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

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

9. port and supply chain security 2008
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. port and supply chain security 2008
Up-front investments
port L1 L2 L3 L4
security related
2.4
3.3
3.6
5.8
of which after July 2004
1.8
2.5
total
( x usd 1mio )
port and supply chain security 2008

12. port and supply chain security 2008
Annual Running Costs
port L1 L2 L3 L4
Annual Running Costs
1.3
1.8
2.6
3.3
( x usd 1mio )
port and supply chain security 2008

13. Actual security costs per category
(in US$)
port L1 L2 L3 L4
per TEU
2.31
3.68
4.59
9.91
Other cargo/ per ton
0.23
0.48
0.46
0.16
per passenger
0.69
0.86 -
port and supply chain security 2008

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

15. port and supply chain security 2008
Up-front investments
Up-front investments
port A1 A2 A3 B1 B2 B3 B4 B5 L1 L2 L3 L4
Total
expected
5,6 5
5.1
0.5
0.1
2.2
0.2
2.4
3.3
3.6
5.8
(x usd 1mio)
port and supply chain security 2008

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

17. Security costs per ton of cargo
0.1
0.2
0.3
0.4
0.5
Cost per ton of
cargo (US$) A1 A2 A3 B2 B3 B4 B5 L1 L2 L3 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. port and supply chain security 2008
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. port and supply chain security 2008
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
in US$
average cost / TEU
average cost / TON
UNCTAD
3.60
0.08
World Bank
4.95
0.22
pondered
ports < 500,000 teu/annum
ports <15 million tons p/a
4.80
0.11
5.40
0.17
port and supply chain security 2008

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

24. port and supply chain security 2008
Background
The ISPS Code in fact is a dedicated component of the larger global security initiative commonly known as “Supply Chain Security” (SCS).
Whereas the ISPS Code concentrates on security issues related to vessels, individual port facilities and the direct port environment, SCS aims to make the entire logistic chain, from producer to consumer, more secure, but, at the same time, more efficient.
While the ISPS, in spite of being an International Code sponsored and led by the International Maritime Organization (IMO), took quite some time to achieve full implementation, SCS is still a mosaic of components and initiatives that may be introduced and become compulsory on a global scale.
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
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26. port and supply chain security 2008
Main initiatives
24-hours manifest
C-TPAT
CSI
ISO (1)
ATDI
10+2
100% scanning (2012)
AEO
Multilateral, bilateral, unilateral
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27. port and supply chain security 2008
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 (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
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31. port and supply chain security 2008
Conclusion
OPENING ADDRESS BY Mr 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. port and supply chain security 2008
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”
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33. port and supply chain security 2008
And, to be truly global, Global Trade must take on board the Developing Countries.
port and supply chain security 2008