arendt (2)

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

1


ENHANCED SECURITY IN CONTAINER TRANSPORT


Dr Frank Arendt

Director, Department Information Logistics

ISL Institute of Shipping Economics and Logistics, Germany

Universitätsallee GW1 Block A, 28359 Bremen

t.i.m.e.Port II, Barkhausenstraße 2, 27568 Bremerhaven

Tel.: +49-421-22096-17

Tel.: +49-471-309838-17

e-mail: arendt@isl.org




ABSTRACT

From the very beginning of goods transport, the safety and security of cargo and vehicles played

a significant role. Its intention is to take care for cargo, vehicles and people so that they will reach their
final destination in good shape and all risks along their way will be eliminated as far as possible.
Whereas safety is related to threats from the environment and unexpected events (e.g. storm, mal-
function of rudder, human faults), security concentrates on safeguarding against criminal actions. In
some cases these two aspects can even be counter productive: a blocked entrance in a terminal to avoid
unauthorised access can also prevent people to escape e.g. if a fire breaks out.

After the terrorist attacks from 9/11, 2001, a lot of additional measures have been taken to

enhance the security of container transports.

This paper will focus on the security aspect – related to container transport with it characteristics

of global standardisation and intermodal usage – and highlights organizational and technical
approaches.





















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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

2




1. Origin

At least for about 7000 years (!) the aspect of cargo security is being discussed aiming at to

guarantee that the content of a container remains unchanged during the transport. “Containers” made of
stone were equipped with a clay cover which was sealed and stamped – the predecessor of today’s
container seals with the same intention. Fig. 1 shows such a sealed container from 5200 BC.

Fig. 1: Sealed „container“ from the ancient time (National Museum Damascus)


2. Threats and dangers

The main risks discussed from the ancient times were smuggle, theft, piracy, stowaways as well

as fraud using wrong documentation, e.g. manifests. Since 9/11, 2001, international terrorism has been
added to this list. This threat against people, economy and governments include:

• Vessels (being high-value assets) as targets
• Vessels as weapons (attacks vessel vs. vessel or vessel vs. infrastructure such as ports

or bridges)

• Containers as weapons carrying illegal weapons of mass destruction (WMD)
• Containers as transport means for terrorists.

Apart from the transport infrastructure (bridges, tunnels, cargo handling facilities, rail tracks,

locks), cargo and transport means seem to be highly vulnerable.

The threat potential can be expressed as combination of vulnerability and impacts. [1]

differentiates between infrastructure risks (destroying infrastructure elements in order to cut transport
chains and networks thus causing a high damage to the national economy) and supply chain risks
misusing supply chains to cause damages treating the transport means not as target but as tool.

The same source reports an estimated damage of 6.6. Bio € if a main European transport

corridor will be interrupted as well as 200 to 500 Bio. € from a nuclear explosion in one of the big port
cities.

That these threats are not of hypothetical nature only show the following examples:

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

3

• The American destroyer “USS Cole” has been seriously damaged in 2000 in the port of

Aden (Jemen) when two assassins of al-Qaida let explode a rubber dinghy packed with
explosives. The impacts were a large hole in the hull (Fig. 2); 17 crew members died, 38
were hurt.

Fig. 2: Attacked vessel MSS Cole [2]


• In 2002, an attack had been performed against the French tanker Limburg off the Jemen

coast. The double-hull vessel, loaded with 390.000 barrels of crude oil had been rammed
by a small boat packed with explosives (Fig. 3); 12 crew members have been hurt.

Fig. 3: Attacked vessel Limburg [3]

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

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3. Measures to reduce the threats

The threats mentioned above lead to increased security measures in order to minimise these

risks.

As direct impact of the al-Qaida attacks on New York and Washington mainly the US – and here

specially the newly founded „Department of Homeland Security“ (DHS) – initiated special measures.
DHS includes 22 different organisations and about 180.000 members, split into the five areas
Emergencies & Disasters, Travel & Transportation, Immigration & Borders, Research & Technology, and
Threats & Protection. An important part forms the unit for Customs and Border Protection (CBP).

