CBP Says it is Open to Further Talks on Adding Non-Asset Based 3PLs to C-TPAT
In a September 7, 2010 letter, U.S. Customs and Border Protection Commissioner Bersin responded to an earlier Transportation Intermediaries Association letter on the merits of allowing non-asset based Third Party Logistics Providers (3PLs) into the Customs-Trade Partnership Against Terrorism (C-TPAT) program.
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CBP to Further Explore Whether to Allow Non-Asset Based 3PLs in C-TPAT
The Commissioner told TIA that CBP will internally deliberate and further explore and consider arguments in support of allowing non-asset based 3PLs into the C-TPAT program as it considers any necessary policy changes. According to the Commissioner, CBP is open to further discussions on the issue of C-TPAT eligiblity for non-asset based 3PLs.
Non-Asset Based 3PLs are Currently Not Eligible for C-TPAT
The Commissioner stated that in developing C-TPAT eligibility criteria for 3PLs, CBP had earlier determined that non-asset based 3PLs that perform duties such as quoting, booking, routing, and auditing, however, do not own or control warehousing facilities, vehicles, aircraft, or any other transportation assets should not be eligible.1
In explaining the reasons why such non-asset based 3PLs are excluded from C-TPAT, the Commissioner noted that it is common for some non-asset based 3PLs to market logistics that are inherently bottom-line driven and the selection of business partners is often made on the lowest-rate basis, something which is not in concert with the strict minimum security criteria required by C-TPAT.
The Commissioner further noted that, due to the competitive and proprietary nature of the non-asset based 3PL sector, customers may not be offered visibility into internal procedures, something that is central to C-TPAT’s minimum security criteria.
TIA Says That Non-Asset Based CHBs, FFs, NVOCCs Are Allowed in C-TPAT
On September 30, 2010, the TIA responded to the Commissioner’s letter by questioning why CBP allows non-asset based customs brokers, air freight forwarders, and non-vessel-operating common carriers to participate in C-TPAT, but not non-asset based 3PLs. According to the TIA, non-asset based 3PLs, simply because they are licensed by the Department of Transportation, instead of the Federal Maritime Commission, Transportation Security Administration, or CBP, have been capriciously excluded from C-TPAT.
1Certain 3PLs are currently eligible to participate in C-TPAT, but in order to be eligible the 3PL must, among other things, be directly involved in the handling and management of the cargo throughout any point in the international supply chain, from point of stuffing, up to the first U.S. port of arrival and manage and execute these particular logistics functions using its own transportation, consolidation and/or warehousing assets and resources, on behalf of the client company.)
(See ITT’s Online Archives or 07/01/10 news, 10063064, for BP summary of H.R. 5619, a bill to allow certain non-asset based 3PLs to participate in the C-TPAT program.
See ITT’s Online Archives or 08/06/10 news, 10080621, for BP overview of the August 2010 COAC meeting at which Commissioner Bersin asked COAC for input on H.R. 5619.)
Letters available by emailing documents@brokerpower.com.