CBP launches five-year pilot allowing non-asset-based 3PLs Into CTPAT for the first time

Non-asset-based third-party logistics (3PL) services providers recently received good news, with the announcement that United States Customs and Border Protection (CBP) has introduced a five-year pilot program, which, for the first time, includes freight brokers and warehouse-based 3PLs to be able to be part of the Customs-Trade Partnership Against Terrorism (CTPAT) program.

CTPAT is widely viewed as a layer in U.S. Customs and Border Protection’s (CBP) multi-layered cargo enforcement strategy. Through this program, CBP works with the trade community to strengthen international supply chains and improve border security. What’s more, CTPAT is a voluntary, public-private sector partnership program that recognizes that CBP can provide the highest level of cargo security only through close cooperation with the principal stakeholders of the international supply chain such as importers, carriers, consolidators, licensed Customs brokers and manufacturers. Since its inception in November 2001, CTPAT has grown to more than 11,400 certified partners spanning the gamut of the trade community.

A November Federal Register notice stated that, “the Department of Homeland Security, acting through the Commissioner of the U.S. Customs and Border Protection (CBP), plans to conduct a pilot for Asset-Based and Non-Asset-Based Third Party Logistics Providers to participate in the CTPAT Program to determine whether allowing such entities to participate in CTPAT would enhance port security, combat terrorism, prevent supply chain security breaches, or otherwise meet the goals of CTPAT as provided for by Congress.”

The impetus for this pilot program stems from the passage of the CTPAT Pilot Program Act of 2023, which was passed in October 2024, and addresses the exclusion of certain types of 3PLs from being allowed to be part of CTPAT. The pilot would begin by December 1 and run for no more than five years, according to the Federal Register notice.

The Federal Register notice explained that Congress recognized non-asset-based 3Plas and asset-based 3PLs play a role in the safety of the international supply chain and national security. And it added that the CTPAT Pilot Program Act of 2023 directed DHS to establish a pilot program, “to assess whether allowing both non-asset-based 3PLs and asset-based 3PLs to participate in CTPAT would enhance port security, assist in combatting terrorism, prevent supply chain breaches, or otherwise meet the goals of CTPAT.”

Chris Burroughs, President & CEO of the Transportation Intermediaries Association (TIA), told LM that this pilot has been years in the making, for TIA membership, going back to when CTPAT was first established, while likening CTPAT to a type of TSA Pre-Check for cross-border freight. But he said there were challenges along the way, with CBP taking the stance that DOT (Department of Transportation)-licensed property brokers did not do enough to ensure the safety and security of cross-border freight, because they were not asset-based, or did not own trucks.

“We kind of pushed back on that over the years, saying we understand that but disagree,” said Burroughs. “But we were a little confused because there are three other entities—Customs brokers, indirect air carriers, and non-vessel-operating common carriers—which don’t touch physically touch freight ever and are all allowed to be part of the program,” he said.

Following that, Burroughs said TIA went to Congress and made its case for inclusion into CTPAT, saying there are a lot of brokers moving cross-border freight not part of CTPAT, and asked why would CTPAT not want companies that meet the minimum-security requirements.  

“The shippers that are requiring it are obviously utilizing asset-based, and there are a lot of large companies that were Customs brokers that just basically would get it from their Customs brokers and then apply it to their freight brokerage, which is really not what you're supposed to do,” he said. “Let's fill the safety gap that exists. Our [members] can ensure the security of it. We know what the commodities are. We can work with the shippers. We can utilize carriers who are part of CTPAT, too. It makes sense, and it could be, honestly, it became a competitive disadvantage too, because we're begging the agency to be part of this voluntary program they're not allowing us into.”

That subsequently led to the establishment of the pilot program, which Burroughs described as a great first step. As for next steps, Burroughs said TIA has had numerous conversations with CBP, adding that the recent Federal Register notice started the process, which will be followed by companies going through the formal process of being vetted, coupled with a lot of steps moving forward, in terms of working together to establish the minimum-security requirements.

“This is a long time coming,” said Burroughs. “It helps everybody in the supply chain. From a security perspective, I think more and more shippers should be requiring CTPAT, and we're happy to fill that void. I know there's 30,000 [brokerage] licenses, but it is probably closer to 10,000-to-12,000 active brokers. The number that would do enough cross-border freight is obviously way less than that in terms of those that want to participate in this, because there are pretty strict requirements you've got to adhere towards. And this is not as simple as getting a TSA Precheck, which, as long as you're who you say you are, is not relatively difficult to get with a background check. But there are a lot of things these companies have to keep in place, for reporting, onsite inspections and investigation, and making sure all the paperwork is correct. We don't see this as a huge influx in terms of resources, and we hope CBP feels the same way once they see the value for this pilot program.”