Risk Management in Port Operations, Logistics and Supply Chain Security

Khalid Bichou, Michael Bell, Andrew Evans

• Publisher: Informa Law from Routledge
• Year: 2013
• ISBN:
  9781317912880
• Edition: 1
• Topic: Law
• Subtopic: Maritime Law
• Index: Law

Risk Management in Port Operations, Logistics and Supply Chain Security is the first book to address security, risk and reliability issues in maritime, port and supply chain settings. In particular this title tackles operational challenges that port, shipping, international logistics and supply chain operators face today in view of the new security regulations and the requirements of increased visibility across the supply chain.

PART I

BACKGROUND

CHAPTER 1

MARINE REPORTING AND MARITIME SECURITY

Mark Rowbotham

Portcullis ISC Marine, UK

Abstract:

Much is being studied about the prevalent issue of maritime security, especially from the point of view of landside operations at sea ports. However, although the issues concerning the overall security of port operations and how these relate to the security of vessels entering, berthed at and leaving port have been investigated, less has been studied concerning the actual security of those vessels at sea, especially in relation to their complements, such as cargo or passengers. The US maritime security issues in the wake of 9/11 imposed significant compliances upon overseas traders sending goods to US shores. These security issues highlighted the lack of information available in many cases concerning both cargo and passenger manifests, as well as the ability of the vessel and its crew to effectively report their details to the US national authorities. How much less, therefore, is the ability of the same or similar vessels to report the same kind of information to other national maritime authorities throughout the world. This study, part of a larger study into the issues of maritime reporting and territorial controls, seeks to address some of the issues at stake, and to shed some light on the overall subject of marine reporting and how it could be better managed and developed.

1 A VIEW FROM THE BRIDGE

The state-of-the-art marine freighter or passenger liner bears little relationship to its forebears in terms of the technology of its control systems. Gone are the telegraphs between bridge and engine room, as are the conventional wheelhouses with their huge steering wheels. Everything is controlled by complex on-board computer systems, from steering and navigation to engine control and position monitoring. Even the marine propulsion systems have changed, from the combinations of conventional stern-mounted screws linked to huge marine engines and bow-thrust mechanisms, to azymuth propulsion systems, where the propulsion systems can revolve through 360 degrees and are connected to smaller, more efficient diesel engines by an adjustable link mechanism, which eliminates the need for a conventional rudder steering mechanism. The one main link with more traditional times is the vast array of Admiralty charts ranged across the available desk space, although even this is giving way to a large extent to the ECDIS computerized charts. Today’s control systems rely heavily on a mixture of GPS, VTS, AIS and conventional radar systems. From port of departure to port of destination, the vessel monitoring process from a navigation point of view revolves around the following systems:

• Leaving port—VTS/AIS;

• Open sea—AIS/GPS;

• Entering port approaches—AIS/VTS;

• Port arrival—VTS.

The VTS systems allow for the close monitoring of vessels within port approaches and port areas themselves, while AIS allows for the monitoring of vessels throughout their voyage, and indeed while the vessel is in port as long as the AIS transponder is switched on. The drawback with any of these systems is that they identify the ship, but not its crew or its cargo or complement of passengers. Equally, the AIS system is still subject to a slight delay between the time the transponder emits the signal and the time this registers on the system and thus registers the ship’s position. All this may be good insofar as it exists, but it does not tell the full story. There are considerable gaps in the whole process, mainly because of the issue of cargo reporting, and these gaps are the issues of the greatest importance owing to the risks posed by unreported cargo and other security considerations. Other risks also prevail, in particular the lack of monitoring of vessels outside the remit of the VTS and AIS systems, which could have an adverse effect on the security and safety of vessels covered by these systems. Despite the evident technological tools available to the ship’s master and his crew, the view from the bridge may still be obscured by many external factors beyond the master’s control.

The synopsis of procedures concerning the voyage of a cargo vessel may be loosely categorized as follows:

1. the ship’s agent and the freight forwarders verify specific documentation (e.g. dangerous goods notes etc.) to ensure compliance with IMO requirements;

2. the cargoes destined for loading aboard vessel are declared to Customs by electronic input;

3. Customs clearance is given for the consignments to be loaded aboard vessel;

4. the ship is loaded at port with the cargoes (e.g. containers);

5. bills of lading are issued for all cargoes loaded aboard vessel, and the cargo information is also entered on the cargo manifest;

6. a copy of the ship’s manifest is given to the ship’s master by the ship’s agent (the port agent) and a further copy of the manifest is also submitted to Customs;

