Vol. 8 No. 7                                              WE COVER THE WORLD                                                   Tuesday January 20, 2009

     Today we launch a new monthly feature titled Thinking Tuesday.
     The idea behind Thinking Tuesday is to create long form pieces in our virtual format.
     While we realize that many of our readers utilize PDAs and cell phones to access FT, we are also aware that articles are saved and filed for reference later so we figure why not add some frequencies to our publication whilst offering even more in-depth coverage of single subject topics.
     So maybe this added frequency to our publishing schedule will become a download now and read later item in your life or perhaps you will read it now.
     In any case your opinion counts, so tell us what you think.
     For January, Gordon Feller, (right) a Mumbai-based reporter who’s been watching and worrying about Asian cargo developments for more than 25 years, writes Thinking Tuesday.
     Gordon did his formal academic training at Columbia University in New York City, where he was a Wallach Fellow and a Lehman Fellow, and completed graduate work in international affairs. But as he likes to say—his real-world training has come from the "school of hard knocks. "
     Gordon Feller has written analysis and commentary for the FT of London, Reuters, Thomson, Informa, Journal of Commerce, McGraw Hill—and many others.
     Again, we welcome your comments and suggestions.
Geoffrey

 

Overview To Australian
Transport Security 2009

     Since September 2001, the Australian Government has spent over $740 million on enhancements to aviation security, part of the overall homeland security funding package of $6 billion for the years 2001-2012.
     It has allocated some of these funds for improvements to air cargo security, using initiatives such as the introduction of explosive trace detection equipment, and implementing trials to test a variety of emerging explosive-detection technologies to assist examination of air cargo.
     Spending on port and harbor security is averaging $50 million annually, after higher years previously, as a result of large injections of government funds in the wake of 9/11.
     Many enhancements are already in place, such as increased policing, staff screening and identification, improved intelligence resources, and higher numbers of surveillance devices, particularly cameras.
     Government, privately-owned ports airports, and airlines, are meeting cost of greater security at Australia’s borders.
     Following current trials of technology and equipment, and subsequent adoption, it is anticipated that annual spending will increase, with attendant opportunities for non-Australian suppliers.
     Names such as Lockheed Martin, Rapiscan, L3 Communications, AS&E, and GE lead the field. The situation is still evolving.
     Exciting new areas such as remotely operated surveillance vehicles and advanced scanning methods will keep the market active and interesting.
     Ports and ocean freight account for 99 percent of Australia's trade by volume and 76 percent by value.
     Screening of containers arriving by sea, however, takes place in low proportions.
     This compares with Australian Customs air cargo inspection of over 70 percent.
     The Australian Government is evaluating technology and equipment to enable much higher rates of container screening.
     Australia’s increased security in the maritime industry has concentrated on security regulated port and ships rather than addressing supply chain security, which the Federal Government considers a more difficult issue.
     The Australian Customs Service is beginning to consider various initiatives to enhance the security of the supply chain.
     The air cargo sector accounts for approximately 300,000 tons of export airfreight annually, with a value of $15 billion dollars.
     The domestic air cargo sector accounts for approximately 200,000 tons of domestic airfreight each year.
     Inspection rates for air cargo are higher than seaborne containerized freight.
     The maritime industry is implementing a Government objective to x-ray seven percent of import containers.
     It is also improving security capabilities at the ports of Launceston, Darwin, Townsville, and Newcastle to bring them into line with major facilities in Brisbane, Sydney, Melbourne, Adelaide and Fremantle.

