Secure Trade Project

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Secure Trade Project Final Report Economy United
States Intermodal ITS Experts
Group Presentation April 2008
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Secure Trade Project Final Report

• Project Background
• Objectives and Approach
• Summary of Key Findings
• Return on Investment (ROI) Model
• Recommendations
• For more information

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Secure Trade Project Final Report

• Secure Trade Project initiated as part of STAR
  to promote and facilitate trade and efficiency
  while enhancing security
• Phases 1 and 2 completed by Australia and the US
  with focus on container track trace
  technologies
• Phases 3-5 were combined and focused on testing
  a specific track trace technology using the SST
  (Smart and Secure Tradelane Technology) program
• SST program ceased operations in 2006 leaving no
  test bed for evaluation purposes, resulting in
  revised objectives and approach

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Secure Trade Project Final Report

• The objectives of the Secure Trade Project were
  focused on 4 key areas

• Efficacy Assessing the use and performance of
  selected security technologies.
• Economics Examining the required investments,
  costs and benefits of selected security
  technologies
• Equity Assessing the differences between
  developed and developing economies in the use of
  security technologies
• Standards Researching the current state of
  standards and ITS applicability for the selected
  security technologies.

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Secure Trade Project Final Report

• To meet the objectives of the project the team
  undertook the following approach
• Analyze the current state of 3 categories of
  Container Security Technology
• Non-intrusive inspection (NII) using X-ray and
  other technologies to generate images of contents
  inside a container
• Radiation detection using equipment to detect
  the presence of radioactive material inside a
  container
• RFID container intrusion detection using
  devices with wireless capabilities that can
  communicate the breach of a containers door
• Research the deployment of Port Security
  Infrastructure in the APEC region
• Create a Return on Investment model for security
  deployment

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Secure Trade Project Final Report
The project team conducted surveys, held
discussions with technology vendors, and
collected information from public sources to
provide an overview of each of the selected
technologies that includes

• operation of the technology
• costs and benefits
• efficacy
• related standards and ITS
• trends driving use of the technology
• feasibility within APEC economies
• equity between developed and developing economies

Yantian International Container
Terminal Shenzhen, China
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Secure Trade Project Final Report
The project team conducted surveys, made visits
to selected ports, met with customs personnel,
and collected information from public sources to
better understand the use of port security
technologies in 18 ports in 16 APEC economies

• Port of Melbourne, Australia
• Port of Vancouver, Canada
• Port of Shanghai, China
• Port of Shenzhen, China
• Port of Hong Kong
• Port of Tanjung Priok, Indonesia
• Port of Yokohama, Japan
• Port of Busan, Korea
• Port Klang, Malaysia

• Port of Auckland, New Zealand
• Port of Callao, Peru
• Port of Manila, Philippines
• Port of Singapore
• Port of Kaohsiung, Chinese Taipei
• Port of Laem Chabang, Thailand
• Port of Los Angeles, USA
• Port of New York/New Jersey, USA
• Port of Ho Chi Minh, Viet Nam

Visit conducted.
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Secure Trade Project Final Report

• Ports within APEC economies are experimenting
  with and using security technologies to varying
  degrees.
• Security technologies are at different levels of
  maturity and present different cost and benefit
  implications to various users, both public and
  private.

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Secure Trade Project Final Report
Non-intrusive Inspection (NII) technology

• Use Non-intrusive Inspection (NII) technology is
  widely used (17 of the 18 ports analyzed), has
  benefited Customs administrations (security,
  fees) but requires significant human operator
  involvement.
• Efficacy The combination of a well-conceived
  targeting process, a clear NII image, and a
  well-trained operator have resulted in the
  detection of potential security risks in
  containerized cargo.

