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Internationalize Supply Chain Security Standards

A global security system of action, reporting, and oversight is required that protects supply chains from the point of manufacture through our ports to store shelves at major retailers such as Target or Wal-Mart.

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Seaports are the on-off ramps to the multi-trillion dollar global economy. Any major system disruption will generate economic losses equal to the gross domestic product of many countries. The closure of West Coast ports, which handle half of all U.S. imports, would start at $1 billion a day and rise rapidly after the first week. A decision to close all ports following a terrorist attack, a likely political response absent a strong management system, would actually fulfill the perpetrators’ key objective.

Better tools are required to help future leaders avoid such a decision. But private sector efforts to secure supply chains, such as the Customs-Trade Partnership Against Terrorism, or C-TPAT, are voluntary. Government on-site validation of security procedures is subject to advance notice, company cooperation, and only performed once.

Meanwhile, the participating companies enjoy preferences in container screening. Security standards should be applied that differentiate shippers and importers who do the minimum from those willing to do more. The existing system depends heavily on unreliable cargo descriptions on shipping manifests. More can be inspected without measurable impact on cargo flow. Reductions in cargo theft, currently estimated at $25 billion per year, can offset at least some security costs.

While the Dubai ports controversy highlighted the importance of maritime security, the solution is not to block foreign operations at ports, but to promote a global security system of action, reporting, and oversight that protects supply chains from the point of manufacture through our ports to store shelves at major retailers such as Target or Wal-Mart. Shipping containers are not the only or even the most likely potential target. Many ports could be shut down by sinking a ship while berthed, as was attempted with the USS COLE in Yemen in 2000, or in a critical shipping channel; others by destroying a single bridge or intermodal transportation link.

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