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."
Autonomous forklift maker Cyngn is deploying its DriveMod Tugger model at COATS Company, the largest full-line wheel service equipment manufacturer in North America, the companies said today.
By delivering the self-driving tuggers to COATS’ 150,000+ square foot manufacturing facility in La Vergne, Tennessee, Cyngn said it would enable COATS to enhance efficiency by automating the delivery of wheel service components from its production lines.
“Cyngn’s self-driving tugger was the perfect solution to support our strategy of advancing automation and incorporating scalable technology seamlessly into our operations,” Steve Bergmeyer, Continuous Improvement and Quality Manager at COATS, said in a release. “With its high load capacity, we can concentrate on increasing our ability to manage heavier components and bulk orders, driving greater efficiency, reducing costs, and accelerating delivery timelines.”
Terms of the deal were not disclosed, but it follows another deployment of DriveMod Tuggers with electric automaker Rivian earlier this year.
Manufacturing and logistics workers are raising a red flag over workplace quality issues according to industry research released this week.
A comparative study of more than 4,000 workers from the United States, the United Kingdom, and Australia found that manufacturing and logistics workers say they have seen colleagues reduce the quality of their work and not follow processes in the workplace over the past year, with rates exceeding the overall average by 11% and 8%, respectively.
The study—the Resilience Nation report—was commissioned by UK-based regulatory and compliance software company Ideagen, and it polled workers in industries such as energy, aviation, healthcare, and financial services. The results “explore the major threats and macroeconomic factors affecting people today, providing perspectives on resilience across global landscapes,” according to the authors.
According to the study, 41% of manufacturing and logistics workers said they’d witnessed their peers hiding mistakes, and 45% said they’ve observed coworkers cutting corners due to apathy—9% above the average. The results also showed that workers are seeing colleagues take safety risks: More than a third of respondents said they’ve seen people putting themselves in physical danger at work.
The authors said growing pressure inside and outside of the workplace are to blame for the lack of diligence and resiliency on the job. Internally, workers say they are under pressure to deliver more despite reduced capacity. Among the external pressures, respondents cited the rising cost of living as the biggest problem (39%), closely followed by inflation rates, supply chain challenges, and energy prices.
“People are being asked to deliver more at work when their resilience is being challenged by economic and political headwinds,” Ideagen’s CEO Ben Dorks said in a statement announcing the findings. “Ultimately, this is having a determinantal impact on business productivity, workplace health and safety, and the quality of work produced, as well as further reducing the resilience of the nation at large.”
Respondents said they believe technology will eventually alleviate some of the stress occurring in manufacturing and logistics, however.
“People are optimistic that emerging tech and AI will ultimately lighten the load, but they’re not yet feeling the benefits,” Dorks added. “It’s a gap that now, more than ever, business leaders must look to close and support their workforce to ensure their staff remain safe and compliance needs are met across the business.”
The “2024 Year in Review” report lists the various transportation delays, freight volume restrictions, and infrastructure repair costs of a long string of events. Those disruptions include labor strikes at Canadian ports and postal sites, the U.S. East and Gulf coast port strike; hurricanes Helene, Francine, and Milton; the Francis Scott key Bridge collapse in Baltimore Harbor; the CrowdStrike cyber attack; and Red Sea missile attacks on passing cargo ships.
“While 2024 was characterized by frequent and overlapping disruptions that exposed many supply chain vulnerabilities, it was also a year of resilience,” the Project44 report said. “From labor strikes and natural disasters to geopolitical tensions, each event served as a critical learning opportunity, underscoring the necessity for robust contingency planning, effective labor relations, and durable infrastructure. As supply chains continue to evolve, the lessons learned this past year highlight the increased importance of proactive measures and collaborative efforts. These strategies are essential to fostering stability and adaptability in a world where unpredictability is becoming the norm.”
In addition to tallying the supply chain impact of those events, the report also made four broad predictions for trends in 2025 that may affect logistics operations. In Project44’s analysis, they include:
More technology and automation will be introduced into supply chains, particularly ports. This will help make operations more efficient but also increase the risk of cybersecurity attacks and service interruptions due to glitches and bugs. This could also add tensions among the labor pool and unions, who do not want jobs to be replaced with automation.
The new administration in the United States introduces a lot of uncertainty, with talks of major tariffs for numerous countries as well as talks of US freight getting preferential treatment through the Panama Canal. If these things do come to fruition, expect to see shifts in global trade patterns and sourcing.
