SPEAKER_00
0:37
Let me tell you a really interesting story. So we have one customer who had their container, uh, it was an ocean container, land at the port, and the port opened it up. And they found a few boxes in front. But once they went past the first couple layers of boxes, they found a living quarters in the back. They found some cots, they found some buckets filled with. You can imagine what the buckets were filled with gross. But if you're traveling across the ocean, you got to do what you got to do. Uh, you know, they found food and sandwich wrappers and what bottled water and all that. And it was like, oh my gosh, what's going on here?
SPEAKER_02
1:15
Joe Hearst is the co-founder and president of Verut, a compliance platform that combines software with hands-on support for logistics companies managing programs such as CTPAT and TSA. For this conversation, we're looking at the compliance systems surrounding Mexico cross-border freight for our Cargo Rex guide, who must be vetted, what must be documented, and what happens when a company discovers too late that it controls only existed on paper. So, Joe, we've already been talking before we hit record and we kind of joked around the, you know, some of the acronyms we're about to explain. So if the folks maybe are a little concerned or not sure, give us a high-level overview of what Verut does and who you help.
SPEAKER_00
1:58
Yeah, that's great. And yeah, if you've been in logistics for more than a minute, you know that there are a lot of acronyms to uh try to keep track of. So a couple of the ones that you mentioned will be uh the ones that that uh that I do here as I'm talking about Verut. So we help companies uh with CTPAC compliance, that's the Customs Trade Partnership Against Terrorism. We'll get into that. And that is a uh that is a program, voluntary program that the US set up to make sure that if people want to get vetted through the US government uh as they're bringing uh cargo into the US and then also exporting it, they can do that. And that helped. There's some various things that we'll talk about that helps them with the amount of time, transport, inspections, et cetera, at the border. So we do that for companies, we help them get certified. And then there's also a maintenance component of that as well. So you need to maintain that and show the government and customs that you're doing the right, the right thing there. And then on the TSA side, most people don't know this, especially if you come from the trucking side or the domestic transportation side only. Is that anytime you put cargo on an airplane, you need to use a TSA certified cargo chain? So there needs to be custody uh so someone doesn't put something bad on the plane. So we help people with that. We help them get TSA uh certified, we help companies uh get the certification to put the cargo on the plane, and uh we manage that uh whole supply chain so people don't need to wonder is this the right guy uh to move my cargo?
SPEAKER_02
3:33
And especially around you know, so many changes that that happen with trade and with customs and you know, tariffs over the last couple of years, there's it feels like the news is is changing all the time. And so this almost sounds like maybe it's like a pre-check for your cargo. Is that accurate or not really?
SPEAKER_00
3:54
Yeah, yeah, no, I'll get into it. It actually is. Um, in fact, CTPAT, the best way you can say about CTPAT or the quickest way you can define it is you can literally sign up with Customs Border Protection and say, hey, listen, I want to be a trusted trader. And I want you to know that I'm doing all the right things to make sure that the cargo that comes from overseas is safe. So I'm gonna look at my suppliers on the other side. I'm gonna have all these policies put together. Once it's brought into the United States, I'm gonna make sure it's safe. And uh, I get several advantages uh to do this. Like if I pledge to the government I'm gonna do this, I get a lot of different advantages actually.
SPEAKER_02
4:39
And so for your customer base, it's usually like importers, shippers, um, is it LSPs and shippers? If I'm reading between the lines?
SPEAKER_00
4:48
Yeah, in fact, uh most of our early customers were logistics solutions providers, so three PLs and forwarders and cross-border highway carriers. But as we've moved on, uh we've uh also done a lot of work for BCOs, beneficial cargo cargo owners, large companies that are importers and importing cargo from all over the world.
SPEAKER_02
5:11
And so with Verut, it it's from what I understand, it's software and a service. So it's not just, you know, making sure, and and maybe you're you're probably best suited to to explain how how the software works, but it it doesn't just end when you collect the paperwork. There's ongoing, you know, making sure that things aren't expired and making sure that the you know insurances uh and coverage are active. Is is that sort of the the solution? And then plus a consulting layer on top of it.
