Security issues on the border: transportation professionals discuss best ways to meet new U.S. requirements.

One of the factors that continues to make Mexico an attractive place to do business is its geographical proximity to the United States. The 2,000-mile border is the world's second busiest and the efficient movement of people and goods is critical to creating economic vitality on both sides.

Since 9-11, the United States has struggled to implement new security precautions and processes at the border that ensure the safety of its citizens and visitors but do not hinder the flow of goods and services.

At an AMERICAN CHAMBER/MEXICO seminar last month, authorities from the U.S. Department of Homeland Security and experts from Mexico's transportation sector gathered to inform the Chamber members of new U.S. import regulations as well as provide attendees with information on innovations and strategies in logistics security.

Jaime Ramsay, program manager for the Customs-Trade Partnership Against Terrorism (C-TPAT) at Homeland Security, introduced the audience to this initiative that is designed to certify the security of a company's logistics chain from its point of origin abroad to its destination in the United States.

He stressed that while C-TPAT is a voluntary program and is not required for doing business in the United States, being certified will be required for using the fast lanes at the border. Furthermore, traditional lanes are likely to become even slower as they are deluged by shipments from non-certified companies.

NOT UP TO SPEED ON C-TPAT

According to the U.S. government, as of April, slightly over 6,000 companies had enrolled in the C-TPAT program worldwide. Of these, 152 are Mexican manufacturing companies, and another 210 are transportation companies operating on the border.

Gisela Keller, partner at Sanchez DeVanny Eseverri, showed that according to a recent survey conducted by her firm, only 8% of the companies in Mexico that trade with the United States know about the program. Another 8% are in the process of being certified.

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"Mexico is losing competitiveness in the market because of the lack of structural reforms, but C-TPAT is an opportunity for companies because it is an open door for being recognized as reliable exporters," she said.

One topic that attracted a lot of interest was the investment companies need to make in security in order to fulfill the C-TPAT's certification requirements. Juan Manuel Lomelin, traffic manager at Berol, told BUSINESS MEXICO, "there is no benefit with this new program. There are too many people involved and the chain is too big, so how can you control that? There is a lack of wide dissemination about the program and good benefits must be shown. If not, I prefer to wait."

NEW TRANSPORT OPTIONS

In the second half of the seminar, the discussion was focused on regulations and security innovations in maritime and rail transportation. International ports will need to be certified as secure by the United States so that foreign ships can dock at their U.S. destination. So far, only 5% of international ports and 2.6% of the world's merchant marine fleet has been certified, which means that 16,000 port facilities around the world still have to be inspected.

Thomas Gillen, regional manager at AIG Mexico Seguros Interamericana, mentioned that the majority of ships and ports are very unlikely to fulfill the new regulations, as the deadline to start enforcement is July 1, 2004.

Carlos Velez, general director of APL Mexico, said a degree of danger exists, because this situation could generate a sudden halt in international commerce since shipments would not be reaching their destinations in the United States. He said that around US$5 million of investment at small-and medium-sized ports is needed to fulfill the regulations.

Edgar Del Castillo is a business research analyst at AMCHAM.