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Standardized container security: not yet
By James. H. Smith
March 13, 2006
The takeover of the P&O ports portfolio by state-owned Dubai Ports World (DPW),
which would have allowed the company to operate container terminals in six
US seaports until a concession was made in the wake of legislative uproar,
has brought security at US seaports to the forefront.
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Amidst bipartisan opposition, DPW has agreed to sell the US operations to a
US operator.
Opposition to the deal in Washington was spurred by concerns that allowing
an Arab country to operate the terminals could compromise national security.
In the wake of the firestorm, the issue of how to safeguard containerized
cargo entering the US has produced calls for high-tech tracking systems and
the enhanced use large-scale X-ray and gamma ray machines and radiation
detection devices to detect explosive devices and chemical threats. Also
suggested are intelligent video systems, crane-mounted sensors, radio
frequency identification (RFID) tags and devices with sensors on containers
which would indicate the presence of chemical and biological materials, the
opening of a door, or the breaking of a container seal.
In addition, testimony before the House Subcommittee on National Security as
early as November 2002 indicates:US ports have programs in place to detect
illegal fissile material or nuclear weapons, but these programs are limited in several respects. They
focus on screening a small portion of total cargo as it enters the country,
and they are carried out without the use of adequate detection aids, such as
equipment that can scan entire containers for radiation. Efforts to target
cargo for screening are hampered by the quality of information regarding
which cargo poses the greatest risk.
Less than five per cent of cargo entering US ports is inspected although the
US government spend for port security has increased by an estimated 700 per
cent since the events of 9/11.
It is estimated that over 12 million loaded containers will pass through US
ports in 2006 – and that number is expected to increase for the foreseeable
future.
While IBM, Unisys, a consortium comprising US-based GE, Japan’s Mitsubishi
and Germany-based Siemens as well as other companies and consortia are
working on such systems, much of the technology is confined to small
privately-held companies.
The consensus is that, until a standard for container security is mandated,
investment in technology will be limited; smaller solution providers will
remain on the sidelines, reluctant to spend money to roll out products that
may not meet those standards.
Investors should be wary of sinking capital into technology companies whose
offerings may be rejected as not meeting standards when those standards are
eventually promulgated.
Disclaimer
James Smith is an independent columnist for this web site. James Smith may
hold long or short positions in any of the stocks mentioned in this article
and those positions can change at any moment.
InvestorIdeas.com Disclaimer:
www.InvestorIdeas.com/About/Disclaimer.asp, InvestorIdeas is not
affiliated or compensated by the companies mentioned in this article. James
Smith is a freelance writer. Nothing in the articles should be construed as
an offer or solicitation or recommendation to buy or sell any specific
products or securities. Past performance does not guarantee future results.
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