The intersectionality of transportation, security, and supply chain risk management

All over the world, critical transformation remains vital for an effective supply chain, particularly concerning conveying goods and services both within countries and across borders. Ensuring that critical transportation, some of which include roads, rails, airports, and cargo ships among others, is secured, remains a significant goal and objective of individuals, governments, businesses, and corporations, as failing to do so could have dire consequences including significant financial loss.

The Global Infrastructure Outlook estimates that $2 trillion of transportation infrastructure investments are required each year until 2040 to drive economic development, in which the global supply chain plays a critical part. In the areas of road transport infrastructure, these include toll roads, tunnels, and bridges.

For rail transport infrastructure, these include heavy and light rail networks, freight operations infrastructure as well as terminals. Under air transport infrastructure, this would include airports and other land-related infrastructure.

For marine transport infrastructure, ports, terminals, and ferries are also required. Other asset types are logistics infrastructure which includes storage and handling assets, as well as equipment networks, and lastly integrated networks covering multiple transportation assets and infrastructure in addition to value-added services.

Given that 90 percent of world trade moves by sea, the importance of ensuring that critical transportation infrastructure in this regard is well-secured cannot be overemphasised. Effects on critical transportation infrastructure results in labor disruptions for trucking companies, warehouses, storage facilities, and ports. In June 2017, the spread of the NotPetya ransomware which affected several transportation companies in countries such as France, the United States, Germany, Italy, and the United Kingdom to mention a few, brought to bear the importance of ensuring the protection of transportation infrastructure.

One of the hardest hits was the Copenhagen-based shipping giant A.P Moller-Maersk. Maersk moves a total of one-fifth of the world’s entire freight. As a result of the malware, operations in at least four countries where Maersk has its terminals were severely affected. This resulted in significant delays and disruptions in the global supply chain, including in food supply and manufacturing, thereby affecting the smooth transportation of goods for several weeks.

During this period, Maersk lost somewhere between $200 to $300 million. Just like Maersk, FedX, another transportation company that remains critical to the global supply chain was also severely affected by the malware to the tune of roughly $400 million. Most of the recovery costs which were announced by FedX were due to the loss of revenue from TNT Express, a delivery, and logistics company based in Ukraine which it had acquired, and which was also affected.

Other companies also affected included Reckitt Benckiser, which is a company that supplies Dettol, a common household cleaning product, and the Nurofen painkiller also estimated a loss in revenue at the time to the tune of £100 million. It is also pertinent to note that securing critical transportation infrastructure also requires ensuring their smooth operations through measures such as decongestion and upgrading outdated infrastructure.

One way to do this is by ensuring better efficiency through the application and use of technology as well as automation. A few examples include the Netherlands’ Port of Rotterdam as well as Australia’s Brookfield’s Investment which is located at Patricks Terminal. This is central to ensuring they can support the global supply chain. Amongst the greatest security threats to critical transportation infrastructure, today are those posed by criminals and terrorists.

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Across the world, terrorists have increasingly sought access to critical transportation infrastructure as part of efforts to gain the attention of governments. Some of how they have done these in the past have included mounting roadblocks, planting improvised explosive devices (IEDs), destroying link bridges, sabotaging rail tracks, and even hijacking airplanes.

All of this has serious consequences on the free flow of goods and services across the world, in addition to often disrupting global supply chains in ways that could take many years in restoring them to their original state. While it is simply not enough to build more roads, new airports, and rail tracks, what matters is in ensuring that these transportation infrastructures are built to be sustainable and well-protected.

Some of the ways by which this can be achieved are by ensuring that they are socially inclusive, technologically advanced, flexible, and resilient to the effects of climate change amongst others. Their design, planning, construction, procurement, and operations must therefore reflect these. For instance, they could be upgraded to foster resilience as well as reflect lower carbon emissions.

The prospect of global urbanization due to population shifts is likely to usher in significant opportunities for transportation infrastructure in addition to its attendant challenges. Managing these well is fundamental to ensuring that they are secure in a way and manner that guarantees their continued value addition to the global supply chain.