Smart and Secure Tradelanes (Securing the supply chain) John Kok Shanghai 5 Nov 2004
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1 Smart and Secure Tradelanes (Securing the supply chain) John Kok Shanghai 5 Nov 2004
2 Context security & supply chain management (SCM) 9/11 the factor Visibility serves SCM and security
3 Rationale Port Perspectives Minimise disruptions to routine operations Reduce chance of port closures Develop security services Supply Chain Perspectives Develop borderless supply chains Achieve an end to end cargo transparency (smart cargo) by linking different networks
4 Worldwide Port Coverage
5 Strategic Council On Security Technology The Strategic Council on Security Technology was founded to:! Analyze and pioneer adoption of new security procedures aimed at efficiently securing the global supply chain! Review and assess emerging technology trends in global supply chain and transportation security! Develop synthesized actionable insights for new solutions combining policy, business processes and productive technology! Take concrete, material action to secure global supply chains from weapons of mass destruction by leading industry on security initiatives
6 Container Security Considerations SOME US LED INITIATIVES - Container Security Initiative (CSI) Targeting and screening at origin (before loading) Use of technology including smart containers - Customs-Trade Partnership Against Terrorism (C-TPAT) trusted parties secure origins and handlers - 24-hour Advance Cargo Declaration (ACD or AMR) Advance information to assist targeting - Operation Safe Commerce (OSC) Test different processes and technologies
7 Container Security Considerations INTERNATIONAL INITIATIVES -IMO(International Maritime Organization) ISPS Code amendment to SOLAS Convention (equivalent to C-TPAT for ports and vessels) -WCO(World Customs Organization) Task Force on Security and Facilitation of the International Supply Chain (data for targeting plus C-TPAT for port hinterland) -ISO TC8(Technical Committee 8) To establish standards for data, process and technology for marine cargo -SCST(Strategic Council on Security Technology) Launched Smart and Secure Tradelanes (SST)
8 Multi-layered Security Facility security IMO ISPS Code Gamma-ray scanning and radiation detection Container information Supply chain security SST
9 Facility Security IMO ISPS Code Global Mandatory Requires port facilities and vessels to have a requisite level of security and be able to respond with higher levels of security if the authorities were to declare heightened security alert levels
10 Cargo Security: Gamma-Ray and Radiation Detection Ports can operate Gamma-ray scanning and radiation detection equipment Images and radiation profiles can be provided to the authorities as required The combination can provide indication of container contents without need for physical inspection Authorities can choose to examine any container image & data as necessary
11 Container Information Ports can provide data feeds as required A broad range of terminal operational data supporting security processes and logistics operational processes container scanned-image and radiation profile data
12 SST Securing the supply chain C-TPAT Manufacture Factory Consolidation Data for targeting Road Transport Consolidator / Distribution Center Road Transport Supply chain efficiency benefits inventory management asset utilisation Port of Loading Monitor at Key Choke & Transit Points Vessel Commercial security benefits Transit Port Brand protection Reduce pilferage, damage Positioned for green lane (reduced inspections) Audit trails for isolation, recovery and learning ( inspected already quicker re-starts) Vessel Port of Discharge Road/Rail Transport Mfg Distribution Center Retail Store National security benefits Reduce terrorism threats Retail Distribution Center
13 Handheld screen
14 Monitoring device
15 Reader at gate
16 Reader at gate
17 Reader at rail terminal
18 Readers on quay cranes
19 Readers on quay cranes
20 SST Scope Port of Loading Port of Discharge Singapore Hong Kong Chiwan Shekou Yantian KaoHsiung Laem Chabang Tacoma Seattle Los Angeles Long Beach Port of Loading Rotterdam Antwerp Felixstowe Port of Discharge New York/ New Jersey Houston Charleston Savannah Supply chains include high-tech electronic, mass retail, consumer packaged goods, auto parts, aviation, garments, footwear, and toys
