An opportunity from container seals

An opportunity from container seals

You may recall back in September when a major new element of the container security system - a requirement for seals on all import containers - was first announced by Asa Hutchinson, Department of Homeland Security undersecretary, in a speech at the Maritime Security Expo.

The announcement represented a big step forward in creating a meaningful security system for international marine containers. Requiring non-electronic, high-security seals to be affixed on all of the roughly 9.5 million containers that enter U.S. ports each year would represent the fourth leg of a stool that until now has been propped up by three programs implemented in the wake of the Sept. 11 terrorist attacks: the Customs-Trade Partnership Against Terrorism, the Container Security Initiative to place Customs inspectors at foreign ports and the 24-hour rule for advance filing of cargo manifests.

But since last fall, little has been said on the subject of container seals, and no regulation along the lines of what Hutchinson described has been announced, much less implemented. But that should not be taken to mean the idea has died. Far from it. DHS plans, "as a short-term step, (to) mandate the use of high-security mechanical seals on all inbound containers," the agency said in a white paper issued prior to its Cargo Security Summit in Washington in December.

Some believe it's only a matter of months before a regulation that would accomplish that is formally proposed. Once implemented, perhaps later this year, it will have a big effect on the daily operations of shippers, carriers, marine terminals and third-party logistics companies. And according to some observers, it would make possible the long-elusive goal of real cargo visibility throughout the supply chain.

Given where we are today, that's a ways away. E.J. Brooks Co., the largest maker of container seals, estimates that only 50 percent of inbound containers are currently sealed at the time they enter the U.S. A large 3PL recently estimated that only 37 percent of the containers it handles are sealed. When a container isn't sealed, it isn't locked.

But a requirement for high-security mechanical seals, which cost between 50 cents and $2 apiece, depending on the model, accomplishes little without a system to verify whether the seal has been broken during the container's journey. A major vulnerability of the supply chain is the multiple handoffs of containers - from assembly plant to trucker, to the marine terminal, to the carrier, etc. - a complex chain of custody that provides numerous opportunities for foul play.

A seal theoretically ensures that the box hasn't been opened somewhere en route. But for the system to be effective, someone must inspect the seal and verify that it's still intact, and notify the authorities if it isn't. In terms of man-hours and speed of movement, that's no minor proposition. Imagine a dockworker having to walk around to the rear of every container truck entering a terminal and then manually initial on a bill of lading that the seal hasn't been broken.

But therein lies an opportunity. If DHS requires manual seals, as it says it will do, the industry would have a major incentive to upgrade to electronic seals to eliminate the extra manpower, if DHS agrees. "If that happens, the industry will have to become more efficient," said Richard S. Kirk Jr., executive vice president of E.J. Brooks, based in Livingston, N.J.

With a simple radio-frequency identification scan, an electronic seal can be verified as intact and identified as the same seal that was affixed to a box when it was stuffed. Take that idea a step further, and the benefits become even more enticing. The scan can pick up information about the contents of the container, creating a level of real-time visibility that does not exist today, and could be cheaply made available to many small-volume shippers for whom visibility remains a remote concept.

This is merely a scenario for how this could play out. Keep in mind that the electronic-seal concept is also advancing within the C-TPAT framework. Customs and Border Protection Commissioner Robert Bonner last month unveiled his Green Lane incentive for C-TPAT-certified importers that adopt "smart-box" technology, including electronic devices that detect if the container was opened in transit. But there are many, including ocean carriers and major shippers, who believe that when it comes to seals, a requirement that creates a level playing field, as opposed to a voluntary incentive through C-TPAT, represents the best opportunity for meaningful improvements in supply-chain security. With half of containers still entering the country unsealed, improvement is something we desperately need.

Peter Tirschwell is vice president and editorial director of Commonwealth Business Media's Magazine Division. He can be contacted at (973) 848-7158, or via e-mail at ptirschwell@joc.com.