August 7, 2003

Horizon Lines Raymond demands box security "from the beginning"

Chuck Raymond, President, Chairman and CEO of Horizon Lines LLC, said yesterday that container security couldn't become a reality unless there is "a coordination of all parties participating in cargo movement."

"All shipment information should be required from the point of the shipment's origin in advance of container stuffing,  said Raymond. "The location where the goods are initially stuffed into a container to begin their journey is the initial point at which shipment information should be captured."

Raymond spoke at the National Defense Industrial Association Transportation Security Administration conference in Charleston, S.C, this week.

As head of America's largest domestic ocean carrier, Mr. Raymond noted that more than six million containers enter U.S. seaports annually aboard more than 5,000 ships from greater than 50,000 port calls.

"Can we be sure--today--that a shipper will not falsely declare a shipment's contents and enable a container to explode inside one of our seaports or largest cities?" he asked.

Every transportation mode "has to have the capability to provide status information relative to their portion of the supply chain - origin through to destination. Intermodal, ocean and terminal operators/stevedores must consistently provide their information on a real-time basis," said Raymond.

"The shipper, therefore, bears the responsibility for one of the most important parts of cargo security--the first piece of cargo information," he added.

"Some shippers are early adopters of the technologies and processes necessary to shelter our nation. These organizations are looking at electronic seals and tags, warehousing systems, and even access controls at their facilities," he said. He noted that recently, Wal-Mart's Chief Information Officer, Linda Dillman, took an unprecedented step and set a mandate for suppliers. By January 2005, the top 100 suppliers must be able to track pallets of goods utilizing RFID tags.

"So, now the question becomes: Will it take until January 2005 and a Wal-Mart lead for the next step in cargo security? Can we, as a country, sit back and wait another 18 months to see how Wal-Mart and their partners make this work? In the meantime, leaving us potentially vulnerable to another terrorist attack, which would further impact our economy?"

Another issue arises when cargo originates in a country on one carrier and then is transferred to another carrier for transshipment, he said. "The last port prior to arrival at a U.S. port is not the cargo's origin. This gap in the information supply chain may provide enough of a window to enable questionable cargo to be overlooked. However, when factory floor data is required, this gap would be visible because the origin and last foreign port are incongruent."

"Based on these variances in the supply chain, a patterning or decision format should be established based on the types of information available from each entity. These irregularities should be identified and managed systematically, subsequently initiating an alert," he said. "Examples of these items include, among others: commodity description on billing record differs from manifest; cargo has been booked from a high risk port, electronic seal has been violated or the shipper or consignee is unknown."

Noting that the bombing of the federal building in Oklahoma City was accomplished with a truck smaller than a 20-foot container, Raymond said that size was not necessarily a significant component for impact or devastation.

"The migration to full supply chain security involves the tight integration of operational information with data coming from electronic devices, and subsequently married to planned and actual cargo events. This creates a real-time 'window' into 24/7 cargo status regardless of transportation mode or location," said Raymond. "Risk assessment is easily enabled because complete visibility has been achieved, and alerts have been triggered for proactive responses. The proactive steps have been taken to prevent a catastrophic event with human and global economic impact."

"The integrity of those six million containers arriving in U.S. ports is challenging, but not impossible," he concluded. "Because, like everything else, it all starts at the beginning."

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