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By
Allen R. Gibson, HomelandDefenseStocks.com,BorderAndPortSecurity.com
December 2004
An Oct. 2004 Deloitte
Research Brief
Alessandro Cassinis
and William D. Eggers had this to say about security costs:
The
Price of Security
Improved security is a
basic operating requirement in today’s economy, but it comes at a price.
For the US shipping industry, various maritime security mandates are
expected to drive up costs by roughly $8 billion over the next 10 years.
Shippers will spend another $1.3 billion on up-front costs, and $730 million
annually, complying with the International Ship and Port Facility Security
Code. Trucking companies will also feel the pinch, since dirty bombs and
deadly biological agents can be easily transported by land. The US
Department of Homeland Security requires truckers to send complete cargo
information to the Bureau of Customs and Border Protection via electronic
data interchange before entering the country. Annual cost to the trucking
industry: $91 million. For the airlines, tighter screening requirements for
passengers and baggage are an enormous, ongoing expense. In the United
States, most of that cost is passed along to travelers as a $10 per
passenger security screening fee. However, the airlines must pay whatever
costs the passenger fees do not cover, which averages about $315 million per
year.
Thriving
in the Secure Economy
Each year, Delta Airlines
faces losses of up to $100 million from baggage mishandling. Through
radio-frequency identification (RFID), Delta believes it can improve
passenger security while slashing the cost of mishandled baggage by up to
$37 million. Delta plans to use the system at all of its 563 operating gates
throughout the United States, tagging 8.6 million pieces of luggage
annually. By making it easier to locate misplaced bags, RFID will reduce
Delta’s lost luggage expenses—including the cost of customer service and
luggage delivery—and improve customer satisfaction. It could even give
Delta a competitive advantage as the airline that gets passengers—and
their luggage—safely to the desired destination.
Allen R. Gibson
Allen R. Gibson has over twenty-five years of experience in media and corporate communications. He has been a reporter, television producer, and marketing communications consultant for public companies in both the US and Canada.
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