(June 12) SAN FRANCISCO — The Agriculture Ocean Transportation Coalition’s annual meeting June 7 provided agriculture ocean cargo shippers a forum to exchange views.
Shipping industry leaders agreed they need to focus on security to protect the supply chain, but it needs to be done in such a way that it does not negatively affect the world economy or bog down the ports, according to industry experts.
Shippers have to think about protecting the supply chain, said Susan Hayman, vice president port and container security, APL Ltd., Oakland, a container transportation company.
“There must be a secure flow of trade,” she said.
The first and most obvious concern in protecting the supply chain is the threat of terrorism. But the second concern is the government’s regulatory response to the threat and knee jerk response to a terrorist event. A terrorist attack on the flow of trade will stimulate the government to shut down the ports and cripple the economy, according to industry insiders.
Hayman urged shippers to consider ways to accomplish these tasks without causing disruptions at the terminals. “One of the problems is just the sheer volume,” Hayman said.
Because not every container can be physically inspected, container profiling is critical.
“You want to make sure you are inspecting the right container,” Hayman said.
Smart containers, sniffer containers, and electronic seals are all options to consider, but they’re all expensive.
The current focus is on imports, but shippers will begin seeing a greater focus on exports in the future, Hayman said.
The Hollings Bill (S.1214) would require all shipping documents for exports to be submitted to Customs prior to loading, according to the Washington, D.C.-based coalition. With port congestion and efficiency already an issue, terminal operators and shippers will not want containers without documentation left sitting on the docks even for a day. Undocumented containers left abandoned certainly could become a security threat and an efficiency problem. How the legislation affects the flow of supplies is being considered, said an aide for Sen. Ernest Hollings, D-S.C. The bill has passed in the Senate and is being reviewed by the House.
Documentation changes are coming — and with them more fees.
“All of it will cost money,” Hayman said.
The coalition considers the Port Terrorism Prevention Act (S. 2426) proposed by Sen. Charles Schumer, D-N.Y., to be especially nettlesome to shippers. The bill is laced with penalties and requires physical inspection of cargo along with X-ray technology.
Shippers can also expect security user fees. Additional operating costs will result.
“I think you are probably going to see more of that as customs tightens down on port vulnerability,” Hayman said.
Peter Friedman, executive director of the coalition, predicts $10 security charges per forty equivalent unit container.