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STUDY ON THE IMPACT OF SECURITY

MEASURES ON THE
EU ECONOMY AND TRADE RELATIONS

Final Report
Prepared by:

HPC Hamburg Port Consulting GmbH


In co-operation with:

Planco Consulting GmbH


Ocean Shipping Consultants

CLIENT:
EUROPEAN COMMISSION
DG TAXUD

Service Contract TAXUD/2008/DE/122

February 2010

European Union, 2010


This study is property of the European Commission. Reproduction is authorised
provided the source is acknowledged.
The views expressed by the consultants do not necessarily reflect those of the
European Commission.
This document has been edited for public consumption.

THE IMPACT OF SECURITY


MEASURES ON THE EU
ECONOMY AND TRADE
RELATIONS

Final Report

This Report has been prepared by:


HPC Hamburg Port Consulting GmbH
Container Terminal Altenwerder
Am Balllinkai1
21129 Hamburg
Germany
Phone:

(+49-40) 7 40 08-135

Fax:

(+49-40) 7 40 08-133

e-mail:

h.bluhm@hpc-hamburg.de

Internet:

http://www.hpc-hamburg.de

18 June 2009

Dr. Jansen

06/07/09 12:02 F:\PROJ\PPOS\23614_EU-Customs \Reports_JV\Final Report\Final R\final_ report_correction 060709-dw.doc

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Table of Content
1
2

EXECUTIVE SUMMARY.................................................................................................... 1
METHODOLOGY ............................................................................................................... 9
2.1 PURPOSE OF THE STUDY............................................................................................... 9
2.2 OBJECTIVES .................................................................................................................. 9
2.3 APPROACH .................................................................................................................. 10
2.4 DEFINITIONS AND ASSUMPTIONS ................................................................................. 11

SECURITY OBJECTIVES AND PRINCIPLES................................................................ 13


3.1 SUPPLY CHAIN SECURITY............................................................................................ 13
3.1.1
WCO SAFE Framework of Standards................................................................... 13
3.1.2
IMO - International Ship and Port Facility Security Code (ISPS).............................. 13
3.1.3
Safety and Security Amendment to the EU Customs Code......................................... 14
3.2 LEGAL ASPECTS .......................................................................................................... 15
3.2.1
Unilateral Requirements by 9/11 Act....................................................................... 15
3.2.2
Unilateral versus multilateral................................................................................. 16
3.2.3
Implementation Problems....................................................................................... 17
3.2.4
Use and ownership of data/ data processing and data transfer ................................. 18
3.2.5
Resource Responsibilities....................................................................................... 18

INSPECTION EQUIPMENT AND PROCEDURES......................................................... 20


4.1 TYPE OF PROCESS AND METHOD ................................................................................ 20
4.2 RADIATION DETECTION ................................................................................................ 20
4.2.1
Detection Process.................................................................................................. 20
4.2.2
Types of Radiation Detectio n Equipment/Installation............................................... 22
4.2.3
Application of Radiation Detection......................................................................... 23
4.3 SCANNING................................................................................................................... 24
4.3.1
Scanning Process and Implications......................................................................... 24
4.3.2
Scanning Technology available .............................................................................. 24
4.3.3
Types of Scannin g Equipment/Installation............................................................... 26
4.3.4
Principal Findings................................................................................................. 26
4.3.5
Scanning Equipment Comparison ........................................................................... 26
4.4 OTHER ISSUES ............................................................................................................ 28
4.4.1
Performance ......................................................................................................... 28
4.4.2
Standards.............................................................................................................. 29
4.4.3
Compatibility of Radiation Detection and Scanning Equipment................................ 29
4.4.4
Developments........................................................................................................ 31
4.4.5
Analysis and Transmission of Information............................................................... 32

CONTAINER INSPECTION PROCEDURES .................................................................. 34

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PORT ANALYSIS............................................................................................................. 42

IMPACT OF 100 % SCANNING ON TERMINAL OPERATIONS.................................. 64


7.1 BASIC ASSUMPTIONS................................................................................................... 64
7.2 CHANGE OF PROCEDURES IN A STRADDLE CARRIER OPERATED TERMINAL .................. 65
7.3 CHANGE OF PROCEDURES ON AN RTG OPERATED TERMINAL ...................................... 67
7.4 CHANGE OF PROCEDURES IN A TERMINAL OPERATED BY AUTOMATED STACKING
CRANES ...................................................................................................................... 69
7.5 ASSESSMENT OF ADDITIONAL TERMINAL OPERATION REQUIRED BY 100% SCANNING OF
US-BOUND CONTAINERS ............................................................................................. 71
7.5.1
Additional Equipment for Terminal Operation......................................................... 72
7.5.2
Additional Human Resources for Terminal Operation.............................................. 73
7.6

COSTS OF ADDITIONAL TERMINAL OPERATION REQUIRED BY 100% SCANNING OF USBOUND CONTAINERS ................................................................................................... 74
7.6.1
Additional Investment in Terminal Operation Equipment......................................... 74
7.6.2
Annual Costs of additional Terminal Operation necessary to scan 100% or US-bound
Containers ............................................................................................................ 75

IMPACT OF 100 % SCANNING AND RADIATION DETECTION ON CUSTOMS


ADMINISTRATION IN THE EU...................................................................................... 77
8.1 EQUIPMENT DESIGNED FOR 100% SCANNING OF US-BOUND CONTAINERS .................. 78
8.2 HUMAN RESOURCE REQUIREMENTS FOR 100% SCANNING AND RADIATION DETECTION
OF US-BOUND CONTAINERS ........................................................................................ 79

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8.3

COST OF 100% SCANNING AND RADIATION DETECTION OF CONTAINERS BOUND FOR THE
US .............................................................................................................................. 81
8.3.1
Investment in equipment necessary for 100% Scanning and Radiation Detection of
Containers bound for the US per Port type.............................................................. 81
8.3.2
Annual Operation Costs of 100% Scanning and Radiation Detection of US-bound
Container by Port Type.......................................................................................... 82

8.4
8.5

OVERALL ANNUAL OPERATION COSTS INDUCED BY THE REQUEST OF 100% SCANNING


AND RADIATION DETECTION OF US-BOUND CONTAINERS PER PORT T YPE ................... 83
HUMAN RESOURCES, INVESTMENT AND ANNUAL OVERALL OPERATION COST REQUIRED
FOR 100% SCANNING AND RADIATION DETECTION OF US-BOUND CONTAINERS 2012
AND 2020 IN EUROPEAN PORTS .................................................................................. 84

COMPARISON OF 100% RADIATION DETECTION AND 100% SCANNING WITH


RISK MANAGEMENT APPROACH ............................................................................... 87
9.1 RISK MANAGEMENT WITH INSPECTION /SCANNING OF HIGH RISK CONTAINERS ............ 87
9.2 EFFECTIVENESS OF THE 100% SCANNING AND RADIATION DETECTION COMPARED TO
RISK MANAGEMENT APPROACH................................................................................... 87
9.3 COST OF RISK MANAGEMENT APPROACH .................................................................... 88
9.4 COMPARISON OF OVERALL ANNUAL OPERATION COST OF 100% SCANNING AND
RADIATION DETECTION OF US-BOUND CONTAINER WITH OVERALL ANNUAL COST OF
RISK ASSESSMENT OF US-BOUND CONTAINER (3% SCANNING AND 100% R ADIATION
DETECTION ................................................................................................................. 90
9.5 COMPARISON OF HUMAN RESOURCES REQUIREMENTS FOR 100% SCANNING AND
RADIATION DETECTION WITH RISK MANAGEMENT INCLUDING 3% SCANNING AND 100%
RADIATION DETECTION OF US-BOUND CONTAINERS.................................................... 91
9.6 NON -LINEARITIES ........................................................................................................ 93

10 POSSIBLE ALTERNATIVE STRATEGIES .................................................................... 96


10.1 ENHANCEMENT OF RISK B ASED APPROACH................................................................. 97
10.2 MUTUAL RECOGNITION ................................................................................................ 98
10.3 RADIATION DETECTION ................................................................................................ 98
10.4 SCANNING................................................................................................................... 98
10.5 SMART CONTAINERS AND ELECTRONIC SEALS........................................................... 99
10.6 CONCLUSION REGARDING ALTERNATIVE OPTIONS ...................................................... 100
11 RECIPROCITY................................................................................................................101
12 LIST OF SOURCES CONSULTED .................................................................................103
12.1 PERSONAL MEETINGS ............................................................................................... 103
12.2 OTHER CONTACTS .................................................................................................... 104

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List of Abbreviations and Acronyms


A
ABP
AEO
AGV
ANSI
APL
APM
ASC
ASP
AS&E
AUS

Association of British Ports


Authorized Economic Operator
Automatically Guided Vehicle
American National Standards Institute
American President Lines
A. P. Mller-Mrsk Group
Automated Stacking Crane
Advanced Spectroscopic Portal
American Science and Engineering Inc.
Australia

B
BC

Barge/Container (Vessel)

C
CAL
CAM
CARIB
CAS
CBP
CKYH
CMA CGM
COSCO
CPA
CSI
CT
CTA
CTB
CTT
C2B
C2C
C-TPAT

Container Advance List


Central America
Caribbean
Central Alarm Station
(US) Bureau of Customs and Border Protection
Shipping Alliance of: COSCO, Kawasaki Line, Yang Ming Line, Hanjin
Compagnie Maritime dAffrtement / Compagnie Gnrale Maritime
China Ocean Shipping Company
Container Prf-Anlage (Container Scanning Facility)
Container Security Initiative
Container Terminal
Container Terminal Altenwerder (Port of Hamburg)
Container Terminal Burchardkai (Port of Hamburg)
Container Terminal Tollerort (Port of Hamburg)
Customs - to - Business
Customs - to - Customs
Customs Trade Partnership against Terrorism

D
DDE
DDN
DDS
DDW
DG ECFN

Delta Dedicated East Terminal (Port of Rotterdam)


Delta Dedicated North Terminal (Port of Rotterdam)
Delta Dedicated South Terminal (Port of Rotterdam)
Delta Dedicated West Terminal (Port of Rotterdam)
Directorate General for Trade, Economic and Financial Affairs

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DG TAXUD
DG TREN
DHS
DIHK
DOE
DP World
DPW

Directorate General for Taxation and Customs Union


Directorate General for Transport and Energy
(US) Department of Homeland Security
German Chambers of Industry and Commerce
(US) Department of Energy
Dubai Ports World (wide)
DP World

E
EA
ECH
ECMT
ECNA
ECT
EDI
EMED
EU

East Asia
Empty Container Handler
European Conference of Ministers of Transport
East Coast North America
Europe Container Terminals (Port of Rotterdam)
Electronic Data Interchange
Eastern Mediterranean
European Union

F
FC
FROB
FTE

Fully Containerised (Vessel)


Freight Remaining On Board
Full Time Employee

G
G.A.
GAO
GDP
GPM

Grand Alliance (Hapag Lloyd, NYK, MISC, OOCL)


(US) Government Accountability Office
Gross Domestic Product
Grands Ports Maritimes (France)

H
ha
HGV
HHLA
HMM
HMR&C
HNN

Hectare
Horizontal Ground Vehicle Transportation
Hamburg Port and Logistics Co.
Hyundai Merchant Marine Co.
HM Revenue and Customs
Hesse Noord Natie Stevedoring (Port of Antwerp)

HPC
HR
H.R.1

HPC Hamburg Port Consulting GmbH


Human Resources
House Resolution 1 of the 110th US Congress

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I
IAEA
IBPEN
ICC
ID
IMDG
IMF
IMO
IND
ILO
ISO
ISPS
IT

International Atomic Energy Agency


Iberian Peninsular
International Chamber of Commerce
Identification
International Maritime Code for Dangerous Goods
International Monetary Fund
International Maritime Organisation
Indian Subcontinent
International Labour Organization
International Organization for Standardisation
International Ship and Port Facility Security Code
Information Technology

K
KeV
km

Thousand Electron Volts


Kilometre

L
LAT

Lowest Astronomical Tide

M
m
m
MCT
ME
MeV
MHC
MISC
mm
MOL
MP
MSC
MT
MV

Metre
Square Metre
Medcenter Container Terminal (Port of Gioia Tauro)
Middle East
Million Electron Volts
Mobile Harbour Crane
Malaysia International Shipping Corp.
Millimetre
Mitsui O.S.K. Lines
Multi Purpose (Vessel)
Mediterranean Shipping Co.
Empty Container
Megavolt

N
NAF
NCSA
NEA

North Africa
North Coast South America
North East Asia

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NEUR
NII
NRF
NVOCC
NYK

Northern Europe
Non Intrusive Imaging
Nuclear Resonance Fluorescence Imaging
Non Vessel Operating Container Carrier
Nippon Yusen Kaisha Shipping Line

O
OCR
OECD
OOCL
OOG
OSC

Optical Character Recognition


Organization for Economic Co-operation and Development
Orient Overseas Container Line
Out of Gauge Container
Ocean Shipping Consultants Ltd.

P
p.a.
P&O
PLANCO
PMT
pnx
pp
PPA
PSA
PVT

Per Annum
Peninsular & Oriental Ports
PLANCO Consulting GmbH
Photo Multiplier Tube
Panamax
Post Panamax
Piraeus Port Authority
Port of Singapore Authority
Polyvinyl Toluene Plastic Scintillator

Q
QCC

Quayside Container (Gantry) Crane

R
RC
RFID
RPM
RR
RSEA
RTC
RTG

Roll-On Roll-Off/Container (Vessel)


Radio Frequency Identification Tag
Radiation Portal Monitor
Roll-On Roll-Off (Vessel)
Red Sea
Rotterdam Container Terminal
Rubber Tyred Gantry Crane

S
SAIC
SC
SCT
SCAN

Science Applications International Corp.


Straddle Carrier
Southampton Container Terminal
Scandinavia

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SEA
SFI
SMART
SNCF
SOLAS
spp
STS
SUB

South East Asia


Secure Freight Initiative
Secure Material Accounted in Real Time
Socit Nationale des Chemins de Fer Franais
(International Convention for the) Safety of Life at Sea
Super Post Panamax
Ship to Shore Container Gantry Crane
Indian Subcontinent

T
TCA
TCV
TEU
TOR
TPF
TPO
T/S
TT
TTU

Terminal de Contenedores Algeciras


Terminal de Contenedores Valencia
Twenty Foot Equivalent Unit
Terms of Reference
Trader Provides Free
Terminal Porte Ocan (Port du Havre)
Transshipment
Terminal Tractor
Tractor Trailer Unit

U
UASC
UK
UN
UNCTAD
US
USA
USGC

United Arab Shipping Co.


United Kingdom
United Nations
United Nations Conference on Trade and Development
United States
United States of America
US Gulf Coast

V
VAT

Value Added Tax

W
WAF
WCNA
WCO
WMED
WSC
WTO

West Africa
West Coast North Am erica
World Customs Organisation
Western Mediterranean
World Shipping Council
World Trade Organisation

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Y
YML

Yang Ming Line

Z
ZDS
ZORA

Central Association of German Seaports


(German) Central Office for Risk Analysis

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Executive Summary

Background
The main objective of the study is to assess the impact on EU customs and related security
aspects of the adoption of US Public Law 110-53, Implementing Recommendations of the
9/11 Commission Act of 2007 of the 3rd August 2007. For the purposes of this study it has
been assumed that, in order to satisfy the requirements of the Act, both 100% radiation
detection and 100% scanning will be called for.
Implications for port infrastructure
Based on statistical, logistical and regional aspects, 11 ports have been selected for
inclusion in the work. The volume of container trade with the USA (covering around 80% of
the total trade to the USA) constitutes one criterion for selection. In the selected ports, in
2012, 1.97 million TEU are expected to be laden containers and in 2020 2.42 million TEU.
The forecast concerning laden containers from Europe to the USA is expected to be 2.42
million TEU and 3.04 million TEU in 2012 and 2020 respectively. Approximately 58% are
transported via the North Sea ports of Bremerhaven, Rotterdam and Antwerp.
The 11 ports are grouped into five types each representing a particular group of European
ports. The criteria for the groups are as follows: total container turnover, how containers
arrive from the hinterland (road, rail and transhipment), and the proportion of container
exports bound to the USA and the location. The port types are low-transhipment ports
(40,000 US-bound containers per year), transhipment ports (50,000 US-bound containers
per year), Mediterranean ports (66,667 US-bound containers per year), Northwest European
ports (333,000 US-bound containers per year) and North Sea ports (500,000 US-bound
containers per year).
Meetings were held with terminal operators and port authorities to collect logistical, technical
and cost information on port operation. None of the visited ports had already prepared
detailed concepts for the implementation of the 100% Container Scanning law (except
Southampton). All terminals and authorities do not expect that the law will be implemented as
originally planned by the US Government.
Without substantial changes in infrastructure, procedures and organisation it will be
impossible to implement the new law at the visited ports. Implementation of the new law will
lead to enormous investment in port operation equipment. Furthermore, additional terminal
operation as a result of 100% scanning and radiation detection will create considerable
annual operational costs. However, it is difficult to receive exact information on space
requirements, technical and organisational changes and related costs, since the majority of
terminals are reluctant to give details of costs.
In the event that all US-bound containers have to be scanned in the future, various changes
regarding operational procedures will have to be considered. These changes vary from port

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to port. Consequently, the implications on container flows have been determined according
to the typical or most likely operation systems e.g. for terminals operated based on Straddle
Carriers, Rubber Tired Gantry Cranes or Automatic Stacking Cranes. The assumptions are
as follows:

To account for seasonal fluctuations, the capacity of all equipment is designed 30%
bigger than the volumes to be scanned require at present.
Export containers to be delivered by truck will be scanned only if they are bound for a
port in the US. This requires the availability of an OCR portal.
US-bound transhipment containers will be transported to a central scanning facility
immediately after being discharged from the vessel.
US-bound containers arriving by rail or by barge will be scanned together with the
transhipment containers, before being transported to the yard.
Empty containers bound for US Ports have also to be scanned. In order to avoid any
manipulation of the container, the empty container must be sealed when it is scanned.
The containers, once scanned, may be stacked into the container yard regardless of
whether the scanning result is available, or not.

The necessary investment in equipment required for 100% scanning and radiation detection
of US-bound containers to take place, expressed in real terms, for each different port type
amounts to 1.87 million for the low-transhipment port, 2.43 million for the transhipment
port, 1.97 million for the Mediterranean port, 8.04 million for the Northwest European port)
and 10.83 for the North Sea port.
Additional manpower required to operate the equipment for the additional terminal operation
are estimated at 21 employees for the low-transhipment port, 36 for the transhipment port, 26
for the Mediterranean port, 114 for the Northwest European port and 172 for the North Sea
port.
The annual costs for the additional terminal operation, expressed in actual monetary terms
consider depreciation, equipment operation, maintenance and labour. The costs do not
reflect possible productivity decreases caused by traffic or space bottlenecks. The cost of the
additional terminal operation as a result of 100 % scanning can be estimated at 1.59 million
for the low-transhipment port, 2.67 million for the transhipment port, 2.09 million for the
Mediterranean port, 8.65 million for the Northwest European port and 12.90 million for the
North Sea port.
The forward projection of these assessments for each port type concludes that an
investment of 62.64 million will be required for equipment to perform the additional
terminal operation in 2012 and 79.95 million in 2020. The required personnel will be
860 employees in 2012 and 1080 in 2020. The annual cost of the additional operation
will amount to 64.45 million in 2012 and 81.67 million in 2020.

