."

Corrado cited a current Congressional proposal that would have every U.S.-bound shipping container inspected by U.S. Customs in foreign ports, and another that would require U.S. Coast Guard inspections of inbound vessels 200 miles from U.S. shores.

"Such proposals are simply unworkable," Corrado said. "The world economy, and the U.S. economy, in particular, cannot sustain the delays in the supply chain that would result."

Instead, Corrado said, shippers, freight forwarders, overseas vendors, transportation providers and government regulators need to continue cooperating to create a multi-layered security web to ensnare potential terrorists who would seek to use containerized shipping to deliver a weapon of mass destruction.

"The job of pushing back the borders goes far beyond ports of origin overseas," Corrado told the group of shipping and transportation managers from the nation's largest organization of shippers, including major retailers and manufacturers. "Just as it's important for us to know you, our shippers, it's important for you - the shipper - to build relationships with your own suppliers."

It was vital, he said, "to ensure that your suppliers and intermediaries, such as freight forwarders and carriers, have systems and processes in place to promote trustworthiness and to document shipments fully and precisely. He cited "smart container" equipment such as satellite-based positioning systems and weight sensors as technology that could, for example, register when a container was taken off its predetermined route or contained more weight than what was logged onto shipping documents.

Corrado said U.S. Customs' Container Security Initiative (CSI) was an example of effective anti-terrorist cooperation among shippers, intermediaries and government. The hallmark of CSI, the 24-hour advance manifest rule, "has greatly tightened security and information-sharing among all parties involved in an international shipment," he said.

The 24-hour advance manifest rule requires carriers to forward their shipping manifests to Customs at least 24 hours before a container is loaded to a vessel. Customs then reviews the shipping information, and determines whether the container can be loaded or must be held for inspection.

"Cargo holds," as they are called, can potentially cause boxes to miss scheduled vessels, resulting in additional cost and inconvenience for both shippers and carriers. Typically, Corrado said, holds result from inaccurate or incomplete information on the manifest, rather than the presence of something that catches an inspector's eye.

"A cargo hold can add up to real money, real fast," Corrado said. "First, it's going to cost you money because it will slow down your supply chain. And, second, if your inaccurate information causes an entire ship to be held for two days, there is a huge potential cost in claims from all the other shippers who have cargo on that vessel."

Corrado said the key to the success of CSI and other security initiatives was clear and precise sharing of information. "We all have to cooperate and communicate - accurately, honestly, quickly, decisively," Corrado said. "That is how all parties in the process can best work together to enhance security while keeping supply chains flowing optimally. And if we don't do that, the requirements that will be imposed upon us are too costly even to calculate.

"C-TPAT must succeed. And it's up to all of us to make sure it does."

APL Logistics offers end-to-end supply chain management services enabled by leading information technology. APLL is a wholly owned subsidiary of Singapore-based Neptune Orient Lines (NOL), a global transportation and logistics company, and sister company to global container transportation provider, APL.