Regulators and legislators are paying more attention than ever to freight shipments and are mandating tighter security constraints. For virtually every global entity, this enhanced focus on security means increased complexities and costs. According to one industry group, even before recent security-related regulations were in place, a typical cross-border shipment involved 35 documents and 25 parties—all subject to more than 600 laws and 500 regulations. On the cost side, inspection rates for inbound containers at many ports have increased from 2 percent before 9/11 to greater than 7 percent.

To help organizations manage this thorny situation and gain competitive advantage, supply chain leaders should consider adopting a three-pronged approach to their freight-security strategies, as summarized in the above graphic.

1. Design an optimal security model. The most successful security models are those that are layered, open, flexible, and tightly coupled. Layering (implementing multiple security solutions) is particularly important because no one solution can fend off all threats. For example, five layers that are each 60 percent effective represent 99 percent effectiveness in the aggregate.

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In addition to layering, an optimal model will be flexible. On the one hand, entities such as the World Customs Organization demand flexibility in process enablement and parameter-setting. However, tailored responses also are needed to comply with such mandates as the European Union’s Waste Electrical and Electronic Equipment (WEEE) Directive. A security model’s flexibility enables organizations to respond quickly and effectively to cataclysms or unexpected rulings from governing bodies.

2. Implement a continuous “sense and respond” capability. A primary security tenet is the ability to pick up and interpret signals, and respond quickly and appropriately based on rapid operational and financial-impact analyses. This will become more vital as the frequency of regulatory events increases and the required time-to-action shortens.

With cross-border shipments already subject to compliance with hundreds of trade agreements and laws, it is necessary to identify, capture, and filter information in advance of physical and financial flows. This means recognizing the conditions under which influential events might occur. It also implies the capacity to interpret information, not just capture it. For example, London authorities benefited from the visibility provided by numerous video cameras and the awareness that a tragedy similar to its subway attacks had occurred the previous year in Madrid. Yet a lack of rapid, insightful interpretation prevented significant action. A meaningful, interpretative capability requires new techniques and technologies for viewing changes in data over time (trends, inflections) and in comparison with other data (correlations, fuzzy logic).

The goal is the ability to recognize threats, rapidly identify response options, evaluate the impact of those options, and take appropriate action. Ideally, an organization’s responses will be preconfigured—tested and refined over time to gauge efficacy and identify delayed or tertiary effects. Preconfigured responses also help companies understand financial implications, such as cost-to-serve impacts and lost-opportunity costs.

3. Conduct closed-loop planning and advocacy. The third facet of an effective freight-security strategy is continuous improvement: scrutinizing environmental conditions, recording those observations, and using them to build dynamic models that improve future outcomes. Basically, it’s an ongoing, closed-loop process: act, document, model, and repeat.

Advocacy is vital, whether it is through regulatory, legislative, media, or partner channels. For example, shipper groups that called attention to congestion at the ports of Los Angeles and Long Beach helped convince the U.S. and Mexican governments to allow intermodal freight to travel in-bond into the United States from the Mexican ports of Manzanillo and Lázaro Cardenas without incurring security-driven delays.

Given that future security “incidents” are probably inevitable, global freight security will likely become evermore costly and complex. It may seem daunting to navigate through an uncertain future clouded with increasing regulation, but every organization can help make the best of this challenging environment by developing and implementing an optimal security model—one that features an innovative sense-and-respond capability and the capacity for continuous improvement and insightful outreach.