7. the ship’s master notifies the port and the Customs authority that all cargoes are loaded aboard vessel;

8. the ship is given clearance to sail;

9. the master maintains contact with the port VTS concerning the ship’s movement out of the port, through the channel and into the open sea;

10. the ship maintains electronic contact with other vessels and land through the use of the AIS system;

11. the ship sails across the ocean to its destination. Upon the approach to the port of destination, the following action is undertaken:

12. the vessel’s agent notifies the port of destination of the arrival of the vessel;

13. the ship notifies the port of destination 24 hours in advance with details of the ship, its crew and any hazardous or dangerous cargoes aboard vessel in accordance with the IMDG Code, and its intention to dock;

14. the ship enters national territorial limits and notifies the port of details of its crew, its stores and any other information required by the national authorities;

15. the ship maintains contact with the port through the VTS system from the time it enters the port approaches, and proceeds to enter the port;

16. a copy of the cargo manifest is submitted by the port agent to the port authority and the Customs authority prior to the ship’s arrival at port;

17. the ship’s master submits a FAL Declaration to Customs of all details of crew and stores on board; and

18. the ship’s master gives a detailed report to the port authority complying with the regulations set down by the ISPS Code.

Although details of cargo reporting may have been covered earlier in this section of the study, they still have an overall bearing upon the safety and wellbeing of both the vessel and its crew. It should be noted that the ship’s master can only report details of the cargo if he is fully aware of that cargo aboard the vessel according to the cargo manifest. In many cases, the cargo may only be known by its groupage description, i.e. a generic description of the consolidated cargo in a LCL container load, and not by details of each individual consignment within that consolidated cargo. This absence of information may not yield vital information, such as the hazardous nature of an individual cargo, or whether such a cargo was (in)correctly stowed aboard vessel. It is this lack of information which may mask a much greater risk to the ship, its crew and its location depending upon the location of other vessels close by, e.g. within the confines of port approaches, or where adverse weather conditions such as fog may be prevalent. It is this anomaly which may prejudice or compromise the safety and security of not only the ship and its crew, but also the safety of the surrounding environment including the port itself. There is a further risk prevalent if the exact nature of the crew is not fully known, concerning their professional competence to crew the vessel or their nationality or even their motives for being aboard the vessel at the time of the voyage.

A major problem arises where the buyer (i.e. the importer) arranges groupage shipments and has the cargo consolidated at a point in the country of departure under an ex works (EXW) basis. Given that the buyer initiated the transport of the various consignments, the shipping line will still issue both a master bill of lading for the LCL groupage shipment as well as a set of house bills of lading, but may not necessarily issue the house bills to the buyer unless specifically requested. Thus, the exporter may never receive a copy of the house bills of lading relating to their consignment since they did not arrange the shipment. Nor will the exporter receive a copy of the export Customs declaration for that consignment, assuming that an individual export declaration has been physically raised by the freight forwarder, which may not be the case in the event of a consolidated consignment. In many cases, this does not happen. There is thus no audit trail available to the exporter to show that their particular consignment was shipped. Furthermore, where a groupage consignment simply shows “freight of all kinds” (FAK) or a generic description such as “cosmetic products” or “automotive equipment”, there is no specific means of verifying the individual consignments grouped within the container in question, as there may be the risk that no specific house bills of lading were raised for each individual consignment as far as the exporter is concerned. Furthermore, this lack of detailed information will also reflect on the cargo manifest issued to the ship’s master and to Customs at the point of export.

The problem is compounded by the fact that the forwarding agent notifies the port agents about the cargo once the shipment has been arranged for loading aboard the vessel. The freight forwarder is responsible for sending full details of the cargo to the port agent for the latter to incorporate the details of the consignment and the container in which it is loaded on the cargo manifest. The port agents are responsible for dealing with all affairs relating to the vessel while it is berthed at port, including the loading and unloading of the vessel, and the liability for conservancy and port handling charges. It is thus the responsibility of the port agent to ensure that the ship’s master is made aware of all cargoes loaded aboard the vessel, and that all hazardous or dangerous cargoes are notified in advance to the master of the vessel in order to ensure compliance with port regulations, SOLAS regulations and the general regulations concerning the correct stowage of all cargoes aboard the vessel. If a freight forwarder does not submit the correct information concerning cargoes, especially those of a groupage or consolidated nature, to the port agent, the freight forwarder could be made liable for any accident or damage which could occur as a result of the failure to inform the port agents or the ship’s master or even the port itself of the nature of the cargo being loaded aboard the vessel. In reality, the responsibility for correctly divulging information pertaining to the cargo lies with the exporter. If the exporter does not inform the freight forwarder of the true nature of the consignment, the rest of the chain of reporting is severely prejudiced, including the ramifications for insurance of the cargo in question.

