Port and Supply Chain Security: World Bank Activities

1. IIIrd Hemispheric Conference on port security OAS/CIP The World Bank activities in relation to Port Security and Supply Chain Security Michel Luc Donner Port and Maritime Transport Specialist The World Bank port and supply chain security 2008

2. Contents • ISPS cost of compliance report (in Developing Countries) • Supply Chain Security (SCS) port and supply chain security 2008

3. port and supply chain security 2008

4. http://siteresources.worldbank.org/INTTRANSPORT/Resources/tp_16_ISPS.pdfhttp://siteresources.worldbank.org/INTTRANSPORT/Resources/tp_16_ISPS.pdf • http://worldbank.org/ports • http://www.worldbank.org/transport port and supply chain security 2008

5. ISPS cost of compliance report • Why ? • Methodology • Analysis per Region • Global Analysis • Comparison with the UNCTAD report : Maritime Security: ISPS Code implementation, costs and related financing, March 2007 port and supply chain security 2008

6. Why ? • Requests by Country-Clients : concerns about financing and consequences of non-compliance • Not a compliance assessment • Centered on Developing Countries port and supply chain security 2008

7. Methodology • 12 selected ports • on-site missions port and supply chain security 2008

8. 12 selected ports Baltic Black Sea Caribbean Africa LatinAmerica port and supply chain security 2008

9. Analysis per Region • 12 selected ports: • 3 in West Africa • 5 in Baltic and Black Sea • 4 in Latin America & Caribbean port and supply chain security 2008

10. 4 ports in Latin America & Caribbean • Heavy upfront investments • Annual Running Costs • Actual security costs per TEU or TON port and supply chain security 2008

11. Up-front investments port and supply chain security 2008

12. Annual Running Costs port and supply chain security 2008

13. Actual security costs per category port and supply chain security 2008

14. Global Analysis • Heavy upfront investments • Actual security costs per category port and supply chain security 2008

15. Up-front investments port and supply chain security 2008

16. Security Cost per TEU 16 14 12 10 8 Cost per TEU (US$) 6 4 2 0 A1 B1 B4 A2 A3 B3 B5 B2 L3 L1 L2 L4 Port Security Cost per TEU port and supply chain security 2008

17. Security costs per ton of cargo 0.5 0.4 0.3 0.2 cargo (US$) Cost per ton of 0.1 0 B2 B3 L3 B5 A1 A2 A3 B2 B4 L1 L2 L4 Port Security costs per ton of cargo port and supply chain security 2008

18. Conclusions and remarks • Range is quite wide • Orders of magnitude, not rocket science • Averages not as high as predicted • Uneven levels of security achieved • Contributing factors • Collateral benefits port and supply chain security 2008

19. Contributing factors • Starting point (navy base, free zone, drug traffic, political regime) • Total cargo throughput • Topography / layout of the port port and supply chain security 2008

20. Collateral benefits • Reduction in number of stowaways • Reduction of theft and pilferage • Increase in Customs revenue (more & better control) • Reduction of cargo delays and waiting times • More orderly ports and terminals, leading to more efficiency port and supply chain security 2008

21. Comparison with the UNCTAD Report • Unctad : 55 questionnaires / WB : 12 on-site missions • Unctad : majority in developed countries / WB : all developing countries • Unctad : small and large ports / WB : majority of smaller ports port and supply chain security 2008

22. Comparison with the UNCTAD Report port and supply chain security 2008

23. SupplyChainSecurity (SCS) • Background and genesis • Main components, initiatives and stakeholders • SCS Guide (project) port and supply chain security 2008

24. Background • The ISPS Code in fact is a dedicated component of the larger global security initiative commonly known as “Supply Chain Security” (SCS). • Whereas the ISPS Code concentrates on security issues related to vessels, individual port facilities and the direct port environment, SCS aims to make the entire logistic chain, from producer to consumer, more secure, but, at the same time, more efficient. • While the ISPS, in spite of being an InternationalCode sponsored and led by the International Maritime Organization (IMO), took quite some time to achieve full implementation, SCS is still a mosaic of components and initiatives that may be introduced and become compulsory on a global scale. port and supply chain security 2008

25. Main Stakeholders and actors • World Customs Organization (WCO) • International Organization for Standardization (ISO) • International Maritime Organization (IMO) • World Trade Organization (WTO) • Regional Organizations • National Governments • International Trade, Logistics and Transport professional Associations port and supply chain security 2008

26. Main initiatives • 24-hours manifest • C-TPAT • CSI • ISO 28.000(1) • ATDI • 10+2 • 100% scanning (2012) • AEO • Multilateral, bilateral, unilateral port and supply chain security 2008

27. Main components • Advanced Electronic Cargo Information • Data collection, aggregation and analysis • Risk management • Container seals • Scanning equipments and image analysis • Integrated Border Management (border agency cooperation) • Authorized Economic Operator management • Real-time cargo tracking and tracing port and supply chain security 2008

28. SCS Guide (project) - genesis The concept of this Guide started to take shape during the 25th International Association of Ports and Harbors (IAPH) Biannual Conference that was held in Houston, Texas, USA from April 27 to May 4, 2007, when experts from the following organizations and companies: • The Rotterdam Port Authority • The International Association of Ports and Harbors (IAPH) • The company SOGET (a Joint Venture of Port of Le Havre Authority and Port of Le Havre Port Community) • The Port of Le Havre Authority • The World Bank (Energy, Transport and Water Department) concurred on the need to increase the awareness of the global trade and transport community, and in particular that in the developing world, of the developments in the field of Supply Chain Security, or SCS. This meeting was followed up with another meeting in Rotterdam in September 2007 in which also a Representative of the World Customs Organization (WCO) participated. port and supply chain security 2008

29. SCS Guide (project) (I) • Commented Inventory of on-going and future initiatives and their reciprocal compatibility • Insight in international developments and uncertainties • Status of SCS from a Regulatory point of view • Insight to the overlaps, bridgeability and interoperability between the proposed certification systems (C-TPAT – AEO - ISO 28.000(1) • Status of mutual recognition port and supply chain security 2008

30. SCS Guide (project) (II) • Outline of container integrity solutions including High Security Seals and RFID seals, and their state of standardization and affordability in Developing Countries • Outline of Advanced Inspection Technology including radiation detection and high speed scanning; relevance of AIT for Developing Countries (scanning for Customs = scanning for security ?) • Users check-lists port and supply chain security 2008

31. Conclusion OPENING ADDRESS BYMr LEE KUAN YEW, MINISTER MENTOR, AT THE INAUGURAL SINGAPORE MARITIME LECTURE, 25 SEPTEMBER 2007 “A balance must be struck between ensuring security and facilitating trade, if we are to preserve the efficiency of shipping and cargo operations and allow global trade to flourish” port and supply chain security 2008

32. Conclusion • To ensure that the measures introduced are sensible and pragmatic, a multilateral approach is more likely to produce pragmatic solutions than uncoordinated unilateral initiatives” port and supply chain security 2008

33. And, to be truly global, Global Trade must take on board the Developing Countries. port and supply chain security 2008