After the tragedy of September 11th, U.S. Customs and Border Protection (CBP) and its government partners implemented several intermodal cargo security initiatives to defend against an attack that could devastate the U.S. economy. Chief among these initiatives is a system designed to pinpoint and inspect cargo containers that may pose a terrorist threat.
The system in place today, however, must strengthen inherent weaknesses and evolve to meet economic, geographic, and political challenges of the next decade that threaten to constrain federal capabilities. Accompanying this evolution will be major changes in the two burdens that container targeting places on business: the 24-Hour Rule and cargo inspections. Supply chain managers must consider how the system will change if they hope to plan effectively for safe and efficient trade in the coming years.
In the weeks following 9/11, CBP had to employ an “implement and amend” approach to supply chain security, forming regulations quickly and adapting them over time. That adaptation has only just begun. Targeting and inspection processes must cope with the fact that maritime trade is expected to double by the year 2020, if not much sooner. Port space, throughput, and security funding already face limits in the United States and abroad. And political battles over security program results and annual budgets cast a cloud of uncertainty over the CBP layered approach to security.
Meanwhile, how CBP chooses to address several system weaknesses could affect the entire targeting system and supply chain management. First, the 24-Hour Rule and maritime container targeting depend on the success of two related programs, the Container Security Initiative (CSI) and the Customs-Trade Partnership Against Terrorism (C-TPAT), both of which face implementation problems of their own. CBP must overcome limitations in its information technology, particularly the Automated Manifest System and the new Automated Commercial Environment, for more effective targeting. And CBP must incorporate additional information in its computer targeting beyond vessel manifests, which do not present the most precise picture of a container and its contents in real time.
American companies must take greater responsibility for individual supply chain security using sound risk management principles. In light of federal changes on the way and the need to mitigate supply chain disruptions, supply chain managers should 1) join C-TPAT to reduce inspection risk; 2) divert shipments to safer channels to reduce inspection risk; 3) adjust inventory management to prepare for inevitable trade disruptions; 4) prepare for shipment data reporting earlier in the supply chain; and 5) prepare for broader document and data reporting requirements.
Because U.S. and global trade are truly one and the same, the protection of U.S. supply chains going forward will have to involve a more international effort that is best led by free-market industry, in conjunction with customs authorities.
This section appeared in Manzella Trade Communications' report Averting Disaster: The Future of Cargo Security and How Supply Chain Managers Must Prepare, 2005.Understand dynamic global markets.
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