Customs - Cross-border Research Association

Towards Trusted Trade-lanes (CORE1207)

December 6, 2016/0 Comments/in Academic, All products, All transport modes, Analytic, Authorized Economic Operator, BMT, CBRA, CLECAT, Compliance management, CORE-Observatory, CPT, Customs, Customs risks, Data sharing, DCA, Demo-cluster, ESC, Exporter, Freight forwarder, Global, ILS, Importer, IRU, ISL, Manufacturer, Resilience, Risk management, Scientific, Shipper, Supply chain, Supply chain security, Systems based control, Terrorism/destruction, Theft, Trade facilitation, Transport carrier, Trusted Trader, TUD, Warehouse keeper, WCO, WP1, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP9 /by Vladlen Tsikolenko

Summary: The paper explores the concept of trusted trade-lane. In trusted trade-lanes operators implement an internal control system that makes possible to detect, handle and report dubious events in a way that meet requirements of customs agencies. Writers identify three essential characteristics of trusted trade-lanes: single partners are considered reliable and trustworthy, collaboration is based on long-term partnerships powered by viable business opportunities and managed by a clear decision-making mechanism, and control systems ensures integrity of traded goods and transferred data. In addition, the paper presents three alternative scenarios how the trusted partnerships can be designed in cross-border trade. The paper can be viewed here: https://pure.uvt.nl.

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Full review: The paper present recent developments in designing forms of partnerships that make possible to manage, predict and reconstruct supply chain operations and events. Customs agencies can use the control system to complete law enforcement and administrative tasks in a way they can reduce or even refrain from physical inspections and checks. The trading partners that have adopted the common control system and expanded it to the needs of regulatory bodies form trusted trade-lanes. Writers identify three essential characteristics of a trusted trade-lane. First, all partners operate transparently, reliable and trustworthy in their business relationships. Second, partners are committed in long-term collaboration that gives all partners opportunities to succeed. The government structure has clear decision making mechanisms and selected legal representative. Third, partners must implement and manage a control system that ensures integrity of transported goods and transformed data within the partners and to the authorities.

The writers design three alternatives how partnerships can evolve into trusted trade-lanes. First, a focal company can act as a supply chain orchestrator and provider technical infrastructure for use of trading partners and logistics operators. The focal company lodges customs declarations and risk information to customs administrations on behalf of the trusted trade-lane partners. In the second alternative, a service provider manages a peer-to-peer information platform that supply chain operators use to communicate between each other and with customs agencies. Data on the platform is reused for both commercial and regulatory purposes (piggy packing). Partners can join and leave the platform as they see appropriate. The platform uses open standards and database management systems. Third, a service provider offers additional ‘assurance’ services for legally independent companies of a specific industrial area. The service provider acts as a trusted trader and defines common rules and requirements for the membership.

The paper demonstrates preliminary results in the CORE project. The project partners adapt trusted trade-lane concept in their own concrete business and logistics processes as well as in their information systems. The models and scenarios are further amended and developed during the project.

Reference: Hulstijn, J., Hofman, W., Zomer, G., & Tan, Y-H. (2016). Towards trusted trade-lanes. In H. J. Scholl, O. Glassey, M. Janssen, & E. (Eds.), Proceedings of the 15th IFIP E-Government conference (EGOV 2016): Electronic Government. (pp. 299-311). (Lecture Notes in Computer Science; Vol. 9820). Guimaraes, Portugal: Springer International Publishing.

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Analytical method to identify the number of containers to inspect at U.S. ports to deter terrorist attacks (CORE1204)

November 11, 2016/0 Comments/in Academic, All transport modes, Analytic, Coordinated border management, CORE-Observatory, Customs, Customs risks, Dangerous goods, Demo-cluster, Dual-use goods, Environmental agency, Global, High-taxed goods, Investigations, Organized crime groups, Phytosanitary agency, Police, Prohibited goods, Restricted goods, Risk management, Risk-cluster, Scanning, Scientific, Screening, Socio-economic impacts, Strategic goods, Supply chain, Supply chain security, Trafficking, WCO, WP1, WP3 /by Vladlen Tsikolenko

Summary: The requirement for 100% container scanning has been a burning topic, since U.S. Department of Homeland Security issued the initiative in order to prevent terrorists from smuggling weapons of mass destructions into the U.S. The paper explores how much it is reasonable to come down from the 100% inspection rate, if deterrence and cost of retaliation are considered in the model. Deterrence means the power to dissuade an attacker from attempting to smuggle weapons as opposite to use coerce or compel. Retaliation cost describes the cost incurred by an attacker e.g. due to dismantling the attacker’s network. It is assumed the defender discloses in advance how many containers are inspected. The paper can be viewed here: https://www.researchgate.net.

