The Deputy Secretary of the U.S. Department of Homeland Security, Michael Jackson, is on the mark in his vision of securing our borders and commerce from terrorist access with information. In his luncheon address at the Sixth Annual Trade Symposium the Deputy Secretary presented a concept of international data sharing as a platform for security. A simple concept, good and timely information is essential for the right decision at the right time. Good and timely information for anti terrorism related to ocean containers is information that can stop a suspect container from being loaded on a ship bound for America or impose preventative measures at the foreign factory. Information from the factory and the container before final lading gives Customs and Border Protection (CBP) officials the ability to target and interdict on foreign soil. Michael Jackson’s vision is achievable with the information normally generated from: 1) fulfillment orders issued by importers, 2) compliance processes in place at the factories and 3) low cost technologies such as radio frequency identification (rfid) tags on boxes and GPS.
All information associated with factory completion of a fulfillment order including cargo loaded inside a container can be sent to CBP electronically and wirelessly at the time the order is filled. Existing technologies such as video surveillance already in use at foreign factories can be configured to permit Customs and Border Protection to "see" electronically and detect potential illegal activity anywhere-anytime. A supply chain exhibiting abnormal behavior can be targeted well in advance of final embarkation of containers to our ports.
Security information is fulfillment data that is assessed against rules and conditions that define normal supply chain operation. Validation of compliance to each rule is established through recording and tracking many transactions that occur during the normal fulfillment of a contract to produce, ship and receive goods. For example: the rfid tagging process and system is used to validate fulfillment; video surveillance and rfid validate the container contents, proper stuffing and sealing; and GPS validates route(s) and change of custody.
The fulfillment data originating at the foreign factory provides asset visibility and optimizes the importer’s ability to make real time decisions that directly affect revenue; i.e., optimizes supply chain agility. Access to this data over a highly secure network offers an availability factor and confidence in the quality of information not previously obtainable by importers.
Trusts but verify is the method to ensure that the foreign source is not compromised. Customs -Trade Partnership Against Terrorism (C-TPAT) is an ideal application of "trusts but verify" for supply chain security. C-TPAT is a CBP voluntary program.
A great majority of our critical supply chains are compliant with C-TPAT rules and procedures for supply chain security. These rules and procedures are designed to increase the security of supply chains end-to-end and have also contributed to changing the attitude and atmosphere at foreign facilities. I observed this transition at a factory in Manila while conducting an Operation Safe Commerce demonstration. My first visit was pre C-TPAT compliance; where I observed many day workers loitering in the entrance, unsupervised personnel moving freely around the loading area and containers being stuffed in an unsecured alley with open thoroughfare. The Post C-TPAT compliance environment was distinct, employee access controls had been implemented and armed guards controlled the loading area. As part of Operation Safe Commerce a well orchestrated covert attempt to breach the factory security and gain access to a container during stuffing was conducted. The exercise was terminated when factory personnel expelled the intruder well before his attempt to access the shipping and container areas. The exercise results were independent and positive validation of the factory C-TPAT program.
Our critical international suppliers are motivated and will comply as long as their costs are kept reasonable. Verification of a facility’s continued compliance to C-TPAT rules is achieved through the system of technologies that permit Customs and Border Protection to "see" electronically and detect potential illegal activity. A factory or supply chain exhibiting abnormal behavior can be detected and targeted for enforcement action or corrective action well in advance of an adverse affect to the importer or supply chain.
The Deputy Secretary’s vision can be accomplished on an accelerated basis with implementation of a comprehensive short and long term aggressive incentive plan that benefits importers for achieving certain levels of compliance. Examples of basic benefits would be zero inspections with the system installed vs. guaranteed inspections without and waiver of requirements such as the 24 hour rule, since the manifest is automated and received days or weeks in advance. An example of an aggressive long term incentive plan objective is 100% of the top tier importers having 50% of their critical supply chains in compliance before 2008. CBP should work in partnership with Trade and industry organizations to fulfill the vision.
Large retailers will realize basis point improvement due to better asset visibility and supply chain agility with proliferation of these systems. Real time supply chain data over a highly reliable network and velocity to market is a value to major importers. Real time supply chain data is necessary for homeland security and therefore of significant value to CBP. In the end we will be safer and confident that international commerce can continue and expand under threat conditions.
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