Maritime Security
     Following the attacks of 9/11, the international community resolved to implement a system to secure the maritime transport sector against the threat of terrorism.
     The International Ship and Port Facility Security (ISPS) Code was developed through the International Maritime Organization (IMO) in December 2002.
     Australia also introduced a number of measures to increase maritime security.
     In 2003, the Australian Government developed its own Maritime Transport Security Act to implement the ISPS Code in Australia. The Act came into effect in 2004.
     In 2004, an Australian Taskforce on Offshore Maritime Security identified the need to regulate the security of Australia’s strategically important, and vulnerable, oil and gas industry.
     This resulted in the Maritime Transport Security Act becoming the Maritime Transport and Offshore Facilities Security Act.
     The Act requires all security regulated ports, port facilities, offshore facilities, and ships to undertake risk assessments, and to implement security plans to address identified risks posed by deliberate threats.
     These entities must prepare and implement a maritime security plan, and provide information on their security measures to other industry participants conducting operations within security-regulated ports.
     All maritime workers now undergo a background screening process before being issued with maritime security identification cards.
     Port corporations are increasing port security and safety in the areas of physical safety of vessels, both in transit and at moorings; electronic surveillance; anchorages, and berthing.
     Before ships can enter Australian ports, they must supply comprehensive details, including the vessel’s name; route information; cargo (if hazardous); displacement, propulsion, and contact details of both the shipping agents and stevedores.
     There has been an increase in the use of database and security management systems to process and store the information.
     Port authorities are interested in vessel tracking systems, with the Sydney Ports Corporation pioneering the use of a Vessel Traffic Service for its harbor zones.
     Bidding for the system closed in December, and Sydney ports have conducted trials with several potential suppliers systems, including an American-made system.

Aviation

     Both government and industry share the responsibility of aviation security in Australia, including air cargo.
     The Aviation Transport Security Act 2004 and the Aviation Transport Security Regulations 2005 apply to specific airport operators, aircraft operators, regulated air cargo agents and occupiers or controllers of an airport area.
     The Act and the Regulations require aviation industry participants to maintain approved Aviation Transport Security Programs, which must detail how the participants will manage security for their operations.
     Aviation security safeguards Australia's civil aviation operations against "acts of unlawful interference".
     The Minister for Infrastructure, Transport, Regional Development and Local Government, and his Department, are responsible for the development and implementation of a national framework of consistent aviation security measures.
     Australia’s 186 security-controlled airports must have security measures in place, including means of ensuring that only authorized people may enter secure areas of the airport. Aviation Security Identification Cards are required to obtain unescorted access to the secure areas of security-controlled airports that have regular public transport services.
     The airports must maintain a plan—a “Transport Security Program”—which outlines the security risks at the airport.
     Of the 186 security-controlled airports, 147 regional airports have no additional specific requirements beyond those imposed on the group as a whole – i.e., protecting secure areas and having a Transport Security Program.
     Screening of either passengers or property is not compulsory at these airports.
     On March 31, 2007, the Australian Government introduced enhanced security measures to limit the amount of liquids, aerosols, and gels that can be taken through screening points at airports. Additionally, the Government is currently trialing new methods of detecting weapons, explosives and other prohibited items.
     Some of the technologies being trialed include detection of potentially explosive liquids, aerosols and gels carried by passengers on civil aircraft.
     On December 1, 2007, checked baggage screening by handheld explosive trace detection equipment commenced at Australian regional airports receiving regular jet air services.
     All regular passenger and charter aircraft with 30 seats or more must be fitted with hardened cockpit doors.
     The Australian Government fully funds implementation of this measure on non-jet regional aircraft.

