Customs head continues ban on C-TPAT eligibility for non-asset based 3PLs

U.S. Customs and Border Protection (CBP) has said it will continue its 17-month-long ban on allowing non-asset based third-party logistics service providers (3PLs) to join the Customs-Trade Partnership Against Terrorism (C-TPAT), one of the agency's leading supply chain security initiatives.

In separate letters to a House lawmaker and to the Transportation Intermediaries Association (TIA), the group representing the 3PL industry, Customs Commissioner Alan D. Bersin, who took over CBP earlier this year as a recess appointment, laid out essentially the same message: that the agency's C-TPAT resources are best allocated to validating companies with extensive international exposure, rather than to 3PLs whose operations are primarily domestic in nature.

Under C-TPAT, which was conceived following the 9/11 terrorist attacks, companies submit plans to CBP showing they have acceptable security measures in place across their supply chain. Those that pass a government audit receive expedited clearance of cargo entering U.S. commerce.

In January 2009, CBP denied eligibility to 3PLs that didn't own any assets and who just did business in domestic U.S. commerce.

CBP has long said an international supply chain is at its most vulnerable at the origin point where a container is stuffed and during the movement of cargo to the point of export to the United States. Most non-asset based 3PLs operate in U.S. commerce and exert little influence over the international supply chain, Bersin said.

Bersin said in a letter written in early June to Rep. William L. Owens (D-N.Y.) that it would not be "prudent to use [CBP's] limited program resources to validate" non-asset based 3PLs with exclusively U.S.-based operations, "when resources would be best served to validate entities abroad." Owens supports the inclusion of non-asset based 3PLs in C-TPAT and has drafted legislation (H.R. 5619) that would amend the 2006 SAFE Port Act to extend eligibility to these companies.

In a Sept. 7 letter to TIA, Bersin wrote that much of C-TPAT's success is "attributed to the program's primary focus on those entities that can physically influence security practices and procedures overseas where CBP has no regulatory reach. Non-asset based 3PLs, defined as companies with no assets such as conveyances or warehouses, would not be a key part of C-TPAT's mission or focus, Bersin said.

Bersin added in his letter that he appreciates the desire of "non-eligible entities" to participate in C-TPAT and encouraged them to work with their business partners to improve cargo security.

John T. Stirrup, TIA's legislative director, said the group would turn its efforts toward helping the Owens amendment move through the legislative process. On Aug. 30, the U.S. Chamber of Commerce, the nation's largest business trade group, threw its support behind the Owens bill, saying the exclusion of non-asset based 3PLs "is to the detriment of both the facilitation of legitimate trade and improving the security of the supply chain."