Risky Business
By Gary Burrows
Supply chain logistics has come a long way in its approach to security and risk management since the dark tragedy of 9/11.
However, to your company’s security experts, it feels like the nightmare where you’re helplessly running in place while your nocturnal demon is rapidly catching up. Cyber-attacks, terrorism, corruption, piracy, protection seems to stretch far beyond merely protecting the assets; it requires the integrity of each step, of each handoff, and each partner. The bad guys always seem one step ahead so companies invest heavily to allay their worst fears.
As Carly Fields points out in this issue’s cover story (“Hidden Risk,” page 12), the biggest threat can be complacency. While project cargo faces different risks than conventional supply chains fed by containerization and perhaps a more expansive flow of data, Fields outlines the many aspects that aren’t top-of-the-head thinking, but are as significant to a successful cargo move.
As a regular feature now, Breakbulk offers its Legal Spotlight, with this issue featuring commentary from Martyn Haines, a master mariner and accredited mediator (“Take Time to Talk,” page 60). Well-reasoned processes, knowing your partners, consistent communication, defining expectations and meeting them. It all sounds so simple.
Imagine then, ratcheting up the degree of difficulty, handling projects in a current hotspot or post-conflict region? Such high risk usually also means greater reward. That was the topic of a highlight session at Breakbulk Middle East in Abu Dhabi. Moderator Tina Benjamin-Lea, logistics manager, SNC-Lavalin, walked with her panel through the process – logistics, infrastructure, security, and ethics and compliance.
“Regardless of whether you’ve operated in an environment before, or its your first time, we can’t over-emphasize the planning phase prior to bringing assets into country,” Wilcox said. “Even from a timeline perspective, you can’t over-estimate or over-plan or over-contingency.”
Certainly the session was as much veterans swapping war stories as insights on securing a project supply chain. But threaded through it wall was the consistent blueprint of steps necessary regardless of the level of risk.
“We’re not reinventing the wheel when we get to what might be described as a frontier location, but we do it legally, ethically and efficiently as we can,” Wilcox said.
A conservative approach is also required, especially for a customer who needs to align expectations with realities.
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“Things just don’t happen quickly in any of these countries,” Wilcox said. “There are no systems in place, just someone with a typewriter. In some of the ports, militia is controlling, and when one militia moves out and another moves in the total order is changed.
One of the challenges for engineering, procurement and construction, or EPC, companies and breakbulk operators entering a post-conflict region for the first time is understanding the value of the costs associated with making sure an operation is “gas-tight, stress-tested in every regard to security,” Wilcox said. That requires due diligence and background checks on partners.
While projects routinely go to the most austere, far-flung locales, the conditions of bridges, roads and infrastructure present huge challenges, said Alberto Pittaluga, director Iraq and Italy, ALE Middle East LLC.
Route decisions are impacted by destroyed roads and bridges, mines and river options snarled with debris. There are health and safety risks, financial risk, as well as the physical challenges.
Simply surveying bridges and roadways for the move brings risk of arrest and confrontations from local government that doesn’t understand what’s going on, Pittaluga said.
“Early engagement is key,” he said. “It’s a combination of effort between EPCs, forwarders, IOCs (international oil companies) and the central government.” For the latter, impressing the project’s value upon that government would create buy-in.
A great obstacle, though, is when stakeholders like risk management or security are outside of decision processes, said Martin Rudd, senior vice president, commercial, of security group Constellis.
Regardless of risk, collaboration is key.
Photo credit: Shutterstock
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