SPEAKER_00
5:39
Yeah, so let's talk about CTPAT in particular. To get CTPAT certified, it's a big job. And so you need typically someone to help you with that, or you need someone who's who's done it before, else it's gonna take you like six to 12 months to pull all the documentation together that you need. Yeah, it's a big job. So, yeah, so you need to first, if you're gonna get CTPAT certified, you need to answer about 168 different questions. Yeah, so we pull together about a 90-page document called a security profile. And then there's about 50 other documents that you need to pull together. Like, for instance, what's your cybersecurity policy? Do you have a money laundering policy? Do you have a business selection and business partner selection policy? Uh, do you have a seven, eight-point inspection policy? The list goes on and on and on. So if you were to recreate or create those from scratch, it would take you a lot of time, right? So it's like, okay, why not hand this off to somebody who could do it efficiently, who's done it before and who can uh you know, shepherd you through this process?
SPEAKER_02
6:40
That makes a ton of sense, especially if there's over 160 documents and it takes six to eight months. If you so it if you're using your service, does it cut down on that time or is it is it almost the assurance that you're gonna do it right the first time and avoid the back and forth with the government?
SPEAKER_00
6:58
Yeah, I think it's both. I think it's speed to market. So you don't want to have to submit data that may not be right to the government and have and have them reject your profile. And that can go on for a lot of time. Not to mention the amount of time it's gonna take you to pull all that information together, right? Time is money. So if you're paying one of your key people at the company to go pull all this information together and move it through the process, chances are uh they could be making money for the company somewhere else or providing support to other staff members, because usually you need a senior level person to be involved in building this uh this portfolio out. In fact, what we usually do is talk to that person, we'll spend a couple hours with them, download all the information from their brain, and then we can go build it on their behalf.
SPEAKER_02
7:45
So, where does this, if you're moving freight across the border with Mexico, where where does a company or when does a company start to engage a company like yours? Is it before the shipment moves? Is it maybe when something bad happens or after the fact? When do they engage with Verut?
SPEAKER_00
8:03
Yeah, well, the question might be why would you want CTPAS certification? Right? Like, like what is what benefit does that give your company? Well, if you are a trusted trader with the US government, there's several things that happen. One is you get to take advantage of the fast lanes, and those are uh special like uh border crossing lanes called the free and secure trade lanes. And those allow you to move your trucks into that lane. So you're like you're automatically qualified to go in that fast lane. The other thing is there's a lot of inspections that happen with containers, right? You're your your trailer or your container in the port may be pulled aside and looked at by the CBP. But if you're a CTPAT member and you're an LSP or an importer that is CTPAT and the CBP stops your container and is like, oh, this is a CTPAT company, they are CTPAT certified, they're gonna let you through in most cases because your risk is much lower, right? So if you're part of their trusted trader program, it significantly reduces the amount of inspections you're gonna have. And then it's very unlikely that your containers are gonna be held or your trailer is gonna be held. And we all know that if if the trailer containers held, that you have to pay the container uh yard uh a certain amount of dollars. Sometimes it's a couple thousand dollars a day to have your container or your trailer sit there, and you can avoid this. So most big companies are companies that are like, hey, we really want to be in the zone of eliminating all those uh inspections and uh container holds up, they're gonna go and get CTPAT certified.
SPEAKER_02
10:38
And so, does that see once your CTPAT certified, does it only for ground transportation, or does that apply to the air freight as well within the the TSA program?
SPEAKER_00
10:49
You're right, it applies to both. So there's a ground component of it, so you can actually get approved as a highway trucker, and there is an air component of it, which you can get approved as a consolidator, so you're moving on ocean or air. Uh, there's actually comp there's actually a way to apply for for almost everybody. For instance, you can apply as a rail carrier, as an air carrier, like an airline itself can apply. The only gotcha is that if you only move freight domestically and you're not crossing the border, then it really doesn't apply for you know to you, right? You're not going to be able to take advantage of that. And uh the government doesn't want to use and spend their resources on someone who's not going to move cross-border freight.
SPEAKER_02
11:33
Now, I would imagine, and correct me if I'm wrong, that but for a lot of companies, they don't really think about compliance until something goes wrong. Right, right. What happens when maybe uh without naming any customers or anything like that? Right. What happens when compliance fails?