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Port authorities and terminal operators indicated that they are willing to perform the additional
terminal operation as long they can charge the additional costs. Ultimately, this means that
the goods transported in a container to the US will be more expensive.
Inspection equipment
Further interviews with port authorities, port customs officials, national customs authorities
and producers of scanning and radiation detection equipment provided technical and cost
information on scanning and radiation detection techniques.
Terminal operators said that spreader and straddle carrier mounted radiation detection
equipment will not work because they will not stand up to the rigorous working environment.
In the port context, radiation detection typically comprises two components:

Primary screening: Applied to all traffic required to be screened


Secondary screening (advanced spectroscopy): Carried out only on those containers,
which trigger an alarm.

Actual acquisition costs are 85,000 for primary radiation detection equipment and 350,000
for secondary radiation detection equipment.
Scanning builds up an image or picture of the contents non-intrusively. The interpretation of
images requires skilled analysts. The analysis and interpretation could either take place in
real time, at the point of scanning, as the images are generated, or be carried out remotely in
the USA. National customs authorities expressed their opinion that the development of the
essential software to transmit to the USA and to interpret the images in real time in the USA
will take a long time.
As a price guide, for the transmission of X-rays, high depth steel penetration and an OCR
system to be able to link the scan images to a real container unit, 2,400,000 is expected for
a mobile unit, 3,200,000 for a drive through portal and 4,500,000 for internal (facility
installations (conveyors):
The hardware technology has not changed very much in the recent past, since the emphasis
of research has been in the area of interpretation and the development of the related
software. Ideally, the aim is to be able to fully automate the interpretation process, although
this is still some way off. At the moment there is still no effective substitute for human
judgement.
Ports that already have scanners, nearly all use them for other purposes than those originally
planned in connection with the law 100% Container Scanning, i.e. scanners are almost all
used for scanning of import containers. The scanners in the ports visited have a very low
performance (4-15 containers per hour), mainly caused by operational procedures. The port
of Bremerhaven plans to replace the existing facility with a new scanning facility. However,
none of these scanning facilities is designed to perform 100% scanning of US-bound
containers.

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Concerning 100% scanning and radiation detection, the following basic principles have been
chosen:

For containers arriving by truck, in port types with lower volumes, drive through
equipment with a capacity up to 60,000 trucks per year (300 days, 10 hours per day)
will be used. In ports with higher volumes, the drive through equipment capacity of up
to 96,000 trucks per year (300days, 16 hours per day) is assumed.
The device, assigned to scan transhipment containers (arriving by rail, barge or feeder
vessel) is proposed to be located at a site central to the terminals. An internal scanning
facility with a conveyor belt is assumed to be able to scan 120,000 containers per year
(300 days, 20 hours per day). To achieve this capacity, a constant container flow is a
prerequisite.
Scanning of containers and radiation detection will be done simultaneously in both the
drive through and the central facility
To account for seasonal fluctuations, the capacity of all scanning facilities is designed
30% bigger than the current volumes require. Furthermore, buffer space is provided in
front and behind the scanning facility.

Impact of 100% scanning on customs administrations in the EU


Discussions with port customs officials, national port authorities and international
organisations more directly involved in supply chain activities, technological and cost
information on inspection procedures, as well as a broad cross section of opinions, have
been collected as a basis for the assessment of the impact of 100% scanning.
The role of the operators and the customs concerning 100% scanning and radiation
detection is not always clear. Some operators said that responsibility should be entirely with
the customs, while others saw themselves as taking the lead. In some instances, scanning
would be considered as a national government responsibility, while in others it would be
assigned specifically to customs. Furthermore, there are differences between national
customs administrations as to how they see their role.
The additional personnel required for 100 % scanning and radiation detection is indicative of
the impact of the request of the US-legislation on customs administration in the EU, as well
as the investment and the annual operation costs requirements. The estimate of the required
human resources for the different port types is based on discussions with custom authorities
in the ports or on national level. It is assumed that customs authorities in the European ports
will have the responsibility to interpret scanned images and to release unsuspicious
containers.
It is assumed that a drive through scanning device will require 5 people; 1 operator, 1 truck
organiser and 3 image interpreters. 6 people will be required for an internal scanning centre;
2 technical experts as operators, 1 container flow organiser and 3 image interpreters. The
scanning personnel are assumed to work in two or three shifts, 6 days a week depending on

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the container volume. For administrative activities (considering also sickness and vacation)
the number of employees is expected to increase by 30%. The number of staff required for
the operation of the radiation detection equipment is estimated to be 1 employee per shift
and station.
Approximately 12% of the required personnel should possess high customs education,
approximately 65% should possess middle customs education and approximately 23%
should be skilled in technical aspects (middle or high education). The image interpreters will
need training. Experts involved in scanning of import containers since 2003 consider training
on the job to be the most efficient form of training. The period necessary to gain sufficient
experience is reported as one year.
It is estimated that 17 employees are needed for the low-transhipment port, 24 for the
transhipment port, 32 for the Mediterranean port, 117 for the Northwest European port and
164 for the North Sea port.
The extrapolation of the human resource assessments per port type at all European
ports with US-bound container trade for 2012 und 2020 shows that the human
resources required for 100% scanning and radiation detection will be 890 employees
in 2012 and 1,140 in 2020. Together with the human resources essential for the
additional terminal operation, a total of 1,750 people will be needed in 2012 and 2,220
in 2020.
Although scanning and radiation expertise exist in the customs authorities to a certain
degree, it is already employed in other customs activities necessary to provide security to
supply chains in and to Europe. This expertise cannot be switched to the scanning of USbound containers. European security cannot be neglected in favour of the 100% scanning of
US-bound containers. Furthermore, the introduction of new techniques or technical
equipment would also demand further training for these experts. Additional manpower has to
be employed and trained, which will all take time.
The investment for scanning and radiation equipment, space preparation and buildings
necessary to perform 100 % scanning and radiation detection are estimated based on the
actual figures provided by producers and responses given by ports or national customs
authorities. The investment per port type expressed in actual monetary terms amounts to
4.98 million for the low-transhipment port, 7.01 million for the transhipment port, 9.53
million for the Mediterranean port, 36.20 million for the Northwest European port) and
51.50 for the North Sea port.
The investment for scanning and radiation detection at all European ports with USbound container trade amounts to 275.76 million and 351.71 million for 2012 and
2020 respectively. Taking into account investment for additional terminal operation
the amounts raise to 338.40 million in 2012 and 431.65 million in 2020.

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The annual scanner operating costs consider depreciation, maintenance, energy


consumption and labour. The cost of 100 % scanning and radiation detection amounts to
2.21 million for the low-transhipment port, 3.01 million for the transhipment port, 4.05
million for the Mediterranean port, 14.48 million for the Northwest European port) and
20.38 million for the North Sea port.
The projection of these assessments per port type at all European ports with USbound container trade arrives at annual costs for 100 % scanning and radiation
detection of 112.06 million in 2012 and 143.20 million in 2020. Considering also the
annual cost of additional terminal operation the overall annual costs add up to 176.51
million in 2012 and 224.86 million in 2020.
According to the interviews, neither terminal operator nor customs authorities are ready to
bear these costs induced by the US request to scan 100% of the laden containers to USports. Because of the request, it is possible that the price of goods sent to the US from
Europe or via Europe will increase.
Effectiveness: Comparison of scanning with existing inspection procedures
The existing security management in the EU is based on a risk assessment based approach.
This is the preferred method among all EU countries. This approach is also a principle that
underpins two major WCO initiatives, the (SAFE) Framework and the Revised Kyoto
Convention. Within the framework of the European Customs Security Amendments, security
pre-arrival/departure declarations will be a voluntary option for traders from July 1, 2009 and
a compulsory requirement as of January 1, 2011. This will contribute to improving the
effectiveness of the risk assessment. Further supply chain security will be achieved by the
AEO concept.
The approach of 100% scanning and radiation detection is in stark contrast to the risk
targeted controls e.g. those carried out under the CSI. It is difficult to demonstrate that 100%
scanning would be more effective. There would be a possible deterrent effect, but the
evidence, such as it is, from the current risk based approach demonstrates that the risk is
anyway low. As a deterrent, therefore, 100% scanning and radiation detection would not
contribute very much. 100% scanning is rigid and unlikely to improve security compared to
the risk management approach, which is flexible. 100% scanning might even create a false
sense of security and undermine security by diverting scarce resources from other essential
measures. 100% scanning will divert EU resources from EUs security concerns and
therefore not improve the overall security situation
According to the national port authorities and national custom authorities in Europe,
100% scanning would not lead to a significant increase in security. If 100% scanning
were to be implemented there would be little point in continuing with the risk based
approach to security. 100% scanning, therefore, effectively represents an alternative
approach, rather than a complementary approach.

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Furthermore, 100% scanning and radiation detection has a high potential to disrupt trade and
transport unnecessarily, within the EU and worldwide. Moreover, 100% scanning and
radiation detection has the potential to induce an important reorientation of transport flows
worldwide and in the EU and would risk undermining the European Union's port policy.
However, some alternative strategies to enhance container security should not be neglected.

Development and acceptance of enhanced risk based approaches and mutual


recognition of AEO and C-TPAT. This would result in a priority lane, through which a
proportion of traffic would flow.
The potential of SMART container and electronic seals etc. merits further investigation,
the latter also in combination with risk based approaches.

Non-linearity
Scanning equipment is designed in a way to achieve a high capacity utilisation.
Consequently, the infrastructure necessary to operate the equipment is also designed for this
capacity utilisation. The non-linearity of the cost function becomes apparent by the
correlation between US-bound container volumes and the overall annual operation cost
because of 100% scanning and radiation detection per container. The cost per scanned
container decrease the higher the capacity of the scanning facility is utilized and increases
when volumes require a further scanning device, which cannot be utilized optimally. The
higher the scanned volumes and consequently the number of scanning units are, the less the
significance of non-linearity.
Non-linearity demonstrates that it would be economically non-viable for ports with
lower US bound volumes to invest into scanning facilities. Consequently, they will
have a severe competitive disadvantage with regard to US bound containers and
would have only minor incentives to remain in the market for this trade.
Reciprocity
While the law imposes the requirement for the 100% scanning of containers bound for the
USA from ports worldwide, there is no such requirement for trade in the opposite direction.
This therefore raises the possibility of the imposition by countries of a reciprocal requirement.
Certainly the imposition of such a condition would pose a problem for the USA. It was almost
the universal view of respondents that it is not a policy that should be seriously entertained
by the Commission.
The non-reciprocity of security measures could also cause other states to introduce their own
security requirements in retaliation and the proliferation of incompatible unilateral measures
could represent considerable barriers to trade. Another significant disadvantage of the
unilateral approach is that the implementing state has no way of knowing for certain if its
measures are effective in preventing the perceived threat of terrorism.

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Multilateral measures on the other hand - are developed by international organisations,


which view security as a global public good and aim to improve the security of all their
members. Their main aim is to create uniform, albeit voluntary, standards, which can be
adopted by all members taking account of their economic development. As a result,
multilateral security measures are most likely to lead to a more consistent security
regime than a patchwork of bilateral agreements with selected trading partners used
to implement unilateral security measures (such as the CSI or 100% scanning).

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Methodology
Purpose of the Study

This study is concerned with the adoption by the USA of the Public Law 110-53
Implementing Recommendations of the 9/11 Commission Act of 2007 on the 3rd August
2007.
It is an anti-terrorist measure and under the legislation 100% of all containers shipped to the
United States will be required to be scanned at the port of loading (prior to departure.) The
objective is to check the contents of the containers for fissile materials and the presence of
dirty bombs and (other) weapons of mass destruction.
The nature of the inspection and checking necessary to fulfil this objective is not precisely in
the Law, but could include 100% radiation detection (to look for the presence of radioactive
substances) and 100% imaging (to build up a picture of the contents of containers.)
The Law is due to be implemented by July 2012, though provided certain conditions are met,
it can be deferred by two year increments.
The following main activities regarding this development have so far taken place:

Preliminary assessment of the impact carried out by the Commission with contributions
from the member states in 2008

Report by the DHS to Congress in April 2008 on the progress made in testing the
feasibility of 100% scanning in three ports (Cortes, Qasim and Southampton.)

Independent evaluation of the Southampton trial by the UK customs in March 2008

CBP Report to the Congress on Integrated scanning Systems

The difficulty of assessing the impact of 100% scanning and the lack of detailed information
led the Commission to undertake three studies: one concerned with trade, one with transport
aspects and one with the impact on customs. The purpose of this study is to analyse the
impact on customs. This study is led by DG-TAXUD.
The results of the study are intended to be used to provide the Commission with a solid basis
for its on-going discussions and negotiations with its US counterparts.

2.2
Objectives
The main objective of the study is to assess the impact of 100% scanning on customs and
related security aspects. This includes estimating the costs that would arise as a result of
100% scanning on terminal operation and security assessment. Furthermore the study
examines the constraints on technology, port infrastructure and customs resources that could
affect the viability of 100% scanning.

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The results to be achieved can be summarised as follows:

An examination and assessment of the technology employed and under development


for 100% scanning, its strengths and weaknesses, its performance, challenges and
constraints,
An assessment of the impact of 100% scanning on port infrastructure, including
volumes of US trade, relevance of transhipment and the effect on terminal operations
procedures and the development of estimates on additional terminal operation costs
necessary to scan US-bound containers,

An assessment of the impact on EU customs administrations, taking account of the


evolution of HR demand, cost of scanning and radiation detection, organisation,
deployment, insurance, health issues and training

An assessment of any non-linearities in the cost functions

A comparison of 100% scanning with existing security measures and their relative
effectiveness, considering all costs and constraints, including the transmission and
analysis of information

A consideration of the possible adoption of the policy of reciprocity

Account is also taken of the merits of 100% scanning in relation to well established riskbased approaches to container security and some conclusions are drawn regarding some
possible alternative solutions to 100% scanning.

2.3

Approach

To achieve the results, an approach has been selected, which combines the analysis of
opinions and discussions in the public as well as in the research community with practical
experiences gained in European ports and by the national customs authorities. Therefore,
the scope of work for the study is divided into two phases:
1. A phase of desk research, to study available published documentation and literature in
both Europe and the USA.
2. A phase of fieldwork, comprising a series of personal interviews with port authorities,
terminal operators and national customs authorities as well as contacts with relevant
organisations in Europe.
As a starting point for the second phase, based on statistical, logistical and regional aspects
11 ports are selected for inclusion in the work. Their volume of container trade with the USA
constitutes one criterion for selection, together with their mix of traffic between road, rail and
transhipment. The need to obtain a broad geographic spread is another important criteria for
port selection and discussion with DG-TAXUD. The following ports have been selected.
Meetings were held variously with terminal operators, port customs officials and port
authorities:

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Antwerp

Rotterdam

Gioia Tauro

Felixstowe
Southampton

Hamburg

Bremerhaven

Le Havre

Valencia

Algeciras

Piraeus

page 11

Parallel meetings with customs authorities at the national level have been given high priority.
Further contacts have been established with

Manufacturers and suppliers of screening and scanning equipment

Port and shipping associations, both national and international

Chambers of Commerce
Other relevant bodies, including the IMO, WCO etc.

In addition the following meetings were held with DG TAXUD:

Kick-off meeting held on Wednesday 21st January 2009

Presentation of first results (desk research) on 18th March 2009

Progress meeting on 21st April 2009

Presentation of Draft Final Report, meeting held on 2 nd June 2009

2.4

Definitions and Assumptions

This is an area where there is some confusion of terminology - on both sides of the Atlantic.
It is therefore important to clarify some definitions in order avoid confusion. In addition, the
basic assumptions on which the work has been based are stated.
The following points are made:

Screening is taken to mean all security activities to check/investigate the contents of a


container. It can either be intrusive, e.g. physical inspection or the use of sniffer dogs,
or non-intrusive, including risk management, study and analysis of shipping
documents, etc. Scanning and radiation detection, both non-intrusive techniques, are
also screening activities.

Scanning is taken to mean non-intrusive imaging (NII), i.e. the building up of a picture
of the contents of a container, by the use of X-rays or gamma radiation.

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Radiation Detection is taken to be a passive non-intrusive process that screens the


container for the presence of nuclear and radiological materials.
The US legislation is somewhat ambiguous as to what is required in terms of X-ray detection
and imaging. For the purposes of the study it has been assumed that, in order to satisfy the
requirements of the Act, both 100% radiation and 100% scanning will be called for. This is
the general expectation - though a 100% scanning only scenario will also be considered.
Next it has been assumed that:

The study is primarily concerned with export containers from EU ports to the USA

All containers must be scanned at the last port prior to despatch

Only containers to be discharged in ports in the USA need to be scanned

The interface between customs and terminal operators in terms of activities and
responsibilities for scanning is also not precisely defined at this point. For the purposes of the
study, it has been assumed that all activities relating to the scanning process itself will be the
responsibility of national customs authorities, but the ancillary operations, such as, for
example, the movement of containers to and from the scanner will be carried out by the
terminal operator.
Another open question concerns the interpretation of the scanned images and where this will
be carried out under the Law. It is the view of equipment suppliers that all images will be
transmitted back to the USA and will therefore not be analysed in real time. Crucially,
however, this would mean that the task would not be the responsibility of national customs
authorities.
For the purposes of cost estimations and the assessment of the impact on customs, the most
probable scenario taken, is that all images will be analysed in real time by national customs
authorities. The technical and logistical constraints of transmitting all images to the USA for
analysis and clearance will also be discussed.

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Security Objectives and Principles


Supply Chain Security

This subchapter provides a short introduction to the main security measures at international
level, including the WCO Safe Framework of Standards, the ISPS Code as well as the
Safety and Security Amendment to the EU Customs Code.

3.1.1

WCO SAFE Framework of Standards

The WCOs Framework of Standards to Secure and Facilitate Global Trade provides a
multilateral set of standards for container security. The Framework consists of four
components: harmonisation of advance electronic cargo information requirements on
shipments; adoption by members of a consistent risk management approach to address
security threats; outbound inspection of high-risk containers and cargo, preferably using nonintrusive detection equipment upon request; definition of the benefits that Customs will
provide to businesses that meet minimal supply chain security standards and best practices.
The Framework creates harmonised standards in relation to benefits, technology,
communication and facilitation and encourages the recognition of other standards.
It is based on two pillars: customs - to - customs networks and customs - to - business
partnerships which consist of consolidated standards. The C2C pillar provides for cooperation between customs authorities in order to inspect cargo before it arrives at the
destination port. It achieves this by providing for the use of advance electronic information to
identify high-risk containers or cargo. The C2B pillar aims to create an international system
for identifying private businesses that offer a high degree of security.
The framework is at a rather high policy level and will be implemented on a voluntary basis
by interested governments. Consequently international customs authorities must also create
a network of bilateral or multilateral co-operative relationships to share information and to
enhance trade security. Thus, for example, the US Container Security Initiative (CSI) will
continue to exist alongside the multilateral WCO SAFE Framework of standards. The Safety
and Security Amendment to the EU Customs code on the other hand is incorporating the
main components of the SAFE framework and ISPS Code, in order to comply with both
multilateral initiatives/standards on a European scale. The EU and the USA signed a letter of
intent to implement the requirements of the WCO SAFE Framework and are doing so.

3.1.2

IMO - International Ship and Port Facility Security Code (ISPS)1

The International Maritime Organisation (IMO) as part of the United Nations is responsible for
the safety of life at sea and environmental protection. In December 2002, the IMO amended

This overview of IMO and WCO frameworks of standards is based int. al. on Christopher Dallimore: Securing the
Supply Chain: Does the Container Security Initiative Comply with WTO Law? - Inaugural-Dissertation, Mnster 2008

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the International Convention for the Safety of Life at Sea (SOLAS) with the expressed aim of
safeguarding the worldwide supply chain against any breach resulting from terrorist attacks
against ships, ports, offshore terminals or other facilities.
The ISPS is the result of consultations with member states, inter-governmental organisations
and non-governmental organisations held under the auspices of the IMOs Maritime Safety
Committee. The provisions of the Code require security plans and enhanced security
measures for ships engaged in international commerce and port facilities. Owing to the fact
that the ISPS Code does not directly regulate land facilities, container security falls outside
its scope. However, the security of land-based facilities has been regulated by the
Framework of Standards 2005 issued by the WCO and the Code of Practice on Security in
Ports 2003 issued by the ILO/IMO.