Natural disasters will continue to become more frequent and more severe, as exhibited by the wildfires in Los Angeles and the winter storms throughout the southern states in the U.S. As a result, expect companies to invest more heavily in sustainability to mitigate climate change.
The peace treaty announced on Wednesday between Isael and Hamas in the Middle East could support increased freight volumes returning to the Suez Canal as political crisis in the area are resolved.
The French transportation visibility provider Shippeo today said it has raised $30 million in financial backing, saying the money will support its accelerated expansion across North America and APAC, while driving enhancements to its “Real-Time Transportation Visibility Platform” product.
The funding round was led by Woven Capital, Toyota’s growth fund, with participation from existing investors: Battery Ventures, Partech, NGP Capital, Bpifrance Digital Venture, LFX Venture Partners, Shift4Good and Yamaha Motor Ventures. With this round, Shippeo’s total funding exceeds $140 million.
Shippeo says it offers real-time shipment tracking across all transport modes, helping companies create sustainable, resilient supply chains. Its platform enables users to reduce logistics-related carbon emissions by making informed trade-offs between modes and carriers based on carbon footprint data.
"Global supply chains are facing unprecedented complexity, and real-time transport visibility is essential for building resilience” Prashant Bothra, Principal at Woven Capital, who is joining the Shippeo board, said in a release. “Shippeo’s platform empowers businesses to proactively address disruptions by transforming fragmented operations into streamlined, data-driven processes across all transport modes, offering precise tracking and predictive ETAs at scale—capabilities that would be resource-intensive to develop in-house. We are excited to support Shippeo’s journey to accelerate digitization while enhancing cost efficiency, planning accuracy, and customer experience across the supply chain.”
Donald Trump has been clear that he plans to hit the ground running after his inauguration on January 20, launching ambitious plans that could have significant repercussions for global supply chains.
As Mark Baxa, CSCMP president and CEO, says in the executive forward to the white paper, the incoming Trump Administration and a majority Republican congress are “poised to reshape trade policies, regulatory frameworks, and the very fabric of how we approach global commerce.”
The paper is written by import/export expert Thomas Cook, managing director for Blue Tiger International, a U.S.-based supply chain management consulting company that focuses on international trade. Cook is the former CEO of American River International in New York and Apex Global Logistics Supply Chain Operation in Los Angeles and has written 19 books on global trade.
In the paper, Cook, of course, takes a close look at tariff implications and new trade deals, emphasizing that Trump will seek revisions that will favor U.S. businesses and encourage manufacturing to return to the U.S. The paper, however, also looks beyond global trade to addresses topics such as Trump’s tougher stance on immigration and the possibility of mass deportations, greater support of Israel in the Middle East, proposals for increased energy production and mining, and intent to end the war in the Ukraine.
In general, Cook believes that many of the administration’s new policies will be beneficial to the overall economy. He does warn, however, that some policies will be disruptive and add risk and cost to global supply chains.
In light of those risks and possible disruptions, Cook’s paper offers 14 recommendations. Some of which include:
Create a team responsible for studying the changes Trump will introduce when he takes office;
Attend trade shows and make connections with vendors, suppliers, and service providers who can help you navigate those changes;
Consider becoming C-TPAT (Customs-Trade Partnership Against Terrorism) certified to help mitigate potential import/export issues;
Adopt a risk management mindset and shift from focusing on lowest cost to best value for your spend;
Increase collaboration with internal and external partners;
Expect warehousing costs to rise in the short term as companies look to bring in foreign-made goods ahead of tariffs;
Expect greater scrutiny from U.S. Customs and Border Patrol of origin statements for imports in recognition of attempts by some Chinese manufacturers to evade U.S. import policies;
Reduce dependency on China for sourcing; and
Consider manufacturing and/or sourcing in the United States.
Cook advises readers to expect a loosening up of regulations and a reduction in government under Trump. He warns that while some world leaders will look to work with Trump, others will take more of a defiant stance. As a result, companies should expect to see retaliatory tariffs and duties on exports.
Cook concludes by offering advice to the incoming administration, including being sensitive to the effect retaliatory tariffs can have on American exports, working on federal debt reduction, and considering promoting free trade zones. He also proposes an ambitious water works program through the Army Corps of Engineers.