Advertisement

Blog

Logistics 101: No Excuses, Please Secure the Shipment

Let me vent, please. How the heck did explosives-laden boxes get on US-bound cargo planes, after 9/11 and despite billions spent by governments and companies securing borders, skies, offices, production facilities, and the extended supply chain?

High-tech companies have been quiet on this, but many executives know this was a close call that, had it gone the other way, could have severely hurt the regular flow of business activities. Here is what we know: Last week, UPS and FedEx, two of the world's largest logistics companies, transported explosive devices on cargo planes headed to the United States before these were discovered. Some of the packages had even traveled on passenger flights before being transferred to cargo planes. Again, how could this have happened?

Investigators are trying to figure out how the bombs got on the planes, but this I know: It should never have happened. It turns out we've all been lulled into a false sense of security. The potential nightmare of planes blowing up over major world cities was averted by security agencies working in tandem globally. That was the good news. The horrible and mind-numbing news was that the bad guys actually got the explosive devices on planes and could have maimed and killed tens or hundreds of people on three different continents.

This is not the place to go into the details, but here is the UPS statement on the investigation. The bombs, according to news reports, had “all the hallmark of a higher degree of professionalism than we've ever seen come out of al-Qaeda. If al-Qaeda indeed made them, they've teamed up with true professionals.”

President Barack Obama in a statement Friday, Oct. 29, called the incident a “credible terrorist threat.” Does that mean the global supply chain is in jeopardy? Yes, but it has been for some time, and logistics, shipping, and third-party service providers are well aware of how fragile the system is. However, it has now become obvious that we have not completely sealed the loopholes terrorists can use to kill and harm individuals or disrupt global commerce.

What else can the international community do? Experts are already weighing in on this, but my initial thought is that we must not ever assume we've done all we can to secure international transportation. Security agencies and companies have to regularly test the system for openings terrorists can exploit and plug these once discovered.

However, as we explore what must be done to make international cargo shipment safer, we also must ask ourselves what must not be done to hand the terrorists a hidden victory. Blowing up a few planes is not going to end global commerce or give the terrorists what they want — whatever that is — but it can add unacceptable costs to transportation expenses worldwide. It can also stifle trade among certain nations, curb individual freedom excessively, and further complicate manufacturing in certain regions.

Already, UPS has “suspended service out of Yemen until further notice,” as the company noted in its statement, while a few countries, including Germany, have canceled until further notice both direct cargo and passenger flights from Yemen. That may seem to be a wise move, but what if the shipment had originated from a much more strategically important location like China? Would Germany, Europe's biggest economy and the No. 1 exporter to Asia, have taken the same action if the explosive devices had been placed on cargo planes originating in Shenzhen?

I have refrained from exploring the implications of these latest developments on the high-tech sector in this article because I am still calling companies to find out how they are responding. So far, most high-tech companies seem to be shrugging this off, but had the planes actually been blown up, the electronics manufacturing supply chain would have certainly suffered a violent, if temporary, seizure.

21 comments on “Logistics 101: No Excuses, Please Secure the Shipment

  1. AnalyzeThis
    November 1, 2010

    However, as we explore what must be done to make international cargo shipment safer, we also must ask ourselves what must not be done to hand the terrorists a hidden victory. Blowing up a few planes is not going to end global commerce or give the terrorists what they want — whatever that is — but it can add unacceptable costs to transportation expenses worldwide. It can also stifle trade among certain nations, curb individual freedom excessively, and further complicate manufacturing in certain regions.

    Totally agree with you on this.

    Anyhow, to be honest, I'm not too surprised by this recent incident. It is just far too easy to slip illegal and dangerous materials through the wide variety of cargo systems available. And the sophistication of these bombs is also a cause for concern, for more some details on the specifics, see here.

    Plus, this isn't even strictly an international problem. Domestic shipping systems may receive further scrutiny as well.

    The bottom line is that there will be changes made (specifically, changes made to policies that allow cargo to travel on passenger planes) and it could have negative consequences. I'm a little nervous, but also aware that there are some problems that need to be addressed.

