BUS606: Operations and Supply Chain Management

A bill was passed in the US in 2007, under the title "Implementing Recommendations of the United States 9/11 Commission Act of 2007", mandating overseas radiation scanning and NII inspection of 100% of all cargo containers destined for the U.S. by 2012. The word "overseas" contains a dimension of extraterritoriality that might be the stumbling stone of the so-called "100% scanning" program. On the other hand, it is already a law in one of the major players in international trade, even if its enforcement date has been set in the, not too distant, future.

Many analysts and observers consider that this initiative is running at cross-purposes with the prevailing multi- layered approach inasmuch as:

• It is contrary to the strategy of risk management and targeting of high-risk shipments, which enables the Government Agencies to allocate their limited resources to the areas where they are most needed.
  
• Given limited resources, 100% scanning may actually end up providing a lower level of security as the focused attention on specific high-risk shipments is being diluted and diverted to a "blanket" approach covering ALL containers, if customs officers are diverted from focusing on high-risk container cargo. "Under the current risk-management system, for example, the scanned images of high-risk containers are to be reviewed in a very detailed manner. However, according to WCO and industry officials, if all containers are to be scanned, the reviews may not be as thorough".
  
• Its systematic approach might, paradoxically, give a delusive sense of security, whereas many specialists contend that truly high-risk shipments will actually receive less specific attention.
  

Other concerns relate to:

• The impact on the productivity of the ports and shipping industries and infrastructure, in general.
  
• The ability of the USA to reciprocate, should trade partners demand reciprocity
  
• The adoption of similar reciprocal exigencies by the other main global trade partners: BRIC (Brazil, Russia, India and China), EU, ASEAN+3, which would mean applying 100% scanning at origin de facto to the whole world
  
• The potential distortion of existing trade routes, and consequent further marginalization of smaller ports, which are many in the developing countries. This would not be neutral on the competitive position of traders from said countries.