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Security measures are being stepped up so that shipping lines are better
prepared for any terrorist attacks that would disrupt sea trade. - AFP
Cruise liners and oil tankers, loaded with potential hostages and dangerous
cargo, will increasingly be used as both weapons and targets in terrorist
attacks designed to disrupt world commerce, experts warn.
``It would be relatively easy to disrupt the global supply chain. If done
effectively, sensitive sea lanes could be blocked or contaminated. That is
certainly a source of concern in the Straits of Malacca, the Strait of Hormuz,
the Panama Canal, Suez Canal and other narrow sea lanes,'' Daniel Wagner,
senior co-financing specialist at Manila-based Asian Development Bank, said.
Some 80 per cent of the oil produced in the Persian Gulf is transported by
tanker through the Strait of Hormuz, which is 55 kilometres wide at its
narrowest point between Oman and Iran.
In Asia, China, Japan and other economies rely on the 994 km Straits of Malacca,
which links the Indian and Pacific Oceans. Four-fifths of Japan's oil imports
are transported via this waterway. Closure of the Straits of Malacca would
increase international freight rates as ships from the Gulf would have to
travel an additional 1,590km to reach Asia.
The importance and vulnerability of these strategic waterways on just-in-time
economies and ``lean'' businesses holding low inventories can also have a
pronounced trickle-down effect.
A recent Aegis report said shipments of manufactured goods from China to
Britain, for example, must pass through four critical choke points and warned
that ``banks would be reluctant to step up to the demands for working capital
injections in the event that delivery of goods took seven weeks instead of
three. This would be the case if ships sailed south around Africa's Cape of
Good Hope rather than through the Suez Canal.
``When Suez last closed in 1973, Britain luxuriated in bloated inventories and
still made goods on shore. Stock markets have now awarded premium ratings to
leanest enterprises, but overlook the one area where the supply chain within
the global village is at its most vulnerable,'' the report said.
To enhance maritime security, the International Ship and Port Facility Security
Code came into effect in July of this year. Under the new regulatory regime,
firms like Pacific Basin Shipping (HK) are required to have their ships
properly certified.
Pacific Basin chief operating officer Jeff Phillips said this additional
security measure will slow down the supply chain but does not really affect the
company as it operates a fleet of bulk carriers and not container ships.
``Our ships are not the same as those carrying containers, where the content is
not known. We are all bulk cargo'', which is loaded via a spout, making it hard
to tamper with, Phillips added.
Container ships are different. According to ADB's Wagner, about 90 per cent of
all goods transported into or out of the United States occurs by sea but only 5
per cent of this is inspected. In light of this, a number of innovative
anti-boarding measures have been introduced, including a 9,000-volt shipboard
electric fence, to help reduce the chances of a successful terrorist attack.
``When one considers the extent to which Asian economies are dependent on
exports to the US [and Europe] for their livelihood, the risk that a terrorist
attack on the transportation infrastructure of the US would impact Asian
economies is profound,'' Wagner said.
dennis.eng@globalchina.com
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