20080410 OAS CIP Presentation: The World Bank and Port Security

port and supply chain security 2008port and supply chain security 2008 11

IIIrd Hemispheric Conference on port security OAS/CIP

Port Security and the World Bank

Michel Luc DonnerPort and Maritime Transport SpecialistThe World Bank


Contents

ISPS cost of compliance report (in Developing Countries)

Supply Chain Security (SCS)



http://http://worldbank.orgworldbank.org/ports/ports http://http://www.worldbank.orgwww.worldbank.org/transport/transport


ISPS cost of compliance report

Why ? Methodology Analysis per Region Global Analysis Comparison with the UNCTAD report : Maritime

Security: ISPS Code implementation, costs and related financing, March 2007


Why ?

Requests by Country-Clients : concerns about financing and consequences of non-compliance

Not a compliance assessment Centered on Developing Countries


Methodology

12 selected ports on-site missions


12 selected ports

Africa

Black SeaBaltic

Latin America

Caribbean


Analysis per Region

12 selected ports:o 3 in West Africao 5 in Baltic and Black Seao 4 in Latin America & Caribbean


4 ports in Latin America & Caribbean

Heavy upfront investments Annual Running Costs Actual security costs per TEU or TON


Up-front investments

port L1 L2 L3 L4

security related 2.4 3.3 3.6 5.8

of which after July 2004 1.8 2.5 2.4 5.8

total 2.4 3.3 3.6 5.8

( x usd 1mio )


Annual Running Costs

port L1 L2 L3 L4Annual Running

Costs 1.3 1.8 2.6 3.3

( x usd 1mio )


Actual security costs per category

(in US$)

port L1 L2 L3 L4

per TEU 2.31 3.68 4.59 9.91

Other cargo/ per ton 0.23 0.48 0.46 0.16

per passenger 0.69 0.86 - -


Global Analysis

Heavy upfront investments Actual security costs per category




port A1 A2 A3 B1 B2 B3 B4 B5 L1 L2 L3 L4

Totalexpected 5,6 5 5.1 0.5 0.1 2.2 0.2 0.1 2.4 3.3 3.6 5.8

(x usd 1mio)


Actual security costs per categoryRegion/port cost/TEU cost/Ton /Passenger

A1 1.06 0.04

A2 1.82 0.05

A3 2.59 0.04

B1 4.2 0.17

B2 0.4 0.50

B3 10.56 0.42

B4 14.33 0.03

B5 3.98 0.04

L1 2.31 0.023 0.69

L2 3.68 0.48 0.86

L3 4.59 0.46

L4 9.91 0.16

minimum 0.4 0.03

maximum 14.33 0.50

average 4.95 0.22


Security Cost per TEU

0

2

4

6

8

10

12

14

16

Co

st p

er T

EU

(U

S$)

A1

A

2

A

3

B

1

B

2

B

3

B

4

B

5

L

1

L

2

L

3

L

4

Port

Security Cost per TEU


Security costs per ton of cargo

0

0.1

0.2

0.3

0.4

0.5

Co

st p

er t

on

of

carg

o (

US

$)

A

1

A

2

A

3

B

2

B2

B

3

B

4

B

5

L

1

L

2

L

3

L

4

Port

Security costs per ton of cargo


Conclusions and remarks

Range is quite wide Orders of magnitude, not rocket science Averages not as high as predicted Uneven levels of security achieved Contributing factors Security fee Collateral benefits


Contributing factors

Starting point (navy base, free zone, drug traffic, political regime)

Total cargo throughput Topography / layout of the port


Collateral benefits

Reduction in number of stowaways Reduction of theft and pilferage Increase in Customs revenue (more & better control)

Reduction of cargo delays and waiting times More orderly ports and terminals, leading to more efficiency


Comparison with the UNCTAD Report

Unctad : 55 questionnaires / WB : 12 on-site Unctad : majority in developed countries / WB : all

developing countries Unctad : small and large ports / WB : majority of smaller

ports


Comparison with the UNCTAD Report

in US$ average cost / TEU average cost / TON

UNCTAD 3.60 0.08

World Bank 4.95 0.22

ponderedports < 500,000

teu/annumports <15 million tons

p/a

in US$ average cost / TEU average cost / TON

UNCTAD 4.80 0.11

World Bank 5.40 0.17


Supply Chain Security (SCS)

Background and genesis Main components, initiatives and stakeholders SCS Guide (project)


Background

The ISPS Code in fact is a dedicated component of the larger global security initiative commonly known as “Supply Chain Security” (SCS).

Whereas the ISPS Code concentrates on security issues related to vessels, individual port facilities and the direct port environment, SCS aims to make the entire logistic chain, from producer to consumer, more secure, but, at the same time, more efficient.

While the ISPS, in spite of being an International Code sponsored and led by the International Maritime Organization (IMO), took quite some time to achieve full implementation, SCS is still a mosaic of components and initiatives that may be introduced and

become compulsory on a global scale.


