FEDEX’s SMITH SAYS ?KNOWN SHIPPER? SHOULD BE APPLIED TO ALL MODES

FEDEXÆS SMITH SAYS ôKNOWN SHIPPERö SHOULD BE APPLIED TO ALL MODES    Express freight pioneer Fred Smith said the “known shipper” program could be applied to all cargo modes, while adding his own suggestions to make that security ruling more effective, at a seminar sponsored by the U.S. Chamber of Commerce Wednesday.
   Smith, chairman, president and chief executive officer of FedEx Corp., told industry executives at the chamber's Washington seminar that spreading the known shipper to all cargo modes has a mandate after Sept. 11.
   “We need to apply such standards when establishing security procedures for cargo, whether by air, ground or water,” Smith said. “It can be done, and moved very broadly into our transportation infrastructure.”
   'The security practices of businesses known as “known shippers” should be more closely monitored, he said. “Known shippers must be required to have adequate security systems in place, and these procedures must be periodically monitored by government authorities.”
   According to a recent amendment to the known shipper ruling, a “known shipper” is a shipper who has a complete customer record and verifiable business history with a carrier or forwarder. Participants in industry have stated the same security measures, in addition to being poorly enforced, have been applied to shippers that are “known” or “unknown.”
   “Different inspection systems must be used for handling shipments from unknown shippers,” Smith said. All cargo from known shippers that enter passenger planes cannot be scrutinized individually. “It is not practical to screen and open every package that goes on passenger planes.'
   Smith said the government, industry, and other transport modes could adapt FedEx’s security measures, such as its tracking program, called “InSight,” which tracks shipments en route. “This type of visibility throughout the shipping and Customs process can make sure that the parties who have a stake in the shipment are identified and informed,” he said.
   Smith supported the Customs-Trade Partnership Against Terrorism (C-TPAT), the new government-industry program, and added that it allows Customs to work with trade to maximize its time and resources to combat terrorism, since member companies from industry undergo Customs’ security inspections. “A major advantage of this program is that it will allow Customs to focus more on cargo they consider a high risk,” Smith said.
   Smith suggested consolidating Customs and the Immigration and Naturalization Service into one branch to regulate the international movement of people. “We believe, longer term, however, that even more integration of information regarding the movement of goods will be required,” he said. He suggested that the Department of Justice, or the Office of Homeland Security, could be the oversight organization for such a measure.
   Smith said that, with the increase of high-value and high-tech goods in the economy, coupled with globalization, the need for fast-cycle logistics has evolved. Such a logistics environment has new needs, both for security and for delivery times. A terrorist act could shut down the logistics cycle, and the results could be economically catastrophic.
   “If we cannot have both increased security and efficient trade, the terrorists will in fact have achieved a major victory,” he said.