An assured sense of security is the pre-requisite for any economic activity to flourish as a credible security regime results from strict adherence to law and order and motivates individuals and institutions to optimize the exploitation of their productive potential for the benefit of the society.

Trade and investment as underwriting factors for economic momentum are acts of faith in the public policies of the government as well as the socio-cultural norms for a better and progressive future. By achieving accelerated levels of investment and trade, countries can successfully fight anaemic conditions of their economies. It is by improving the conditions conducive for investment and trade that we can hope to achieve the desired goals. Given the present-day world-wide turbulence and uncertainties, a comprehensive and workable security regime assumes a pre-condition when it comes to smooth and speedy maintenance of international trade.

Centuries back when international trade adopted sea route as a prime mode of transportation, exporters used to be cargo owners, shippers, ship owners, insurers, bankers as well as logistics coordinator, all in one . As the time passed, trade amongst nations and its transportation from the country of origin to the country of destination underwent sophistication and there emerged division of functions and activities, right from the point of storage of goods meant for export to the point of delivery of trade goods to the ultimate consignee overseas.

Now the entire process of transportation of global trade is a chain process, where trader/exporter, freight forwarder/logistics operator, inland transporter - railways, road-haulage, inland waterways - seaport/airport authorities, shipping line, air line etc. are the links of this transportation chain, with vital institutional role being played by customs, immigration, insurance and banking, covering the entire cycle in terms of physical movement of goods between exporters and importers, streamlining payments thereof, management of risk liability as well as observance of national laws regulating the movement of trade with rest of the world.

The global trade now claims a share of 20 per cent of the entire world production, with a forecast of doubling up over the next decade. While for developed economies, exports represent a welcome addition to their GDP, in case of developing countries earnings from exports constitute the very life-blood of the economy.

The diversity of trade amongst nations, particularly after the World War II, can substantially be attributed to the revolution in the means of global transportation, both sea and air. Container revolution, kicking off in mid 1960’s, immutably transformed the world shipping and sea port industrial scene; though being multi-modal container has implications for airline industry. Moreover, spectacular increases in dimensions of bulk ships and oil tankers massively contributed to expansion in commodities trade. Trade transported in container promised security, speed and efficiency. Thus, containerization became the pre-dominant mode of transport for international trade.

Today’s container transport industry is vast and complex. According to statistical data, last year, the world’s trade total movement in containers amounted to 72 million TEU’s ( 20 foot equivalent unit), implying movement between port of origin and port of destination. H.P. Drewry, a UK-based shipping consultancy, has a figure of 244 million TEU’s to express total number of containers handled by all ports of the world during 2001, including empty containers for re-positioning and containers destined for trans-shipment from main-haul hub ports to feeder ports by smaller container feeder vessels. It has been estimated that over 15 million containers move every day at sea or on land or are waiting for delivery in the yards. They account for about 90 per cent of the world’s traded cargo by value.

Commercial airfreight, too, has contributed to the promotion of global trade over the past 50 years, by supporting massively “just-in-time “ mode of production, Taking off with vigour in the mid 1970’s with the arrival of the wide-bodied aircraft like the Boeing 747,capable of uplifting 100 tonnes, commercial airfreight added a new dimension to international transport landscape. Soviet relic Antonov An-124, and much bigger An-225, Boeing’s BC-17 and Airbus A-380 - under development - are capable of carrying far more load than Boeing 747 for global cargo market predicted to grow in volume by more than 6 per cent per year from 1998 to 2017. Airfreight is the right mode of transport where speed of transit is of essence, particularly for high-valued, emergency, perishable cargo or items susceptible to damage or changing tastes.

The so far unprecedented success of international trade can be attributed to the primacy of trust in the whole venture, in terms of security against threats of risks and violations of national laws, security of life and property in the countries of origin and destination, of contrabands and security against other crimes in the conduct of trade, right from stockyards of exporters to warehouses of importers. The bottom-line in the whole venture is assurance that goods reach destination safe and secure, without being instrumental in causing damage or destruction while in transit. Any breach of this trust would entail distortions and strain the international trade regime. All players are presumed to be good corporate citizens, abiding by national law in letter and spirit. In the cross-border trade, thus, the most universal and core concern relates to the security regime encompassing the entire movement of goods, from beginning to the end. Any lapse, at any stage in the chain of transportation, may bring unimaginable damage in its fold.

