Containing Cargo Risk

By Teresa Anderson

A U.S. company that imported high-tech goods from China recently conducted a security audit on its cargo operation. It found a significant vulnerability in an unlikely place. The problem was that although all of the company’s goods were searched and secured before they left China, they were then stacked on a single pallet to be flown to Los Angeles. Once in the United States, the cargo had to be broken down by airport workers and reshipped via numerous airlines to its final destinations. During this reshipping process, various people, unknown to the company, had the opportunity to steal or tamper with cargo. They could even potentially use the company’s containers to transport a terrorist weapon within the United States.

To minimize risk, company representatives visited the Chinese cargo terminal where the company’s goods originated and negotiated to have its freight treated differently. Under the new arrangement employees from the manufacturing company delivered the goods to the cargo terminal and then, with direction from terminal workers, they divided the cargo into batches—grouped by common final destination once in the United States—and encased each batch in secure netting. This way, the facility receiving the goods would not need to open and repackage pallets and the facility staff could easily tell whether the cargo had been compromised by checking whether the netting had been disturbed.

This is but one example of how companies are working to better secure cargo against possible theft and attack or misuse by terrorists. The challenge they face is considerable because of the number of players involved in the supply chain, the global logistics, and the sheer volume of cargo involved. American businesses imported 23.5 million loaded cargo containers in 2004—90 percent via seaport.

The risk of damage from a terrorist being able to smuggle a weapon of mass destruction (WMD) into a container extends far beyond the harm that could be wreaked on the ports of entry themselves. “Every major U.S. container port contains other critical infrastructure such as energy refineries, chemical facilities, and power plants. And all of them are close to large urban population centers,” Council on Foreign Relations analyst Stephen E. Flynn explained at a recent congressional hearing.

The government is addressing the threat through various strategies that cover all modes of transport and all players in the supply chain It is in the private sector, however, that success or failure will really be determined.



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