Asia likely to be hardest hit by scanning of US-bound containers
Shippers in Asia, Europe and North America fear that a 9/11 provision that requires the compulsory scanning of all United States-bound containers at foreign ports within five years will slow the flow of goods and even create a gridlock at ports at a time of booming world trade.
Eighty-nine per cent of containers arriving from overseas ports are scanned as they enter the US, up from 37 per cent a year ago.
The Global Shippers Forum is concerned that the unpopular law will drive up shipping costs - owing to the high cost of investment and maintenance involved - forcing consumers to ultimately pay more for goods. Longer waiting times to clear containers are expected to emerge at weak points in the global port system, triggering delays along the entire supply chain, without necessarily improving security at US ports.
Asia is likely to be hardest hit by the new legislation as it is the main exporter to the US. 'We need to ensure that the pursuit of port security measures should not impede legitimate trade and the efficient operation of our port. We will monitor closely the development on the 9/11 Act and engage the US government in active dialogue as appropriate,' said a Hong Kong government spokeswoman.
Ahead of the introduction of the unpopular bill, Hong Kong and the US have recently agreed to co-operate on the Secure Freight Initiative that aims to keep radioactive weapons out of US-bound cargo.
Authorities in Hong Kong expect to start providing radiation detection and imaging capabilities on a limited capacity in the fourth quarter as part of a pilot scheme aimed at determining the impact of radiation scanning at large volume ports. In fiscal year 2006, Hong Kong processed more than 1.3 million shipments bound for the US, constituting approximately 13 per cent of all shipments arriving in the US.
Under the initiative, US-bound containers leaving Hong Kong via a designated Modern Terminals facility in Kwai Chung will be scanned on a voluntary basis.
'We shall assess the feasibility and effectiveness of the currently available scanning technology under the pilot scheme as well as the impact of scanning on port operations and cargo flow,' said the government spokeswoman.
It remains to be seen what the spill-over effect from the 100 per cent box scanning legislation will be when it is implemented fully at the world's third busiest container port. There are signs emerging, however, that it will not cause as much disruption as anticipated in Hong Kong following the successful 2004 launch of a pilot project, known as the Integrated Container Inspection Systems (ICIS), at terminals operated by Modern Terminals and Hong Kong International Terminals, to scan containers on moving trucks for illicit nuclear and radioactive material.
The ICIS scans containers as they pass through the entry gate on their trailers at a speed of up to 16km/h to prevent any delay to traffic. The Hong Kong Container Terminals Operators Association maintains the equipment is capable of scanning 100 per cent of containerised cargo shipments at the terminals without impacting the trade flow, while maintaining operational efficiencies in a safe environment.
ICIS is capable of providing customs authorities and other relevant parties around the world with integrated scanning data on every export container that enters a terminal, enabling inspectors to target high-risk containers quickly and efficiently by identifying differences from expected contents manifests.
Hong Kong Container Terminal Operators Association chairman Alan Lee believes that 100 per cent box scanning will be beneficial to the shipping community in Hong Kong as he foresees that US-bound containers scanned prior to export will less likely be inspected upon arrival at US ports.
On the other hand, Anthony Tam, group corporate affairs manager at Hutchison Port, the parent of HIT, pointed out that despite already initiating container scanning at several of its installations worldwide, there is much work to be done before the introduction of 100 per cent container scanning legislation by 2012.
'The industry needs to come together and work closely with government agencies at loading ports as well as with the United States authorities in putting together detailed processes and protocols and agreeing on standards.
'In particular, we believe it is equally essential to track the movement of containers to ensure they have not been tampered with en route before and after scanning.'
He said this would also ensure that a means was in place, in the event of any incident, to ascertain the origin and movement of the container involved and thereby permit the speedy recovery of normal activity on global trade routes. To this end, HPH has successfully trialed and now implemented a system known as SaviTrak developed by Savi Networks to track shipping containers and their contents with a variety of radio frequency identification tags.