The United State has strengthened security measures in the wake of the devastating 9/11/2011 terrorist attack, and their CSI(Container Security Initiative) requires inbound cargo or containers from foreign ports be pre inspected in order to prevent high-risk cargo. If containers are recognized as high-risk after a high-risk container originating at a CSI port arrives in the USA, local government customs authorities and USA customs officers deployed in the country of origin will jointly determine whether the container had been subjected to pre-shipment inspection.
For several years South Korea's Customs has borne responsibility for CSI matters, including signing a CSI MOU with the US and establishing inspection equipment and personnel at the port of Busan to facilitate cooperation with the Busan-stationed American CSI team. The government of South Korea has also introduced various security measures, such as CSI(including 24-hour rule) and AEO(Authorized Economic Operator), in compliance with global security trends and the war on terror. However, many participants in the supply chain are still unfamiliar with the purposes and functions of CSI, 24-hour rule, and AEO.
These types of regulations, driven by one country's national interests represent a break with the past. They are certain to result in greater risk in comparison to more diversified traditional methods formulated and implemented by international supply chain participants.
As such, considering these risks as obstacles or interfering factors in supply chain, this study suggests proper management schemes, which can identify and measure, as well as evaluate these risks. The objective of this study is to identify security risk factors in the supply chain and provide risk management solutions for supply chain participants.
For empirical analysis of supply chain risks, after selecting twenty-two types of risks, this study investigates via a questionnaire. Mapping the risks using frequency and severity, this study determines key risks. After multiplying severity by frequency, this study determines four types of management-levels based on degrees of risk management and importance of risk.
These four types consist of the following and proper management types, which have high importance and high-level management.
This study determines which risk management factors maximize logistics performance. Based on questionnaires, statistics reveal the following results:
First, supply chain participants should consider key risks and maintain professional knowledge.
Second, the effort required to elevate both underestimate management and excessive management.
Third, the effort required for major risks in underestimate management.
Fourth, supply chain risks caused by AEO, which can be managed by obtaining AEO certification and 24-Hour rule management.
Sixth, CSI risk management, which can improve logistics financial performance.
Seventh, CSI risk management and AEO risk management, which can improve logistics service performance.
Finally, although logistics security has various disadvantages for participants in the supply chain bearing the burden of maintenance, logistics security also carries advantages, offering opportunities to participants. Participants should consider encouraging their companies to design risk management systems, which could generate increased business performance and expand market influence. excessive management types, which have low importance and high-level management underestimate management types, which have high importance and low-level management ordinary management types, which have low importance and low-level management