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In today’s challenging beauty market, marketers and suppliers need every competitive edge they can get. Companies pursuing global sourcing for the competitive cost advantages it offers is nothing new—neither is the fact that delays caused by customs problems, information snags, missing or ill-prepared shipping documents or inappropriate cargo routing can eat up those cost savings in a hurry. When it comes to logistics, speed is second only to reliability as the competitive edge companies want—though too many companies seem resigned to accepting shipping delays as a necessary evil. That simply should not be the case.
Speed Equals Planning
In the world of global sourcing and shipping, speed is actually synonymous with planning and preparation. Inadequate preparation, reflecting incomplete information about customs and shipping requirements, is the most preventable, and most costly, problem when it comes to inefficiencies in global sourcing. The industry needs to realize that advance planning, with the help of a knowledgeable logistics provider who knows what to plan for, can put shipments on the fast track while complying with even the strictest customs and security rules.
One excellent example of this is the Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary Department of Homeland Security initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT covers global imports from any country by any transport mode. This column will consider an aspect of the program that applies to motor truck shipments between Canada, Mexico and the United States.
Being Sound by Ground
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C-TPAT is a voluntary government business initiative recognizing that U.S. Customs and Border Protection (CBP) can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain—such as importers, carriers, consolidators, licensed customs brokers and manufacturers. Through this initiative, CBP asks businesses to ensure the integrity of its security practices and communicate and verify the security guidelines of their business partners within the supply chain.
C-TPAT validation begins when importers and shippers apply for validation. This is a process through which CBP agents meet with company representatives and visit selected domestic and foreign sites to verify that supply chain security measures contained in the C-TPAT participant’s security application are accurate and being followed. In cross-border truck shipments, for example, trailer and container integrity must be maintained through the use of a high security seal that meets or exceeds government security standards. Written procedures should stipulate how seals are controlled and include details on recognizing and reporting compromised seals and/or trailers to the CBP or the appropriate foreign authority. Only designated employees should distribute container seals for integrity purposes.
The advantages of being C-TPAT-certified mean that cross-border shipments move through customs and security faster and more efficiently. Key features include:
- a reduced number of CBP inspections, reducing border delay times;
- priority processing for CBP inspections, including front-of-the-line processing for inspections when possible;
- assignment of a C-TPAT specialist who will work with the company to validate and enhance security throughout the company’s international supply chain;
- potential eligibility for the CBP Importer Self-Assessment program with an emphasis on self-policing, not CBP audits; and
- eligibility to attend C-TPAT supply chain security training seminars.
Prepare for Air
It is apparent that, when shipping by ground, taking the time for preparation beforehand can produce shipment speed and efficiency at the border checkpoint. Switch the focus to another transport mode that typifies speed—air cargo—and both the potential delays and the planning that can circumvent them are equally apparent.
By August 2010, 100% of air cargo must be screened by Transportation Security Administration (TSA)-approved methods before being loaded on a passenger aircraft, with a preliminary requirement of 50% screening by February 2009. Screening must be done by breaking down pallet-wrapped shipments into individual items, with the number of pieces determined by shipper-level documentation. Significant carrier delays, cargo backlogs and transit time increases are inevitable without advance preparation.
That preparation comes in the form of TSA’s Certified Cargo Screening Program (CCSP) to allow screening of cargo early in the air cargo supply chain by a trusted, vetted and audited facility. A facility approved for CCSP status must establish the integrity of a shipment through enhanced physical and personnel security standards, and verify the integrity of a shipment throughout the supply chain by utilizing stringent chain of custody methods. CCSPs can be located at shipping facilities, third-party logistics providers, warehouses and distribution centers, freight forwarding facilities or manufacturing facilities. Even producers that do not frequently use air cargo importing would be well-advised to establish a CCSP relationship.
The Planning Advantage
Previous Supply Chain columns have emphasized the efficiency of using a freight forwarding service, and it is important to note that freight forwarders can be certified members of both the C-TPAT and CCSP programs. This enables forwarders to facilitate efficient release of goods and prompt resolution of any outstanding issues affecting customs processing of shipments. The value of certification planning for freight forwarders and for any size U.S. importer of record is immense. Participation in these worldwide supply chain security initiatives ensures a more secure and expeditious logistics arrangement for all involved in the supply chain.
As shown by the CBP and TSA provisions, the government agencies responsible for customs clearance and homeland security are much more supportive of and willing to work with shippers that use sophisticated freight forwarding intermediaries. The best freight forwarders are at the vanguard of new technological advances and cutting-edge supply chain methodology. Their services can be customized for use by both the smallest and largest businesses and corporations. Freight forwarders can often find creative solutions where traditional supply chain handlers see obstacles. And they have the logistics insight to do the advanced planning that takes best advantage of their cutting-edge electronic tracking and documentation systems. The result is the kind of speed and efficiency at the critical point—border crossings—that eliminates delays and supports profitability.
Simon Kaye is founder and CEO of Jaguar Freight Services, with operations and fully integrated door-to-door freight solution networks in Europe, North America, South America, Australasia, Asia, the Middle East and Africa. E-mail: firstname.lastname@example.org; www.jaguarfreight.com; 1-516-239-1900