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Mexico Logistics and Transportation at El Paso and Ciudad Juarez: Project 21 Update

The Project-21 initiative was established by the City of El Paso to develop a Model Port for U.S. – Mexico logistics and commercial shipments.

The International Ysleta-Zaragoza Port of Entry (“the Y-Z POE”) that links El Paso and Ciudad Juarez, Mexico has a state-of-the-art cargo facility that is significantly underutilized at present. Through Project-21, this facility will be further employed and transformed into the core for the Model Port.

The Y-Z POE has effective existing lane segmentation for trusted northbound shipments. Project 21 deploys a suite of technology-based solutions from SecureOrigins, Inc., a member of the Tecma Group of Companies. These provide live monitoring of shipments, with instant collaboration between U. S. Customs and Border Protection (CBP) and trusted Mexico supply chain partners.

The cornerstone of the Model Port is a unique Public-Public-Private partnership between CBP and the City of El Paso, which is coupled to the collaborative technical solutions and support services of the private sector participant, SecureOrigins. Inc. A Memorandum of Understanding between the City of El Paso and the United States Department of Homeland Security’s U.S. Customs and Border Protection (CBP) is the document that governs the Project 21 initiative.

The Memorandum promotes the improvement of both Border Security and U.S.-Mexico Trade. The results of the collaboration will deliver vital economic value to the El Paso region as the result of more secure cross-border U.S.- Mexico logistics, trade and enhanced global competitiveness.

The comprehensive approach undertaken by Project-21 includes the careful integration of:

1. the state-of-the-art commercial port facility;

2. the lane segmentation of trusted shipments;

3. the leading technologies for monitoring and communications.

The Y-Z POE has been carefully designed to optimize the processing of commercial shipments. Project-21 enables the conduct of highly efficient inspections that make the prioritization of trusted shipments possible.

On the Mexico-side of the border, “Frontera-21” was implemented with a “Dedicated Lane” that ensures that C-TPAT shipments eliminate wait lines and have direct access to the entrance of the Mexican “Aduana,” or Customs. The Dedicated Lane extends through Mexican Customs to the primary inspection stations of CBP. Thereby, C-TPAT/NEEC shipments are able to avoid unnecessary and costly delays. Finally, the Operational Center of SecureOrigins, Inc. and comprehensive communications software provide mission-critical situational awareness and information sharing between CBP and its trade partners.

During the first stage of Project-21, cross-border trade has already achieved a higher volume of trusted and expedited shipments. These results produced a major return-on-investment for all direct participants. Tangible benefits were felt throughout the supply chain.

All Project-21 shipments are monitored and validated by SecureOrigin’s advanced Operational Center for optimal visibility,vigilance and velocity. The proprietary ElectronicEscort™ provides coverage of each shipment from origin to destination. It also makes the reporting of any anomalies or incidents instantaneously. Unrivaled results such as these produce a real-time Common Operating Picture and, as well as Information Assurance between CBP and trusted trade partners.

Project-21 is staking the core baseline for the Model Port that can be replicated at all major U.S.-Mexico border crossings. Project-21 shipments are moving through both CBP and Mexican Customs in an average time of 20 to 25 minutes. ( This compares with over one hour for regular shipments). Participants in the Project are achieving greater profitability by:

1. experiencing greatly improved crossing times;

2. working on the basis of consistent schedules that enable more shipments per day by the carriers; and

3. implementing Just-In-Time and Bill-To-Order Mexico manufacturing.

The next stage is ready to improve the southbound shipments and security of the NEEC program of Mexican Customs. The convergence of benefits for both sides of the border results in the greater competitiveness of all parties involved.

Carrier Benefits

Transportation carriers have the greatest responsibility for security, as well as carry the greatest risks. Additionally, transportation carriers typically operate on low profit margins.

