MAIN HEAD Container shipping security 2 pages DECK HEAD Digital Ship held a conference in Sept 8-9 in Antwerp about container shipping and vessel operations security BODY The fundamental questions for container shipping security: what do we have to do, why should we do it and who is going to pay, remain unanswered. The general consensus was that the ISPS code does not adequately regulate container shipping security, beyond some vague comments about ports and shipping lines preventing unauthorised cargo. The ISPS code tries to make shipping lines take responsibility for the integrity of their cargo shipments, and while that might be the easy solution from a regulatory perspective it is near impossible for shipping lines to commit to. ISPS experts in the room pointed out that ports do not actually need tall fences to comply with the ISPS code, as many people believe. The code just demands that the port - interface is controlled, which could be made by a security guard controlling access to the jetty. There is some solace for shipping lines in the US Customs C-TPAT initiative, which, as described by Audrey Adams, U.S. Customs and Border Protection Attaché, Brussels is a means for shippers to demonstrate what procedures they follow for security to the US customs, as a means of gaining a favourable risk assessment. This effectively passes some of the security effort onto the shippers. SUBHEAD Why should we do it? Many delegates are not convinced about the nature of the threat, or that there are any practical means of reducing it. The two main threats are that that terrorists will use a container to smuggle something nasty into a country and let it off, and another that they will try to blow up a port. Both of these threats were shrugged off by various speakers. Materials are already available to make all kinds of nasty weapons in most developed countries, there is no need to smuggle it in a container. Besides, any terrorist smuggling nasty materials into a country in a container will have perfect paperwork and will not show up on any risk assessment. Blowing up a port is not going to cause any major economic disruption, because the nature of the container shipping system means that there is always another port which containers can be routed through. SUBHEAD Who is going to pay? Paul Valkeniers, managing director of P&O ports in Antwerp, was adamant that spending money on security was just a cost, and there were no additional benefits in terms of improved management of containers and data, although a number of consultants in the room tried to convince him otherwise. Security measures will be very expensive, he said, and charges will be levied soon. "Shippers should make provision in their budgets for it," he said. Some delegates believed that the international industry is being asked to spend money to protect the US, and the US government should be contributing much more to the costs. The group which possibly stands to gain the most financially from container shipping security initiatives is owners of international brands, who are engaged in a continuous battle against both counterfeit goods appearing on the market and theft of their own branded goods en route. Having a more controlled international supply chain would make it much easier for them to both ensure that all genuine goods make it to where they are supposed to go, and also to trace back counterfeit goods to where they are being manufactured and close the plant down. One delegate suggested that forwarders should reclassify themselves as brokers as a means of avoiding all liability for the cargo they are involved with. SUBHEAD How should we do it? It is practically impossible to inspect every single container at the port; it is practically impossible to inspect every single container when it is being stuffed. Unless governments were willing to foot the bill to employ thousands of customs agents and shippers were willing to tolerate lengthy delays for checks. There are radiation and X-ray scanning devices, becoming more widely used; although these are not perfect they are the best we have. The Smart and Secure Tradelanes initiative, which provides information about where containers are and whether or not they have been opened, can contribute to security, providing you have a good idea about what is in the container in the first place. Chris Austen of MUSC pointed out that the most useful thing people can do is develop more of a safety culture in their organisation, whereby all employees, from the bottom to the top, are continually on the look-out for breaches of security and are comfortable reporting anything they notice. "Have your cleaners and garbage collectors involved," he said. "Spend your money on training." BODY P&O Ports Antwerp Paul Valkeniers, managing director of P&O Ports in Antwerp, said that the funding for ISPS requirements must come from importers and exporters, since container terminals have no spare margin to pay for any security measures themselves. It is also still unclear in many European countries about how the ISPS code will be implemented in national legislation, he said. Mr Valkeniers asserted that the container terminal is not the right place to ascertain the integrity of a container's cargo. Container terminals are a very small terrorist risk themselves, he said, because even if a terminal was closed due to terrorist action there are always other terminals. Few origins and destinations are dependent on a single port. Mr Valkeniers noted that he had never visited one terminal with a completely secure access system and this will all