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PALGRAVE STUDIES IN MARITIME ECONOMICS
Girish Gujar
Adolf K. Y. Ng
Zaili Yang
Contemporary
Container Security
Palgrave Studies in Maritime Economics
Series Editors
Hercules Haralambides
Erasmus School of Economics
Erasmus University Rotterdam
Rotterdam, The Netherlands
Elias Karakitsos
EN Aviation & Shipping Research Ltd
Athens, Greece
Stig Tenold
Department of Economics
NHH – Norwegian School of Economics
Bergen, Norway
Palgrave Studies in Maritime Economics is a new, original and timely
interdisciplinary series that seeks to be pivotal in nature and improve our
understanding of the role of the maritime sector within port economics
and global supply chain management, shipping finance, and maritime
business and economic history. The maritime industry plays an increas-
ingly important role in the changing world economy, and this new series
offers an outlet for reviewing trends and developments over time as well
as analysing how such changes are affecting trade, transport, the environ-
ment and financial markets. Each title in the series will communicate key
research findings, shaping new approaches to maritime economics. The
core audience will be academic, as well as policymakers, regulators and
international maritime authorities and organisations. Individual titles
will often be theoretically informed but will always be firmly evidence-
based, seeking to link theory to policy outcomes and changing
practices.
Contemporary
Container Security
Girish Gujar Adolf K. Y. Ng
Division of Business and Management Department of Supply Chain Management
Beijing Normal University-Hong Kong Asper School of Business
Baptist University St. John’s College
United International College University of Manitoba
Zhuhai, China Winnipeg, MB, Canada
Zaili Yang
Department of Maritime & Mechanical
Engineering
Liverpool John Moores University
Liverpool, UK
This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Preface
This book addresses the security of the global system of maritime trade,
of which containers form an integral and highly critical component. We
consider container and maritime security as synonymous. Thus, we
address container security from its myriad perspectives, for instance, how
to approach it, how to measure it, and how to better secure transconti-
nental shipping. This book focuses on answering the following
questions:
Of course, this is not the first (and surely not the last) collaborative
effort on this topic. There has been considerable research on maritime
transport security, maritime safety, security, and piracy (including some
works done by us). In this regard, we focus on container security as books
v
vi Preface
that are completely dedicated to this topic are scarce. However, our ratio-
nale is much more than just filling up the ‘scarcity’ hole. Nowadays,
global supply chains depend a lot on marine containers originating from
different locations around the world. Very often, they need to get through
complicated logistical networks before reaching final destinations and, in
between, involve multiple participants and points of transfer.
Unsurprisingly, many challenges related to security exist during the pro-
cess. For instance, the Cargo Committee of the International Maritime
Organization (IMO) inspects about 15,000 containers annually and
found that a substantial portion contains misdeclared contents. The US
Customs pegs this figure at around 32% based on annual audits of con-
tainers in seven countries. Such misdeclaration maybe a non-invasive
mismatch due to an inadvertent or deliberate error in packing, stuffing,
and the reporting of container contents by consignors for various reasons.
Furthermore, at the dawn of this century, continuous economic growth
and the rising importance of supply chain management are prominent
trends that are on the lips of every policymaker, scholar, and business
executive. Indeed, they have become almost synonymous. Buzzwords in
security are competitive multi-polarity, rising powers, asymmetric threats,
and increasing uncertainty. However, the incommensurability of these
trend lines, the opportunity and integrated growth, and increasing uncer-
tainty and risks all contribute to a dearth of practical dialogues across
much of the strategic and commercial communities. Thus, one should
not be surprised that the majority of commercial and strategic communi-
ties operate exclusively in their own spheres.
This is not helped by the existence of multiple countries and regions
along global supply chains. The inland carriage of containers is governed
by different legal regimes. As such, there is a lack of clarity with respect to
who is liable for security failure. Another example is that the customs
assumes that if a container’s door handle seal is intact, the cargoes inside
are tampered with, despite considerable empirical evidence to the con-
trary. Unless there is a broken seal, locks, or other manifest damage of the
container, the mismatch of cargoes is not considered by the customs as a
trespass. Non-invasive mismatch is detected by the customs only after a
container is opened. Customs may then levy penalties, allow amendment
of manifest, or confiscate the cargoes. In general, the onus of correct
Preface vii
References
Gujar, G. C. (2016). Container Security and Current Legal Regime. LLM thesis,
School of Law, City University of Hong Kong, Hong Kong, China.
Yang, Z., Ng, A. K. Y., & Wang, J. (2013). Prioritizing security vulnerabilities
in ports. International Journal of Shipping & Transport Logistics, 5(6), 622–636.
