Logistics and Security 2

Logistics and Security 2

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Logistics and Security 2

There are three significant security issues that FedEx must consider when transporting customers’ goods across borders today. First, recent years have seen a steep increase in the number of radicalized militant groups that carry out terrorism attacks. These groups are progressively looking for newer ways to move their weapons undetected. This has been precipitated by the impeccable surveillance and profiling of policing and counter terrorism units across the globe. This coupled with the high level of innovation and creativity that has produced new methods of creating weapons especially bombs increase package screening challenges for FedEx. Even physical inspection can do very little in ascertaining the properties of the contents in packages (McLay and Dreiding, 2012). The contents might look innocent and passive but later react to form dangerous compounds or even explode. Second, there is the ever-growing threat of climate change and global warming. Global warming and climate change are occurring at unprecedented fast speeds than before. This has caused weather patterns and other conditions to be erratic and unpredictable (Henschke, 2012). Since this phenomenon affects different regions and areas in different ways, it makes cross-border operations perilous and highly uncertain. This in turn has resulted in the significant increase in overheads.

The melting of ice, renegade droughts and storms, wildfires are all the results of climate change and global warming. They also significantly increase the risk factors to FedEx staff, equipment and cargo. This increasing risk levels increase operations costs and insurance premiums for FedEx dealing major blows to its profits. Third, there is the serious threat of freak disease outbreaks that have severe impact on cross-border operations. The recent Ebola virus outbreak affected FedEx operations in West Africa. They had to spend more to ensure thorough screening process for cargo as well as ensure the safety of their staff. This included arranging for emergency evacuation that significantly increased their operation overheads. The company also saw a steep increase in labor costs from the paying out of higher allowances to staff that worked in the affected routes. The problem further escalated when the outbreak led to destabilization in the West African region (Price-Smith and Whitman, 2001). This further affected operations and reduced revenues while greatly increasing the risks to staff, equipment and cargo.

FedEx is a global courier service that handles millions of tons in cargo annually. Their huge geographical area of operations makes these security issues a major concern to their operations. It is becoming extremely hard to trust packages even after inspection. It is also becoming extremely expensive for FedEx, which has had to invest in more stringent security measures. Other than the threat of terrorism and extremism, the company also faces an ever-increasing threat of legal action. If the packages they deliver are involved in terrorism activities, they will also be held liable and culpable. Due to the complexities in cargo sizes and packaging, FedEx has to use different means to transport different cargo. The erratic and unpredictable weather can change causing delays in delivery times or can cause the loss of cargo. Air and sea transport is dependent on clear and favorable weather. The weather can however be clear at the beginning of the journey and drastically change afterwards increasing the risk to personnel and cargo. They may also result in delays and lead to the spoilage of cargo or its obsolescence which will increase FedEx’s expenditure from paying out fines and replacing cargo. This will also significantly increase their insurance premiums. Outbreaks can happen in any part of the world. Destabilization can also occur in any part of FedEx’s large area of operations. This has similar effects to costs and risks to personnel, equipment and cargo as global warming.

Particular customers and types of goods are more problematic to FedEx than others are. Developments and advances in policing and profiling have provided many insights into identifying terrorists and extremists. They have also increased FedEx’s risks of inadvertently discriminating against their clients. Global terrorist alerts are centered on males of Middle Eastern descent between the ages of 18-40 (Sauter and Carafano, 2005). Although their might be very few if any terrorist from people fitting that description, they and their packages will always face stricter screening. This has the potential of resulting in increased lawsuits against FedEx and decreases the effectiveness of procedures. Delays and long queues can adversely affect the company’s ability to attract and retain clients effectively reducing their revenues and profits. Some packages can be difficult to screen effectively. Due to privacy and confidentiality policies, the company might not be able to open packages collected or delivered sealed. The packaging material might also be impervious to X-ray scans making it difficult to ascertain the nature of the contents. Fragile and perishable goods also pose significant risks to the company’s continuity and sustainability. Breakages and spoilages result in significant losses as the company might be compelled to compensate clients in many cases. This also increases their insurance premiums. Time sensitive cargo like medicines might dent FedEx’s brand identity if their delay results in the death or worsening of patient conditions.

References

Henschke, L. (January 01, 2012). Going it alone on climate change a new challenge to WTO subsidies disciplines: Are subsidies in support of emissions reductions schemes permissible under the WTO. World Trade Review, 11, 1, 27-52.

McLay, L. A., & Dreiding, R. (July 16, 2012). Multilevel, threshold-based policies for cargo container security screening systems. European Journal of Operational Research, 220, 2, 522-529.

Price-Smith, A. T., & Whitman, J. (2001). Plagues and Politics: Infectious Disease and International Policy. Basingstoke: Palgrave Macmillan.

Sauter, M., & Carafano, J. J. (2005). Homeland security: A complete guide to understanding, preventing, and surviving terrorism. New York: McGraw-Hill.