Oct. 30 (Bloomberg) -- Two years after South Korea’s busiest port installed a $3.5 million scanner to check U.S.- bound shipping containers for nuclear weapons, the machine sits idle because truckers won’t drive through it due to fears of radiation exposure.
That means about 1.9 million containers left Busan for American harbors last year without U.S.-mandated screening. Singapore and Hong Kong, the world’s busiest and third-busiest ports, also don’t participate. Nine years after the Sept. 11 attacks, less than 1 percent of the 14.5 million cargo boxes reaching U.S. shores are scanned abroad, the government said.
A goal to screen all containers is opposed by the Retail Industry Leaders Association, a group representing Wal-Mart Stores Inc., Apple Inc. and Nike Inc. “Prohibitive challenges” involving cost and technology mean a July 1, 2012, deadline for 100 percent inspections will be delayed by at least two years, Department of Homeland Security Secretary Janet Napolitano said.
“The system remains very vulnerable,” said Stephen Flynn, president of the Washington-based Center for National Policy, which studies security issues. “If I were an adversary who wants to cause mass destruction to the global economy, this is the system to target.”
Two packages shipped by air-freight from Yemen and directed to Jewish institutions in Chicago were found in the U.K. and Dubai containing explosive materials in what President Barack Obama said yesterday represented a “credible terrorist threat.”
The Department of Homeland Security responded to the discovery of the packages by increasing checks on people and cargo.
U.S. senators Patty Murray, a Washington Democrat facing re-election Nov. 2, and Susan Collins, a Maine Republican, introduced legislation in July eliminating the 2012 deadline and supporting a “layered security approach” toward “high-risk cargo containers” identified by the U.S. Customs and Border Protection agency. That approach started in 2006.
The retailers group, whose members also include Home Depot Inc., Target Corp. and Costco Wholesale Corp., endorsed the bill. RILA supports current programs requiring shippers to send cargo manifests to the Homeland Security Department 24 hours before a container leaves a foreign port, said Kelly Kolb, the group’s vice president of global supply chain policy.
“It’s not effective or feasible to scan every container that meets our shore,” Kolb said.
The association also asked whether U.S. taxpayers or U.S. companies will pay for the scanners and the Customs personnel to operate them. The Busan scanner was paid for by the U.S. government.
“That’s the question of the day,” Kolb said. “The legislation is not particular on that.”
About 90 percent of world trade is carried by sea. Trade is expected to grow by 11.4 percent this year and 7 percent next year on the strength of emerging economies, the International Monetary Fund said last month.
About 14.5 million loaded twenty-foot equivalent containers reached the U.S. last year, the Army Corps of Engineers said.
The Secure Freight Initiative adopted in 2007 requires the U.S. to buy scanners, install them after reaching agreements with host countries and use Customs personnel to man them. Napolitano has told Congress it would cost about $16.8 billion to deploy scanners in all ports.
Customs spent $61 million on the 100 percent scanning program so far, said Jenny Burke, an agency spokeswoman. Current scanners require staffing and cannot detect threats on their own, Napolitano said in explaining her reasons for pushing the mandatory deadline to at least 2014.
‘New Trade Barrier’
“Most observers have serious doubts about whether that will be ever implemented,” said Ron Widdows, chief executive officer of Singapore-based Neptune Orient Lines Ltd., owner of Asia’s second-largest container company by capacity. “The impact that will have on flow of commerce, not just in the U.S. but in other parts of the world, will be fairly dramatic.”
A European Commission staff working document said in February the mandate “may become a new trade barrier” and trigger reciprocal actions requiring the U.S. to scan all outbound cargo.
It would cost 10 percent more to ship goods from Europe to the U.S., and European countries would spend 430 million euros ($595 million) initially to comply and 200 million euros annually after that, the document said.
“It could actually bring the flow to a screeching halt,” American Association of Port Authorities President Kurt Nagle said.
U.S. Customs started pilot programs in 2007 in Puerto Cortes, Honduras; Port Qasim, Pakistan; and Southampton, U.K. They later expanded to Hong Kong, Busan and Oman’s Salalah.
Hong Kong scanned boxes from November 2007 to April 2009, Jessie Law, spokeswoman for the customs and excise department, said in an e-mail. About 24,000 containers were checked, and each X-ray took less than a minute.
Singapore agreed to participate starting in late 2008. That was aborted when U.S. Customs decided to focus on “high-risk trade corridors,” the agency said.
Busan, the world’s fifth-busiest port, handled 12 million containers last year, with 16 percent going to the U.S. It agreed to the scanner in 2008 because the U.S. is South Korea’s third-biggest export market after China and Japan, the Busan Port Authority said in an e-mail.
“The machine has virtually been unused since then,” the authority said.
Truckers are supposed to drive rigs through the approximate 20-foot-high (6-meter-high) scanner before cargo is loaded on ships. Yet the drivers balked.
The U.S. was planning to bring in new equipment that has not yet arrived, the port authority said. Officials with U.S. Customs in Busan declined to comment.
“The truckers have refused to conduct container screening because we are worried about being exposed to radiation,” said Cho Ik Ryeol, who leads the local union chapter. “There hasn’t been any scanning.”
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