Ports challenged to meet 2012 box scan deadline

There is only a tiny chance that all foreign ports serving the United States will be ready to apply controversial security legislation requiring the scanning of all containers before arrival into the United States by the July 2012 deadline, a new report commissioned by the World Customs Organization claims.

U.S. Congress passed the law last July as part of the 9/11 Commission Implementation Act of 2007 designed to protect the country from another terrorist attack.

The study by the University of Le Havre said 100 percent scanning would cause an immediate slowdown in world trade and snarl port operations in the short term. However, the study didn't quite deliver the outright dismissal the WCO might have hoped for.

The author, Frederic Carluer, professor in territorial management at the university, outlined his findings at a WCO seminar in Brussels on Tuesday.

The study puts the direct unit cost of scanning a container at about $30 if more than 100,000 TEUs are scanned annually by a port, although this figure will vary markedly depending on the volumes and equipment used.

At the present time I am convinced that technology will not be the barrier to 100 percent scanning. The training of customs officers and data analysts will be a bigger problem, Carluer said.

According to the study, the United States imported 18.5 million containers in 2006, up 10.2 percent over 1997. During that time frame Asia's U.S.-bound market share has risen from 61.9 percent to 74.4 percent. China alone has increased its share to 45.7 percent from 19 percent. As a consequence all regions outside of Asia have suffered a shrinking in market share with Europe down from 21 percent to 13.4 percent.

Carluer said Europe is in danger of losing further share of the traffic in part due to the passive& attitude of the European Commission towards scanning.

They work on the position that it's not going to happen although we saw some change in attitude during our conversations, he said.

Asian countries are fairly open-minded. Even Indian customs who previously didn't care about security are now fully behind the idea.

Carluer argued the United States would be better served signing bilateral agreements with its major trading partners than to push on with its unilateral approach that is unlikely to succeed globally. For example, even based on the most pessimistic forecasts, China and Hong Kong will be the origin for a minimum of half of U.S. imports in 2012, he said.

The French academic predicted with strong probability that U.S. law will lead to a very limited club of ultra secure ports made up of the biggest gateways in Europe and Asia. That club will also include other ambitious smaller avant-garde ports such as in the Philippines, which have gambled on becoming a major regional hub through heavy investment in scanning equipment.