New Zealand Customs Mobile X-Ray at Port of
Auckland
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Secure Trade Project Final Report
The use of Non-intrusive Inspection (NII)
technology in the researched ports
(1) According to World Bank
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Secure Trade Project Final Report
Radiation Detection technology

• Use Programs such as CSI, SFI and the Megaports
  Initiative are supporting the increased
  deployment of radiation detection technologies.
  Radiation detection infrastructure is not as
  widely deployed as NII.
• Efficacy Nuisance alarm rates and
  transshipments reduce the efficacy of existing
  portal-based Radiation Detection

Radiation Portal Monitor (RPM) at Port of New
York / New Jersey
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Secure Trade Project Final Report
The use of Radiation Detection technology in the
researched ports
(1) According to the World Bank (2) As of Oct.
3, 2007, Container Security Initiative
Operational Seaports according to U.S. Customs
and Border Protection (3) Megaports Initiative -
Operational port/country or at various stages of
implementation
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Secure Trade Project Final Report
RFID container intrusion detection/identification
technology

• Many tests and indications from ports and
  government entities indicate that the technology
  can be an effective tool for detecting container
  door breaches
• Questions about efficacy remain as it relates to
  technologies that only focus on the door and not
  all 6 sides of the container
• A lack of clear requirements, mandates,
  incentives from government agencies has inhibited
  the widespread use of the technology

GE Container Security Device (CSD) being mounted
inside container door
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Secure Trade Project Final Report
The use of RFID container intrusion
detection/identification technology in the
researched ports
(1) According to the World Bank
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Secure Trade Project Final Report

• A Cost estimate for port security infrastructure
  deployment
• Based on a generic port with two container
  terminals and an annual TEU volume of 800,000
• The deployment of NII, Radiation Detection, and
  RFID container intrusion detection technology
  could range anywhere between 4.8M and 19.6M
  (USD) given certain assumptions
• Costs can be offset, shared or recovered through
  a variety of methods including revenue generation
  (fee collection), technology vendor support,
  government program support such as the Megaports
  Initiative

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Secure Trade Project Final Report

• Equity
• Hypothesis Developing nations could be at a
  disadvantage in terms of their ability to
  acquire, fund and deploy advanced technologies
  such as NII, radiation detection and RFID
  container intrusion detection in the port
  environment.
• Finding There does not appear to be a
  correlation between whether an economy is
  developed or developing and the degree to which
  container security technologies are available and
  being utilized by an economy. Two other factors
  are more relevant
• Participation of the seaport or economy in
  security agreements or programs (CSI, Megaports
  Initiative, etc.)
• Investment by commercial entities (terminal
  operators, technology vendors) in advanced
  security technologies.

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Secure Trade Project Final Report

• Standards and ITS (Intelligent Transportation
  Systems)
• Standards continue to evolve for container
  security, particularly with respect to RFID
  container technologies.
• Widely agreed upon requirements, incentives and
  mandates do not exist to support the use of RFID
  container technologies.
• Standards for NII and Radiation Detection are
  primarily focused on safety
• Container security technologies have
  applicability for ITS
• Each of the three researched technologies have
  productivity, safety and economic implications
• Networks that read on-container security devices
  present an opportunity to provide systemic
  productivity benefits to public and private
  entities

