November 2003 | Commentary | Viewpoint

Finding the Real Silver Bullet for Cargo Security

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Cargo security is becoming a commonly used term defined and discussed differently depending on group or audience. But what is the real "silver bullet" needed to secure cargo? One answer rests in the capability to ensure the integrity of each container's contents.

With more than six million containers entering U.S. seaports annually, aboard more than 5,000 ships from greater than 50,000 port calls, what is the first step? Port authorities and terminal operators have installed millions of dollars worth of facilities perimeter security such as cameras, fencing, facility access controls, and enhanced gates. Regulatory initiatives have provided funding for these security improvements.

In addition, the U.S. Department of Homeland Security has reached out to other foreign agencies to build partnerships that are mutually beneficial.

Carriers are adhering to these regulatory requirements, such as the 24-hour manifest rule, and working with their customers to receive critical shipment information at earlier points in the life cycle.

The RFID Mandate

Closer attention is also being paid to cargo tracking. Recently, Wal-Mart took an unprecedented step and set a mandate for their suppliers—by January 2005, the top 100 suppliers must be able to track pallets of goods utilizing RFID tags.

Now the question becomes: Will it take until January 2005 and a Wal-Mart lead for the next step in cargo security? Can we, as a country, sit back and wait another 14 months to see how Wal-Mart and its partners make this work—in the meantime, leaving us potentially vulnerable to another terrorist attack, which would further impact our economy?

The first step must be a coordination of all parties participating in cargo movement. Intermodal, ocean, and terminal operators/stevedores must consistently provide their information on a real-time basis.

But, if information from within the supply chain is readily available, have we secured the supply chain? We need to ask this question: Can we be sure that a shipper will not falsely declare a shipment's contents and enable a container to explode inside one of our seaports or largest cities?

With the question of information integrity now in the forefront, how do we further secure the supply chain when we cannot necessarily trust all the data being provided?

All shipment information should be required from the point of the shipment's origin in advance of container stuffing. The location where the goods are initially stuffed into a container is the initial point at which information should be captured.

The shipper, therefore, bears the responsibility for one of the most important parts of cargo security: the first piece of cargo information.

The shipper may, however, have already booked the container on an intermodal or ocean carrier. Subsequently, the booking information may then actually be the first piece of shipment information, making the warehouse data the first actual piece of tracking data.

Closing Up the Gaps

Another issue arises when cargo originates in a country on one carrier, and is then transferred to another carrier for transshipment. The last port, prior to arrival at a U.S. port, therefore, is not the cargo's origin. Visibility to the shipment's "complete" movement is not apparent.

This gap in the information supply chain may provide enough of a window to enable questionable cargo to be overlooked. When factory floor data is required, however, this gap would be visible because the origin and last foreign port are incongruent.

Using these variances in the supply chain, a decision format should be established based on the types of information available from each entity. Irregularities should be identified and managed systematically, subsequently initiating an alert.

Information obtained from electronic tags/seals, operational messages, rail event messages, terminal employee access cards, and the like provide the basis for setting up the matrix. Examples of these items include, among others: commodity description on billing record differs from manifest; cargo has been booked from a "high risk" port; electronic seal has been violated; the shipper or consignee is unknown.

Once all events or non-events in the supply chain have been mapped out, a process should be established to handle each occurrence. Severity levels and response times for all items must be outlined. This enables proactive management of the cargo. Shipment data has to be effectively captured and interpreted into meaningful and actionable items or it is useless.

Take, for instance, a trip plan for a container of rugs moving from a warehouse yard in Tehran to a distribution facility in Chicago. The cargo physically originates at the factory in Tehran, then moves to a facility in Bandar Abbas where it is carried to the port facility and loaded on a ship.

A decision matrix rule has been set up that will trigger an alert for inspection and additional shipper security checks for any cargo originating in Iran. If the leg from Tehran to Bandar Abbas was not captured the trigger would not have been set off and a potential disaster might occur long before or when it reaches Chicago.

This is why comparing scheduled information with actual, real-time and complete cargo data becomes a necessity. Exception alerts distributed to designate individuals/groups for the action is now standard operating procedure. By creating a decision matrix, ranking the alerts, and outlining procedures based on the received information, the power to effectively manage cargo risk would be a reality.

The migration to full supply chain security involves the tight integration of operational information with data coming from electronic devices. This creates a real-time "window" into 24/7 cargo status regardless of transportation mode or location. Risk assessment is easily enabled because complete visibility has been achieved, and alerts have been triggered for proactive responses.

Throughout all this process and technology, the supply chain has been effectively secured without decreasing the flow of commerce. In addition to a more secure supply chain, other benefits include improved economics through better information planning, speed of cargo movement due to earlier and more accurate data, and faster cargo clearance releases

The "silver bullet" or answer to the question of real supply chain security, therefore, lies within the management and real-time actions taken as it relates to the information collected. The integrity of those six million containers arriving in U.S. ports is challenging, but not impossible. Because, just like everything else, it all starts at the beginning.

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