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Industry Worries Security May Slow Port Business

The maritime industry is concerned policy initiatives to boost port security could slow the flow of goods and increase costs.

LONG BEACH, Calif. — The maritime industry is voicing concerns that policy initiatives to boost port security could slow the flow of goods and increase costs.

This story first appeared in the November 25, 2008 issue of WWD.  Subscribe Today.


Speakers at the Maritime Security Expo, held Nov. 18 and 19 at the Long Beach Convention Center, stressed the need for the maritime industry and government to work together to achieve a balance between trade and security issues. With the world’s economies gripped by financial turmoil, speakers said the potential costs of implementing an increasingly complicated web of regulations could impair global commerce.

The 10+2 security initiative, which requires an importer to provide information about cargo prior to being loaded onto ships bound for the U.S., generated particular attention during the conference. Under the rule, carriers must submit “10+2” pieces of information. The numbers refer to two data elements required from carriers, including a vessel stow plan used to transmit information about the physical location of loaded cargo and information about container movement, and 10 from importers. U.S. Customs and Border Protection asserts that 10+2, now slated to go into effect in about three months, will help it better identify high-risk shipments.

Catherine Robinson, director of the National Association of Manufacturers, argued that the new measure would disrupt supply chains and could cause delays of two to five days. She called for a pilot program to assess the impact of the additional data collection before the program is widely rolled out.

She said the initiative “is the costliest rule that will be implemented during the George W. Bush presidency,” and “a lot of the costs that will arise from 10+2 have not been considered.”

Robinson also said she believes 10+2 is a political pawn in the 100 percent scanning deliberations. Last year, Congress approved and the President signed into law a mandate that all cargo be scanned before it is loaded onto ships headed to the U.S. by 2012. A pilot program has been instituted at foreign ports in Pakistan, the U.K. and Honduras, but 100 percent scanning is facing rising opposition from trade organizations and foreign countries.

The Government Accountability Office issued a report this year citing nine major challenges to the pilot program and, ultimately, the success of 100 percent scanning. Challenges centered on the use and ownership of data, workforce planning, reciprocity concerns, logistical feasibility, technology infrastructure, resource availability and a lack of information about foreign port cargo examination procedures.

At the expo, attendees and panelists said 100 percent scanning was unrealistic and should be shelved until greater cooperation between the U.S. and foreign governments is achieved.

It is unknown what position President-elect Barack Obama will take on the matter. However, Obama joined eight other senators last year in pressuring Wal-Mart Stores Inc. to support the scanning legislation.

“The 100 percent scanning debate is going to drastically increase in the new Congress, and it is going to be interesting to see the line the President will draw,” said Robinson. “In the next year, there’s going to be several different alternatives that are going to emerge.”

Regardless of the outcome on 100 percent scanning, members of a panel on managing supply-chain security and the flow of commerce stressed that enhanced transparency is inevitable.

“Greater visibility can really help both performance and cost saving,” said Dan Prieto, vice president of homeland security and intelligence at IBM.