SHIPOWNERS SQUEEZED BY INCREASING SECURITY COSTS

SHIPOWNERS SQUEEZED BY INCREASING SECURITY COSTS    Shipowners are willing to do their part to improve supply chain security, but believe the costs should be spread more equitably among carriers, shippers and consumers.
   “It should come down to the question of what is the U.S. consumer willing to pay to protect the infrastructure?” said Margaret Kaigh Doyle, executive director of the Chemical Carriers’ Association. “During the past year, the shipowners seemed to be eating most of the costs.”
   Shipowners discussed increasing security costs at the Marine Log’s Maritime Legislation, Regulation & Policy 2002 conference in Washington Tuesday.
   Executives compared expensive new security measures to the implementation of the 1990 Oil Pollution Act. The legislation required shipowners operating in U.S. ports to replace their single-hull tankers with double-hull tankers over a 15-year period.
   Doyle said the costs to comply with new maritime security regulations may be more substantial for shipowners than OPA 90.
   A proposed user fee by Congress, for example, would cost the foreign chemical transportation industry about $43.8 million a year. Doyle said this estimate is conservative.
   Doyle said another example of a shipowner-borne security cost is the Coast Guard’s requirement for armed guards on ships with detained crews. These guards are “a visual deterrent,” she said. “They can’t stop anyone from leaving the ship.”
   The security guards are also expensive. In the Port of Houston, shipowners must hire security guards at a rate of $31 an hour. One carrier that calls frequently at the port has already spent about $3.5 million for security guards since Sept. 11, 2001, Doyle said.
   Other security demands will involve increased staffing and vessel equipment for shipowners.
   “We don’t see the benefit in a lot of these measures,” Doyle said. “If a shipowner can’t afford to come this country, they won’t come.”
   Gerhard E. Kurz, president and chief executive officer of Fort Lauderdale, Fla.-based Seabulk International, said the government and industry can make many security enhancements without spending a lot of money. “It’s largely common sense,” he said.
   Kurz said, for instance, it’s unlikely that terrorists would try to enter well-guarded gates at the terminals. They would be more inclined to attack a ship or port infrastructure by using bomb-laden pleasure boats. He believes that pleasure boats should be kept further away from docked vessels.
   However, Kurz also believes that improved security in the maritime sector is “long overdue.” He said he has “every confidence” in Coast Guard Adm. James Loy, deputy undersecretary for transportation security and chief operating officer of the Transportation Security Administration, to develop security regulations that the industry can live with.