Details of CBP’s Favorable C-TPAT Survey Results

U.S. Customs and Border Protection has posted a report providing the results from the 2010 Customs-Trade Partnership Against Terrorism cost/benefit survey that was prepared for the agency by the University of Virginia.

The following are highlights of the report:

Nearly Half of C-TPAT Members Took Part in Survey

At the time of the survey, C-TPAT had 8,166 business partners. For the purpose of the study, these C-TPAT business partners were grouped into importers (3,822); carriers (2,270), including U.S./Canada highway carriers, U.S./Mexico highway carriers, rail carriers, sea carriers, and air carriers; service providers (1,400), including U.S. marine port authority and terminal operators, U.S. air freight consolidators, ocean transportation intermediaries or non-vessel operating common carriers (NVOCCs), and licensed U.S. customs brokers; and, foreign manufacturers (674).

Of the 8,166 companies participating in C-TPAT, a total of 3,901 businesses, nearly half

(47.8%) responded to the 2010 survey. This represents a substantial improvement over the 29.4% response rate obtained for the 2007 survey.

The response distribution by business type is fairly close to that of the 2010 C-TPAT business partner population. 39.2% of respondents to the 2010 survey are importers, 29.5% are carriers, 19.5% are service providers, and 11.8% are foreign manufacturers.

67% of Members Say Benefits Outweigh or are Equal to Program Costs

Overall, 42.1% of businesses reported that the benefits of participation in C-TPAT outweighed the costs, approximately a 10 percentage point improvement over the 2007 survey. 25% of businesses reported that the benefits and costs of participation in C-TPAT were about the same, 14.9% reported that the costs of participation outweighed the benefits and 18.0% reported that it was too early to tell.

Perceptions of Benefits Increased with Years in C-TPAT Program

Businesses that had been certified longer were systematically more likely to report that the benefits of participation outweighed the costs. Perceptions of net benefits increased in a linear fashion with years in C-TPAT, ranging from 30.2% among companies certified less than 1 year to 47.7% among companies certified more than 5 years.

Larger Companies More Likely to Perceive Benefits

Larger companies are systematically more likely to perceive greater net benefits from C-TPAT membership. And this comes despite often reporting lower absolute levels of satisfaction with various aspects of the C-TPAT partnership. Specifically, the perception that the benefits outweigh the costs increased in a linear fashion with company size, ranging from 36.5% for companies with less than $10 million in annual revenues to 55.7% of companies with more than $10 billion in annual revenues.

Better Workforce Security, Less Time to Release Cargo Were Benefits

Overall, the greatest C-TPAT impacts on business have included improvements in the field of workforce security, decreased time to release cargo by CBP, reduced time in CBP inspection lines, and increased predictability in moving goods.

Importers identified an additional impact related to a decrease in disruptions to the supply chain. For the majority of non-importers, C-TPAT had a limited impact on their number of customers and sales revenues. For highway carriers, the major C-TPAT impact has been the decrease of their wait times at the borders.

Enhanced Security in Supply Chain Also Listed as Benefit

Of all the potential intangible benefits, increased security awareness and enhanced security in supply chain had the highest mean ratings (3.76 and 3.75 respectively on a 4 point scale). In each of these cases, roughly three quarters of all businesses considered them to be very important benefits.

Other intangible benefits from the C-TPAT program included demonstrating corporate citizenship and, improving risk management procedures and systems. For importers, the most important potential benefits included the assignment of a C-TPAT Supply Chain Security Specialist (SCSS) to help the company validate and enhance security throughout their supply chain and self-policing and self-monitoring of security activities through the Importer Self-Assessment program.

Costs of Physical Security, Cargo Security Noted

Across all businesses, improving or implementing physical security costs (doors, windows, electronic access, cameras, fences, gates, lighting, etc.) received the most mentions of all the potential C-TPAT implementation costs. For importers additional important costs were associated with developing a new supplier security evaluation survey process and educating foreign suppliers, manufacturers, or vendors about security requirements.

Of all the maintenance cost items, maintaining the physical security and maintaining cargo security were the most frequently mentioned by all the businesses. Next on the list of maintenance cost items is maintaining in-house education, training, and awareness.

(The 2007 C-TPAT survey included questions asking for detailed information about expenditures and dollar values. In the 2010 survey, these questions were deferred to a more detailed survey conducted with a small sub-sample of C-TPAT members as part of the effort to streamline the primary survey instrument. The results of the more in-depth survey will be made available later in 2010.)

52% Have a Formal System in Place for Assessing, Managing Supply Risk

Over half (52.2%) of all businesses reported that they had a formal system in place for assessing and managing supply risk before joining C-TPAT and nearly half (47.8%) of businesses did not report having one in place. Of the businesses that had a formal system in place for assessing and managing supply risk, 87.6% agreed or somewhat agreed that their businesses’ ability to assess and manage supply risk has been strengthened as a result of joining C-TPAT.

Overall, the 2010 survey showed both a higher proportion of companies reporting pre-CTPAT risk management and contingency planning systems and a higher level of satisfaction with improvements in those systems attributed to C-TPAT membership.

Only 8.6% Considered Lack of Global Harmonization a Serious Problem

Among companies with offices in other parts of the world, more than two-thirds (67.9%) are aware of other security programs operating in those foreign countries. Only 8.6% of these companies considered a lack of mutual recognition or harmonization to be a serious problem, while an additional 33.9% considered it somewhat of a problem.

84% Say C-TPAT Global Harmonization Efforts Good or Very Good

Satisfaction with the progress C-TPAT is making in strengthening harmonization and establishing mutual recognition between the security programs of different countries was good overall, with 84.1% of those companies for which global harmonization is a pertinent issue rating those efforts as either, “good,” “very good” or “excellent.”

Supply Chain Security Specialists Answer Questions Timely, are Trusted

79.2% of respondents have been in contact with their SCSS in the last 12 months. Among those businesses having contacted their SCSS in the past 12 months, 77.4% stated they had gotten what they needed all of the time, with most of the remainder (18.9%) reporting that they had gotten what they needed most of the time.

In addition, over 95% of businesses that have contacted their SCSS with questions indicated that their SCSS responded in a timely fashion all of the time (75.8%) or most of the time (20.4%). Overall levels of trust for the SCSS were extremely high with 87% of respondents saying they trusted their SCSS very much.

(See ITT’s Online Archives or 09/23/10 news, 10092302, for BP summary announcing the availability of the report.

See ITT's Online Archives or 09/12/07 news, 07091210, for BP summary of the 2007 cost/benefit survey results report.)