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EU logistics security – an interesting decade

May 21, 2016/0 Comments/in Authorized Economic Operator, Blog, CBRA, CEN, CLECAT, CPT, EC, ESC, EU, Freight forwarder, Government, Inland waterway, IRU, Other-cluster, Policy, Rail, Risk management, Risk-cluster, Road, Standardization, Supply chain security, Terrorism/destruction, Theft, Transport carrier, WP19 /by Vladlen Tsikolenko

I had a great pleasure to work intensively on the European surface transport security standardization efforts, some years ago – this CBRA Blog aims to summarize the main work done, and the key objectives achieved.

Couple of years after the US 9/11, 2001 terrorist attacks, the European Commission Directorate General of Transport and Energy, EC DG TREN, started to prepare a proposal for a regulation of the European Parliament and of the Council on enhancing cargo surface transport security. In the meanwhile, 9/11 was already triggering an avalanche of new customs, aviation and maritime supply chain security regulations, programs and standards, in the US, Europe and across the globe. But when it came specifically to surface transport security for road and rail cargo (and inland waterways, to that matter) in Europe, nothing was cooking before the DG TREN initiative “Secure Operator”, first announced in 2004. By 2006, the main goal of the EC proposal for a regulation on enhancing supply chain security (SCS) in the EU was shaped as to achieve greater protection of the European freight transport system against possible terrorist attacks. The specific objectives of the draft regulation were defined as: (i) to increase the level of security along the supply chain without impeding the free flow of trade; (ii) to establish a common framework for a systematic European approach without jeopardizing the common transport market and existing security measures; and (iii) to avoid unnecessary administrative procedures and burdens at European and national levels. In addition, the draft regulation related to the need to prevent a patchwork of various supply chain security standards and solutions across EU.

However, it quickly became clear that there was no common sense of urgency in supply chain security regulations across EU Member States, particularly in the context of threat of terrorism to surface (cargo) transport. One was lacking a commitment towards an integrated approach, which would urge everybody to look at the holistic supply chain picture. The countries and especially stakeholder (or, lobby) organizations clearly focused on their specific interests on a part of the supply chain, thus appearing uncomfortable when trying to identify the “big picture”. Ultimately, the draft regulation was blocked in the European legislative process and finally officially withdrawn by the Commission, in 2010.

In the meanwhile, already in 2005, an expert group in supply chain security was formed under the umbrella of European Committee for Standardization (CEN) – and that’s when Cross-border Research Association started to play a role in the “EU land transport security regulations and standards play”, first as the rapporteur for the expert group, and later as the research party for the technical committee in supply chain security. The expert group was formed technically under the CEN working group “Protection and Security of the Citizen” (CEN/BT/WG161), and the (pre)standardization work was partly based on the Logistics Action Plan of the EC that indicated the need for standardization in the transport security domain for the whole logistic chain.

Following the conclusions and recommendations by the expert group, the CEN Technical Committee in Supply Chain Security (CEN/TC 379) was established in 2008, producing ultimately three tangible outputs: Supply Chain Security Feasibility Study (in 2010); CEN Technical Report “Supply Chain Security — Good Practice Guide for Small and Medium Sized Operators” (in 2012, CEN/TR 16412:2012); and, a European Standard: Logistics – Specifications for reporting crime incidents (in 2013, EN 16352:2013-06). The first of the outcomes is available for free (ask by email: cbra@cross-border.org ), and the latter two you can purchase e.g. from your national standardization institute web shop. All in all, great project experience behind us, couple of good publications, and many new contacts and even few friends for lifetime – thus, no regrets, and if asked, would become rapporteur and lead researcher on these important topics, again and again!

And finally, when it comes to the future of SCS regulation and standardization work in Europe – in particular in the land transport security sector (e.g. the LANDSEC expert group, Commission Decision 2012/286/EU): do not be shy in exploiting the tangible outcomes of a decade of our joint work, in particular the Euronorm EN 16352:2013-06, “Logistics: specifications for reporting crime incidents” – no reason to reinvent the wheel!

CBRA Blog by Dr. Juha Hintsa on 21.5.2016

Summarizing the main milestones of the surface transport security 2004-2014 regulatory and standardization process tracks:

A) Regulatory process -track was largely driven by the European Commission Directorate General for Transport and Energy (EC DG TREN), comprising of the following five sequential steps:
A1. Preparation of the Secure Operator legislation at EC DG TREN (2004-2006)
A2. Publication of the legislative proposal (EC, 2006a)
A3. Publication of an impact assessment study (EC, 2006b)
A4. Announcements and debates at European Parliament and Council (2006-2009)
A5. Withdrawal of the proposal by the Commission, (18.9.2010)

B) Standardization process -track – for which the European Committee for Standardization (CEN) was responsible – consisting of the following seven, chronologically ordered steps:
B1. Establishment of an Expert group in supply chain security, under CEN/BT/WG161, “Protection and Security of the Citizen” (2005)
B2. Publication of the final report of the Expert group, approved by CEN/BT/WG161 (14.11.2006)
B3. Establishment of the CEN Technical Committee in Supply Chain Security, CEN/TC 379 (2008)
B4. Publication of Supply Chain Security Feasibility Study (15.1.2010)
B5. Publication of the CEN Technical Report, CEN/TR 16412:2012 “Supply Chain Security — Good Practice Guide for Small and Medium Sized Operators” (2012)
B6. Publication of a European Standard: Logistics – Specifications for reporting crime incidents, EN 16352:2013-06 (2013)
B7. Closure of the CEN Technical Committee in Supply Chain Security, CEN/TC 379 (2014).

