 Italy's
Approach To Supply Chain Security
Due to the physical shape of Italy and
its strategic position in the Mediterranean area, the Italian corridor
can be considered as the ideal enabler for efficient logistic platforms
for the north-south trade in and outside of Europe. In Italy, 63% of total
imports and 46% of total exports pass by sea. Italian ports are able to
handle nine million containers and 65 million tons of goods a year. During
the next ten years, the movement of containers is expected to increase
by 75%.
Sector operators have come to appreciate
the increasing importance of efficient logistics and supply chain management
especially as it relates to cost effectiveness, customer satisfaction
and competitive advantage.
Market demand for security products has
grown, largely due to fear of threats such as terrorism, piracy, theft,
illegal goods crossing borders (such as drugs, explosives or nuclear and
chemical weapons) and to the impact of natural disasters and logistics
failures. Additional security measures are required because only one part
of the supply chain needs to be compromised for an attack to succeed.
The introduction of new types of vessels and mobility patterns require
that further measures be taken to maintain safety and security at sea.
Supply chain security can be defined as
the effort to enhance the transport and logistics system for the movement
of goods. Supply chain security activities include credentialing, screening
and validating of cargo, advance notification of the cargo, use of locks
and tamper-proof seals, and inspection through the use of an inspection/detection
systems.
The majority of cargo is transported by
road (72 percent), followed by maritime (24 percent), and only approximately
four percent traveling by rail. A very small portion is transported by
air. The concentration of transportation by road leads to inefficiency
due to the increased probability of accidents, delays and thefts. It is
estimated that logistics costs close to 22% of gross domestic product,
6-7 percent higher than other countries with efficient infrastructures
and effective organization in the transportation of goods.
In Italy and across Europe, emphasis has
been placed on homeland security, transportation and critical infrastructure
protection. Key areas of interest include high-risk facilities such as
port infrastructures.
Port and maritime security has been a national
priority. The transportation sector and maritime industry in particular
should continue to perform upgrades in light of the above mentioned programs
and requirements and due to the ever-changing nature of security in the
transport of goods.
Supply chain security concerns industry
and trade, port authorities, terminal operators and competent authorities,
and it comprehends a wide variety of aspects, including:
•
Physical security
•
Risk analysis
•
Access control
•
Education and training awareness
•
Personnel security
•
Documentation processing security
•
Procedural security
•
Incident management/investigations
•
Information security
•
Conveyance security
•
Trading partner security
Sector operators have come to appreciate
the increasing importance of efficient logistics and supply chain management
especially as it relates to cost effectiveness, customer satisfaction
and competitive advantage.
Supply chain security activities revolve
around international, European Union (EU) and national regulations, programs
and initiatives, including:
•
The International Ship and Port Facility Security Code (ISPS Code),
an agreement of 148 countries that are members of the International Maritime
Organization (IMO): The ISPS came into force in 2004 with requirements
for security measures for ships, ports and government agencies and prescribing
responsibilities to governments, shipping companies, shipboard personnel,
and port/facility personnel to "detect security threats and take
preventative measures against security incidents affecting ships or port
facilities used in international trade.” Italian port authorities
successfully met the requirements for security assessments, security plans
and security officers to be put in place (albeit with some delay);
•
The IMO adopted resolution MSC.202(81) which required the establishment
of an international system for long range identification and tracking
of ships (LRIT). This automatic system consists of the ship-borne LRIT
information transmitting equipment, Communication Service Providers (CSPs),
Application Service Providers (ASPs), LRIT Data Centers, a LRIT Data Distribution
Plan and the International LRIT Data Exchange. The European Maritime Safety
Agency (EMSA) stressed that the objective of the EU LRIT system should
include maritime security, Search and Rescue (SAR), maritime safety and
protection of the maritime environment, taking into consideration developments
within the IMO context;
•
Standards for the establishment and management of supply chain security,
ISO 28000:2007, released by the International Organization for Standardization
(ISO); The Authorized Economic Operator (AEO) as part of the World Customs
Organization SAFE framework of standards: The growth of global trade and
increasing security threats to the international movement of goods have
forced Customs administrations to increasingly shift their focus to securing
the international trade flow and away from the traditional task of collecting
customs duties.
Common criteria are outlined in EC regulation
648/2005 and EC regulation 1875/2006 and came into force January 1, 2008.
An AEO is defined as: “a party involved in the international movement
of goods in whatever function that has been approved by or on behalf of
a national Customs administration as complying with WCO or equivalent
supply chain security standards. AEOs include, inter alia, manufacturers,
importers, exporters, brokers, carriers, consolidators, intermediaries,
ports, airports, terminal operators, integrated operators, warehouses
and distributors”.
