What price security?

Although fuel costs, tight capacity and driver shortages have been top-of-mind concerns lately for logistics professionals, the terrorist bombings in London last month have underscored the pressing need for supply chain security. While business as usual resumed in the U.K. within a day of the attacks, other European countries as well as the U.S. responded by heightening alert levels for their own mass transit systems.

Just one week prior to the first attacks in the U.K. (at press time, London had been hit twice in two weeks), Rosalyn Wilson called for a strengthening of security measures designed to combat terrorism, while on the same day (June 27) U.S., Canadian and Mexican officials met to discuss the North American Security and Prosperity Partnership (www.dhs.gov) initiative. Wilson, who was presenting the State of Logistics Report, sponsored by the Council of Supply Chain Management Professionals (www.cscmp.org), highlighted the need for more training and various standards in security processes.

Meanwhile, the ministerial-level meeting in Ottawa, Ont., focused on "building strong relationships" to "further common security goals and achieve transformational improvements."

Ironically, both events were focused on prosperity. The State of Logistics Report highlighted logistics costs to the U.S. as well as the overall economic impact of logistics. The homeland security event stressed the fact that "security and prosperity go hand in hand."

U.S. Commerce Secretary Carlos Gutierrez called for a regional strategy as the inter-governmental group agreed to establish a single integrated North American Trusted Traveler Program within three years.

An earlier meeting of President George Bush, President Vicente Fox and Prime Minister Paul Martin had set goals of implementing common border security and bioprotection strategies. They identified the need to enhance critical infrastructure protection and implement a common approach to emergency response. The three leaders also set a goal of implementing improvements in aviation and maritime security, to combat trans-national threats and enhance intelligence partnerships. In addition, they called for implementation of border facilitation strategies to build capacity and improve the legitimate flow of people and cargo at shared borders.

Rosalyn Wilson's approach is more concrete. After noting that most security spending has been in the area of passenger aviation, she points out that the greatest security risk in the cargo supply chain is with ocean cargo containers. With millions of containers entering the country each year, the potential impact of a port closure for security reasons would be massive. "The labor shutdowns at West Coast ports in 2002 cost about $1 billion per day in lost commerce," she points out by way of example.

Looking at various security programs, Wilson notes that the Maritime Transportation Security Act (MTSA) established the International Port Security Program (IPSP) to promote reasonable and consistent implementation and enforcement of enhanced security that begins with vulnerability studies, documentation and sharing of industry best practices and development of vessel and facility security plans. The Container Security Initiative (CSI) established the means for maritime containers deemed to pose a risk to be identified and examined at foreign ports before shipment to the U.S. And, finally, the Customs-Trade Partnership Against Terrorism ( CTPAT) is a joint initiative between government and business to protect the security of cargo entering the U.S.

A recently completed study by the U.S. Government Accountability Office (GAO) (www.gao.gov) notes that issues ranging from funding to staffing levels at overseas ports translated into 35% of U.S. bound shipments from CSI ports not being targeted or subject to inspection, cautions Wilson. The report goes on to state that 28% of containers referred to the host government for inspection were not inspected.

Though C-TPAT shippers represent 40% of U.S. imports by value, says Wilson, only 11% of the 9,000 current CTPAT members have been validated. The U.S. Bureau of Customs and Border Protection (CBP) (www.cbp.gov) has no written guidelines to indicate what scope of effort is adequate for the validation process, Wilson notes. A significant risk, she says, are the C-TPAT containers that receive less scrutiny and could be used by terrorists given the current limited resources for inspection and enforcement.

Standardized evaluation criteria must be developed and training must be applied consistently at all ports, she continues. Inspection equipment such as x-ray and radiation detection equipment and the requisite training should be standardized across ports.

Container seal standards should be established, including seal verification and processes for dealing with seal anomalies. Guidelines for validation under CTPAT must be developed along with certification of third-party entities to perform those validations, Wilson adds. The latter is necessary to process the backlog of applications.

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