Due to the unfortunate events of September 11, 2001, the war in Iraq and new threats of terrorism, the United States continues to examine its vulnerabilities. To keep America safe, new national security initiatives have been announced almost weekly.

To date, many security improvements have been made, including bullet proof cabin doors on airlines, stricter border crossing identification requirements, and the passage of both the Homeland Security and the Maritime Transportation Security Bills.

But how will this impact your supply chain?

Homeland Security’s New Initiatives

The new Homeland Security Department is responsible for analyzing intelligence on cyber, nuclear, chemical and biological terrorism, protecting the U.S. infrastructure, guarding our borders and airports, and coordinating responses to future emergencies. In short, Homeland Security combines the entities responsible for coastline, border and transportation security.

Although imperative to our country’s future safety, these measures have caused supply chain disruptions. To avoid problems associated with longer waits at ports and borders due to increased inspection and identification requirements, some supply chain managers have shifted to a “just in case” inventory, rather than depending on “just in time” delivery.

Cargo Inspection Improvements

The United States' 361 sea and river ports are responsible for the transfer of more than 2 billion tons of freight annually. Yet, until recently, only 2 percent of containers arriving here were inspected. Through new U.S. Customs initiatives centered on inspections, risk reduction and container security, this has improved.

In the past, Customs primarily used physical inspections to examine cargo. Today, technological inspections are becoming the norm. Not only do x-ray and gamma ray machines increase the speed of inspections, but they are more effective at detecting dangerous substances and/or suspicious materials than dogs or humans. Technology, however, is not error-proof and mistakes can cause delays.

Inspections at Home and Abroad

To address suspicious cargo entering the U.S., the Sea Cargo Targeting Initiative is in place. It includes the processing of all manifests through the Automated Targeting System and the standardization of Customs procedures and practices.

In addition, non-intrusive technology is being used to examine potentially high-risk containers and their seals. By doing this, Customs is trying to quickly separate cargo into general and high-risk categories, limiting any delays for general cargo.

Two other programs, the Container Security Initiative (CSI) and the U.S.-Canada Smart Border Plan, are now being used to scrutinize inbound containers. Under CSI, U.S. Customs personnel are stationed at 20 ports throughout the world, including Singapore, Antwerp, Le Havre, Bremerhaven, and Hamburg. These personnel, in coordination with the host country, identify and pre-screen U.S. bound containers before they are even loaded.

Since cargo destined for Canada and U.S. are often transshipped through each others' ports, both countries have assigned Customs personnel to inspect cargo bound for each others' countries. The ports currently involved in the Smart Border Program are Newark and Seattle in the U.S. and Vancouver, Halifax and Montreal in Canada.

Risk and Information Gathering

Information gathering is a key piece of U.S. Customs’ new approach. In fact, in February 2003, Customs enacted the 24 hour manifest rule. This requires carriers to electronically send detailed manifest information at least 24 hours in advance of loading cargo on a ship destined for the U.S. If Customs is unable to process the manifests in a timely manner, it could mean costly delays for shippers and carriers, and negatively impact your supply chain.

Another new initiative, the Customs-Trade Partnership Against Terrorism (C-TPAT), is a voluntary program designed to improve supply chain security. Participating businesses agree to self-assess their supply chain security, submit a supply chain security profile, create and implement a supply chain security program, and communicate C-TPAT guidelines to other businesses with which they work.

For doing so, participants may have fewer Customs inspections when their cargo arrives in the U.S. — a way to keep supply lines intact and running smoothly.

Improving Container Security

Currently under development are tamper-proof seals for containers that will indicate if containers were opened. Also being developed are new containers and global positioning system transponders which will track containers in real-time and determine if they alter course or schedule. As such, to expedite their shipping process, companies should think about obtaining these new products.

Adapt to Tomorrow's Changes

In order to comply with today's new security initiatives, supply chain managers need to stay abreast of new regulations and implement new procedures. And this may require the purchase of new technology and equipment.

But to successfully keep your products flowing tomorrow without disruptions, you may need to develop a new and flexible strategy that will keep you one step ahead of the curve.

This article appeared in Crain's Detroit Business, April 2003. (CO)

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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