Kroll's Security Concepts Podcast

In this episode, Simon Ashenden and Chris Palmadesso from Kroll’s Security Risk Management practice discuss port security risks for both the ports themselves and the ever-growing backlog of companies’ products sitting stagnant across the world's ports. Listen to Simon and Chris discuss the increased risks of crime and terrorism at ports due to COVID-19, emerging trends and technology in port security and how businesses can protect themselves against delays and risk.

Passages from the Episode

Global Impact of COVID-19 on Port Security

“I think it's plainly obvious that company supply chains have resulted in a lot of increase in frustration from consumers and suppliers around the world, and especially through these challenges of COVID. Products being stuck in locations for additional periods of time and causing additional pressure and the whole supply chain. But I think these frustrations whilst they're always there, there are a lot of additional challenges that are raising the head, and particularly for parts of the supply chain, such as the maritime ports. And they're so key to moving vast amounts of product around the world. And I think it's fair to say that they've always been targets as we know of crime and fraud, moving illicit goods, and because of the value of the products and the strategic nature of ports for countries and regions they've also always been targets for terrorism and certainly bad actors and criminal activity.”

“There's no doubt that with the increased pressures and tensions that COVID has brought and the situation at the moment around the world, that the target, if you like as a port, is certainly increased. And I think there's a couple of other factors that are interesting there. One is that there's so much talk around the intelligence agencies around the world in different countries about the potential resurgence and uptake in terrorism in 2022. And this is due to many, many factors and I think we only have to read the information out there to get a good feel for that, but certainly ports have always been, and will continue to be a target for terrorism.”

“We know by looking at the polls that are out there at the moment, the companies are concerned about these issues, and they certainly see a sort of multi-pronged approach to securing their supply chain, which maritime ports are part of it. And part of the things, or some of the things they can do there is ensuring that they've carried out risk assessments either of the location, or maybe the country that the port that is key for them seems to be situated in. And certainly looking at that from a terrorist perspective. We’re seeing a lot of approaches from our clients to help them in these areas and to carry out this kind of work for them.”– Simon Ashenden

Increasing Security Measures at Ports

“With everything going on with the supply chain crisis, really impacting those Pacific ports of entry. Throughout my coast guard careers, after 10 years of active duty in five years of reserve, I've really never seen anything such as this matter where logistics is really such a concern and so critical with regards to planning, preparation and supporting port security. Really what we look at when you look at the history of the Department of Homeland Security in the last 21 years or so since 9/11. What we see now is 20 years later after the Maritime Transportation Security Act of 2002. I mean, we're looking 20 years later, right? This is federal statute that is under the authority of the U.S. Coast guard, Customs and Border Protection to ensure that there is safety and security standards at these ports of entry.”

“It really has a lot to do with the terrorism aspect, really looking at the terrorism threat, preventing it, putting security measures in place for the constant ebb and flow of trade and commerce. However, what we see now is so unprecedented where there is that backlog. I mean, containers are building up left and right, we have ships at bay, and this is mostly in the Pacific sector as I had mentioned before. I'm on active duty right now with the coast guard. I'm really concerned on my logistics end of it, trying to figure out how to allocate resources and ensure that the ships at bay are safe, the ships in harbor are safe. And quite frankly, the trucks coming in and the trains coming in to keep commerce moving. From a federal perspective, it's concerning, right?”

“If you're a port security director and you're looking at this whole element, you're thinking okay, I got a lot of a product in my terminal, this product needs to move. There is a significant vulnerability. And as we mentioned in the last podcast, we talk about risk management, we talk about threat and the intent and capability of the adversary. A lot of the times we talked about terrorism, especially when it comes to port security. I mean, back in my time in the United States Coast guard, I was giving a lot of briefings and they were with regards to terrorism and how it impacted certain events and special events in New York Harbor. And then dealing with my colleagues out in Long Beach, for instance, which is a port that's getting impacted greatly by this crisis and how they're managing their threat, planning and response. Right?”

“Now we're looking at a vulnerability issue. You've got a lot of money worth of product that's sitting in these yards. You've got ships at bay, you've got great opportunities for threat actors to exploit this. And I don't just speak to this as a terrorism expert. I also speak to it from an organized crime perspective. There's a lot of opportunity out there to exploit these vulnerabilities. I'll give you a case in point right now, the federal government just passed Port Crane Security and Inspection Act, literally a few weeks ago. And this was an act to ensure that these port cranes are consistently updating their software on the port crane, so obviously worried about cyber intrusions and cyber attacks. They're thinking about it from that perspective, and that's great. Any sort of a cyber consultation from Kroll for instance, would be a fantastic opportunity I think to make sure that they're up to speed with regards to that.”

