CIO —
Between 2002 and 2005, the Department of Homeland Security spent $75 million to track several companies’ cargo containers coming into the seaports of Seattle/Tacoma, Los Angeles/Long Beach, and New York/New Jersey. The project, called Operation Safe Commerce, used GPS technology and radio frequency identification to monitor cargo from a handful of major importers (including Sara Lee and Motorola) as it made its way from overseas factories to its final destination in the United States.
The goal of Operation Safe Commerce was to identify weak links in the global supply chain. A report summarizing its findings was due more than a year ago, in February 2005. To date, for a variety of reasons, no report has been released. But sources close to the project have told CIO that Operation Safe Commerce revealed that companies actually know very little about what goes on in their supply chains.
Among common unsafe practices identified by these sources were: truckers dropping off containers without ever encountering terminal security, containers left in unsecured areas, and containers bypassing a port that’s considered safe (even if scheduled to pass through that port) and traveling instead through a country that poses a greater threat—without either the company or U.S. Customs and Border Protection being informed.
According to Steve Schellenberg, a senior consultant at the trade advisement company IMS Worldwide who worked on Operation Safe Commerce for the port of Seattle, the project "showed us that there needs to be a quantum leap in the information we possess about the supply chain."
Companies will have to find a way to make that leap—possibly within the next year—because soon the government will make sharing this information a cost of doing business for every company that engages in international commerce.
The mechanism for the government’s initiative is already in place: the Customs-Trade Partnership Against Terrorism, or C-TPAT, which requires that companies take responsibility for the security of their supply chains. C-TPAT is currently voluntary, but program members say that the benefits of compliance—which include reduced wait time at borders and fewer inspections—will make participation an unavoidable cost of doing business.
"There’s really very little that Customs can do to speed things up," says Schellenberg. "But they can sure as heck slow you down."
Furthermore, members of the trade community believe that the government will eventually make C-TPAT participation mandatory, although a spokesman for Customs disputes that. CIOs need to begin preparing now, or they could find themselves facing a massive last-minute hurry-up, comparable to their Sarbanes-Oxley travails, if they don’t want to watch their company’s containers get held up at Customs while their competitors’ crates sail through.
