The US Government has issued an “Executive Order” to “bolster the security of the nation’s ports” by attempting to replace the Chinese-built ship-to-shore gantry cranes at container terminals. A statement from the Whitehouse issued on Wednesday 21st February said that the new Executive Order will give the U.S. Coast Guard “the express authority to respond to malicious cyber activity in the nation’s MTS (Marine Transportation System) by requiring vessels and waterfront facilities to mitigate cyber conditions that may endanger the safety of a vessel, facility, or harbor”. This seems to suggest that the US authorities will pressure container terminals to replace the electronic control systems on cranes, however there also seems to be an implication that operators will be obliged to buy new entire crane systems as well. 

The reason for this action was given by the Whitehouse as the need to secure “our maritime infrastructure’s digital ecosystem and addresses several vulnerabilities that have been identified”. It appears that the authorities in the US believe that the Chinese government is capable of taking-over the cranes remotely or using them as a platform for cyber-attacks within the US. 

Although the official statement from the Whitehouse did not explicitly suggest that terminals can or will be forced to replace entire crane systems, there is an implication that they are looking to eradicate all Chinese manufactured cranes from container terminals in the US. The statement elaborated that the Biden Administration aspired to rebuild “the U.S.’s industrial capacity to produce port cranes with trusted partners. The Administration will invest over $20 billion, including through grants, into U.S. port infrastructure over the next 5 years through the President’s Investing in America Agenda, including the Bipartisan Infrastructure Law and the Inflation Reduction Act. As a result, PACECO Corp., a U.S.-based subsidiary of Mitsui E&S Co., Ltd (Japan), is planning to onshore U.S. manufacturing capacity for its crane production”. This seems to imply that the purpose of the new legislation is as much about manufacturing cranes in the US as any security concerns. 

It is also unclear if this initiative also includes the replacement of other container terminal equipment such as straddle-carriers or FLTs, some of which are made by Chinese manufacturers. 

It is tempting to view this development as an extreme example of trade protectionist policies that have gripped the US Government over the past few years.

Author: Thomas Cullen

Source: Ti Insights

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