     

  2. bolaji ojo
    November 1, 2010

    Dennis, It's fascinating that the almost knee-jerk reactions have started already. In  Britain they've just suspended cargo shipment from Somalia! (See: Theresa May announces terror measures). It gets sillier. The report said: “Toner cartridges larger than 500g (17.6oz) will also be banned from hand baggage on flights departing from the UK and also on cargo flights unless they originate from a regular shipper with security arrangements approved by the Department for Transport, she added.”

    Why is anyone allowed to board a plane with toner cartridges in their carry-on luggage? As a business executive said in that same report: Ryanair chief executive Michael O'Leary said: “What happens, particularly in the coverage of the Yemeni issues of recent days, is that we have another huge lurch by the securicrats into making travel even more uncomfortable and an even more tedious ordeal for the travelling public… Sadly they always win the day and they lurch around with ludicrous new measures.”

    The government has to respond but the measures they bring up should be designed to make the system safer not just to be seen to be doing something that only burdens the system and not make it safer and more secured.

     

  3. Barbara Jorgensen
    November 1, 2010

    Excellent blog, Bolaji and vent away. That this isn't all that surprising does not excuse “let's get on to the next thing.” (PS–guilty) I was remarking to a colleague today how this went from “We interrupt our regularly scheduled programming…” to “In other news, the investigation into explosives on cargo planes continues…” in a single news cycle. We are fixated on how the next security pat-down is going to affect travelers while little attention is paid to cargo. We don't know enough about how cargo is screened and we must continue to ask. I'm anxious to know what companies are (and are not) telling us.

  4. AnalyzeThis
    November 1, 2010

    The report said: “Toner cartridges larger than 500g (17.6oz) will also be banned from hand baggage on flights departing from the UK and also on cargo flights unless they originate from a regular shipper with security arrangements approved by the Department for Transport, she added.”

    Do these people think that the only way to smuggle explosive material onto an airplane is via toner cartridges? Will I need to display a business license and provide a photo ID the next time I buy a printer out of fear that I may transform it into a bomb? This is absolutely ridiculous on so many levels, but not a completely unexpected policy, I suppose.

    The government has to respond but the measures they bring up should be designed to make the system safer not just to be seen to be doing something that only burdens the system and not make it safer and more secured.

    Correct. I suppose they're also trying to create the illusion of safety as well, but pumping in more smoke and putting up some additional mirrors should not be the solution.

  5. DataCrunch
    November 1, 2010

    What I always think is funny (and sad) as I walk through the security line at the airport, is that I will be forced to consume or discard my beverage or bottled water prior to passing through the security scan, but as soon as I pass through I can buy as many beverages and bottled waters (of course at a premium) from a number of stores and vendors, which I can carry onto my flight.  I think this security concern was done in cahoots with the stores and vendors.

    It wouldn’t surprise me to see a printer toner kiosk after the security check in the future. 

     

  6. Anna Young
    November 1, 2010

    Barbara, because the terrorists did not succeed we have gone from “Did they really do that” to “Could you pass the remote, please.” It took 9-11 to concentrate the mind on the evil our society faced then and now. This story is going to continue for a few more days, perhaps one more week or several as more facts about the plot come to light, but after that we'll all move on having avoided the trauma of seeing planes blown up in our cities though the danger persists. This time it was toner cartridges. What will these guys think of next time and are we prepared and able to terminate their evil plans before these are implemented? We are chasing toner cartridges now–right after chasing shoes–tomorrow it will be what exactly?

  7. Laurie Sullivan
    November 2, 2010

    Bolaji,

    I remember interviewing folks from FedEx, UPS and logistics companies about this issue in 2001 and 2002 after 9/11. At the time, the airlines didn't check cargo from delivery companies or the U.S. postal service because they had security clearance. It was just a matter of time that something like this would happen related to a commercial or a freight airline. 

    Laurie

  8. Ariella
    November 2, 2010

    Anna, you bring up an excellent point.  It is not enough to look at what has been used in the past. The only way security measures would be effective is if they cover what may be used in future attacks.  The difficulty lies in predicting what, when, where, and how.

