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This study proposes a design of a decision support framework for a reliable cargo container shipment and handling system based on failure mode effect and criticality analysis for inbound containers at U.S. ports. The proposed prototype of a simple risk assessment system is offered that safeguards against potential security risks in cargo container shipments entering U.S. ports. An application of the proposed framework is presented--in a situation involving an inbound shipment from China designated for a U.S. destination--that shows how effectively it helps reduce the risk of failure. Additionally, the industry research looks at how the initiatives being deployed affect supply chain managers as they contend with the changes and the associated costs faced by their businesses.
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It did not take long for governments and private agencies worldwide to speculate on the potential security risk unprotected shipping containers pose as a means of shipping in illicit and harmful materials. Seeing the vulnerability, the United States government strengthened its regulations as well as established international and business trade partner initiatives to tighten control and surveillance of shipping container cargo entering and leaving the country (Dahlman et al. 2005, Hessman 2003).
This article begins with cargo containers transport value chain and mapping points of its vulnerability. Some recent initiatives being taken by governments and trade partners to secure cargo containers are presented. Various cost drivers to businesses for security of cargo containers are discussed. A decision support framework for a reliable and safe global cargo shipment and handling system is proposed. The focus is on developing a FMECA model for assessment of risk. This model facilitates failure analysis through fault tree and critical index analysis. Application of the model is illustrated using an example of a cargo container shipment from China to the U.S. Understanding that everything has a cost, this article will also present some of the new challenges that supply chain managers need to consider to ensure their compliance as trade partners in a secure commerce system. The article concludes by providing some recommendations and suggesting opportunities for future research.
CARGO CONTAINERS: THE NEXT TROJAN HORSE?
Most of the world's non-bulk cargo travels from point of origin to final point of destination in standard marine shipping containers. These cargo containers are subject to numerous transfers within the transport chain, which makes them vulnerable to being subverted from their legitimate commercial purposes (United States Congress 2001, Export911 2006). Figure 1 depicts the flow of a container as it travels through the supply transportation chain and its points of vulnerability. This is a simplified version of a complicated and layered model consisting of several distribution and transportation networks. Major elements of this supply chain transportation chain are described below.
[FIGURE 1 OMITTED]
* Factory: This is the primary point of vulnerability where goods can be tampered with, or hazardous materials can be packaged and concealed as the product is being prepared for shipment. Standard screening inspections and employee criminal background checks through Transportation Worker Identification Credential (TWIC), which is applicable in the U.S., are two of several security measures that should be taken to reduce terrorist threats, as well as other illicit activity (smuggling, counterfeit goods, etc.).
* Warehouse Consolidation/Intermodal Exchange: If final packaging and consolidation is not performed in the factory, it will usually take place at a warehouse or staging area, which prepares the product shipment for truck or rail transport to the port. At this stage, illicit activity can occur while products are being consolidated into larger shipping loads, and while being trucked or railed to their maritime port of disembarkation. Constant surveillance within the warehouse facility, final load inspection, and employee background checks for both warehouse and transport personnel are effective to improve security. As a prepared load is being transported, a truck can easily be diverted from its given route, providing the opportunity to tamper with the shipment. The use of Global Positioning System (GPS) technology gives transportation management the ability to better track adherence to routes. Truck drivers often have broad discretion over their routes, and are subject to last-minute changes.
* Port: As with personnel at the factory, warehouse, and in-ground transport operations, terminal operators may not be adequately screened for criminal background information. The shipping containers may be at risk of tampering, especially if they must sit for extended periods of time before being staged and loaded onto a cargo ship. Terminal operators may not routinely check containers for seals or signs of container tampering.
* Sea: Containers typically do not have a uniform seal or any way to exhibit obvious signs of tampering. Ocean carrier personnel may not routinely check containers for seals or signs of container tampering while onboard. Container ships often stop at various seaports to unload and load containers. The container ship's transits through various routes and ports pose different levels of security risks (Maritime Transport Committee 2003, Tzannatos 2003).
GOVERNMENT INITIATIVES FOR SECURING CONTAINERS
The U.S. Customs Service, transferred to the Department of Homeland Security (DHS) and already responsible for inspections of containers at U.S. ports, took the lead to develop new procedures to move containers in and out of ports under increased security. Some of the other agencies incorporated into the DHS during March 2003 were U.S. Immigration and Naturalization Services (INS), Transportation Security Administration (TSA), and Federal Emergency Management Agency (FEMA). The United States government has heightened awareness in maritime security by introducing new initiatives that tighten the handling of containers on both domestic and international shores. These initiatives and regulations involve industry partners as well as foreign governmental cooperation. They are the Container Security Initiative (CSI), the Custom-Trade Partnership against Terrorism (C-TPAT), the "10+2" regulatory standards, and the Secure Freight Initiative. These initiatives and regulations work with existing international maritime regulations such as the Maritime Transportation Security Act (MTSA) of 2002 and the International Ship and Port Security (ISPS). The ISPS is governed by International Maritime Organization (IMO) which is authorized by the United Nations. Both the MTSA and the ISPS Code deal with maritime port and vessel procedures, and have established security mandates regarding infrastructures, security personnel, emergency contingency plans, and training programs. These regulations address cargo handling, but to a lesser extent than CSI and C-TPAT (Hannon 2004, United States Congress 2002, United States Congress 2004, Maritime and Port Authority of Singapore 2004).
CSI is an initiative developed by U.S. Customs, newly renamed U.S Customs and Border Protection (CBP). The primary purpose of this initiative is to protect the global trading system and the trade lanes between CSI ports and the United States. Under the CSI program, a team of United States CBP officers works with the host nation's counterparts in targeting cargo containers that pose a potential threat (United States Customs and Border Protection 2006a).
As of March 2006, twenty-five nations have committed to CSI and are implementing the procedure in forty-four ports (United States Customs and Border Protection 2006b), as detailed in Table 1.
Through this initiative, CBP is requesting that businesses ensure the integrity of their security practices and communicate their security guidelines to their suppliers within the supply chain (United States Customs and Border Protection 2005, United States Department of Homeland Security 2003).
This new security infrastructure, illustrated in Figure 2, exhibits how each transfer point in the supply transportation chain is covered to reduce the risk of a breach via U.S. and international cargo security initiatives. The figure illustrates how CSI and C-TPAT are the overarching programs that are meant to provide stability and security within the whole supply transportation chain. In addition, MTSA and ISPS contribute to the monitoring of the various ports, as well as the seas. Figure 2 shows a simplified model that delineates the boundaries of various regulatory standards applicable to different parts of the transportation supply chain.
Later in this article we use this transportation supply chain model (Figures 1 and 2) in developing the fault trees (Figures 4 through 9) for the analysis of various vulnerable areas with the potential for catastrophic occurrences. Through C-TPAT and CSI, the security issues associated with these transfer points identified in the supply transportation chain shown in Figure 2 become more manageable through strengthened regulation. This reduces inspection bottlenecks at outbound ports, thus reducing workload for inspectors, allowing them to concentrate on the scrutiny of cargo from non C-TPAT partners.
Through CSI, the amount of information that is mandated from importers and transport management, coupled with increased technological advancements in screening techniques, sets out a larger, less porous net over verifying the safety of inbound cargo containers (Thibault, Brooks, and Button 2006). On September 29, 2006, the United States Congress passed the SAFE (Security and Accountability for Every) Port Act, which added strength to CSI by mandating that all incoming cargo to a U.S. port will contain data elements from both the shipper and the carrier, which are known as 10+2. This dataset is shorthand for ten additional information elements and two reports routinely used in order to track containers that enter U.S. ports (Edmonson 2006).
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