END THE APATHY BEFORE IT CRIPPLES INTERNATIONAL TRADE

And we interview the Port of New York & New Jersey’s security chief.

The horror of the train bombings in Madrid on 11 March highlights the vulnerability of a world striving to rid itself of the scourge of terrorism.

The discovery of an unexploded rucksack with its deadly contents of explosives and a mobile phone also brings home just how simple it is to deliver devastation and terror to an unsuspecting public.

Andrew Burgess argues for a more pro-active stance.

Without being alarmist – what might be the result of a much more powerful blast from within a shipping container wending its way through a heavily populated city; or what might be the result if there were a series of bombs in containers on vessels or at strategic ports around the world and these were remotely detonated? They would become the catalyst of a chain reaction that, in the first instance could destabilise shipping trade lanes, close ports and then spread to cripple countries and the global economy itself?

Last year’s OECD report entitled, “Security in Maritime Transport” recognised the inevitability, in the absence of new and effective security measures, of a global economic impact in that the very things that have allowed maritime transport to contribute to economic prosperity also render it uniquely vulnerable to exploitation by terrorist groups. The vulnerabilities range from the possibility for physical breaches in the integrity of shipments and vessels to documentary fraud and illicit money-raising for terrorist groups. The stakes are extremely high, as any important breakdown in the maritime transport system would fundamentally cripple the world economy.

We know that competition amongst shipping lines is intense.

Container terminal operators are equally aggressive in chasing shipping lines for their business. With an estimated 80% of consignments from developing countries being misdeclared, the accuracy of cargo documentation leaves a lot to be desired. Other than trusting the declaration of shippers, container lines and terminal operators have no idea what is actually in units that pass through their hands. Current strategies are unlikely to improve the reliability of documentation and, unless forced to change, operators are unlikely to strive to make much difference either.

The United Nations estimates that 75% of the 5.89 billion tons of cargo traded each year is moved by sea through one of five choke points, Straits of Malacca, Panama Canal, Suez Canal, Straits of Hormuz and the Strait of Gibraltar. The result of a terrorist attack at one or more of these points would be catastrophic in both environmental and economic terms.

The current extent of risk and vulnerability of maritime transport from terrorist organisations is not meant to suggest that considerable effort has not already been expended by countries around the world to curtail acts of terror. It must be stressed that this is not a time for security decisions to be delegated to commercial entities such as shipping lines and terminal operators. Governments must not procrastinate in taking decisive action to protect their homelands against the threat from prime terrorist groups or the emerging network of terrorist alliances.

Every maritime trading country in the world relies on foreign shipping lines to carry cargo to/from their ports. The importance of the shipping lines to national economies is recognised but governments must nevertheless clearly differentiate between the commercial interests of lines and the security needs of their homeland. National security is patently a Government responsibility and to accept anything less, or to allow commercial interests to delay the adoption of security measures, is to abrogate national management responsibility to others.

Lines will argue their margins are too tight and seek to pass the costs directly on to their shippers who in turn will argue that they too cannot incur any further cost if they are to remain competitive. These arguments hold far too much sway in a world that is being threatened on an ever increasing – one could say almost daily basis – by “man’s inhumanity to man”. Such arguments cannot be allowed to delay the introduction of new security initiatives and, frankly, the world’s innocent bystanders should not tolerate the alarming complacency that pervades the maritime transport and logistics industry.

The threat of maritime terrorism is not hypothetical. It has been recognised publicly by prominent people around the world but has not yet been addressed satisfactorily.

Governments deem that the solution lies in the hands of the maritime industry whilst, for its part, the industry will take no action without strong and decisive leadership from government. This stalemate is frightening in the face of the great danger that is posed by the unscreened movement of shipping containers.

An estimated $277 billion in global trade fraud occurs each year.

This and the fact that drugs and weapons are still finding their way into society with relative ease is testimony to the ineffectiveness of current strategies.

Most Customs agencies around the world profile cargo and container manifests using computers to assess intelligence they have about consignments, countries of origin, types of cargo, etc. From this initial screening, fewer than 5% of containers are designated for special inspection. In some cases, such screening is assisted using detection equipment such as X or Gamma-Ray which results in a further small percentage of containers being physically unpacked and examined. Frankly, this is a huge leap of unjustified faith in a largely ineffective system and the levels of screening are patently inadequate.

Such low levels of screening are not acceptable in the airline industry and yet some 180 million containers involving 2.3 billion tonnes of maritime general cargo are carried around the world on ships and roll through national highways and rail corridors each year without a meaningful check as to what the cargo actually is. Continuing apathy is putting billions of dollars of assets in transport infrastructure at risk.

The reality is that marine and land transport logistics operators can no longer rely on past practices and procedures, yet, they do – thus making it only a matter of time before a significant disaster occurs. The signs are there, the expert warnings are increasing but the messages are not being heeded. All it would take is a terrorist incident with a single container or series of containers and the domino effect takes over.

Mr Efthimios Mitropoulos, Head of the UN’s International Maritime Organisation has warned that the prospect that terrorists could hijack a large ship and explode it in a port is a real and present danger and that geographic isolation offers no protection against ship borne terrorism. Mr Mitropoulos has been urging those involved with maritime trade and the protection of their borders to act with maximum speed.

Technology is available to screen containers as they are received and delivered at a port. The screening is non intrusive, does not require a change to current Customs profiling work and would not impede the normal terminal operations. The results would be fast and real time data available to government agencies in a manner that would immeasurably improve the gathering of cargo intelligence. At best, gathering intelligence is an imprecise science and tools that significantly complement such work should be utilised.

Whilst the screening of cargo will not in itself provide a 100% failsafe solution it is not a reason for not doing it. Physical screening represents a real starting point for the continuous improvement in maritime border protection. Its ultimate effectiveness will come from a coordinated global commitment to screening and not a piecemeal approach. A start has to be made.

Indicatively, and depending on the characteristics of each country, the cost of a screening solution would be less than point one of one per cent of the average value of goods shipped. The message however is that – properly introduced and administered – neither the costs nor the operation is a deterrent to introducing of a total container screening solution.

In last year’s OECD report one conclusion was that most participants in the international maritime trading system agree that the maritime security measures being introduced are desirable. They are not free, but they do bring about benefits that have the potential to change long-established practices in the industry – for the better.

Also savings from security initiatives can be significant and can serve to counter-balance the increase in security costs.

Comprehensive container screening will:

test the veracity of shipper declarations thus strengthening trading relationships, provide a deterrent to trade fraudsters, improve duty collection for Customs as comprehensive screening has done at airports, enable cost savings for operators by increasing the efficiency of the industry, improve safety for operational employees, and enhance national reputations internationally by being associated with solving the vexing question of maritime transport and logistics security.

1 July 2004 marks the implementation deadline for the International Shipping and Port Facility Security (ISPS) Code measures. The challenge to the maritime industry will be to ensure that the millions of dollars that have been spent on the roll out of the ISPS Code are not wasted by paying lip service to measures that lack any real force in protecting the industry and people generally from the evil intentions of terrorist groups.

Andrew Burgess, a former CEO of P&O Ports’ Australian and New Zealand stevedoring operations, is now a Director of Homeland Security Pty Ltd