Study Analyzes Economic Impact of U.S. 100% Container Scanning
10/01/08 03:16 PM
The World Customs
Organization (WCO) study,
Global Logistic Chain Security: Economic Impacts of the
US 100% Container Scanning Law, prepared by the
University of Le Havre in June 2008, analyzes the impact on global
trade and shipping of the U.S. “100% scanning” law, or House
Resolution 1 (H.R. 1). The “100% scanning” law is intended to
protect the U.S. against terrorist risks and requires that 100% of
the containers destined toward the U.S. be inspected. If this law
enters into application on July 1, 2012, it is expected to affect
operations of more than 600 points throughout the world, at an
estimated $500 billion.
In 2005, 325 millions boxes were handled in around 600 ports around the world, of which 0.5% were scanned. Examination of the U.S.-bound container trade transactions reveals that the growth in the Americas, Africa and Oceania has been largely homogenous at around 70% over the past decade. The imports from Asia increased around 185% over the same period, led by China at 472% growth. Imports from Europe grew at 52% over the last decade. Thus, Asia today accounts for almost 75% of the U.S.-bound imports of maritime containers, and is the only continent to have gained market share over the period. The 75% of the containers represents almost 14 of the 18 million boxes imported in 2006.
If these asymmetrical continental dynamics continue, the study predicts that the “100% scanning” law would essentially be relevant to Asia. In other words, by 2012, the logistics process and corresponding port reorganization would almost exclusively concern the Pacific, specifically the key Asian and U.S. West Coast ports, and to a much lesser extent those of the East Coast of the U.S. and a few European megaports.
However, a new framework of standards may develop between now and 2012 and be modified or deterred, even if the trend for seaports would be to become 100% scanning (as it is for the airports).
According to the study, there also remains a question of financing these new infrastructures, primarily on U.S. territory. The study reminds of the U.S. aviation industry receiving a retroactive bill from the U.S. government for the expenditures required to upgrade airport terminals (six years after the upgrade), which suggests that it will be private actors who will have to pay a large part of the costs linked to the application of the “100% scanning” law. The operators are likely to pass on the cost of the scanning law implementation onto the final consumer, which may slow down international trade dynamics and consequently world growth.
In 2005, 325 millions boxes were handled in around 600 ports around the world, of which 0.5% were scanned. Examination of the U.S.-bound container trade transactions reveals that the growth in the Americas, Africa and Oceania has been largely homogenous at around 70% over the past decade. The imports from Asia increased around 185% over the same period, led by China at 472% growth. Imports from Europe grew at 52% over the last decade. Thus, Asia today accounts for almost 75% of the U.S.-bound imports of maritime containers, and is the only continent to have gained market share over the period. The 75% of the containers represents almost 14 of the 18 million boxes imported in 2006.
If these asymmetrical continental dynamics continue, the study predicts that the “100% scanning” law would essentially be relevant to Asia. In other words, by 2012, the logistics process and corresponding port reorganization would almost exclusively concern the Pacific, specifically the key Asian and U.S. West Coast ports, and to a much lesser extent those of the East Coast of the U.S. and a few European megaports.
However, a new framework of standards may develop between now and 2012 and be modified or deterred, even if the trend for seaports would be to become 100% scanning (as it is for the airports).
According to the study, there also remains a question of financing these new infrastructures, primarily on U.S. territory. The study reminds of the U.S. aviation industry receiving a retroactive bill from the U.S. government for the expenditures required to upgrade airport terminals (six years after the upgrade), which suggests that it will be private actors who will have to pay a large part of the costs linked to the application of the “100% scanning” law. The operators are likely to pass on the cost of the scanning law implementation onto the final consumer, which may slow down international trade dynamics and consequently world growth.