Expanding trade through safe and secure borders

              Sponsored by the Arizona Department of Transportation and conducted
by The University of Arizona Office of Economic Development
CYBERPORT TM
CyberPort is a new way of thinking about cross-border
trade. CyberPort is not a place, but a process for the
safe, secure and efficient movement of people, goods
and information through the U.S.-Mexico border.
It is a system-wide process designed to simultaneously
increase both security and trade-flow efficiency.
A more efficient and effective border-crossing
process can be achieved through coordination,
cooperation, technology, planning and design.
Now is the time to undertake a new effort to
redefine and implement an improved model for
cross-border trade.
You can help to make CyberPort happen. Establish the
Nogales port as a national model and pilot test site.
CyberPort is multinational in its approach and considers the impacts of cross-border traffic at the local, state, and regional levels. The goal of CyberPort
in Arizona is to increase the capacity of Nogales, San Luis and Douglas to serve as safe, secure and efficient gateways between the United States and
Mexico. Nogales, as Arizona’s primary commercial port-of-entry, is naturally positioned to serve as the port of choice for western U.S.-Mexico trade.
What is CyberPort?
8
10
40
10
Edmonton
Manzanillo
Culiacán
Guaymas
Hermosillo
Helena
Phoenix
Salt Lake City
Guadalajara
Tepíc
Mexico City
Las Vegas
Laredo
Tucson
Douglas
Portland
Seattle
El Paso Nogales
Mazatlán
Ciudad Obregón
McAllen
Brownsville
San Luis
Calexico
San Diego
Los Angeles
San Francisco
Puebla
The Challenge
Safety = Security = Trade
Safety and security do not have to come at the expense of trade
facilitation. CyberPort is based on the principle that safety, security and
trade-flow efficiency can be mutually reinforcing concepts. In today’s
security environment, border ports-of-entry have had to increase levels
of inspection and enforcement while operating with limited capacity to
accommodate significant increases in U.S.-Mexico trade.
Through participation in safety and security compliance programs,
enforcement agencies are able to maximize the use of risk management
to facilitate the border-crossing process for legitimate trade.
Arizona is Losing Ground
Arizona’s primary port-of-entry in Nogales serves as a principal gateway
for U.S.-Mexico trade and is a keystone to the CANAMEX corridor. Total
U.S.-Mexico surface trade has more than doubled in terms of value from
$88 billion in 1994 to approximately $200 billion in 2002.
However, trade through Nogales has not grown at the same rate as the
entire U.S.-Mexico border. The Nogales border port-of-entry has lost
one quarter of its relative market share since 1995.
Securing a Competitive Advantage
Geographic position alone cannot maintain Arizona’s competitiveness
in the global marketplace. Regulatory, process and infrastructure
improvements are critical to ensuring that Arizona maintains strategic
access to the markets of North America and beyond. Significant
improvements at the port-of-entry and throughout the trade-flow
process are required to maintain Nogales as a port of choice and to
secure Arizona’s position as a primary gateway for U.S.-Mexico trade.
Solutions Outside the Box
To address these issues in Arizona and position the state as a national
and global leader, the Governor’s CANAMEX Task Force commissioned
the Nogales CyberPort Project. The CyberPort concept was derived from
creative input from binational industry and agency stakeholders as well
as detailed analyses of legal, logistical and commodity-flow issues.
CANAMEX Trade Corridor Nogales serves as a principal gateway for U.S.-Mexico trade. Arizona’s natural tradeshed encompasses 14 states in the western
U.S. and Mexico and extends to serve the entire U.S. for southbound trade destined for western Mexico. It also includes Mexico’s 13 southern states for
trade destined for the western U.S. and Canada. Arizona’s tradeshed is that of the CANAMEX Corridor. In addition to key north-south access, Arizona is
also positioned along three major east-west freight corridors: I-8, I-10 and I-40.