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Full review: The study provides an economical model based on the game theory to estimate the optimal inspection rates in order to deter perpetrators from smuggling weapons into the U.S. The model assumes the customs or Border agency aims at minimizing the expected damages and cost of inspections while perpetrators are simultaneously trying to maximize their rewards. The used parameters are number of attackers, estimated damages, the cost of inspecting a container, the cost of a smuggling attempt, the cost of retaliation and the probability of detecting weapons. Retaliation cost describes the cost incurred e.g. due to dismantling the attacker’s network. Cost of a smuggling attempt are the costs of acquiring, developing or manufacturing the weapons, and any logistical costs required to smuggle them into the U.S. It is assumed the government agency announces publicly the inspection level and set of retaliation policies. Retaliation policy must pose a credible threat that means the governmental agency would retaliate even if that were not economically justified.

The study has four main limitations. First, the paper does not describe under what conditions the model works well or poorly. The quality of strategic and tactical intelligence, the efficiency of criminal investigation and prosecution processes, the extent of inter-agency cooperation and information sharing, the degree of private sector involvement and successfulness of awareness campaigns on retaliation policies are probably factors that influence on the model and its parameters. Second, the study does not provide numerical estimates to the parameters such as detection rates and cost of retaliation. Third, it is very unlikely that weapons of mass destructions are transported in containers into the U.S., what makes it difficult to assess the usefulness of the model in real life cases. Forth, costs of retaliation are not calculated and published by law enforcement agencies, thus criminals cannot make decision based on financial risks.

Despite of these limitations the CORE project can adapt the game theory and benefit from the paper. Traditionally law enforcement agencies highlight the number of seizures, arrests and successful prosecutions to measure operations and their impacts. The presented model brings two interesting components, a cost of crime attempt and a cost of retaliation. If criminal activities are financed and managed based on the same principles like legal ones, expected losses due to seizures of illicit goods or drugs are very likely calculated in the criminal business models. Consequently, making criminal business unprofitable is key to stop criminal activities. The approach enables to model the dynamic between costs and rewards from viewpoints of both law enforcement and criminal actors. In the other words, the model makes possible to study two dimensions in the Innovation Agenda, societal costs and friction costs caused by implemented security measures.

Reference: Bier, Vicki M. & Haphuriwat, N. (2011). Analytical method to identify the number of containers to inspect at U.S. ports to deter terrorist attacks. Annals of Operations Research, 187(1), 137–158.

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Supply chain security culture: measure development and validation, 2009 (CORE1200)

October 26, 2016/0 Comments/in Academic, All transport modes, Analytic, BMT, Capacity building, CBRA, CLECAT, Consulting, CORE-Observatory, CPT, Customs, Dangerous goods, DCA, Demo-cluster, Dual-use goods, Environmental agency, ESC, Exporter, Express courier, Freight forwarder, Global, High-taxed goods, High-value goods, ILS, Importer, INTERPOL, IRU, ISL, Mail operator, Manufacturer, Perishable goods, Phytosanitary agency, Police, Prohibited goods, Resilience, Restricted goods, Retailer, Risk management, Risk-cluster, Scientific, Shipper, Strategic goods, Supply chain, Supply chain security, Terrorism/destruction, Theft, Time-critical goods, Transport carrier, Transport security agency, TUD, Warehouse keeper, WCO, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP18, WP19, WP6 /by Vladlen Tsikolenko

Summary: Supply chain security culture (SCSC) is as an overall organizational philosophy embracing norms and values that keep employees vigilant when performing supply chain security practices. The article presents a scale that makes possible to gauge supply chain security culture and its correlation to organization’s ability to respond to unexpected disruptions. Employees are asked to assess two topics: security strategy of the company and impacts of significant supply chain breech to business operations. According the study improved supply chain security culture makes company more resilient against major disruptions. This research helps executives to justify their expenditures on security efforts. The reviewed document can be purchased here: http://dx.doi.org.