It is not surprising that container transport is the main focus from the US point of view: About 95%

of all imported goods are transported by containers. There are about 150 ports in the US, from which 40
with international relevance. In 2003, about 9 Mio. Overseas containers were processed by US Customs
[4].

Some of the relevant regulations and initiatives created by DHS and International Maritime

Organisation (IMO) are mentioned in the following list. These new measures aim at minimising the
vulnerability and impacts, e.g. by

• strengthening organisational and physical security measures along the chain, e.g. for

vessels and ports, e.g. by strict access controls

• checking of suspicious goods in advance
• making high security seals for container doors mandatory.

3.1 ISPS Code (International Ship and Port Facility Security Code)

As extension of the SOLAS Convention (International Convention for the Safety of Life at Sea,

1974) IMO created the ISPS Code [5]. This code deals with the increase of security on board of
merchant vessels (of 500 BRZ and above) and in port terminals. For ISPS compliance (certificates)
certain risk defence plans were created by the operators (shipping companies, stevedores) and certified
by so-called “designated authorities” being appointed by each country. In Germany these authorities are
the Federal Maritime and Hydrographical Agency (Bundesamt für Seeschifffahrt und Hydrographie) in
Hamburg for the vessels sailing under German flag and e.g. the Bremen Senator for Economy and Ports
for the Bremen ports.

The ISPS Code consists of a mandatory and a voluntary part; its application leaves room for

interpretation so that a worldwide harmonisation is not necessarily achievable. It entered into force on
July 1, 2004. Certain new roles had been created, e.g. SSO - Ship Security Officer, CSO - Company
Security Officer, PSO - Port Security Officer, PFSO – Port Facility Security Officer etc.; related education
and training measures are mandatory.

3.2 C-TPAT (Customs-Trade Partnership against Terrorism)

This initiative started in 2002 is a partnership between US Customs and the US traders for

fighting against international terrorism [6]. By following voluntary obligations of the companies the whole
supply chain up to the final customer in USA shall be secured.

This program is open to transporters, importers and freight forwarders. It includes the audit of the

companies by US Customs. The proposed measures range from access controls to the plant, secure
packing and shipment up to security checks of staff members. Advantages are accelerated and eased
handling processes in the sea ports.

3.3 CSI (Container Security Initiative)

CSI shall work against threats from terrorist misuse of container transports in worldwide sea

transports [7]. Aims are: Creation of security criteria for identifying high-risk containers based on
previous information, Application of new technologies for examination of high-risk containers,

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

5

development of secure and “smart” containers. This initiative shifts the security control from the transit or
discharge port in the US to the loading port outside the US. It is a voluntary partnership of the national
Customs Authorities with US Customs, where – e.g. in the ports of Bremerhaven and Hamburg - US
Customs agents support their German partners.

In practice the US Customs agents get access to the IT systems of US Customs in order to

detect probable risky containers, X-ray or inspect them in coordination with their local partners. The CSI
agreement is bilateral, but is not yet applied from the European Customs Authorities in the US.

3.4 24-Hour Rule

With the „24 hour rule“ the US have created an additional instrument for the rejection of import

containers in advance. This rule entered into force in December 2002 [8]. Not later than 24 hours before
loading a container the manifest with detailed information about cargo, route, shipper, destination,
loading port, etc. have to be reported electronically to US Customs. Changes of manifest data after that
will not be accepted; the loading or transit of the container may be rejected.

3.5 Special Measures in Germany

Beyond the implementation of international regulations there are two German institutions being

worth to be mentioned:

• The Working Group on Maritime Security (Bund-Länder-Arbeitskreis Maritime Security

(BLAMS)) with representatives from the Federal Government and the German Länder.
This group discusses common approaches in order to avoid different structures for the
implementation of international regulations.

