Security issues will continue to dominate

Since 9/11, it is no exaggeration that security issues have come to dominate much of the thinking and planning in global supply chain operations. Security within the chains has become the subject of a great deal of political focus in recent years and, for Europe at least, the function of securing them has yet to be resolved in an acceptable way. Acceptable, that is, from the point of view of cost to industry and the facilitation of trade. Understandably, the United States has led the way in this process, but what has been put in place is far from satisfactory. I do not believe that the US has been able to count the cost as yet, and much of this has been imposed on those countries that export to America. If and when other countries impose their conditions on US exporters, there may well be a reaction. Having a secure supply chain at minimal cost and with little disruption to trade appears difficult to achieve within the same strategy, thus posing yet another challenge for industry and the politicians. There are some commentators that hold that many burdens placed on the forwarding industry to police security within the supply chain are unreasonable and are more often than not created for political expediency and value than real enhancement of freight security. As a trade association charged with looking after the interests of our membership, I ensure we have a large role in formulating UK and EU legislation to counter empty and often counter-productive political efforts. This effort is especially important as over the next decade there will be increasingly complex modifications to regulations controlling the movement of goods imposed by politicians, whether in Washington, London, Brussels or Pretoria. Often these changes will be inflicted without true industry consultations, leading to ill-thought-out and impractical inspection and control procedures. I suggest that only a barnstorming politician could have promoted a regime that says 100% of containers entering the US have to be inspected! A European view for managing security is still under consideration, not least because the significant road transport element that delivers inter-European trade across borders that are no longer policed. For the forwarder in this situation knowing the customer and his freight is legitimate trade is essential, if easier said than done. European Customs authorities have been attempting to make changes to the Customs Code that has for the first time had to have inserted in it a requirement that takes account of security needs. Alongside this is the developing concept of the Authorised Economic Operator (AEO), a status that can be granted to any trading company including freight forwarders who can demonstrate that they are able to meet established criteria to prove their legitimacy. Such AEO status is aimed to provide the authorised company with less onerous control processes in order to move freight from one country to another. When we entered 2008, this new regime and the protection that it promises were only theoretical but authorities are clearly looking toward the US for recognition that will equate with their own C-TPAT (Customs and Trade Partnership Against Terrorism). Gaining AEO status for the freight forwarder, some believe, is a form of licensing that has been an objective for the industry over many years. Customs plays down this suggestion but there is no doubt that in the coming years we shall begin to see a new era emerging where the authorised trader will be able to add value to supply chain operations in an increasingly legislated environment. Protecting the cargo from the terrorist is only one aspect of security. The customer is, legitimately, far more concerned about protection for his cargo from would-be criminals. This can represent a far more expensive price tag and raises another issue that must be tackled by the partners in the supply chain, working together rather than in isolation. Globalisation does not just respect legitimate activity. Criminals have become more sophisticated and successful, taking advantage of the increasing amount of unprotected cargo in transit.