What Is ISPS Code In Shipping?

What Is the ISPS Code?

The International Ship and Port Facility Security (ISPS) Code is an internationally recognized security framework introduced by the International Maritime Organization (IMO) as part of the Safety of Life at Sea (SOLAS) Convention. It was developed in response to heightened global security concerns following the 9/11 attacks and became mandatory in 2004 for ships and port facilities engaged in international trade.

The ISPS Code provides a structured approach to identifying potential threats and implementing preventive measures. It outlines both mandatory requirements (Part A) and recommended guidelines (Part B) to help ensure maritime security worldwide. Among its key elements are:

• Monitoring cargo movements and crew activities to detect risks.
• Establishing security levels based on threat assessments
• Assigning clear responsibilities to ship officers, port officials, and local authorities.
• Gathering and sharing intelligence on maritime security threats.
• Preparing response strategies for potential onboard or port-side incidents.

By defining roles and responsibilities at every level, the ISPS Code ensures consistent security practices across international shipping operations.

Role of ISPS Code in International Shipping

The ISPS Code plays a critical role in safeguarding global maritime trade by protecting ships, ports, and cargo from security threats such as piracy, terrorism, and smuggling. Its implementation not only strengthens security but also supports the safe and efficient movement of goods across borders.

For businesses, particularly U.S.-based importers, compliance with the ISPS Code is non-negotiable. Ports and carriers apply ISPS-related charges to cover the cost of maintaining these security measures, though these fees are not always transparent and can cause confusion. Understanding these charges is important for accurate budgeting, supply chain planning, and avoiding unexpected costs.

Beyond compliance, the ISPS Code indirectly benefits importers and exporters by minimizing the risk of delays, disruptions, or financial losses tied to security incidents. In this way, it acts as both a protective framework for maritime operations and a stabilizing force for international trade.

What Are the Key Elements of the ISPS Code?

The International Ship and Port Facility Security (ISPS) Code consists of two parts:

1. Mandatory requirements (Part A): These include security plans, assessments, and responsibilities for ships, port facilities, and governments. They must be adhered to by governments contracted by SOLAS.
2. Recommendatory Guidelines (Part B): These provide practical advice on implementing the mandatory requirements contained in Part A. They are not mandatory.

The key elements of the code include the following:

• Ship Security Assessment (SSA): A systematic evaluation of a ship’s vulnerabilities and threats. It identifies key shipboard operations to be protected, evaluates existing security measures, and pinpoints weaknesses to prioritize appropriate countermeasures.
• Ship Security Plan (SSP): These plans detail security protocols and procedures tailored for vessels. They are essential for identifying, evaluating, and mitigating risks. The plans incorporate risk analyses, emergency response strategies, access management, crew training, cargo operations, and communication systems.
• Port Facility Security Plan (PFSP): The PFSP is a document required to be prepared under the code that outlines the measures implemented to protect a port facility, its ships, people, and cargo. The plan concentrates on the measures taken within a port facility to mitigate the risk of a security incident.
• Port Facility Security Officers (PFSOs): These officers are responsible for creating, implementing, updating, and maintaining the PFSP, as well as coordinating with ship security officers and company security officers.
• Ship Security Officers (SSOs): These officers must maintain security measures on vessels. Their job involves coordinating with their crew onboard and relevant authorities to ensure the vessel complies with the ISPS Code.

What are the levels of the ISPS Code?

The International Ship and Port Facility Security (ISPS) Code defines three security levels, each representing a degree of threat. These levels guide the security measures that must be implemented by ships and port facilities.

Security Level 1: Normal (Average Threat)

This is the baseline level for ports and vessels. It represents the ‘normal’ security conditions. Routine – i.e., the minimum – security measures are implemented, such as controlling access to restricted areas and monitoring shipboard activities.

Security Level 2: Heightened (Increased Threat)

This is applied when there is an increased risk of a security incident. Additional measures are enacted. These measures should be put in place for a period of time when a heightened risk exists.

Security Level 3: Exceptional (Severe Threat)

This security level is reserved for situations of imminent or ongoing security incidents. Extreme measures are taken. The port authorities will usually work with government agencies to address the situation.

Understanding these levels ensures that importers remain prepared for potential changes in security protocols that may affect shipping schedules and costs.

Different Types of ISPS Charges

ISPS charges are fees levied to cover the cost of implementing security measures in compliance with the International Ship and Port Facility Security (ISPS) Code. These charges are typically passed on to importers as part of their shipping costs.

The two primary types of ISPS charges are the Carrier Security Fee and the Terminal Security Charge.

