[Senate Hearing 107-855]
[From the U.S. Government Publishing Office]
S. Hrg. 107-855
SECURING OUR PORTS AGAINST TERROR:
TECHNOLOGY, RESOURCES, AND HOMELAND DEFENSE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TECHNOLOGY, TERRORISM,
AND GOVERNMENT INFORMATION
of the
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 26, 2002
__________
Serial No. J-107-61
__________
Printed for the use of the Committee on the Judiciary
U.S. GOVERNMENT PRINTING OFFICE
85-082 WASHINGTON : 2003
___________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON THE JUDICIARY
PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, Jr., Delaware STROM THURMOND, South Carolina
HERBERT KOHL, Wisconsin CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California ARLEN SPECTER, Pennsylvania
RUSSELL D. FEINGOLD, Wisconsin JON KYL, Arizona
CHARLES E. SCHUMER, New York MIKE DeWINE, Ohio
RICHARD J. DURBIN, Illinois JEFF SESSIONS, Alabama
MARIA CANTWELL, Washington SAM BROWNBACK, Kansas
JOHN EDWARDS, North Carolina MITCH McCONNELL, Kentucky
Bruce A. Cohen, Majority Chief Counsel and Staff Director
Sharon Prost, Minority Chief Counsel
Makan Delrahim, Minority Staff Director
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Subcommittee on Technology, Terrorism, and Government Information
DIANNE FEINSTEIN, California, Chairperson
JOSEPH R. BIDEN, Jr., Delaware JON KYL, Arizona
HERBERT KOHL, Wisconsin MIKE DeWINE, Ohio
MARIA CANTWELL, Washington JEFF SESSIONS, Alabama
JOHN EDWARDS, North Carolina MITCH McCONNELL, Kentucky
David Hantman, Majority Chief Counsel
Stephen Higgins, Minority Chief Counsel
C O N T E N T S
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STATEMENTS OF COMMITTEE MEMBERS
Page
Cantwell, Hon. Maria, a U.S. Senator from the State of Washington 70
Feinstein, Hon. Dianne, a U.S. Senator from the State of
California..................................................... 1
Kyl, Hon. Jon, a U.S. Senator from the State of Arizona.......... 14
Schumer, Hon. Charles E., a U.S. Senator from the State of New
York........................................................... 3
WITNESSES
DeBusk, F. Amanda, former Assistant Secretary for Export
Enforcement, Department of Commerce, and former Commissioner,
Interagency Commission on Crime and Security in U.S. Seaports,
Washington, D.C................................................ 30
Petersen, Kim E., Executive Director, Maritime Security Council,
Fort Lauderdale, Florida....................................... 35
Quartel, Rob, Chairman and CEO, FreightDesk Technologies, Inc.,
and former Member, United States Federal Maritime Commission,
McClean, Virginia.............................................. 39
Schubert, William G., Maritime Administrator, Department of
Transportation, Washington, D.C................................ 4
Steinke, Richard D., Chairman of the Board, American Association
of Port Authorities, and Executive Director, Port of Long
Beach, Long Beach, California.................................. 27
Tischler, Bonni, Assistant Commissioner, Office of Field
Operations, United States Customs Service, Washington, D.C..... 11
Upchurch, Charles W., President and CEO, SGS Global Trade
Solutions, Inc., and Representative, Global Alliance for Trade
Efficiency, New York, New York................................. 57
Venuto, Kenneth T., Rear Admiral, Director of Operations Policy,
United States Coast Guard, Washington, D.C..................... 15
SUBMISSIONS FOR THE RECORD
Advanced Research and Applications Corporation, R.A. Armistead,
President and CEO, Sunnyvale, California, statement............ 67
International Microwave Corporation, Anthony Acri, Chief
Executive Officer, East Norwalk, Connecticut, statement........ 71
Nacht, Michael, Dean and Professor of Public Policy, Goldman
School of Public Policy, University of California, Berkeley,
Berkeley, California, statement................................ 72
Port of Oakland, Oakland, California, statement.................. 75
Science Applications International Corporation, John H. Warner,
Jr., Corporate Executive Vice President and Director, and James
Winso, Corporate Vice President, General Manager Security
Products, San Diego, California, statement..................... 77
SECURING OUR PORTS AGAINST TERROR: TECHNOLOGY, RESOURCES, AND HOMELAND
DEFENSE
----------
TUESDAY, FEBRUARY 26, 2002
United States Senate,
Subcommittee on Technology, Terrorism, and Government
Information,
Committee on the Judiciary,
Washington, DC.