Yang, Z., Ng, A. K. Y., & Wang, J. (2014). A new risk quantification approach
in port facility security assessment. Transportation Research Part A: Policy and
Practice, 59, 72–90.
Praise for Contemporary Container
Security
“Containerized shipping is key for global value chains. Without ever more inter-
connected maritime transport networks, globalization as we know it could not
have happened. At the same time, the more complex the networks become, the
more important it is to understand and mitigate their security risks. The new
book provides a very timely and comprehensive analysis of key container ship-
ping security issues. It is recommended reading for trade and transport analysts
and practitioners alike.”
—Jan Hoffmann, Chief, Trade Logistics Branch, UNCTAD; President,
International Association of Maritime Economists (IAME) (2014–2018)
“Port security and safety have become a focal and challenging issue as the impacts
of containerization on world trade is growing. This book is a ground-breaking
piece of research full of profound analysis and problem-solving methods for the
stakeholders in the issue.”
—Paul Tae-Woo Lee, Director and Professor, Institute of Maritime Logistics;
Zhejiang University; Associate Editor, Transportation Research Part E
ix
x Praise for Contemporary Container Security
air security, and cybersecurity, this is a highly recommended book that broadens
our perspectives on how best to secure global maritime trade.”
—Thanos Pallis, Professor of Port Economics & Policy, Department of Shipping
and Trade, University of the Aegean; President, IAME (2018-present)
Contents
References 203
Index 211
List of Figures
xiii
List of Tables
Table 4.1 Linguistic variables of risk parameters and their fuzzy mem-
berships69
Table 4.2 Screening the pairs of vulnerabilities and threats 74
Table 4.3 Performance of the four facilities F11, F12, F15, F28 under T1
with respect to D75
Table 4.4 Evaluation of all the F–T pairs with respect to the four criti-
cality parameters 76
Table 5.1 The hierarchy of KSPIs (S, security level; P, parameter level; I,
indicator level) 87
Table 5.2 Fuzzy membership functions of KSPI grades 91
Table 5.3 Parameter pairwise comparison matrix in terms of CC 102
Table 5.4 KSPIs’ weights and security estimations in the context of CC 103
Table 5.5 The security levels of the three P–T pairs: CC, CP, and CV 107
Table 5.6 The unified security decision-making attribute estimates 109
Table 6.1 The details of survey respondents 131
Table 6.2 The CONSEC scores of the studied dry ports 132
Table 6.3 The breakup of container security failures at dry ports 133
xv
1
The Criticality of Container Security
At the turn of the century, economic growth and supply chain man-
agement are two prominent global trends for policymakers, scholars, and
industrial practitioners. The seeming incommensurability of these trend
lines—opportunity and integrated growth on the one hand, and increased
uncertainty and risk on the other—has contributed to a dearth of practi-
cal dialogue across much of the strategic and commercial communities.
Too often, it is assumed that increased security equals decreased effi-
ciency, or worse, that economics and strategy cannot inform one another
in any productive way. It is not surprising that the majority of the com-
mercial and strategic communities operate exclusively in their own
spheres of influence. Hence, we attempt to overcome such perceived
watertight silos of operations. We bring together different stakeholders
and communities, as we believe that it helps launch a dialogue on global
supply chain security in an environment that seemingly contradicts trend
lines. Our effort is to embrace an interdisciplinary context, accounting
for and representing stakeholders of all hues. In this context, we try to
sketch a truly comprehensive global strategy for maritime security in the
contemporary world.
The last decade has witnessed an increasing worldwide concern in
terms of the security of trade. The emergence of transnational non-state
actors acting in coordination with global criminal organizations has raised
the stakes for maritime infrastructure protection. In addition, localized
but highly intensified maritime piracy hotspots have increased concern
about the security of seaborne cargoes and crew. Hitherto, policymakers
are far more worried about the capacity of the containers and their con-
tents. However, they conceal their anxieties so as to prevent chaos and
collapse of the already fragile economies. Despite such efforts, it is com-
mon knowledge that the security of the global supply chain is precarious.
Also, it is commonly known across the industry that numerous incidents
of container security failure are detected on a daily basis for which nobody
is or can legally be held responsible. The electronic inspection equipment
available for non-intrusive scanning of containers is far and few between,
and the security personnel available undermanned, overworked, poorly
trained, and lowly paid. Such is the state of the global distribution net-
work that sustains the quality of life of billions and underpins the eco-
nomic conditions of our century, and it is widely acknowledged.