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Full review: Researchers have stressed the importance of having an organizational culture that highlights proactivity and vigilance toward supply chain security breaches. In security-focused supply chain management environment workers are empowered to detected and handle supply chain security threats without seeking formal permission from supervisors and managers. Company security strategy gives specific attention how SCS concepts are embedded into firm processes and procedures. Alignment with organizational culture and business or corporate-level strategies is believed to result in enhanced organizational performance. In addition, organization culture encompasses supply chain continuity management. The paper presents a scale for measuring supply chain security culture defined as the overall organizational philosophy that creates supply chain security as a priority among its employees through embracing and projecting norms and values to support secure activities and to be vigilant with security efforts.

The study makes possible to assess how implemented FP7-CORE security technologies, tools and practices influence on supply chain resilience based on the perception of company managers and employees. The article gives also guidelines how to develop survey forms and protocols in order to assess the influence of implemented security measures on other KPIs such as supply chain visibility and reliability. The survey tools based on perceived operational and organizational changes complete toolbox to measure impacts of introduced security interventions.

Reference: Zachary Williams, Nicole Ponder, Chad W. Autry, “Supply chain security culture: measure development and validation”, The International Journal of Logistics Management, Vol. 20 Iss: 2, pp.243 – 260

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Enhancing security through efficiency focus- Insights from a multiple stakeholder pilot implementation (Sternberg et al. 2012)

June 30, 2016/0 Comments/in Academic, CBRA, CORE-Observatory, Customs, Customs risks, Data quality, Data sharing, Demo-cluster, EU, Global, IT, Maritime, Optimization, Other-cluster, Police, Risk management, Road, Satellites, Scientific, Sea port, Shipper, Supply chain security, Tax evasion, Terrorism/destruction, Theft, Tracking, Trade facilitation, Trafficking, Transport carrier, Transport security agency, WP10, WP11, WP13, WP14, WP15, WP17, WP19 /by Vladlen Tsikolenko

Summary

Efficiency and security are said to be opposing goals of logistics operations: when security goes up, efficiency decreases, and vice versa. Yet, it is suggested that information technologies could improve efficiency and security simultaneously. Sternberg et al. (2012) investigate this hypothesis: whether and to what extent increased attention to efficiency results in improved security in carrier operations in a seaport context. In a longitudinal case study, they research carrier operations in connection with port terminals carrying out Roll-in Roll-out (RoRo) operations on trailers at the port of Gothenburg. They find that investments in new ICT solutions, in fact, remove some of the barriers to higher efficiency and improve security against cargo theft and terrorism. In particular, they report that ICT investments increased efficiency in terms of reduced waiting times and increased ability to plan port operations (pre-arrival notification) and fast positioning of trailers in a port. The new ICT solutions also increased security in terms of more secure document handling (decreases the risk that sensitive information falls into the hands of criminals), better anomaly detection (helps customs identify trailers that are most likely tampered in-transit) and increased visibility. The abstract is available at: http://onlinelibrary.wiley.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

This article is relevant for CORE demonstrations that focus on sea port operations (WP10-11 and WP13-15 and WP17). The research shows how a ‘common information sharing platform’ – an electronic and highly automated communication network among LSPs, carriers, ferry operators, port operators and authorities – increases logistics efficiency and security performance simultaneously. The main components of this platform include information sharing through a common information area, real-time geographical position of truck and trailer, identification technology in truck, RFID tags on transport units and RFID readers mounted on terminals, electronic manifest, and electronic container seals. More specifically, Sternberg et al. (2012) observed that adoption of a set of IT-enabled SCS solutions eliminated logistics efficiency and security issues simultaneously:

Real-time geo-positioning of trucks and trailers enabled the port operator to allocate a vacant spot for a trailer prior to its arrival, which reduced the waiting time at the port entrance. The real-time information enabled also customs to detect anomalies in shipping schedules and routings that would imply a heightened risk of smuggling.
RFID-based identification of drivers, trucks, and trailers automated and accelerated the access formalities at the port entrance and increased reliability of driver authentication.
Digitalization of cargo manifests eliminated the time-consuming manual document handling and reduced the risk of unauthorised access to confidential information.
E-seals enabled customs officers to identify intact containers and spare them from time- consuming inspections.

Reference

Sternberg, H., Nyquist, C., & Nilsson, F. (2012). Enhancing Security Through Efficiency Focus— Insights from a Multiple Stakeholder Pilot Implementation. Journal of Business Logistics, 33(1), 64-73.

