Competitive advantage

Competitive advantage

In the weeks after the Sept. 11 attacks, some U.S. pundits criticized Canada for what they saw as a lackadaisical attitude toward border and supply-chain security. Canadian officials say the criticism was unfair then and even more unfair now.

"I believe it is part of a cultural misinterpretation of the way Canada does things," said Chris Badger, vice president of customer development and operations at the Port of Vancouver, British Columbia. "We do tend to be perceived by the world as a little more relaxed, and a little more laid-back, and we do approach things differently."

Different isn't necessarily bad, said Badger, who joined Marc Gregoire, assistant deputy secretary of Transport Canada, in discussing security this month in Vancouver at the annual conference of the Association of Canadian Port Authorities.

Badger said that with supply-chain security, U.S. and Canada take different paths toward the same goal. After 9-11, the U.S. moved quickly to centralize decision-making under the new Department of Homeland Security. Badger said that approach enabled the U.S. to secure approval of new International Maritime Organization rules in phenomenally short time.

Canada, by contrast, has taken a decentralized, multiagency approach. Although this can be seen as decision-making by committee, Badger said it also has benefits. "It's more difficult to get consensus among the various agencies and groups, but once you have that consensus, you have buy-in from the various parties. Canada's system may be a little more slow, but once you've got buy-in among the sectors and regions, you can be more comfortable in allowing them to make decisions that are specific to their area."

Badger and Gregoire said Canada is determined not to be considered a weak link in supply-chain security, for two reasons. First, Canadian officials don't want their country's transportation system to be a target of a terrorist attack. Second, there's a competitive element - they don't want anyone to think that competing U.S. ports have better security. U.S. ports "would have a competitive advantage if their ports were seen as being more secure than Canada's ports, which is something we don't want," Gregoire said.

Badger said poor security should be seen as a competitive disadvantage for a port, but that ports should not see security as way to gain a competitive edge. He said security standards should be high everywhere, with no lapses, and that the various layers of security should be almost invisible to the day-to-day supply chain.

Instead of competing on security, he said, ports should compete on upgraded operations that result from security-driven improvements to technology and communications. Badger said that's where Canada's decentralized decision-making helps. "If you have regional agencies comfortable with making decisions on security, they can come up with idea that can improve operations as well as security. That's where you can gain a competitive advantage."

Joseph Bonney is editor of The Journal of Commerce. He can be contacted at (973) 848-7139, or at jbonney@joc.com.