Supply-chain security refers to efforts to enhance the security of the supply chain, the transport and logistics system for the world’s cargo. It combines traditional practices of supply-chain management with the security requirements driven by threats such as terrorism, piracy, and theft.
Typical supply-chain security activities include:
- Credentialing of participants in the supply chain
- Screening and validating of the contents of cargo being shipped
- Advance notification of the contents to the destination country
- Ensuring the security of cargo while in-transit via the use of locks and tamper-proof seals
- Inspecting cargo on entry
Key Initiatives
There are a number of supply-chain security initiatives in the United States and abroad, including:
- The Customs Trade Partnership against Terrorism (C-TPAT), a voluntary compliance program for companies to improve the security of their corporate supply chains.
- The World Customs Organization (WCO) adopted the Framework of Standards to Secure and Facilitate Global Trade in 2005, which consists of supply-chain security standards for Customs administrations including authorized economic operator (AEO) programs.
- The Container Security Initiative (CSI), a program led by U.S. Customs and Border Protection in the Department of Homeland Security focused on screening containers at foreign ports.
- The Global Container Control Program (CCP), a joint United Nations Office on Drugs and Crime (UNODC)/World Customs Organization (WCO) initiative working to establish effective container controls at select ports across the globe with the aim to prevent trafficking of drugs, chemicals and other contraband and to facilitate trade by strengthening cooperation between the customs, trade and enforcement communities.
- The Global Trade Exchange, a DHS data-mining program designed to collect financial information about shipments, with the objective of determining safety of cargo shipments are safe.
- Efforts for countries around the world to implement and enforce the International Ship and Port Facility Security Code (ISPS Code), an agreement of 148 countries that are members of the International Maritime Organization (IMO).
- Pilot initiatives by companies in the private sector to track and monitor the integrity of cargo containers moving around the world using technologies such as RFID and GPS.
- The International Organization for Standardization have released a series of Standards for the establishment and management of supply-chain security. ISO/PAS 28000 Specification for Security Management Systems for the Supply Chain, offers public and private enterprise an international high-level management standard that enables organisations to utilise a globally consistent management approach to applying supply-chain security initiatives. ISO/IEC 20243 is The Open Trusted Technology Provider Standard (O-TTPS) (Mitigating Maliciously Tainted and Counterfeit Products) that addresses supply-chain security and secure engineering.
Security Criteria
In the midst of elevated global trade security risks and regulations, companies are positioning their supply chains to overcome these challenges and to create new opportunities in the marketplace. The success of a business’s global supply chain, however, depends on the rigor of their approach to managing and mitigating risks.
From mapping cargo flow and identifying business partners, to conducting threat and vulnerability assessments, it all boils down to having an effective and secure trade plan. Don’t know where to start? These steps are outlined in the U.S. Customs and Border Protection’s (CBP) “5 Step Risk Assessment Process” for managing an effective C-TPAT program.
Below are the CBP’s minimum security criteria:
- Choosing a secure business partner: All foreign manufacturers and partners must demonstrate C-TPAT security criteria via written/electronic confirmation.
- Container and trailer security and inspection: All containers and trailers require security and inspection procedures, including ensuring proper sealing, reliability of locking mechanisms and doors; and reporting and resolving unauthorized entry into containers/trailers or container/trailer storage areas.
- Personnel security: Implement an employee identification system, as well as regular, detailed background checks for new and current employees.
- Secured procedures: Make sure security measures and procedures are in place to track and manage cargo transportation, handling, and storage.
- Documentation control: All cargo documents must be legible and accurate. Outgoing and incoming cargo must also be verified against purchase and delivery orders, and all drivers must be positively identified.
- Facility security: All cargo and storage facilities must have physical barriers and deterrents, including fencing, gates, secured parking, alarm systems, proper light, locking systems and video surveillance.
- Information technology security: Create and implement IT security procedures and policies, such as password protection and employee training.
- Security training and threat awareness: Create a threat awareness program for employees so they can identify possible threats posed by terrorists and contraband smugglers.
It’s critical to re-evaluate all the necessary requirements and your plan, including the information gathered – at least every two years – in order to optimize your supply chain performance and alleviate risk. Some companies may want to re-evaluate annually, depending on the goods, countries and commodities they are dealing with.
Not only do companies continue to face heightened global trade security challenges, they are also grappling with stricter customs audits. This new trend may include more of a focus on small- and mid-sized companies, which means there may be more frequent targets. Proper preparation is key for these companies, including assessing your compliance risks.
Figuring out how to best improve efficiency, performance and compliance of your global trade strategy will ultimately help improve cargo flow and even your bottom line.