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Estimating the Operational Impact of Container Inspections at International Ports (Bakshi et al. 2011)

June 30, 2016/0 Comments/in Academic, CBRA, CORE-Observatory, Counter-terrorism, Customs, Demo-cluster, Global, Maritime, Optimization, Other-cluster, Resilience, Risk management, Scanning, Scientific, Screening, Sea port, Supply chain security, Terrorism/destruction, Trade facilitation, Trafficking, Transport security agency, USA, WP10, WP11, WP13, WP14, WP15, WP17, WP19 /by Vladlen Tsikolenko

Summary

The US government is pushing a new 100 % screening regime for US-bound containers in foreign ports to mitigate the risk of weapons of mass destruction entering US soil. The 100 % regime, however, is a major concern for foreign port operators because the current Container Security Initiative (CSI) regime seems not to be scalable for high inspection rates. The paper of Bakshi et al. (2011) simulate impacts of two container inspection regimes (the CSI and a new one) in terms of port congestion, handling cost and dwell time. To carry out the simulation, the authors use discrete event queuing network simulation with real container movement data from two of the world’s busiest container terminals. The analysis shows that cargo inspections many times disrupt optimized logistics processes at seaports. In particular, inspections extend the transportation leadtime because shipments lose time as they (i) are moved to an inspection site, (ii) queue for inspection to start, (iii) pass inspections themselves. Download the abstract here: http://pubsonline.informs.org.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

This paper is highly relevant for CORE demonstrations that involve screening in seaports (WP10-11 and WP13-15 and WP17). The research illustrates the impact of the security integration on speed, cost, and predictability of the seaport logistics. Bakshi et al. (2011) observe that security inspection at port entrances (quayside for ships and city-side for trucks) with drive-through inspection portals, does not delay nor divert the routine container handling process, in which a crane unloads a container from a ship or a truck and deposits it to a stack where the container waits until it is its time to leave the port. But if a container is inspected a few hours prior its scheduled departure, as is currently done under the US Container Security Initiative (CSI) regime, the routine handling process gets disrupted, (see Figure 6). Remarkably, the only value-adding security activity “non-intrusive inspection” (11) requires three preceding activities (8P10) and another three following activities (12-14), none of which add value from security or service standpoints. Other valueless activities, which do not appear in the illustration, include searching of the shipment selected for screening and verification of its documentation. The extra activities consume time and money but add no value to the shipping service. The first approach with drive-through portals eliminates the non-value adding supportive logistics activities (8-10 and 12-14) and therefore enhances logistics speed and efficiency without necessarily lowering the security level.

Reference

Bakshi, N., Flynn, S. E., & Gans, N. (2011). Estimating the operational impact of container inspections at international ports. Management Science, 57(1), 1-20.

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CASSANDRA compendium. Standards in supply chain management (Ch. 9)

June 8, 2016/0 Comments/in All transport modes, CBRA, CORE-Observatory, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, Deliverable, EU, FP7, Freight forwarder, Global, Manufacturer, Other-cluster, Retailer, Shipper, Supply chain security, Trade facilitation, Transport carrier, WP18, WP19 /by Vladlen Tsikolenko

Summary: Chapter 9 of the CASSANDRA compendium lists and discusses various standards that set the context for international supply chain management. The chapter focuses especially on management standards (e.g., ISO28000), technical standards (e.g., RFID, electronic seals and barcodes), standards for exchange of information among supply chain stakeholders (e.g., UN/EDIFACT and XML messaging), and customs security standards (especially the World Customs Organisations’ SAFE Framework of Standards). GS1 Global Visibility Framework and other industry standards are included in the discussion, as well. The chapter points out that because a large variety of standards are already available, the challenge is not a lack of standardisation but the lack of harmonisation between different standards. The section also concludes that even if the diversity of standards was harmonised, the next step would be to ensure that the standards would be consistently implemented in different contexts.

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Full review: The chapter focuses on listing different standards that affect the modern supply chain management. There not much details to be reported in this section. However, especially people working with CORE work package 6 “SCS Reference Framework and Standards” should read the brief listing and general discussion of standards and standardisation. Other chapters of the CASSANDRA compendium provide complementary information about standardisation in the field of supply chain management (e.g., Ch. 5 & 6).

