The impacts of CSI and C-TPAT The impacts of CSI and C-TPAT security initiatives on supply chain: security initiatives on supply chain:

Adding value to the supply chainAdding value to the supply chain

Presented By: Ziyad AlharbiPresented By: Ziyad Alharbi 33rdrd year undergraduate student year undergraduate student

OverviewOverview

Maritime security backgroundMaritime security background Container security initiative (CSI)Container security initiative (CSI) US Customs-Trade Partnership against Terrorism US Customs-Trade Partnership against Terrorism

(C-TPAT(C-TPAT) ) Impact of CSI and C-TPAT on Supply Chain Impact of CSI and C-TPAT on Supply Chain

Management Management Security adds value to the supply chain Security adds value to the supply chain ConclusionConclusion

Maritime security Maritime security backgroundbackground

Many factors could raise the awareness of Many factors could raise the awareness of security threats in the maritime supply chain:security threats in the maritime supply chain:

– OOpen nature nationally and globallypen nature nationally and globally

– ComplexityComplexity

– Important for Important for global trade global trade

Container Security Initiative Container Security Initiative (CSI)(CSI) Strategic program developed by Strategic program developed by

US Customs after the events of US Customs after the events of September 11, 2001 September 11, 2001

24 hour rule24 hour rule

– requires ocean container carriers to send a manifest to requires ocean container carriers to send a manifest to US Customs authorities that includes detailed US Customs authorities that includes detailed information about container cargo at least 24 hours prior information about container cargo at least 24 hours prior departure from foreign ports. departure from foreign ports.

– requires containers bound to US to be scanned 24h prior requires containers bound to US to be scanned 24h prior loading onboard vesselloading onboard vessel

US US Customs-Trade Partnership Customs-Trade Partnership against Terrorism (C-TPAT)against Terrorism (C-TPAT)

Objective:Objective:

For businesses participating For businesses participating

in the supply chain to partner in the supply chain to partner

with U.S Customs in order towith U.S Customs in order to

improve security throughout improve security throughout

the supply chain and to ensure the supply chain and to ensure

container integrity all the way container integrity all the way

to the origin of shipper to the origin of shipper

Scope of IMO and US Maritime Security Scope of IMO and US Maritime Security

Initiatives across a Supply ChainInitiatives across a Supply Chain

Impact on supply chain Impact on supply chain (Efficiency)(Efficiency)

Negative Negative

– Delays and congestionDelays and congestion– Increased transit timeIncreased transit time– Higher inventory levelsHigher inventory levels– Higher transportation Higher transportation

costscosts

EfficiencyEfficiency(cont’)(cont’)

PositivePositive

– Early reportingEarly reporting– Reduced time to Reduced time to

resolve resolve documentation issuedocumentation issue

– Time sensitive Time sensitive operationsoperations

– Cargo availabilityCargo availability

Impact on supply chain Impact on supply chain (cost)(cost)

NegativeNegative

– High technological High technological investmentsinvestments

– Expertise and Expertise and manpowermanpower

PositivePositive

– Accurate info exchangeAccurate info exchange– Early reportingEarly reporting– Increase service and Increase service and

documentation reliabilitydocumentation reliability– Reduced errors and Reduced errors and

service variability service variability – Avoid compensation cost Avoid compensation cost

(Damage and accidents)(Damage and accidents)

Impact on supply chain Impact on supply chain (Management)(Management)

NegativeNegative

– Costs Costs – Increase prices of Increase prices of

services providedservices provided– Challenge for small and Challenge for small and

medium sized firmsmedium sized firms– Complex networks & Complex networks &

relationshipsrelationships

PositivePositive

– Increased Increased collaboration collaboration

– Facilitate trade & Facilitate trade & attract shippersattract shippers

Adding Value to supply Adding Value to supply chainchain

Information sharing and technologyInformation sharing and technology Better shipment visibilityBetter shipment visibility Better understanding of customers wants Better understanding of customers wants

and needand need Reduced order cycle timeReduced order cycle time Reduced errorReduced error

Collaboration and integrityCollaboration and integrity Share information and risk,Share information and risk, Eliminate excess inventories Eliminate excess inventories Reduce lead times and uncertainty Reduce lead times and uncertainty

Improved SQ & Improved SQ & customer customer valuevalue

Adding Value to supply chain Adding Value to supply chain (Cont’)(Cont’)

Improved performance and enhanced service qualityImproved performance and enhanced service quality Through encouraging time sensitive & Through encouraging time sensitive &

efficient operations efficient operations

Harmonized and secure tradeHarmonized and secure trade Security along the entire supply chainSecurity along the entire supply chain e.g.e.g. TThe events of September 11, 2001 resulted in he events of September 11, 2001 resulted in

significant financial impact on US supply chains estimated significant financial impact on US supply chains estimated at USD 150 billion a year due to increased inventories, filled at USD 150 billion a year due to increased inventories, filled warehouses, border closures, increased lead timeswarehouses, border closures, increased lead times

ConclusionConclusion

Compliance with CSI and C-TPAT requirements may affect Compliance with CSI and C-TPAT requirements may affect supply chain performance positively and negativelysupply chain performance positively and negatively

Players in the supply chain should consider effective Players in the supply chain should consider effective security management in order to benefit from security security management in order to benefit from security initiatives as much as possible and reduce its negative initiatives as much as possible and reduce its negative impact impact

CSI and C-TPAT can play a critical role in adding value in CSI and C-TPAT can play a critical role in adding value in the supply chain through facilitating information sharing, the supply chain through facilitating information sharing, technology, integrity and collaboration as well as technology, integrity and collaboration as well as enhanced efficiency and harmonized trade enhanced efficiency and harmonized trade

THANK YOUTHANK YOU

ANY QUESTIONS?ANY QUESTIONS?