3.1.3

Safety and Security Amendment to the EU Customs Code2

The main task of customs nowadays in all administrations is the protection of citizens and
their interests, while facilitating legitimate trade.
The safety and security amendment to the EU customs code covers activities supporting the
development and implementation of measures enhancing security through improved, more
sophisticated customs controls. The amendment introduces proper security controls to
ensure the protection of EUs internal market and, in close co-operation with major trading
partners in the world, secure the international supply chain. The amendment balances
controls with trade facilitation. Traders demonstrating compliant efforts to secure their part of
the supply chain will be rewarded by benefits such as fewer controls.
The "security amendments" to the Community Customs Code, which entered into force in
April 2005, provides the legal framework for the measures introduced in the EU Customs
Security Programme.

Traders are required to provide customs authorities with information on goods prior to
import to or export from the European Union (Pre Arrival / Pre Departure Declarations).
This will enable customs authorities to carry out better risk analysis, e.g. before goods
arrive in the customs territory, and to focus on high risk cargo due to the availability of
risk-information at an early stage. It will also allow quicker processing and release upon
arrival, resulting in a benefit for traders

Regulation (EC) No 648/2005 of the European Parliament and of the Council of 13 April 2005
amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code,
OJ L 117 of 04/05/05
Regulation (EC) No. 1875/06 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of
Council Regulation (EEC) No 2913/92 establishing the Community Customs Code

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Reliable and compliant traders will benefit from simplifications in the customs
procedures and/or from facilitation with regard to customs controls relating to safety
and security under the Authorised Economic Operator (AEO) Certification scheme. The
AEO concept should ensure a safer and more secure end-to-end supply chain. Being
recognised as an AEO will constitute an added value for the operator, as it
demonstrates compliance with solid security criteria and controls. This will provide a
competitive advantage to participating companies.

By introducing a new risk management framework the aforementioned "security


amendments" provide a better risk information sharing mechanism and set uniform
Community risk-selection criteria for controls, supported by computerised systems. Such an
efficient risk assessment is vital to detect illegal goods crossing the EU borders such as
drugs, explosive materials or nuclear and chemical weapons.
These three approaches are interlinked and will provide enhanced security through a
combination of measures. The provisions were planned to enter into force as of 2007 and will
be finalised by July 2009, although this deadline might be extended since not all member
states are able to implement the paperless customs process until then.
The European Community is expecting more security and more facilitation from these rules
as, for example, the use of advance electronic information and electronic systems for risk
analysis will enable customs to identify high-risk cargo bound for Europe at an early stage in
the logistical process. With the new security initiative, Customs will be enabled to carry out
more targeted controls on high risk shipments by means of automated systems, as well as
new technologies.
All these enhanced security measures have to be seen against the international background,
as there are mainly ISPS (refer to section 2.1.2) as well as the WCO Framework of
Standards (2.2.1)

3.2

Legal Aspects

This sub-chapter summarises the unilateral requirements of the United States, discusses
unilateral vs. multilateral approaches and outlines some key problems regarding 100%
scanning in respect to legal aspects.

3.2.1

Unilateral Requirements by 9/11 Act

The legal basis for the so-called 100% scanning requirement reads as follows:
The 9/11 Recommendations Act establishes the following under its section 1701 regarding
container scanning and seals:

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General Rule A container that was loaded on a vessel in a foreign port shall not enter the
United States (either directly or via a foreign port), unless the container was scanned by nonintrusive imaging equipment and radiation detection equipment at a foreign port before it was
loaded on a vessel.
Timeline - This must be implemented by July 1, 2012, unless a port meets two of several
conditions for extension.
Extension Conditions:
(A)

Systems to scan containers are not available for purchase and installation.

(B)

Systems to scan containers do not have a sufficiently low false alarm rate for use in the
supply chain.

(C)

Systems to scan containers cannot be purchased, deployed or operated at ports


overseas, including, if applicable, because a port does not have the physical
characteristics to install such a system.

(D)

Systems to scan containers cannot be integrated, as necessary, with existing systems.

(E)

Use of systems that are available to scan containers will significantly impact trade
capacity and the flow of cargo.

(F)

Systems to scan containers do not adequately provide an automated notification of


questionable or high-risk cargo as a trigger for further inspection by appropriately
trained personnel.

The 9/11 Act provides the Secretary of DHS with the authority to extend the 2012 deadline in
two year increments provided two of the six statutory conditions exist. There is no limit to the
number of extensions that can be granted.

3.2.2

Unilateral versus multilateral3

The main advantage of the unilateral approach lies in the fact that the state has total control
over the security standards it considers necessary to protect its national security and can
formulate its strategy accordingly.
National security measures are invariably mandatory in nature, backed by primary legislation
and enforced by trade measures. Recent examples of security measures in the United States
include the SAFE Port Act 2006 and H.R. 1 Implementing the Recommendations of the 9/11
Commission.

Refer to Christopher Dallimore: Securing the Supply Chain: Does the Container Security Initiative Comply with WTO
Law? - Inaugural-Dissertation, Mnster 2008 pp. 13 - 23

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However, it is important that such legislation is transparent, reflects international standards


and allows sufficient flexibility. At the same time the US - as prominent global player - is in a
position to enforce its unilateral customs controls through effective sanctions. Through the
CSI, CBP seeks co-operation from strategically important states and uses its trading power
over those states in order to conclude security agreements. In fact, Section 1701 of the Act
Implementing the Recommendations of the 9/11 Commission 2007 (amending Section 232
of the SAFE Port Act 2006) goes even further and effectively makes the very existence of
trade relations, (as far as container transport is concerned), with the United States
dependent on the implementation of U.S. security standards (from 2012 earliest).
It is important to note that UN Resolution 1456 obliges states to respect their international
obligations when implementing security measures. Another significant disadvantage of the
unilateral approach is that the implementing state has no way of knowing for certain if its
measures are effective in preventing the perceived threat of terrorism.
Multilateral measures are developed by international organisations, which view security as a
global public good and aim to improve the security of all their members. Their main aim is to
create uniform, albeit voluntary standards, which can be adopted by all members taking
account of their economic development. In particular, a body such as the World Customs
Organisation can ensure that countries - even if they are less developed and short of
resources - are not excluded from security standards by coupling their implementation with
necessary capacity building. International organisations also formulate measures within the
framework of the treaty obligations binding their members as well as international legal
principles. As a result, multilateral security measures can (in theory at least), lead to a more
consistent security regime than a patchwork of bilateral agreements with selected trading
partners used to implement unilateral security measures (such as the CSI or 100%
scanning).

3.2.3

Implementation Problems

These requirements to be implemented in all international ports, which are willing to continue
maritime trade with the US are causing not only technical, logistical or economic impacts, but
they are affecting the sovereignty of the countries trading with the US.
The US government is aware of this fact; e.g. the US cannot compel foreign governments to
use specific equipment for the 100% scanning requirement. The United States Government
Accountability Office (GAO) identified challenges in nine areas that are related to the
continuation of the SFI pilot programme and the longer-term 100% scanning requirement. 4 At

Based on: United States Government Accountability Office: SUPPLY CHAIN SECURITY - Challenges to Scanning 100
Percent of U.S.-Bound Cargo Containers; Statement of Stephen L. Caldwell, Director, Homeland Security and Justice;
Testimony Before the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and
Security, Committee on Commerce, Science, and Transportation, U.S. Senate; GAO-08-533T

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least two of them are more or less directly linked with the legal framework (including the
national budget / public spending regulations) of the countries involved.

3.2.4

Use and ownership of data/ data processing and data transfer

The legislation that mandated the SFI pilot programme and 100% scanning does not specify
who will have the authority or responsibility to collect, maintain, disseminate, view, or analyse
scan data collected on cargo containers bound for the United States. While the SAFE Port
Act specifies that SFI pilot programme scan data should be available for review by U.S.
government officials, neither it nor the 9/11 Act establishes who is to be responsible for
managing the data collected at foreign seaports. Other unresolved questions include
ownership of data, how proprietary information is to be treated, and how privacy concerns
are to be addressed. For example, officials from UK Customs stated that UK privacy
legislation barred sharing information on cargo containers with CBP unless a specific risk
was associated with the containers. To comply with UK laws, while still allowing CBP to
obtain scan data on container cargo, UK Customs and CBP negotiated working practices to
allow CBP to use its own handheld radiation scanning devices to determine whether cargo
containers emitted radiation, but this was only for the purposes of the SFI pilot programme.
According to the European Commission, for 100% scanning to go forward, the transfer of
sensitive information would have to take place systematically, which would only be possible if
a new international agreement between the United States and the European Union (EU) was
enacted. In the absence of agreement with the host government at more than 700 seaports
that ship cargo to the United States, access to data on the results of container scans could
be difficult to obtain.

3.2.5

Resource Responsibilities

European government officials expressed concerns regarding the cost of equipment to meet
the 100% scanning requirement, as well as the cost of additional personnel necessary to
operate the new scanning equipment, view and transmit the images to the United States, and
resolve false alarms.
Though CBP and DOE have provided the bulk of equipment and other infrastructure
necessary to implement the SFI pilot programme, they have also benefited from host nation
officials and port operators willing to provide, to varying degrees, the resources associated
with additional staffing, alarm response protocols, construction, and other infrastructure
upgrades.
However, according to CBP, there is no assurance that this kind of mutual support is either
sustainable in the long term or exists in all countries, or at all seaports, that export goods to
the United States.

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From the point of view of the US trade partners, it is not clear who has - in case of
implementing 100% scanning in their harbours - the inspection authority. In other words:
Who takes responsibility for, stopping a suspicious container before loading the ship bound
for US? Who would be liable for the economic consequences, if the container was stopped
wrongly? , i.e. finally the container is not a risk, or alternatively a true risk container reached
the US?

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Inspection Equipment and Procedures


Type of Process and Method

This is an aspect that needs to be clarified: attention is again drawn to the distinction
between screening (radiation detection) and scanning (imaging.)
It is necessary to consider two main components, relevant to the study, which will be
necessary to implement 100% scanning of US bound containers. These are as follows:
First, the type of activity or process, of which there are two:

Radiation detection: to measure the presence of radioactive materials including primary


and secondary screening steps

Scanning: to build up an image of the contents of the container

Second, the method used to deploy each process, including for scanning equipment such
installations as the following:

Drive through portals

Internal (facility) installations (conveyors)

Gantry systems

Mobile systems
and for radiation detection equipment the following types:

Drive-through portals

Mobile equipment

Spreader mounted

Straddle carrier mounted

Hand held

While both radiation detection and imaging are considered for 100% scanning of export
containers the emphasis is on imaging, since there are far greater implications surrounding
its implementation in almost all respects, including the impact on customs, port operation and
financial aspects.

4.2
Radiation Detection
4.2.1
Detection Process
This is a passive, non-intrusive process that screens (in this context) containers for the
presence of nuclear and radiological materials. The process is capable of detecting various
types of radiation emanating from special nuclear materials, from natural sources and from
isotopes commonly found in medicine and industry.
Detectors do not emit X-rays or any other radiation. They read energy emitted by radioactive
sources that happen to pass near them. They are therefore completely safe and they are
used to ensure that radioactive materials are not improperly moved.

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In the port context the screening typically comprises two components:

Primary screening: Applied to all traffic required to be screened

Secondary screening: Carried out only on those containers, which trigger an alarm,
typically 1% or 2% of the total number of containers passing through the primary
detectors.

By way of example, all containers entering a port may pass through a pair of radiation
detector portals. The majority of these containers clear the portals - the primary detectors without incident. In a minority of cases, they trigger the alarm. Such containers are then
diverted into a designated holding area for further - secondary - inspection.
An alert by a primary monitor indicates that a source of radiation has been detected. An alert
by itself does not necessarily mean that a nuclear weapon or harmful radiation has been
detected. There are many legitimate, innocent, sources of radiation, including naturally
occurring radiation and various medical and industrial isotopes that pose little or no threat.
The primary detector is designed to screen the container for the sources of gamma
radiation/free neutrons. The presence of the latter - at between 20 and 30 counts per second
- can only come from fissile material.
At the primary stage the application of norm filtering, which is the application of sophisticated
software, can cut down the incidence of innocent alarms that are presented to the operator.
The container may trigger an alarm, but the norm filtering then kicks-in and in up to 85% of
cases identify the source as benign. These cases are then not presented to the operator and
the cargo passes straight through. This norm filtering cannot be set to 100% because in
some cases a high gamma reading may look benign, but may be shielding something
sinister.
The purpose of secondary inspection is to establish what isotopes have been detected in
order to decide whether they are innocent or sinister.
For example, radioactive isotopes of potassium occur naturally in some vegetables and are
innocent. On the other hand, the detection of the presence of an isotope of cobalt could be
dangerous.
In order to carry out the secondary inspection, equipment employing advanced spectroscopy
is employed. This provides a spectrum that illustrates the signature of the isotopes present
and can be used to discriminate between them.
The equipment may be a fixed installation or mobile, e.g. handheld.
Following this analysis, a decision can then be taken as to the contents of the container.

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There are two possibilities:

The contents can be identified, are benign and the container is cleared

The contents cannot be explained and may appear sinister. In practice, this occurs only
in a tiny minority of cases. However, in such instances, a specialist has to be called in
to carry out further investigations. Emergency services may have to be notified and the
port closed. Under no circumstances must the container be opened at this stage.

In practice, the interpretation of the spectra produced by ASP equipment may be complicated
by the fact that one signature overlaps or shields another. It therefore becomes very difficult
to discriminate between them, no decision as to the source of the radiation can be taken and
specialist expertise is required.
A typical primary installation comprises both a PVT and a He-3 detector, while NaI (Sodium
Iodide) detectors are commonly used in ASP equipment for secondary inspection.

4.2.2

Types of Radiation Detection Equipment/Installation

The following are the main types of equipment/installation employed for radiation detection
applications:

Drive through portals


Mobile equipment

Spreader mounted

Straddle carrier mounted

Hand held

Of the above types, all are well established with the exception of the spreader and straddle
carrier mounted types, which are still at the testing stage. However, to provide a
comprehensive overview, they are included in the analysis, although port terminal operators
are of the opinion, that this equipment is not able to resist the physical constraints
experienced during container handling. In general, attitudes towards these types were
negative. It was considered that the working conditions would be too rough for the equipment
to last for very long. Obviously there is a difference between laboratory conditions and the
port.
A He-3 scintillator comprises, inter alia, a bulb-like device with a long filament. It requires
careful handling and is vulnerable to banging and shaking, which would be bound to occur on
this type of equipment. Also, the point was made as to what would happen if there was an
alarm. It would cause more disruption to yard/terminal operations than if this occurred at the
point of entry/departure of the terminal.

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In summary, nobody thought that this type of equipment has much future potential - and is
anyway concerned with radiation detection - rather than scanning - for which application
established equipment performs quite well.
Hand held equipment is used, but is not always very satisfactory in use. Although it has
some ASP capability, it can be very slow sometimes taking up to 20 minutes to produce an
image, which may then be difficult to interpret. They are probably a necessary part of an
overall comprehensive installation, but only for occasional use.

4.2.3

Application of Radiation Detection

Radiation detection is relatively well established and is already installed in some ports where
it is carried out for both export and import, but with the emphasis very much on the latter. In
Antwerp all containers pass though detector portals at the in and out gates. In the UK import
cargo is screened in selected ports under the cyclamen programme.
The emphasis of activity is on cargo arriving and departing by road, though rail traffic is also
covered. However, relatively little - if any - transhipment cargo is screened.
It should also be noted that the above sections describe scanning equipment for road traffic
applications, but similar arguments in terms of technology and type would apply to rail
scanning equipment.
Countries tend to be concerned with national security and are therefore more interested in
what is coming into their countries (not only radioactive materials, but also other illegal
imports such as smuggled goods) than what is leaving. This exactly mirrors the concern of
the USA, except that European countries are not proposing to export their borders.
National approaches start with a concern for national security - that is the basis of national
inspection policies. If that fits in with the requirements of the USA then that is a bonus.
Radiation detection is therefore not seen as a measure being related only to US cargo, but to
all containers.
In principle, it is clear that radiation poses in nothing like the problem of scanning. It is to an
increasing extent a common tool and people (customs, port operators, truck drivers,
forwarders etc.) are familiar with it. Certainly it is much cheaper to implement than 100%
scanning, though its implementation would still impose significant human resource demands
on national customs authorities.
However, in some ports, it could cause operational difficulties - particularly where existing
installations may be set up only to screen import cargo.

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4.3
4.3.1

page 24

Scanning
Scanning Process and Implications

Beside the actual physical inspection of containers, there is also the possibility to build up an
image or picture of the contents non-intrusively. This image can then be analysed and
decisions made regarding the contents without opening the container.
There are two components to this process:

Scanning to obtain an image

Analysis and interpretation of the resulting image

The above distinction is important, particularly in the context of the study. While the scanning
obviously takes place in the port, the analysis and interpretation can take place in real time
as the images appear, or it can be carried out remotely, and the results fed back at some
later point in time. Following this, the appropriate action would have to be taken. It is also the
case that the interpretation of images tends to take longer than the imaging itself and
requires skilled analysts.
The requirements of the 100% scanning law are not clear on this point. The analysis and
interpretation could:

Take place in real time at the point of scanning as the images are generated. In this
case, the work would be carried out by national customs authorities who would have to
have the authority to grant clearance on behalf of the US customs This would require
bilateral agreements that are not in place at present

Be carried out remotely in the USA. This would involve the transmission of all images
across the Atlantic for scrutiny by US customs personnel, who would then give
clearance, or not as the case may be. Apart from the IT challenges of handling large
quantities of data, the results would take some time to become available. They would
then have to be sent back to the terminal concerned and if necessary containers would
have to be removed from the yard prior to shipment for further inspection.

Clearly there are substantial implications for both human resources for national customs and
also for terminal operations, depending on which of the above alternatives is adopted.

4.3.2
Scanning Technology available
Scanning can be carried out by employing one of two types of electromagnetic radiation:

X-rays, with varying degrees of energy

Gamma rays, similar to X-rays but with a shorter wavelength.

Both of the above have their place in scanning applications and have their attendant
advantages and disadvantages:

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X-rays with a longer wavelength and with higher energy have better penetration than
gamma rays.

Gamma rays have a much smaller radiation footprint, require less shielding and can
therefore be more suitable for use in crowded port areas.

Both of the above are, in principle, similar in terms of the physics involved. There is,
however, one major difference: the radiation source:

Gamma radiation results from the decay of atomic nuclei and is a natural process. This
radiation cannot be switched off and radiation shielding is required even when the
system is not in use. Normally for the gamma radiation Iridium 192, Caesium 137 or
Cobalt 60 are used. It has a maximum steel penetration of 190 mm and therefore is
more suitable for lightly loaded containers.

X-radiation results from high energetic processes with electrons. It commonly results
from two different processes: from the acceleration of charged particles and their
thermalisation or from high energetic transitions in the atomic shells of atoms or
molecules. For containers, which are loaded with high density material, X-ray scanners
are more suitable.

For X-rays two main technologies are in use:

Transmission, where a beam of X-rays is projected through the container from one side
and an image picked up on the other side.

Backscatter, where a beam of X-rays is directed at the container and the reflected
image is picked up on the same side.