In short, the neither the ship’s master nor the shipping line nor the port authority may be entirely knowledgeable about the crew of the vessel or its cargo. Although the ISPS Code goes a long way towards tightening up security measures aboard vessels as well as providing information about the crew, it only covers that which is known or is divulged in the company’s interests. In the case of the ISPS Code, there are, however, likely to be cases where although the crew’s nationality may be known, other information about each crew member may not be known because of the withholding of personal information by certain crew members for personal or other reasons. Furthermore, there is no internationally-binding code obliging the exporter or the freight agent to correctly declare all freight being loaded into a container, and in this way the cargo considerations are completely divorced from the issues of the nature of the vessel’s crew. Even the recently introduced ISO 28000 and 28001 standards allow the trader to compile and implement their own set of checklists and procedures concerning cargo security, and do not dictate the exact details of such procedures. The underlying principle is still one of uberrimae fidei. Thus, in an age of information technology and access to information, the data held by the shipping line pertinent to the cargo on any of its vessels may only be as accurate as the organization inputting that information to the shipping line, such as a freight agent. With large-scale cargo consolidations, the risk of inaccuracy and heightened risk on this basis is greatly increased. A ship will not report in either to a sea port or a control centre overlooking a narrow strait concerning the nature of its cargo if it is not aware of any hazardous or dangerous cargo on board, especially since the 24-hour reporting mechanisms in place at many ports, particularly those in the UK, are still voluntary and not fully mandatory. The ship is entirely at the mercy of the shipping line’s agents and the freight agents responsible for shipping cargo consignments. This level of uncertainty only adds to the risk of accidents or catastrophes occurring as a result of marine accidents, and thus severely compromises marine safety for the vessel, its crew and other cargoes aboard the vessel.

2 A VIEW FROM THE SHORE

The aspect of maritime reporting is naturally important from the onboard vessel perspective. However, from the port perspective, there are many issues which beset port and landward activity which need to be addressed on a longterm basis, mainly as a result of recent maritime legislation which affects worldwide maritime activities.

The EU Directives covering vessel monitoring and tracking have meant that more sea lanes must be covered by some form of VTS system. The waters around southern Scandinavia are being increasingly brought under some form of VTS activity, with the most recent being the Storebaelt (Great Belt) within Danish territorial limits. Invitations to tender have also been submitted for the purpose of the provision of a VTS system to cover the Öresund, between Denmark and Sweden. And yet, there are still many sea areas, including much of the coastal waters surrounding the UK, which are not yet covered by an interactive VTS system similar to that at the Strait of Dover. Only the AIS system is being actively used around all UK waters, and even this is only effective if the vessels have their AIS transponders switched on. There are various AIS websites for public use, and these are in some ways the only way in which many organizations can monitor maritime activity around the UK coast. However, there is no fully-integrated VTS system for the whole of the UK, and every port manages its own affairs concerning vessel control activity. Indeed, there are still major ports in the UK which are not yet equipped with a VTS system, inferring that they have little, if any, monitoring or control facility over inward and outward vessel movements, despite the incidence of marine accidents close to their domains. Ports do not divulge information to other ports for a variety of reasons, and there is therefore no way of knowing a vessel’s circumstances without being located at the port of arrival or departure. In short, the UK system of vessel control is severely fragmented, with information concerning a vessel’s movements restricted to the authorities located at the vessel’s port of arrival, unless it is passing through the Strait of Dover, in which case that information is also known to the MCA’s CNIS operations. Other than this, only the vessel’s agents will retain information concerning a particular vessel, its cargo and movements, and they will only convey that information to the port of destination.

Such information concerning the vessel’s cargo is also becoming less manageable because of the increasing sizes of vessels. The latest vessels entering service with shipping lines such as Maersk, CMA CGM and COSCO are well in excess of 100,000 grt and can carry some 9,000–10,000+ TEUs (twenty-foot equivalent units). The increasing numbe...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Preface
• Introduction
• Lits of Contributos
• Contents
• Lits of Figures
• Lits of Tables
• Part I Background
• Part II Systems for Enhancing Port Security and Operational Efficiency
• Part III Frameworks for Managing the Security of Global Trading and Supply-Chain Systems
• Part IV Models for Analysing Security Risks and Policy Implications
• Index