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapter 9

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CASSANDRA compendium. Technologies for supply chain visibility and security (Ch. 8)

June 8, 2016/0 Comments/in All transport modes, CBRA, CORE-Observatory, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, Deliverable, EU, Exporter, FP7, Freight forwarder, Global, Importer, IT, Manufacturer, Police, Retailer, Risk management, Risk-cluster, Satellites, Scanning, Screening, Shipper, Supply chain security, Terrorism/destruction, Theft, Tracking, Trade facilitation, Trafficking, Transport carrier, Transport security agency, WP14, WP15, WP16, WP17, WP2, WP3, WP9 /by Vladlen Tsikolenko

Summary: Chapter 8 of the CASSANDRA compendium reviews current and future technologies that help managers to improve visibility and security over global end-to-end supply chains. The supply chain visibility technologies, in essence, provide logistics managers with a variety of information – shipment data, performance metrics, inventory levels, production / delivery schedules and sales forecast, for example – in or close to real time. The chapter’s review on supply chain security technologies focus mainly on security sensors (e.g., motion detectors), container seals, biometric user authentication devices (e.g., fingerprints), and non-intrusive inspection equipment (e.g., X-ray screening stations). The section also elaborates modern ways for sharing information among stakeholders that are concerned about security of the supply chain. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: Chapter 8 includes some interesting details and insights about modern visibility and security technologies, many of which are relevant especially for CORE demonstrations but also for other work packages such as WP2 (SCS controls), WP7 (CORE Connectivity Infrastructure and Solutions Development Environment) and WP8 (CORE Ecosystem).

Many large logistics operators have developed own supply chain visibility systems to coordinate and organise logistics operations. A large logistics service provider, Kühne+Nagel uses its KN login visibility system that allows the company to optimise its complex global operations in terms of speed, time-certainty, security and cost-efficiency and many other relevant metrics. DHL, a German-based international express courier and logistics company, uses its LOGIS software for its operations. Previous EU projects have also developed visibility systems, for example Smart CM SICIS (Shared Intermodal Container Information System).

These visibility systems enable fast response to most operational contingencies that are about cause deviations from original plans. For instance, if a shipper got instant information about a stolen container, a new delivery could be quickly arranged and the consignee could be informed as soon as possible about the reshipment. Moreover, the visibility systems often interface ITC systems of other key stakeholders in the international supply chains. Customs, for example, receive advance cargo information (ACI) automatically from these systems.

The second part of the chapter 8 focuses exclusively on security technologies. The review starts with description of security sensors that are designed to detect tampering, unplanned detours, and other suspicious events in the supply chain. The modern sensor technologies sense at least changes in lighting, acceleration, location (geo-fencing functionality), motion and CO2 levels (used, e.g., to detect stowaways inside shipping containers). The chapter introduces modern user authentication technologies (e.g., fingerprints, face, retina, hand geometry and other unique biometric characteristics). Some information is provided regarding non-intrusive screening solutions that are often considered to be necessary for fast and secure screening operations. The rest of the chapter discusses various technical and institutional solutions for exchanging security-relevant information among supply chain operators and relevant government agencies. Especially interoperability of ICT systems seems to be crucial for effective security efforts in the global supply chains. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapter 8

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CASSANDRA compendium. Private sector perspectives on risk management (Ch. 5) and crime prevention and security management in supply chains (Ch. 6)

June 8, 2016/0 Comments/in All transport modes, Authorized Economic Operator, CBRA, CORE-Observatory, Corruption, Counter-terrorism, Counterfeiting, Customs, Customs risks, Cybercrime, Deliverable, Document forgery, Environmental crime, Exporter, FP7, Fraud, Freight forwarder, Global, Hijacking, Human trafficking, Identity theft, Importer, Manufacturer, Money laundry, Other-cluster, Police, Retailer, Risk management, Risk-cluster, Shipper, Supply chain security, Tax evasion, Terrorism/destruction, Theft, Trade facilitation, Trafficking, Transport carrier, Transport security agency, Trusted Trader, Violence, Warehouse keeper, WP18, WP19, WP2, WP3, WP4 /by Vladlen Tsikolenko

Summary: Chapters 5 & 6 of the CASSANDRA compendium provide a general overview on supply chain security risk management from the private sector perspective. Explaining the essentials of supply chain risk management, Chapter 5 introduces commonly used risk management models and tools (e.g., risk matrices and risk registers), discusses various classifications of supply chain risks, and elaborates current trends of risks and risk management in the supply chain context. Chapter 6 focuses on specific challenges of supply chain security risks – the risks that arise from intentional, man-made criminal activities such as terrorism, theft, trafficking, and sabotage. The chapter explains a few early classifications of supply chain security risks (e.g., motive-based typology and taxonomies based on private sector perspectives). Following the classifications of security risks, the chapter puts forth a few models for managing security risks in the supply chain context (e.g., the 8-layer model for supply chain security management). The chapter concludes with a detailed case study on security management of an international security company and a comparison of supply chain security management and the total quality management (TQM) management philosophy. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: Previous observatory entries have already shown the relevance of the CASSANDRA compendium to the community of supply chain management professionals. The compendium’s chapters 5 & 6 give a brief summary of risk management and security risk management in the context of international supply chains. The contents of the chapters are relevant and useful for people involved in FP7 CORE project, especially for those involved in work packages 3 (Multi-method Threat and Vulnerability Analysis Suite) and 4 (SC Situational Awareness Tools & Maps).