  9. Jennifer Baljko
    November 2, 2010

    Bolaji,

    Good post. Similar to Laurie, I remember the post 9-11 discussion about protecting port shipments and plane cargo, and the concern that something like this could happen again because of the gaps in security. All sorts of red flags went up, and companies were called on to work with government agencies to strike a balance between safe, open, and effective logistics operations. Remember the Customs-Trade Partnership Against Terrorism (C-TPAT) initiative, the supply chain security program headed up by U.S. Customs and Border Protection that was specifically aimed at developing secure cargo measures with input from industry?  According to Wikipedia, as of April 2005, 9,000 companies were participating.

    So, in the wake of the latest incident, where does this program stand today in 2010? What security measures came out of it?  Did it help or hinder routine trade? Become too big to manage? Did companies and government lose interest?  Or, did the maintenance of such widespread compliance become too much of an inconvenience for both government and business?

    More importantly, assuming those intent on doing harm will always find a loophole, where do we go from here? Throwing up our hands and saying “I don't know” or “Let's wait and see” are far from good answers.

    Jenn

  10. tioluwa
    November 2, 2010

    These plots are deliberate and well planned out, so also must be the battle against them

    These plots are products of ceaseless efforts of creative evil and wickedness, so also must be the approach against them

    all we have are anti-terrorist activities, maybe we need “pro-terrorist” actions. If these guys are relentless in their efforts, there is no need to be relentless in efforts against them. Security measure highten durrent plots, and after the treat goes down, the measures are reduced until we hear of another plot or something happends.

    Let's face it, these guys won't rest, and there is no reason to ever relent at anytime against their plots.

    I wonder with Jennifer, what did happen to those Initiatives, and where are their results?

     

  11. bolaji ojo
    November 3, 2010

    These terrorists have to succeed only once to tear the fabric of global commerce and we can't expect they will stop until they've made a significant dent. That's why the efforts to stop them must anticipate rather than only respond to their latest initiatives. In the area of commerce, however, it can't be left to the government. Businesses have to offer governments ideas for plugging holes in their operations. It's that kind of collaboration that will defeat the terrorists.

  12. DataCrunch
    November 3, 2010

    Unfortunately, all countries are extremely vulnerable to terrorist attacks. This is a fact.  We only hear about the failures, but never the successes.  Letting the public know how attacks are being foiled would allow the terrorists to adapt more rapidly.  This is a reminder that we must stay vigilant and continue to invest in anti-terrorism measures; this also includes piracy which has the potential to wreak havoc on the maritime supply chain. 

    Here’s an interesting stat recently reported by the New York Times that only 65 percent of incoming air cargo in the US is inspected, and that only includes cargo arriving on passenger flights. Dedicated freight aircraft cargo are not subject to inspections.

    There clearly is room for improvements and increased security measures.

     

  13. bolaji ojo
    November 3, 2010

    Dave, I had a question on my mind after the government announced the latest bombing attempts. I was wondering if it should have been given so much publicity. It reminded me of a time when the government's goal–it seemed–was to frighten us all into surrendering all rights. By announcing this new approach, it looked like we should all have another panic attack. Now, I wonder if we really need to know each time a terrorist lights up a cigarette that might burn something. What are your thoughts on this?

  14. DataCrunch
    November 3, 2010

    Bolaji, I think if every attempted or foiled terror attack was publicized, no one would leave their homes.  Maybe I am exaggerating a bit, but I think you get the picture.  This is a difficult question to answer, but in the recent instance, I am not sure what the real motives were behind the publicity around this attack.  Was it to tout that we thwarted a terrorist plot or to let the public know we still have gaps in the system? 

    It will be interesting how all this plays out in terms of air parcel and freight shipments in the future and will 100% inspections be mandated and how it will affect delivery times and costs.

  15. bolaji ojo
    November 4, 2010

    My current take on this is that perhaps businesses have previously kicked against 100 percent inspection of all cargo prior to shipment and now governments worldwide want to use the latest bomb scare to pressure them to accept this initiative. It could also come down to who would pay for the inspection. Government may be asking companies to split or pay the full cost. What's sure to happen now is that a greater percentage of cargo will be subject to pre-shipment inspection.

