How secure are our supply chains?

Wednesday, 12 December 2007
Over the last 12 months there have been various reports in the media about security lapses at airports. Last year at Charles de Gaulle airport, Paris, people were discovered airside with false or expired passes; this year at O'Hare airport in Chicago a similar example was uncovered. In the security arena more generally, only last month, it was revealed that illegal workers in the United Kingdom had acquired Security Industry Authority (SIA) identification badges and that some of these people were carrying out security duties at airports and maritime ports.

With incidents like these, how certain can we be that our supply chain is truly secure?

Shippers who seek to comply with security regimes (mandatory or voluntary) pay for the privilege. Security does not come cheaply and naturally no security system is complete without an independent audit and inspection of our premises. But is everyone getting the same level of audit and inspection?

Attending a recent UK aviation security training course (comparable to the new rules about to enter European law for example) I learned more than I expected and it made me think about those recent headlines I have just highlighted, and just how secure the supply chain is. Let me share some of the issues this course raised:

1. Prior to 2003 the U.K had over 10,000 known shippers when listed freight forwarders did the security audit of their clients. Then the system changed to ensure shippers had independent audits, and now there are only about 2,000. Shippers now have to pay the independent auditor whereas before many forwarders did it for free or built the costs into their prices. Now, many freight forwarders charge between 7 and 9 pence a kilo (€0.05) on their freight invoice to cover their supposed costs of security.

2. Regular airfreight flying on cargo-only aircraft can only come from an account consignor; to be an account consignor one must provide financial information on your company. Knowing how wary companies can be about divulging such information, I would be surprised if many willingly give this information away lightly. You don’t get asked for this information if you are a "known consignor/shipper" and your cargo can fly on any aircraft. Would it not be better, therefore to be a known consignor rather than an account consignor?

3. All freight has to become "known" to fly on an aircraft: the rules are slightly different for freight flying in passenger aircraft than for all-cargo aircraft, but nevertheless this is the case. If you are not a 'known consignor' then the forwarder makes your freight known by scanning or screening it: but how do we know this actually happens? My suspicion was aroused when a colleague (a shipper) told me his company had sent a large machine by air: it was too big to be screened or scanned so sniffer dogs were used to check it and make it known; nothing to worry about here except for the fact that this was not the first of such shipments to have been shipped by air and they had not encountered the use of sniffer dogs before. So how had previous shipments been made known?

4. It is a legal requirement in the UK for 5 year pre-employment checks to be performed on all personnel who come into contact with known cargo; similarly everyone must have aviation security training, delivered in English by an authorised trainer. Dealing with the training issue first, it is not uncommon to come across drivers in the UK whose grasp of English is not sufficient for them to have understood security training given in English. With regard to the pre-employment checks for drivers, I have similar concerns that these may not be happening as required by the law, especially if one considers that drivers are employed to drive any freight – not solely export air freight that has been made secure (i.e. known cargo). I see the same drivers which pick up and deliver import freight (not known cargo) used to pick up and collect known cargo. Is it really true that all of them have been vetted and received the necessary security training?

The system needs policing. Yet of concern to me is the low number of inspectors available to check all the listed freight forwarders (or 'registered agents' as they are becoming known as today). Again using the UK as the example with which I am familiar, there are 60 or more independent auditors who check shippers, which equates to approximately one auditor to 33 shippers: compare this to the 6 Department of Transport inspectors employed to police the regulated agents. Even accounting for the fact that the DfT website only lists one entry per company (not per site) on its list of regulated agents, it still suggests perhaps 1 inspector to 100 or more agents. Is this really sufficient to inspire confidence that the regulated agents are properly being monitored and policed?

One solution would be to open up the auditing of registered agents to independent authorised auditors whose reputation hangs on the doing a professional job or else they might lose it. This would allow the officials to focus on policing the system.

Shippers are paying for the security of their products irrespective of being known or not. I remain unconvinced that the rest of the industry is necessarily taking their corporate responsibility as seriously.

So is our supply chain secure? I have my doubts. There is a strong lesson to be learned by all countries introducing tighter aviation security regulations for cargo; make sure sufficient resources are available to monitor and police compliance. I hope we learn this lesson quickly and not the hard way from a serious and tragic security breach.

This blog has been written by a former shipper and now an advisor in logistics and supply chain security. Due to the sensitive nature of the topic, the author has decided to remain anonymous.

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