SPEAKER_00
11:50
Well, this is a very interesting topic because it's it's also like, well, why would you want to be CTPath certified? Why would you want to be a trusted trader? Let me tell you a really interesting story. So we have one customer who had their container, uh, it was an ocean container, land at the port, and the port opened it up and they found a few boxes in front. But once they went past the first couple layers of boxes, they found a living quarters in the back. They found some cots, they found some buckets filled with you can imagine what the buckets were filled with gross. But if you're traveling across the ocean, you got to do what you got to do. Uh, you know, they found food and sandwich wrappers and what bottled water and all that. It was like, oh my gosh, what's going on here? So, what it happened with that company was actually CTPAT certified, believe it or not. And typically that would result in a real big fine, right? Because something happened. Um, the CBP would probably go after that company, but the company had all the processes and procedures in place that they needed. They inspected the cargo at the actual point of origin. They put a seal on it, a government-certified seal. They moved it on their own company that they had vetted, their own business partner that they had vetted, actually using our software. They had vetted their business partner. Uh, we'll talk about that in a minute. And then it came through the port. And uh, so they were very surprised. So they were able to call their supply chain security specials, which you get if you're a CTPAT company. You get one. So that's part of becoming CTPAT. You get a special CBP person that's assigned to you. And they were like, We did everything right. And they showed them all the documentation, they showed them all their policy and procedures. And the supply chain security special is like, Yes, you did. So, you know what? We're gonna take it easy on you. We're not going to level the boom like we typically would on somebody that we found doing that. And the other thing they were able to do is find a root cause, which was very interesting. This was actually they traced it back to an inside job where they actually removed the pins on those giant steel doors. They pounded them out, and instead of taking the seal off between the doors to open it, they just removed bolt doors, slid the people in, and then somehow put both. So this must have been a big job because those doors weigh hundreds and hundreds and hundreds of pounds. And this must have been done under the cover of night somehow, probably with a crane. So, anyway, that's well, that's what happens when compliance fails. Some sometimes very bad things. But if you're CT bad certified and you're proving that you're doing all the right things, it can allow you some leeway when you go to the government, when you go to the CBP.
SPEAKER_02
14:41
So it's almost like providing a record to the government that, hey, we are following all of the rules. And so when these things happen outside of our control, it's both correctable, but you're not going to put us out of business for something like this happening.
SPEAKER_00
14:56
Bingo, you are so right, Brother. That's 100% the way you got to look at this. It's like insurance for your company and allows you to have an open chain of communication with the CBP. And uh, it's like you're on the same team. So that's pretty interesting. And they, for instance, uh, this company and many other companies, you said, why do they use your software? Well, if you have many business partners around the world, you need to make sure they're all safe. So we use our software to send each one of those business partners a risk assessment, which they have to fill out, which is automatically graded. They have to do it every year. They have to submit documentation showing they're doing all the right things. Are you inspecting the cargo? Do you have security in place? Do you have locks? Do you have cameras? Things like that. So that's what the software does instead of just trusting somebody that, oh, I know Bob, we've worked with Bob for 20 years. You should send, well, in fact, you have to send him a security questionnaire every year from a CBP standpoint, from a CTPAT standpoint, to make sure that they are doing the right thing. And then the CBP will review that annually to make sure that you're tracking all your business partners' um certifications and their um their ability to help you mitigate all this risk. So that's what our software does, among many other things, but that's a main point of it.
SPEAKER_02
16:16
And that's where the vetting comes in, is not just the initial vetting for maybe when you're onboarding new customers, but the continuous vetting of your of all of your different partners.
SPEAKER_00
16:26
That's right, of all your different partners. So think of it. If you're the one with CTPAT certification, let's say your company name is XYZ Express, you may use 50 to 5,000 partners around the globe, right? Depending on the size of your company. And all those partners exemplify some sort of risk. So not all of them are CTPAT certified, certainly, probably just a small amount. In fact, there's only about 12,000 CTPAT certified companies. Oh, yeah, surprising. But there's many, many logistics providers, right? And logistics solutions providers and warehouses. So those companies that are at the top of the CTPAT food chain that are CTPAT certified have to make sure that whole uh uh supply chain is certified and properly vetted. And they use our software to do that.
SPEAKER_02
17:12
So I'm curious what the the onboarding and then the ongoing experience looks like for a new Verut customer. Is it, you know, you you mentioned earlier about kind of six months in order to gather all of the paperwork and you know, cross all the T's and dot all the I's? Um, I would imagine that it's a much quicker and smoother process with using your company. But then what happens after all of those things are done? Is it, you know, a tab that you keep open on your desktop? Is it, you know, kind of one person in the company that's monitoring the software? What does it look like on sort of the day-to-day?