• The Maritime Safety Centre (Maritimes Sicherheitszentrum MSZ) with Central Command

for Maritime Emergencies Germany (Havariekommando) located in Cuxhaven as central
contact point under supervision of the Federal Ministry for Transport, Building and Urban
Affairs in order to collect all safety and security related messages about vessels, ports
and waterways in the German waters and to distribute these information to all
responsible authorities and organizations. This centre is intended to become a national
information hub; similar institutions shall be created in all maritime countries.

3.6 Other Initiatives

Furthermore, apart from the measures described above there are certain other regulations,

initiatives and tests which should be mentioned (without claiming to be complete):

• CHCP (Cargo Handling Cooperative Program): Own organisation aiming at promoting

innovations in container handling, raising productivity by research and development,
supporting security aspects in container handling as well as performing training and
education efforts on innovative items. In the course of CHCP tests with RFID seals have
been performed in the US [9].

• CSC (International Convention for Safe Containers): This convention – enforced by the

International Maritime Organisation (IMO) in 1972 and meanwhile updated several times
[10] – defines a safety standard for containers in order to minimise the risk for workers
involved in container transport as well as to harmonise the safety and security rules for all
surface transports worldwide. The CSC convention consists of guidelines for container
tests, stability regulations, inspections and maintenance.

• Trusted Shipper Program: This program examines and certifies shippers and packing

centres on their status. It has been initiated by the US Department of Customs and Border
Protection, originates from air cargo transport and has close relations to T-CPAT.

• OSC (Operation Safe Commerce): From 2002, selected container supply chains from

Europe to the US have been investigated how they could be secured by using electronic
seals. OSC has been initiated by the US Department of Transport and the US Customs.

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

6

Containers have been equipped with RFID seals, the terminals along their routes with
RFID readers. After having completed the tests, the equipment was removed again.

• SST (Smart and Secure Trade lanes): The SST initiative was founded by the US Strategic

Council on Security Technology (SCST) [11]). This initiative is industry driven and aims on
the enhancement of the worldwide total chain security from the shipper to the consignee.
Evolving technological trends, business processes and policy are investigated; studies
and industry initiatives are supported. New perceptions have been developed towards
new solutions. First tests with “smart containers” have been performed. 13 ports (e.g. Los
Angeles, Hong Kong, Rotterdam) have equipped their terminals with reading devices ;
more than 800 containers have been involved ; a second phase shall expand this network
to hinterland transports [12]. A basic information flow is shown in Fig. 4:

Fig. 4: SST Scenario [13]

4. Technical options

Special technical options for securing the container transport are increasingly discussed and

tested in the previous months. But new technologies can also create new risks. The equipment of all
ocean vessels with AIS transponders enables their permanent global position tracking. Free available
services such as AIS-Live [14] allow the position tracking for everyone – also for persons with criminal
intents.

Two promising developments are mentioned below.

4.1 The electronic seal (eSeal)

The electronic seal links the benefits of a mechanical bolt seal with an RFID transponder. The

data of the electronic seal (e.g. seal number and status) can be read without mechanical or visual
contact and deliver added value e.g. by identifying seals in seaports. The global nature of container
transport requires the necessity of worldwide technical standardization; a measure that ISO Working
Group 104 (Freight Containers) cares for with the standard ISO18185. A draft standard is on its way;
apart from that a market driven approach by the large container shipping companies is still possible.

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

7

For the data content of electronic seals there are generally two approaches: whereas the

“minimal” approach only basic information such as seal number and seal condition is stored, the “total”
approach foresees the storage of the complete information about container, cargo, and route. The first
strategy prevails, because the risk (e.g. for thefts) was considered to be much higher in the second one.

Actually, one-way seals are favoured since any re-use – combined with the possibility to

additionally store data on the seal – was rejected by the key players for security reasons e.g. preventing
that the writing and re-sealing function could be misused..

