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Crippling implications of US initiative
01 Jan 2007
One of the more interesting announcements at the beginning of 2007 is that the opposition party in the US, the Democrats, are to fast track legislation which within three years aims to ban containers from entering the US unless they are scanned at source by US-installed equipment and fitted with US mandated seals. It is appropriate that the words “United States” were mentioned numerous times in this announcement as this is clearly the focus: i.e.protection of the US with almost a total disregard for the impact such a measure would have on the container system outside the US.
It is no exaggeration to say that if such a measure were introduced it would have a huge impact and quite possibly lead to an effective capacity reduction of the world’s container terminals exporting boxes to the US by up to one third, a not insignificant figure.
The Democrats are, however, in the driving seat in the US following the November elections – the Democratic majority House of Representatives is backing such a measure and the US Senate,also controlled by the Democrats, is understood to have introduced its own Bill which means that the two versions will be reconciled and forwarded for President Bush’s signature. The House of Representatives initiative is known to be proceeding without the opportunity for hearings or the ability to insert amendments – in effect it is fait accompli.
The core of the relevant passage in the House of Representatives proposal is the requirement for all containers originating from “countries that shipped more than 75,000 teu to the US in 2005” to be scanned and sealed in a USapproved manner in order to be allowed to be handled in US ports. These countries will be directly impacted by the new legislation within three years of the passing of the legislation and thereafter it is intended that it is applied to the whole world – i.e.within five years of the passage of the legislation.
Reaction so far to this measure? It having slipped out in the lazy period after the Christmas and New Year break there has not been an instantaneous clamour of protest but you can bet your bottom dollar this will build as the word spreads. It is true to say that such an initiative has potentially crippling implications for the container sector and particularly the overseas terminals in the front line of doing business with the US.Protest is logical and essential.
MIKE MUNDY