SPEAKER_00
17:47
Yeah. So, you know, we try to get someone certified as quickly as possible. And what does that mean? You know, our job is gonna probably take uh six to eight weeks of interacting with our customer and getting all the documentation that we need to put together. Every customer is different. So, you know, I don't want to say it's a one size fits all, but we will submit it and then typically it takes a couple months for the CBP to approve it. This is versus I say the typical customer would probably take six to eight months to get all their documentation in place and you know, another few months for the CBP to approve it. So we'd like to say we can typically get it done in about a third of the time of the average company to do this. So that's number one. And in terms of maintenance, we offer a full uh maintenance package, in other words, a managed solution where we go ahead and for our clients, we'll say, Hey, you know that whole vetting thing that you have to do with all your suppliers? We'll do that for you. We you can outsource that to us. We will send the uh questionnaires and the risk analysis to your providers, we'll get that back, we'll look at it, we'll make sure they're all doing the right thing. If they're not, we'll send them corrective actions and then we'll follow up on that in a couple of months and make sure it's all good. So it allows them if they don't have the resources in the team in place, and it's a it's a big job, right? It allows them to outsource that to us.
SPEAKER_02
19:14
And I would imagine too, with a you know, just all of the changes that have gone on over the last handful of years with trade policy, that this is also something that, you know, these people technically might not have the bandwidth to pay attention to, you know, press conferences every day and new executive orders and things like that. And so that's where, you know, working with a solution like yours is one where it probably makes sense for for most teams that don't want to hire internally to take care of this.
SPEAKER_00
19:42
Yeah, and the cost of a good employee now keeps going up, right? Uh, so it's it is very difficult to keep up with all this. And one of the things I like about our like vantage point is since we help hundreds of companies do this when the CBP has like a new point of emphasis, we can roll it out to everybody. So we'll hear about it maybe in this region, and they'll say, hey, this is gonna become the next thing that's happening. We can roll it out to everyone. And I'll tell you what, Bly, this year's been crazy because you mentioned at the beginning all the tariffs and changes and all this. I think CTPAT has been mentioned more in the news this year than in my last 10 years, maybe 15 years of doing this, because this year, President Trump released an executive order called Strengthening Customs Enforcement. And they specifically mentioned this acronym that we've been talking about, CTPAT, so much so where they said, listen, if you're a foreign importer of record, you have to either get CTPAT validated, which is sort of like the next step of CTPAT. It's like one year or two years into it, or you have to use a CTPAT validated customs broker. So now all the customs brokers that aren't CTPAT validated are gonna have to go out and get CTPAT validated. We've had a bunch of those come to us uh asking for help. So, so yeah, it's like President Trump said, hey, listen, it is a uh privilege, not a right to trade with us. And then they're also trying to clean up all these importers of records that have issues. Like you you mentioned uh when we were talking a little bit before the the program here, you mentioned you've seen various fines for for these companies that uh that have been fined by the CBP for various things, whether it's bribery, whether it's containers that are not using, like for, for instance, proper wood packaging material, things like that. And those people are going to be removed from the roster of importers if they're doing the wrong thing. And that was the point of the executive order.
SPEAKER_02
21:42
And I think we've been talking, you know, it about TSA and CTPAT, but there are a few other acronyms that I wanted to bring up too, because I mean, sure to your point earlier, like there we have a lot of acronyms in logistics, but even this was kind of blowing my mind that there's there's I I'm I'm just gonna call it FAST, but I don't know if it's F-A-S-T because that's the acronym. There's AEO, which is we have that in marketing. Um, so I'm curious what it means in logistics, and then there's OEA. Can you kind of break down the importance of each one of these?
SPEAKER_00
22:13
Yeah, so other countries have programs like CTPAT. So when we talk about AEO, the acronym is called Authorized Economic Operator or OEA, which is I I would butcher the Spanish, uh, but it's like the Brazilian version of AEO or the South American version of AEO. So what happens is AEO countries will have what is really termed as like a uh reciprocal partnership with us, where they'll be like, hey, if your guy's CTPAT approved and he's coming into the UK, we're going to uh give him a break because he's CTPAT certified, and vice versa. So we have so whoever we have these reciprocal relationships with, uh they're actually called mutually recognized arrangement arrangements is the typical term or the technical term that they use, MRA. Then we um we'll take we'll take a kinder look for those companies that are that are OEA or AO certified and give them a break, or maybe not inspect them with the same level of uh of of inspection that we would a typical company.