“But, when talking about all of that commerce in trade happening and being stalled at this time, we're really looking at a huge vulnerability at the site. Really a wise decision from the port security directors are decision-making capabilities. And this is coming from a former United States Coast guardsman that was enforcing the Maritime Transportation and Security Act is to really be very, very vigilant and aware of the vulnerabilities of all of this cargo on your site. As we move forward, that's going to be an area that I believe from my professional background, that any port security director should really focus their time and energy on addressing them. And it really is going to be expanding, we've literally just got done talking to some of our points of contact over on the Pacific area about rail cyber security initiatives. Federal agencies like the NSA are really putting into place serious conversations right now to address not only the crane security that I spoke about, but also rail cyber security.”

“There's really a multifaceted approach that we're looking at over here. As a veteran of the United States Coast Guard, this is incredibly unprecedented. I really do believe that if you are a port security director and you're working on that staff, you really need to take this from a strategic planning perspective and ensure that you're putting those measures into place to be left of boom, as we used to say in the United States Coast Guard, right? And ensure that we are putting plans and measures in place, identifying those vulnerabilities and ensuring that we are able to capably function under the guidance of the Maritime Transportation and Security Act. We want to make sure that all of those elements are in place. It's so vital and I'm so honored to be able to speak with Simon on this topic and look at it, not just from the perspective of the United States, but from the global perspective, I'm really, really very interested in what he has to say as well.”– Chris Palmadesso

“As you mentioned, the fact that products are sitting or are in situ for longer periods, really having to focus on the issues of pilfering of theft. The opportunity of bad actors to use this period of, not necessarily confusion, but heightened challenge to move more counterfeit products through ports and to fraudulently move goods through dealing with sort of gray markets as well. Which it meant that ports have had to really tighten up their security process and policies. Often, it's not just putting more people on the job and physical security staff, as I mentioned. With conditions being so difficult and having to turn to technology, certainly the use of CCTVs and making sure they've got adequate camera coverage around the port areas. But it's certainly a challenge for them and certainly something that we're seeing out here in Asia Pacific. The ports are certainly asking for support to review and monitor the protocols they have in place to see if they're best practices that they could use from other scenarios around the world.– Simon Ashendon

Protection Against Delays and Risk for Businesses

“I think the key for clients that we're hearing and what we're also telling them is resilience and making sure that all your eggs aren't in one basket. Now that could be a little challenging when you're moving through some sort of strategic areas, and there really are certain strategic ports that you have to go through. I think it's probably fair to say that, whilst everybody can do better and no matter how strategic and large supporters, I'm sure everybody could do more to move their security forward. But I think it's when clients are having to look at additional options of movement. It may well be additional suppliers from different countries that have to use smaller and ports that they haven't had experience with in the past.”

“It's sometimes the speed and the requirement to get a new supply and get a new supply chain and to get that going through a new port and a new location and get your goods across to your client base, halfway around the world perhaps, can obviously and understandably lead to less due diligence, less background checking. Understanding of who you are really doing business with now, perhaps in the smaller, faster moving ports that are available to serve you. But is that really going to be the best option for you in the long run, if you don't know who you're dealing with? So, it really comes back to those points that we were mentioning before about clients taking a multi sort of pronged approach of understanding their supply chain and who they're doing business with and who are the major components in that supply chain”

“When it comes to ports, who are they making decisions to have an additional channel of supply with in case their major ports, can't work for them? I think it's really just doing those risk assessments and that due diligence on your port suppliers and making sure you truly understand who they are and that they can support you.”– Simon Ashenden

Emerging Security Trends for Ports and Businesses

“I think the larger structured corporations that have internal security organizations are probably quite capable of carrying out this kind of due diligence and checking with the ports. Smaller companies, not so, even medium size companies, not so. Certainly takes a lot of resources, a lot of time and effort and staff to secure these kind of things. From the port side of things, I think that all ports are doing the best they can at the moment. I think they're probably dealing with issues that they haven't had to deal with for some time and certainly COVID is a very new and different challenge for them.”

“But as you said, there's always been good and a lot of security at ports. I think it's just having to take a slightly different turn in a slightly different role. And ports are certainly focused on it, but again are always looking for outside the best practice and ideas from external sources that can move them forward as quickly as possible. That's certainly what we're seeing at the moment, and where we're finding a lot of requests to help out with our services and resources, and with our supply chain risk review process and tools that we have. We've been adding a lot of value, I think, to both these sides of the supply chain.”– Simon Ashenden