Wilson fires a shot across the DHS bow

By Michael A. Levans, Chief Editor -- Logistics Management, 7/1/2005

It's mid-summer, and all eyes are on a document called the "Annual State of Logistics Report." In issuing the report, economist and industry consultant Rosalyn Wilson carries on the tradition begun 16 years ago by the late Robert V. Delaney.

Through Wilson's diligence and the support of the Council of Supply Chain Management Professionals (CSCMP), the report remains the defining source for statistics on the state of the U.S. business logistics system. This year, it also includes thought-provoking commentary on cargo security.

You'll find an overview of the report in our cover story (Page 32), but here are some figures to know before you dive in: In 2004, total logistics costs rang up at just over $1 trillion, or 8.6 percent of GDP—the lowest level in the past 20 years. Still, that was a $71 billion jump from 2003, much of it from rising transportation costs.

You're already painfully familiar with the cost drivers Wilson mentions: Freight volumes reached new highs, carriers struggled to meet demand, fuel prices shot through the roof. Those conditions, she says, will continue to push rates higher, right into 2006.

Yet the impact of those issues, Wilson suggests, would be dwarfed by a terrorist action against the nation's supply chain. She fires a shot across the Department of Homeland Security's bow, saying that efforts by DHS and other federal agencies have failed to reduce our vulnerability. "Supply chain security is finally getting the attention it deserves, but is the attention more lip service than action?" she asks.

After re-reading my conversation with cargo security evangelist Stephen Flynn (Go to logisticsmgmt.com, search FLYNN), it's tough to disagree with Wilson's contention. It's easy to understand why the Transportation Security Administration (TSA) spent $11 billion on airport security to assuage passengers' apprehension and get the airline industry moving again.

It isn't easy to understand the lack of attention by DHS and TSA to other transportation modes. If the West Coast port shutdown in 2002 cost the U.S. economy $1 billion a day, Wilson says, imagine the damage that would be inflicted by an attack on key ports—an event Flynn says the country is utterly unprepared to handle.

In light of Wilson's report, Flynn's call to action, and the recent events in London, it may be time for shippers to become more deeply engaged in cargo security issues and consider how their companies could get more involved.

Without more shipper involvement, these programs will indeed be nothing more than lip service.

Michael A. Levans, Chief Editor