SPEAKER_02
23:25
So how do you how do you know as a company, maybe you have hired um maybe Competitor or somebody who works in compliance, or or maybe some maybe a company has already made that investment. How do you know that they're doing a good job?
SPEAKER_00
23:39
Yeah, so I think that's part of what the CBP does every year. Is so there's an annual review, and then there's what's called a validation process. The annual review, they come in and they kind of peel you apart a little bit and say, Hey, what's going on here? Are you sending out these risk uh uh questionnaires to every one of your vendors? What do you have? Have you done a management review? Have you done a cargo map? Have you done a global risk analysis? All these things that we help our customers with on a yearly basis, and our software helps our customers with on a yearly basis, right? So those are the things that the CBP is gonna ask on a on a yearly basis. Because you're right, you can apply for that first time, and then if you just fire and forget, how do you know the person's doing their job, right?
SPEAKER_02
24:28
Or they leave with all that. Was one of the other concerns, too, that I saw is like you hire somebody that's done all the compliance work, and then they leave and go somewhere else, and then you don't know what's been done, if you know there's still kind of outliers you know that remain that you're not aware of. Um, so there is definitely some dangers in not documenting your own compliance uh software, your own compliance processes. And and I am curious what with uh specific to Mexico, is there anything that's specific to move and freight between US and Mexico that would be different certifications versus the rest of the world, or maybe vice versa, um, that's different for the rest of the world, but maybe there's a fast lane that exists for you know US and Mexico?
SPEAKER_00
25:14
Well, yeah, I'll I'll definitely get into the Mexico question in a minute, but I do want to say, you know, since we're talking about a little bit about what we do to help uh customers, when you think about that, if you have one person in the compliance seat and there's not a defined uh chain of custody with all the documentation and and everything there, it can leave you a little uh a little light if that person leaves, right? You kind of got to rediscover what that they they've done. And so if companies use our software or our consulting arm, we've been in business for 17 years, they're gonna have someone they can lean on. So if that person does get another job or does move on, in most cases, what happens is they just move up with the company or they change jobs with the company because that person's very valuable, right? So that person will typically move up into management and they might get like a younger person to backfill them. Boom, they've got all the data there, they've got all the history there. That's what our software does, and it can protect companies from having to go through a pretty violent transition process as they're moving somebody in or out. But yeah, that's the idea. And then the the CBP will also come in and validate you as well. And every three years, they actually come on site and they'll sit with you across the table and they're gonna they're gonna grill you, they're gonna ask you probably about 70 or 80 questions, and we help companies prepare all the documentation that you need to show for that as well. So, and this is a nice segue into the Mexican, you know, the Mexico question because there's a lot of companies who get CTPAT certified exclusively because they are moving agriculture across the Mexican border, a lot of our uh car parts, for instance, get built down in Mexico and in automo automotive and automobiles in general get built and moved across. So if you are a highway carrier that moves cargo or an air carrier from Mexico to the US and you do it on your own assets, or if you're an air carrier and you're TSA certified, you do it on somebody else's assets, you are certified to get CTPAT, or you are, I should say, you qualify to get CTPAT certified. And then you can use those fast lanes that you mentioned. So instead of waiting at the border, you get to use the free and secure trade lane, and you can get over into the far right or left lane, depending on what what port you're coming into, and your truck gets to slide through a lot faster.
SPEAKER_02
27:45
Yeah, because I've seen video clips where it's almost a separate construction lane that's almost an overpass that you get to go on, and there's videos of the trucks going in that lane, and all of the rest of the border is backed up. And so um I've definitely seen that. And it's good to know that carriers can do this on their own too, because here I was thinking that it was mainly for you know shippers that are moving their goods, you know, to and from. But for a carrier, I would imagine that that would open the doors up. Uh, to your point earlier, uh, you know, there's only so many CTPAT certified, you know, companies out there. Right. So if you're a trucker and you do this, or you're a carrier and you do this, then maybe that would open you up to not only just a fast lane, but additional opportunities to move more freight.
