Cargo Security Management: How Digitization Safeguards Shipping

Introduction

In the field of cargo security management, technology plays a pivotal role — not only in how shipping is managed, but also in how effectively risk is mitigated and security is established through system-wide control mechanisms. To help protect cargo and supply chains, digitization has been shown to be an effective approach that allows businesses and stakeholders to more effectively monitor the movement of goods and inspect cargo in order to ensure safety and reduce the threat of terrorist activity gaining a foothold in the cargo supply chain (Fruth & Teuteberg, 2017). However, not all ports are created equally, and some are more advanced than others in providing digitization services that enhance cargo security. This paper compares and contrasts the issues surrounding digitization as a means of combating terrorism in cargo security management.

Literature Review

As Fruth and Teuteberg (2017) point out, the health of the global economy is critically linked to the safety of the world's ports and the protection of the cargo that moves through them. Over the past two and a half decades, cargo traffic has grown by approximately 10% year over year, and ships have grown in size to reflect this expansion in shipping volume. Because of the sheer scale and capacity of cargo today, it stands to reason that digitization could provide cargo security managers with the kind of Big Data needed to better manage cargo-related logistics (Fruth & Teuteberg, 2017). Digitization of processes can better ensure "efficiency, safety and energy saving" (Fruth & Teuteberg, 2017), but there are also risks in handling Big Data — including the threat of cyberattack, hacking, and Big Data being sold or leaked to third parties. Rahman, Saifullah, and Dhaka (2016) show that "demand pressure for a digitalized commercial environment" is growing in the cargo security management field, and that a globalized world in a technologically advanced era essentially requires digitization to be more thoroughly incorporated into cargo management services at ports around the world (p. 267).

Digitization can also help combat terrorist threats in cargo security management by linking ports together. Heilig, Schwarze, and Voss (2017) have shown that "as actors in world-wide supply chains, seaports are particularly affected by technological change," which means they should respond to that change in a uniform manner so that security features in place at one port are replicated at another. Digitization is also necessary to ensure that cargo shippers remain competitive within an industry that is shifting rapidly toward digital operations. As Heilig et al. (2017) note, "due to the high requirements in the logistics sector, e.g., regarding costs, efficiency, security, and sustainability, digital innovation is essential to stay competitive" (p. 1341). In short, digitization is here to stay as a result of the technological revolution of the Information Age. If it is not incorporated into cargo security management policy, the supply chain it oversees will be weakened as a result.

Implementing an effective digitization strategy can be complicated, however — and costly. For that reason, it is important that stakeholders work together to share costs so that a uniform approach can be achieved. Ahokas, Kiiski, Malmsten, and Ojala (2017) identify several ways that both state and non-governmental operators can more effectively manage cargo security. The first is that managers can "commercialize their own cyberskills and cooperate with national or other non-governmental operators" (p. 11). By working together with various stakeholders in the supply chain, a more comprehensive safeguard of cargo can be accomplished. The second approach is that managers can "form different alliances, for instance with national authorities that can offer them cyberskills" (Ahokas et al., 2017, p. 11). By forming such alliances, cargo security managers can better establish a unified front against the threat of terrorism while ensuring that cargo is at all times being safely monitored, tracked, and overseen.

Ahokas et al. (2017) acknowledge the risks inherent in using digitization tools, as Fruth and Teuteberg (2017) do, but they argue that "even though cyberspace can be used for malicious operations, it has established a platform for new innovations, such as digitalisation, virtualisation and automation. Thanks to these innovations, organisations have been able to cut various intermediaries from their production and service chains" (Ahokas et al., 2017, p. 11). By doing so, costs can be saved and those savings can be reinvested in the digitalized infrastructure needed to safeguard cargo. That infrastructure can take a variety of forms — including tracking technologies, surveillance systems, sensors, wireless technology, mobile equipment, drones, 3D printing, and analytics. As Heilig et al. (2017) note, these technologies represent a valuable way to help ensure that cargo is shipped on time, that security is guaranteed, that port capacity is maximized, that process efficiency is supported, and that costs are reduced for cargo operators, port operators, and shipping clients. Indeed, Heilig et al. (2017) show that industry leaders have increasingly turned to digitization simply to better serve their clients.

Thus, in spite of the costs associated with upgrading infrastructure to include digitization technology, the savings and security that this technology provides can be well worth the investment in the long run. Furthermore, the fact that digitization is not going away anytime soon makes it more necessary than ever for businesses seeking to remain competitive. For cargo security managers, therefore, digitization is a tool that will not only help protect cargo but will also help attract customers who want assurance that every effort is being made to ensure their shipments are safe from port to port.

Conclusion

Digitization should be recommended in the cargo security management field despite the potential costs associated with updating existing infrastructure and incorporating new technology into existing frameworks. The reason for this recommendation is that all industries are steadily moving toward digitization, as it is a technological advancement that has fundamentally changed the nature of business and communications. The expected security benefits of digitization will shape the cargo industry for years to come, though risks also accompany its implementation: hacking can occur, information can be stolen, and data that should remain private can be sold or leaked to third parties. Nonetheless, as with any advancement, risks exist, and digitization should not be avoided either because of those risks or because of the costs of infrastructure upgrades. The benefits of digitization far outweigh the drawbacks.