Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
In the bustling Indonesian seaport of Surabaya, a truck driver with ties to al Qaeda turns into an alley and backs his rig up to a nondescript warehouse. His cohorts pry open the door of a container filled with designer sneakers and thrust a lead-shielded dirty bomb inside. The driver heads for the dock, where the container is loaded on a feeder vessel for the first leg of its voyage to the United States.
Some weeks later, the Chicago-bound container enters North America via the Port of Vancouver. Noting that it originates from a company that has joined the Customs-Trade Partnership Against Terrorism, U.S. Customs inspectors at the port wave the container through without inspection. It's loaded directly on a railcar for movement to a Chicago distribution center (the dirty bomb's lead shield prevents detection by the radiation pOréals deployed along the U.S.-Canadian border). When workers at the DC go to open the container, a device on the door triggers a violent explosion, releasing a cloud of industrial-grade radioactive material in the process.
That's the scenario that keeps Stephen E. Flynn awake at night. It may be a hypothetical account, Flynn said in testimony to the House Armed Services Committee this spring, but it's nonetheless plausible. That grim scenario is also what compels Flynn, a retired Coast Guard commander and senior fellow at the Council on Foreign Relations (CFR), to spend his days trying to convey the urgency of the port security problem to Congress and the American public.
Five years after the World Trade Center attacks, U.S. ports remain a security risk. Just about everyone who deals with security issues agrees on that. As a nation, we have yet to come up with an effective means of protecting our seaports, some of which are secured by nothing more than a chain-link fence. Perhaps more to the point, we have yet to find a way to ensure that none of the millions of containers entering the country each year harbors chemical, radiological, biological or nuclear weapons.
While everyone agrees port security is important, there's little consensus on what it will take to prevent terrorists from smuggling a dirty bomb into the country via an ocean container. Or how effective security programs implemented over the last five years have been. Or how to secure the vital cooperation of other nations. In the meantime, the debate continues. In fact, the issue of port security came to the fore just recently. In late September, Congress passed the SAFE Port Act of 2006, which among other measures, increased federal funding for port security, mandated nuclear and radiological container screening at 22 ports, and launched cargo-scanning pilot programs at overseas ports.
Are we safe yet?
If security efforts have fallen short, it's certainly not for lack of trying. In the last five years, the U.S. government, international organizations and the private sector have all taken steps to boost security. Ports have spent millions of dollars on security upgrades. Congress has passed legislation aimed at protecting U.S. ports and waterways from terrorist attacks, including the 2002 Maritime Transportation Security Act (MTSA). The International Maritime Organization has adopted security requirements for its 159 participating governments, which have now been codified as the International Ship and Port Facility Code (ISPS). And U.S. Customs and Border Protection (CBP) has established the Customs-Trade Partnership Against Terrorism (C-TPAT), a strategic plan aimed at getting U.S. companies to police their own supply chains.
But their efforts have met with decidedly mixed reviews.
Port executives would argue that the nation has made headway. In a statement last month on the eve of its annual meeting, the American Association of Port Authorities said, "In the nearly five years since 9/11, America's seaports and the federal government have joined forces to make major gains in fortifying and hardening port facilities against intruder attack. With the combined efforts of public ports, initiatives of federal agencies within the Department of Homeland Security such as the U.S. Coast Guard and Customs and Border Protection (CBP), ports are significantly safer now than prior to 9/11."
The CBP hews to the party line as well. Last spring, Deborah Spero, who was acting commissioner of CBP, told those attending CBP's C-TPAT conference, "Together, we have worked to strengthen the global trading systems and have made our nation's cargo more secure. And the result is that America is safer."
Others, however, have reservations. That became clear from a report released last month by the Lyndon B. Johnson School of Public Affairs at the University of Texas. Conducted for the Congressional Research Service, the study, titled "Port and Supply Chain Initiatives in the United States and Abroad," examined port and supply chain security initiatives around the world. Though the report did not attempt to assess the efficacy of the programs, it did present viewpoints critical of the existing security initiatives. "Our research found an abundance of conflicting views on both ISPS and its domestic counterpart, MTSA," the report said. MTSA, according to critics, does not address real security risks while substantially increasing the workloads of port security officers. ISPS also came in for criticism much of it centered on its implementation, which was termed inconsistent at best.
Targeting the supply chain
The mixed reviews in the LBJ study, though, appear positively optimistic compared to the grim perspective offered by Flynn, who is one of the foremost critics of port security policy. In his testimony this spring, Flynn was blunt in his assessment of the state of port security. "[T]he security measures currently in place do not provide an effective deterrent for a determined terrorist organization intent on exploiting or targeting the maritime transportation system to strike at the United States," he told the committee. (Flynn's testimony is taken from a transcript on the CFR Web site. He could not be reached for comment.)
And the heart of the problem, he contends, is the supply chain. "[T]he threat is not so much tied to seaports as it is to global supply chains that now operate largely on an honor system because the standards are so nominal and the capacity for agencies like the Coast Guard and Customs is negligible," he said. "Based on my experience and research on this issue for nearly 15 years, I believe that the greatest vulnerability that will involve the maritime sector and our seaports is overseas within the transportation system before a container reaches a loading port."