need to be improved, and he has not seen a watcher on a ship checking who goes in and out for several years. Mr Valkeniers also noted that the container terminal never checks boxes, and it does not know anything about the shipper, only the forwarder. Despite a number of consultants in the room protesting otherwise, Mr Valkeniers said that security measures were only a cost and would not lead to any economic benefits. "Security processes are not going to save money," he said. "Its theory but not everyday life." There have been discussions going on for 15 years about how to improve data flows in the container shipping industry, but no-one has ever found a piece of data which can be taken out of the chain, he said. The only means he could think of to assess integrity of containers was by analysing the data about them and assessing the risk. SUBHEAD Ships with suspect containers Michael Egan, director of homeland security for intermodal transportation, System Planning Corporation, raised the issue of what authorities can do with a ship coming towards their port if they suspect there is a terrorist device onboard, rather than send it back to where it came from. Mr Egan said that several of the checking devices being used are flawed. For example, many ports are using radiation detectors to try to check for radioactive substances in containers, but can be triggered by substances which are naturally radioactive. "False alarms will kill you economically," he said. He criticised the initiatives which aim to assess the risk of a shipper or process and determine that it is safe, and hence subject to fewer security checks. "The more you determine that someone is safe, the more attractive you make them to terrorists," he said. SUBHEAD Security transforming shipping? Jack Riley, director, public safety and justice with US consultancy RAND, said he thought that commercial shipping will be transformed by Sept 11, 2001, in the same way that air travel was transformed by the terrorist attacks of the 1970s. As passport, visa and scanning controls in airports improve, ships would become a more logical area for terrorists to look at, he said. There is currently a major terrorist attack every 3-4 months, he said, with terrorists gradually moving towards easier targets. However there are increasing numbers of organisations perpetuating these attacks. "What is emerging is the outlines of a common vision for secure ocean commerce," he said. Mr Riley suggested that personnel and staff should be psychologically prepared for any terrorist attack, so that if anything does happen, people can get the containers moving again quickly. SUBHEAD Dave Bradbury Dave Bradbury, regional director, Langdon Systems, said that the quality of port security in the UK has gone down in the past few years. "We used to have a police on every dock in the UK," he said. "Now most are completely open. Pulling these people out was money saving political decision." Mr Bradbury said that in the air industry, freight forwarders are required to vet suppliers and establish a security chain, and they have a proper definition of "known shipper." Mr Bradbury was sceptical about how important maritime security is politically. "If its so politically important, why isn't' there a political champion?" he asked. SUBHEAD OECD - the big picture Philippe Crist, author of the OECD report about the costs and benefits of maritime security, talked about his assessment, the results of which have been widely reported (available free online, see http://www.oecd.org/dataoecd/63/13/4375896.pdf). The assessment was commissioned by the countries which are members of OECD, and will probably influence government policy in some countries. Maritime security has already proven very expensive, he said. Because of the uncertainty in trade flows, shippers need to have a much larger quantity of goods in transit at any time to make sure it arrives when it is required. This additional inventory score has eroded half of the productivity gains of the last 10 years. Mr Crist claimed that maritime security measures ought to ultimately lead to reduced delays, faster data processing, better asset control, fewer thefts and decreased insurance. He noted that reduced insurance costs due to better security was a "theoretical benefit"; something that might happen but has not happened yet. "I don't think it's wildly unlikely," he said. The bulk of the costs being incurred are in labour, for the extra staff required to guard and check everything. Mr Crist addressed the issues of insuring the integrity of the cargo in such a complex supply chain, saying he believed that carriers were the people who could do the most to ensure cargo integrity, which is why the responsibility for it is being laid on their shoulders. "I'm not saying that's the right decision, its actually the easy decision," he said. "I do see great difficulty in the carrier having to vouch for the container," he said. " They will do it - they have to do unless there is a system that puts responsibility on the shipper." SUBHEAD US Customs Audrey Adams, U.S. Customs and Border Protection Attaché, Brussels, Belgium senior U.S. Customs and Border Protection representative to the European Union, talked about developments to harmonise customs efforts in the US with the EU. Earlier in the year, the US Customs made the European Union angry, by negotiating with separate countries allowing them to station US Customs inspectors in their countries, under the premise that containers going through ports with US Customs inspectors would get faster clearance in the US. The