Further Developments
     The Australian Government is trialing new ways of detecting weapons, explosives and other prohibited items.
     Some of the technologies now being trialed include explosive detection in liquids, aerosols and gels carried by passengers on civil aircraft.
     The Government is working to strengthen and examine security arrangements for the transport of dangerous goods, with a focus on various types of explosives, flammable gases and liquids, toxic substances, oxidizing agents, and ammonium nitrate.
     Australian Customs now has more than 1,400 closed circuit television cameras in operation at Australia’s key international airports.
     The Airports National Monitoring and Analysis Center, located in Melbourne, enables Customs officers to monitor, and remotely record airport camera feeds from Brisbane, Sydney and Melbourne Airports, 24 hours a day, seven days a week.
     A number of new technology projects have received funding in recent years to enhance maritime and aviation security.
     These projects include:
     • New technology for chemical detection including: raman spectrometers, gas chromatograph-mass spectrometers, ion mobility spectrometers, and immuno-assay trace detectors,
     • Advanced automatic x-ray machines at the Sydney Gateway Facility and the Melbourne Airmail Transit Centre, including metal-detection technology for general mail items.
     • Extension of waterfront closed circuit television network, extending the existing waterfront system from 32 proclaimed ports to all 63 proclaimed ports.
     • A field trial of neutron scanning technology, developed by the Commonwealth Scientific and Industrial Research Organization, capable of scanning air cargo containers.
     During October/November 2008, the Australian Government conducted a trial of new X-ray security scanners at Sydney, Melbourne and Adelaide airports.
     The X-ray technology allows screeners to detect non-metallic devices, objects and weapons concealed on a person's body.
     The Department of Infrastructure, Transport, Regional Development and Local Government is correlating and evaluating results.
Australian receptivity is high for foreign-origin manufactured equipment.
     The extensive research and development conducted by various companies following September 11, 2001 has resulted in the development of technology that is critical to Australia’s security.
     During the years 2001-2012, Australia will spend over $6 billion on homeland security initiatives prompted by the increased threat of a terror attack.
     This report is general in nature and covers a range of sector equipment used to increase security of Australia’s ports and airports.
     Some of the funds have been allocated to increased inspection capacity at seaports; air security officer programs (marshals); increased intelligence and communications capacity; an increase in personnel, and replenishment of the national medical stockpile ($110 million).
     Yearly Australian Federal Budget allocations for overall security largely determine the market demand and value for port and harbor security. According to budget statements, most of the 2008-09 funding in the area of national security sets out to continue or enhance existing programs, rather than initiate any new ones.
     The 2009-09 budget includes a large proportion for manpower increases, with the forecast expenditure mostly over a period of years. Funding measures, which continue or enhance existing programs or capabilities include (today’s currency conversion):
     • $16 million over five years to develop a recruitment and retention program within the Australian Federal Police
     • $5.5 million over four years for the continued provision of intelligence support to Australia’s response and law enforcement operations against illegal foreign fishing in the Southern Ocean
     • $700,000 million in 2008–09 for Customs to continue aerial surveillance of Australia’s northern waters
     • $23 million over two years to keep the Customs vessel ‘Triton’ on patrol in Australia’s northern waters
     • $10 million over four years for Customs to increase inspection and examination of containers in Launceston, Darwin, Townsville and Newcastle
     • $5.5 million in 2008–09 to continue the Air Security Officer program.
     Innovative security equipment is a high priority. The Australian Government considers present port security measures adequate.
     It is committed, however, to continually examining new ways to improve security procedures.
     The Office of Transport Security in the Department of Infrastructure, Transport, Regional Development and Local Government oversees trials of new technology and equipment.
     In response to constantly evolving and emerging threats, the Government is evaluating available technologies for use in Australian airports.
     It has been conducting trials on advanced technologies for carry-on luggage X-ray, body scanners and liquid explosive detectors.
     The purpose of the trials is to determine possible approaches to aviation security screening technology.
     Some of the technologies are currently in use in the United States.
     • Sydney Airport's international screening point will use an AS&E X-ray backscatter body scanner, and an L3 X-ray for carry-on luggage.
     • Melbourne domestic airport (Tiger Airways) screening point is trialing a Rapiscan X-ray backscatter body scanner, an Ahura liquid detector, and a Rapiscan X-ray for carry-on luggage.
     • Adelaide's main screening point is trialing an L3 millimeter wave scanner, a Smiths x-ray for carry-on luggage, and a Chinese-manufactured, NuTech Computed Tomography/Digital Radiography bottle scanner.
     Trials concluded November 30, 2008, with performance reports expected in the first quarter of the 2009.
     Once results are known the Department of Infrastructure, Transport, Regional Development and Local Government will make recommendations to the Government.