Both again have their advantages and disadvantages:

Transmission can employ higher energies and greater penetration and copes better
with the detection of elements with atomic numbers higher than 80, e.g. heavy metals.

Backscatter takes place on only one side of the container and is therefore suitable for
mobile applications and use in the container yard. It is also particularly effective and
produces images with good resolution for elements with lower atomic numbers.

The choice of all of the above can depend on many factors, including the particular
application and the location.
There has been a tendency recently for fixed X-ray installations to employ a combination of
both transmission and backscatter, as an optimum solution.
However, this becomes very expensive and was generally considered not to be necessary
for the purposes of 100% scanning.

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Types of Scanning Equipment/Installation

The following are the main types of equipment/installation in common use:

Drive through portals

Internal (facility) installations (conveyors)


Gantry systems

Mobile systems

4.3.4

Principal Findings

Scanners are in use in some ports, not to the extent that radiation detection equipment is
found. Where they are installed they carry out scans as necessary, but nowhere to the extent
of 100%. In practice, only a minority of import containers are scanned mainly for detection of
contraband. Furthermore, the above sections describe scanning equipment for road traffic
applications, but similar arguments in terms of technology and type would apply to rail
scanning equipment.
Some respondents were somewhat dismissive of gamma ray equipment because of its lower
penetration (see section 3.3.5.) However, such systems have a significant share of the
market. One major scanning equipment supplier said that of 400 systems that the company
has installed worldwide, about half are gamma ray systems. They said that the radiation and
health and safety concerns surrounding X-rays can sometimes sway an argument in favour
of gamma ray systems.
In the course of the work there were relatively few instances of the employment of
backscatter equipment. However, there was some feeling that it is making some progress in
the market, both as stand-alone units (because it can be mobile) and in combination with
transmission units.
Where they are in use, port personnel were generally conversant with the different
technologies, but did not know much about their relative merits and demerits. There was
much concern over the possible implementation of 100% scanning and a view that the
present implementation date of 2012 will not be possible. Very few if any have yet taken
any positive steps to plan and acquire scanning equipment specifically for the
implementation of the 100% law. Many ports are adopting a, wait and see attitude and are
looking to the Commission to provide a lead.
It is clear that scanning is a very much more challenging issue for ports than radiation
detection it is a problem of a different order of magnitude.

4.3.5

Scanning Equipment Comparison

The various different types of scanning systems described above have their relative
advantages and disadvantages, e.g. some of them are re-locatable while others have a high

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throughput. The specific application and its location are important considerations in the
selection of the most appropriate system.
There are of course also cost implications with a wide range of prices depending on the
precise specification.
Nevertheless, some types of equipment will not be the best choice to scan huge volumes of
containers within very short timeframes, in addition to delivering high quality scans.
Table 3.1 below summarises some typical scanning equipment in terms of the type of
installation, the technology employed, depth of penetration, capacity and manning
requirements.
Table 3.4-1: Container Scanning Equipment Overview
Type of Equipment Type of Radiation Source
Mobile Scanner
X-Ray 3-4 MV
X-Ray 4.5 MV
X-Ray 6 MV
Gamma Ray
Gantry Scanner
X-Ray 4.5 MV
X-Ray 6 MV
Gamma Ray

Penetration Depth
280 mm
300 mm
375 mm
190 mm
300 mm
330 - 400 mm
120 - 190 mm

Capacity [per hour]


25 trucks
60 - 80 trucks
120 trucks
60 - 180 trucks
40 - 50 trucks
20 - 50 trucks
60 trucks

Portal Scanner

X-Ray 2.5 MV

220 mm

200 - 400 trucks

Facility Scanner

X-Ray 6 MV
Gamma Ray
X-Ray 3-4 MV
X-Ray 6 MV
X-Ray 9 MV

400 mm
120 - 190 mm
350 mm
410 mm
425 mm

180 trucks
60 - 180 trucks
25 - 40 trucks
25 - 40 trucks
25 - 40 trucks

Manning [minimum]
2
2
2
2
1
2-4
2
depending on required
analysis time
depending on required
analysis time
1
2
3
3

Source: HPC, 2009

Devices, which are equipped with gamma ray scanners, have problems to deliver high
quality images with a steel penetration of more than 190 mm. Some respondents said that
this was generally insufficient for container scanning applications. They said that portal or
mobile scanners equipped with X-ray systems would be able to handle large container
volumes without major delays within the container flow. However, the relatively high
incidence of gamma systems discussed above would appear to refute this claim.
To be able to handle the expected volumes of containers in the 100% scanning context, to
minimise additional handling and interruption of the cargo flow, equipment must be capable
of processing at least 25 trucks per hour. In addition, scanners must allow trucks to pass
straight through without stopping in order to avoid delays and extra handling within the
delivery process.
The best equipment alternative within a specific terminal will be based on the container
volumes to the US, the operational mode e.g. RTG or straddle carrier and the transport mode
split e.g. transhipment, barge and feeder services and rail services. More detailed

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information about the different terminal operation systems and transport modes is given in
chapter 5.
The acquisition cost of installations varies very widely. However, guide prices for the
purchase of the following types of unit, including transmission X-ray radiation sources, high
steel penetration depth and an OCR system to be able to link the scan images to a real
container unit are:

Mobile unit: 2,400,000

Drive through portal: 3,200,000

Internal (facility) installations (conveyors): 4,500,000

Detailed information concerning manning and infrastructure costs were not available
because this is highly dependent on factors such as:

local laws and regulations referring to exclusive zones around the scanners

health and safety regulations

container volumes to the US

port operating hours

arrangements for the analysis and interpretation of the images

location of the installation within the terminal.

All the above questions must be clarified country-by-country and terminal-by-terminal in order
to provide firm cost estimates for any specific installation.
Finally, scanning equipment can be supplied combined with radiation detection devices. This
reduces the required land plot for the scan and detection zone. However, this has not to date
been significant because of the very different perceived requirements for each activity and
the fact that - to date at least - they take place in different locations and operationally are not
closely related.

4.4
4.4.1

Other Issues
Performance

In general, the performance of both detection and scanning equipment was considered to be
acceptable and was normally up to expectations. There was, however, some feeling that it is
not always equal to the rigours of the port working environment and that manufacturers
should take more account of the difference between the laboratory and the working
environment.
However, some problems were reported. Specific comments made included the following:

performance is adversely affected by high humidity

rainy conditions cause problems

the scanner cannot operate in strong winds

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equipment takes a long time to warm up: normally between 15 and 40 minutes, but up
to two hours if it has not been used for two or more days

One port said that they have experienced a lot of downtime, but due to excellent service the
failures are repaired within a short time period. Another port mentioned that because of the
susceptibility of the equipment to adverse or extreme climatic conditions, it is better if they
are housed indoors.
Even when equipment is working normally there are sometimes difficulties in the
interpretation of the images for both radiation detection equipment and scanners, but this
may be due to lack of operator experience. For the former, the use of hand held equipment
for secondary inspection can be difficult: it is very slow and does not always give good
results, even after periods of up to 20 minutes.

4.4.2

Standards

There are no international standards for radiation detection and/or scanning equipment
relating to build or manufacture. Most technical specifications are based on the clients
requirements and - consequently - vary considerably.
However, there are performance standards, e.g. ANSI 42-38, defining spectroscopic
requirements for vehicle monitoring at ports (also related to an IAEA specification.) and ANSI
42-35, specifying gross counting requirements for vehicle monitoring at ports. In addition,
equipment must meet the appropriate health and safety standards including achievement of
EC marking approval with the relevant product tests, type examination etc. to meet all EC
marking requirements. However, there is a specific need to have international standards for
equipment and execution of inspection processes.

4.4.3

Compatibility of Radiation Detection and Scanning Equipment

At the moment, there are no problems arising with the compatibility of the equipment used for
radiation detection and scanning, as the two processes are different in various ways:

the technology and physical principles are different

they take place at different locations in the port, with the emphasis of radiation
detection on import cargo

mostly different makes of equipment are involved


interpretation and clearance are different processes

In summary, they are separate activities and there is not necessarily a close relationship
between the two. However the following points should also be noted:

at the moment there is a higher incidence of detection than scanning

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the situation could change in the context of 100% scanning, which could bring about a
closer integration of the two activities

The relationship between ports/terminal operators and customs (and customs and national
governments) could be more difficult. At the moment there IS some confusion and
uncertainty between the parties involved in the context of 100% scanning in terms of the
following:

what would be their respective roles?

who would carry out which activity?

who would provide/pay for the necessary land, e.g. for a secondary exclusion zone?

who would provide/ pay for the necessary infrastructure?

who would have ultimate responsibility?

who would be financially liable?

There was also some discussion among customs as to whether funding would be by national
governments or would be expected to come out of customs budgets.
The above issues would have to be clarified before the implementation of 100% scanning.
The relationship between port authorities has not always been easy in terms of the provision
of land and facilities and who should pay for them. There is the principle of TPF (trader
provides free). Following the advent of the single European market there was some
argument that TPF constituted a restraint to trade and was not legal. This caused
considerable argument.
Port authorities and customs have different points of view. In an ideal world the port does not
want any vehicles to be stopped, whereas the customs want to apprehend all illegal traffic,
which will involve stopping and inspection. Consequently, there may be agreements
between port authorities as to the incidence of vehicles that are stopped for any reason. The
port then knows what percentage may be stopped and makes operational allowances for
this. So if, for example, there is a high number of alarms on the radiation detector which turn
out to be innocent, part of the unofficial allowance is taken up. The customs do not like this,
since it will lower the level of other inspections available to them.
It is also the case that the overall authority of customs authorities in numerous countries has
diminished over the last 20 years.
There is a significant variation between customs and port authorities in different EU countries
and it is therefore sometimes difficult to generalise.
There is no apparent problem with nuclear experts, who are normally externally based and
called in only when, for example, a secondary inspection presents a problem that cannot be
solved.

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4.4.4

page 31

Developments

The point was made by numerous respondents that the basic technology for scanning
equipment has been around for a long time. The principles of X-ray scanning - both
transmission and backscatter - as well as gamma rays, are well established. There has been
some refinement and a move towards higher energy X-rays, but essentially the operating
principles have remained the same.
As far as radiation detection is concerned, the development of germanium detectors has
been a recent development.
However, it has to be cooled to low
temperatures (and is expensive) and some said that the images it produces are difficult to
interpret. It was said that it can be useful if there are a number of different point sources in
one container. To some extent it was said to be a specification written by a scientist and
that it adds to costs without providing commensurate benefits.
The use of HE-3 detectors is becoming more problematic as the price of the gas has recently
increased significantly (supplies come from nuclear establishments in the USA and Russia.)
As a result, there had been a move towards to greater use of Lithium-6 scintillators.
There has been a recent trend towards equipment that combines both radiation detection
and scanning in the same installation. So far, this has not been seen as a development of
great significance as the attitudes towards the two processes are rather different. However,
this situation could change if it becomes evident that 100% scanning will definitely be
implemented.
A new approach in identifying threats such as explosives, fissile materials, toxic materials
and weapons of mass destruction, is the design and development of Nuclear Resonance
Fluorescence (NRF) imaging systems for non-intrusive cargo inspection. NRF will be able to
inspect a region space without intrusion and measure the isotopic content of the material in
that place for any element with an atomic number greater than that of helium. This new
technique would involve the exposure of material to a continuous energy distribution of
photons and detecting the scattered photons for complete isotopic analysis. The photons,
ranging from 2 to 8 MeV, have a high penetrating capability and can identify objects through
thick steel plates or protection shields of lead. The aim is to develop a high throughput
system with automated identification of cargo contents with simple visual displays and alarms
making image analysis superfluous.
At present, NRF equipment for application in the port and transport sector is in the design
and development phase and a date for its market introduction cannot be given. First rough
cost estimates given by the developing company (and probably future system manufacturer)
indicate a range of 9 to 11 million Euro/unit. Costs for operation and maintenance and repair
cannot be specified at present.

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4.4.5

page 32

Analysis and Transmission of Information

As referred to above, the main problem surrounding the scanning issue is not the generation
of the images but their interpretation; in particular, where it will take place and who will carry
it out? These are questions that have yet to be addressed, but which, potentially, have
enormous implications for national customs authorities.
Particular points are:

the analysis of scanned images is potentially slow and time consuming and certainly
takes longer than the generation of the image

interpretation requires highly skilled personnel

such personnel require frequent breaks when looking at screen images and cannot
work continuously for long periods

it is a very labour intensive process wherever it is carried out.

It is clear that human judgement is crucial to the process. Typical cargoes generate typical
images and operators come to recognise them and can process and clear containers quickly
(less than a minute). They become used to the types of cargo that are frequently handled.
The illustration was given that if an operator was moved from the Port of Singapore to work say in Hamburg - it would take some time for him to analyse at the same speed as in the
previous port. He would have become used to the frequently handled types of goods passing
through Singapore and would have developed the skill to recognise the resulting images
instantly. In another port e.g. Hamburg the pattern of freight handled might be very different producing different scanned images - and thus a learning process would be involved.
Overall, if the technology of the hardware has not changed very much in the recent past, it is
in the area of interpretation and the development of the related software that has seen the
emphasis of research activity.
This is true for both radiation detection and scanning.
For radiation detection the software now available for the setting of norms permits the
filtering out of innocent alarms: the portals may detect the presence of radiological material
and an alarm is potentially triggered. However, before this occurs, the software is able to
analyse the nature of the material detected and, in many cases - up to 85% - immediately
recognise it as benign and be certain that nothing sinister is being shielded. In such cases
the alarm is not triggered and the operator is not informed.
There are similar developments in the area of the analysis of ASP spectra following
secondary inspection. The software is able to provide better discrimination particularly where
one spectrum may be overlapping with another and potentially shielding something sinister.
Such abilities facilitate analysis, reduce ambiguity and uncertainty and thus reduce the
requirement for additional investigation.

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In the area of scanning, the emphasis is on the facilitation of the interpretation of the images
again via more sophisticated software.

The aim ideally is to be able to automate interpretation fully, but this is still some way off. As
mentioned above, at the moment there is still no effective substitute for human judgement.
Overall, it is in this area the technology is moving ahead - partly stimulated by the Law - but it
would probably be developing anyway. Some respondents said that if the implementation of
100% scanning is deferred, then there is a chance that the technology will have developed
sufficiently to provide easier solutions to the problem of interpretation.
Where the interpretation of scanned images would take place in the 100% scanning context
remains an unanswered question, as does the ultimate responsibility, or liability.
Their remote interpretation has neither really been seriously considered by the equipment
manufacturers nor by the DHS and US Customs. It is not a usual feature of existing
equipment and installations, the majority of which are geared up for analysis and
interpretation in real time as the images are generated, with the appropriate number of
screens and operators in place necessary to achieve this.
It is clear that the transmission of the volumes of data involved from Europe to the USA
would require increases in bandwidth and other technical features. These are said to present
technological challenges that have not as yet been addressed.
Remote interpretation would also mean that the images would not be interpreted in real time.
This would have major operational implications: the container would pass through the
scanner and would proceed to the yard for storage prior to loading. At some point, a negative
result of the interpretation would have to be fed back to the terminal involved, the container
involved located and removed from the stack for further investigation.
If all interpretation of scanned images of US-bound containers worldwide were to be
undertaken centrally in America, the task would be immense. Based on the total volume of
traffic to the USA it would be necessary to handle over 25,000 images per day, or over 1,000
per hour.

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Container Inspection Procedures

page 34

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Port Analysis

page 42

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7
7.1

page 64

Impact of 100 % scanning on Terminal Operations


Basic Assumptions

In the event that all US-bound containers have to be scanned in the future, various changes
regarding operational procedures will have to be implemented. These changes are described
for each of the common handling systems named in the previous sections of this report. As
already mentioned, each terminal, even with the same technical container handling system,
has its own procedures, dependent on operators philosophies and practices, legal and/or
technical restrictions, modal split, handling volumes etc. Thus the descriptions may only
represent typical or most likely scenarios for the different handling systems. There is no
doubt that some of the procedures may differ at different container terminals.
The same basic assumptions apply for all descriptions regarding changing procedures. They
are listed in the following paragraphs prior to the description of the necessary operational
changes for each technical handling system.
All further descriptions are based on the following assumptions:

All US-bound containers have to be scanned.

It is assumed that scanning of containers and radiation detection will be done


simultaneously.

Export containers to be delivered by truck will be scanned only if they are bound for a
port in the US. This requires the availability of an OCR portal to recognise the container
number and truck licence plate in front of the scanner portal

Container scanning for containers received from the landside (road) will be completed
at the gate.

Transhipment containers will be transported to the scanning facility immediately after


being discharged from the vessel in order not to create any performance obstacles in
the quayside operations.

Also empty containers bound for US Ports have to be scanned. In order to avoid any
manipulation of the container, the empty container must be sealed when it is scanned.

All Export containers to be delivered by rail will be scanned together with the
transhipment container before being transported to the yard.

The containers, once scanned, may be stacked into the container yard independently
from the availability of the scanning result.

The terminal operators will not be responsible for the analysis/evaluation of the images.

Loading a US-bound container on a vessel requires the additional release of the unit by the
authority in charge for the analysis/evaluation of the scanning results.

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7.2

page 65

Change of Procedures in a Straddle Carrier operated Terminal

For transhipment containers, the straddle carrier could transport them directly from the
quayside to a trailer parking area, load them onto a parked trailer and return to the quayside
in order to receive the next transport order. In this case, beside the additional moves to be
performed by the tractor and trailer, only one additional move 6 for the straddle carrier
(unloading the trailer, transport to the yard and stacking the container to its storage position)
applies. Due to high performance requirements at the quayside, it is unlikely that the same
straddle carrier that has transported the container to the scanner portal will also execute the
transport from the scanner portal to the yard.
This procedure is also not possible if transhipment containers received by a feeder vessel
are not already booked to the final destination but only to the transhipment hub. In this case
the IT system cannot identify US-bound transhipment containers when they are unloaded
from the feeder vessel. Most of the transhipment containers are already booked to its final
destination, but a minority is only booked with the destination of the transhipment hub.
Export containers received by truck have to be scanned as long as they are on the truck that
delivers the container at the terminal in order to avoid additional moves on the terminal. An
effective system requires automatic recognition of container number and truck licence
number prior to the scanning activity, avoiding those containers not bound for US ports and
not requiring scanning. If the control system of the terminal can check the containers port of
destination prior to the scanning activity, then only those trucks can be directed through a
scanner portal, that carry US-bound containers or the scanner can be activated only when
such a truck drives through the portal. If the scanning result is not suspicious, no additional
operational procedures are necessary in terms of additional moves for container handling
equipment.
Export containers bound for the US arriving by rail should be treated similarly to transhipment
containers. This requires only one additional move for the straddle carrier (unloading the
trailer, transport to the yard and stacking the container to its storage position).
Otherwise, a scanning portal has to be mounted over the access track where all arriving
trains have to drive through. According to interviewed experts of the terminals and the port
authorities, the implementation of these scanning devices is very expensive, as it requires
the complete reorganisation of the railway yards. Furthermore, all containers have to be
scanned and images of containers not bound for US ports have to be deleted immediately.
On the other hand, all US-bound containers would have been already scanned upon arrival
at the terminal. The same situation as already stated for export containers arriving by truck

One move is defined as any handling of a container, such as e.g. a shuffle move in order to give access to a container
which stands under another container, a movement between to different locations (including lifting and horizontal
transport) etc. Additional move means any move that has to be performed in addition to the moves that apply anyhow
without scanning.

