Shippers and carriers are complaining about a Puerto Rico Ports Authority plan to require electronic imaging of every domestic container and trailer arriving from the U.S. mainland, at a cost of up to $69 per box.
“This plan is not about security, it’s about making money,” said Hernan Ayala-Rubio, president of the Puerto Rico Shipping Association. “It’s going to make it more expensive to do business in Puerto Rico.”
Ayala-Rubio said the association, whose 32 members include carriers, forwarders, terminals and other maritime companies, plans to challenge the scan-all requirement in court.
The new requirement marks the latest step in a complicated series of steps for shipping security following the September 11 terror attacks. Despite a drive in Congress in the years after 2001, efforts to require 100 percent scanning of U.S. import containers have been stalled by the lack of technology and by Customs and Border Protection’s view that screening and targeted inspections are the most effective use of resources.
Congress voted in 2007 for a scan-all bill but allowed the Department of Homeland Security to delay the scheduled 2012 implementation if adequate technology was lacking. The Government Accountability Office said in 2009 that scan-all technology didn’t exist.
Puerto Rico officials say they want to use nonintrusive imaging of all boxes to improve security and to catch shippers who submit false cargo manifests to dodge taxes or fees.
“It is a well-known fact that the inbound cargo containers may sometimes include undisclosed items and products to be cleverly introduced as contraband into Puerto Rico to avoid paying the applicable excise tax, other related taxes, or otherwise avoid their detection. This practice has a direct and negative effect upon Puerto Rico’s tax revenues,” the ports association said in proposing the scan-all rule.
After Puerto Rico unveiled its scan-all proposal last winter, Customs advised commonwealth officials that the agency retains exclusive authority to screen and inspect cargo arriving from overseas or in-bond via U.S. ports.
The PRPA agreed to restrict its scanning to domestic shipments from the U.S. mainland. However, that raises a constitutional issue involving regulation of interstate commerce. “What if New York insisted on scanning every shipment from Michigan? Or Florida started scanning every shipment from Massachusetts?” Ayala-Rubio said.
Puerto Rico’s proposed fee would be $4 per ton for containers and motor vehicles, with a maximum fee of $69 per container. Breakbulk cargo would be charged $3.25 per ton; empty containers or chassis, $4 per unit; liquid sugar and molasses, 58 cents per ton; and oil and other bulk liquids, 3.9 cents per barrel.
The port authority said the fees on all cargo are justified by the need to recover all expenses for the scanning operation. Ayala-Rubio said it’s unfair and makes no sense to charge shippers of commodities such as bulk petroleum whose cargoes wouldn’t be scanned.
Delays are another concern, he said. “They promised they can scan a container in 20 seconds, and I have no doubt they can,” Ayala-Rubio said. “But it will take someone five minutes or more to examine that scan of the contents of a 40-foot container.”
The scanning would be conducted by California-based Rapiscan Systems under a 10-year contract with two options for five-year extensions. A losing bidder’s challenge of the port authority’s contract process is pending in a Puerto Rico court.
Contact Joseph Bonney at email@example.com.