European Union felt that this gave certain ports an unfair competitive advantage and the US should have negotiated directly with the EU. Ms Adams noted that the intent of the US Customs is to try to continue the existing programs but simultaneously satisfy the demands of the EU. The C-TPAT initiative, she said, involves asking companies to examine their security procedures, such as physical security, training, access to cargo and security of conveyance. They submit an outline of their procedures to US Customs, which then assesses them and possibly makes suggestions for improvement. "It's a very collegial, co-operative relationship," she said. No manufacturer / shipper will be forced to participate, but whether or not the they participate will be a factor in the risk assessment made when the container arrives on US shores, with the decision about whether to allow the container straight through to destination or delay it to be inspected. Further information about US Customs and Border Protection is at www.cbp.gov. SUBHEAD Smart and Secure Tradelanes Lance Trebesch, executive director of the Strategic Council for Security Technology (SCST), talked about the program, developing an international container tracking system with many different companies involved. Mr Trebesch stressed that there is no central database in the scheme, but a shared network with shared benefits and shared costs. Mr Trebesch said that although electronic seals are currently an important part of the scheme, this is only because this is an existing security practise; but over the longer term it is developing a "smart container" with many different security devices, the seal will be just one of them. SCST is fitting containers with seals which both physically close the container and also remember if they have been broken. It is fitting electronic seal readers onboard container cranes, which read the seals as the container is being loaded onto the vessel, to verify that the container was loaded onto the vessel with the seal intact. In other terminals, the seal readers are being fitted on the terminal gate, so they can verify that the container entered the terminal with the seal intact. Phase I of SCST has already been implemented in 13 ports including Seattle, NY NJ, Rotterdam, Antwerp, Felixstowe. SCST has calculated the value to shippers of $1600 per container through having the system, in terms of the improved data the shippers have about the container's status. Mr Trebesch noted that one of the largest retailers in the US has stated that it only receives 65 per cent of the data it needs to run its supply chain, and of this, 30 per cent is incomplete, inaccurate or untimely. He compared the security measures to the demands made in the 1960s and 1970s that workplace safety should be improved, with better procedures brought in. People initially complained about the costs but later found that the procedures led to greater working efficiency, reduced risk and reduced insurance costs. Susan Evans, senior solution consultant Europe with Savi, one of the major companies behind the initiative, noted that the revenue model is still being worked on, but could well be a single price per container charged to the shipper. "The shipper is getting all the benefit," she said. "There's people who invest in infrastructure who should get the return back." SUBHEAD Jan Bossens, CAMCO Jan Bossens, managing director of automated gate systems company CAMCO, talked about his systems which can quickly help assess the security of a container at the gate. The systems can be coupled with biometric systems, to check that the driver is who you think it is. He suggested that fingerprinting is the most reliable biometric system. Fingerprints need to be used together with a smart card, with the fingerprint data actually stored on the card; if the system has to check the fingerprint against a fingerprint on a central database it will be very slow. One advantage of a camera-based container gate system is that it can check all sides of the container, including the top. No other system checks the top of the container. There have been times when thieves have climbed on top of a container, opened it like a can of tuna and no one has noticed. Mr Bossens noted that optical character recognition technology has improved a great deal over the past 5 years. When first introduced, there were so many errors that everything had to be checked manually, making the system not really worthwhile, but now this has changed. SUBHEAD John Alioto, VeriTainer John Alioto, chairman of the board of container passive gamma ray detection company VeriTainer, said that the vast majority of containers have no inspection of any kind. The number of containers going into and out of the US being scanned has increased from 2 per cent to 5.2 per cent in the last two years, with 45 VACIS scanners (gamma ray imaging system manufactured by SAIC) in US ports increasing to 145. "You can see which way these numbers are growing," he said. Mr Alioto estimated the cost of container security over the next 10 years to be $7.3bn, which all probably be picked up by the consumer. Mr Alioto mentioned the health concerns with radiation and X-ray scanners. "I assure you that if there is dangerous radiation going on, the unions will short down the whole waterfront and set out the problem before people go back to work," he said. "Exposure to X-rays I s harmful," he said. "When you have an X-ray at the dentist, dentists put lead on you and get out of the room X-rays should not be in the immediate area where people have to