10 Innovations for Cargo and Supply Chain Security

Global sourcing relies on an extended multimodal transport system with security vulnerabilities. Aggressive thieves exploit any lack of security preparation, and the line between terrorism and piracy has become increasingly blurred. Logistics suppliers and authorities in charge of customs and border security are responding with sophisticated and integrated techniques for protecting cargo and supply chain security.

These techniques have spurred innovations in shipment processes used, technology tools applied and regulatory compliance required to enhance logistics security efforts. The comprehensive regime of processes, technology and regulations is shaping a strategic solution to security issues that provides the control necessary for secure shipping at every stage of the supply chain.

The benefits from reduced shipment theft and loss fully justify the time and money invested for implementation. The following 10 innovations are at the forefront of new security tools.

1. Shipment tracking.
The most sophisticated electronic shipment tracking systems are customized, interactive, transparent, available 24/7 and allow users at any time to see where a shipment is and what it consists of — down to individual item descriptions, quantities, product codes, vendor or consignee identities, and countries of origin and destination. They provide automatic alerts for key events (loading, sailing, arrival and delivery) and allow customers to query their shipments online using purchase order numbers and SKU product codes. Such systems are password-protected and encrypted for added security. As a result, shippers always know the status of the shipment and can immediately identify any disruption that requires remedial action.

2. Geofencing.
The use of this technology is becoming more widespread. In it, the carrier essentially puts a virtual “fence” around the route the load is scheduled to travel from pickup to delivery. A Global Positioning System tracking device allows the carrier and shipper (marine, truck or rail for intermodal methods) to follow the load along the route. All parties are alerted the moment the load veers off the planned route or the device itself is impacted, initiating immediate remedial action to recover the shipment.

3. Electronic seals.
These high-alert devices send an instant alert to the security team monitoring a shipment if container or transport vehicle seals are breached. Units incorporate industry standard security seals and bolts and typically use a combination of the global system for mobile communications and the GPS system for tracking and positioning. Devices can be fitted to any standard container, offer weeks of operation before recharging is needed and provide immediate notification if a shipment or seal has been tampered with. The best devices are part of a fully managed tracking system through a control center to monitor and act on alerts as they occur.

4. ISO 28000
The International Organization for Standardization 28000 standards series on supply chain security management provides a comprehensive framework to address theft, terrorism or piracy. It specifies the requirements for a security management system and offers certification and registration of conformity either by an accredited third-party organization or through self-determination of conformity. ISO 28000 can be used by organizations of all sizes and with all transportation modalities to address strategic and operational security issues.

5. Coordinated best practices.
Practical application of ISO standards must be coordinated for each transportation mode. In truck shipment, for example, loads should travel in an ISO container instead of a more vulnerable trailer. Seals should be placed on the container to demonstrate the shipment hasn’t been compromised. Use of an air cuff lock on the tractor (which prevents the truck’s brakes from being released) is an additional precaution.

6. Marine Security: ISF
U.S. Customs and Border Protection has created rules for an Importer Security Filing that requires importers to submit security-related information on their shipments at least 24 hours before the goods are loaded on an ocean vessel. The ISF filing must be made electronically and includes 10 categories of detailed identification and individual line-item information regarding the manufacturer, shipper, consolidator and importer, as well as information on the shipping container stuffing location and various shipment identification numbers.

7. Air Security: CCSF.
U.S. government standards mandate 100 percent security screening of all cargo transported on aircraft. The Transportation Security Administration isn’t responsible for the screening of cargo, which is to be handled by a Certified Cargo Screening Facility that can be a shipper’s own facility, a freight forwarder or an airline. Forwarders approved by the TSA can meet the air cargo security rules by using electronics to document the integrity of a shipment throughout the supply chain by utilizing stringent chain-of-custody methods.

8. Ground security: C-TPAT.
The Customs-Trade Partnership Against Terrorism is a cooperative cargo security effort between CBP and the full supply chain of importers, carriers, consolidators, licensed customs brokers and manufacturers. Customs asks these businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their supply chain partners, as affirmed in meetings with and inspections by CBP agents. As one example, trailer and container integrity of motor truck shipments from Canada or Mexico approved through C-TPAT must be maintained by using high-security seals and related procedures.

9. Risk profiling: CHIEF.
Other countries are implementing their own integrated security and customs programs. In the United Kingdom, for example, the country’s Revenue and Customs Agency interacts with the Border Agency to ensure freight security, and it has developed a number of new programs to facilitate security screening of import shipments. Key innovations include Customs Handling of Import-Export Freight, or CHIEF, which uses a sophisticated risk-profiling system to identify goods that require documentary or physical examination while using electronic communication between customs and business users. Using EDI inter-system messages, CHIEF checks that the data on the customs declaration matches the inventory maintained on each of six independent trade systems nationwide.

10. Insurance integration.
Insurance and security management for shippers and freight forwarders continue to integrate. The new Rotterdam Rules that include carrier liability terms in individual, confidential contracts clearly document responsibility and liability during the whole transport process and dovetail with customs and security regimes for multimodal shipments. Just as qualified forwarders can secure approval from security regulators to conduct the required screening and itemizing, so too can they use their knowledge of Incoterms and electronic tracking systems to compile the detailed bills of lading required under the Rotterdam Rules. The result is one-stop security and insurance oversight that benefits all shippers.

Simon Kaye is founder and CEO of Jaguar Freight Services, a Valley Stream, N.Y.-based global logistics provider. Contact him at simon@jaguarfreight.com.
 

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