In my posts throughout the week, I have outlined several reasons why President-Elect Obama should appoint a cabinet member to focus on public policy for E-Commerce to support improvements to the US economy, environment, health care system and homeland security strategy. In this post I will focus on how e-commerce can help to support homeland security initiatives by improving supply chain security.
Since the 9/11 terrorist attacks the US has passed a number of legislative acts requiring industry to assume greater responsibility for supply chain security. For example, the Customs Trade Partnership Against Terrorism (C-TPAT) offers corporations an incentive to implement tighter physical security controls for importing activities. Businesses participating in C-TPAT will receive reduced inspections at the port of arrival, expedited processing at the border and penalty mitigation.
One of the greatest challenges the Department of Homeland Security faces in securing the US borders is the lack of scalability for inspection procedures. The government simply cannot physically inspect a high enough percentage of the trucks, rail cards and ocean containers crossing the border for evidence of potential terrorist activities. Further technology investment is required to automate the cargo screening and security procedures in order to mitigate the risk of attack.
Customs and Border Patrol have instituted a number of procedures to leverage B2B e-commerce technologies for supply chain security. For example, the Advanced Manifest Rule specifies that an ocean container can be allowed into US only if detailed information about the contents is provided electronically in advance. Similar procedures have been enacted for all trucks entering the US from Canada or Mexico. Ground freight carriers must submit an electronic manifest prior to arrival at the border. Recently, the regulations have become more formalized with an initiative called 10+2 that specifies 12 pieces of information that must be submitted to Customs and Border Patrol from an ocean vessel destined for the US prior to the ship’s departure from the foreign port. The 10 and the 2 refer to the number of data elements required from the importer and transportation carrier respectively.
E-commerce technologies such as EDI are the primary means by which transportation carriers, third party logistics providers, US importers and foreign exporters can submit cargo manifests and customs declarations to the Department of Homeland Security. Further adoption of EDI within the transportation industry would enable faster compliance with regulations and ultimately greater scalability for homeland security procedures.
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