A newly effective federal port security law could have far-reaching effects on inland marine transport and its coverage, possibly delaying shipments, the head of the Inland Marine Underwriting Association warned.
Ronald Thornton, president and chief executive officer of IMUA, told National Underwriter there would be some effect on truckers going in and out of the ports, and it could create some delays in transit.
Mr. Thornton said that while it most likely will not affect coverages or pricing, “if there are delays caused by this in the supply chain, if there are issues where merchandise gets stopped or delayed, then it's a whole new ballgame.”
Titled the Port Security Improvement Act, the measure signed into law by President George W. Bush on Oct. 13 was designed to strengthen security at U.S. ports by establishing improved cargo screening standards.
The new law provides incentives to importers to enhance their security measures and implement a framework to ensure the successful resumption of shipping in the event of a terrorist attack.
The legislation–drafted by Sen. Susan Collins, R-Maine, who chairs the Homeland Security Committee, and Sen. Patty Murray, D-Wash.–also requires the Department of Homeland Security to develop a plan for the resumption of shipping in the event of a terrorist attack, and to install radiation detectors at the 22 largest American ports by the end of next year.
Mr. Thornton said coverage that could come into play as a result of the new law includes protection “for the carrier's liability for the cargo it's carrying, or from a transit insurance standpoint, where the shipper or consignee takes out insurance for their own account.”
He explained that inland marine already covers cargo from the time it's picked up to the time it's delivered, “so it's not going to change that. What might change is how it affects goods in transit for a lot of companies working with just-in-time delivery.”
Another issue, he said, is the types of security measures that will be put in place. He noted that the bill's wording discusses ports, trucks, containers, barges and railroads.
“Will they screen more containers? Put biometrics in? How will they do that, and what will it do to delays in the supply chain?” he asked.
Even though this is a port bill, he added, “there is some discussion about what it will do if law enforcement does more random checks of trucks moving on the highways–that's a big unknown right now.”
He also wondered what the measure would do to vessel loading, turnaround and delivery. “We're early on. There are preliminary indications that it may do something, but what that is remains to be seen.”
The act, which authorizes $400 million for port security grants, would, according to the Senate Homeland Security Committee:
o Help secure cargo and seaports.
o Help prevent a lengthy shutdown of America's seaports in the event of an incident.
o Provide layered security at every step of the supply chain.
o Push the borders out so limited resources can focus on suspect cargo.
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