SPEAKER_00
28:33
Oh, I mean, you hit it, you hit the nail on the head. I mean, most people come to Verut and they say, Hey, listen, I've got an opportunity. I need to be able to be CTPAT certified to move this freight. So many of the big Fortune 1000 will demand that you know their tier one and tier two logistics service providers are CTPAT certified. Because then at least they know we have a government-approved uh certified program in place, right? So, and they and they don't need to pay for it. So the Fortune 1000 or Fortune 5000, they're like, hey, you do it, you do it, you handle the cost, you handle the maintenance, and guess what? The government will actually uh uh make sure that you're certified. So, as I mentioned, there's about 12,000 CTPAT certified companies and growing, a lot more people are hearing what you're saying, like, hey, I've got business opportunities that I'm missing. At the same time, there is 51% of all cargo that moves into the US actually moves through CTPAT certified channels. Oh, wow, pretty amazing, right?
SPEAKER_02
29:40
Yeah, I mean, uh those 12,000 companies are eating, it sounds like yeah, yeah, exactly exactly.
SPEAKER_00
29:47
They're that's hilarious. Yeah, they are eating, you know, and and that's where like I always someone comes to me and says, Hey, should I get CT CT BAT certified? I'm like, listen, if you're uh if you're not looking to grow, and if you have three customers who don't care if you're CTBAT certified, it'd be hard for me to twist your arm to say, Hey, it's worth it for you to get CT BAT certified. But if you have growth plans, if you want to be uh a logistics service provider that can kind of climb that uh ladder, or if you're a uh an importer or a shipper that wants to relieve all your hassles at the ports, all the static that you're getting, and that's going to be coming down from the government with the strengthening uh customs enforcement regulation, just get CTPAT certified. And so, what does that look like? Go ahead, ask the question, Martin.
SPEAKER_02
30:36
Well, I guess from the lens of I maybe I'm a company that I'm like, yeah, I hear this interview and I think, yeah, that sounds like a good thought. I'll put it on the back burner. But what if it's somebody that's like, oh, I really want to do this? What kind of I guess paperwork or documentation, what should they start putting in order now before they reach out to someone like you?
SPEAKER_00
30:58
I would say don't waste your time. Uh, just call us. Just call us. We know what the federal government and the CBP needs from you, and there's a chance that you have it in place, but there's a good chance that you don't have it all in place. In fact, most companies come to us and they probably have about 30 to 40 percent of what they need in place in terms of a policy, in terms of their standard day-to-day. And we basically give them the recipe for the remaining 60%. So we'll do it, we'll cook the cake with you. You literally come to us and say, Hey, we need we need a cake, and we'll say, Okay, we'll get a couple ingredients from you, but we'll bake the rest of the cake and we'll give you the cake back and we'll get you CT batch certified, and we'll help you along that whole process, that whole way. We'll build, we'll set you up with software, we'll go out and do the risk analysis for all your uh suppliers around the world, and we'll get it done for you. And that's the easiest way, it's the lowest cost, most effective way to do that instead of you know tying up your organization uh with getting certified and maintaining the certification.
SPEAKER_02
32:02
Yeah, it makes a ton of sense, especially with Mexico becoming our our number one trading partner. There's money to be made. There's this, you know, as Littlefinger from Game of Thrones said, you know, there's opportunity or there's chaos as a ladder, and it might seem like chaos with all of these, you know, regulations that are coming down or getting folded up, or you know, there's uh there's lots of opportunity to to better yourself and better your company with with resources like what you're providing.
SPEAKER_00
32:27
Yeah, I think it's just uh as you mentioned, there's chaos, there's opportunity, and then there's also just climbing the food chain so you can continue to help all of your customers, right? That's really what Ct PAT in particular puts your puts your company in position to do. So I've got another interesting story since let's hear it. It's always fun, fun to hear the uh what we were talking about before is like when compliance really fails, right? So uh we we had a company come to us that had their cargo pulled aside by customs, and they were shipping uh tobacco-related products. And what had happened was one of their vendors uh started putting nails in the product, so you know, like construction nails in the product, and you might say, Well, why would they do that? Okay, and so the CBP found them as they were going through their typical course of inspection, and they started doing some digging and some asking, and they found out that the reason they were doing this was because they were testing to see if the CBP would notice because their next plan was to put packets of drugs in each one of these tobacco products, so they were just doing a little look-see to see if the government knew it was just kicking the tires, just kicking the tires, exactly. So, so that company had a long talk with the CBP, and um, and the CBP said, Hey, listen, I can see that you want to do the right thing. You guys wanna want to do the right thing, you want to be a partner, go through and become CTPAT certified and get your supply chain in order. So they came to us and we helped them kick off their CTPAT program. And we obviously went back to the CVP and said, we got it. Um, we've you know removed some of these suppliers, we've added some new ones, we've revamped the whole way we do security throughout the entire supply chain. And of course, that story has a very happy ending. They're CTPAT certified today, and uh their product is uh you know obviously much safer for all their consumers as well.
