Supply Chain Security Study Guide

Unlike Customs administrations, who view their increased role in securing international trade as an extension of their historical responsibilities, the role business is expected to play is new and far more challenging. Business has been asked to support the fight against terrorism through tougher controls. Restrictions imposed in the name of security have made the movement of goods more complex.

CTPAT and other international forms of Customs-private sector partnership (such as AEO and Regulated Agent) have placed considerable additional responsibilities on companies in the supply chain. Although these programs are voluntary, companies that do not participate are at a disadvantage.

Governments have developed extensive guidelines on the security requirements expected of supply chain businesses. Individual businesses must look after their own security and must also be aware of the security standing of others in their supply chain. CTPAT publishes minimum security criteria for nine different sectors of the supply chain, including importers, carriers across all modes, brokers, manufacturers, freight consolidators, and port and terminal operators (CBP 2006b). The breadth of the list reflects the reality that supply chain security depends on every link, not just the importer.

Carriers, freight forwarders, port authorities and terminal operators are each responsible for different stages in the supply chain process. The best procedures of one trusted trading partner are meaningless if other parties in the supply chain do not have effective security procedures of their own. This is the notion of an integrated supply chain. An integrated supply chain also requires close collaboration between industry and government.

Why Participate? Incentives & Benefits

Why Business Participates	What Compliant Businesses Gain
•  Customs clearance is the single greatest source of unpredictable supply chain delay •  Logistics managers need to reduce delay risk to remain competitive •  Regulatory agencies offer faster processing as an incentive for participation	✔ Expedited Customs processing of cargo ✔ Lower transportation costs ✔ Faster movement through the supply chain ✔ Reduced risk of delay or spoilage ✔ Continued participation in international trade

 

Business Must Self-Assess Security

Beyond compliance with external requirements, businesses are expected to self-assess their own security practices across two dimensions:

Physical Security •  Facility access controls and perimeter security •  Container and load integrity verification •  Conveyance sealing and inspection procedures

Personnel Security •  Pre-employment screening and background checks •  Ongoing training on security awareness •  Controls over employee access to sensitive areas and cargo

 

Companies must embrace their role in supply chain security if they are to continue to do business. The benefit of compliance is the ability to remain an active participant in international trade and, in many countries, to receive expedited processing of their goods.