New Security Steps: What's It "Cost" To Be Safe? - Holiday Central

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It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

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Oct.16

9:51 AM ET

Tuesday, 16 Oct 2007

New Security Steps: What's It "Cost" To Be Safe?

Posted By:Margaret Brennan

Topics:Consumers | Retail Sales

Sectors:Retail

Companies:Lockheed Martin Corp

Port Elizabeth, New Jersey
AP
Standing here at the Port of Wilmington in Delaware, I was surprised to see the number of Dole and Chiquita logo'd trucks driving cargo to the port. Who knew that P of W is the #1 banana port and Chilean grape import/export port in the U.S.?!

Anyhow, I'm in Wilmington for the rollout of the long-delayed and controversial Transportation Workers Identity Card (TWIC) program. The first of 750,000 workers in the nation will be enrolled tomorrow but we got a sneak peak today of the biometric cards and the enrollment process.

What this means is that truckers, dock workers and, basically, anyone who needs unescorted access working on the ports will now go through I.D. requirements similar to the FBI (fingerprinting, criminal record check, drug testing, terror threat screening, physicals, etc.) Before year end the rollout is scheduled to come to bigger ports: Corpus Cristi, TX, Baton Rouge, LA, Beaumont, TX, Honolulu, HI, Oakland, CA, Tacoma, WA, Chicago/Calumet, I'll Houston TX, Port Arthur TX Providence RI, Savannah, Ga.

So far retailers aren't too worried about the new program slowing the flow of cargo traffic (per the NRF, they are more focused on the cargo screening pilot program.) The financial impact will be felt first by the trucking and transportation industries. The new TWIC cards cost workers $132.50 each in addition to a $200 health screening. While Conway is footing the bill for their drivers, YRC hasn't yet finished negotiations with union reps on whether the workers or their employers will pay.

Bigger picture impact: the independent drivers. According to the Assoc. Of Independent Truck Drivers the time and financial costs of obtaining these new cards, in addition to the already required drivers I.D.s and hazmat cards, is high. Additionally, the group estimates that there are around 100,000 drivers who are illegals. This new program will take them out of the work system and potentially cause wage inflation.

Bottom line: security doesn't come cheap (this program is estimated to cost the Fed government and Transportation Systems) about $800 million over the next ten years.

But there is also a whole new industry profiting off of these new biometric and security programs. Lockheed Martin [LMT Loading... () ] won the $70 million contract to implement the TWIC program just this year. Will cargo be next?