Chapter 5 elaborates a set of common supply chain risk management tools. The model of Waters (2007) summarises rather obvious three steps of the risk management process: identifying risks, analysing risks and responding to risks. The model proposes, for example, that managers can identify supply chain risks through analysis of past events, collection of opinions, and through operational analysis. The model also calls for managerial attention to prerequisites of successful risk management – mutual trust, cooperation and information exchange among relevant stakeholders involved in supply chain management – and highlights importance of continuous monitoring and controlling the risk management process. The chapter concludes with the four classic approaches to risk management: risk avoidance, risk reduction, risk transfer (e.g., insurance and contractual agreements), and acceptance. The classifications of supply chain risks include typologies focusing on risk sources (natural hazards operational failure and terrorism), risk consequences (e.g., risk to operations, risk to reputation and risk to profits), and objects of vulnerability (e.g., information, materials, personnel and financial flows).

The chapter on crime prevention and security management (Ch. 6) in supply chains provides a concise summary on supply chain security management from the private sector perspective. The chapter starts by describing some early classifications of supply chain security risks. A motive-based taxonomy classifies such risks into the three categories: economic crime (profit as motive), other crime types (ideological, emotional and other reasons as motive) and facilitating crime that covers activities that do not bring direct crime benefits but help committing other rewarding crime crimes later on. (e.g., document fraud, bribery and use of intimidation). The chapter’s next section elaborates ways to mitigate security risks in the global supply chains, highlighting the key ideas of the so-called 8-layer model for supply chain security management (the model incorporates multiple aspects of risk assessment, hands-on design and planning, implementation of a variety of technologies, procedures, and incentives as well as preparation for dealing with the consequences of supply chain crime). The chapter provides also a case study with an international tobacco company that runs high security risk supply chain operations. The section also contrasts, rather interestingly, principles of security management against the fundaments of the total quality management (TQM) management philosophy. The chapter continues with a brief review of regulations (e.g., EU customs security and aviation security regulations) and standards on supply chain security management (World Customs Organization’s SAFE framework of standards, and industry standards of the Transported Asset Protection Association).

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapters 5 & 6

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First results from the WCO Cancun AEO benefit survey

June 8, 2016/0 Comments/in Academic, All transport modes, Analytic, Authorized Economic Operator, Blog, CBRA, Customs, Exporter, Express courier, Freight forwarder, Global, Importer, Known Consignor, Mail operator, Manufacturer, Mutual Recognition Agreement, Other-cluster, Regulated Agent, Risk-cluster, Shipper, Supply chain security, Tax evasion, Trafficking, Transport carrier, Transport security agency, Trusted Trader, Uncategorized, Warehouse keeper, WCO, WCO, WP19 /by Vladlen Tsikolenko

In today’s CBRA Blog we provide a sneak preview of the outcomes of the AEO Benefit survey carried out by CBRA research team at the 3^rd Global WCO AEO Conference, in Cancun, Mexico, 11-13 May 2016.

We keep today’s Blog very simple. First, we would like to introduce a new test-categorization of Customs granted AEO benefits, with the following five groups:

More streamlined / simplified Customs (and related) procedures
Less frequent interventions by the Customs administration
Increased priority over non-AEO companies (“getting to the front of the queue”)
Increased (positive) attention by the Customs administration
Increased number of other privileges granted by the customs administration

And second, we list the AEO benefits from our survey (only question 2 in the survey form, which focuses explicitly on Customs granted benefits to the supply chain companies, and not benefits for Customs themselves, or any kind of “side benefits” for the companies) under each of the five categories. The order of the benefits per category is based on the survey outcomes, i.e. the first bullet point benefit was the most common one in the survey, followed by the second bullet and so forth. Please note that there are no ranking indications between the five groups, neither when it comes to the groups per se, nor to the individual benefits – these will be included in our academic publications, bit later this year…