The European AEO program is open to all operators
in the supply chain and differs from the other programs in that it has
a wider scope, as it encompasses customs simplified procedures and security
thus relating to compliance with all customs legislation, including customs
duties. The AEO program aims to reduce customs inspections by up to 90%,
which should streamline traffic, allow for fewer customs inspections,
facilitate procedures, overall strengthen controls and, at the same time,
facilitate trade. The number of applications for AEO certification by
Italian operators is lower than in other countries (21 versus, for example,
192 in the Netherlands). Italian regions with the most requests are Lombardy,
Trentino-Alto Adige and Emilia-Romagna. At a European level, the most
active countries, based on an analysis of the applications for certification,
are the Netherlands (192 applications), Switzerland (92 applications),
Germany (82 applications) and Great Britain (61 applications).
As of July 2009 traders must provide customs
authorities with advance information on goods brought into or out of the
customs territory of the European Community (entry and exit summary declarations).
Failure to respect these procedures will mean goods cannot be loaded on
ships bound for the EU. The risk management system will be fully computerized
by 2009. The regulation also requires customs authorities to exchange
information electronically on exports in order to speed up export procedures.
This requirement has aroused concern and perplexity among Member States
regarding the new procedures and the requirement of each individual government
to develop its own software. Italy has not yet announced when it will
look into this matter. Suspect loads entering Italian borders must therefore
be checked.
•
The Container Security Initiative, and C-TPAT, programs led by U.S.
Customs and Border Protection in the Department of Homeland Security(DHS)
focused on screening containers at foreign ports: In response to the 9/11
attacks, the U.S. introduced the Customs-Trade Partnership Against Terrorism
(C-TPAT) initiative to reduce the risk of weapons of mass destruction
entering its ports undetected. Under C-TPAT, importers are required to
take all reasonable steps to ensure the integrity of their supply chains.
There are 700 overseas ports that ship to the U.S., although it is the
56 CSI (Container Security Initiative) ports that generate 86% of the
container traffic entering the U.S. Italy currently has five CSI ports
that include Genoa, La Spezia, Livorno, Naples and Gioia Tauro.
•
In the 9/11 Implementation Bill of 2007, Congress enacted a mandate
requiring that 100 percent of all maritime cargo be scanned prior to entering
the US. Following much debate, DHS has strived to put in place a policy
that is more industry-friendly, including a 10 plus 2 ruling that requires
that CBP receive ten data submissions, plus a vessel stow plan as well
container status messages from a shipper prior to the shipment of cargo
to the US. This system should allow for more flexibility, cost-efficiency
and a better idea of what cargo contains, without having to turn to invasive
scanning.
•
Pilot initiatives by companies in the private sector to track and
monitor the integrity of cargo containers moving around the world using
technologies such as RFID and GPS.
•
The GALILEO European satellite radio navigation and positioning
program: The European Commission launched the system which was developed
jointly with the European Space Agency and should be operational by 2013.
Gallileo will have multiple applications in many areas including maritime,
road and rail transportation.
•
Trans-European Transport Networks (TEN-T): a planned set road, rail,
air and water transport networks designed to serve the entire continent
of Europe. Projects for a trans-continental railway, the development of
short-sea shipping as an alternative to road transport (Motorways of the
Sea project) and financial incentives for increasing the capacity of inland
navigation routes.
Companies that are currently operating in
the supply chain security field with operations in Italy include: Cotecna
(Switzerland), Bureau Veritas (Belgium), Lloyd’s Register (United
Kingdom), Intertek Group plc (United Kingdom), SGS Group (Switzerland),
Cosec (Switzerland).
Worldwide container traffic is projected
to grow to 400-460 million containers in 2010, and 510-610 million containers
in 2015. EU Member States have over 600 significant ports along their
thousands of kilometers of coastline, and these handle around 90% of EU
external trade and around 35% of trade between EU countries. There are
more than 20,000 commercial ships at sea in European waters. On an annual
basis, 1.600 million tons of cargo is transported by sea and eight million
tons of cargo is transported by air into and out of the European Community.
The number of companies affected by intra-EU supply chain regulation is
4.7 million of which 600.000 are exclusively involved in logistics operations.
85% of these logistic operators are micro enterprises with less than ten
employees, whereas 60% of freight transport activities are initiated by
large enterprises. The initial cost to industry to implement security
management in the intra-EU supply chains is about 48 Billion Euro, while
the annual cost to maintain security management also will be in the order
of 36 Billion Euro.. A more systematic approach to quality, environmental
and safety management has proven to yield substantial gains in efficiency
to industry -- which may go as high as 8 or 9% of return on assets.
The EU is now making considerable efforts
to encourage the integration of existing transport modes and the use of
intermodal systems: the development of sustainable, innovative and interoperable
regional and national transport and logistics networks, infrastructures
and systems. Intra-Community maritime transport and inland waterway transport
are two key components of intermodality which must provide a means of
coping with the growing congestion of road and rail infrastructure and
of tackling air pollution. Up until now these two modes have been underused,
even though the Community has huge potential (35.000 km of coastline and
hundreds of sea and river ports) and virtually unlimited transport capacity.
