Port Security Firms at Defendory”


Two leading international firms in the field of Ports Security, SGS of Switzerland and Nuctech of China, were first-time participants in the Defendory Exhibition.

from left: Mr Andy Liu (Nutech company), Mr Thomas Revillard (SGS company), Mr Pantelis Fourniadis, Mr Conny Michalopoulos

SGS are leaders in the field of inspection, while Nuctech is a manufacturer of advanced X ray scanners for inspecting cargoes on trucks and in containers. The two companies have formed a partnership to undertake projects in Trade Facilitation for ports, having as one of their targets the Greek market.

Economic Outlook spoke with Mr. Andy Liu, Marketing Manager of Nuctech, and Mr. Thomas Revillard, Vice President of SGS at Defendory International 2008 held last month at the Hellenikon Exhibition Center.

Q: What does the SGS-Nuctech partnership hope to bring to Greece?

• Revillard: SGS and Nuctech have joined forces to offer solutions in the field of “trade facilitation and security reinforcement” for the Greek ports. The objective is to streamline the processing of cargo through a port, while still ensuring that cargos are properly inspected for security and customs purposes.

Q: Is this a new field for SGS and Nuctech?

§ Liu: Not really. Nuctech has been producing advanced scanners for cargo inspection for more than 10 years, and we have scanners installed in over ____ ports worldwide.
§ Revillard: SGS also has a long history, more than 50 years, providing inspection services to ports and to cargo shippers. Through our partnership with Nuctech now we are offering a complete trade facilitation solution to the market.

Can you describe how “Trade facilitation” works?

• Revillard: “Trade Facilitation” uses modern techniques of automation to streamline the processing of cargo through the ports, along with advanced scanners and computerized risk management tools to ensure that cargos are properly inspected for security and customs purposes. All the cargo manifests are sent electronically from the port and analyzed by the computerized risk management system before the ship even reaches the dock. Transactions are characterized according to their level of risk, and the resources for cargo machine scanning and human inspection are concentrated on specific risk cargos, according to scientific algorithms based on historical experience and the criteria of the port, customs, and other government and security authorities.

Q: Gre ece is well positioned as a trade crossroads, but cargo volumes at our ports are not growing as much as hoped. Could “trade facilitation” improve this current situation?

• Revillard: Yes, we believe trade facilitation could be very helpful to the commercial operation of Greek ports. Most of the world’s major ports use “Trade Facilitation” techniques with very good results. Cargo moves thru the port in a matter of hours from the time the ship docks until the cargo is on its way to be delivered. This makes those ports more attractive to shippers, as less time wasted means greater profits and improved ability to satisfy customers.

Q: But doesn’t the type of streamlined operation you’re discussing raise the chances of dangerous cargos being allowed into the country?

• Liu: Actually, it’s the opposite. Cargo containers and trucks can now be scanned very quickly and with almost total accuracy. Nuctech’s newest “Fast Scan” scanners can analyze completely the contents of a cargo, while the truck is driving through with no stopping. Even at speeds of 15 km/hour, the scanners are able to “see” the contents clearly. Manual methods of cargo inspection are much slower and therefore could not be applied to 100\% shipments. Scanners offer a good alternative solution enabling the increase of inspection and effective results in terms of stopping such things as terrorist weapons, illegal drugs, radioactive sources/waste, people smuggling, etc. The newest scanners can also incorporate capabilities for license plate and cargo container ID number recognition, truck chassis inspection, as well as many others for enhancing port security within a very short period of time.

Q: How would the SGS-Nuctech approach affect Greek ship owners and shipping companies?

• Revillard: Ship owners would benefit from having better functioning ports where automation methods speed the offloading of cargo and thus reduce turnaround time at the terminal.
• Liu: Also shippers, especially those sending cargos to the States, will benefit as the addition of the newest Security scanning capability allows them to comply with the U.S. Cargo Security Initiative (CSI) and qualify for “fast track” processing.

Q: What other benefits can be realized with “trade facilitation”?

• Revillard: SGS’s experience at other ports shows that when you improve the security and operation of ports with modern tools such as scanners and computerized risk management, the country is safer, consumers are better protected, and the amount of customs duties and tax revenues collected by the State usually increases drastically. This of course benefits the taxpayers and also can provide a revenue stream to pay for ports and other infrastructure improvements. By increasing the speediness of the whole process we enable an increase of the trade exchanges at the same time.

• Liu: We might also mention the new EU framework of regulations relating to Customs and cargo inspection set to come into effect next year. Under the new system known as “Authorized Economic Operator” the first port where a cargo container enters the EU will handle all the security and customs inspections, and approve the entry of that container into the EU. In other words, the burden for making sure cargo shipments contain no dangerous or illegal items will shift from the country of final delivery, to the first EU port of entry. Trade facilitation is the only approach which can meet these new EU requirements without introducing huge delays in the port’s cargo-handling or costing huge sums of money.

Q: Accepting the benefits of the approach, it seems it would be very expensive to implement especially in the current world economic environment. Can you estimate what the cost would be to the Greek state?

• Revillard: Indeed, implementing “trade facilitation” does require a significant up-front investment, but the cost does not necessarily have to be borne by the taxpayers. SGS often works on a PPP (Public Private Partnership) basis with Build Own Operate & Transfer scheme, whereby SGS undertakes the financing of the project as well as operation for a period of several years (to be defined and agreed with the client), with some of the revenue coming from improved customs and tax collection and/or cargo inspection fees.

Q: Isn’t it very risky to let private companies take over such an important function as cargo inspection?

• Liu: This approach can actually be less risky if done correctly. The World Customs Organization (WCO), an association of 159 countries to which Greece belongs, has recommended that all its members put in place Trade Facilitation systems.

• Revillard: Also, in a Trade Facilitation scenario SGS/Nuctech would not actually “take over” the cargo inspection function. We would be responsible for training, operation and maintenance of the system and equipment, but Customs, Coast Guard, and the other State responsible agencies would remain the Decision makers. They would set the criteria and inspection levels for the system, and their officials would be present side-by-side with our operations personnel and will make the decision on each transaction. Our personnel are specially trained in the operation of these modern scanning and risk management tools, and our corporate incentive is to conduct inspections as thoroughly as possible so as to intercept any illicit cargo and ensure full customs recovery. In this way our aims are well aligned with those of the Greek state, the port and the citizens.

Q: A final question, are you optimistic about your potential in the Greek market?

• Revillard: SGS is already working in Greece in the area of inspection & certification services, with a significant presence here since 19___. Recently we have begun to look at the ports market. We see that the SGS model of “trade facilitation” is ideally suited for Greece, and we are confident that our experience in setting up effective and complete trade facilitation systems gives us a strong competitive advantage.

• Liu: I already mentioned Nuctech’s “FastScan” technology, which is clearly a big advantage for us. Another Nuctech technology called “dual energy” is unique in the industry. With “dual energy” the scanner performs scans at two different energy levels at the same time in order to identify the exact materials inside the cargo and produce a color coded picture where dangerous or suspicious items can be identified very easily.

Interview: Markos Kantzios(economic outlook September 2008)

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