Pending Security Policy May Unkink Global Supply Chain

By Jacqueline Emigh  |  Posted 06-02-2005 Print Email

Terrorism fears spawn a new global standard for cargo security, being shaped by the World Customs Organization in partnership with businesses.

Terrorism worries are adding new dimensions to the job of supply chain manager, according to Theo Fletcher, one of IBM's own supply chain managers.

Fletcher has been working with the WCO (World Customs Organization) lately to help support a proposed global cargo security standard that comes up for a big vote later in June.

"Supply chain managers have always put a lot of focus on security, [in the sense of] preventing theft or vandalism of goods," said Fletcher, IBM's vice president of import compliance, in an interview with CIO Insight.

"But now, we also need to make sure we're keeping things out of our shipments that shouldn't be in there. We have to be prepared for any sort of [terrorist] supply chain disruption that might occur."

Since Sept. 11, 2001, many world governments have been coming up with procedures for providing cargo manifests lists of a container's contents and where it came from in advance of cargo's arrival at international borders, according to Fletcher.

For example, since 2004, U.S. Customs has required 24-hour advance notification of the contents of a ship's cargo, and four-hour advance notification for air shipments, according to Robert Caton, an analyst and consultant specializing in the cargo transportation industry.

More than 200 million containers are shipped internationally each year. The United States alone receives about 17,000 containers per day, according to statistics compiled by Stanford University.

Fletcher told CIOInsight.com that he believes it would be much easier for shippers to conform to regulations if they were relatively uniform worldwide.

"Almost every government understands the need to make supply chains more secure. Yet some governments are still working their way through validation [procedures]," Fletcher said.

Supply chain managers face other issues associated with cargo and container validation, too.

"How will one government recognize the validation work that another has already completed, for instance?" Fletcher asked.

The Framework of Standards to Secure and Facilitate Global Trade - a set of rules designed to provide an international standard is due for a vote by the WCO Council in meetings slated for June 23 to 25.

"If the framework is adopted, we'll only need to be validated once, instead of going through 165 different [types of] validation processes," Fletcher said.

The effort which also stipulates advance alerts about "high-risk" shipments is being forged by the 165 nations belonging to the WCO, in partnership with private industry.

For example, during mid-May in Amman, Jordan, the Jordanian customs administration held an awareness session about the framework in conjunction with the Jordan Business Confederation.

"It [is] essential to ensure the understanding and support of the framework by the business sector in order to realize and maximize its benefits," said WCO Deputy Secretary General Kunio Mikuriya, in remarks prepared for the event in Jordan.

The meeting in Jordan took place during the same time frame as the WCO's release of the final framework document that will be voted on in June.

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