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Secure Trade Project Final Report
Standards - RFID In terms of radio frequency
allocation, many economies have opened key
frequencies for use in supply chain and logistics
applications. Japan was one of the few countries
that, until recently, had not approved 433 MHz
for logistics applications. This approval took
place in early 2007. In addition to Japan, the
economies of China and Korea have opened the 433
MHz band in recent years for logistics
applications. In early 2007, ISO ratified an
active RFID standard for electronic container
seals, ISO 18185. It was completed in
anticipation of a US government requirement that
seals of containers entering the United States be
inspected. However, a mandate for seal inspection
has not materialized to date. To this point, as
it relates to container seals, the ISO (PAS)
17712 specification is the closest thing to a
standard for sealing a container. ISO (PAS)
17712 is a set of specifications for mechanical
seals which have been endorsed by the WCO as well
as by U.S. CBP for required use in the C-TPAT
program.
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Secure Trade Project Final Report
Standards - RFID As it relates to RFID-based
CSDs, U.S. CBP published on Dec 12, 2007, a
request for information (RFI) to solicit industry
input on determining whether available
Container/Conveyance Security Device systems meet
its needs. The container security systems are
intended primarily for monitoring the doors of
shipping containers and other conveyances to
determine if an intrusion occurs during the cargo
transit. This set of requirements is in response
to Section 216 of the Safe Port Act of 2006.
The RFI from CBP specifically excludes electronic
seals attached to the outside of a
container. New Zealand Customs Service requires
that its Customs approved seal must meet
Revised Kyoto Convention Annex E.1, Minimum
requirements to be met by Customs seals and
fastenings.
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Secure Trade Project Final Report
Standards Radiation emitting equipment such as
NII X-Ray and Gamma Ray In 2006, the
International Atomic Energy Agency (IAEA)
approved for publication its Fundamental Safety
Principles. These standards were jointly
sponsored with several groups including the
International Maritime Organization (IMO) and the
World Health Organization (WHO) among
others. The Occupational Safety Health
Administration (OSHA) in the U.S. Department of
Labor has standards on ionizing radiation (29 CFR
- 1910.1096). In 2005 it issued a request for
information (RFI) concerning those radiation
standards citing that it has been an issue of
great interest to the longshoring industry
because of the increase in container screening
for homeland security purposes. In Australia,
X-ray systems must meet stringent radiation
safety standards set by the Australian Radiation
Protection and Nuclear Safety Agency, and the
World Health Organization safety standards.
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Secure Trade Project Final Report
ITS Applicability Intermodal Freight
applications include applications that track,
monitor and communicate with conveyances such as
maritime cargo containers. This area of ITS has
the most applicability to the research conducted
in the Secure Trade project, particularly RFID
container intrusion detection/identification
technologies. As the networks that read
on-container devices extend to include locations
outside of seaports, the true intermodal
potential of this technology becomes evident. A
container that can make its security status,
location, and other critical information
available to a multi-nodal network that is
accessible by various public and private supply
chain participants can provide systemic benefits
whether the container is under the control of an
ocean carrier, trucker or rail operator.
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Secure Trade Project Final Report

• ITS Applicability
• In the port environment, congestion is a
  significant issue as trucks often queue for long
  periods of time waiting to pickup or drop-off
  containers associated with maritime transit.
  Port authorities that have responsibility over a
  large amount of diverse infrastructure could have
  the most interest in the potential benefits of
  these on-container technologies. The Port
  Authority of New York/New Jersey oversees not
  only the seaport but also airports, roads and
  bridges. This responsibility could provide an
  opportunity to take a systemic approach to
  problems like security and productivity
  including, for example
• Using the road toll system in conjunction with
  truck cab/driver information to better plan
  arrival and entry of container trucks at the
  seaport
• Tracking the history of a truck being stopped on
  a road for a commercial vehicle inspection so
  that the same truck is not stopped again on its
  continuing journey. This would reduce repeated
  stoppages of moving goods avoid utilizing police
  and other valuable resources for duplicate
  inspections.

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Secure Trade Project Final Report

• There is no single commercially viable security
  solution that eliminates the vulnerabilities
  posed by intermodal shipping containers
• Gaps in national policies, global standards and
  international agreements represent difficult
  challenges to a more secure trade environment
• Non-intrusive Inspection (NII) technology is
  widely used, has benefited Customs
  administrations but requires significant human
  operator involvement
• Nuisance alarm rates and transshipments
  reduce the efficacy of Radiation Detection
• Container intrusion detection deployment is
  being slowed by a lack of mandates, incentives,
  and standards
• International programs and capacity-building
  efforts are driving container security technology
  deployments in developed and developing countries
  alike

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Secure Trade Project Final Report
A return on investment model has been developed
for estimating the costs, benefits and potential
return by the use of RFID container intrusion
detection / identification technology. This is a
spreadsheet-based tool that allows the user to
enter a variety of information related to the
port, supply chain and RFID technology being
utilized.
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Secure Trade Project Final Report

• Coordinated efforts between APEC economies to
  target/screen containers and to effectively use
  NII technology should be accelerated
• APEC should consider studying the effects of
  different security and scanning scenarios in the
  region
• APEC should incorporate an update of
  international security programs, policies and
  standards into its regular meetings
• Capacity building and program assistance should
  continue and be focused on identified security
  gaps
• APEC should consider studying the security
  implications of transshipments in the region

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Secure Trade Project Final Report

• Full report posted to the APEC website
• Limited hard copies of full final report
  available
• Contact
• Adam Kiesel
• Unisys Corporation
• adam.kiesel_at_unisys.com
• 1 602 412 3240