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 ofprevention and managing risks of terrorist attacks on the nation’s supply chains, specifically theports. Ports remain a vulnerable terrorist target because of high volumes passing through largeconcentrated ports. Government and industry participants have played a major role in tighteningmaritime security by implementing legislation, programs, and technologies that focus ondeveloping more secure and transparent supply chains.The focus of this research effort was to evaluate the effects that various port securitymeasures or catastrophic events have on an electronic firm’s supply chain through the six majorwest coast ports. A constrained transportation optimization model was developed to representthe firm’s distribution system. Three scenarios were evaluated: the first scenario estimated theeffect 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 ofSeattle and Long Beach.Results indicated in all scenarios that the impacts at the ports caused an increase in perunitcosts, 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 distributionsystems to counteract negative impacts imposed at ports, while meeting demands andmaintaining supply chain efficiency.