At six pages, the new National Strategy for Global Supply Chain Security is a slim document that, although short on details, serves as a strong indication that securing global trade is a matter of national security and economic vitality. It’s a concept firmly embedded in the government’s DNA.
It’s not the first time the Department of Homeland Security has published a supply chain security strategy. It is, however, the first to look at the issue on a global scale, and shines a new light on the importance of supply chain resilience — the ability to resume normal commerce after it’s disrupted by a natural or man-made catastrophe.
That Homeland Security Secretary Janet Napolitano would introduce the strategy at the World Economic Forum in Davos, Switzerland, only underscores its importance.
“DHS has a lot on its plate, and hopefully this will get the energy and commitment of the secretary on down. It obviously has her attention,” said Scott Bates, president of the Center for National Policy. “At a time when the president has placed economic growth and security as a top priority, as he said in the State of the Union, this is part of the execution of that vision.”
Risk management and a layered approach to security has been Customs and Border Protection’s doctrine since the September 11 terror attacks. It’s familiar to any shipper participating in the Customs-Trade Partnership Against Terrorism, or any importer or carrier that files cargo data in advance under Importer Security Filing rules.
“The United States is making the point that the integrity of the international supply chain is important to us,” said David Heyman, DHS assistant secretary for policy. “If you’re going to do business with us, we want to make sure that low-risk goods are moved expeditiously through the system, and that we have confidence that if there are disruptions, we’re going to be able to rapidly recover.”
Risk-based targeting has been part of the surface supply chain for a decade, and now Customs and the Transportation Security Administration are taking the system to protect inbound international air cargo.
“The challenge of international supply chains makes aviation security look easy,” Heyman said. “You have all the different countries involved, air, land and sea modes, and you have the movement of everything from raw materials to manufactured goods, to distribution and delivery.”
It will take years to complete the security net, but Napolitano has taken the first steps. In the last half of 2011, she met with the World Customs Organization, International Maritime Organization, International Civil Aviation Organization and Universal Postal Union.
“The secretary has made significant strides in addressing the challenges we face on an international level,” Heyman said. “We are more secure at home the sooner we are able to identify, investigate and interdict threats. That means engagement internationally.”
Supply chain resilience, meanwhile, is a concept long in Customs’ sights but, even with a resilience director on the National Security Council, one that has largely been on the back burner as the agency developed programs to prevent terrorists from using the supply chain as an attack vector.
The evolution of the global supply chain to a just-in-time delivery model demonstrates not only the efficiencies built into the system but also just how vulnerable the movement of goods today is. Just as a Hurricane Katrina can disrupt the flow of steel and forest products to far-flung countries in Europe, Asia and South America, an earthquake in Japan can paralyze production of automotive factories in Louisiana and Tennessee.
“Resilience is embedded in the national security structure, and now you’re seeing it come through in DHS planning,” Bates said. “It’s not just the language, but the promotion of resilience as a value across the federal government, and making it a national goal. I think people are more sensitive to the idea that we’re all linked in. Now we’ve seen the downside to the global supply chain, when just one piece of that network is disrupted.”
“It’s incumbent on government and the private sector to take a look at this system.” Heyman said. “It was built for efficiency, but we also need it to be reliable. There is a false belief that if you add security, you increase delays. We can design systems where we find the sweet spot between economic efficiency and security.”
For Bates, the national strategy isn’t as much the final word on the subject, but the vehicle to draw shippers and carriers into a continuing discussion. “I think DHS launched this as a way to focus all the players. The private sector has practically all the stakes,” he said.
In the course of daily business, Bates said, the private sector can easily overlook security and resilience. “They’re not focused on this day-to-day, so this is where the government can play a catalytic role,” he said. “That’s what this strategy is: an attention getter.”