21 Examples of Tradelanes Shipper and Origin Port of Origin Port(s) of Discharge End Destination(s) Container Volumes Computer Components Malaysia, Singapore Singapore Los Angeles Long Beach Tennessee 171 Consumer Goods China Hong Kong Seattle Washington 260 Lighting Equipment Shanghai, Jakarta Singapore Hong Kong Los Angeles Long Beach California 48 Tires Bangkok Singapore Savannah South Carolina 25 Consumer Goods Jakarta Singapore Long Beach California 17 Electronic Components Netherlands Antwerp New Jersey New York 12 Chemicals Germany Rotterdam New Jersey Charleston New Jersey North Carolina 15 Tires Indonesia Singapore Antwerp Luxembourg 60 Chemicals Houston Houston Singapore Singapore 30 Electrical Goods Thailand Laem Chabang Seattle Washington 30 Consumer & Industrial Goods Taiwan Kaohsiung Los Angeles Various 350 Consumer Goods China Shenzhen Long Beach Various 5 Other 3PL/LCL Cargo Various Various Various 180
22 Industry participation SST brings together partners & participants for joint development and testing government authorities shippers service providers ports ocean carriers other carriers technology providers
23 Operation Safe Commerce (OSC) SST being tested in new tradelanes Starbucks: Guatemala to Seattle Canadian Tire: Thailand to Tacoma Vitra: Turkey to NY/NJ HPH participating in OSC projects involving the testing of other technologies and leveraging SST processes, e.g. Tioga project: different information system Innolog project: different tags & scanning devices
24 Going forward Promoting industry action to secure the supply chain mandatory versus penalties and incentives versus commercial benefits (or all of the above) involving government Smart containers and the green lane Further interactions with various customs agencies (China; Netherlands, UK, etc.) & WCO private industry Multi-layered approach Establish commercial viability Roll-out plans and network growth
25 Actions Interfaces to governments support; collaborative projects funded by the US, Japanese and Chinese governments (including HK & Taiwan), EU? Product defined, developed & refined Smart Containers, non-intrusive inspection, targeting systems, etc. satisfy security and supply chain efficiency Insurance insurance industry support on risk management to influence adoption Test marketing working with shippers to uncover actual benefits and market adoption Shipping Councils/Associations building coalitions with shipping lines to encourage active participation World Customs Organization working with specialist organisations to improve solution
26 Scanning equipment layout Radiation Portal Gamma-ray Portal OCR Portal 4 m 5 m 4.25 m Low radiation power High penetration 75 m Detects spectrum of radiation (special nuclear materials like plutonium, cesium, uranium) Can distinguish normal radiating materials (eg. Bananas)
27 Gamma-ray scanning portal
28 Radiation portal
29 Gamma-ray images
30 Smart Container - Potential issues Pin security issues cause security seal and tag security to be ineffective.
31 Smart Container Possible solutions US Customs suggests high security bolt seals be places that the base of the locking bar. This will require a ½ inch hole be drilled to insert the seal.
32 Pardo Hole Approximately Approximately a ½ inch inch hole hole all all the the way way through. through.
33 Towards Smart Containers Step One Historical Step Two Retrofit Technology Step Three Retrofit Technology and Processes Step Four Smart Container STT Phase One Implementati on SST Phase One Prototyping SST Phase Two Implementation SST Phase Two Prototyping Objective Basic Deterrence Manual Detection Enhanced deterrence, track/sense throughout supply chain Track/sense throughout supply chain while further enhancing physical security. Further improvement in physical security, enhanced sensing capabilities and reduced costs Methodology and Process Existing Processes Existing Processes New processes for adapting and sealing containers Automated Technology Bolt Seals Electronic Bolt Seals Improved intrusion detection sensors. transmitter inside container Sensors and Communications built into Container
34 Smart Container
35 Nested Visibility As items are put into boxes their information is entered into the box-level RFID tag. As boxes are put on pallets their information is entered into the pallet tags. As the pallets are loaded into a freight container their information is entered into an active tag on the container. Active RFID Tag
36 7 Future Extension (South China example) Guangzhou Dongguan Factory Pearl River Delta 沙田 Consolidation Centre Shenzhen YICT Hong Kong Zhuhai HIT Hutchison Ports HKG Airport SST Cargo RF Infrastructure
37
38 Heading towards Borderless supply chains ( green lanes everywhere ) Networks of networks, all interlinked Virtual central clearinghouse of information Smart cargo cargo transparency
39 Our Mission To be the global market leader in port development, operations and logistics services
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