How Secure Is The Global Supply Chain?

Only 5% to 6% of the 25,000 shipping containers that enter the U.S. daily from foreign origins are checked either by gamma screening or manually, according to a recent article by AMR Research analyst Greg Aimi. And these are containers that the U.S. Department of Homeland Security (DHS) intelligence identifies as potentially high risk explains Aimi.

So how do companies protect their supply chains without disrupting business? Aimi advises the use of more information, process automation, and new technologies not just by U.S. corporations, shipping companies, and domestic ports, but at factories and facilities at international origins as well.

One way that companies are trying to protect their supply chain is through voluntary complying with Customs-Trade Partnership Against Terrorism (C-TPAT).

There are three tiers of compliance, according the article.

The cooperative program has three tiers:

  • Tier 1 -- Requires that a company files an attestation that it has performed a risk analysis of its supply chain and has taken steps to mitigate any vulnerabilities. Approximately 5,800 companies have been accepted by customs.
  • Tier 2 -- Requires that the attestation be validated by customs officials. Almost 3,800 corporations have either achieved this status or are in the process of being validated.
  • Tier 3 -- Customs has determined that these companies must continuously follow supply chain security best practices, although it hasn't declared an official definition of what that is.

Approximately 130 companies have reached this level to date. This level receives expedited flow of shipments through customs.

Looking to future supply chain regulation, a new trading process system, the Automated Commercial Environment (ACE), will require importers to send increasingly detailed information to customs prior to arrival at border crossing. Those that don't will find significant delays. Those that do it well will eventually be in the fast lane when crossing customs. This process isn't expected to be completed until 2010.

Read the full article.

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