Title: Smart containers and the public goods approach to supply chain security

Authors: Darren Prokop

Addresses: Department of Logistics, College of Business and Public Policy, University of Alaska Anchorage, Rasmuson Hall, 3211 Providence Drive, Anchorage, Alaska, 99508, USA

Abstract: This paper will review the state of technology related to smart containers; discuss their role in the drive to securing global supply chains; and use the economics of public goods to help explain the strategic decisions faced by government, shippers and carriers. The US Bureau of Customs and Border Protection has offered to give 'green lane' treatment to any smart container arriving at a US port of entry. Promised benefits would be no inspection and immediate release at the port. The problem is that there is no smart container currently in use; nor is the nature of a smart container yet agreed to by industry and government. The economics of public goods, as developed in this paper, help to clarify the role of the importer, the carrier, the foreign vendor and the US regulatory agencies. Essentially, the issue is how to manage the trade-off between efficient trade flows and security across international supply chains. It will be shown that some of these players have incentives to under-provide expenditures devoted to such security. But this creates a further opportunity for smart containers to mitigate that situation.

Keywords: smart containers; ports; supply chain security; public goods; USA; United States; supply chain management; SCM; global supply chains; economics; trade-off; efficient trade flows.

DOI: 10.1504/IJSTL.2012.046191

International Journal of Shipping and Transport Logistics, 2012 Vol.4 No.2, pp.124 - 136

Published online: 14 Aug 2014 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article