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Just in Time – Facilitating Secure Cargo Movement
APEC Air Cargo Security Workshop
24th June, Bangkok, Thailand
Matt HemyVice President, Security & Crisis ManagementDHL Express Asia Pacific
Bangkok | June-24-2008 Page 2
Express Delivery Services (EDS) industry
• Some statistics:
– Over 30 million shipments daily
– Our customs declarations are estimated at 25% of total declarations in AP
– 1, 200,000 employees / 170,000 vehicles / 1,700 aircraft
– Operations in over 220 countries
– By 2017 EDS is expected to represent almost 36% of global air cargo
• EDS is unique
– Speed and Reliability - Nothing Stands Still
– Fully integrated, door-to-door delivery
– Global reach
– Full Custodial control
– “Track and trace” technology
Bangkok | June-24-2008 Page 3
Pickup (PU)
1 2
Processed& Bagged (PL)
43
DepartsFacility (DF)
ArrivesFacility (AF)
Processed& Bagged (PL)
DepartFacility (DF)
ConfirmedUplift (CU)
5 6 7
ORIGIN SERVICE CENTRE ORIGIN GATEWAY
TRANSFER HUB
ArrivesFacility (AF)
Processed& Bagged (PL)
DepartsFacility (DF)
ConfirmedUplift (CU)
8911 10
DEST GATEWAY DEST SERVICE CENTRE
Processed& Bagged (PL)
DepartsFacility (DF)
ArrivesFacility (AF)
Arrives atFinal Dest (AR)
WithCourier (WC)
ShipmentDelivered (OK)
12 13 14 15 16 17
Typical End to End Shipment Movement Process
Bangkok | June-24-2008 Page 4
EDS – already secure
• Best in Class
• We see the shipper and the package
• A video record is kept of every shipment in our facilities
• Secure facilities and vehicles
• Pre-employment screening of staff and contractors
• Formal training of front line staff on security practices and procedures
• Sophisticated risk management techniques
• Our normal theft prevention measures also protect shipments from
unauthorized interference
• Over 30 years of experience – proven track record with large, professional
security teams managing all aspects of security
Bangkok | June-24-2008 Page 5
Secure Facilities: Example
Bangkok | June-24-2008 Page 6
Secure Facility: Security Control Centre
Bangkok | June-24-2008 Page 7
Secure Facilities: CCTV
Bangkok | June-24-2008 Page 8
Securing the EDS Network
Bangkok | June-24-2008 Page 9
Securing the EDS Network
1. X-Ray was suspicious
2. Shipment manually searched
Bangkok | June-24-2008 Page 10
Track record of Express Industry
Example: Forged Passports and Forged Credit Cards Detected in Thailand
Bangkok | June-24-2008 Page 11
The Regulatory Environment
• EDS as integrators have to deal with multiple agencies and regulations as a
part of the supply chain
• Aviation Security (ICAO, IATA etc) vs WCO SAFE Framework & AEO
• Airline industry has been ahead of the ‘game’ and focused on this for a very
long time
• Physical vs Intelligence layer focus
• Government Collaboration with Civil Aviation Administrations, Law
enforcement
• WCO is now leading the charge on a holistic approach to supply chain
security
Bangkok | June-24-2008 Page 12
WCO SAFE Framework – principles & partnerships
• The Introduction of the WCO Framework states:
– SAFE is designed to secure the movement of global trade in a way that
does not impede but, on the contrary, facilitates the movement of that trade.
– A holistic approach is required to optimize the securing of the international
trade supply chain while ensuring continued improvements in trade
facilitation.
• Customs to Business partnership is one of the pillars of SAFE
– Our customers have long demanded secure supply chains due to their
critical nature and high value of their shipments
– Thus we have been making significant investments in security of premises
and processes for many years, even before 11th September 2001
Bangkok | June-24-2008 Page 13
A balancing act
• Authorities now see the need for much greater levels of control in response to the current security situation
• At the same time the rising volumes of global trade increasingly demands secure, timely and affordable international delivery of time critical documents and goods
• Therefore a coordinated & balanced policy approach is necessary
– DHL Express supports Authorized Economic Operator (AEO) regimes, “known shipper” programs and the like because they are good for our business
– Authorities should not be too reliant on physical measures rather than “intelligence” available from industry and other government agencies
– Security requirements of Customs vs Aviation Security vs Transport Administrations need alignment
– Risk vs threat
Bangkok | June-24-2008 Page 14
Physical Security Measures
• EDS has substantial programs in place and can control its link in the
chain
• Physical security depends on the weakest link and clear lines of
responsibility
• Physical means “visible” which is politically popular
• Physical measures can compromise our operation between pick-up
and delivery
• Compliance is a cost and resources issue for our customers,
especially SMEs
• Can change the whole EDS business dynamic
Bangkok | June-24-2008 Page 15
The Intelligence Layer
• WCO acknowledges the use of strategic intelligence
• The US TSA strategic plan is focusing on risk based screening
• EDS already works closely with authorities
• An area of opportunity for collaboration between government
agencies and law enforcement
• Enables us to continue to offer high levels of security whilst
maintaining trade facilitation
Bangkok | June-24-2008 Page 16
Threat Assessment & use of Data
• We have always promoted a threat-based approach to security
• Threat Assessment requires data, but we already supply it to Customs
• We could tighten and provide account-opening data, also reducing bad debts
• Requires coordination between different arms of government
– Customs
– Immigration
– Law Enforcement Agencies (e.g.: Police)
– Criminal intelligence bureaux
– Civil Aviation authorities
– Ministries of Transport
Bangkok | June-24-2008 Page 17
Best Case & Worst Case Scenarios
• Ideally ….
– The assessment of the totality of our security; does not specify physical
measures between pick-up and delivery
– EDS integrators improve the timeliness of data on shipments and provide
better data from account opening procedures
– A “whole of government” approach which considers ICAO, WCO SAFE etc
– A collaborative Government & industry approach to air cargo security
– Mutual recognition across countries
• Nightmare …
– Red lane / green lane system
– Responsibility for security compliance of our customers
Bangkok | June-24-2008 Page 18
Thank You for your attention
Matt HemyVice President, Security & Crisis ManagementDHL Express Asia Pacific