Koch: Maritime security regulations, technology need careful meshing

Koch: Maritime security regulations, technology need careful meshing    The U.S. government and international shippers must take care while developing an advanced container security device to incorporate features and standards that incorporate user requirements, not just ones pushed by technology vendors, said Christopher Koch, president of the World Shipping Council.
   The Department of Homeland Security has said an advanced container security device equipped with multiple sensors and wireless communication capability that can detect in-transit breaches of a container or dangerous contents is at least three years from commercial deployment because the technology is still not sufficiently reliable.
   In a speech to American Association of Port Authorities’ spring conference, Koch said a key to devising a so-called “smart box” is determining what type of sensors are needed and how government and industry would coordinate implementing such technology in the supply chain.
   Koch called for a common, universal standard for deploying the technology, transmitting and sharing the data.
   “Cost does matter. A decision to invest in a particular technology applicable to the global container industry will be expensive and will require assurance that government is not likely to abruptly change requirements,” Koch said. “Proprietary solutions that require a particular manufacturer’s product or reading system will not be acceptable.
   “Technology vendors who push products that involve the vendor capturing, managing, and profiting from all the data generated from the device — and there are number of these — are highly likely to encounter hard questions, if not strong resistance, from industry.”
   Koch did not mention any companies by name, but GE Security is a prominent company in the field that has a proprietary RFID-type device under review by U.S. Customs and Border Protection. It plans to charge a fee for managing the data and activating the devices.
   Koch said 100 percent inspection of inbound containers was unrealistic and attributed some of the calls for higher inspection levels to “technology vendors or parties wishing to perform inspection services.” A security regime that incorporated such inspection levels would likely be reciprocated by other U.S. trading partners. Similarly, he said, the expected announcement this year by DHS requiring container seals on all international cargo shipments is also likely to be required by other countries for containers leaving U.S. ports.
   Koch also indirectly criticized the port community for complaining about the lack of port security funding by the federal government. The port security grant program has doled out about $516 million to port authorities, terminals and other port users for equipment, infrastructure, training, guards and other security measures. The AAPA has been vocal in saying this amount is a fraction of the $7 billion the Coast Guard estimated would be needed during the next 10 years to implement new maritime security laws passed by Congress.
   “One cannot fairly compare the cost that the Coast Guard projected the industry would have to spend to comply with the (international code and U.S.) regulations with the amount of port security grants, and imply that the difference reflects a lack of federal government commitment to port security. The Coast Guard’s cost estimates were estimates of what the industry was going to have to spend to comply with the new security rules, not the amount of money the government needed to provide the industry,” Koch said.
   Koch said the industry would have better success if it identified specific projects that reflect unique problems that justify additional targeted federal assistance.
   “Too much of the public coverage of this issue has created the unintended impression that maritime security enhancement is only about federal port grant spending and that the government is neglecting security,” he said.
   Koch said transportation congestion will continue to get worse leading to increases in shipping costs, delays, slower supply chain velocity, higher inventory levels and warehousing costs.
   He called for “an honest, comprehensive analysis and set of actions to help address the challenge,” saying that other supply chain participants have the same view.
   “Government clearly has an important role, especially as to harbor dredging and landside transportation connectivity and capacity;” Koch said. “However, much of what needs to be done will not involve or require government.” Furthermore, when the industry goes to government with proposals for how to address these issues, it will need to have “clear, specific requests” to address specific problems.
   Koch said the World Shipping Council will work with AAPA and other supply chain participants on such an effort.
   The council agrees with the view that more physical port capacity alone will not be sufficient to address port needs in the long term.
   “Port facility productivity and throughput has to be improved,” he said. One recent port facility productivity analysis showed Asian port facilities to be 44 percent more productive than U.S. port facilities, Koch reported.
   “While there are certainly real operating differences between ports in different parts of the world that can explain differences in terminal productivity, one of the best known terminal operations in Southern California has not been able to improve its port productivity in 10 years,' he said.