Group 1. More streamlined / simplified Customs (and related) procedures

Enjoying increased paperless processing of import/export shipments
Enjoying an access to / pre-qualification with various simplified customs procedures
Enjoying having a reduced number of data elements in the (final) declaration
Enjoying having entry/exit summary declarations with reduced data sets
Enjoying easier access to other governmental certification in the supply chain (e.g. in aviation security)

Group 2. Less frequent interventions by the Customs administration

Enjoying minimum number of cargo security inspections
Enjoying the option of audit-based / account-based controls (versus only transaction-based controls)
Enjoying access to self-audit or reduced audit programs

Group 3. Increased priority over non-AEO companies (“getting to the front of the queue”)

Enjoying priority use of non-intrusive inspection techniques when examination is required
Enjoying a priority status in Customs processing during a period of elevated threat conditions
Enjoying priority response to requests for ruling from Customs
Enjoying expedited processes to resolve post-entry or post-clearance inquiries
Enjoying priority treatment of consignments if selected for control
Enjoying preferential treatment at border crossings in post-disaster/post-attack situations
Enjoying a priority status in exporting to affected countries after a security incident

Group 4. Increased (positive) attention by the Customs administration

Privilege to deal with designated Customs contact points / assistance by Customs supply chain security experts
Privilege to receive training provided by Customs experts
Privilege to be notified of the intention to release goods prior to their arrival (“pre-clearance”)
Enjoying special treatment in some non-criminal legal cases
Privilege to exploit “extended Customs office opening hours”, during high peak / congestion times

Group 5. Increased number of other privileges granted by the Customs administration

Enjoying from tax privileges, such as speedier tax refunds and compensation
Enjoying the option to manage clearance formalities, inspections etc. at the business site
Enjoying from financial guarantee waivers, reductions or rebates
Privilege to self-manage the bonded warehouses
Enjoying tangible benefits due to mutual recognition agreements / arrangements (MRAs) with 3rd countries
Privilege to choose the place of controls (if selected for control)
Enjoying reductions on some Customs fees or charges
Privilege to conduct self-assessments when Customs automated systems are not functioning

And that’s about it! Please be reminded again that this CBRA Blog is just a first scratch on the surface to start publishing results from the WCO Cancun 2016 AEO conference… And by the way, we are also working to publish the results from the WCO Madrid 2014 AEO conference, as we have been waiting to publish the full results of the both conferences in a parallel manner / in a same paper. In the meanwhile, please email us any feedback, ideas and/or criticism regarding this Blog!

In Lausanne, 8 June 2016, CBRA Blog Dr. Juha Hintsa

PS. Our earlier Blog with all the WCO Cancun 2016 AEO survey questions can be read at: https://www.cross-border.org/2016/05/08/aeo-benefits-or-no-benefits-thats-the/

PPS. Related literature by the Cross-border Research Association team and key partners:

Most of these papers are available for download at ResearchGate, https://www.researchgate.net/profile/Juha_Hintsa/publications . And all of them can be naturally requested by email ( cbra@cross-border.org )

Hintsa, J., Mohanty, S., Rudzitis, N., Fossen, C. and Heijmann, F. (2014), “The role and value of customs administrations in minimization of socio-economic negative impacts related to illicit import flows in freight logistics systems- three preliminary cases in Europe – FP7-CORE”, Proceedings of the 9th WCO PICARD Conference, September 17-19, 2014, Puebla.

Hintsa, J. (2013), AEO – MRA Study for RTC- Thailand Europe Cooperation TEC-II, PDSC: Implementation of international standards on Supply Chain Security leading to a secure Trade Environment and to increased Trade Facilitation (Activity Code : TRA 4), Final Report, Bangkok.

Urciuoli, L. and Ekwall, D. (2012), “Possible impacts of supply chain security certifications on efficiency – a survey study about the possible impacts of AEO security certifications on supply chain efficiency”, Proceedings of Nofoma Conference, June 6-8, 2012, Naantali.

Hintsa, J., Männistö, T., Hameri, A.P., Thibedeau, C., Sahlstedt, J., Tsikolenko, V., Finger, M. and Granqvist, M. (2011), Customs Risk Management (CRiM): A Survey of 24 WCO Member Administrations, Study for World Customs Organization (WCO), February 28, 2011, Lausanne

Hintsa, J., Hameri, A.P., Männistö, T., Lazarescu, M., Ahokas, J. and Holmström, J. (2010), ”Conceptual model for measuring benefits of security in global supply chains”, Proceedings of the the 3rd International Conference on Transportation and Logistics (T-LOG), September 6-8, 2010, Fukuoka City.