NAFTA and the Global Marketplace
The development of the CyberPort as an ideal universal concept enables
its application elsewhere in the United States, specifically along the
U.S.-Mexico border. The CyberPort concept works in support and
agreement with the 22-Point U.S.-Mexico Border Partnership Action
Plan as well as the 30-Point U.S.-Canada Smart Border Action Plan.
The CyberPort concept can be applied to international border
ports-of-entry throughout the world. While great diversity exists
among international border ports-of-entry, the CyberPort concept serves
as a comprehensive framework for developing place-specific models
appropriate for use anywhere.
Implementation of the CyberPort concept in Nogales and at Arizona’s
other commercial ports-of-entry will require a sustained and focused
effort. Significant gains come at significant cost and demand a dedicated
commitment on behalf of government officials and the trade community.
It is critical that business leaders, federal, state and local government all
recognize the importance and urgency in meeting the needs of the border.
In addition to the doubling in value of total U.S.-Mexico surface trade, northbound commercial truck crossings have experienced a similar increase from
approximately 2.7 million in 1994 to over 4.4 million in 2002. This growth has simply outpaced the increase in capacity at many border ports-of-entry.
The implementation of CyberPort
involves: multiple modes of
transportation, cooperation
among nations, decentralization
and streamlining of the
border-crossing process,
widespread application of new
technology, and building on
progressive programs within
the U.S. Bureau of Customs and
Border Protection such as FAST,
SENTRI, ITDS, ACE and C-TPAT.
Nogales Relative Share of Northbound U.S.-Mexico Surface Trade by Year
  1994 1995 1996 1997 1998 1999 2000 2001 2002
250
200
150
100
50
0
  1994 1995 1996 1997 1998 1999 2000 2001 2002
Total Value of U.S.-Mexico Surface Trade by Year in Billions USD
8%
7
6
5
4
3
2
1
0
The Goals of CyberPort
The goal of the Nogales CyberPort Project is to achieve a coordinated,
seamless, flexible and integrated system for the safe, secure and efficient
movement of trade. The project looks beyond technology and beyond
the port compound to consider a holistic, system-wide approach to the
development of innovation and advancement throughout the entire
trade-flow process — from the point of origin to the point of destination.
CyberPort aims to reduce congestion and bottlenecks while meeting the
needs of government agencies and the trade community.
How CyberPort Works
The CyberPort concept optimizes a mix of consolidation and
decentralization of border-crossing procedures at locations throughout
the trade-flow process where each is the most appropriate, efficient
and effective. The CyberPort concept integrates the modernization
of technology, logistics and infrastructure along with reforms in the
procedural and regulatory environment.
CyberPort’s Guiding Principles
The CyberPort concept is based on principles that respond to nine rules
for new global trade. Technology is a thread that runs through each of
these principles and serves to unify the solution that CyberPort offers.
CyberPort’s guiding principles include: coordination and cooperation;
integrated systems; incentivized pre-clearance; risk management;
infrastructure capacity and design; shared information; maximizing
new technology; shipment transparency; performance standards and
measurement; multimodal solutions; and multinational partnerships.
The CyberPort concept diagram illustrates the U.S.-Mexico trade-flow process under conventional and CyberPort scenarios. Critical areas of
congestion in the conventional process are upon approach to customs facilities and within secondary customs compounds. Key elements of the
CyberPort concept that relieve congestion are off-site inspections (particularly for agriculture and truck safety); pre-certification (electronic fee
payment and permitting); pre-clearance (sealed shipments from C-TPAT compliant warehouses and carriers); and dedicated access to customs
facilities for qualified users.
Primary
Mexico
Customs
Mexico United States
Destination/Origin
Primary
U.S.
Customs
Secondary
U.S.
Customs
Secondary
Mexico
Customs
Joint U.S./Mexico
Public/Private
Examination Zone
Conventional
Origin/Destination
CyberPort
Origin/Destination
U.S. and state agriculture and
vehicle safety inspections,
permit issuance and fee payment.
All inspections,
fees, permits.
Pre-cleared and
pre-certified shipments.
Local, Regional Warehouse
Agricultural inspections
at local warehouse or
joint-use facility.