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would apply here: no additional operational procedures would be necessary in terms of


additional moves for container handling equipment, if the scanning result is not suspicious.
Empty containers arriving by truck or train and which already have a booking reference for a
US Port as a destination will be scanned following similar procedures as full containers and
as already described above. No additional operational procedures are necessary in terms of
additional moves for container handling equipment if the scanning result is not suspicious.
Empty containers that are booked, once they are already on the terminal, have to be
scanned prior to their delivery to the quayside. As the scanning results have to be available
at the latest 24 hours prior to loading the container on the vessel, it is no longer possible to
directly transfer the empty container from the empty container yard handover area to the
quay crane. The container has to be transported from the empty yard to a scanner and then
to a storage area (either again in the empty container yard or in the full container yard most
likely the container will then be stored in the full container yard as it already has a booking
reference).
Furthermore, empty containers that are already scanned have to be sealed immediately after
the scanning inspection in order to avoid any manipulation. Another typical procedure at
some terminals, the recording of the container number only at the moment when the empty
container is loaded on the vessel, is no longer possible. Thus, operational procedures will be
more complicated as the loading sequence of the vessel has already to be considered when
the empty container has passed through the scanner portal and before it is stacked again in
the container yard.
The main conclusions for straddle carrier operated terminals are as follows:

Additional cost applies for the straddle carrier driver and for the tractor/trailer driver
(scanning activity is not included).

Extra space is needed for


o The scanner device and necessary manoeuvring and pre-storage areas for
handling equipment and/or containers
o Equipment parking areas for tractor/trailer units or for a conveyor system that
moves the container through a scanner portal
o The maintenance area for additional kind of equipment and thus for the
storage of additional kinds of spare parts.
The additional space requirements may lead to reduced space for container storage
and thus to a lower handling capacity of the terminal and consequently less profit.

Compared with RTG- or ASC-operated terminals where units are already available for
tractor/trailer units, the straddle carrier needs an additional device, or vehicle, to move
the container through the scanner portal. The straddle carrier itself cannot move the
container through the portal due to its dimensions. Furthermore, the container is
transported between the boogies of the straddle carrier, which does not allow for

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proper scanning of a container that is transported by a Straddle Carrier. This applies for
all containers that are not delivered by external trucks.

An additional kind of equipment on a terminal means the adaptation of new


procedures, training of equipment operators, additional maintenance resources,
provision of additional spare parts, additional training of mechanics, adaptation of and
integration of new equipment types into the IT-system etc., Thus the maximum
operational impact of scanning on technical / operational issues is on a straddle carrier
operated terminal.

Lining-up of containers in front of a scanner as practised today by some terminals,


driving with a mobile scanner over the container row and then moving the container to
the container yard will not meet any performance requirements and will cause
enormous space requirements when 100% scanning applies. This method is only
practicable for scanning small amounts of containers.

The following additional moves for handling equipment apply:

No additional move for export containers as these containers are scanned as long as
they are on the truck that delivers the container to the terminal
At least one extra move for a straddle carrier, plus one extra move with a tractor/trailer
unit for transhipment containers, if the container is scanned on the way between
quayside and container yard, after being discharged from the arriving vessel.
At least one extra move for a straddle carrier, plus one extra move with a tractor/trailer
unit for railway containers, if the container is scanned on the way between the railhead
and the container yard, after being discharged from the arriving train.

In case transhipment or railway containers have to be stacked in the yard before scanning, at
least two additional moves for a straddle carrier (up to 5 extra moves incl. necessary shuffle
moves) plus one extra move with a tractor/trailer unit will apply.

7.3

Change of Procedures on an RTG operated Terminal

Transhipment containers are stacked in the container yard as described under the current
procedures in the foregoing section. In the event that transhipment containers have to be
scanned, they will have to be delivered to a tractor/trailer unit, moved to and through a
scanner and returned to the storage area. This gives rise to the following additional physical
activities:

Allocation of a tractor/trailer unit at the handover position in the container yard,


simultaneous allocation of an RTG at the same place.

Picking the container from the stack by the RTG and loading it on the trailer.

Transport to a scanner portal by the tractor/trailer unit and moving the tractor/trailer unit
with the container through a scanner portal.

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Return to the handover position in the container yard, simultaneous allocation of an


RTG at the same place.

Picking the container from the trailer by the RTG and stacking it to its assigned storage
position.
Alternatively to the procedures described above, the tractor/trailer unit could transport the
container directly from the quayside to a scanner portal, drive through the scanner portal and
transport the container to the container yard to its assigned storage area, where it is then
picked by the RTG and stacked in the container yard. However, due to high performance
requirements at the quayside, most of the operators reject this alternative, as it reduces the
quayside performance due to its longer travel distance and time consumption by the
tractor/trailer unit, even if it saves extra travel for the tractor/trailer units and extra moves for
the RTGs.
For export containers, arriving both by truck and rail, the same applies as already described
for the straddle carrier variant.
Empty containers arriving by truck or train and which already have a booking reference for a
US port as destination will be scanned following similar procedures as for full containers and
as already described above. No additional operational procedures will be necessary in terms
of additional moves for container handling equipment as far if the scanning result is not
suspicious. For empty containers that are booked, once the container is already on the
terminal the same applies as has already been explained for the straddle carrier system.
The main conclusions for RTG-operated terminals:

Additional cost applies for the RTG driver and for the tractor/trailer driver (scanning
activity is not included).

Additional space is needed for:


o The scanner device and necessary manoeuvring and pre-storage areas for
handling equipment and/or containers
o Equipment parking areas for additional tractor/trailer units if the existing
equipment park cannot provide the additional required transport capacity.
o In the maintenance area for additional equipment and thus for storage of
additional spare parts 7.

The additional space requirements may lead to reduced space for container storage
and thus to a lower handling capacity of the terminal and, consequently, less profit.

The following additional moves apply for handling equipment :

Additional moves for the equipment shorten the maintenance intervals or require additional equipment that has to be
maintained.

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o
o

7.4

page 69

No additional move for the export containers as these containers are scanned
as long as they are on the truck that delivers the container at the terminal
At least one extra move for a tractor/trailer unit for transhipment containers, if
the container is scanned on the way between quayside and container yard
after being discharged from the arriving vessel.
At least one extra move with a tractor/trailer unit for railway containers, if the
container is scanned on the way between the railhead and the container yard
after being discharged from the arriving train.
In case transhipment or railway containers have to be stacked in the yard
before scanning, at least two additional moves for an RTG (up to 6 extra
moves incl. necessary shuffle moves) plus one extra move with a tractor/trailer
unit apply.

Change of Procedures in a Terminal operated by Automated Stacking


Cranes

Transhipment containers are stacked in the container yard as described under the current
procedures in the foregoing section. In the event that transhipment containers have to be
scanned, they have to be delivered at the landside, moved to and through a scanner and
returned to the storage area. This gives rise to the following additional physical activities:

Allocation of a trailer unit at the landside handover position in the container yard.

Picking the container from the stack by the ASC, transfer to the handover area and
loading it on the trailer.

Allocation of a Terminal tractor, picking up the trailer and transport to a scanner portal
by the tractor/trailer unit and moving the tractor/trailer unit with the container through a
scanner portal.

Return of the tractor/trailer unit to the landside handover position in the container yard,
simultaneous allocation of an ASC at the same place.

Picking the container from the trailer by the ASC, transfer to the assigned storage
location and stacking the container to its storage position.
Alternatively to the procedures described above, the US-bound transhipment containers
could be scanned on their way from the quayside to the container yard. A scanner portal
could be mounted close to the quayside and the AGVs transporting US-bound containers
could be sent through the portal by rule. Advantages are:

No extra movement nor transport are necessary

No additional drivers are necessary

Extra time requirements are reduced to the travel time for the deviation of the AGV (from
quayside via scanner portal to the container yard instead of the direct way from the quayside
to the container yard).

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On the other hand, this alternative has some disadvantages and is not feasible in peak
situations when almost all available equipment is in use - the deviation extends the travel
distance of the AGVs and thus reduces the quayside performance as it may induce
unacceptable waiting times for the quay cranes. Further waiting times and performance
reduction may result from additional traffic in some areas if a high number of AGVs have to
travel to the scanning portal first. Another problem is the necessary maintenance of the
scanner portal. When maintenance personnel have to cross through automatic operation
areas activity in these areas has to be interrupted for the time that the maintenance staff
needs to reach the portal. Thus, this alternative is very unlikely.
For export containers arriving by truck and rail the same applies as already described for the
straddle carrier variant.
Empty containers arriving by truck or train and which already have a booking reference for a
US port as destination will be scanned following similar procedures as full containers and as
already described above and no additional operational procedures are necessary in terms of
additional moves for container handling equipment as long as the scanning result is not
suspicious. For empty containers that are booked, once the container is already on the
terminal the same applies as already explained for the straddle carrier system.
The main conclusions for ASC-operated terminals are almost similar to the conclusions
made for an RTG-operated terminal:

Additional cost applies for the tractor trailer driver (scanning activity is not included) in
case transhipment units cannot be scanned, while they are on an AGV and the
containers have to be stored in the container yard first.

Additional space is needed for:


o The scanner device and necessary manoeuvring and pre-storage areas for
handling equipment and/or containers
o Equipment parking areas for additional tractor/trailer units if the existing
equipment park cannot provide the additional required transport capacity.
o The maintenance area for additional equipment and thus for storage of
additional spare parts.

The additional space requirements may lead to reduced space for container storage
and thus to a lower handling capacity at the terminal and, consequently, less profit.
The following additional moves for handling equipment apply:
o No additional moves for export containers as these containers are scanned as
long as they are on the truck that delivers the container at the terminal
o At least one extra move for a tractor/trailer unit for transhipment containers, if
the container is scanned on the way between quayside and container yard
after being discharged from the arriving vessel.

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At least one extra move with a tractor/trailer unit for railway containers, if the
container is scanned on the way between the railhead and the container yard
after being discharged from the arriving train.
In case transhipment or railway containers have to be stacked in the yard
before scanning, at least two additional moves for an RTG (up to 6 extra
moves incl. necessary shuffle moves) plus one extra move with a tractor/trailer
unit apply.

The main difference to an RTG-operated system is that no labour costs apply for the yard
crane as this equipment is automated.
Terminal operation costs induced by 100% scanning are difficult to generalise independent of
the terminal operation system. Especially when the existing facilities have to be expanded in
terms of land, costs cannot be determined as they may differ in terms of the availability of
land that matches the requirements and the leasing conditions. Thus, the prices may also
differ at different locations. Furthermore, no terminal operator will publish such sensitive
information.
As a rough estimate, the pure equipment cost for one single move can be calculated,
depending on the operational system, with a minimum cost of 20 Euro8 for each move. But
this figure does not reflect the real cost that applies for the terminal operator, as it does not
include any cost for infrastructure, cost for provision, nor the preparation of extra space.
Costs that occur due to the capacity reduction of the terminal are not included.
estimates a total cost of around 160-200 Euro on average for each container that
has to be moved from the stack to a scanner and back to the stack, including shuffle moves,
changes in the yard stacking strategy, gate despatch etc. In
, the additional cost per
container to be scanned was estimated at least around 110 Euro. Other ports have not been
able to assess the additional cost, due to the uncertainties mentioned above.

7.5

Assessment of Additional Terminal Operation required by 100% Scanning


of US-bound Containers

To assess the requirements of 100% scanning of US-bound containers on terminal


operation, the following procedures are assumed:

Containers arriving by feeder vessel, barge or railway are scanned in a central facility
before being stacked in the yard and

This minimum cost applies for one kind of handling equipment for each container handling (shuffle move, transport
between two destinations including vertical lift(s) and horizontal transport. If a container that is already stored in the
container yard of an RTG terminal has to be scanned, at least 3 moves apply: One move (or more, if shuffle moves are
necessary to get access to the container needed) for the RTG that picks the container from the yard and loads it on a
trailer, one move for the tractor/trailer unit that transports the container from the storage area to the scanner and back to
the yard and one move again for the RTG that unloads the container from the trailer and stores it in the yard.

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Containers arriving by truck are scanned at the gate.


There are also developments to scan trains by portal scanners. These possibilities are not
taken into consideration, as in most ports considerable redesign of the railway facilities will
be necessary. This would be very expensive and possibly not feasible.
The minority of the transhipment containers bound for the USA, which are not already
booked to the final destination, but only to the transhipment hub, have to be identified in any
case, whether scanning is required or not.

7.5.1

Additional Equipment for Terminal Operation

The estimates of the necessary terminal operation equipment required for 100% container
scanning are based on the container flows in the three terminal operation systems. The
estimates of the additional equipment are calculated for each of the five port types described
in chapter 5.2. The performance levels heavily depend on local situations and therefore
differ from port to port. In order to get an impression concerning the additional equipment
required, the calculation uses average performance characteristics. It has been assumed
that a tractor/trailer unit performs 12.000 moves per year, a straddle Carrier 50.000 moves
per year and a RMG 70.000 moves per year.
The turnover, in TEU or container per year, the number of US-bound TEU, or container per
year and their respective distribution on the incoming transport mode (truck, railway, barge
and feeder vessel) is determined for the five port types defined in chapter 5.2. This forms the
basis to estimate the additional equipment capacity required for 100% scanning of US-bound
container. In addition, a seasonal peak of 30% of the turnover has been taken into account
when determining the required capacity of the equipment. According to the performance
capacities mentioned above, the following additional equipment will be needed for 100%
scanning. 100% radiation detection requires no additional operation.

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Table 7-1:

page 73

Estimated Terminal Operation Equipment per Port Type required by


100% Scanning of US-bound Containers according to Handling System
Low-tranship- Transhipment Mediterranean
Northwest
North Sea port
ment port
port
port
European port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3,200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47,500

Straddle Carrier
Trailer/Tractor

1
3

1
6

RTG
Trailer/Tractor

1
3

1
6

Straddle Carrier
Trailer/Tractor

1
3

1
6

Handling System
additional Operation Equipment per port
Handling System
additional Operation Equipmentper port
Handling System
additional Operation Equipment per port

3,333,333
2,222,222
100000
66,667
43,333
4,000
19,333
Straddle Carrier
2
3
RTG
1
3
ASC/TTU
2
3

7,142,857
4,761,905
500000
333,333
176,667
40,000
116,667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150,000

5
17

7
26

4
17

5
26

5
17

7
26

* container equals TEU/1.5

7.5.2

Additional Human Resources for Terminal Operation

Human resources from the side of terminal operation have to be provided for movement of
containers as a result of the 100% scanning of US-bound containers. Currently very few
containers are scanned in the ports that have been visited by the Consultants. Scanner
operation is usually performed by customs mostly for import containers, for export containers
partly with assistance of US officials. Additional human resources of the terminal operator
depend on the utilisation of the terminal and its equipment, on handling volumes, peak loads
etc. As a guideline the following figures may serve.
Table 7-2: Human Resources per Unit of Different Handling Systems
Handling System

Annual Moves per Machine

Staff for a 3-shift System per Unit

Trailer Tractor Unit

12,000

4 Tractor Drivers

Straddle Carrier

50,000

4 Straddle Carrier Drivers

RTG

70,000

4 RTG drivers,12 Tractor Drivers

ASC

100,000

12 Tractor Drivers

Source: HPC, May 2009

The human resources required for 100% scanning of US-bound containers are presented in
the following table. In addition to the personnel involved in terminal operation, 30% extra
employees have been added to take into account administrative aspects, sickness leave and
vacation.

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Table 7-3:

page 74

Estimated Human Resources for Terminal Operation by Port Type


required by 100% Scanning of US-bound Containers
Low-tranship- Transhipment Mediterranean
Northwest
North Sea port
ment port
port
port
European port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3,200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47,500

Straddle Carrier
Trailer/Tractor
Administration**
Total

4
12
5
21

4
24
8
36

RTG
Trailer/Tractor
Administration**
Total

4
12
5
21

4
24
8
36

Straddle Carrier
Trailer/Tractor
Administration**
Total

4
12
5
21

4
24
8
36

Handling System
Human Resources per port
Handling System
Human Resources per port
Handling System
Human Resources per port

3,333,333
2,222,222
100000
66,667
43,333
4,000
19,333
Straddle Carrier
8
12
6
26
RTG
4
12
5
21
ASC/TTU
8
12
6
26

7,142,857
4,761,905
500000
333,333
176,667
40,000
116,667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150,000

20
68
26
114

28
104
40
172

16
68
25
109

20
104
37
161

20
68
26
114

28
104
40
172

* container equals TEU/1,5, **additional personnel considering adminstration, sickness leave and vacation

7.6

Costs of additional Terminal Operation required by 100% Scanning of USbound Containers

Costs of additional terminal operation required for 100% scanning of US-bound containers
depend on the technical container handling systems that are implemented at the terminals.
Even at terminals with the same handling system, different approaches may apply for various
reasons such as local regulations and restrictions, health concerns for equipment drivers that
have to drive through scanning portals, IT-environment, pre-announcement of container
information, etc. The cost of changes in the IT-systems, other necessary services (e.g.
disconnecting and connecting reefer containers to be scanned) are different in each port.
However, to get an impression of the impact of additional terminal operations required for
100% scanning of containers, the investment costs and the operation cost per year that are
necessary to perform the additional terminal operation are estimated, based on the required
equipment and human resources.

7.6.1

Additional Investment in Terminal Operation Equipment

In order to perform the additional terminal operation, equipment has to be purchased. Based
on information gained in the port analysis a trailer/tractor unit is assumed to cost 155,000
Euro9, a Van Carrier (VC) 780,000 Euro, a Rubber Tired Gantry Crane (RTG) 1,300,000

Prices include an amount for spare parts

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page 75

Euro. The purchasing price of an Automated Stacking Crane (ASC) is estimated as


2,500,000 Euro.
Further investment might be necessary in the organisational software and in the
reorganisation of the operational procedures. However, these investments, as well as
investments into the road system are very port specific and difficult to estimate. The figures
presented here are rough assumptions in order to take these investments into account.
The investment in equipment, software and reorganisation measures considered necessary
to perform the terminal operation required by 100% scanning and radiation detection is
presented in the following table for the five port types and terminal operation systems.
Table 7-4:

Investment necessary to perform terminal operation required by 100%


scanning and radiation detection of US-bound Containers per Port Type
Low-tranship- Transhipment
ment port
port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47500

Handling System
Investment cost per port in Euro

equipment
software
reorganisation
Total

1,245,000
50,000
50,000
1,345,000

1,710,000
100,000
100,000
1,910,000

equipment
software
reorganisation
Total

1,765,000
50,000
50,000
1,865,000

2,230,000
100,000
100,000
2,430,000

equipment
software
reorganisation
Total

1,245,000
50,000
50,000
1,345,000

1,710,000
100,000
100,000
1,910,000

Handling System
Investment cost per port in Euro
Handling System
Investment cost per port in Euro

Mediterranean
port
3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
Straddle Carrier
2,025,000
100,000
100,000
2,225,000
RTG
1,765,000
100,000
100,000
1,965,000
ASC/TTU
2,025,000
100,000
100,000
2,225,000

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
333,333
176,667
40,000
116667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000

6,535,000
100,000
100,000
6,735,000

9,490,000
100,000
200,000
9,790,000

7,835,000
100,000
100,000
8,035,000

10,530,000
100,000
200,000
10,830,000

6,535,000
100,000
100,000
6,735,000

9,490,000
100,000
200,000
9,790,000

* container equals TEU/1,5

7.6.2

Annual Costs of additional Terminal Operation necessary to scan 100% or


US-bound Containers

The annual costs of additional terminal operation necessary to scan 100% of the US-bound
containers take into account the depreciation of the investment for additional equipment, the
maintenance of this equipment, the additional energy consumption and the cost of the
additional personnel. These costs do not reflect possible productivity decreases because of
traffic or space bottlenecks.
The estimation of annual terminal operation costs is based on experience or stems from the
interviews with experts in the analysed ports. The annual depreciation considers the work life
of the equipment: 7 years for Trailer/Tractor Units, 10 years for Van Carriers and 15 years for
Rubber Tired Gantry Cranes.