The committee met, pursuant to notice, at 3:24 p.m., in
room SD-226, Dirksen Senate Office Building, Hon. Dianne
Feinstein, chairperson of the subcommittee, presiding.
Present: Senators Feinstein, Schumer, and Kyl.
OPENING STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM
THE STATE OF CALIFORNIA
Chairperson Feinstein. I would like to open this hearing
and particularly thank our witnesses for coming. I will
introduce them in a moment.
Senator Kyl, the ranking member, with whom I have the great
pleasure of working, is at the White House and will be along,
but will be a little late. And so in the interest of time, I
thought we might begin this.
I would like to begin by just making a brief statement. A
while ago, in this committee while we were considering the
PATRIOT Act and the Attorney General John Ashcroft was making a
presentation, he held up a copy of the Al-Qaeda terrorist
handbook. And one part of that was on recruiting. Now, this is
a translation, but I just want to read one paragraph.
``Recruit people carefully because such activities could
lead to death or arrest. Most likely candidates are smugglers,
the needy, those seeking political asylum, adventurers, workers
at coffee shops, restaurants, and hotels, and workers at
borders, airports, and seaports.''
And it is the last word really that we are here to discuss
today. Seaports are often out of the public eye, but they are a
very critical and important part of economic activity. Ninety
percent of cargo moves by container, and much of that is
stacked stories high on huge ships.
Each year, 200 million containers move between ports,
making this the most important and critical part of global
trade. Our nation's seaports handle 95 percent of U.S. trade
with non-contiguous countries, meaning non-connecting
countries--big words--and this trade is expected to triple in
the next 15 to 20 years.
Now, a lot of this growth is going to occur in my home
State, California, and we boast two of the busiest seaports in
the Nation: Los Angeles/Long Beach and Oakland in the San
Francisco Bay Area.
While seaports are essential hubs of commerce and
transportation, they are also plagued with serious problems,
and that is what we are here today to discuss and see what we
might be able to do about it.
Our seaports today are extremely vulnerable to terrorism.
Drug trafficking, alien smuggling, export of stolen
automobiles, and international cargo theft are rampant. Yet in
spite of the fact that the major problems besetting seaports
all fall within the traditional jurisdiction of United States
law enforcement, no Federal agency currently has comprehensive
authority to regulate activity at seaports. That is point No.
1.
So, in a nutshell, I believe that many of the problems at
seaports are really due to insufficient Federal oversight and
the lack of personnel and technology. I know that Senators
Hollings and Graham, of Florida, have introduced legislation to
help solve these problems, and that legislation has passed the
Senate. But there is much more that we can do to ensure the
safety and integrity of our seaports and the communities that
typically surround them.
Let me give you an example. Last October, Rizik Amid Farid,
an Egyptian and suspected Al-Qaeda member, was found in a
container aboard a vessel bound for Canada. The container also
had a bed, toilet, portable heater, and water supply for the 3-
week trip. Farid also had a Canadian passport, global satellite
phone, cell phone, laptop computer, various cameras,
identification documents, airport maps, an airline mechanic's
certificate, and security passes for airports in Canada,
Thailand, and Egypt.
He was found during a routine inspection by Italian
authorities while the ship was at dock in southern Italy. Farid
is suspected of being a senior Al-Qaeda member because the
operation to smuggle him into Canada was obviously expensive
and well organized.
One wonders whether other Farids have managed to come into
North America through seaports. Due to short staffing and
limited technology, inspectors today look at only 1 or 2
percent of containers; 98 to 99 percent are just waved through.
Hence, virtually every time a ship docks, the only people who
know what is on a container are the people who shipped it,
maybe, and the people picking it up, maybe. And if those people
are terrorists, they are free to ship munitions and weapons
overseas to their compatriots or even set off a bomb, or even
sleepers themselves.