Drug/Weapon Screening
Rapid Enforcement Lanes
Superbooth Processing
Shipments requiring agricultural
inspections may be sealed and
released to local inspection site.
Dedicated Access
CyberPort CyberPort CyberPort
Existing Areas
of Congestion
The University of Arizona Office of Economic Development
PO Box 210458, Tucson, AZ 85721-0458
Telephone 520.621.4088 http://oed.arizona.edu
CYBERPORT
Nine Rules for New Global Trade
1. Share the Work
Enable the user to prepare for a transaction at the front-end of the
process. Giving users a secure opportunity to establish themselves as
legitimate and, literally, check themselves through the process results
in time and labor savings as well as reduced congestion at processing
choke points. Pre-payment of fees, pre-issuance of documents and
pre-clearance for security streamlines the trade process significantly.
2. Give Preferred Treatment
Specific incentives to save time and money must be provided to encourage
users to modernize their traditional ways of operating. Dedicated access
to facilities, as well as low-risk designations, help speed the trade-flow
process and reduce the chance of time-intensive inspections. Incentives
also are needed to encourage users to invest in new technology, maintain
preferred safety and security standards and make infrastructure upgrades.
3. Staff to Demand
Industry and agencies on both sides of the border must work together to
create a flexible framework for staffing that allows for variable allocation
of human resources to accommodate changes in demand throughout the
day, week, month and year. Staffing levels must respond to high demand
for services.
4. Build to Demand
No matter how rapidly processing operations occur, the sheer volume
of peak flows will create a bottleneck if there is not sufficient space
to accommodate the demand. Variations in flow need to be reduced while
facilities and infrastructure must be flexibly designed and large enough
to accommodate demand the vast majority of the time.
5. Maximize Technologies
The application of new technologies throughout the trade-flow process
and manufacturing supply-chain is essential to experiencing greater and
greater levels of productivity as well as maximizing safety and security.
A uniform platform for the identification, testing and application of new
technologies in a multinational user environment must be developed.
6. Execute Placeless Transactions
The placeless transaction is where e-trade meets e-government.
The only thing that must physically change hands in the world of trade
is the good itself. All other aspects of a transaction can occur
electronically. The advantage to electronic commerce is clear. However,
tremendous coordination involving complex information management
systems is required.
7. Manage Risk
Risk management is perhaps the single greatest principle affecting the
physical flow of international commerce. It is imperative that customs
and other government inspection agencies have the greatest amount
of information possible to make a well-informed assessment as to the
legitimacy of a transaction or shipment. Users need to be given the
opportunity to demonstrate their legitimacy, thereby significantly
reducing the chance of inspections. Inspection agencies need to trust
users that demonstrate legitimacy and users need to trust inspection
agencies to use the secure information provided in strictest confidence.
8. Share Inspection Responsibility
Every trade shipment is subject to a multitude of authorities at the local,
state and federal levels. A redundancy of inspection often occurs when
there is a breakdown in coordinated enforcement protocol. Agencies
can help one another simply by knowing what each are trying to achieve
and the protocols by which they operate. This may be demonstrated in
developing a binational protocol that provides for accountability in
re-sealing shipments inspected in transit. Ultimately, shared access
and inspection responsibility must be granted by trading countries,
where each is able to establish a designated zone in which to perform
pre-inspections in the country of origin. Redundant inspections must
be eliminated.
9. Measure Performance
Significant data gaps are the most pressing variable inhibiting
comprehensive measures of success. Standard classifications of trade
and standard metrics by which to measure it are essential. The data must
then be gathered in a consistent fashion and time frame among countries.
The establishment of standards of success and the measurement of that
success is critical to addressing current needs and planning for the future.
Arizona Department of Transportation-Transportation Planning Division
206 South 17th Avenue, Phoenix, AZ 85007
Telephone 602.712.8143 http://www.dot.state.az.us
CyberPort is a trademark owned by the Arizona Board of Regents on behalf of The University of Arizona.