Main references / bibliography:

CEN (2013), “Logistics: specifications for reporting crime incidents”, EN 16352:2013-06
CEN (2012), “Supply chain security (SCS): Good practice guide for small and medium sized operators”, CEN/TR 16412:2012
CEN (2006), “Expert group: Supply chain security”, approved by CEN/BT/WG161, 14.1.2006
EC (2012), “Commission Staff Working Document on Transport Security”, SWD(2012), 143 final.
EC (2006a), COM(2006)79 final, 2006/0025(COD), COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on enhancing supply chain security Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on enhancing supply chain security, (SEC(2006)251)
EC (2006b), SEC(2006)251 COMMISSION STAFF WORKING DOCUMENT. Annex to the COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on enhancing supply chain security and Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on enhancing supply chain security – IMPACT ASSESSMENT – {COM(2006)79 final}
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, 15.12010

CORE-Observatory

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.

CORE1207

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Integrating carrier selection with supplier selection decisions to improve supply chain security (CORE1206)

November 25, 2016/0 Comments/in Academic, All products, All transport modes, Analytic, BMT, CBRA, CLECAT, CORE-Observatory, CPT, Demo-cluster, ESC, Freight forwarder, Global, ILS, IRU, ISL, Manufacturer, Risk management, Risk-cluster, Scientific, Shipper, Supply chain, Supply chain security, Terrorism/destruction, Theft, Trade facilitation, Transport carrier, TUD, Warehouse keeper, WP1 /by Vladlen Tsikolenko

Summary: The paper describes a collaborative decision making process that makes possible to select optimal combination of suppliers and carriers that meet both business operational and security requirements. Security information is quantified in order to create a pool of qualified suppliers and logistics providers. Quantification enables to incorporate security with other business criteria such as price, delivery and quality into an optimization model. Logistics and purchasing managers can use the model to analyze the tradeoff between these criteria. The paper can be viewed here: http://onlinelibrary.wiley.com.

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Full review: Different managers typically carry out security assessments and selections for logistics providers and suppliers separately. The study presents a mechanism for quantifying and measuring supply chain security that justifies removing of suppliers and carriers from further consideration if they fail to meet the minimum required security performance. In the next phase security is incorporated into an optimization model that minimize procurement and quality costs caused by late and rejected deliveries. The optimization model allows selecting a combination of suppliers and logistics providers that best suits their individual situation defined by risks and operational requirements. The study demonstrates how the tradeoff between security and cost can be assessed parallel in a way that the process leads to the better solutions than if assessed separately.

The paper presents a dynamic optimization tool that can be considered both revolutionary and easy to implement in practice. There are security-rating systems that set minimum requirements for suppliers and carriers such as TAPA Facility Security and Trucking Requirements that enable to create a pool of qualified service providers for transportation of high-value goods. However, several manufacturing and logistics companies are outside the TAPA system, because the goods produced and transported are not prone to thefts and hold-ups. For them it is a matter of internal management coordination when choosing suppliers and carriers and willingness to carry out necessary steps to minimize the cost of providing a secure supply chain. It is also a strategic decision, if company aims at minimizing internal costs by managing suppliers and carriers by contracts or operation management principles. Several international companies have chosen the first option by selecting one or two main service providers instead of issuing regularly quotations for materials and transportation services. The paper proves it is more a question of company practices to select suppliers and carries than minimizing internal management costs.

The paper brings very interesting viewpoint to the CORE project. The CORE project focus on managing risks and unexpected events through additional sensors and information systems. However, commercialization and selling of the CORE technologies and data management platforms requires understanding procurement processes in private and public organizations. The presented model embeds security into the selection process of suppliers and carriers. It is essential the CORE project can identify decision-making moments that give opportunity to introduce new technologies and practices and improve collaboration in supply chain network. Only collaboration between logistics managers and purchasing managers as well as among buyers, suppliers, and carriers can result in improved supply chain security performance in the whole network.

Reference: Meixell, M. J., & Norbis, M. (2012). Integrating carrier selection with supplier selection decisions to improve supply chain security. International Transactions in Operational Research, 19(5), 711–732.