     The Government will then make an informed choice as to whether or not to implement the technologies over a period of time.
     According to the Department, it will not make results available to the general public.
     Should decisions be made to implement any of these technologies, the Department will hold further consultation with interested stakeholders. Individual aircraft owners who are not required to develop and implement security programs, will determine practical measures to mitigate the risk of theft in the general aviation sector.
     These measures include fitting auxiliary locks – for example to propellers or propeller controls, securing aircraft in hangars, or aircraft door locks. The Australian Department of Defense is interested in harbor protection systems for its naval facilities.
     Navy Fleet Headquarters, Sydney, is conducting the study, to determine which harbor protection systems would be the most suitable.
     In 2007-08, Australia’s three major trading partners in terms of the import value of goods were the EU, the U.S., and China.
     The top three destinations in terms of the export value of goods were Japan, China, and the EU.
     A total of 798 million metric tons of international freight moved through Australian ports and airports.
     After seven years of testing border control biometrics, Australian Customs Service will introduce the “SmartGate” processing system at every Australian international airport by June 2009.
     SmartGate uses facial recognition biometrics for border control, which Customs considers necessary because of an expected major increase in travelers entering Australia.
     The SmartGate system will involve placing e-passports on a scanner at a kiosk, which unlocks and reads data stored on the embedded chip.
     The stored data passes through a scanning station where the system checks data associated with the ticket against biometric data collected from the person.
     Currently, New Zealand is the only other country able to use Smartgate.
     The Australian Government considers it necessary to develop local expertise to improve security at both ports and airports.
     For example, it is conducting trials of new freight screening technology to assess its suitability for use within the Australian aviation sector (see above).
     Australian Customs will construct a facility in Brisbane to trial world-first, non-intrusive neutron technology, developed by the Commonwealth Scientific and Industrial Research Organization.
     The system will facilitate rapid detection of explosives and other threats in air cargo more effectively than conventional x-ray systems.
     The technology will be capable of scanning an airfreight container in less than two minutes.
     The Australian Government will place additional personnel resources at major airports to ensure effective intelligence collection, dissemination and liaison.
     It will also develop an aviation security information collection and dissemination capacity in the South East Asia and Pacific regions.
     The Australian Government will conduct trials of new airport security scanning systems, assisted by scientists from the Australian Nuclear Science and Technology Organization, including performing technical tests on designated X-ray equipment.
     The Defense Science and Technology Organization (DSTO) is assessing other scanning devices, such as those that use radio waves. Those trials officially commenced in the middle of October 2008 continued until the end of November.
     DSTO has recently opened a new facility at the Australian Technology Park in Sydney, where it is researching advanced simulation, and developing state-of-the-art equipment to assess security risks at seaports and develop measures to counteract threats.
     It is using visualization software representing major ports and harbors, to scan for security weaknesses and improve situational awareness.      The Commonwealth Scientific and Industrial Research Organization worked recently with Chinese Nutech Company to develop a new air cargo scanner, which is being trialed at Brisbane International Airport.
     The equipment consists of neutron and x-ray scanning, providing material specific images. Following a successful initial trial, plans are in place to produce the first commercial unit in Beijing. Beijing Zhongdun Anmin Analysis Technology Co offers its FISCAN x-ray scanning equipment through an Australian distributor.
     The UK-based company Smiths Industries has scanning equipment installations at Australian airports, and it is participating in scanning trials at Adelaide Airport.
     Among the U.S. technology and equipment suppliers who are actively focused on homeland security in Australia:
     • Lockheed Martin is bidding on a vessel traffic management system for Sydney Ports.
     • Rapiscan, through its Australian subsidiary, won a recent tender to supply six regional Australian airports with its automated hold baggage screening systems.
     • L3 Communications has equipment installed at Australian airports.
     • AS&E has equipment in trials.
Gordon Feller



Zurich Airport handled 27,250 tons of air cargo in December down 16.4 %, but January-December traffic netted 387,671 tons, up 3.6 percent for the year . . . Qantas added A380 flights to Singapore and London, Monday January 19 . . . Air China Ltd., will report its first annual loss in memory as passenger demand tanked and because of poor hedging bets on fuel prices . . . Singapore Airlines said cargo traffic slumped in December last year, with SIA filling just 55.2 percent of space last month, down from 62 percent in December 2007 as SIA recorded an 19 percent fall in freight ton kilometers. Meantime SIA has cancelled more than 200 flights from now until the end of March connected to poor demand for the carrier’s services . . .