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Securing the Global Supply Chain Without U.S. Leadership

Published Jul 19, 2011 1:45 PM by The Maritime Executive

By: Dr. Jim Giermanski, Chairman at Powers Global Holdings, Inc.

In 2007 the European Union's Framework Programme for Research and Technological Development (FP7) was established as "...a key tool to respond to Europe's needs in terms of jobs and competitiveness, and to maintain leadership in the global knowledge economy."   It will last for seven years from 2007until 2013. On August 1, 2008, a new research component called the SMART-CM project (SMART Container Chain Management) was created within the 7th Framework Programme (short title) and scheduled to last until July 31, 2011.  Its purpose is to ... advance technology implementation and research in order to overhaul the complete container door-to-door transport chain so that it is more efficient, secure, market driven, and competitive. It systematically analyses current processes and systems, produces new innovative concepts for processes and technologies, and demonstrates all these in a set of 2 world scale Demonstrators covering 4 supply chain corridors. Its view, analyses, and recommendations fall in the following four areas thus ensuring a fully comprehensive coverage of the call subject:

   - Innovation / Technology
   - Commercial / Market issues
   - Business / Organisational issues
   - Legal / Security issues 

The SMART-CM deliverables can be summarized as "...an improved legal basis, increased reliability, quick response, improved flexibility, and risk management improvement."     More specifically, research within SMART-CM has facilitated the development, demonstration and evaluation of new concepts and processes that will improve the efficiency, user friendliness and quality of service of existing door-to-door container transport chains operating in different environments and conditions and using a range of technologies and processes that increase security.

Participant private sector firms and Customs Administrations ranged across 10 nations, including two Asian participants, Thailand and China.  Although U.S. Customs and Border Protection (CBP) was invited to participate along with other countries, it declined.  In 2009, a representative of the SMART-CM came to the United States and at a meeting with one of the senior House Homeland Security Committee staff again invited the United States to participate.  In addition to this writer's presence at the meeting was the CEO of a U.S. firm who actually is a member of the EU Commission's SMART-CM advisory board.   However, despite the encouragement of the SMART-CM representative and U.S. CEO, there seemed to be no interest in participating.   Except for the United States, international cooperation with the Program has been positive as evidenced by the participation of additional Customs administrations from six nations, including China.  International private sector participants included Toyota, COSCO, Kuehne + Nagel, DHL, European DataComm and more. 

As a result of this government/private sector cooperation, multiple pilot projects with container security devices, control platforms, and communication protocols were conducted to meet the goals of the SMART-CM program - all without U.S. government participation.  As a result of these tests over the past 3 years, and the impending July 31st project termination date, it is time now for Europe and those SMART-CM participants to recommend global standards with respect to communication spectrums and protocols and international standards for container security devices and systems.   The SMART-CM has included many standards organizations some of which are listed below:

  1. International Standards Organization (ISO);
  2. French Standards (NF)
  3. EFQM (European Foundation for Quality Management (EFQM) Excellence Model;
  4. ASTM (ASTM International, formerly known as the American Society for Testing and Materials (ASTM); and
  5. SAE (SAE International).

The obvious question is: how is it possible, then, for the United States to be up-to-date on global supply chain security developments without participating in their development?   Without  cooperating with the rest of the world, the United States can't know the posture and potential reaction of its trading partners, especially Europe, to isolated U.S. container security requirements demanding that foreign sovereignties adhere to flawed U.S. requirements for action by and within the territory of these sovereign nations.   For instance, the United States mandated that foreign nations perform container scanning  in their ports prior to the container's departure to a U.S. port, a mandate soundly rejected by our trading partners and even by the World Customs Organization (WCO).   

Even more revealing are the high technological level and quality of U.S. private sector advancements in the area of supply chain security and efficiency.  U.S. private sector achievements and its knowledge of global logistics processes and demands within a secure and efficient international supply chain far exceed DHS's knowledge and awareness of these issues.   DHS seems to be floundering, not knowing what direction to take, not even working smoothly among the security agencies within the Department.    And where it creates a domestic policy like "pat downs," and intrusive x-ray screening with naked body images at U.S. airports, it incurs the wrath of the public.  What's worse than having a flawed policy on pat downs, is no security policy on U.S. containers being shipped out of the United States.  And with respect to inbounds, it knows that its Container Security Initiative (CSI) and Ten + Two programs don't really reveal the contents of inbound containers, but only what  is said to be in the container by the shipper.   What is more revealing of DHS leadership is, 10 years after 9/11, the fact that DHS still has no standards on container security devices (CSDs).   Yet, the Department of Homeland Security refused to participate in the SMART-CM project, one purpose of which, is to develop standards and protocols dealing with ...Authorized Closing,  Authorized Opening ,  Breach (Real or False Alarm),  Customs check during a container trip, [and]  Service oriented and security oriented information (shock, temperature, humidity, nuclear, etc)...

The EU's determination to strengthen the efficiency, effectiveness, and security of the global supply chain is commendable.  The EU Commission  has brought together different nations, industry sectors, and academics to develop international standards that the United States has not only failed to do but also refused to participate in doing.  Although clearly a national interest, U.S. leadership in the global supply chain is essentially non-existent or at best, lethargic.  While many in the private sector discuss whether it's the virtual incompetence of DHS middle or upper management, there is no disagreement that regardless of what managerial level or what DHS agency, the ultimate responsibility rests in the Office of the Secretary of Homeland Security.
 

Dr. Giermanski is the Chairman of Powers Global Holdings, Inc. and President of Powers International, LLC, an international transportation security company. He served as Regents Professor at Texas A&M International University, and as an adjunct graduate faculty member at the University of North Carolina at Charlotte. He was Director of Transportation and Logistics Studies, Center for the Study of Western Hemispheric Trade at Texas A&M International University.

MarEx does not necessarily endorse the opinions herein.