Main Stakeholders and actors

World Customs Organization (WCO) International Organization for Standardization (ISO) International Maritime Organization (IMO) World Trade Organization (WTO) Regional Organizations National Governments International Trade, Logistics and Transport

professional Associations


Main initiatives

24-hours manifest C-TPAT CSI ISO 28.000(1)) ATDIATDI 10+210+2 100% scanning (2012)100% scanning (2012) AEOAEO Multilateral, bilateral, unilateralMultilateral, bilateral, unilateral


Main components

Advanced Electronic Cargo Information Data collection, aggregation and analysis Risk management Container seals Scanning equipments and image analysis Integrated Border Management (border agency

cooperation) Authorized Economic Operator management

Real-time cargo tracking and tracing


SCS Guide (project) - genesis

The concept of this Guide started to take shape during the 25th The concept of this Guide started to take shape during the 25th International Association of Ports and Harbors (IAPH) Biannual International Association of Ports and Harbors (IAPH) Biannual Conference that was held in Houston, Texas, USA from April 27 to Conference that was held in Houston, Texas, USA from April 27 to May 4, 2007, when experts from the following organizations and May 4, 2007, when experts from the following organizations and companies:companies:

The Rotterdam Port AuthorityThe Rotterdam Port Authority The International Association of Ports and Harbors (IAPH) The International Association of Ports and Harbors (IAPH) The company SOGET (a Joint Venture of Port of Le Havre Authority The company SOGET (a Joint Venture of Port of Le Havre Authority

and Port of Le Havre Port Community)and Port of Le Havre Port Community) The Port of Le Havre AuthorityThe Port of Le Havre Authority The World Bank (Energy, Transport and Water Department)The World Bank (Energy, Transport and Water Department)

concurred on the need to increase the awareness of the global trade concurred on the need to increase the awareness of the global trade and transport community, and in particular that in the developing and transport community, and in particular that in the developing world, of the developments in the field of Supply Chain Security, or world, of the developments in the field of Supply Chain Security, or SCS. SCS. This meeting was followed up with another meeting in Rotterdam in This meeting was followed up with another meeting in Rotterdam in September 2007 in which also a Representative of the World September 2007 in which also a Representative of the World Customs Organization (WCO) participated.Customs Organization (WCO) participated.


SCS Guide (project) (I)

Commented Inventory of on-going and future initiatives and their reciprocal compatibility

Insight in international developments and uncertainties

Status of SCS from a Regulatory point of view Insight to the overlaps, bridgeability and Insight to the overlaps, bridgeability and

interoperability between the proposed interoperability between the proposed certification systems (C-TPAT – AEO - ISO certification systems (C-TPAT – AEO - ISO 28.000(1))


SCS Guide (project) (II)

Outline of container integrity solutions Outline of container integrity solutions including High Security Seals and RFID seals, including High Security Seals and RFID seals, and their state of standardization and and their state of standardization and affordability in Developing Countriesaffordability in Developing Countries

Outline of Advanced Inspection Technology Outline of Advanced Inspection Technology including radiation detection and high speed including radiation detection and high speed scanning; relevance of AIT for Developing scanning; relevance of AIT for Developing CountriesCountries

Users check-listsUsers check-lists


ConclusionConclusion

““A balance must be struck between A balance must be struck between ensuring security and facilitating trade, if we ensuring security and facilitating trade, if we are to preserve the efficiency of shipping are to preserve the efficiency of shipping and cargo operations and allow global trade and cargo operations and allow global trade to flourishto flourish” ”

(…)(…)“In the ongoing Western-driven development “In the ongoing Western-driven development of a global framework of rules and standards of a global framework of rules and standards governing international shipping”governing international shipping”(…)(…)

To ensure that the measures introduced are To ensure that the measures introduced are sensible and pragmatic, a multilateral sensible and pragmatic, a multilateral approach is more likely to produce approach is more likely to produce pragmatic solutions than uncoordinated pragmatic solutions than uncoordinated unilateral initiatives” unilateral initiatives”


ConclusionConclusion

To ensure that the measures To ensure that the measures introduced are sensible and introduced are sensible and pragmatic, a multilateral approach pragmatic, a multilateral approach is more likely to produce pragmatic is more likely to produce pragmatic solutions than uncoordinated solutions than uncoordinated unilateral initiatives”unilateral initiatives”

OPENING ADDRESS BY OPENING ADDRESS BY MRMR LEE KUAN LEE KUAN YEW,MINISTER MENTORYEW,MINISTER MENTOR, AT THE INAUGURAL , AT THE INAUGURAL SINGAPORESINGAPORE MARITIME LECTURE, 25 SEPTEMBER 2007 MARITIME LECTURE, 25 SEPTEMBER 2007


And, to be truly global, Global And, to be truly global, Global Trade must take on board the Trade must take on board the Developing Countries.Developing Countries.

20080410 OAS CIP Presentation: The World Bank and Port Security

Documents

maritime security

uneven levels of security

unctad report unctad

countries unctad

orderly ports

pondered ports

teuannum ports

ton of cargo