Validating X-border security systems.

With about $1 billion in trade flowing daily across the Canada-U.S. border and increasing American concerns over security, border congestion is causing an increasing problem for shippers with just-intime goods.

Security regulations on trade only stand to get tougher as U.S. anxiety levels increase and the Office of Homeland Security seeks to plug every hole.

A new joint U.S. government-business initiative has been designed to ensure the faster flow of goods with new security procedures in place.

Customs-Trade Partnership against Terrorism (C-TPAT) program was launched in 2001 to encourage companies to secure their supply chain and border security issues by strengthening their security programs.

The program allows the U.S. Customs and Border Protection service to designate companies as low risk and therefore less likely to be examined at border crossings.

Investment in cross-border security programs will be a must for Canadian shippers as more and more U.S. importers will require suppliers to validate their security systems in order to get their business.

Abitibi-Consolidated is one of the few forestry companies in Canada that is C-TPAT certified.

The producer of newsprint and commercial printing paper indicated they were C-TPAT compliant in their 2005 annual report.

The designation is based on a company's past customs compliance history and a validation of its supply chain security profile.

Though tight-lipped about the nature and the expense of the highly-confidential process, Seth Kursman, the company's Montreal-based vice-president of communications, says program membership is voluntary.

"I can't go into details about what we need to do and prove--because that gets into security component--but it involves quite a bit of work and the company making changes to demonstrate the security of our facilities and operation in terms of access."

But being a certified member offers some real advantages as part of their supply chain effort, which is critically important to the relationships with their U. S. customers.

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"For us there's significant advantages which includes faster passage of our cargo across the U.S.-Canada border and few container inspections.

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In return we have obligations including stricter control of access to our places of business and a whole set of rules that are implemented as part of the program that extend to our operations and even here at our head office."

Kursman says C-TPAT certification is a lengthy process. "We need to demonstrate that our entire supply chain is secured and that reduction in border wait time as well as the number of inspections has been critically important in terms of us meeting the needs of customers."

He was reluctant to reveal how much faster product was getting to the customer. "Part of our deal is we don't talk much.

"We believe it is also a competitive advantage for us since we have it. It was quite an effort to get it but we're happy to make the changes to meet the program's obligation."

Besides providing access to FAST lanes at the border, among the benefits of compliance includes movement of freight across the border even during "red alert" levels and also a reduction in cargo theft.

While Export Development Canada does not have access to a list of companies that are C-TPAT compliant, U.S. government information pegs the number of Canadian companies that are either compliant or in the application phase at around 2,000.

EDC spokesman Toby Herscovitch says most companies who choose to make their certification public, use it as a marketing tool.

To meet the financial demands of the program, Export Development Canada offers security compliance loans to help Canadian companies finance the upgrades to meet C-TPAT security standards.

The EDC provides a term loan for up to $150,000 to finance the costs related to becoming C-TPAT compliant. The loan can be for up to 85 per cent of the specific costs identified.

Loans are generally unsecured with a three-year repayment term.

To be eligible, a company must be a registered Canadian company, an importer of record into the U.S. and must have been in business for at least three years.

www.edc.ca/CTPAT

By IAN ROSS 

Northern Ontario Business