Air Freight and Supply Chain Security

The World Trade Centre attacks led to airport security becoming a key issue for all governments. The high profile initiatives undertaken focussed on passenger transport and included limits on the amount of liquids passengers can carry and an increase in the number of passenger searches. Despite this increased focus on security, air freight seemed to escape attention leading terrorists to target  air freight as a potential security weak link. This lack of interest in air freight security is surprising as the US Department of Homeland Security (DHS) announced that securing the supply chain was part of a broader strategy for national security with it requesting that businesses begin to secure their supply chains. The attacks and changes in geopolitical situation generally led to governments and companies redefining supply chain security –  pre September 11 supply chain security focussed on theft, pilferage and fraud after the attacks  focus shifted to preventing terrorist materials entering the supply chain as a method of causing harm to society in general.

Despite this focus on supply chain security, supply chains remain vulnerable. The vulnerability of supply chains is shown by the increased targeting of air freight. This targeting has made the headlines in the UK papers over the last week as the Department for Transport has stopped UPS from screening air cargo at some UK facilities because of security concerns, this has led UPS to state:-

  “In cooperation with the Department for Transport, UPS continues to assess the operation of its UK network to ensure full compliance of EU and UK security requirements, leading to a higher level of service to its customers’

The Department of Transports reaction comes after previous security problems with air freight in late 2010, which led to Home Secretary Theresa May pledging to review air freight security.  The 2010 incidents involved explosive devices being transported from Yemen to synagogues in Chicago, this highlights that our efficient  air freight and distribution networks can also be utilised as a way of delivering an explosive directly to a target, additionally transporting explosives via air freight allows terrorists to detonate the explosive in populated areas and as a high proportion of air freight is transported on passenger planes it allows them to cause widespread casualties on domestic and international flights.

It is clear that terrorism has a major effect on society but it also has a major effects on the businesses involved:-

• If a supply chain lets a weapon of mass destruction be shipped by container, it will cost the supply chain about $1 trillion (Eggers, 2004).
• About 30 percent of financial and risk managers said that their firms were not ready for disruptions to their business (Bradford, 2003).
• About 40 percent of businesses that are affected by terrorism never re-open; of those that do, 30 percent close within two years of re-opening (Hardy and Roberts, 2003).

Despite the societal and business risk it is often difficult for firms to justify spending on security as there is often no direct threat and the return on investment is difficult to calculate this has led to:-

• About 80 percent of CEOs saying supply chain security is more important now than before 9/11, but only 33 percent said that they would spend more on security (Fischer and Green, 2004).
• 57% of transport executives said physical security was vital but only 9% said physical security in the  industry was excellent

So what can be done to reduce the risk of such terrorist attacks?

There are a number of activities that can be taken by all those involved in the supply chain to reduce the risk of terror attacks. Firstly the company and its supply chain must take inter-organisational and intra-organisational approaches to supply chain security and develop prevention measures that reduce the possibility of their supply chain becoming a victim of a terrorist such measures include building a security culture, identifying and  mitigating risks in the supply chain,  training all staff in security, developing strict document match procedures which prevent additional units being added or replaced within consignments, segmented storage for different types of product, and the usual use of guards, security checks, restricted access and CCTV. These measures should be supported by six sigma tools to guarantee quality and allow unusual instances to be detected. Furthermore as supply chains involve multiple companies collaboration and visibility between supply chain companies must be established to ensure full visibility of movement.

The focus of much of the publicity and policy discussion on supply chain security has been cargo screening. The cargo screening methods used vary greatly between countries,  ranging from no screening to screening a small sample or simply matching consignment sheets with goods. The UK uses a ‘known consignor’ system, where freight companies are audited by the Department for Transport and once the company gains trusted status, its freight is no longer checked. The audit of such companies includes site inspections, staff checks, security checks and procedure checks. In the UK freight from unknown consignors is screened utilising sniffer dogs and x-ray technology.

However, given the large amount of cargo transported it is currently not possible to screen all cargo for example in 2008 only 3 – 4% of worldwide air cargo was scanned. Attempts to screen a higher proportion of cargo will either need the development of substantially better technology or it will mean that significant delays will be added into the supply chains of the high value or short shelf live product that is transported by air. Clearly the technology solution is unlikely in the short term and supply chain delays are undesirable. This means that the best available option is intelligence led security which utilises data analytics to identify freight which is unusual, once unusual freight is identified it will be screened for explosives.

It is clear that no solution is perfect and that screening is not the answer, the best option is for companies to work to improve their supply chain security and for air freight providers to use data analytics on shipping data to identify unusual freight for screening