A recent study on the subject revealed that freight carriers earn approximately $10 per cross border shipment. It was also determined that the number of round trip border crossings per day ranges from 1.5 to 2 for most carriers. The Project-21 Model Port initiative promises to facilitate an economically advantageous increase in the number of average round trips that freight conveyances make. With the average price of roughly $110 per cross-border shipment, the addition of another paid shipment per day will have dramatically improve and stabilize this critical supply chain segment.

SecureOrigins, Inc. has developed a Carrier Profit Estimation Tool which enables carriers to quickly evaluate the economic benefit derived from increasing the number of cross-border commercial “round trips” per day. Through significantly improved crossing times, as well as more consistent cross border movement of freight, carriers are beginning to increases the number of round trips per day. This results in the improved usage of existing resources, and helps to minimize the necessity for backup or contingency drivers and equipment. Equally important, these improvements positively impact manufacturers. Lastly, carriers experience reduce down time between shipments.

Drivers, or the human factor, are considered the highest risk link in the international supply chain. The study found that drivers are typically paid on a daily basis. They work 12 to 18 hours per day, and 6 days each week to meet their shipping requirements. A careful analysis of daily shipments demonstrates that much of the day is spent waiting for loads to be readied. The Project-21 Model Port initiative is bringing focus upon this issue. Greater attention to this important detail will improve upon the status quo through a greater collaboration between supply chain partners. Increasingly efficient manufacturing processes, and improved logistics resulting from the Model Port will provide the opportunity to greatly improve conditions for drivers.

Carriers hold the greatest requirements and responsibilities in overall efforts of establishing and maintaining secure procedures and best practices. This is predominantly due to the increased potential for contamination, theft and other illegal activities which plague international supply chains. The Model Port provides important benefits to carriers, as well as their drivers, by assisting in establishment and maintenance of security protocols through the external monitoring of shipment integrity. Also, the significant reduction in crossing times increases the profitability of the industry that makes these security investments. Increased security practices resulting from the Project-21 Model Port shipments provide a clear increase in overall security and a subsequent reduction in threats and opportunities for security breaches.

Mexico Manufacturer Benefits

A shorter crossing time with established consistency that minimizes or eliminates shipment disruptions will provide a lasting foundation for improved Mexico logistics and manufacturing efficiencies. While manufacturers currently use Just-In-Time (JIT) or Build-To-Order processing, logistics improvements and consistency allow for more efficient use of time and other valuable resources. This also provides direct benefits to the carriers and drivers who spend fewer hours waiting or responding to unexpected delays or demands of ‘hot’ shipments. With the cost of expedited shipments being in the tens of thousands of dollars, the Model Port becomes a valuable money saving regional resource to manufacturers, and their subsidiary supply chain partners.

C-TPAT Protection

Protection of C-TPAT / FAST certification is of great importance and economic consequence to Carriers / Drivers. The Common Operating Picture developed by SecureOrigins has been designed to provide real-time information sharing. The purpose of this is to improve collaboration between trusted trade partners and CBP. Recent C-TPAT policy changes regarding Reporting Suspicious Activities, Anomalies, and Security Breaches are well served by this component of the Model Port solution. The new policy provides protection from C-TPAT “immediate suspension” if security breaches are self reported prior to third party discovery. Even temporary loss of C-TPAT certification can be financially devastating to carriers. The new policy reads:

“If a partner reports suspicious activities, anomalies, or security breaches prior to CBP’s discovery, a partner will not be immediately suspended. C-TPAT is committed to working with its with its partners to secure the international supply chain through cooperation and information sharing. Reporting a breach would result in an immediate joint review of the totality of circumstances.”

The recent policy change by CBP provides both incentive and immediate value to carriers to invest in additional best security practice solutions. In addition, the secure Common Operating Picture portal provides real-time monitoring of live shipments, and instantaneous communication in the event of detected and validated suspicious activities. Coupled with electronic recording of GPS positions, sensor alerts and other information, the real-time information sharing by carriers and manufactures becomes more valuable and is expected to significantly improve the overall security and safety of cross border trade.

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