Cutting through the noise (page 3)

-- Logistics Management, 11/1/2005

Page 3 of 4
Scott Kirk, E.J. Brooks' executive vice president, says that while shippers may gravitate toward inexpensive security solutions, some of the newer, more expensive options are stronger and will help shippers comply with new regulations, such as one requiring seal verification at the point of embarkation. "That's going to require massive amounts of labor and it's going to push the market to automation," he says. "At that point we're definitely going to see the market using electronic seals."

Layered Approach

Just how quickly and effectively vendors step up to meet the growing need for cargo-security technology is anyone's guess. Most vendors are bullish on their prospects for success, while industry experts are more conservative in their outlook. The HSRC, for example, says that by 2010, most anti-terror systems will rely on "fused technologies" rather than on a single product to protect users' shipments. That's because a single technology can be "fooled," says Pely, and therefore is incapable of addressing all threats.

Instead, shippers should be looking at taking the "layered" approach advocated by Cmdr. Stephen Flynn of the Council on Foreign Relations and other security experts. Combining two types of security measures that are each 80-percent effective, for example, results in a solution that's 96-percent effective, explains consultant Jade Rodysill, of Accenture For example, by combining electronic seals with surveillance devices and spot checks while containers are in port, shippers can better achieve their security goals, he says. Replace that arrangement with five layers of security that are each 60-percent effective, and you wind up with a 99-percent effectiveness rate. Since no solution on the market today can offer 99-percent certainty on its own, Rodysill says, a layered solution is most effective.

Going forward, Wolfe says, vendors of cargo-security technology will have to fine-tune their product offerings and bring prices down. At the same time, users will need to develop confidence that they are maximizing the value they derive from those products. He compares shippers' confusion over security devices to truckers' learning curve when they began using satellite, cellular, and onboard computer technology for fleet management. It took time for carriers to determine which of those options worked best for them and had the most advantageous cost and service levels.

If an act of terrorism involving freight transportation should occur, it could lead to a good news/bad news scenario. The bad news: It would certainly speed up the passage of blanket regulations, which probably would adversely affect the time to market for new products. Yet it could push companies to invest in and adopt cargo-security technologies much more quickly. But Wolfe hopes it never comes to that.

"If that kind of event happens, it will trigger emotional overreaction by politicians, much like what we've seen in airport security over the last four years," says Wolfe. "If there is a supply chain-related event, the pressure to use these technologies will become much more urgent."

Contributing Editor Bridget McCrea frequently covers supply chain technologies and distribution strategies.

Editor's Note: For an in-depth view of security threats, see, "How vulnerable is your supply chain?", an interview with Stephen Flynn of the Council on Foreign Relations, in the April 2005 issue of LM. Available online at www.logisticsmgmt.com.  Continued...

Previous 1 2 3 4 Next