Cargo Container Security Navigates the High Seas

Adoption rates for electronic systems aren't as fast as many expected -- and here's why

"Transportation is still a labor-intensive business," explains Ritter. "The first reaction to problem solving in this industry can be to throw more people at the problem versus reaching for technology solutions." Even more challenging, adds Ritter, is that when the industry adopts technology, it often doesn't do so as an early adopter.

"Finally," says Ritter, "the complicated and critically important cost/benefit justification associated with an investment in cargo container screening devices is still being developed."

Jim Giermanski, Ph.D., professor and director of International Business Studies at Belmont Abbey College and a former Regents Professor at Texas A&M International University, agrees that money is the big hold-up for the industry.

"The private sector is not going to invest in anything until it sees a return," says Giermanski, "and the government is not providing incentives." He points out that the Safe Port Act of 2006 provided for so-called "green lanes" to speed up container processing for companies that met C-TPAT requirements and the requirements of the Container Security Initiative that were outlined in that Act. The problem is, says Giermanski, "green lanes at seaports still do not exist."

"Look at the 100 percent scanning requirement or the new RFIs coming out of DHS," adds Giermanski. "The government really doesn't know what we mean by smart container and what it can do."

If Giermanski is correct, then the only hope for better use of relevant technologies to protect our supply chains is going to have to come from within the private industry. Ritter thinks that's where it has to be driven, but he also believes the solutions have to be positioned as not simply another security alarm, but as an end-to-end supply chain security solution.

"Some of these devices have the potential to provide additional visibility in the supply chain, particularly for goods in transit," says Ritter, "and visibility is one of those critically important issues in global trade where business process improvement and enhanced security/resiliency can intersect to create real return on investment."

That bottom line advantage is what will drive these technology offerings, but ROI and bottom-line advantages aren't as easy to spell out as they seem at first. However, Giermanski -- who is a big advocate of satellite-enabled smart container communications -- says that the technologies can prove themselves without the supply chain or security executive trying to divine ROI numbers. He cites a trial of a GPS-based solution where criminals were actually apprehended during the test breaking into one of the containers. On the same trial, the shippers lost one of the cargo containers, and the satellite system was able to locate it.

And while neither Ritter nor Giermanski could point to a specific cost point where container security devices would prove their value unequivocally, Ritter says that "there is a per unit price point that justifies (or nullifies) most return on investment calculations in business, and cargo security is no exception."

Therefore, if businesses can define that value, the adoption of these technologies will happen - with or without any standards defined by DHS or the European Union.

Giermanski, however, is not so optimistic about near-term adoption of container security devices.

"It's a combination of a private sector that doesn't see the benefits," laments Giermanski, "and the government that doesn't know how to show the private sector the benefits."

Fortunately, the market isn't altogether afraid of the conditions. As GE's Greg Burge noted in their ASIS press conference, there may be difficulties and challenges in the cargo container security market, but there's still business to be done.