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Editor's Blog and Industry Comments

Ill considered US container law at the heart of row between the EU and the US.

21 February, 2008
America wants 100% of all containers shipped to their shores from Europe to be scanned prior to shipment, thus extending lead times, adding significant cost, alienating Europe and not having a massive impact on terrorism reduction.
There are simply too many unanswered questions regarding the latest brainwave for protecting American ports. The risks are high and protection is paramount, no-one can deny this, but the implications of new laws need to be fully considered before barging in with both feet. Scanning every container that ships to America will add an enormous burden on cost and land usage, many smaller ports will be unable to meet the requirements, businesses will collapse and jobs will be lost. For those ports that remain, the throughput rates would be unable to cope with the capacity demands and therefore lead times will be extended with inevitable pressure coming to bear on the port authorities regarding prioritisation issues and compensation claims. Manufacturers will start quoting back dock shipment dates instead of delivery dates so US consumers will have no clue about when their European ordered products will actually arrive on their doorstep.

However, the most significant issue is the cost. I can't imagine for a single moment that either European suppliers or tax payers are going to show any willingness to absorb the additional costs associated with this, which some estimates put at over £100 million a year so the cost will have to be added to the shipping charges and will come out of the pockets of American consumers, something that I doubt they would be happy about either.

These and other issues are the focus of the attention of John Bruton, the EU Ambassador to the United States and it is hoped that he has enough power in his elbow and backing from the EU to navigate his way through the tangle of issues and unanswered questions associated with it and to come out of it with an agreement that is based on common sense.

The point I made about not having a massive impact on the fight against terrorism is based on the simple equation of cost against risk. Any manufacturer knows that you can't perform 100% inspection on everything all of the time because it's a waste of time and money. With the right risk assessment and sampling plan, you catch all the defects anyway. The risks are different with port security but the principles and the mathematics are identical.
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