Sea freight sector awaits impact of new US security regime

The impact of the International Ship and Port Facility Security Code (ISPS) under the Maritime Transportation Security Act, implemented yesterday, is being keenly monitored by the industry. The new code was introduced following the September 11th terrorist action and affects all ships sailing to the US as well as every port at which they may call.

The ISPS basically requires security on ships and in ports to be at a standard which will minimize the opportunities for terrorists to carry out a ship borne atrocity, for instance by smuggling weapons of mass destruction onboard. All ports and ships are required to be assessed for compliance, and are then issued with a certificate. According to US Coastguards, ships which do not have such a certificate will not be allowed to dock at a US port.

However a recent survey by the International Maritime Organization (IMO) has shown that only about half of ships and ports have been issued with the necessary certificates. This suggests that many ship owners and ports are waiting to see how strictly the US authorities enforce the regulations before investing time and money on compliance.

With 90% of the world’s trade carried by sea, the impact of the changing security regime is of vital importance to global supply chains. Some fear that the extra bureaucracy involved in the initiative could result in long delays for ships sailing to and from the US. With shipping capacity in short demand, this would have a knock on effect on freight rates as well as increasing the cost of inventory held within the system. However it will take several weeks before the full impacts can be assessed.