The Project > Phase I

Background
Operation Safe Commerce (OSC) is a public-private partnership whose goal is to provide information that will be used to develop a new model for international freight that maintains open borders and facilitates commerce while improving security. The initial focus of this project is on examining the security of the supply chain for containerized cargo entering the U.S. through the Northern border in New Hampshire and Vermont. Point-of-origin security, in-transit transparency and accountability, and data query capability designed to validate and facilitate the movement of legitimate containerized cargo are addressed.

Objectives
The main objectives of this Phase One study are to 1) evaluate the international supply chain for a container shipment of a volunteer shipper in New England, 2) perform a review of available container tracking and security technologies and 3) conduct and document a field demonstration of a single shipment of a container instrumented with tracking and security sensing capabilities.

Approach
In February 2002, the inter-agency Technical Support Working Group (TSWG) provided funding to conduct OSC Phase One in New England. OSC Phase One consisted of three major tasks:

- Container Security Technology Assessment
- Supply Chain Analysis
- Container Security Technology Demonstration

Technology Assessment
The Volpe Center (part of the Research and Special Programs Administration of the U.S. Department of Transportation) reviewed commercially available tracking and security systems to determine which best met the project requirements as stated by the OSC Partnership. As a result, a suite of components was selected for the Technology Demonstration which included a Global Positioning System (GPS) transceiver and data logger, seals and intrusion detection devices. Additional data on security technologies was received from several agencies during the project and evaluated.

Supply Chain Analysis
The Supply Chain Analysis evaluated the container shipment process for a volunteer shipper's product from point of production in Europe to point of distribution in the United States. The analysis described the movement from the point the container was packed in Slovakia, through transshipment points in Hamburg, Germany and Montreal, Canada to its destination in New Hampshire. Data was collected for four aspects, or channels of the Supply Chain: distribution, communications, transactions and custody. The Distribution Channel concerns the physical movement of the container, the Communication Channel involves the documentation and communications which support the shipment, the Transaction Channel concerns the financial and legal functions supporting the movement and the Custodial Channel involves what organization governs each stage of the shipment.

The Volpe Center Team observed the operations along the route, and interviewed individuals involved in each stage of the process. The team had limited time to collect data at each site, but was able to characterize many of the practices involved. A detailed description of the four channels was produced.

The Supply Chain of the sample shipment was relatively simple, involving a single commodity, single points of origin and destination and a single carrier and freight forwarder. The sample movement illustrates many of the complexities of container shipments, however. The shipment was international, traversing several international borders and their respective governmental agency involvement. The shipment was also intermodal, involving both motor carrier and maritime transportation.
Security Practices and Vulnerabilities

In parallel to developing the description of the supply chain, the Volpe Center Team documented security practices and security technologies in use by the organizations which handled the container. The Volpe Team also identified potential vulnerabilities in the supply chain. The length of the site visits did not permit a comprehensive security assessment to be conducted, but the cumulative observations made throughout the supply chain enabled the team to identify many areas where security could potentially be enhanced.

The observed security practices and vulnerabilities have been described in terms of ten categories. It was not the team's original intent to collect information on all these categories, but findings are presented in this format to suggest areas where future improvements might be made as part of a comprehensive approach to improving container security throughout the supply chain. These categories include:

- Security Programs and Policies
- Use of Intelligence and Threat Data
- Personnel Security
- Physical Security Systems
- Operational and In-Transit Security
- In-Transit Security Technologies
- Shipment Monitoring
- Shipment Screening
- Information and Financial Management Systems
- Custody

The Volpe Center Team believes that the vulnerabilities identified are typical of many international supply chain operations. The specific findings are not included in this summary because of their sensitivity.

Technology Demonstration
A demonstration of container tracking and security sensing technologies was conducted in May and June 2002. The equipment chosen for OSC Phase One was selected to meet several requirements identified by the OSC Partnership. These requirements included the capability to detect intrusions to the container while enroute.

A container used by the volunteer shipper was instrumented in Slovakia with a GPS transceiver and data logger, seals and intrusion sensors. In addition, interrogation stations for collecting data from the container and transmitting it back to the Volpe Center were installed at five locations along the route.

The Technology Demonstration provided valuable insight into the effectiveness and feasibility of utilizing container tracking and sensing technologies. The demonstration identified specific technical capabilities needed by an integrated container security system. In addition, the demonstration illustrated the challenges to deploying a container security infrastructure, employing equipment such as wayside interrogators, throughout the global logistics system.

Recommendations
As a result of the insights gained by the Supply Chain Analysis, Technology Assessment and Technology Demonstration recommendations for improvements to the security of international container commerce have been suggested for each of the ten categories identified above.

In addition, the following actions are recommended for future Operation Safe Commerce Programs:

- Operation Safe Commerce initiatives should be conducted in collaboration with related initiatives in government and industry to improve the security and efficiency of international commerce. OSC should be used as a "test bed" to evaluate key issues and proposed improvements.

- To ensure comparability among future OSC initiatives, participants should agree on a common set of supply chain evaluation criteria.

- In addition to the types of supply chain analysis and technology demonstration conducted in Phase One, risk assessments of the container logistics process should be conducted to identify the most cost effective set of mitigation measures.

- OSC participants and stakeholders should develop, and future OSC initiatives should be designed to demonstrate comprehensive "systems solutions" which optimize security, mobility and economic impacts.

For further information regarding the OSC Phase 1, reference U. S. Department of Transportation report DOT-VNTSC-TSWG-02-03 (For Official Use Only)