Press release

The European Commission has published this week the long awaited proposals for legislation that would make transport security throughout the logistics supply chain reality. The ESC has welcomed the fact the Commission is proposing a voluntary security scheme for road, rail and inland waterway-based movement of freight.

ESC has continuously argued that any security measures required ought to improve visibility and control of the transport chain providing greater efficiency gains and also a reduction in theft. ESC has during the consultation process called for a voluntary ‘known cargo’ security approach, emphasising that not only the shipper but also the transport operator has responsibility for making and maintaining the cargo’s ‘known’ status. The Commission proposal for a ‘security quality label’ is in line with these suggestions. However, the ESC has still a large number of questions and concerns.

Nicolette van der Jagt, Secretary General of the ESC, commented, “There is no escaping to enhanced security for all the parties in the supply chain and for the fact that security will add a further line in the accounts of companies involved in international trade. The trick will be to ensure that the costs are minimised and do not impede trade or the overall economic viability of conducting international business. We are also concerned that a large numbers of companies and their contracted hauliers, freight forwarders and agents would apply for a special security status without very obvious and immediate cost benefits.”

“A further major obstacle will be the liability of the different parties in the chain and their individual limits of liability: if this is not addressed and clarified it will be a substantial deterrent to companies volunteering to participate in such a regime.”

The ESC also fears that the proposal will lead to different implementation in individual Member States and consequently create unfair commercial disadvantages for those whose governments are less industry-friendly. Overall it will be the responsibility of Member States and the EU to ensure that security is not creating competitive disadvantages to EU companies compared to their global competitors.

The Commission proposes that when having been awarded the “secure operator” status, this would effectively reduce the number of “alerts” and inspections of freight in ports and terminals and at border points. Only the percentage of freight without the secure operator status would raise sufficient suspicion as might require further inspection. The ESC believes that these benefits are not clearly quantified. Ports have already responded by saying that they are not convinced on how to implement a “fast track treatment” which confirms this concern.

ESC also believes that the Commission should be more clear on how the proposed status of “secure operator” ties with the status of an “Authorized Economic Operator” and “Known Consignor”. Global companies risk being faced with a fragmented regulatory approach.

The Commission underlines in its Communication that Member States will be able to operate the schemes on a cost-neutral basis. It fails to give a complete picture of the costs implications because the costs for industry are not being assessed in this proposal.

The Commission makes it clear that failure of the market to accept the voluntary scheme could result in more ‘stringent measures.’ If take-up were limited, there is, in ESC’s view, an increased chance that regulations may be introduced by the European Union, that force them to participate, and force them to adopt security measures that are inappropriate for the company or a particular supply chain, set standards that are unnecessarily high and costly, and possibly add little to our overall protection fro terrorism.

For further information contact: Nicolette van der Jagt, Secretary General of the ESC - Brussels 00 322 230 2113