SPEAKER_02
34:43
Yeah, for sure. I I that is almost like what you hear with the scary stories around you know, Halloween candy and things like that, that people are you know putting like little needles inside. Remember that was a story when I was a kid, is they're gonna put a needle inside of a Snickers bar, don't bite into it until we check it. But then suspiciously the Snickers bar would go missing and the rapper would be next to my dad, you know, at some point.
SPEAKER_00
35:05
That's hilarious. I mean, we grew up. Well, I don't wanna, I don't wanna I think I'm definitely older than you, put it that way. But I will say that that is so funny. I grew up in that era where you had to dump all your Halloween candy out, and and mom had to check it, and dad had to check it. And they were so nervous about it, they were like convinced that someone had putting three razor blades into your uh into your stickers bar. It was hilarious.
SPEAKER_01
35:29
All it took was one story to to make it around. And now now we've got uh we've got the nails in in the tobacco products, the tobacco, yeah.
SPEAKER_00
35:38
No longer, no longer, uh, after a complete revamp. Very proud of that team. And you know, that was another inside job, too, by the way. Most of these things are hiring the wrong providers and and providers without the detailed specs that you'd expect them to have. If someone's gonna go through and and take all the time and energy, right, to put stuff down on paper, to make sure their employees get training, sign off on it, they're typically gonna do the right thing, right? It it they're motivated to do the right thing. So you find once you get a good supply chain in place that it really does make your life a lot easier.
SPEAKER_02
36:13
I I think that that that is a perfect place to leave it. And well, maybe uh one last question. Is there anything that you feel is important to mention that we haven't already talked about?
SPEAKER_00
36:24
Not not with regard to CTPAT, other than again, keep in mind that if you're not in that 51% of the CTPAT cargo that transacts across the border, remember 51% of all cargo moves on CTPAT channels across the border. You're in the 49% and you're in the risk group. So you don't want to be in that 49% because the target's on your back. So become part of the 51% and go out and, like you said, go eat, get some customers, uh, add to your bottom line, or if it's if it's on the shipper side, get yourself some improved uh opportunity to get your freight across the border faster, to have that direct relationship with the CBP, all the good things that come along with being C uh CTPAT certified uh under the CBP.
SPEAKER_02
37:23
So you kind of you you you sleep better at night and you have the opportunity to make more money. So I think that that is um something that every business business owner would want at this stage of the economy.
SPEAKER_00
37:34
So that's that's a classic win-win for sure.
SPEAKER_02
37:38
All right, Joe, where can folks you know follow you, follow more of your work, uh, you know, get get in contact with Verut, all that good stuff.
SPEAKER_00
37:45
Yeah, you can go to Varut.com, it's pretty easy, V-E-R-O-O-T.com. Uh, you can uh follow me on LinkedIn, uh Joe Hearst, and then just type in the word Verut. Uh, you'll find me there. And uh every once in a while uh I'll I'll throw a video up there uh with some of the newer uh regulations we're seeing come across uh across the line. And then yeah, if you email compliance ofvarut.com, we can take care of you there as well.
SPEAKER_02
38:12
Amazing. Well, I'll put all of that in the show notes just to make it easy for folks. But Joe, this was a fascinating conversation that I didn't know that I needed to have, but hopefully it helps the folks out there who are looking to better optimize their their cross-border freight between the US and Mexico. So thank you again.
SPEAKER_00
38:28
Thank you, Vlad. Thanks for dealing with all the acronyms. I appreciate it.
SPEAKER_02
38:32
It's part of the job, I guess.
SPEAKER_00
38:33
That's right.
SPEAKER_02
38:35
Thank you so much for tuning into this special edition from Cargo Rex. This is one of many series that we have planned. So if you have a chance to check out more of our content, please do hit the subscribe button. It helps a lot with growing the channel. And then also, if you want to support more content like this, head on over to CargoRex.io and consider becoming a premium or plus member. Offers a lot of benefits, all listed over on the website. Just hit the pricing tab over on the website and you can get signed up and even possibly be featured in one of these interviews just like this. Thank you so much.