  16. Hardcore
    November 4, 2010

    Hi Ojo,

    It is a difficult situation to  analyze, and just prior to the printer 'packages' being found there were complaints from Certain U.K carriers about American requests for inspection of passengers.

    Shortly after the packages were found a number of sources were suggesting that perhaps it was a publicity stunt By the Americans, which really does the biscuit for conspiracy theories.

    The real problem is that we are dealing with intelligent people and as such no matter what safety systems are in place, these people are spending significant resources ….. time money, intelligence… on finding ways through the security system.

    As long as passenger planes are allowed to carry cargo from unsecured sources, there will always be a significant risk of a 'device' getting through the checks.

    I'm very familiar with the cargo shipping systems starting at the factory all the way to the final customer, even with pre-shipment inspection of cargo  I can think of a multitude of ways to  get a 'device' into the system, ultimately we are talking about something  the size of a portable phone ,weighing no more than 500g.

    When you stand inside a 40' container being filled with 200,000 'small' electrical products  in a factory in China , you quickly realize inspection is not the way to go, especially when you realize the container can then be 'decanted' at any stage of its shipment.

    These people are more interested in news that will get headlines and involves killing significant numbers of people, i cannot see DHL/UPS or other 'pure' cargo carrier systems being a major target in such a campaign, unless the terrorists know the cargo will be decanted onto commercial airliners at a particular point in its journey.

     

     

  17. Anna Young
    November 7, 2010

    Hardcore, The likelihood that any determined terrorist would finally succeed is high and shocking to consider. This entire situation brings to mind the reality that the security of the global logistics system depends more on trust and willingness of participants to engage in self-survival practices than anything else. We can seal up what we can but what if the bad people infiltrate even areas we think are currently safe? What if they gain the trust and confidence of people at any of the major high-tech manufacturers and smuggle bombs into those containers that may not be inspected closely simply because they are coming from trusted sources? What do we do at that point and who do we see from then on as friend when foes are seen all around us?

  18. Hawk
    November 7, 2010

    I don't see 100 percent global cargo inspection happening anytime soon, which means we will continue to live in fear of the unknown. The challenge for regulators is knowing what to inspect, what to leave and what to watch carefully. The governments involved have to juggle the task of keeping shipments safe while avoiding massive delays. Bolaji is right. The shipments must be kept safe. That's what the inspectors must do no matter how complicated or difficult.

  19. bolaji ojo
    November 7, 2010

    Hardcore, The example you gave demonstrates how difficult a job it is and will be for governments worldwide to safely secure shipments across international lines. However, this must still be done, pitching what we would like against what we can do without impeding the regular flow of commerce. Logistics companies cannot just deal only with trusted sources. Their profit interest demands otherwise so the job of ensuring only safe products are transported must necessarily fall not just on them but also on all parties to international shipment.

  20. Hardcore
    November 9, 2010

    I read in the Hong Kong daily yesterday morning, that they had a 'fire' at the central dispatch warehouse post office. All hell broke loose, they thought it was a 'device', and as a result had to scramble the full works: fire/emergency, police ,army and bomb disposal personnel.

    Fortunately it was a shipment of LI-Ion batteries that had short circuited. After checking they found they had been shipped by 'surface', which does not preclude shipping such devices.

    The Hong Kong post office ships 500,000 packages a day all over the world, and a significant part of that is electronic components/ populated PCB boards/ electronic samples.

    There is no way that they could inspect 100% of the goods, plus many,many of the packages are 'mislabeled' because the senders are operating semi-legal businesses, buying goods in China and shipping out to customers via the HK post system.

     

    Pure Inspection will not work.

  21. bolaji ojo
    November 9, 2010

    Just imagine if we have to screen every parcel that gets sent by surface mail. After thinking about this the last week, I couldn't but wonder how Israel secures the shipment of products into and out of the country. Israel has taught airlines a thing or two about how to secure air passenger transporation. We should get some ideas from them about securing cargo shipment. Does anyone know how Israeli cargo is screened?

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.