Companies—both U.S. and non-U.S. companies–which contract with the U.S. Government may be well advised to read and assess carefully the recent September 20 advisory issued by the staff of the U.S.-China Economic and Security Review Commission. The Commission Staff issued an “Issue Brief” or advisory on China’s National Transportation and Logistics Public Information Platform for the transmission of logistics data (aka LOGINK). That advisory may be found here LOGINK: Risks from China’s Promotion of a Global Logistics Management Platform (uscc.gov).
As described by the Commission Staff, “LOGINK provides users with a one stop shop for logistics data management, shipment tracking, and information exchange needs between enterprises as well as from business to government. China’s government is encouraging global ports, freight carriers and forwarders, and other countries and entities to adopt LOGINK by providing it free of charge.” Although LOGINK may not be an issue in 90% of a business’ international supply and sales efforts, one may well imagine that international shipments to, through, or from certain areas of the world may intersect with ports, freight carriers, and forwarders which employ China’s LOGINK.
The Commission Staff warns of adoption of LOGINK, both for the security of confidential information and trade secrets of individual companies as well as the future of economies built on the protection of free trade and civil liberties. The September 20 Advisory notes the following:
“Widespread adoption of LOGINK could create economic and strategic risks for the United States and other countries. As with other Chinese entities sponsored or subsidized by the government, LOGINK could undercut U.S. firms that provide more innovative products at higher costs without state support. LOGINK’s visibility into global shipping and supply chains could also enable the Chinese government to identify U.S. supply chain vulnerabilities and to track shipments of U.S. military cargo on commercial freight. Though LOGINK claims users can share only the data they want, the security of the platform is unclear. The Chinese Communist Party (CCP) could potentially gain access to and control massive amounts of sensitive business and foreign government data through LOGINK.” Advisory at page 3.
At this stage, unfortunately, there are more questions than answers.
That said, one may reasonably anticipate that the Commission Staff’s September 20 Advisory will not be the final word on this topic. One might reasonably anticipate that the legislative and executive branches of the U.S. government in the near future may add further advisory information or compulsory direction. As a result, a business may be wise to proceed with caution with regard to LOGINK, particularly those which contract with the U.S. government. Furthermore and to the extent not already undertaken, a prudent business may be wise to undertake some inquiry to identify whether LOGINK is already in active use by ports, freight carriers, or freight forwarders relevant to its operations.
