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Once the bill has been passed CBP will have 60 days to define the criteria for non-asset logistics providers.

There is certain to be a rush of logistics companies to become C-TPAT Certified after the passage of this bill. Logistics providers should strongly consider becoming C-TPAT Compliant immediately, because this will make certification a substantially easier and faster process once it is available.

Here’s the full bill:

111th CONGRESS, 2d Session, H. R. 5619

IN THE HOUSE OF REPRESENTATIVES

June 28, 2010

Mr. OWENS introduced the following bill; which was referred to the Committee on Homeland Security

A BILL

To amend the SAFE Port Act to provide for the eligibility of certain third party logistics providers for participation in the Customs-Trade Partnership Against Terrorism program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. ELIGIBILITY OF CERTAIN THIRD PARTY LOGISTICS PROVIDERS FOR PARTICIPATION IN C-TPAT PROGRAM.

(a) In General- Section 212 of the SAFE Port Act (Public Law 109-347; 6 U.S.C. 962) is amended by inserting after ‘contract logistics providers,’ the following: ‘non-asset based third party logistics providers that arrange international transportation of freight, including motor carrier brokers of property licensed by the Department of Transportation,’.

(b) Effective Date-

(1) IN GENERAL- The amendment made by subsection (a) takes effect on the date of the enactment of this Act and applies with respect to applicants seeking to participate in the Customs-Trade Partnership Against Terrorism (‘C-TPAT’) program on or after the date on which the regulations published pursuant to paragraph (2) take effect.

(2) REGULATIONS- The Secretary of Homeland Security, acting through the Commissioner responsible for United States Customs and Border Protection of the Department of Homeland Security, shall publish in the Federal Register criteria for participation in C-TPAT program of non-asset based third party logistics providers described in section 212 of the SAFE Port Act, as added by subsection (a), not later than 60 days after the date of the enactment of this Act.

Nation2Nation publishes articles of interest to professionals involved in Supply Chain Security, Supply Chain Management, Logistics, Import Export, International Trade, Border Security, Transportation, Transportation Safety, Trucking, Railroad, Air Freight, Maritime and Cargo Management. Contact Jeff Platts at contact@nation2nation.com.

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Why aren’t more NVOCC’s participating in the U.S. Customs C-TPAT program? C-TPAT (Customs-Trade Partnership Against Terrorism) is a voluntary program administered by U.S Customs & Border Protection.

The minimum security criteria for NVOCC’s (Non-Vessel Operating Common Carrier) does not require the NVOCC to own any assets, such as trucks, trailers or a warehouse. Conversely, the minimum security criteria for 3PL’s (third party logistics providers) requires them to have some form of assets, a condition that voids most 3PL’s chance of being accepted.

Since NVOCC’s are not required to own any assets, the C-TPAT certification process is easier to comply with. NVOCC’s still must have a comprehensive, documented set of security procedures and reporting practices.

Since they deal with many foreign agents, the NVOCC’s biggest challenge in C-TPAT compliance is having a means by which they can periodically audit their foreign agents. The necessity of auditing foreign agents and the frequency of those audits is determined by a series of risk factors. The NVOCC must conduct on-site audits of their most important foreign business partners, but these audits can often be out-sourced to someone located in the same region as the foreign agent.

Jeff Platts is a C-TPAT Consultant and the publisher of Nation2nation.net.