CT-PAT Cost Saving Report

Posted on: 25/09/2012

Can AEO approval save you money?

Companies in the UK and EU are concerned about the time and effort that must be dedicated to applying for Authorised Economic Operator (AEO) status.  Is it worth it?

Although the application is administered without any cost by the customs authorities it does incur often lead to some expenditure but the significant drain on the business can be finding the time for staff to work on the AEO application process while continuing to do their own work.

We have seen instances where companies who have gone through the AEO process have found areas to save money, reduce costs and streamline both customs and supply chain activities and it was interesting to see that the US Customs Board Protection (CBP) decided to undertake a survey of their AEO equivalent members CT-PAT (Customs & Trade Partnership Against Terrorism) to see if they could find any tangible cost savings.

See below for a link to the full report and some bullet point issues raised (note the implementation costs) - it would be interesting to see a similar survey undertaken in the EU - maybe Germany who has the most members (nearly 5,000).

CT-PAT Cost Saving Report

On March 6th 2012, U.S. Customs and Border Protection (CBP) released a Survey on the Costs & Savings of participating in C-TPAT. This report covers the 2011 C-TPAT Costs & Savings Survey (CSS), which was a follow-up to the 2010 Membership Survey.

CLICK HERE for the full survey

Some bulletin points

Costs to Maintain the C-TPAT Program

There were 91 respondents (62%) who reported a dollar value for maintenance costs related to CTPAT membership. The median cost – among those who reported a cost – was $9,000. Reported maintenance costs ranged from $45.00 to $815,000.

Time Savings from the C-TPAT Program

There were 38 respondents (26%) who reported a number of person-hours for time savings related to C-TPAT membership. The median time savings – among those who reported savings – was 373 person-hours annually. Reported time savings ranged from 25 to 48,000 person-hours annually.

 Estimated Costs of Border Delays

Small numbers of importers and carriers reported their estimates of the costs of border delays in four different modes of transport. The median costs were $200 for land delays, $500 for air delays, $1,000 for rail delays and $1,500 for sea delays.

Costs to Implement the C-TPAT Program

There were 110 respondents (75%) who reported a dollar value for implementation costs related to CTPAT membership. The median cost – among those who reported a cost – was $17,370.  Reported implementation costs ranged from $280.00 to more than $4 million.

Net Savings or Costs

Respondents were asked to consider the financial costs and financial savings related to C-TPAT membership and summarize them as net positive, neutral, or net negative. After excluding about twenty percent who said they could not determine this or preferred not to say, roughly one-third of the respondents fell into each summary condition (net positive, neutral, net negative).

 Note: this News item was originally posted on 12/03/2012 but has been made live again on 25/09/2012

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