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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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Review of Cargo 2000, C2K – an IATA interest group with the mission of creating and implementing quality standards for the worldwide air cargo industry, 2015 (CORE1043)

April 27, 2016/0 Comments/in Air, All-clusters, CBRA, CORE-Observatory, CPT, Demo-cluster, Express courier, Global, IATA, IT-cluster, Mail operator, NGO, Other-cluster, Risk-cluster, Standards, Transport carrier, WP12, WP14, WP15, WP16, WP17, WP19, WP22, WP3, WP4, WP5, WP7 /by Vladlen Tsikolenko

Summary: Cargo 2000 is the quality standard for the tracking, measuring general air cargo shipments. It is a project commenced in 1997 and is supported by a self-funded group of the world’s leading Airlines, Forwarders, Ground Handling Agents and specialist IT providers. IATA then provides oversight, administration and facilitation on behalf of the Membership. Cargo 2000 (C2K) uses standard recognized IATA Cargo-IMP (Interline Message Procedures) already used within the air cargo industry to provide reference points for measurement. These are known as FSU (Freight Status Update) messages. The key metrics under C2K are NFD (Notified for Delivery), in which case the destination has received both the physical cargo shipment and the information (paper or electronic) is available for collection by the Agent of the Consignee, and FAP, Flown as planned. In this case, the service delivered matches that which was promised to the customer in terms of timings and flights. In order to simplify and standardize the various processes that support C2K, as it is used by multiple stakeholders in a live environment, the C2K Master Operating Plan (MOP) was completely revised in 2012. The result is a very visual process description that allows every stakeholder to clearly see the part they play in the overall end-to-end routing of the shipment. The visual nature of the schematics, also allows the assessment of any new legislation, processes or procedures to be predicted both up and down the chain. Available to General Pubic at the IATA Website, this standard is hyperlinked here: http://www.iata.org

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Full review: Relevance for CORE: The CORE implementation objectives, which specify what will be done and how to reach the vision, are all subject to the Policies, Regulations, and Standards that exist within the Security Domain of the Global Supply Chain. Among all Work Packages of the project, some are directly impacted by the project, while others are solely primarily or secondarily contributed. Among these Work Packages, the CORE demonstrators will validate the applicability and benefits of the CORE approach in representative operating scenarios characteristic of the global supply chain. They will specifically show the way towards a Global Secure Supply Chain. The overriding goal is to demonstrate substantial gains in security and facilitation covering every major facet of the supply chain security sector.

The following CORE Work Packages are directly impacted by the C2K Industry Standards:

WP7: CORE Connectivity Infrastructure and Solutions Development Environment – provide an integrated set of tools for developing solutions for the Demonstrators in line with SCSRF utilising results from reference projects particularly e-Freight and iCargo.
WP12: Demonstrator Schiphol – apply global data pipeline concept to air cargo supply chains, managing air freight specific trade compliance requirements, and offering supply chain visibility in dashboards. Trade lanes with e.g. Africa, involving multiple inspection authorities.
WP17: DHL Demonstrator – managing airfreight trade compliance requirements EU-US in the context of fast supplying of parts. In this demonstrator, Cargo 2000 and mutual recognition with the US will become evident.

The following CORE Work Packages are primarily contributed by C2K:

WP14: Demonstrator FALACUS – FastLAne through CUStoms – implement an extensive supply chain of ceramics products along international corridors between Italy and USA.
WP15: Decathlon Demonstrator – operational and security related Key Performance Indicators (KPIs) within the CORE framework will be applied to monitor the overall level of security within the supply chain for different supply chain actors Taiwan to retail shop destinations across Europe implementation of this new transit modality and the impact it would have on the overall performance of the supply chain.
WP19: Stakeholder Engagement – Knowledge Diffusion and Sustainable Development Specify and apply an inclusive Stakeholder Engagement Strategy emphasising international co-operation to promote harmonisation of regulations, and to support further development and implementation of international standards.

The C2K Standard will have the secondary effects on the following Work Packages:

WP3: Multi-method Threat and Vulnerability Analysis (MTVA) Suite
WP4: SC Situational Awareness Tools & Maps
WP5: Real-time Lean Agile Resilient Green Optimised (LARG+O) SC
WP16: ENI Demonstrator
WP22: Analysis and Testing of a Secure Hybrid Composite Container

CORE Impact Anticipation: CORE seeks to give consolidated solutions and develop the resilience, optimisation and interoperability of the global supply chain, including Port, Container, Post, Truck, Rail, Maritime and Air. Cargo 2000 contributes thence directly to CORE vision.

Cross References: Introduction to Cargo 2000 by IATA, http://www.iata.org/whatwedo/cargo/cargo2000/Documents/c2k-introduction.pdf

Full Citation: IATA Website, Cargo 2000 Page, accessed 22 September 2014: http://www.iata.org

CORE1043

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Posts

EU logistics security – an interesting decade

CORE-Observatory

Integrating carrier selection with supplier selection decisions to improve supply chain security (CORE1206)

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

Review of Cargo 2000, C2K – an IATA interest group with the mission of creating and implementing quality standards for the worldwide air cargo industry, 2015 (CORE1043)

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