Core Elements

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

The framework consists of four core elements: harmonization of electronic cargo requirements; adoption of a consistent risk management approach for handling security threats; an agreement that sending nations will perform outbound inspections of high-risk cargo; and a definition of benefits to be received by businesses adhering to the standard, such as expedited customs processing.

Earlier in May, the WCO announced plans to include customs officials from the nation of Dubai in its list of experts on customs security. Dubai's customs agency has been building an electronic customs clearing system known as the e-Mirsal.

Most containers received into the United States now receive some level of government screening, according to Caton, who is president of CSTA Cargo Shipping Transportation Analysts.

The level of screening used is determined by U.S. Customs officials, who have been specially trained to detect signs of suspicious activities.

Since U.S. companies are now required to comply with advance notification requirements, they do not receive expedited processing at U.S. ports simply for sending in their manifests on time, Caton said.

But some companies that voluntarily comply with another U.S. Customs initiative&#151the still emerging C-TPAT (Customs Trade Partnership Against Terrorism)&#151 will be "greenlighted" for faster processing through U.S. Customs.

"However, C-TPAT is more about physical security around the supply chain, such as having access control systems in place at plant facilities," the analyst told CIOInsight.com.

The "greenlighted" companies will need to meet the requirements of both C-TPAT and the recently unveiled C-TPAT Plus, which calls for the use of tamper-proof seals on shipping containers.

For its part, IBM submitted a CT-PAT profile in February 2003, and won CT-PAT certification for its profile two months later, an IBM spokesperson said.

C-TPAT's plans include sending teams of supply chain specialists around the world, to visit members and freight carriers, and to make sure facilities meet minimum supply chain security criteria, according to a C-TPAT document.

Other goals and objectives for C-TPAT include requiring participants to "leverage partners" in their supply chains; developing a C-TPAT "secure communication platform"; creating criteria for "smart" shipping containers; conducting anti-terrorism training seminars; and internationalizing C-TPAT's principles through "cooperation and coordination" with other nations.

But David Schrier, an analyst with ABI Research, said that the WCO's framework encompasses more basic supply chain security requirements, which will be easier for other nations to meet.

The ABI analyst sees more parallels between the WCO's initiative and CSI (Container Security Initiative)&#151still another U.S. Customs program&#151than with C-TPAT, at this point.

"Under CSI, U.S. Customs has sent agents to foreign ports to work with domestic customs agents, and to sort of help things along on shipments bound for the U.S.," Schrier told CIOInsight.com.

Yet some of the language in the WCO's documents indicates there's also an intention to build a secure supply chain platform at some time in the future, according to the analyst.

Meanwhile, during 2005, IBM's Fletcher has been meeting with customs officials for several member nations to talk about IBM's position on the WCO's proposed international security framework.

"I've already met with eight of the 20 countries that are critical to IBM's [import] operations. I expect to meet with six more by the end of June, and the remainder by the end of this year. We are interested in partnering with them," he told CIOInsight.com.

Fletcher added that he views compliance with the WCO's emerging measure as more than just a "cost of doing business" for IBM.

"When we implement this, it will create efficiencies for U.S. around the world, with fewer inspections and quicker clearance through international customs. Compliance will be voluntary. But over time, companies that comply will gain a competitive advantage, because they'll be viewed as the kinds of companies others will want to do business with," said IBM's Fletcher.

Check out eWEEK.com's for the latest news and analysis of enterprise supply chains.

This article was originally published on 06-02-2005
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