By Lt. General P.C. Katoch (Retd) Former Director General of Information Systems, Indian Army

In simple terms ‘supply chain security’ implies mechanism and effort to enhance security of the supply chain, the transport and logistics system for movement of cargo combining traditional practices of supply chain management incorporating security requirements driven by threats like terrorism, piracy and theft. Supply chain security activities would include: verification of participants in the supply chain; screening and validating of the contents of cargo being moved; advance notification of the contents to the destination; ensuring the security of cargo while in-transit via the use of locks and tamper-proof seals, and; inspecting cargo on entry at port of destination. Economic opportunities have grown exponentially with rapid globalization and interdependence of economies. The international trading system, which comprises transport and logistics systems for the world’s cargo and commercial trade, is a key driver of global economic growth, and innovation. At the same time, movement being critical to increasing demands, cargo and commercial trade supply chains have become highly susceptible to threats such as terrorism, piracy, theft and illicit trade. Illicit trade in particular, is a global threat that undermines governments, manufacturers, retailers and consumers. This phenomenon has grown to an unprecedented level, posing tremendous risks to society and the global economy, accounting for anywhere between US$ 1 trillion and US$ 2 trillion every year. According to Frost & Sullivan research, the global maritime security market size from US$ 13.1 billion in 2012 is expected to increase to US$ 20.2 billion by 2021, ISR segment contributing more than 50 per cent to this market by 2021. Also, since 2012, Interpol has supported cross border regional operations to fight illicit trade in all corners of the world, which has resulted in the seizure of illegal and counterfeit goods worth approximately US$ 550 million. A vital key in combating illicit trade and ensuring the security of supply chains lies in innovative security solutions and enhanced collaborative action between governments, the law enforcement community, the private sector and consumers. Illicit trade in illegal and smuggled goods are a particular concern to country governments because of the direct consequences on public’s safety and health, the loss of legitimate revenue opportunities for governments, and due to the links with organized crime and subversive groups. It is for this reason that Interpol has established the dedicated ‘Traffic in Illicit Goods and Counterfeit Directorate’ to address the problem and coordinates operations with the law enforcement partners and authorities of over 170 member countries. Other initiatives related to supply chain security are: Customs Trade Partnership Agreement against Terrorism (C-TPAT) which is a voluntary compliance program for companies to improve the security of their corporate supply chains; World Customs Organization (WCO) that adopted the Framework of Standards to Secure and Facilitate Global Trade in 2005, and consists of supply chain security standards for Customs administrations including Authorized Economic Operator (AEO) programs; Container Security Initiative (CSI) which is led by the US for screening containers at foreign ports; Global Container Control Program (CCP) which is a joint United Nations Office on Drugs and Crime (UNDOC) and World Customs Organization (WCO) container controls at selected ports across the world to prevent trafficking of drugs, chemicals and other contraband and to facilitate trade by strengthening cooperation between the customs, trade and enforcement communities, and; Global Trade Exchange, which is a DHS data-mining program for collecting financial information about shipments with a view to safety. In addition are efforts to implement and enforce the International Ship and Port Facility Security Code (ISPS) 148 member countries of the International Maritime Organization. Then are initiatives by companies in private sector to track and monitor cargo containers using technologies like RFID and GPS. The international Organization for Standardization has released a series of standards for establishment and management of supply chain security. Optimizing supply chain technologies and Transportation Management Systems (TMS) are gaining momentum. 97 percent of India’s trade being dependent on sea, it is not only the safety of the Sea Lanes of Communications (SLOCs) that is of concern to us but equally important is the security of the supply chain and efficient supply chain management. We have suffered terrorist attacks by sea and there have been instances of explosive materials and even shells coming in through containers. We need to exploit technologies and keep upgrading our supply chain security.