Security is not an option

Security is not an option

Does it matter where in the world you operate your business? In today's global market, an incident or attack involving a critical segment of the transportation infrastructure is certain to affect you, whether your business is in Berlin, Germany, or Berlin, Va. Every-one involved in this interconnected global economy has to make decisions on the cost and pricing of products and services and the overall profitability of the business.

Deciding not to invest in new security protocols, either procedural or physical, because they are too expensive may appear to be a necessary and logical business decision. If you choose to invest in new security protocols and your competitor does not, it may mean that you have to raise rates. This, in turn, could drive business away from you and toward your competitor.

Let's take the question of increased security and/or protection and apply it to a moderately sized city with five hotels. Four of the five hotels have great security procedures, and the fifth hotel has none. What logical assumption can be made about the vulnerability of the fifth hotel? Right. Its guests will be more vulnerable to being robbed, assaulted or even being victimized by a terrorist attack. However, should the fifth unsecured hotel fall victim to a terrorist attack, all hotels will lose substantial revenue and business, not just the unsecured one that decided not to invest to security procedures.

The same principle can be applied to companies operating within every aspect of the global transportation industry. A successful attack on this vital conveyor of the global economy will impact everyone in every corner of the world. Consequently, everyone in-volved in the transportation sector bears responsibility as a global citizen to in-corporate deterrents in their operations.

"America the Vulnerable," a recent book by Stephen Flynn, received much attention for its unabashed look at security shortfalls since Sept. 11. Flynn addresses a multitude of critical security failures and shortfalls by the public and private sector. A pivotal point that I focused on is the "absence of clearly defined and well-enforced government security requirements," wherein the ability of implementing better security procedures are hamstrung.

This lack of well-defined security requirements has a negative impact on the individual company attempting to implement security procedures. That is because a company that invests in protective measures for the part of the infrastructure that they own, places itself at a competitive disadvantage due to the aforementioned increase in the cost of doing business. As Flynn points out in his book, approaching security and protective measures investment on an individual-company basis illustrates the "tragedy of the commons." This theorem, first proposed by William Foster Lloyd in 1833, holds that if individuals or companies are left to their own accord, they will look out for themselves, not for the common good.

If one applies the "tragedy of the commons" to the issue of investing in security measures, the theory would apply as follows: Securing a particular company's assets involved in the larger global transportation infrastructure is accompanied by certain expenses. A company may be reluctant to take on that additional financial burden to achieve intangible benefits. If that "company does not believe other companies are willing or able to make a similar investment, then it faces the likelihood of losing market share while simply shifting the vulnerability" to a competitor. Furthermore, in the event of an attack, the company that has made the investments will suffer right along with his competitor that has not.

Put more succinctly, if left un-checked and unregulated, individuals will do what is good for them and their company, not what's good for the industry. No business owner wants regulations that will make conducting business an even more arduous activity. Notwithstanding those concerns, the burden of securing the global transportation infrastructure does not fall on the shoulders of national governments alone, but on each company and individual involved in and profiting from that industry.

Each of us in transportation must commit ourselves to taking appropriate and rational deterrent measures that will bolster other security initiatives undertaken by both the public and private sector. While we will never be able to completely shield ourselves from those who wish to harm us and our friends and allies around the world, we must strive to deter them in every conceivable way. Security is everyone's obligation and the costs to implement necessary measures are insignificant compared with the potential costs incurred by damage to the global infrastructure and economy.

Boris A. Populoh is director of programs and education at the Household Goods Forwarding Association of America in Alexandria, Va. He can be reached at (703) 684-3780, or via e-mail at boris.populoh@hhgfaa.org.