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Annual maintenance costs are estimated as percentage shares of the investment cost of the
equipment, e.g. for Van Carriers and Trailer/Tractor units are estimated at 12% of the
investment cost and for Rubber Tired Gantry Cranes, at 8%. Annual energy costs of the
additional equipment range between 60.000 Euro and 85.000 Euro. The average annual
costs of personnel are considered to 50.000 Euro per employee10.
The annual costs of additional terminal operation are calculated for the five port types and
presented in the following table.
Table 7-5:

Annual Cost of additional Terminal Operation induced by 100% Scanning


of US-bound Containers by Port Type in Euro
Low-tranship- Transhipment Mediterranean
Northwest
North Sea port
ment port
port
port
European port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47500

Handling System
annual terminal operation cost necessary to
perform 100% scanningof US-bound
containers per port in Euro

depreciation
maintenance
energy
labour
Total
Euro per container

144,429
149,400
252,000
1,040,000
1,585,829
40

210,857
205,200
432,000
1,820,000
2,668,057
53

depreciation
maintenance
energy
labour
Total
Euro per container

153,095
159,800
264,000
1,040,000
1,616,895
40

219,524
215,600
444,000
1,820,000
2,699,124
54

depreciation
maintenance
energy
labour
Total
Euro per container

144,429
149,400
252,000
1,040,000
1,585,829
40

210,857
205,200
432,000
1,820,000
2,668,057
53

Handling System
annual terminal operation cost necessary to
perform 100% scanningof US-bound
containers per port in Euro
Handling System
annual terminal operation cost necessary to
perform 100% scanningof US-bound
containers per port in Euro

3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
Straddle Carrier
222,429
243,000
324,000
1,300,000
2,089,429
31
RTG
153,095
159,800
264,000
1,040,000
1,616,895
24
ASC/TTU
222,429
243,000
324,000
1,300,000
2,089,429
31

7,142,857
4,761,905
500000
333,333
176,667
40,000
116667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000

766,429
513,171
1,380,000
5,720,000
8,379,600
25

1,121,714
1,138,800
2,064,000
8,580,000
12,904,514
26

723,095
732,200
1,356,000
5,460,000
8,271,295
25

1,009,048
1,003,600
1,980,000
8,060,000
12,052,648
24

766,429
784,200
1,380,000
5,720,000
8,650,629
26

1,121,714
1,138,800
2,064,000
8,580,000
12,904,514
26

* container equals TEU/1,5

The additional terminal operation costs as a result of the 100% scanning request of the ports,
are higher for ports with low US bound container volumes, than those of the port types with
relatively high US-bound container volumes. Due to the high share of containers arriving on
trucks, these costs are relatively low in the Mediterranean ports. All terminal operators
indicated that they are willing to perform the additional terminal operation as long they can
charge the additional costs. Ultimately, this means that the goods transported in a container
to the US will be more expensive.

10

In the analysed ports annual labour cost varies between 30.000 Euro and 75.000 Euro per employee

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


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page 77

Impact of 100 % Scanning and Radiation Detection on Customs


Administration in the EU

The impact of 100% scanning and radiation detection of US-bound containers is estimated
based on the experiences gained during the interviews in the ports, by discussions with
experts in various associations and by discussions with experts in national customs
authorities. Scanning equipment installations are already in operation in various ports.
However, in Europe, scanning is executed mainly for imported containers. German custom
authorities provided information on scanning facilities existing in Hamburg or planned in
Bremerhaven. Further information has been provided by the interviews in the ports and with
the other national custom authorities. Although these facilities are mainly for scanning of
import containers, the specification provide some preliminary ideas.
Table 8-1:

Specification on existing or planned German Facilities to scan Import


Containers
Bremerhaven
Scanning

Kind
Capacity in TEU per day

Waltershof

planned
equipment
fixed with conveyor
200

existing
fixed
234

investment*

13,000,000

24,000,000

space sqm
office space

2,000
50

8,500
450

7
1

5
8

3
37
34
3
72,767

3
39
30
9

time requirements
preparation in minutes per container
scanning in minutes per container
staff requirements
number of shifts
number of employees
scanning and evaluation
administration
Number of hours per year

* investment includes site preparation, infrastructure, building, hard and software

Further kinds of equipment are under development, as shown in sec tion 3 of this report. The
following table presents the different equipment types offered by producers.

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


Final Report

Table 8-2:

page 78

Specification of Scanning and Radiation Detection Equipment presented


by Producers
Scanning

radiation
energy in MV
penetration in mm
Capacity in trucks per hour
investment costs in Mio. Euro
Radiation detection
Capacity in trucks per hour
investment costs in Mio. Euro

Fixed systems
drive through internal with Gantry
portals
conveyor
Systems
x-ray
x-ray
x-ray
2.5 - 6.0
3.0 - 9.0
4.5 - 6.0
220 - 400
350 -425
300 -400
60 - 400
25 - 40
20 -25
2.2 -4.5
2.2 - 4.5
1.7 - 4.0
primary
panel installation
120
0.1 - 0.4

Mobile Systens
x-ray
3.0 - 6.0
280 - 375
20 -25
2.5

secondary
4 panel ASP
20
0,4 - 0,5

It seems to be appropriate to combine the experience gained with the existing scanning
facilities with the potential of the equipment offered in the market. Fixed scanning facilities
and the primary and secondary radiation detection equipment will be taken into account to
highlight the impact of the 100% scanning request. The drive through portal with a capacity
of between 20 and 60 trucks per hour, depending on the volumes to be scanned, is
considered as being appropriate to scan incoming trucks. All containers arriving by rail,
barges or feeder vessels will be scanned by an internal scanning facility with a conveyor.
This equipment is assumed to work with a capacity of 20 containers per hour (80% of
capacity mentioned above).

8.1

Equipment designed for 100% scanning of US-bound Containers

The design of scanning equipment considers the container volumes and the modal split
determined in the five port types. Concerning containers arriving by truck, a drive through
equipment will be used. The capacity will depend on the volumes coming into the port. For
port types with lower volumes, the capacity will be used of up to 60.000 trucks per year (300
days, 10 hours per day). In the ports with higher volumes, the capacity of up to 96.000 trucks
per year (300days, 16 hours per day) has to be used.
The second scanning device, assigned to scan transhipment containers (arriving by rail,
barge or feeder vessel) is proposed to be located at a site central to the terminals. An
internal scanning facility with conveyor belt appears appropriate. The mechanical conveyor
moves the container through the scanning device. This guarantees a continuous container
flow and avoids any health risk for drivers or equipment operators. This device is assumed to
be able to scan 120.000 containers per year (300 days, 20 hours per day). To achieve this
capacity an inherent container flow is a prerequisite.

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Seasonal fluctuations can disturb a continuous flow. Therefore, the capacity of all scanning
facilities is designed to be at least 30% bigger than the volumes to be scanned require.
Furthermore, buffer space is provided in front and behind the scanning facility. The size of
the buffer space depends on the time estimated to evaluate the images. Assuming 2 minutes
for scanning and 6 minutes for image inspection the buffer space should be sufficient for at
least 5 trailer/tractor units. This corresponds with the data gained in the port analysis. For the
five port types the following table presents the required facilities, the necessary capacity and
the capacity utilisation.
Table 8-3:

Scanning Equipment required by 100% Scanning of US-bound


Containers by Port Types
Port type

Annual Throughput
US-bound TEU p.a.
US-bound containers p.a*.

drive through scanning equipment at the


gate per port
internal scanning equipment at central
site per port

TEU
Cont.
TEU
Total
Road
Rail
Transhipment
number
capacity in trucks/year
capacity utilisation in %
Number of scanner
capacity in container per year
capacity utilisation in %

Low-transhipment port

Transhipment
port

Mediterranean
port

2,500,000
1,666,667
60000
40,000
20,000
16,800
3,200
1
60,000
87%
0
0
0%

4,411,765
2,941,176
75000
50,000
1,500
1,000
47,500
0
0
0%
1
96,000
68%

3,333,333
2,222,222
100000
66,667
43,333
4,000
19,333
1
60,000
94%
1
60,000
51%

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
333,333
176,667
40,000
116,667
3
96,000
80%
2
120,000
85%

10,714,286
7,142,857
750000
500,000
265,000
85,000
150,000
4
96,000
90%
3
120,000
85%

* TEU/1,5 equals container

Furthermore, it is assumed that primary radiation detection equipment is allocated at the gate
and in combination with the central scanning unit. Secondary radiation equipment will also be
located together with the central unit.
It is obvious that the request to scan 100% of the US-bound containers in European ports
requires scanning equipment with high capacity, particularly in ports with high US-bound
container turnover.

8.2

Human Resource Requirements for 100% Scanning and Radiation


Detection of US-bound Containers

The estimation of the required personnel for the different port types and volumes is also
based on the results of the discussions with customs authorities in the ports or on a national
level. The assessment is based on the assumption that the customs authorities in the
European ports have the responsibility to interpret scanned images and to release
unsuspicious containers. In case the images are transferred to the US and the image
inspection will be performed by US-authorities, the numbers of interpreters of the European
customs authorities can be reduced to 1 per scanning unit.
For the smaller scanning device the personnel is assumed to be 5, 1 operator, 1 organiser of
the trucks and 3 image interpreters. Concerning the scanning centre, the number of
personnel required is 6, i.e. 2 technical experts as operators, one organiser of the container

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


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page 80

flow and three image interpreters. The scanning personnel are assumed to work in two or
three shifts, 6 days a week depending on the container volume. For administrative activities
(considering also sickness and vacation) the number of employees is increased by 30%. 11
The number of personnel for the operation of the radiation detection equipment, is estimated
at 1 employee per shift and station.
The following table shows Human Resources required to perform 100% scanning and
radiation detection in the five port types.
Table 8-4:

Human Resource Requirements resulting from 100% Scanning and


Radiation Detection of US-bound Containers
Low-tranship- Transhipment
ment port
port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

Human resources per port type for drive


through scanner at the gate

Human Resources per port type for


central internal scanner
Human Resources per port type for
radiation detection

TEU
Cont.
TEU
Total
Road
Rail
Transhipment
operation
image inspection
administration**
Total
operation
image inspection
administration**
Total
primary
secondary
Total

Mediterranean
Northwest
North Sea port
port
European port

2,500,000
1,666,667
60000
40,000
20,000
16,800
3,200
4
6
3
13
0
0
0
0
2
2
4

4,411,765
2,941,176
75000
50,000
1,500
1,000
47,500
0
0
0
0
6
9
5
20
2
2
4

3,333,333
2,222,222
100000
66,667
43,333
4,000
19,333
4
6
3
13
4
6
3
13
4
2
6

7,142,857
4,761,905
500000
333,333
176,667
40,000
116,667
18
27
14
59
12
24
11
47
10
2
12

10,714,286
7,142,857
750000
500,000
265,000
85,000
150,000
24
36
18
78
18
36
16
70
14
2
16

17

24

32

117

164

Human Resources per port type for 100% scanning and radiation
detection
* container equals TEU/1,5, **additional personnel considering adminstration, sickness leave and vacation
***no central internal scanner assigned see table 7-3, ****no drive through scanner assigned see table 7-3

The health impact of scanners operating in the ports to scan import containers is reported to
be far below the limitations of the European nuclear protection. Also, the planned scanning
facility in Bremerhaven is designed in a way to exclude any health risk. The experience
gained in these cases has to be taken into account, when implementing new scanning
facilities. Nevertheless, the personnel involved in the scanning have to be trained in nuclear
protection. At present, any German personnel involved in scanning are trained 10 h per year
in nuclear protection.
In addition, the image interpreters will need training. Experts involved in scanning of import
containers since 2003 consider training on the job as most efficient. The period necessary to
gain sufficient experience is reportedly one year.

11

Figures derived from discussions with national customs authorities

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


Final Report

8.3

page 81

Cost of 100% Scanning and Radiation Detection of Containers bound for


the US

The cost of the required investment will be assessed as well as the operation cost of the
scanning facilities. All costs will be expressed in Euros and reflect actual prices. The costs
indicated here, result from the interviews with port authorities, national custom authorities
and producers.

8.3.1

Investment in equipment necessary for 100% Scanning and Radiation


Detection of Containers bound for the US per Port type

The Investment is calculated based on the assigned equipment in the five port types
considered necessary to scan 100% of the US-bound containers. The investment costs are
assumed to be:

4.500.000 for internal scanning equipment with conveyor,

2,400,000 or 3,000,000 for a drive through portal, depending on the utilisation 12,

85,000 for primary radiation detection equipment, and

350,000 for secondary radiation detection equipment.

The cost of a building of one central facility is estimated to be 2,500,000. Site preparation
and infrastructure works are assumed to cost 2,000,000 for the drive through portal and
3,000.000 for a central facility. Offices for the radiation detection are estimated to cost
70,000.
The investment calculated for the five port types is shown in the following table:
Table 8-5:

Investment Cost for 100% Scanning and Radiation Detection of USBound Containers by Port Type
Low-transhipment port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

Investment cost per port type for 100%


scanning of US-bound container in Euro
Investment cost per port type for 100%
radiation detection of US-bound
containers in Euro

TEU
Cont.
TEU
Total
Road
Rail
Transhipment
equipment
building
infrastructure
Total
primary
secondary
offices
Total

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200
2,400,000
0
2,000,000
4,400,000
85,000
350,000
140,000
575,000

Transhipment Mediterranean
port
port
4,411,765
2,941,176
75000
50,000
1,500
1,000
47500
4,500,000
0
2,000,000
6,500,000
85,000
350,000
140,000
575,000

3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
4,800,000
0
4,000,000
8,800,000
170,000
350,000
210,000
730,000

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
333,333
176,667
40,000
116667
18,000,000
5,000,000
12,000,000
35,000,000
425,000
350,000
420,000
1,195,000

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000
25,500,000
7,500,000
17,000,000
50,000,000
595,000
350,000
560,000
1,505,000

* TEU/1,5 equals container

12

according to the producers prices include transmission X-ray radiation sources, high steel penetration depth and an
OCR see also chapter 3

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


Final Report

8.3.2

page 82

Annual Operation Costs of 100% Scanning and Radiation Detection of USbound Container by Port Type

The annual operation costs of the scanning and radiation detection facilities comprise the
necessary investment in form of depreciation, repair and maintenance, energy consumption
and personnel involved.
The depreciation considers the life span of the equipment, the building and the infrastructure.
The life span of scanning and radiation detection equipment has been taken to be 10 years.
The annual depreciation of this equipment is calculated to be 10% of the initial investment.
The investment of buildings and infrastructure are calculated to be 3.33% depreciation per
year.
The annual cost of repair and maintenance of the scanning and radiation detection
equipment is estimated at 12.5% of the investment in this equipment. Repair and
maintenance of buildings and technical infrastructure are assumed to be 5% of the
investment.
Based on discussions with national customs authorities and producers, the annual costs of
energy are assumed to amount to 175,000 for the drive through portal and 670,000 for the
internal scanning facility, including the conveyor belt. The annual energy costs of the
radiation detection facilities are estimated to amount to some 175,000.
The annual costs of personnel differ between various countries between 30,000 and
75,000. 50,000 per year has been taken as an average cost per employee involved in
scanning and radiation detection.
The estimated operation costs of 100% scanning and radiation detection of US-bound
containers for the five port types are presented in the following table:
Table 8-6:

Annual Scanner Operation Cost for 100% Scanning and Radiation


Detection of US-bound Containers by Port Type
Low-transhipment port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.

annual scanner operation cost to perform


100% scanning of US-bound containers
per port in Euro

annual scanner operation cost to perform


100% scanning and radiation detection of
US-bound containers per port in Euro
* TEU/1,5 equals container

TEU
Cont.
TEU
Total
Road
Rail
Transhipment
depreciation
maintenance
energy
labour
Total
Euro per container
depreciation
maintenance
energy
labour
Total
Euro per container

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200
306,667
400,000
175,000
650,000
1,531,667
38
354,833
461,375
550,000
850,000
2,216,208
55

Transhipment Mediterranean
port
port
4,411,765
2,941,176
75000
50,000
1,500
1,000
47500
516,667
662,500
175,000
975,000
2,329,167
47
564,833
723,875
550,000
1,175,000
3,013,708
60

3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
613,333
800,000
350,000
1,300,000
3,063,333
46
672,333
875,500
900,000
1,600,000
4,047,833
61

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
333,333
176,667
40,000
116667
2,366,667
3,100,000
1,865,000
5,265,000
12,596,667
38
2,458,167
3,217,875
2,940,000
5,865,000
14,481,042
43

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000
3,366,667
4,412,500
2,710,000
7,410,000
17,899,167
36
3,479,833
4,558,625
4,135,000
8,210,000
20,383,458
41

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


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page 83

The annual operation cost for 100% scanning and radiation detection varies in the port types.

Ports with low US-bound container volumes are faced with annual scanning and
radiation detection costs of approximately 2.2 million and Mediterranean ports with
4.0 million (55 and 66 per US-bound container).
Transhipment ports have to take into account annual scanning and radiation detection
costs of approximately 3.0 million (60 Euro per US-bound container).

Northwest European ports with relatively high US-bound container turnover have to
consider annual scanning and radiation detection costs of approximately 14.5 million.

North Sea ports with high US-bound container volumes have to bear even annual
scanning and radiation detection costs of approximately 20.4 million (43 and 41 per
US-bound container).
The differences of the cost per US-bound container between the port types depend on the
achieved capacity utilisation of the scanning equipment. In the case of a theoretical capacity
utilisation of 100%, the differences between the port types decrease.

8.4

Overall annual Operation Costs induced by the Request of 100% Scanning


and Radiation Detection of US-bound Containers per Port T ype
The overall annual operation costs caused by the request of the US-legislation of 100%
scanning and radiation detection of US-bound containers, are the aggregate of the annual
cost of additional terminal operation and the annual cost of 100% scanning and radiation
detection. The following table presents these overall costs according to port types.
Table 8-7: Overall annual Operation Costs induced by the Request of 100% Scanning
and Radiation Detection of US-bound Containers per Port T ype
Low-tranship- Transhipment
ment port
port

Port type
Annual Throughput
US-bound TEU p.a.
US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47500

Handling System
overall annual operation costs required by
100% scanning and radiation detection of
US-bound containers per port type

depreciation
maintenance
energy
labour
Total
Euro per container

499,262
610,775
802,000
1,890,000
3,802,037
95

775,690
929,075
982,000
2,995,000
5,681,765
114

depreciation
maintenance
energy
labour
Total
Euro per container

507,929
621,175
814,000
1,890,000
3,833,104
96

784,357
939,475
994,000
2,995,000
5,712,832
114

depreciation
maintenance
energy
labour
Total
Euro per container

499,262
610,775
802,000
1,890,000
3,802,037
95

775,690
929,075
982,000
2,995,000
5,681,765
114

Handling System
overall annual operation costs required by
100% scanning and radiation detection of
US-bound containers per port type
Handling System
overall annual operation costs required by
100% scanning and radiation detection of
US-bound containers per port type
* container equals TEU/1,5

Mediterranean
Northwest
North Sea port
port
European port
3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
Straddle Carrier
894,762
1,118,500
1,224,000
2,900,000
6,137,262
92
RTG
825,429
1,035,300
1,164,000
2,640,000
5,664,729
85
ASC/TTU
894,762
1,118,500
1,224,000
2,900,000
6,137,262
92

7,142,857
4,761,905
500000
333,333
176,667
40,000
116667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000

3,224,595
3,731,046
4,320,000
11,585,000
22,860,642
69

4,601,548
5,697,425
6,199,000
16,790,000
33,287,973
67

3,181,262
3,950,075
4,296,000
11,325,000
22,752,337
68

4,488,881
5,562,225
6,115,000
16,270,000
32,436,106
65

3,224,595
4,002,075
4,320,000
11,585,000
23,131,670
69

4,601,548
5,697,425
6,199,000
16,790,000
33,287,973
67

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


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page 84

The overall operation costs resulting from the request of 100% scanning and radiation
detection of US-bound containers do not significantly vary between the handling systems. In
all port types the costs of labour amount to approximately 50% of the overall operation cost.
The overall operation costs add up to approximately

3.8 million in a low transhipment port,


5.7 million in a transhipment port,

6.1 million in a Mediterranean port,

23.1 million in a Northwest European port and

33.3 million in a North Sea port.

