Six Critical Elements of a Strong Cargo Security Program Global supply chains are growing in complexity, yet remain vulnerable to a myriad of threats and hazards that damage businesses and threaten the global economy. The list of unforeseen disruptions is exhaustive, ranging from terrorist attacks to natural disasters to corruption to politics—and the list goes on. Supply chain disruptions, delays, and loss of goods are costly global problems, with studies in 2014 showing over $23 billion* lost to cargo theft globally. It just continues to grow. Following the November 2015 terrorist attacks in Paris, U.S. Homeland Security Secretary Janet Napolitano called on the world to launch a combined effort to improve cargo security to protect against attacks that could significantly harm global trade.  According to Napolitano, more solutions and processes are needed in the supply chain to protect against disruption. These include arranging counter-terrorism evaluations, identifying the most critical elements of the supply-chain system, and bolstering resiliency so the supply chain can recover quickly from any disruptions. Closer to home, the recent attacks in San Bernardino are now driving more screening of supply chain partners, carriers, and employees, the effects of which will resound in every industry. Governments will reach further into importer and exporter information to better understand how goods are moved and which parties are involved. Rather than traditional batch or bulk screening, shipment screening processes will be more dynamic, and at the transaction level. The biggest challenge for shippers in 2016 will be their ability to gather supply chain data more efficiently and faster to keep goods flowing across borders without costly delays. Because global supply chains stretch across geographies and involve many more players, they create difficult risk management challenges. Most companies see proactive protection of supply chains as a priority, but many are not prepared nor have they any business continuity plans in place with their suppliers in the event of a disruption. Many can’t even identify their key suppliers and 70 percent* say they lack visibility over their entire supply chain. During a disruption, these companies will scramble to find alternative plans, which will be costly, damaging to business reputations, and cause suppliers to lose clients. There needs to be a marked increase in proactive practices, starting with clear continuity plans in case of disruptions. Implementing Better Cargo Security Supply chain assessments must begin with identifying any risk that will interrupt the flow of goods from the location where materials are originally sourced to the end product on store shelves. A strong cargo security program should be implemented connecting each and every critical link in a holistic approach.  This type of program requires, at a minimum, these six critical elements:  • Define risks — Companies need to work with their suppliers and providers to determine which risks are most likely to occur within their supply chain, rank them according to those most likely to occur given each unique scenario, and determine which risks carry the most disruption.  • Implement risk mitigation “must-haves” — A strong cargo risk mitigation strategy starts with C-level support. Other must-haves including budget and organizational structures to support the program and financial incentives to encourage compliance to policies.  • Follow best practices — Cargo risk management strategies should address the best practices of people, processes, and technology. • Develop and manage importer self-audits — At the most basic level, perform regular supplier audits, diagram the supply chain, and profile suppliers according to location, transportation modes, port of shipment, carriers and each supplier’s tier two and tier three supplier network. • Develop corrective action plans — Once risks are identified and ranked, shippers should establish corrective action plans (CAPs) for deficient suppliers and other supply chain issues. • Provide risk mitigation training and remediation — This training, together with a formal, written security manual, should include overall awareness training and follow-up requirements, including in the areas of procedural, personnel, documents and records, and facility security.

By implementing these basics, businesses and their partners will have transparency into their overall risk posture. With a better understanding of their vulnerabilities and programs to manage and correct them, companies will be in a more secure position. If each importer takes these steps within their own network, global threat levels will be lower and world economies stronger.