The European Commission has published guidelines regarding transportation
policy and has suggested that, to help establish this trans-European shipping
network, priority should be given at the national level to ports which
have good connections to the inland network, particularly along the Atlantic
and Mediterranean coasts, and which could form part of an authentic logistics
chain.
Again due to the physical shape of Italy
and its strategic position in the Mediterranean area, the Italian corridor
can be considered as the ideal enabler for efficient logistic platforms
for the north-south trade in and outside of Europe. More than 80 million
passengers pass through Italian ports every year. The Italian interport
system includes 19 working structures, mainly localized in Northern Italy,
and 17 structures are in the works in Central and Southern Italy. In Italy,
63% of total imports and 46% of total exports pass by sea. Italian ports
are able to handle nine million containers and 65 million tons of goods
a year. During next ten years, movement of containers will increase by
75%, as ro-ro (roll/on, roll/off) cargo movements will step up. Nowadays,
this infrastructure engages 1,021 companies and 60,000 employees. Italian
fleet ranks first in Europe and thirteenth in the world.
The port of Trieste was the number one Italian
container port, as published by Confetra (Italian Transport and Logistics
Federation) in Oct. 2008. In the context of declining air and rail transport,
ports are holding up (+6% compared with 2007). In container transport,
Trieste (+32.9%) is followed by Savona (17.2%), then Venice (+13.9%) and
Livorno (+12.2%). Less impressive growth figures can be seen for the ports
of La Spezia (+8.4%), Cagliari (+1.9%), Gioia Tauro (+1.7%) and Naples
(+1.1%). Transport has diminished for Taranto (- 2.4%), Genoa (-4.8%)
and especially Salerno (-9.2%).
In Italy, the Port of Genoa has always been
a center of economic and industrial affairs, and its importance reaches
far beyond the regional borders of Liguria. It can accommodate any type
and size of ship and handle any type of dry and liquid cargo through its
13 connected terminals. To guarantee a perfect functionality of the Port,
the main objective of the P.O.T. (Operational Triennial Plan) for the
period 2006-2008 was to develop the whole port area through the construction
of new infrastructure and the improvement of some of the available services.
In addition, the Port Authority of Genoa,
in conjunction with the local government authorities, has given the go-ahead
to an ambitious seaport and airport redevelopment plan drafted by one
of the world’s leading architects, Renzo Piano, to cater for the
future vessel upsizing and the enormous surge in trade flows through the
Mediterranean. The focal point of the plan is the relocation of the international
airport to a new artificial island and the conversion of its existing
space into a cargo facility capable of handling the largest projected
containerships. The plan will transform the entire 20 kilometer coastline,
streamlining the existing layout of the port and double the operating
surface area from 200 to 400 hectares.
In May 2008, the President of Piedmont Region
signed an agreement with Genoa’s port authority in order to realize
and manage an intermodal hub in Alessandria connected with the Ligurian
Ports system. Concurrently, Insiel, a system integrator based in Friuli
Venezia Giulia, recently announced the use of a new system for the integration
and rationalization of terrestrial and maritime goods flows. The SEC project
(Safe and Efficient Cargo), sponsored by the Transport Department of Friuli
Venezia Giulia Region, aims to trace the flow of goods of the main logistic
infrastructures and to automatically manage the relevant documents, such
as docking demands and boarding/landing requests by truck drivers passing
through Trieste harbor.
In October 2008, the European Intermodal
Association (EIA) organized the Italian Intermodal Day focusing on the
Berlin-Palermo corridor. This is one of the most important axes of Italy
and covers almost the entire Italian territory, while it can be considered
as an ideal European link between industrial and consumer markets towards
the Mediterranean region. It is a growing concern to search intermodal
ways to by-pass congestion in Western Europe and provide business alternatives
to road-only solutions. The liberalization of access to infrastructure
is an ongoing crucial topic on the European and national government agendas,
as are fundamental criteria to develop efficient transport services. Numerous
business opportunities can be found and developed on the corridor, and
speeding up the process of liberalization will also allow newcomers to
take advantage of new possibilities.
EU Member State ministers responsible for
European Affairs met last year to discuss how an Integrated Maritime Policy
can best ensure a sustainable future for oceans and seas. The ministers
recognized the need to reinforce the maritime governance, with regard
to the coordination between European Community’s agencies in charge
of sea-related issues, and the cooperation within different sea basins,
taking into account region-specific challenges. Member States supported
the initiative to establish the European network for maritime surveillance,
with a view to ensure better interoperability of surveillance systems
in use and to streamline the surveillance activities carried out by Member
States.
Gordon Feller |
Air
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