Regarding overall operation costs per container, caused by the request of 100% scanning
and radiation detection, low transhipment and Mediterranean ports face relatively high overall
operation costs of 95 and 92 per US-bound container. The transhipment ports in the
southern part of Europe have operational costs of as much as 114 per US-bound container.
These overall operation costs fluctuate to around 5 % of the freight rate per container from
the Mediterranean Sea to US of 2,000. However, the ports with higher volumes situated on
the North Sea or the Atlantic, have overall operation costs of 67 or 69 per US-bound
container lower, but still reflecting around 5% of the rate from this range to US ports of
around 1,250 Euro.

8.5

Human Resources, Investment and annual overall Operation Cost Required


for 100% Scanning and Radiation Detection of US-bound Containers 2012
and 2020 in European Ports

According to the forecast provided by the recovery scenario, in 2012 in the selected ports
1.97 million and in 2020 2.42 million TEU destined to the USA will be laden. The forecast
concerning containers laden from Europe to the USA assumes, in the recovery scenario in
2012, 2.42 million TEU and 3.04 million TEU in the year 2020. Approximately 58% are
transported via the North Sea ports Bremerhaven, Rotterdam and Antwerp.
Human Resources
100% scanning and radiation detection of US-bound containers requires considerable human
resources particularly in ports with high US-bound container turnover. According to
discussions with national customs authorities approximately 12% of the required personnel
should possess high, approximately 65% middle customs education and approximately 23%
should be skilled in technical aspects (middle or high education).
Based on the forecasted volumes of containers laden in European ports and destined to the
USA in 2012 and 2020, approximate human resource requirements in European ports can be
assessed. The following table indicates the human resource requirements induced by the
request of 100% scanning and radiation detection in the years 2012 and 2020.

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


Final Report

page 85

Table 8-8: Human Resource Requirements induced by the Request of 100% Scanning
and Radiation Detection in 2012 and 2020
2012

2020

Human resources required for 100% scanning and radiation detection


in European ports

890

1140

Human resources for additional terminal operation because of 100%


scanning an radiation detection in European ports

860

1080

Overall human resources required by 100% scanning and radiation


detection

1750

2220

The additional personnel for scanning and radiation detection cannot be extracted from the
staff of the customs authorities, as this will affect supply chain security in Europe. Additional
personnel have to be recruited. However, experienced personnel will be difficult to find.
Intensive and long lasting training will be unavoidable.
Investment
The investment necessary to perform 100% scanning and radiation detection in European
ports assessed for the container volumes forecasted for 2012 and 2020, is presented in the
following table for scanning, radiation detection and additional terminal operation.
Table 8-9: Investment necessary to perform 100% Scanning and Radiation Detection
in European Ports for Container Volumes forecasted for 2012 and 2020
2012

2020

Investment cost in European ports for 100% radiation detection of USbound containers in Euro

12,818,000

16,809,000

Investment cost in European ports for 100% scanning of US-bound


container in Euro

262,943,000

334,900,000

Investment cost in European ports for additional terminal operation


because of 100% scanning and radiation detection in Euro

62,638,000

79,937,000

Overall investment in European ports because of 100% scanning and


radiation detection in Euro

338,399,000

431,646,000

Annual overall operation cost


The annual overall operation costs to perform 100% scanning and radiation detection are
composed of annual costs of scanning and radiation detection and the cost of additional
terminal operation. The following table presents the annual overall operation cost to perform
100% scanning and radiation detection in European ports.

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Table 8-10: Annual overall Operation Cost to perform 100% Scanning and Radiation
Detection in European Ports in 2012 and 2020
2012

2020

Annual operation cost in European ports for 100% scanning and


radiation detection

112,062,000

143,203,000

Annual cost of additional terminal operation in European ports


because of 100% scanning and radiation detection

64,452,000

81,672,000

Overall annual operation cost in European ports because of 100%


scanning and radiation detection in Euro

176,513,000

224,875,000

According to the interviews, neither terminal operator nor customs authorities are ready to
bear these costs induced by the US request to scan 100% of the containers laden to USports. Because of the request it is possible that the price of goods sent to US from Europe or
via Europe will increase.

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9
9.1

page 87

Comparison of 100% Radiation Detection and 100% Scanning with Risk


Management Approach
Risk Management with Inspection/Scanning of High Risk Containers

The existing security management in the EU is based on a risk assessment based


approach13. This is the preferred method among all EU countries. This approach is also a
principle that underpins two major WCO initiatives, the (SAFE) Framework and the Revised
Kyoto Convention 14
Risk assessment is based on a matrix of information as a documentary analysis, which
includes as its integral part, selectivity, profiling and targeting for assessing risks and
addressing them appropriately. Selection criteria includes the history of the importer,
exporter, carrier, agent, etc., the origin and routing of the goods, and prohibitions or
restrictions.15 Risk profiling is the means by which Customs puts risk management into
practice. The profiles, along with other information and intelligence, will provide a basis to
isolate high risk containers.
For high risk containers, further checks are made by customs. These may take the form of
additional enquiries, making intelligence investigations, carrying out radiation screening
and/or X-ray scanning and even a full physical examination. The question may then be
asked, how effective the current approach provides security and what does this approach
cost?
The risk management approach has so far been proven successful concerning import of
containers. In the opinion of the majority of the experts interviewed there is no evidence that
100% scanning will provide higher security than a risk management approach. On the
contrary, experts often indicate that, in combination with electronic seals, risk management
would be more effective.

9.2

Effectiveness of the 100% Scanning and Radiation Detection compared to


Risk Management Approach

The blanket approach of 100% scanning and radiation detection is in stark contrast to the
risk targeted controls like those carried out under the CSI. It is difficult to demonstrate that

13

see chapter 2

14

IINTERERNATIONAL CONVENTION
PROCEDURES (as amended)

15

Further examples can be found in the WCO Manual on Risk Assessment, Profiling and Targeting as well as in the WCO
Handbook on Container Control. Risk indicators are specified selectivity criteria such as: specific commodity code,
country of origin, country whence consigned, licensing indicator, value, trader, level of compliance, type of means of
transport.

ON

THE

SIMPLIFICATION

AND

HARMONIZATION

OF

CUSTOMS

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100% scanning would be more effective in detecting a weapon of mass destruction. Certainly
it is possible that such a weapon could pass undetected through a scan, but it is not possible
to assign a probability to such an event, or it could bypass scanners or go through trade
flows not covered by US legislation. There would be a possible deterrent effect, but the
evidence, such as it is, from the current risk based approach demonstrates that the risk is
anyway low. As a deterrent, therefore, 100% scanning and radiation detection would not
contribute very much.
What can be said is that the opinion was widely voiced e.g. by the national port authorities
and national custom authorities in Europe that 100% scanning and radiation detection would
not contribute significantly to an increase in security. 100% scanning is rigid and unlikely to
improve security compared to the risk management approach, which is flexible. 100%
scanning might even create a false sense of security and undermine security by diverting
scarce resources from other essential measures. 100% scanning will divert EU resources
from EUs security concerns and therefore not improve the overall security situation.
Furthermore, 100% scanning and radiation detection has a high potential to disrupt trade and
transport unnecessarily, within the EU and worldwide, at high cost as presented in the
previous chapters. Moreover, 100% scanning and radiation detection has the potential to
induce an important reorientation of transport flows worldwide and in the EU and would risk
undermining the European Union's port policy.
The effectiveness of a risk management approach cannot really be quantified because if
nothing sinister was found it does not necessarily mean that something sinister did not slip
through. Nevertheless, the risk management approach is applied to all kinds of goods and
not only to containers and therefore provides a more general degree of supply chain security.
However, at present, the risk management approach is used for import and export
containers. Within the frame of the European Customs Security Amendments security prearrival/departure declarations will be voluntary option for traders from July 1, 2009 and a
compulsory requirement as of January 1, 2011. This will contribute to improving the
effectiveness of the risk assessment. Further supply chain security will be achieved by the
AEO concept.
100% scanning and radiation detection and a risk management approach with 3% scanning
and 100% radiation detection effectively represent alternative approaches, rather than being
complementary. 100% scanning and radiation detection certainly needs supplementary
operation costs and Human Resources compared to a risk management approach for USbound containers.

9.3

Cost of Risk Management Approach

In
, 8 customs authority employees perform the risk assessment of all import
containers as a prerequisite to the supply chain security in Europe and in order to detect tax

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page 89

and customs irregularities. According to this experience, it is assumed that a team of 8


experts supported by appropriate hardware and software are able to perform the risk
assessment and to create risk profiles of all US-bound containers. The assumptions for the
assessment of the annual cost of a risk management approach are:

In port types with low or moderate US-bound container volumes, 4 experts would be
required and in ports with high US-bound container volumes, 8 experts with a salary of
50,000, would be required to perform the risk assessment according to WCO
standards (1 shift 6 days a week).

AEO and C-TPAT certifications will be promoted

Approximately 3 % of the US-bound containers are detected as risk containers and are
assigned to be scanned. Radio detection is performed for all US-bound containers.

European customs are authorised to provide the container clearance and to inspect risk
container. Assuming similar cost structures and port types as in chapters 6 and 7 the
following costs are estimated for this approach:
Table 9-1: Annual cost of Additional Terminal Operation of US-bound Container (3%
Risk Container Scanning and 100% Radiation Detection) per Port Type
Low-tranship- Transhipment
ment port
port

Port type
Annual Throughput
US-bound TEU p.a.
3% US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
1,200
600
504
96

4,411,765
2,941,176
75000
1,500
45
30
1425

Handling System
annual terminal operation cost necessary to
perform scanning of 3% US-bound
containers per port in Euro

depreciation
maintenance
energy
labour
Total
Euro per container

50,071
56,100
66,000
250,000
422,171
11

50,071
56,100
66,000
250,000
422,171
8

depreciation
maintenance
energy
labour
Total
Euro per container

54,405
61,300
72,000
250,000
437,705
11

54,405
61,300
72,000
250,000
437,705
9

depreciation
maintenance
energy
labour
Total
Euro per container

50,071
56,100
66,000
250,000
422,171
11

50,071
56,100
66,000
250,000
422,171
8

Handling System
annual terminal operation cost necessary to
perform scanning of 3% US-bound
containers per port in Euro
Handling System
annual terminal operation cost necessary to
perform scanning of 3% US-bound
containers per port in Euro
* container equals TEU/1,5

Mediterranean
port
3,333,333
2,222,222
100000
2,000
1,300
120
580
Straddle Carrier
50,071
56,100
66,000
250,000
422,171
6
RTG
54,405
61,300
72,000
250,000
437,705
7
ASC/TTU
50,071
56,100
66,000
250,000
422,171
6

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
10,000
5,300
1,200
3500

10,714,286
7,142,857
750000
15,000
7,950
2,550
4500

50,071
56,100
66,000
250,000
422,171
1

61,143
65,400
96,000
400,000
622,543
1

54,405
61,300
72,000
250,000
437,705
1

65,476
70,600
102,000
400,000
638,076
1

50,071
56,100
66,000
250,000
422,171
1

61,143
65,400
96,000
400,000
622,543
1

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Table 9-2: Overall annual Operation Cost of Risk Management, Scanning of RiskContainer and Radiation Detection of US-bound Containers per Port Type
(3% Risk Container Scanning and 100% Radiation Detection)
Low-tranship- Transhipment
ment port
port

Port type
Annual Throughput
US-bound TEU p.a.
3% US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47500

Handling System
overall annual operation costs of risk
management with 3% scanning and 100%
radiation detection of US-bound containers
per port type

depreciation
maintenance
energy
labour
Total
Euro per container

364,905
467,475
528,500
800,000
2,160,880
54

364,905
467,475
449,750
800,000
2,082,130
42

depreciation
maintenance
energy
labour
Total
Euro per container

369,238
316,738
534,500
800,000
2,020,476
51

369,238
316,738
455,750
800,000
1,941,726
39

depreciation
maintenance
energy
labour
Total
Euro per container

364,905
467,475
528,500
800,000
2,160,880
54

364,905
467,475
449,750
800,000
2,082,130
42

Handling System
overall annual operation costs of risk
management with 3% scanning and 100%
radiation detection of US-bound containers
per port type
Handling System
overall annual operation costs of risk
management with 3% scanning and 100%
radiation detection of US-bound containers
per port type

Mediterranean
port
3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
Straddle Carrier
364,905
467,475
449,750
800,000
2,082,130
31
RTG
369,238
316,738
455,750
800,000
1,941,726
29
ASC/TTU
364,905
467,475
449,750
800,000
2,082,130
31

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
333,333
176,667
40,000
116667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000

364,905
467,475
449,750
1,000,000
2,282,130
7

375,976
476,775
479,750
1,150,000
2,482,501
5

369,238
316,738
455,750
1,000,000
2,141,726
6

380,310
327,810
485,750
1,150,000
2,343,869
5

364,905
467,475
449,750
1,000,000
2,282,130
7

375,976
476,775
479,750
1,150,000
2,482,501
5

* container equals TEU/1,5

9.4

Comparison of overall annual Operation Cost of 100% Scanning and


Radiation Detection of US-bound Container with overall annual Cost of Risk
Assessment of US-bound Container (3% scanning and 100% Radiation
Detection

The investment for terminal operation equipment and scanning devices is considerably
higher in the case of 100% scanning and radiation detection of US-bound containers than the
investments necessary for the risk management. Also, the cost of terminal operations and
human resources are significant higher.
The comparison of the overall annual operation costs for 100% scanning and radiation
detection of US-bound containers with those induced by a risk management approach with
3% scanning of US-bound containers and 100% radiation detection displays that the request
of the US-legislation is significantly more expensive. The highest supplementary overall
annual operation costs of 100% scanning and radiation detection appear in transhipment
ports, followed by Low-transhipment ports and Mediterranean ports. Also, in the port types
with high US-bound container turnover, the supplementary overall annual cost, induced by
the request of the US-legislation, are considerably higher than those for the risk management
approach with 3% scanning and 100% radiation detection. The following table presents the
supplementary, overall annual operation costs for 100% scanning and radiation detection

THE IMPACT OF SECURITY MEASURES ON THE EU ECONOMY AND TRADE RELATIONS


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page 91

compared to a risk management approach with 3% scanning and 100% radiation detection,
for the different port types and handling systems.
Table 9-3: Supplementary overall annual Operation Costs of 100% Scanning and
Radiation Detection compared to a Risk Management Approach with 3%
Scanning and 100% Radiation Detection of US-bound Containers per Port
Type
Low-tranship- Transhipment
ment port
port

Port type
Annual Throughput
US-bound TEU p.a.
3% US-bound containers p.a.*

TEU
Cont.
TEU
Total
Road
Rail
Transhipment

2,500,000
1,666,667
60000
40,000
20,000
16,800
3200

4,411,765
2,941,176
75000
50,000
1,500
1,000
47500

Handling System
additional operation costs of 100%
scanning of US-bound containers to risk
mangement approach with 3% scanning of
US-bound containers per port type

depreciation
maintenance
energy
labour
Total
Euro per container

134,357
143,300
273,500
1,090,000
1,641,157
41

410,786
461,600
532,250
2,195,000
3,599,636
72

depreciation
maintenance
energy
labour
Total
Euro per container

138,690
304,437
279,500
1,090,000
1,812,627
45

415,119
622,737
538,250
2,195,000
3,771,106
75

depreciation
maintenance
energy
labour
Total
Euro per container

134,357
143,300
273,500
1,090,000
1,641,157
41

410,786
461,600
532,250
2,195,000
3,599,636
72

Handling System
additional operation costs of 100%
scanning of US-bound containers to risk
mangement approach with 3% scanning of
US-bound containers per port type
Handling System
additional operation costs of 100%
scanning of US-bound containers to risk
mangement approach with 3% scanning of
US-bound containers per port type

Mediterranean
port
3,333,333
2,222,222
100000
66,667
43,333
4,000
19333
Straddle Carrier
529,857
651,025
774,250
2,100,000
4,055,132
61
RTG
456,190
718,562
708,250
1,840,000
3,723,002
56
ASC/TTU
529,857
651,025
774,250
2,100,000
4,055,132
61

Northwest
North Sea port
European port
7,142,857
4,761,905
500000
333,333
176,667
40,000
116667

10,714,286
7,142,857
750000
500,000
265,000
85,000
150000

2,859,690
3,263,571
3,870,250
10,585,000
20,578,512
62

4,225,571
5,220,650
5,719,250
15,640,000
30,805,471
62

2,812,024
3,633,337
3,840,250
10,325,000
20,610,611
62

4,108,571
5,234,415
5,629,250
15,120,000
30,092,237
60

2,859,690
3,534,600
3,870,250
10,585,000
20,849,540
63

4,225,571
5,220,650
5,719,250
15,640,000
30,805,471
62

* container equals TEU/1,5

Following the opinions collected in the port interviews, the discussions with national customs
authorities and international organisations that 100% scanning and radiation detection does
not provide more security than a risk management approach, these figures indicate that the
latter also provides a measure of security and is considered to be cost effective.

9.5

Comparison of Human Resources Requirements for 100% Scanning and


Radiation Detection with Risk Management including 3% Scanning and
100% Radiation Detection of US-bound Containers

100% scanning and radiation detection requires significantly more personnel not only for
terminal operation but also for the inspection activities than the risk management approach.
human resources necessary to perform a risk management approach with 3% scanning and
100% radiation detection of US-bound container are presented in the following table.

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Table 9-4: Human Resources necessary to perform a Risk Management Approach with
3% Scanning and 100% Radiation Detection of US-bound Container
Port type
TEU
Cont.
TEU
US-bound TEU p.a.
Total
Road
3% US-bound containers p.a*.
Rail
Transhipment
Human resources per port type for
primary
radiation detection of US-bound
secondary
container
Total
operation
Human Resources per port type for
image inspection
risk management and scanning (3%)
administration/risk assessment
of US-Bound containerr
Total
Human Resources for risk management, 3%scanning and radiatin
detection of US-bound container per port type
Annual Throughput

Low-tranship- Transhipment
ment port
port

Mediterranean
port

Northwest
North Sea port
European port

2,500,000
1,666,667
60000
1,200
600
504
96
2
2
4
1
2
4
7

4,411,765
2,941,176
75000
1,500
45
30
1,425
2
2
4
1
2
4
7

3,333,333
2,222,222
100000
2,000
1,300
120
580
4
2
6
1
2
4
7

7,142,857
4,761,905
500000
10,000
5,300
1,200
3,500
10
2
12
1
2
8
11

10,714,286
7,142,857
750000
15,000
7,950
2,550
4,500
14
2
16
1
2
8
11

11

11

13

23

27

* TEU/1,5 equals container

A risk management approach with 3% scanning and 100% radiation detection does not
require high equipment utilisation. Whereas the 100% scanning requires that the equipment
will be utilised 24 hours a day, in three shifts, the risk management approach involves the
experts only during common working hours.
Furthermore 100% scanning will generate a lot more false positives reducing the productivity
of the terminal and increasing the average dwell time of containers in the terminal.
The personnel involved in the 100% scanning and radiation detection compared to fewer
people in a risk management approach, clearly shows the disadvantages and challenges that
the European customs authorities will be confronted with.
Table 9-5: Supplementary Human Resources of 100% Scanning and Radiation
Detection compared to a Risk Management Approach with 3% Scanning
and 100% Radiation Detection of US-bound Containers per Port Type
Port type
TEU
Cont.
TEU
Total
Road
3% US-bound containers p.a*.
Rail
Transhipment
primary
radiation
detection
supplementary Human Resources
secondary radiation detection
per port type for 100% scanning and
Total radiation detection
radiation detection compared to risk
operation of scanner
management with 3% scanning and
image inspection
100% radiation detection of USadministration
bound container
Total
Total supplementary Human Resources for 100% scanning and radiation detection
of US-bound container per port type compared to risk management
Annual Throughput

US-bound TEU p.a.

