DHS Official Outlines New Freight Security Concept

By Calvin Biesecker

The U.S. government needs to go further than it currently does in obtaining data about the global supply chain for goods that eventually come into the country, Michael Jackson, the deputy secretary of Homeland Security, told industry officials last week at an annual trade symposium.

But rather than develop, build and own the information technology systems that gather the data "order to fulfillment," these data fusion centers would be owned by intermediaries that are between the private sector and the government, Jackson said at the Customs and Border Protection (CBP) Trade Symposium in Washington, D.C. Government would do the risk analysis based on a core set of data, he said.

"We are not so nimble and good at building those types of fusion systems," Jackson said, referring to the U.S. government. "The government does wholesale, you do retail. We need retail. We need to reach down and touch all the actors as much as possible that touch the supply chain and to find out how to mine that data. It doesn't mean that the analytical piece is done by industry. It means that the industry can gather and help present core data and common data sets to governments globally and in doing so they can retain the data, they can protect the data, they can own the data, they can reduce concerns about privacy, they can manage it in a more coherent and functional way."

Jackson was attempting to allay fears within the trade industry that bringing in industry partners to help manage proprietary data could potentially compromise their competitive positions. Companies want to be sure that competitors cannot get access to their trade secrets and that the way the government uses the data will not result in it being shared openly.

Jackson also said there is a place for this next generation cargo security system, which is dubbed Secure Freight, on a global scale to be used by countries other than just the United States. In the immediate post-9/11 environment the United States and some other countries were focused on protecting their homelands through their own unique initiatives,

"Our job is to try and drive a common operating platform, a business model that is rooted more in what you know, own and can give to multiple governments and how you do that," he said.

In June the World Customs Organization unanimously adopted the Framework of Standards to Secure and Facilitate Global Trade, which for the first time creates some common standards to secure cargo moving into and out of ports throughout the world. Jackson said the agreement is both a "good sign and tool" to help move the next generation security system beyond U.S. only regulation.

The Secure Freight initiative was first announced in July by Homeland Security Secretary Michael Chertoff as part of a major reorganization of DHS. But Chertoff offered little in the way of substance about what Secure Freight would entail. The initiative, at least for now, has nothing to do with air cargo and instead would focus on goods that transit the seas at some point.

Currently CBP uses the Automated Commercial Environment, which helps the agency perform risk assessments of waybills using certain rules to determine the security of container shipments.

The system also allows for expedited payment processing of duties and fees by companies to CBP. But ACE isn't sophisticated enough to handle complex data requirements needed for greater cargo security and it isn't a system that can be replicated from one country to the next without a lot of wasteful duplication, Jackson said.

"If we knew when something was ordered, when it was scheduled to be delivered, the carriers along the supply chain, where the container has been...then we could do a much more sophisticated job about profiling which containers we need to inspect and we could find our way to expedite the movement of commerce through our security systems in a much more aggressive way to make it financially desirable for industry to find a common operating platform which they themselves helped build, own and operate," he said.

Jackson said that DHS has begun talks with some countries on potential pilot programs for Secure Freight. Rather than roll it all out at once, a pilot program would let the countries know what could work and then build on that, he said.

To work globally Secure Freight trading countries would need to develop a "minimum set of performance standards" from order to fulfillment that can be scored for risk, he said.

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]

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