October 2006 | Commentary | Risks and Rewards

Cargo Security: Collaborate, Prevent, React

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Q: With all the cargo security initiatives that have been implemented recently, what can transportation companies expect for the future?

A: After the Sept. 11 terrorist attacks, both government and industry launched unprecedented efforts to ensure cargo safety throughout the transportation chain. Despite these collaborative efforts, maintaining a safe and secure transportation system remains a significant concern.

Last summer, for example, German authorities investigated the circumstances surrounding two pieces of luggage containing propane gas that were left at separate railway stations. In one incident, the station was evacuated until the device could be removed for disposal.

In an incident closer to home, the Port of Seattle was closed for several hours in August when a dog trained to detect explosives reacted to two sealed containers that originated in Pakistan. While a full inspection of the contents failed to identify any dangerous material, the incident caused a major disruption to the port's operations and to the surrounding area.

In addition, the National Cargo Bureau recently issued a sobering report on the findings of an exercise in which it opened 25,000 containers to check their contents against their cargo declarations. Approximately 32 percent of the containers did not comply with hazardous cargo rules, and authorities halted their movement.

Good Security equals Good Business

Faced with the prospect of having to deliver goods faster and cheaper, some shippers and carriers need to be convinced that time and energy spent on security initiatives makes good business sense. Breaches of routine security standards can, in fact, have significant implications.

Delays and losses caused by security lapses can result in loss of business, damage to good will, and significant direct costs. In the Seattle terminal incident, for instance, the forwarder that arranged the container shipment is being held responsible for all costs and claims resulting from that incident.

At a recent cargo security conference in Washington, logistics operators were asked to suggest ways transportation stakeholders could ensure safe, efficient, and economical cargo delivery. Among the responses was the suggestion that we unify security standards—both national and global—perhaps using the C-TPAT private-public partnership as a model.

Most participants agreed that greater collaboration among shippers, transporters, and government interests will help them clarify their roles and responsibilities, as well as outline affirmative steps that each participant along the transportation chain must undertake. In their view, a system lacking unified standards leaves operators to their own devices when determining what security measures to employ.

Partnerships are Powerful

A move toward greater collaboration appears to be occurring in the government sector. The Senate recently approved a bill that requires inspection of certain high-risk cargo at foreign ports, and expedites incoming cargo from previously approved manufacturers and other business partners.

In addition, The Department of Homeland Security recently completed a risk management framework called the National Infrastructure Protection Plan (NIPP), which will formalize and strengthen existing partnerships it has with national industries. The NIPP identifies 17 critical infrastructure and key resource sectors, including aviation, maritime, and surface transportation, with which it intends to create a baseline for public and private security collaboration.

Security 'CPR'

Until cargo security becomes standardized, logistics professionals in today's security-conscious environment are well served by adhering to these simple measures, represented by the acronym "CPR":

  • Collaborate with your public and private partners, and determine the roles and responsibilities each party will assume to ensure that your goods are transported safely, efficiently, and expeditiously.
  • Prevent a transit stoppage or other incident by implementing minimum security standards and establishing a loss prevention program. A growing number of operators view security measures as a tangible value-added service for their customers.
  • React to any feedback you receive that will improve your security measures, and prepare a response plan in the event of an emergency.

Even before the Sept. 11 attacks, cargo security was a significant risk for shippers and transporters. The terrorist attacks added a new risk dimension to business and national security.

But regardless of whether security measures are aimed at preventing loss or damage to goods, illegal contraband, or criminal acts, the transportation industry has a financial stake in successful cargo security over the long run.

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