* TEU/1,5 equals container

Low-tranship- Transhipment
ment port
port

Mediterranean
port

Northwest
North Sea port
European port

2,500,000
1,666,667
60000
40,000
20,000
16,800
3,200
0
0
0
3
4
0
7

4,411,765
2,941,176
75000
50,000
1,500
1,000
47,500
0
0
0
5
7
1
13

3,333,333
2,222,222
100000
66,667
43,333
4,000
19,333
0
0
0
7
10
2
19

7,142,857
4,761,905
500000
333,333
176,667
40,000
116,667
0
0
0
29
49
16
94

10,714,286
7,142,857
750000
500,000
265,000
85,000
150,000
0
0
0
41
70
26
137

13

19

94

137

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9.6

page 93

Non-linearities

The scanning equipment is designed in a way to achieve a high capacity utilization.


Consequently, the infrastructure necessary to operate the equipment is also designed for this
capacity utilization. As indicated in the previous chapters, the cost estimation has been
based on the capacity utilisation of the scanning equipment, greater than 80 %. However, the
volume of containers to be scanned in ports with low US-bound container turnover is not
sufficient to achieve a sufficient capacity utilisation. As a consequence the scanning costs
per container are higher than in those ports where the capacity utilisation of the scanning
equipment achieved is greater than 80 %. In ports where the US-bound container volumes
require the assignment of several items of scanning equipment, only the last equipment
might not reach a suitable capacity utilisation. Therefore, in these ports, the correlation
between volumes to be scanned versus the scanning costs per container (unit costs) is less
stringent than in ports where volumes require one scanning facility only.
The non-linearity becomes more visible with the correlation of average volumes of laden
containers to USA with the costs per scanned container.
Figure 9-1 Overall annual Operation Costs per Container in European Port Groups
because of 100% Scanning and Radiation Detection against the Average
US-bound Port Turnover per Port Group
150

costs per container in Euro

125
Transshipment ports
100

Low-transhipment ports
Mediterranean ports

75
Northwest European ports
50

North Sea ports

25

0
0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

annual turnover in mio. US-Bound containers per port

The purchase and operation of scanning equipment are significant financial investments
resulting in high costs for scanning and radiation detection. Costs are particularly high in
those ports where the scanning facility are necessary to fulfill the 100% scanning request,
but the container volume does not permit high capacity utilization. These ports might refuse

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to handle US-bound containers, because of the 100% scanning request of the US legislation,
in order to avoid these investment costs. Such opinion has already been expressed during
the interviews with the port authorities.
It is logical to believe that low-volume ports would not be willing to invest in scanning
equipment and would redirect US-bound containers to transshipment ports instead. Such
developments will concentrate US-bound shipping activities on particular ports. Ocean
carriers are concerned over the potential need to re-route and re-schedule vessels in
response to changes in port policies.
The non-linearity of the cost function can be shown by the correlation between the US-bound
container volumes and the cost aggregate consisting of the annual cost of additional terminal
operation and the cost of 100% scanning and radiation detection per container. It becomes
obvious, that the cost per scanned container (unit cost) decrease the higher the capacity of
the scanning facility is utilised. In case of a capacity overflow a further scanning facility has to
be purchased, which will at first perform with low utilisation. The unit cost will thus increase
and slow down with the rise in capacity utilization. These unit cost developments are shown
for a high volume North Sea port, a transshipment port and a Mediterranean port in the
following graphs.

cost per US-Bound container in Euro

Figure 9-2 Development of the overall annual Operation Costs per Container for
100% Scanning and Radiation Detection in a North Sea Port with RTGSystem
100

70

40
0

250,000

500,000

750,000

US-bound container volume

1,000,000

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Figure 9-3 Development of the overall annual Operation Costs per Container for
100% Scanning and Radiation Detection in a Transhipment Port with RTGSystem
cost per US-Bound container in Euro

Unit cost development in Transshipment Port with RTG system

160

130

100

70

40
0

50,000
100,000
US-bound container volume

150,000

cost per US-Bound container in Euro

Figure 9-4 Development of the overall annual Operation Costs per Container for
100% Scanning and Radiation Detection in a Mediterranean Port with
Straddle Carrier System
160

130

100

70

40
0

50,000

100,000
150,000
US-bound container volume

200,000

250,000

The above graphs also demonstrate that it would be economically non-viable for ports with
lower US bound volumes to invest in scanning facilities. Consequently, they will have a
severe competitive disadvantage with regard to US bound containers and would have only
minor chances or incentives to remain in the market for this trade.

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page 96

Possible Alternative Strategies

A trial that was carried out in Southampton indicated that the 100% scanning of US-bound
containers would be feasible. However, Southampton in some respects was not typical: the
volume of containers shipped to the USA was relatively small, as was the incidence of
transhipment traffic, which presents particular difficulties. There are some points that would
benefit from clarification:

The alarm rate was in the order of 1.2% of all traffic which, based on experience was in
line with expectations.

The static equipment failed on 21 occasions during the course of the trial, but it is not
known which equipment failed or the nature and duration of the fault.

The trial indicated that staff were spending most of their time processing consignments
that were innocent.
There were US personnel in the port for the trial (as in other CSI ports.) However, it is
doubtful if this could be replicated in ports worldwide in the 100% scanning context. Firstly, it
would require substantial overseas deployment of manpower and would greatly increase
costs. Secondly, even if it were possible that such deployment was possible, issues that
were dealt with between UK and US personnel on an informal basis in Southampton would
have to be formalised. This would require inter-governmental bilateral agreements to be
entered into which would be difficult.
Trade associations, customs bodies and security equipment manufacturers say that 100%
scanning and radiation detection of US-bound containers in European ports will not happen
because it would be impossible to implement, in practise. Whether for political reasons, or
whether the realisation of the sheer practical difficulties - or impossibilities - involved, this is
the view of the majority, based on the fieldwork.
There is intense lobbying against full implementation on both sides of the Atlantic, from
organisations such as the WCO and the World Shipping Council (WSC). The WSC argues
against the measure from the outset and had the backing of the retail forwarding and
shipping communities in the United States.
There are also the majority of the delegates of the European seaports organisation who say
that the administration wants a compromise and would welcome alternative proposals as a
way of getting out of full implementation. However, any alternative must be seen to deliver
enhanced container security.
In this situation it is appropriate to consider alternative strategies to 100% scanning. Some
possibilities, which are discussed in the following paragraphs, represent combinations of
existing methods, while there are some which are fundamentally different.

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Enhancement of Risk Based Approach

Current EU security measures for containers are based on risk assessment. Control is
oriented in the EU countries more on the import side (i.e. national security was focused on
the protection of the national border.) The current initiative of inspecting US-bound
containers - referring to CSI and Megaports - shows the following: Under the 24 hour rule,
certain information relating to containers (contents, shipper etc.) are provided to the US
authorities. They in turn analyse the documentation and make a decision either to clear the
container or raise a query. In the event of the latter decision, they refer back to the shipper
and inform the national customs.
Further checks are made by customs. These may take the form of additional enquiries,
making intelligence investigations, carrying out radiation screening and/or X-ray scanning
and even full physical examinations. Many queries raised are successfully dealt with without
screening, scanning or full physical examinations.

The current risk based approach to security is widely accepted and is considered to be
effective. For the future, and as a compromise to 100%, some development of this approach
is the preferred way forward.
By supplying more detailed information on the basis of the 24 hour rule, it is suggested that
the results could be improved and the level of security enhanced. Certainly this approach is
receiving attention (see next section.)
Related to this is the SAFE Framework promulgated by the WCO as an effective alternative
approach to 100% scanning, as discussed in detail in chapter 2. It will not be easy to
implement, but if internationally accepted it could be presented as an alternative to 100%
scanning.

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page 98

Mutual Recognition

Following on as a development of the general comments made in the previous section, one
area, which is being actively worked on is that of mutual recognition. This refers to C-TPAT
(Customs - Trade Partnership against Terrorism) in the USA and to AEO (Authorised
Economic Operator) in Europe.
These two approaches are similar, but are not the same. They both, however, essentially
evaluate and assess shippers and would grant automatic clearance and preferential
treatment to approved economic operators. This would mean that their containers would be
immediately cleared and would be much less likely to be subjected to scanning. Containers
moved by these shippers would effectively pass through a priority lane.
The granting of AEO/C-TPAT status depends on the manufacturer/shipper applying for
approval. Non-approved shippers would pass through a process in accordance with the
current procedures. Their containers certainly would be more likely to face more rigorous
checking and inspection than priority lane traffic.
The problem, at the moment, is that the requirements to qualify for AEO/C-TPAT are not
exactly the same. They are not exactly equivalent and the philosophies differ to a certain
extent, since the US C-TPAT programme focuses mainly on technical aspects like fences,
locks etc. whereas the EU AEO programme also includes safety plans, assigned personal
responsibilities etc.

10.3

Radiation Dete ction

One component of an alternative to the implementation of the Law would be the extension of
100% screening for radioactive materials, but without scanning. As already described, there
is some familiarity with this procedure as it is already installed in some ports, though more for
imports than for exports. It is recognised as making a positive contribution towards security. It
would therefore be likely to be more readily acceptable as a measure than scanning. The
costs would be less than 100% scanning and it would cause less operational disruption in the
ports.

10.4

Scanning

Another possible option would be to recognise the need for scanning, but not the
requirement to scan every container. The incidence of scanning could be increased, but not
to 100%. The following would be possibilities

Increase the number of containers scanned based on a risk management approach.


For example, every container queried under the 24 hour rule could be scanned, or if
more rigorous conditions were applied to the risk assessment, then more scans would
be generated.

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A proportion of all containers could be scanned on a random basis, even if the risk
assessment did not generate a query, or such scanning could be carried out prior to
risk assessment and the information analysed collectively.

Scan all containers from what are considered to be high risk countries

10.5

SMART Containers and Electronic Seals

Recent developments, which can enhance security, but are fundamentally different to the
possibilities discussed above, include tracking and monitoring devices. The following are
examples:

SMART (Secure Material Accounted in Real Time) container technology, the goal of
which is to enhance the automation and accuracy of visibility into containerised cargo.
A single RFID (Radio Frequency Identification Tag) would be attached to the outside of
the container. That tag stores a record of the containers inventory. An RFID reader is
installed within the container and is programmed to emit a read signal whenever the
container is closed. All the tagged assets within the container respond to the read
signal with their identification data, which the reader receives and transmits to the
external tag. Thus as tagged assets are added to, or removed from the containers, the
external tags inventory record is updated dynamically. The benefit is that, despite there
being numerous tags within the container at any given time, only the single external tag
need be read to obtain an accurate, up-to-date record of the inventory.

Electronic seals: these operate in one of three states - open, closed and secured. Its
current state is determined every second by sending a light pulse through a cable. Only
if the seal receives this signal back at its re-connection point is it closed. Securing can
only be achieved by a fixed reader or by authorised personnel. These changes of state
are recorded in an internal memory. For example, if a consignment were to be opened
illegitimately the seal would not be secured and this event, along with the date and
time, would be discovered when the seal was next connected to a computer with a
fixed reader.

One problem that was mentioned in connection with any tracking device, was the difficulty to
communicate with a container if it is located deep in the vessel. Another weakness might be
risks of criminal intervention since the purely physical protection of the seal is low and there
might be electronic manipulations hiding the fact of a broken seal.
The above are fairly recent developments 17 and may have potential for the future, in
particular electronic seals (it was considered that SMART technology could prove to be too
expensive.) However, it is not considered that they represent alternative options at this stage.

17

In the Bremen/Bremerhaven area, one of Europe's core logistics regions, internationally renowned companies Hellmann Worldwide Logistics, EUROGATE Container Terminal Bremerhaven and MSC Gate Bremerhaven - have

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10.6

page 100

Conclusion regarding alternative options

The issue of 100% scanning certainly will not disappear completely. The status quo is not an
option. There must be some developments to enhance container security. And it is
universally accepted that container security is important and neither cannot - nor should not
be ignored.
It is concluded that the following possibilities should be considered:

Development and acceptance of enhanced risk based approaches and mutual


recognition of AEO and C-TPAT as discussed above. This would result in a priority
lane through which a proportion of traffic would flow. It is difficult to estimate what the
proportion would be, but the view has been expressed that it could be around 30%.
Such cargo would not be exempted from scanning altogether, but the probability of
such inspection would be reduced.

Other cargo would be processed in accordance with the current procedures. Not all of
these containers would be scanned, but a proportion would be selected, on the basis of
risk assessment. This would have the effect of increasing the incidence of scanning,
but it would not be 100%.

If the above proves not to be possible (or to take too long) an alternative would be to
increase the number of all containers scanned, either based on a risk assessment
approach or by random selection.

Expansion of radiation screening to cover all ports: this would not present the problems
of 100% scanning and would fulfil one of the requirements of the HR.1 Law. It is
anyway in place in some ports, though admittedly in some cases only for imports. It
could also be implemented in conjunction with risk based enhancement.

The potential for seals etc. merits further investigation.

formed a consortium under the leadership of Astrium, to implement a security service in order to appropriately meet
security requirements in the global trade in goods. The security concept supports the regulations concerning the
Authorised Economic Operator, AEO, as well as complete container access control through personal authorisation,
which the Customs Trade Partnership against Terrorism, C-TPAT, calls for.

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page 101

Reciprocity

While the law imposes the requirement for the 100% scanning of containers bound for the
USA from ports worldwide, there is no such requirement for trade in the opposite direction,
i.e. containers exported from the USA to destinations worldwide do not have to be scanned.
This therefore raises the possibility of the imposition by countries of a reciprocal requirement
and the insistence by, e.g. the EU, that 100% of containers exported from the USA bound
for Europe must also be scanned.
Certainly the imposition of such a condition would pose a problem for the USA. The
implementation of 100% scanning in the USA would probably be more difficult in American
ports than in Europe. Not only would there be operational difficulties at least to the same
extent but probably more than in Europe, but also there could be other aspects, such as,
for example, the strong unions that could add to the difficulties. It is also likely that
implementation would be more costly than in Europe.
The evidence is that the implications of a reciprocal condition have not been lost on the
Americans.
It was almost the universal view of respondents in all different types of organisation and
however negative their attitude is towards 100% scanning - that it is not a policy that should
be seriously entertained by the Commission. They felt that it would be a kind of retaliation
approach not suited to the inter-continental negotiating table.
In general, it is indicated to treasure the general antagonism of unilateral versus multilateral
approaches 18
Unilateral measures could conflict with the principle of pacta sunt servanda, according to
which partner states must comply with their obligations under regional and international trade
agreements. The non-reciprocity of security measures could also cause other states to
introduce their own security requirements in retaliation and the proliferation of incompatible
unilateral measures could represent considerable barriers to trade. Another significant
disadvantage of the unilateral approach is that the implementing state has no way of knowing
for certain if its measures are effective in preventing the perceived threat of terrorism.
Multilateral measures on the other hand - are developed by international organisations,
which view security as a global public good and aim to improve the security of all their
members. Their main aim is to create uniform, albeit voluntary standards, which can be
adopted by all members taking account of their economic development. International
organisations also formulate measures within the framework of the treaty obligations, binding
their members as well as international legal principles. As a result, multilateral security

18

Refer to Christopher Dallimore: Securing the Supply Chain: Does the Container Security Initiative Comply with WTO
Law? - Inaugural-Dissertation, Mnster 2008 pp. 13 - 23

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measures can (with great likelihood), lead to a more consistent security regime than a
patchwork of bilateral agreements with selected trading partners used to implement unilateral
security measures (such as the CSI or 100% scanning). Therefore, the EU security approach
is based on the WCO SAFE Framework of Standards, which is ratified and followed by a
huge majority of states.
Finally, a situation should be envisaged where the 100% scanning approach becomes
international rule. That means, de facto, all national borders as far as container transport is
considered are exported to the country from where the box is shipped. But there remains a
crucial question: Would the importing country reduce its own security checks because the
exporting country is scanning the respective container prior to arrival on its own territory?
Most likely it depends - if risk assessment tools are used - on the reputation of the exporting
country with respect to the applied risk criteria. Consequently, only a very good AAAsecurity rating might make an additional scanning dispensable for the importing country.
Thus, consequently a security regime based on 100% reciprocity will lead to useless double
scanning. The magnitude will depend on the confidence between the nations or trading
blocks. Resources are wasted and the international trade will be more expensive, but not
more secure.

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12
12.1

List of Sources consulted


Personal Meetings

APM Terminals Algeciras

AS&E
Belgian Customs

Bremen Port Authority

Bremen Ports

British Chambers of Commerce

British Ports Association

Canberra

Chamber of Shipping UK

CMA-CGM

DG TAXUD

Direction Regionale des Douanes du Havre

DP World PSA HNN Antwerp

ECT Rotterdam
European Sea Ports Organisation

European Shippers Council

Freight Transport Association

German Customs Port of Hamburg

Ghent Port Authority

Grand Port Maritime du Havre

HHLA Hamburg Port and Logistics Co.

Hutchison Ports UK Felixstowe

International Chamber of Shipping

Italian Customs

London Chamber of Commerce and Industry


Maersk Line

Malta Maritime Authority

Medcenter container Terminal Gioia Tauro

MSC Gate Bremerhaven

Netherlands Customs

Nucsafe

OOCL

Passport Systems

Piraeus Port Authority S.A.

Port Authority of Valencia

Port Autonome du Havre

page 103

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Port of Copenhagen

Port of Cork

Port of Liverpool

Port of London Authority


Port of Malmo

Port of Rotterdam

The Shippers Voice

UK Customs

US Customs Border Protection, Piraeus C.T

US Customs Border Protection, Valencia C.T

12.2

Other Contacts

ABI Research

American Chamber of Commerce

Association of German Port Operators

Association of German Seaports


Aylesbury Scientific

Canberra HLS

Central Association of German Seaports

CNN

Cotecna

ECMT

European Union

Eurostat

Federal Finance Directorate North, Hamburg

German Chambers of Commerce and Industry (DIHK)

German Federal Parliament (Deutscher Bundestag)


Hellenic Customs, Piraeus Container Terminal

ICC

IMF

IMO

Information Forum RFID

International Chambers of Commerce

International Organisation for Standardisation

International Shipping Management and Logistics Research Centre

Logistics Management

Maersk Sealand (USA)

Marine Log

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Nucsafe

Nuctech

OECD

Piers
Principal Customs Office, Hamburg

Rapiscan Systems

Representative of German Industry and Trade

RFID Journal

SAIC

Seaports Press Review

Several Law Documentary Sources

Siemens

Smiths Detection Systems

The Heritage Foundation

UNCTAD
University of Le Havre

University of Mnster

US Customs and Border Protection

US Customs and Border Protection Agency

US Department of Homeland Security

US Embassy Berlin, Trade Relations

US Government Accounting Office

US National Retail Federation

Veritainer

WCO World Customs Organisation

World Council of Shipping

WSC
WTO

ZORA Central Office for Risk Analysis

page 105

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