Supply Chain Analysis: Port Security Measures And Catastrophic Events

The perception of maritime security in the post 9/11 era has dramatically shifted to a focus of prevention and managing risks of terrorist attacks on the nation’s supply chains, specifically the ports. Ports remain a vulnerable terrorist target because of high volumes passing through large concentrated ports. Government and industry participants have played a major role in tightening maritime security by implementing legislation, programs, and technologies that focus on developing more secure and transparent supply chains. The focus of this research effort was to evaluate the effects that various port security measures or catastrophic events have on an electronic firm’s supply chain through the six major west coast ports. A constrained transportation optimization model was developed to represent the firm’s distribution system. Three scenarios were evaluated: the first scenario estimated the effect of increasing the rate charged for services at the port by five, ten, and fifteen percent. Scenarios two and three investigated the impacts of shutting down operations at the Ports of Seattle and Long Beach. Results indicated in all scenarios that the impacts at the ports caused an increase in perunit costs, while the total transportation cost decreased because of loss of quantity demanded. Overall, the key insights of this study are the adjustments a firm makes to their distribution systems to counteract negative impacts imposed at ports, while meeting demands and maintaining supply chain efficiency.