The Criticality of Container Security 3
threats, especially war between major powers, a euphemism for the USA
and the erstwhile USSR (and currently China) has receded in the minds
of many analysts and policymakers; the focus shifted from international
strategic matters to domestic mundane issues, particularly those concern-
ing economic growth and employment. Even the reaction to 9/11, per-
haps surprisingly, favours this trend, as the phenomenon of global
terrorism was and continues to be viewed by many governments as law
enforcement rather than a strategic problem.
In both academic and policymaking circles, including international
organizations and informal ‘Track II’ diplomacy forums, considerable
efforts have been spent on developing a conceptual prism through which
one could view and apply a new security agenda to the old idea of collec-
tive security. With the added concepts of common, comprehensive, and
cooperative security, confusion is bound to follow if the term is used to
describe different things or conditions under differing circumstances.
The question is less of what exactly is security? Rather, it is perhaps better
phrased as what are the different ways in which security is conceived?
What are the implications for policy? As most theorizing about security
has not been maritime-focused, it is essential to place the development of
concepts of maritime security within the context of the wider security
debate. This leads to a series of questions. Security for whom? Security for
which values? How much security? From what threats? By what means?
At what cost? And in what time period?
the world daily on ships, trains, trucks, and barges. Any single one could
pose a deadly threat.
Since 9/11, trade security has mainly been viewed from an economic
and financial perspective, as worldwide annual theft and losses in con-
tainer commerce appear to be in the range of US$ 20 billion, with bil-
lions more lost in uncollected taxes. The focus today is on minimizing
security risks associated with the international flow of goods and services.
Although the security of ports and sea lanes was beefed up worldwide in
the aftermath of 9/11, maritime transport remained a rather weak link
due to the ease of concealment within a ship and the assured freedom of
navigation at sea. The growing containerization of trade has compounded
the problem of illicit transfers. The initiatives for strengthening security
in the international supply chain have multiplied, most of which have
been taken by governments, though many international organizations
have also been involved. The attack against the US World Trade Center
in 1993, another against an American destroyer USS Cole outside Yemen
in 2000, among others elsewhere, gave sufficient warnings of the immen-
sity of the impending threats, which the world almost wilfully ignored.
The 9/11 attacks triggered an overdue wakeup alarm and brought a
heightened focus on security in the transport chain. In response, the US
government launched various programmes that consisted of both legisla-
tion and voluntary cooperation between companies and authorities, pri-
marily its customs authority, namely the Customs and Border Protection
(CBP).
It should be noted that container security starts with the stuffing of
containers whose seals do not evidence or guarantee the legitimacy of the
cargoes loaded in it. The fact is that almost all of them are deliberately
ignored. The containers are vulnerable throughout the transit, beginning
with stuffing operations and before the shippers seal them. Also, vulner-
ability is high at the point of transfer or repacking of the containers.
During transportation by road, and in small harbours, the security risks
are also considerably grave. As such, road transport, where a container is
in the hands of a single person for long periods of time, can and does pose
substantial risks. Furthermore, one should note that container seals (or
so-called one-time locks), though carried out using the associated intel-
ligent technologies, are not difficult to remove, reproduce, and forge;
8 G. Gujar et al.
indeed, they can even be circumvented by lifting off container doors off
their hinges or just the top locking bar handle keeper. Subsequently, con-
tainers can be tampered for holes that are cut and then welded. Despite
such, they are consistently ignored at the cost of our own peril. It is just
a matter of time before this bomb explodes in our faces, as the scale of the
problem grows bigger by every passing day. According to McNicholas
(2007, 32):
Since 9/11, the focus has been on the minimization of security risks
associated with international flows of cargoes and services. The grow-
ing containerization of trade has compounded the problem of illicit
transfers. Hence, several initiatives and regulations such as Container
Security Initiative (CSI), Customs Trade Partnership Against Terrorism
(C-TPAT), 24-Hour Rule, to name but a few (see Chap. 2), were for-
mulated by the USA for strengthening security in the international
supply chain. These initiatives were subsequently adopted by many
countries and regions, for instance, the EU, Japan, Canada, China,
Australia, to name but a few (Rowbotham 2014). These are coopera-
tive efforts between the various National Customs Services and private
sector firms to deter illegal activities such as drug trafficking, wildlife
and flora smuggling, money laundering, and the illegal import and
export of prohibited items. In this regard, the regime has shifted its
primary focus from preventing the movements of narcotics to counter-
terrorism, although the former remains an important programme
objective. Its objective is to increase supply chain security through an
accreditation process for all private sector stakeholders along the sup-
ply chains, including importers and exporters, brokers, forwarders
independent of transport mode, for example, air, sea, and land, and
terminals (Szyliowicz 2014).