Technical tests have been performed at several sites, e.g. in the US in the framework of the

Cargo Handling Co-Operative Program [15]. A broad concept for the application of electronic seals
including the interests of all involved companies and authorities as well as the concept for a central data
platform for security data have been developed in 2004 in the COSI project (Container-Sicherheit)
funded by the State of Bremen [16] with participants from industry and science. Actually, a follow-up
project called “CSS Container Security System” is on its way which will perform also real-life tests with
electronic seals in door-to-door chains from Germany to the US for selected transports.

4.2 Smart containers

This technology does not only foresee door security measures such as the electronic seal but

also includes additional sensors, e.g. positioning via GPS (or future Galileo), light and door contact
sensors, mayday functions, sensors for detection of weapons of mass destruction or persons.
Challenges of this technology are the high initial and maintenance costs.

The permanent position tracking of containers seems useful only for containers with high-value

goods or dangerous cargo – mainly for cost reasons. For standard containers a tracking through status
messages (e.g. sealed, packing area left, gate in terminal, loaded, discharged,…) is said to be sufficient.

There are at least two actual initiatives on smart containers which have been published:

• IBM and Maersk Logistics developed the TREC (Tamper-Resistant Embedded

Controllers) system being real-time tracking devices which will not require a network of
interrogators (as RFID technology does) but uses wireless networking to transmit the
container location, temperature, humidity, and intrusion alerts [17].

• Savi Technology and Hutchinson Port Holdings founded a new company Savi Networks

LLC which aims at the creation of a network allowing smart containers to be tracked and
monitored on environmental conditions such as temperature, humidity and light [18].

5. What comes next?

The measures taken so far build a first step towards the secure container chain. In the coming

months and years these measures will be tightened whereas the balance between increased security
and the related costs and the free trade have to be taken into consideration. The consequences have to
be clear e.g. when a vessel of 8000 TEU or more will be captured in the port or rejected to be handled
because of one suspicious container on board. The economic impact allow this action only in seriously
reasoned cases.

The risk assessment is difficult: how probable seems a terrorist act which is prepared using sea

ports or vessels? Which measures can be justified? Where is the weakest point in the process chain?
Can “dirty contents” be easiest packed into a container at the original packing station and will then be
“securely” transported until its final destination? Do also empty containers (or those being declared to be
empty) have to be included because they are easy accessible? Which measures will become mandatory
and which remain voluntary and could form a competitive advantage? Many questions which have to be
answered by policy and industry in the coming years.

Some specific actions which are expected in the near future are:

• Seal Verification Program: from 2007 tightened security requirements are expected from

the US. Aim is the obligation of the overseas loading ports to inspect the container seals

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

8

for US export containers especially at the truck gate and for containers in transit – those
being discharged e.g. from feeder vessels and loaded to ocean vessels towards US.

• Directive of the European Parliament and the European Council for increasing the threat

protection in ports [19] for enlarging the ISPS Code from the terminals to the whole port
area.

• Discussion and decision about the Supply Chain Security Regulation of the European

Commission [20]. Whereas the already implemented ISPS Code aims on terminals and
vessels, this regulation intends to include the whole door-to-door container chain from the
shipper up to the consignee. It will cover the external EU borders (like the US measures)
but also the EU internal trade. It defines “secure operators” with a related certification
process to be established in all Member States. Special chapters for shippers, transport
companies, forwarding companies, Warehouses, storage facilities or inland terminal
operations (including inland ports) detail the measures and requirements. It is stated that:

o Existing regulations do not cover all transport modes. They cover maritime

transport, air transport as well as land-based dangerous cargo transports

o Most of the EU Member States did not impose an overall security policy

o Some large companies have installed own security measures for their supply

chains. For the smaller ones, the awareness for terrorist threads is quite low.

o The EU Council has defined the necessity to protect transports – of all modes –

on the EU territory.

• A specific research and development program for security issues is expected in the 7

th

Framework Programme of the European Commission.

