Security regs drive shipping firms online

In the face of heightened terrorist alerts, shipping companies are being required to meet tougher rules and regulations to move cargo around the world. And many of them are using Web-enabled services to ease the way.

The United States is not the only country to tighten cargo security regulations in the wake of the Sept. 11 terrorist attacks, but every nation has different rules, according to Greg Stock, vice president of marketing for Vastera Inc., a global technology solutions firm.

"What's happened since [Sept. 11] is that every company recognizes that they need to do their part to fight terrorism [and make] sure they are not doing business with potential terrorists," Stock said. "You need to know who your customers are."

Vastera uses Web-enabled technology to help shippers determine the rules in every port of call and what forms they need to file electronically before loading or unloading their cargo.

Vastera's product manages the system for shipping companies that lack the staff or technical knowledge to do it on their own, and it keeps track of all cargo, so a shipment does not sit idle and vulnerable to being used to smuggle contraband.

George Weise, former Customs commissioner and now Vastera's vice president of global trade compliance, said customs agencies worldwide have been performing more risk assessments of cargo in light of growing terrorist threats.

"The only way to look at it is not transaction by transaction, but by risk factors and get to know your importer," he said.

The risk of contraband or weapons of mass destruction being smuggled aboard a ship is growing even though an estimated 80 percent of world trade is handled by 20 percent of importers, he said.

"You need to know where your goods are at every point of the process and have security measures in place all the way through," he added.

Rob Quartel, a former Customs official and now chairman and chief executive officer of FreightDesk Technologies LLC, a technology company with a transportation management application, describes it as a case of self-policing.

"Customs is very much asking the industry...to voluntarily deal with these issues," he said. "That is necessary, but it is absolutely not sufficient. This is a process that the government has to be very much involved in. You really need to gather the data well before it actually moves."

To help companies do their own screening along the way, Vastera provides profiles of countries that manufacture products that terrorists could use. A Vastera profile of Brazil, for example, cautions that the South American country has developed biological material that could be deadly, and Libya and Iraq reportedly have been interested in Brazil's ballistic missiles.

Concerns about the country's biological and missile programs mean there will be "a restrictive attitude toward the export of biological and missile- related technology from the European Union and the United States," according to the profile.

"No one wants to be the next CEO who makes the mistake of sending goods to a known terrorist," Stock said.

To keep that from happening, Vastera has a database of more than 400 names from the State Department and other sources that includes terrorists and drug felons and traffickers so companies can run the names against customer lists.

"Companies are going to find that trade in this new paradigm is much harder," he said. "But with the Web technology, companies are able to update changes every day and tap into ways to automate the process of getting goods across borders."

Even before Sept. 11, Vastera was developing technology to ease the way for shippers and other kinds of cargo carriers. The company provided management services that helped companies navigate the complex maze of trade and tariff rules, calculate the real cost of importing and exporting, and supply the required electronic documents.

Adrian Gonzalez, an analyst with the Arc Advisory Group Inc., a market research and consulting firm, said Vastera is part of a growing trend of merging technology with managed services.

"Vastera is a good example of how [it plays] out in the realm of international trade," Gonzalez said. "When you look at international trade, technology by itself has limited value. It's really about people, processes, technology."

Vastera's customers include Nortel Networks Ltd., Lucent Technologies and Dell Computer Corp.

"If you are shipping a camera from the United States to Germany, there are 12 to 15 documents that have to accompany the camera," Stock said. "Our software figures out the right classification [and] tells you what it costs, because when goods get to customs, you don't want it to sit there for long." n