Terrorist threats to the North American supply chain require a new co-ordinated approach to security, according to Network-Centric Security for Canada-U.S. Supply Chains, co-published by The Fraser Institute and the Washington-based Center for Strategic and International Studies (CSIS) and released today.

The North American logistical system for moving commercial goods poses a special attraction for terrorists. The large spaces within sea containers or truck vans can easily conceal, and then deliver for detonation, a range of weapons. In addition to the substantial loss of life and property that could result, such an attack could shut down U.S./Canada trade for an extended period.

Focusing on the U.S./Canada border, this new paper shows a way for business and government to work together to dramatically broaden and deepen supply chain security.

"It is the unprecedented stealth and lethality of the post-September 11 threat that thrusts private firms into a heightened role in protecting their own infrastructure and operations," said Joel Webber, author of the paper and a transportation lawyer.

Webber shows how existing technology could transform the supply chain. A move to "network-centric security" would pool information from all participants in the supply chain, from port operators to shippers, to receivers. Using computer and satellite tracking capabilities, the system would follow each shipment from its loading to delivery. By incorporating wireless devices, electronic seals, sensors, and logistics software that is already available, each transaction in the system would be visible remotely in real time and at multiple locations.

This new protocol would augment manual searches and machine scans at ports and border checkpoints, which are today's main source of direct observation of freight flows.

"For the next stage of post-September 11 supply chain security, Canada and the United States can better protect their mutual freight flows against terrorist penetration by engaging the logistics system on its own operational terms, thereby keeping it moving while also making it safe," said Webber.

At its core, the new network-centric approach makes terrorist penetration significantly more difficult by rendering the supply chain visible at all times to government agencies and officials who can protect against such breaches.

Webber proposes three key components of a new system:

• Network-centric security, instead of today's stop-and-search security.
  
• Combining supply chain and security expertise in a private/public sector consortium, instead of having government officials impose a plan.
  
• Employing commercial and security incentives to create compliance, rather than compulsion. Incentives could include expedited port and border clearance, tax benefits, and liability protections.

"Adapting the most advanced twenty-first century trade relationship to cope with the most perilous of twenty-first century risks will require the innovative application of more than just technology," he pointed out.

Webber shows how the private sector can lead this new initiative by working with government through a joint consortium that would have similarities to the existing International Standards Organization (ISO) model. He points out that businesses, especially competing businesses, have already found ways to work together to develop standards in areas from computing to television. Developing standards, implementing strategies, and managing membership would be key tasks of the new security consortium, though direct government involvement would be a necessity.

"Whether we opt for the stop-and-search model or a network-centric one has important implications for both our physical safety and economic stability. The sooner we decide on one over the other, the greater our ability will be to protect ourselves against possible asymmetric threats hidden within our freight system," concluded Webber.

"Despite new technology employed at the border, we still use nineteenth century border strategy for the twenty-first century supply chain against a threat that was unimaginable even a few years ago" added Fred McMahon of The Fraser Institute. "We have to stay ahead of the terrorist threat and we aren't. Network-centric security takes us a leap ahead."