Hintsa, J., Ahokas, J., Männistö, T. and Sahlstedt, J. (2010), “CEN supply chain security (SCS) feasibility study”, CEN/TC 379 Supply Chain Security, Final report, January 15, 2010

Gutiérrez, X., Hintsa, J., Wieser, P. and Hameri, A.P. (2007), “Voluntary supply chain security program impacts: an empirical study with BASC member companies”, World Customs Journal, Vol. 1 No. 2, pp.31-48.

Gutierrez, X. and Hintsa, J. (2006), “Voluntary supply chain security programs: a systematic comparison”, Proceedings of the International Conference on Information Systems, Logistics and Supply Chain (ILS), May 15-17, 2006, Lyon.

MARITIME SECURITY – Vessel Tracking Systems Provide Key Information, but the Need for Duplicate Data Should Be Reviewed, GAO, March 2009 (CORE1065)

May 26, 2016/0 Comments/in Analytic, CBRA, CORE-Observatory, Counter-terrorism, Counterfeiting, Customs, Customs risks, Demo-cluster, GAO, Government, IT, Risk management, Satellites, Supply chain security, Tax evasion, Terrorism/destruction, Tracking, Trafficking, USA, WP14, WP9 /by Vladlen Tsikolenko

Summary: The US government considers identification and tracking of vessels at the US coastal areas, inland waterways and ports important for protecting the US homeland and economy from maritime terrorism. The US coastal guards use a range of identification and tracking solutions to detect any anomalies in maritime traffic that might suggest terrorist activity, such as transportation of weapons of mass destruction, use of explosive-laden boats as weapons, smuggling of weapons, drugs, people or other contraband. This GAO report reviews the US Coast Guards’ current and future solutions for monitoring the maritime traffic: long-range identification and tracking system (LRIT), long-range automatic identification system (AIS) and various radar and camera systems. The report elaborates strengths and weaknesses of these identification and tracking solutions and proposes a roadmap for further strengthening of the US coastal security. The future advancements should pay particular attention to tracking of small and non-commercial vessels and to reconsider ways to collect and analyze data that is relevant for coastal surveillance. Offering background information about vessel-level tracking and tracing of maritime cargo movements, the report is a relevant source document for those CORE demonstrations that involve shipping of containers from, through and into the US. The report is available for download at: www.gao.gov/new.items/d09337.pdf.

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Full review: CORE demonstrations of WP9 and WP14 benefit from the background information this GAO document offers on identification and tracking of vessels because these two demos involve US seaports and shipping at the US territorial waters. Also the CORE’s risk and IT clusters might find the information of this GAO document useful. The information that the identification and tracking provide allow the coastal guards to assess risk-levels of individual vessel movements and decide when it is reasonable to intervene and check anomalies. The vessel tracking and identification involves also a great deal of IT integration because it currently involves many technical components and synthetizes data collected from many different sources.

Cross-references:

Maritime Security: Information Sharing Efforts Are Improving. GAO-06-933T. Washington, D.C.: July 10, 2006.
Maritime Security: Public Safety Consequences of a Terrorist Attack on a Tanker Carrying Liquefied Natural Gas Need Clarification. GAO-07-316. Washington, D.C.: February 22, 2007.
Maritime Security: Coast Guard Inspections Identify and Correct Facility Deficiencies, but More Analysis Needed of Program’s Staffing, Practices, and Data. GAO-08-12. Washington, D.C.: February 14, 2008.

Additional keywords: Maritime security, long-range identification and tracking system (LRIT), long-range automatic identification system (AIS), track & trace

CORE1065

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Analytical method to identify the number of containers to inspect at U.S. ports to deter terrorist attacks (CORE1204)

Supply chain security culture: measure development and validation, 2009 (CORE1200)

Estimating the Operational Impact of Container Inspections at International Ports (Bakshi et al. 2011)

CASSANDRA compendium. Private sector perspectives on risk management (Ch. 5) and crime prevention and security management in supply chains (Ch. 6)

First results from the WCO Cancun AEO benefit survey

MARITIME SECURITY – Vessel Tracking Systems Provide Key Information, but the Need for Duplicate Data Should Be Reviewed, GAO, March 2009 (CORE1065)

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