6. Conclusion

There is general agreement that with the already implemented as well as additional regulations a

guaranteed full security for container transports can never be reached. A comparison with computer
virus attacks seems appropriate: for each new virus there is an immediate virus scanner which brings
“virus terrorists” to develop new viruses etc. For container transports, this would mean that it is quite
likely that terrorists will find a hole in the processes – but the threshold to be detected is steadily
increased.

Measures and initiatives exist partially; their extension to the whole transport chain (all modes

and all countries to avoid unfair competition) is near. This tackles the law enforcement, such as the
intermodal chain security regulation, as well as the technological sector such as electronic seals.

To find the balance between these measures and the related costs as well as to clearly define

responsibilities are the biggest challenges for policy and industry. The optimal solutions are those which
increase security and optimize logistics processes in one concept – as it is possible with RFID
transponders at containers and with electronic seals.

Undoubtedly, one goal the terrorists of 9/11 have reached: the public damage, expressed by

additional costs for new security measures (e.g. by introducing the ISPS code in ports and shipping
companies), security conferences, workshops, pilot tests with new technologies, is tremendous. It is
quite likely that without the attacks, the interest for this topic and the speed of implementation would
have been much lower.

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1st INTERNATIONAL CONFERENCE OF LOGISTICS

INTLOG 2006

„LOGISTICS IN GLOBAL ECONOMY – Challenges and trends”

9

BIBLIOGRAPHY

[1] DNV consulting (2005): Study on the impacts of possible European legislation to improve transport

security, Final Report: Impact Assessment, Rev. 2, Antwerp/Brussels

[2] http://www.lockport-ny.com/

[3] http://www.middle-east-online.com/

[4] ISL Institute of shipping Economics and Logistics (2005), Shipping Statistics Yearbook 2004, Bremen

[5] International Maritime Organisation (2003): The International Ship and Port Security Code, 2003

Edition

[6] http://www.customs.ustreas.gov/xp/cgov/import/commercial_enforcement/ctpat/

[7] http://www.customs.ustreas.gov/xp/cgov/import/cargo_control/csi/

[8] http://www.customs.ustreas.gov/xp/cgov/import/carriers/24hour_rule/

[9] http://www.marad.dot.gov/Programs/CHCP/

[10] International Maritime Organisation (1993): International Convention for Safe Containers (CSC),

1993 Edition

[11] http://www.scst.info/

[12] Hollmann, M. (2003): Hinter elektronischen Schlössern, DVZ Nr. 146, 6.12.2003, p. 24

[13] Evens, Susan/de Bruijn, Ed (2003): Technology in practice, Presentation on the Container Shipping

Security Conference Antwerp

[14] http://www.aislive.com/

[15] Cargo Handling Cooperative Program (CHCP) (2004): Container Seal Technology and Processes

[16] http://www.mobilecity.org

[17] Collins, J. (2005): IBM, Maersk Developing Cargo Tracker, RFID Journal Sept. 22, 2005,

http://www.rfidjournal.com/article/articlprint/1884/-1/1

[18] Savi Networks Funded $50M to Track Ocean Shipments, RFID Update April 25, 2005,

http://www.rfidupdate.com/articles/index.php?id=855

[19] European Commission (2004): Proposal for a Regulation of the European Parliament and of the

Council to strengthen security in ports, COM(2004) 76 final, 2004/0031 (COD), 10.2.2004

[20] European Commission (2006): Proposal for a Regulation of the European Parliament and of the

Council on enhancing supply chain security {SEC(2006)251}, Brussels 27.2.2006

[21] Wolfe, M. (2002): Freight Transportation Security and Productivity, Executive Summary, Intermodal

Freight Security and Technology Workshop Long Beach, California, April 2002

[22] Wolfe, M. (2003): Automating Cargo Security: do electronic Seals Make Sense?, eyefortransport,

February 12, 2003


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