work." VeriTainer, Mr Alioto's company, uses passive detection techniques; rather than passing X-rays or radiation through a container and detecting how much gets through, it detects the natural radiation which almost everything gives out to some degree. By building up a radiation picture of the container, it is possible to assess the likelihood that the contents of the container are as written on the manifest, eg by comparing it to the radiation picture generated by other containers said to contain the same cargo. The device can also detect radiation shielding materials, eg lead, which might put around any severely radioactive materials by terrorists. Mr Alioto suggests fixing four VeriTainer devices on container crane spreaders, so they can all take a radiation picture of the container while it is being lifted, so that it does not disrupt container flow at all. The system is not expensive, he said. The most expensive part is employing someone to read the container number so it can be inputted together with the radiation data, because current automatic character recognition technology is not good enough to read the container automatically. Mr Alioto suggested that there could be two levels of detection at a port; all containers could be scanned using passive radiation detectors, and any suspicious containers could be subject to a more aggressive scan, such as VACIS. Mr Alioto, who is also a practising lawyer, also noted that if any terrorist action is ever caused by a device being smuggled inside a box, the lawyers would have a field day. "They'll sue everyone. They'll sue the owner of the box, they'll sue the shipping line," he said. "The issue of liability needs to be examined." SUBHEAD Ship operations Maritime security consultant Chris Austen, managing director, Maritime and Underwater Security Consultants, who was involved in the original production of the ISPS code, said that the code is all about being prepared for events such as hijacking and unauthorised boarding of ships, and putting preventative measures and communications systems in place, rather than what to actually do in the event of an emergency. Mr Austen noted that the ISPS code does not include any substantial measures to check the integrity of container shipments, saying vaguely that port facilities should ensure that they do not take "unauthorised cargo." Some ports in the "more chaotic" parts of the world will never comply with ISPS completely, he said; if vessels arrive from these ports in the US, the US will make its own risk assessment. The US will fine vessels which are non-ISPS compliant $10-$20,000, he said. Mr Austen said that his involvement in maritime security began several years ago when he was on a ship in South East Asia which was targeted by pirates. "We gave them a fairly robust welcome and they went elsewhere," he said. Mr Austen later found out that the pirates had in fact attacked a different ship, and his vessel responded to its mayday call and found the crew had suffered some horrific injuries. He realised how much the risk of piracy could be reduced with some simple steps, and started work on writing a code which seafarers could follow. He looked for a company to sponsor or work with him on the project. "The only people interested were DNV, who considered it part of their premise to promote safety of life at sea," he noted. After September 11, 2001, there was much greater interest in maritime security. Since then MUSC has carried out security assessments for 30 ships and 40 ports, he said, including the Port of Antwerp. The security requirements of Antwerp are very special, because the port spreads out over a large area, much of it residential with public access to the port area. The port is also used in many different ways, including for containers, liquids and bulk, and each one has a special security problem. Also it is the hub of the world diamond trade and Al Qaeda has been known to trade diamonds there. The Port of Antwerp wanted to a harmonised approach to security across the whole of the port. It set up port security councils, involving the police, customs, private companies and the port authorities. SUBHEAD Barber Shipmanagement Svein H Guldteig, manager business development with Barber Ship management, said that the company still has some radio officers on its staff, and will be retraining them as company security officers. Barber currently manages 250 to 260 vessels, of which 25 are owned by its parent company Wallenius Wilhelmsen, and employs 7000 seafarers. Mr Guldteig raised the issues of seafarers not being able to enter the US because they cannot obtain visas. This creates a particular problem if seafarers want to go home, either for personal reasons, emergencies or because it is the end of their time at sea; they have to wait until the vessel reaches a non-US port. "We are hoping this will clear up by new year," he said. Mr Guldteig noted that although the ISPS requirements will be valid throughout the world, "the US ports are the most keen at the moment." Mr Guldteig noted that there is no standard yet for how and what seafarer training is necessary under the ISPS code. "A colleague of mine did it in one day," he said. "Some people say 18 hours. Some people say its impossible to do it in 18 hours." Ropax vessels are a very large terrorist threat, he said, because it is relatively simple for suicide bombers to drive a vehicle onto the ship containing a car bomb. Mr Guldteig also noted that the vessel which carried dynamite for a 1999 Mombassa terrorist bombing had previously been hijacked, renamed and re crewed.