Flynn went on to say that if something like his hypothetical dirty bomb scenario did occur, the consequences would go well beyond the mayhem caused by the explosion. It would also shake the American public's faith in the risk-management system currently in place. "All the current container and port security initiatives would be compromised by the incident," he said. "There will be overwhelming political pressure to move from a 5-percent [container] inspection rate to a 100-percent inspection rate, effectively shutting down the flow of commerce at and within our borders."
But that can all be avoided, he said. With international cooperation, the security problem can be solved. What's required, he said, is a program of mandatory cargo scanning. To that end, Flynn urged U.S. authorities to work closely with overseas terminal operators to create a system that scans every container destined for the United States before it leaves a loading port.
The scan debate
Is something that ambitious possible? Technologically, maybe. For the past two years, the Port of Hong Kong has scanned every single container entering two of its terminals, which are among the world's busiest. The Integrated Container Inspection System, sponsored by the Hong Kong Container Terminal Operators Association, uses three types of imaging to screen trucks and containers. As the vehicles pass through two giant pOréals, they're first scanned for radioactivity. They then undergo gamma ray scanning to generate a radiographic image of the container's contents and optical character scanning to read the container's ID number so it can be checked against cargo manifest data.
Would it work here? Flynn believes it would. He told the committee that four terminal operating companies handle 80 percent of the containers headed for the United States, and that if they imposed a fee of $20 per container, it would pay for installing and operating a scanning system worldwide.
But winning cooperation from widely divergent port operations will be no easy task. For one thing, many overseas players already resent what they see as heavyhanded attempts to secure their cooperation with U.S.-centric port security initiatives. In interviews with port officials around the world, researchers for the LBJ study heard complaints that U.S. security initiatives were being forced on other nations. And for many overseas ports, security simply isn't the top priority. "One of the most striking findings ... is the fundamental incongruity between the maritime security priorities of the U.S. and those of other countries," the report said. Terrorism was not a primary security concern for any of the port officials interviewed, who were much more focused on smuggling, fraud and human trafficking.
Even on the home front, the notion of 100-percent scanning has many opponents, including a number of shippers. In a letter urging Sen. Susan Collins, chair of the Homeland Security and Government Affairs Committee, to oppose any legislation requiring the scanning of all U.S.-bound containers, Sandy Kennedy, president of the Retail Industry Leaders Association, argued that 100-percent scanning would "impose immense costs on our economy and foreign relations without improving the security of our international trading systems." She cited a June 2006 study by RAND Corp. that concluded that 100-percent scanning would delay the movement of cargo containers by 5.5 hours per container.
C-TPAT doubts
Stepped-up container scanning is only one potential solution to the security problem, of course. In his congressional testimony, Flynn also proposed a second measure: tightening C-TPAT. Noting that Customs had only 80 inspectors to monitor compliance of some 5,800 C-TPAT certified companies, he urged Congress to require independent audits of the security plans developed by importers.
Flynn is hardly the only critic of C-TPAT. Some C-TPAT members themselves have reservations about the program. As part of the LBJ school study, researchers conducted a survey of National Industrial Transportation League members on the program (about 80 percent of the respondents were C-TPAT members). That survey revealed at least some disenchantment with the program. "[I]ndustry respondents believe that it is not operating efficiently," the report said. "In fact, most private-sector representatives feel that C-TPAT is an inadequately funded and managed program that requires costly, if not cost-prohibitive, security measures."
Those who responded to the survey acknowledged that they saw promise in the program for balancing security and trade growth. But they also criticized it for being highly bureaucratic. Further, the program was termed "virtually useless without foreign participation."
Despite all the disagreement over how to approach the problem, this, at least, is certain: security efforts will go forward. Leigh Boske, who headed the LBJ school study, was at pains to stress that in an interview. "It is too easy to begin with criticism and end with criticism," said Boske, who is associate dean and a professor of economics at the school. But those critical comments are just a small part of the picture. "That is not reflective of what foreign public officials or the private sector believe," he stated. "They believe in security."
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
The Boston-based enterprise software vendor Board has acquired the California company Prevedere, a provider of predictive planning technology, saying the move will integrate internal performance metrics with external economic intelligence.
According to Board, the combined technologies will integrate millions of external data points—ranging from macroeconomic indicators to AI-driven predictive models—to help companies build predictive models for critical planning needs, cutting costs by reducing inventory excess and optimizing logistics in response to global trade dynamics.
That is particularly valuable in today’s rapidly changing markets, where companies face evolving customer preferences and economic shifts, the company said. “Our customers spend significant time analyzing internal data but often lack visibility into how external factors might impact their planning,” Jeff Casale, CEO of Board, said in a release. “By integrating Prevedere, we eliminate those blind spots, equipping executives with a complete view of their operating environment. This empowers them to respond dynamically to market changes and make informed decisions that drive competitive advantage.”