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Key steps for protecting your supply chain against terror attacks

December 12, 2018

Terror attacks on global supply chains are on the rise. A report from British Standards Institute (BSI) estimates a 16% year-over-year increase within the last decade, with terrorist organizations striking supply chains an average of once a week. The report identified 35 countries in which attacks occur regularly, with Colombia, Egypt, India and Turkey particularly prone to supply chain terrorism.

Credit, Political Risk and Terrorism
Geopolitical Risk

Supply chains can make a tempting target. Organizations don’t always take adequate measures to protect their transportation channels from disruption, which can leave them vulnerable to piracy and terrorist acts that result in lost or damaged cargo.

When these strikes occur, they can often be more devastating than a traditional military attack. If for example, a ship were attacked inside the Suez Canal, a major route that handles 8% of global trade, the economic implications would likely be severe and not just for Egypt. Rerouting ships around Africa would add thousands of miles to the voyage, increasing costs. It could also mean that ships might have to travel through equally, if not more dangerous waters.

So, what should companies do to protect themselves?

While there’s no way of avoiding a major terrorist attack on your supply chain, there are steps companies can take to become more resilient and minimize business disruption.

Organizations directly involved in the supply chain will find that official guidelines can be helpful. One of these is from the International Organization for Standardization, which specifies the aspects critical to security assurance of the supply chain. If operating along global supply chains that pass through U.S. ports, there’s the Customs Trade Partnership Against Terrorism. This was set up after the 9-11 terror attacks, and is a public-private partnership through which U.S. Customs and Border Protection works with the trade community to strengthen international supply chains and improve border security.

Closer coordination between companies and supplies needed

For the majority of companies that rely on third-party suppliers, the solution is not just governmental or legislative. There needs to be closer cooperation between companies and their suppliers. Taking more interest in the routes and working with local, regional or national governments to ensure they’re doing all they can to protect vital trade routes is important. Additionally, understanding the processes and conditions in which assets are moved, continually assessing key vulnerabilities and maintaining a full understanding of the protective measures offered by the logistic operators can be an effective approach to risk mitigation..

Security assessments

Companies should also conduct regular security assessments as they bring renewed focus on their risk appetite and will help in developing an appropriate security plan. Robust practices around cargo security are important and a key element to raising awareness of the associated risk exposures.

Insurance solutions

Other risk management approaches, including insurance can also be employed. Trade disruption insurance, for instance, can protect the company’s balance sheet by providing cover against the risk of late delivery or non-delivery of goods due to events such as a terror attack. This cover should also include a supplier risk assessment that enables a company’s clients to mitigate risks to their supply chain.

Companies are increasingly threatened, extorted and directly targeted by terrorist organizations worldwide. As with all security, a sophisticated, multi-layered approach is most effective in providing “defense in depth”. Such efforts may come with a cost, but so do major disruptions to the supply chain and attacks on company and supply chain staff. Considering these steps will not only help you reduce risks and help ensure reliability of service, but also help you keep your operations running.

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