If you have a significant global logistics operation, chances are that, by now, you have sophisticated tracking capabilities and can tell at any given time at least where your cargo was at one point during the last 24 hours. And this is good. But if you want to go beyond minimum import/export requirements that have emerged, and are continuing to emerge, in the US and EU, then you need more than continuous tracking and monitoring — you need chain of custody.

Chances are that, right now, you’re thinking this is nuts because “chain of custody”, thanks to CSI-like forensic cop dramas, is associated in your mind as a “police” or “forensics” requirement when a crime is being investigated and has nothing to do with your supply chain, but it’s a wrong association. And when one remembers that many of these laws were put in place to prevent terrorism and illegal goods (such as drugs), which regulators are expecting to occur in, or through, import/export operations, it starts to make sense. And it makes even more sense when one realizes that it’s (becoming) a requirement for C-TPAT, which is crucial for efficient import/export operations given the slowdowns that have resulted by all of the additional paperwork and inspections that have been added to the import/export process over the last decade.

So what is a chain of custody? It is a process that asserts:

• the cargo is what it purports to be and in the quantity stated,
• the cargo was in the continuous possession or control by the carrier who took charge of the cargo from the time it was loaded in the container at origin until the time it is delivered at final destination, and
• there is evidence of the identify of each person or entity who had access to it during its movement and that the cargo remained in the same condition from the moment it was sealed in the container for transfer to the carrier who controlled possession until the moment that carrier released the cargo into the receipted custody of another.

This, in turn requires that the cargo is secured from the time it is packed, verified, and sealed at origin, as confirmed by an authorized agent, until the time it arrives at its final destination and is verified to have been secured the entire way. In addition, all information relating to the cargo, its container, its movement, the person(s) verifying and sealing the cargo, and the persons transporting it must be maintained securely in the container security control system.

This may require more work, and more certifications, but there are benefits to the shipper, consignee, carrier, and CBP, as discussed in this great article on Tracking and Chain of Custody: The Difference over on Maritime Executive Magazine. Select Benefits include the following

• for the shipper
  • World-wide tracking and location of container for security and asset management
  • Lower insurance costs
  • Expedited entry of cargo by CBP and faster through-port time
• for the consignee
  • Enhanced knowledge of shipper and carrier performance
  • Third-party verification of all supply chain data elements and reports
  • Increased or enhanced knowledge needed for 10+2 Program Importer Security Filings
• for the carrier
  • Protection against claims by shippers that unauthorized contents were the results of carrier action
  • Automatic transmission to CBP of container data
  • Compliance with and protection within the new Rotterdam Rules impacting vessel carriers
• for CBP
  • Knowledge of which containers need no inspection improving man-power efficiency
  • Elimination of third-party reporting of trade data
  • Evidentiary data for potential legal action