Nothing can stress more the critical role and significance of security regime in the international traffic - both of people and merchandize —than the cataclysmic events of September 11, 2001 in USA. All that happened on that day at the WTC and the Pentagon was a monumental security slip. On the heels of events in the USA occurred a startling event, across the Atlantic, at the South Italian port of Gioia Tauro, where a person allegedly belonging to Al-Qaeda, was found in a container, equipped in comfort for the duration of the intended sea-voyage of the container from Italy to the port of Halifax in Canada. He is stated to be carrying plans of airports, an aviation mechanic’s certificate and security passes. The alarming discovery exposed the tensions between requirements of international security and those of international trade, and sent a shock wave for the Intelligence establishment of the USA.

This also shows how the advances of technology can be used to realize diametrically opposite goals and objectives. The container that became metaphor for speed, security and efficiency in the conduct of cross-border trade, thus appeared to be a source of unimaginable security risk, and this is what is reflected in the growing concern of international trade. It is all the more so for the developing economies that are so much dependent on exports of their value-added products to developed economies to sustain their economic momentum. The progressive and forward-looking ones amongst them, realizing the inevitability of container revolution, had followed suit to restructure their shipping and port industry to meet the demands of container revolution. Singapore and Hong Kong are the outstanding example of such countries and since years are rotating the first and second top positions in the world container ports league between themselves, they have also evolved themselves as hubs of international trade.

Spurred by 911 events TSA (Transportation Security Agency), headed by ex-US Secret Service director John Magaw, was formed in USA. TSA is clearly preoccupied with the many politically-charged issues surrounding passenger screening that have arisen since the September 11 terrorist attacks in New York and Washington. However in his first meeting with reporters, Magaw said cargo shipping is also on agency’s agenda. The TSA, an agency of the US department of transportation is the top regulatory concern for any business that deals with carrying goods into, out of or inside the United States. Freight businesses fear new security costs and operational restrictions and air express companies, their business models built on speed, worry that tougher requirements to screen shipments would put an untenable drag on their operations. This would imply delays, calling for higher levels of inventories by manufacturers. According to the published data, the ratio of inventory to GDP in the US since 1980 , has declined from 25 per cent to 15 per cent.

The total value of America’s business inventory amounted to $1.5 trillion in 2000; without the policies and programmes in the realm of logistics undertaken during past 20 years, it would have been $2.5 trillion. A 5 per cent increase in inventory - in the wake of implementation of stricter security regime - would cost American companies $20 billion additionally, related to an annual amount of $1 trillion spent by American business on logistics. While sea port security has generally so far been deemed as a poor relation of airport security, the alarming discovery in October 2001 in Italian sea port Gioia Tauro has shaken the very foundations supporting the unprecedented growth and diversity of global trade over the past half century.

The segments of US economy related to international trade are displaying over-sensitivity to the security risks emanating from the conduct of international trade. The professional view is that the USA can not impose security requirements on foreign shippers, but it could be ensured that the receivers of containers in the USA realize that they will face delays unless they know their customers and can validate cargo security. While further refinement of the ‘shipper rule’, in case of airfreight, is being contemplated, a lot more would be required to make security regime for sea-freight credibly effective. This is a game that must have world-wide participation. While every container may theoretically be hiding potential death and destruction, measures and policies have got to be devised to minimize such risks. The governments and private sector world-wide would have to develop a mechanism that would ensure maximum security with the minimum disruption to trade. Other wise security barriers would become trade barriers.

This calls for greater vigilance on the part of the exporting sector of the developing countries, focusing on security regime as a matter of zero-tolerance. This also would open up new business avenues for the private security industry to conduct security audit on behalf of multi-national industrial conglomerates, depending on global supply chains. It sounds realistic to assume that in future security regime in the developing countries would claim greater focus of efforts and resources, both of the governments and the private sector than heretofore, in order that their exports are acceptable in the developed countries. In case of Pakistan the FPCCI (Federation of Pakistan Chambers of Commerce and Industry), Pakistan International Freight Forwards Council (PIFFC)) and Pakistan Shippers Council (PSC) could join hands to develop an effective action plan against the back-drop of growing security concerns surrounding the global trade. Presently, the UNCTAD’s experts are also involved with Pakistan Trade & Transport Facilitation Project; security regime could be a point of critical emphasis in their project. Freight forwarders and logistics operators can play a vital role in the evolving situation by up-scaling themselves professionally and enlarging their range of services, with security audit as a distinct activity.