The world’s customs are increasing the use of scanning technologies to inspect goods crossing borders as new risks have increased, such as the COVID-19 pandemic, trade restrictions and organized crime, and also as the investigation and the develop progresses.
Increased inspection procedures, tighter import and export controls, and new security regulations could cause disruption to companies’ businesses.
International container traffic is subject to security and customs inspection and related procedures in countries of origin, destination and transshipment points. These inspections can lead to seizure of cargo, delays in loading, unloading, transhipment or delivery of containers and the imposition of customs duties, fines or other penalties against exporters or importers and, in some cases, customers.
Overall, US and Canadian authorities have increased container inspection rates at customs
Customs and technological changes
Government investment in non-intrusive container scanning technology has grown and there is an interest in electronic monitoring technology that would allow centralized remote monitoring of containers during shipment to identify tampering or opening of containers.
Also, additional safety requirements have been imposed for ships, including the installation of safety alerts and automatic identification systems on board ships.
After a series of recent terrorist attacks in cities around the world, there has been a higher level of security and new security procedures could be introduced at customs.
For example, for the company Atlas, which operates a fleet of 118 container ships, it is unclear what changes – if any – to existing inspection procedures will ultimately be proposed or implemented, or how those changes will affect the industry.
According to this company, such changes may impose additional financial and legal obligations on carriers and may make shipping certain types of goods per container uneconomical or impractical. The additional costs that may arise from current or future inspection procedures may not be fully recoverable for customers through higher fees or security surcharges.
Atlas deploys its ships on long-term fixed-time charters to take advantage of the stable cash flow and high utilization rates that are generally associated with long-term time charters. As of March 10, 2020, charts on the 118 vessels in its operating fleet had an average remaining lease period of approximately four years, on a TEU-weighted basis, excluding the effect of chartering options to extend certain charts of time.
The clients of its operational fleet as of March 10, 2020 were Arkas, CMA CGM, COSCO, Hapag-Lloyd, KMTC, Maersk, MSC, ONE and Yang Ming Marine, leaders in maritime transport.
In this framework, the World Health Organization (WHO) declared for the first time that COVID-19 was a global health emergency in January 2020.
Customs and COVID-19
In early March, the focal point of infections moved from China to Europe, especially Italy; But in April 2020, the focus shifted to the United States, where the number of infections was accelerating. The new coronavirus has sickened more than 1.95 million people, with 126,000 deaths as of mid-April. More than 80 countries have closed their borders to arrivals from countries with infections, have ordered the closure of companies, have instructed their populations to be quarantined, and have closed schools to approximately 1.5 billion children.
In late January 2020, China was the first country to impose travel restrictions, followed by South Korea and Vietnam. During the four-week period from mid-March to early April 2020, more than 17 million Americans applied for unemployment insurance, increasing the possibility of a deep economic recession and a significant increase in the unemployment rate.
Uncertainty about the duration and depth of the economic effects related to the health crisis are fueling perceptions of risk and volatility in financial markets and corporate decision-making. Furthermore, uncertainties about the global pandemic and the effectiveness of public policies aimed at reducing its spread are increasing market volatility.