Initiatives to Increase Maritime Supply Chain Security

Several government and industry initiatives have been introduced in the past two years to improve the security of the supply chain segment that deals with shipping containers that travel across the waterways of the world. Thousands of the world’s 2,700 container ships (1) travel through the ports of America each day, unloading more than 17,000 shipping containers. These containers carry more than 80 percent of all U.S imports (4).

The shipping containers and ports must be protected to insure the nation’s security. A security attack on a U.S. port would cost the economy “several orders of magnitude” (in billions of dollars) more than the price to prevent such an attack (1). Due to the size and scope of maritime shipping, an attack on the maritime supply chain would take a long time to solve the security issues, while stopping or slowing shipping interests around the world (1). Supply chain security initiatives to prevent maritime attacks include:

• Container Security Initiative (CSI)
• Smart and Secure Tradelanes (SST)
• Automated Targeting System (ATS)

• Customs-Trade Partnership Against Terrorism (C-TPAT)

Container Security Initiative (CSI)

For the most efficient supply chain security process, prevention of problems entails security at the source. The CSI is a U.S. Customs program that encourages foreign governments to inspect and screen container shipments before leaving port to detect possible security problems. This program sets up the exchange of customs officers between countries so that outbound shipments to a country will be inspected by that country’s customs officers. The CSI focuses on 20 ports around the world where most imported products originate (2). The aim is to reduce the risk of problems on vessels and prevent an explosion in a port before the vessel can be unloaded. (2) Once a vessel departs port, security initiatives must be in place to prevent tampering with containers while in transit.

Smart and Secure Tradelanes (SST)

An industry initiative, SST, was established in October of 2002. The purpose is to identify the tampering of containers while in transit using automated tracking, detection and security technologies. Once the initiative is fully implemented, the goal is for these SST containers to quickly move through U.S. Customs, which is the next step (2).

Automated Targeting System (ATS)

U.S. Customs requires shippers to send a detailed description of cargo being loaded on a vessel destined for the United States at least 24 hours in advance of loading (2). Vessels will not be allowed into U.S. ports without this advance notice. Customs uses the ATS as advanced screening to help choose suspicious shipments to receive inspection.

Customs Commissioner Robert Bonner realizes inspections are costly and slow down the supply chain process (2). The ATS and CSI initiatives are designed to enhance the effectiveness of inspections instead of increasing the inspection rate. Source inspections and detailed prescreenings increase security while also allowing an efficient supply chain process. To increase security and improve the supply chain, the U.S. government is also encouraging companies to streamline their documentation and material handling processes through the Customs-Trade Partnership Against Terrorism (C-TPAT) program.

Customs-Trade Partnership Against Terrorism (C-TPAT)

The C-TPAT is a program for manufacturers, suppliers, importers and carriers to analyze their own supply chain security processes. It encourages these companies to improve their supply chain security plans, communicate security plans with their trading partners and suppliers, and monitor and improve their security measures on an ongoing basis (3). Once these companies are C-TPAT certified by the government, their products will be able to proceed through ports and border crossings much faster. They will also develop a closer working relationship with U.S. Customs and other C-TPAT certified companies. The C-TPAT program will enable companies to avoid transportation costs associated with border delays; reduce inventory needs by having a secure, reliable supply chain; and improve supply chain relationships with suppliers and customers (3). More than 500 companies have joined the C-TPAT program to increase their supply chain security processes (3).

Due to the events of September 11, 2001, the government requires specific security measures. These measures are currently being implemented and improved, and will evolve to increase security and shipping efficiency over time. Much of the responsibility is on companies to improve their security process all along the supply chain. Companies must “optimize a secure supply chain in the most cost-effective manner.” (2). Companies that do not have a secure supply chain will eventually lose customers, become less competitive, and be much less efficient.

References:

(1) Edmonson, R.G. Beyond Calculation. August 25, 2003. Journal of Commerce.

(2) Lee, Hau L. and Wolfe, Michael. Supply Chain Security Without Tears. Jan/Feb. 2003. Supply Chain Management Review

(3) McGuire, Michele. The New Era of International Supply Chain Security. November 2002. World Trade.

(4) Press release for SST initiative. Referenced on September 13, 2003