Carrier Security Fee

These fees are charged by shipping lines to cover the security measures implemented on board the vessel. Costs may vary depending on the carrier and the level of security required.

Terminal Security Charge

This charge is imposed by port facilities (or terminal operators) to finance the security measures mandated under the ISPS Code. These charges may contribute to the maintenance of secure perimeters, access controls, and surveillance systems.

Both charges aim to ensure that vessels and ports can operate safely and efficiently, even in the face of heightened security threats.

What Factors Influence ISPS-Related Costs?

Several factors determine the overall ISPS-related costs an importer may incur:

• The Type and Size of the Vessel: Larger vessels (for instance, ships with greater TEU) or those carrying high-value cargo may require more extensive security measures, increasing ISPS charges.
• Port Facility Infrastructure: Ports with advanced security infrastructure might impose higher fees to recover their investment in cutting-edge technology and personnel training.
• The Risk Level: Higher threat levels necessitate additional security measures, which can escalate costs for carriers and port facilities.
• Compliance and Security Practices: Carriers and ports that go beyond minimum ISPS requirements to adopt best practices may charge higher fees.
• Shipping Routes and Geography: Routes passing through high-risk regions, such as areas prone to piracy, are likely to incur more significant security costs.

How Does the ISPS Charge Impact Supply Chain Planning?

The ISPS charge directly affects the logistics costs of businesses relying on maritime transport to ship their goods. It will, therefore, influence overall supply chain planning in several ways:

Higher Shipping Costs

First and foremost, the ISPS surcharge adds an extra layer of expense to shipping operations, impacting the logistics budget. For companies managing high shipping volumes, these additional fees can increase their overall costs. This is particularly relevant if businesses are shipping across routes that present a high-security risk and stop at terminals with stringent security measures.

Cost Variability

ISPS charges are not fixed and can fluctuate based on factors such as shipping routes, vessel type, and port security requirements. This variability means businesses must be prepared for unpredictable changes in shipping expenses.

Financial Planning

Incorporating the ISPS surcharge into financial planning and cost management strategies is essential for accurate budgeting. Importers should anticipate these costs to stay on top of the situation and avoid unexpected costs.

What ships does ISPS apply to?

The ISPS Code applies to the following types of vessels:

• Passenger ships (including high-speed passenger craft)
• Cargo ships of 500 gross tons or more
• Mobile offshore drilling units

The ISPS Code requires standardized security measures that aim to maintain the safety of global trade while addressing the evolving threats in maritime operations.

Note that the code does not apply to some ships, including military vessels, fishing boats, wooden ships, ships with less than 500 gross tonnes, and non-commercial yachts.

Who Imposes ISPS Charges, and Who Is Responsible for Paying Them?

The ISPS charge is levied by shipping companies and port facilities as a security surcharge on ocean shipments. This fee may appear as a Carrier Security Fee (CSF) or a Terminal Security Charge (TSC) on shipping invoices.

The CSF is charged by the carrier, and the TSC is charged by the container terminal. The responsibility for paying the ISPS surcharge lies with the party covering the freight costs, which is usually either the shipper or the consignee, depending on the freight agreement.

ISPS charges are usually included in the overall freight quote. As such, they must be paid alongside the freight charges.

How to get an ISPS certificate?

To obtain an ISPS certificate (ISSC), a shipping company must:

1. Develop a Ship Security Plan (SSP) in line with ISPS Code requirements.
2. Assign a Company Security Officer (CSO) and a Ship Security Officer (SSO).
3. Submit the plan for approval to the flag state or its authorized RSO.
4. Undergo a security assessment and verification audit on the vessel.
5. Once compliance is confirmed, the flag state (or RSO on its behalf) issues the International Ship Security Certificate.

ISPS Code FAQs

What are ISPS charges?

ISPS charges are fees added by ports or carriers to cover the cost of security measures required under the code. These fees are typically paid by importers/exporters and vary by port.

Is the ISPS Code mandatory?

Yes. The ISPS Code is mandatory for passenger ships, cargo ships over 500 gross tons, and mobile offshore drilling units engaged in international voyages, as well as the port facilities serving them. It became compulsory in 2004 under the SOLAS Convention (Chapter XI-2).

Who regulates the ISPS Code?

The ISPS Code is regulated and overseen by the International Maritime Organization (IMO). However, enforcement is carried out by flag states (countries where ships are registered) and port states (countries where ships call), often through their maritime security administrations.

Who is responsible for the ISPS certificate?

The flag state of a vessel is ultimately responsible for issuing the International Ship Security Certificate (ISSC). In practice, this is often delegated to Recognized Security Organizations (RSOs), such as classification societies, which verify compliance through audits and inspections.