Freight Security and the World Economic Forum December 5, 2002.

Freight Security and the World Economic Forum

December 5, 2002

2©Accenture 2002 All Rights Reserved

The Real Threat to Global Supply Chains

The Problem – Where to Begin

Questions

The Call to Arms

Agenda


The Transportation Security Model is a conceptual model or “framework” designed to:

Build an understanding of the security threats facing the transportation system

Create a common view which addresses the security issues of each mode of transportation

Provides a structured approach to collect and analyze risk management data

A Conceptual Framework


Transportation System

Transportation Mode

Mode Entry Points

Main Threat Areas

The entire system as a sum total of all transportation modes

Method for moving goods and people within the system (Air, Maritime, Rail, Highway)

Points or locations at which threats may enter the transportation mode

Focused areas or entities which have credible potential to introduce threats into the transportation system

Definitions

The model was designed around a basic transportation process applicable to all modes of transportation and the potential threats to each mode.

Transportation Security Model


PassengersEmployees

Cargo

Airports-Domestic-Foreign

Air

Transportation System

Mod

e

Mai

nTh

reat

A

reas

Ent

ry

Poi

nts

Highway Maritime

Ports-Domestic-Foreign

EmployeesHazardous Material

Cargo

Border CheckpointsPickup and Delivery Points

ShippersEmployees

Cargo

Transportation Security Model - Examples




Questions

The Call to Arms

Agenda


The threat is systemic:

While there are a number of individual activities or programs, individual action will not provide the required security

Cargo is the thread of continuity across modes

Modal exchange and interchange points provide significant risk to compromising supply chain security regardless of a company’s individual activities

The threat is fluid and will change in response to any activities

The Threat


There has not been a comprehensive response:

There have been a number of approaches suggested to support freight and cargo security. Most of these focus on a specific aspect or component of security.

To date there has not been an overall vision or approach defined to support this critical function.

While the desire to avoid impacting supply chain efficiencies has been acknowledged, there has been little work or analysis to suggest how this can be accomplished

The Response




Questions

The Call to Arms

Agenda


At the 2002 Annual Meeting in New York, the Logistics and Transportation Governors discussed the issue of “Security” and its impact on the industry.

The World Economic Forum, Accenture, and the Massachusetts Institute of Technology (MIT) partnered to explore relevant industry-wide issues that could be addressed.

Decision was made to put in place a program to move the issue forward.

The Freight Security Initiative was developed to provide the industry with a platform it could leverage to take a pro-active stance on addressing freight security.

Program Background


Crystallize and communicate the issues regarding freight security

Conduct a fact-based analysis of these issues and develop corresponding recommendations

Provide recommendations from the business community to governments and controlling entities such as IATA, US DOT and the EU to develop and implement programs and processes for global freight security

Identify and mobilize the appropriate resources to influence these issues and implement the recommendations

The program will provide a means to identify and communicate inter-modal security issues and create a framework for industry to engage governments and controlling entities.

Program Objectives


Conduct fifteen to twenty interviews with senior executives representing carriers, shippers, government authorities, and insurance companies

Conduct a broad survey of executives in the transportation industry based on the interview responses

Analyze interview and survey results and develop key messages

Develop and disseminate a white paper for the 2003 Transport and Logistics Governors Meeting

The initial research will be developed to support the Annual Meeting in Davos with both qualitative as well as quantitative research.

Project Plan


Industry Perception of the Threat

Anecdotal evidence supports our belief that the industry views the threat to freight security to be highly relevant.

Internal Security Initiatives

Organizations are reviewing security procedures and policies, but there has been little impact on reducing the overall threat to freight security.

Government Initiatives

Governments are taking a controlled response to freight security, but still lack unilateral security measures to deal with the issue.

Customer Security Requirements

Shippers will rely on carriers to lead the effort in developing industry and organizational programs to address the security issue.

The Economics of Security

An effective freight security program will increase supply chain costs, however there currently is no clear economic model for providing enhanced security.

The Research is Structured Around Our Five Freight Security Hypotheses


Facility and Operations

Assessments

Conduct assessments and certify the operations of each provider in the supply chain – shippers, carriers including maritime, rail, truck, air, and bus, freight forwarders, and port operators

Shipment Data Repository

Establish a standard repository for all shipment data that includes the origination, route, and each “handling” that occurs.

Tracking Technology Utilize technologies – RFID, GPS, Smart Seals – to track shipments in route and potential tampering activities.

Pre-Emptive Screening

Utilize shipment manifest information to target suspect or high risk shipments for detail inspections or analysis.

Re-Active Countermeasures

Utilize technologies to track vehicle locations against pre-authorized routes and schedules. If deviations occur, vehicles could be stopped electronically.

This Platform can be Used for an Industry Led Response in Key Focus Areas

Illustrative




Questions

The Call to Arms

Agenda

Freight Security and the World Economic Forum December 5, 2002.

Documents

mode of transportation

threat slide

modes of transportation

cargo security

transportation governors

security threats

security issues

freight security