It is likely that CSI and C-TPAT compliance standards will drive the establishment of new global security standards, possibly through the 159 customs administration members of the World Customs Organization. These, plus the results of pilot risk assessment and security improvement projects, can be expected to force changes in the management of global supply chains.

            Three trends in particular seem to be emerging:

            •Migration of security and documentation responsibilities toward the manufacturer/importer at the beginning of the chain.

            •Centralization of supply-chain processes under a single party with the ability to manage multiple supply-chain assets and vendors via an integrated IT platform.

            •Outsourcing of supply-chain integration and management functions to a third-party lead logistics provider (LLP), particularly those with assets and operational control, to take advantage of specialized expertise, partner relationships and economies of scale.

            Whether managed in-house or through an LLP, an ability to see the big picture of the supply chain, effect technical and operational changes across the entire chain, understand the technicalities of security compliance, and control costs, will be critical as companies pursue the dual-track goal of security and value.

            Where supply-chain productivity concerns itself with streamlining for speed and flexibility – stripping out unnecessary steps, decision-making layers and so forth – security considerations focus on thoroughness. It is less about slowing down processes than about ensuring that processes are done correctly as planned, and that no gaps exist which permit unauthorized activities to take place. Security concerns focus on four key points in the supply chain move.

Container loading

            At present, a freight booking generates release of a container to the customer’s premises and trucking arrangements, for pick-up of the cargo. The container may be sealed by the manufacturer or shipper at time of loading, or by the ocean carrier at time of receipt at the origin port container yard. Mechanical container seals vary in their resistance to tampering, from indicative seals – wire or plastic strips bearing their unique container identification numbers – to barrier seals that are heavy bolts bearing the identifiers.

            These procedures are expected to change to barrier seals due to security concerns. In all cases, the shipper will likely be responsible for providing and affixing tamperproof seals at time of loading in accordance with C-TPAT or comparable international standards.

            Ocean bill of lading and cargo manifest data typically derive from shipping instruction and container yard receipt information – in other words, initiating documentation prepared after the container is loaded and at the time it is received for loading aboard ship. This overrides information taken by the carrier at the time of booking, which may often be different as transaction terms and shipping decisions change.

            From a security standpoint it is preferable to capture and enter this initial bill of lading information as early as possible in the supply-chain process – at minimum as the container is loaded and sealed, as verified against the purchase order. When linked to the specific container and verification of the container seal, this data forms the basis of all subsequent shipping documentation a step further back in the chain. Electronic replication of it eliminates errors through re-keying that might prompt exception alerts and subsequent delays.

            Beyond what is in the container, information on the shipper-of-record, consignee, country-of-origin, destination and routing are also important. Matching these and other data points with container loading information is central to cargo pre-screening efforts under programs such as CSI.

            All of these steps place new burdens on shippers and logistics providers to hire and train factory employees, truck drivers and terminal employees in data entry; introduce stricter procedures for weighing, counting and certifying cargo and equipment; report shortages and overages; and spot and report inconsistencies. It may also entail placing audit personnel on factory premises, or installing enterprise resource planning software and systems.

            Several shipping companies and LLPs already have comprehensive documentation and tracking systems and supply-chain parties whose processes are not fully web enabled will find themselves at a serious disadvantage in achieving full security compliance. A growing number of global shippers and intermediaries handling their own logistics are turning to multi-carrier portals such as GT Nexus, CargoSmart and Inttra, which offer services such as ocean and rail shipment booking, scheduling and tracing; customized management reports; e-mail notification and exception alerts; and cargo planning and order management.

In transit

            Single-party responsibility and asset control are particularly advantageous in maintaining the security of goods in transit. Shippers must begin to consider factors such as whether the containers used for its shipments have truly tamper-proof seals; whether ships might be registered under flags of convenience with lax certification rules and employee screening for officers and crew; whether rail cars are dedicated or common user; whether truck operators are under contract, screen drivers and use driver teams for fewer stops; whether rail cars and trucks are fitted with GPS locator systems.

In facilities

            When it comes to security, port and inland terminals, container freight stations, transloading facilities, inland intermodal terminals, consolidation and distribution warehouses may all be among the weakest links in the supply chain. It is at these facilities that cargo sits idle – and potentially vulnerable – the longest during a move (the potential for piracy or attack at sea is more limited). The following are among the questions that might reasonably be asked during any initial threat assessment:

            •Is the cargo being routed through facilities with C-TPAT or equivalent certification?

            •Does the shipper or LLP have ownership or contractual leverage over the facilities it uses?

            •Are the perimeters of container storage areas secured with adequate fencing, surveillance and patrols?

            •Is a designated security officer on the premises to supervise entry/exit of cargo?

            •Are employees screened, and access restricted within the terminal according to job function?

            •Are procedures in place for monitoring containers, verifying seals and, where cargo is loaded and unloaded, verifying contents, count and weight?

            •Are procedures in place for reporting exceptions and suspicious activity?

            •Are gates configured, with procedures in place, to prevent unauthorized entry and removal of cargo?

            As with normal supply-chain operations, contingency planning is also important. Handling, routing and scheduling flexibility must be built into the system to keep inventory moving and delivery commitments met in the event of inspection delays or an actual terrorist attack. This may include diversifying carriers, port gateways and/or regional distribution patterns under contract to ensure reliable, secure services and equipment if and when cargo flows must be quickly shifted.