So we are here today to hear from some very critical people
who are very knowledgeable with respect to our seaports, and
this committee is particularly looking for good ideas which can
stand the test of time, are practical and doable, and so that
we might put together a piece of legislation to improve the
situation.
I would like now to introduce our first panel.
Captain William Schubert, United States Department of
Transportation. Captain Schubert is the Department of
Transportation's Maritime Administrator. He was recently
confirmed last November. He is a former maritime industry
consultant and maritime industry official. He has over 27 years
of professional maritime experience.
I will just mention the three of you, and then we will go
right down the line, if this is all right.
Bonni Tischler is from the United States Customs Service.
She is the Assistant Commissioner to the Office of Field
Operations of the United States Customs Service. She is the
first woman to hold that position. She is directly responsible
for trade compliance, anti-smuggling, outbound and passenger
operations, 20 Customs management centers, and 300 ports of
entry. She also manages an annual operating budget of
approximately $1 billion and the operations of more than 12,000
employees.
And, finally on this panel, Rear Admiral Kenneth Venuto,
United States Coast Guard. Rear Admiral Kenneth Venuto is the
Director of Operations Policy for the United States Coast
Guard. As Director, he maintains management oversight of a wide
range of programs supporting the Coast Guard's five strategic
goals: maritime safety, mobility, maritime security, protection
of natural resources, and, finally, national defense.
So that is our first panel, and if we may, Mr. Schubert,
may we begin with you please. Welcome.
Captain Schubert. Thank you, and good afternoon. Madam
Chair, with your permission, I would like to submit my written
comments for the record, and I have some brief comments to
make.
Chairperson Feinstein. May I ask you to hold up?
Captain Schubert. Sure.
Chairperson Feinstein. Because this might even get his vote
on something, if I let him speak right now.
[Laughter.]
Senator Schumer. Dianne always gets my vote on whatever she
wants.
Chairperson Feinstein. I would like to acknowledge the
senior Senator from New York, Chuck Schumer, to make a
statement.
STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR FROM THE
STATE OF NEW YORK
Senator Schumer. Well, thank you, Senator Feinstein. I very
much appreciate your holding this important hearing. As the
person who represents the largest ports on the West Coast and I
represent the largest port on the East Coast, obviously we both
have an interest in this. It is extremely timely. It is
extremely important, and I want to thank the witnesses for
coming. This is an issue of great concern to many, many New
Yorkers and certainly to me, and your taking the leadership on
this issue is wonderful.
I would ask that my entire statement be read into the
record and just make a couple of brief points.
I guess what I would say is I have a fear greater than just
about any other, and that is that someone will use our ports
and bring a nuclear weapon through a container. The bomb in
Hiroshima was a very simple device. It was two chunks of high-
grade uranium, weapons grade, at opposite ends of a tube. And
what the bomb did is, when it was detonated, all it did is slam
those two chunks of uranium together, creating what physicists
call a critical mass of uranium, and the nuclear explosion
ensued.
You don't need an airplane to deliver that kind of a bomb.
You don't need a missile. You can put it in a container, send
it by ship, and create huge, huge havoc--or on a truck, for
that matter.
And so we have a big job ahead of us because how can we not
do everything we can to stop that from happening and at the
same time make sure that our ports continue to be able to flow
commerce. You know, we could inspect every container hand-to-
hand, and the ports would be backed up all the way from Los
Angeles to Tokyo or New York to London.
So we have to do a lot. I support the Hollings bill, but I
think we have to go further, and I think this hearing is so
important because it highlights attention.
The bill that I am planning to introduce soon--and I hope
we could debate it at some point--would first mandate that all
ports in the U.S. that receive international cargo have the
capability to inspect and span up to 10 percent of the
containers entering the port. That means we would provide each
port in the Nation with enough Customs inspectors and scanning
machines to inspect up to 10 percent. Right now it is less than
3.
Second, we would create a new research and development fund
to develop new technologies related to port security. We need
to be able to know that every container is safe.
And, third, there are a lot of loopholes that remain in
port security infrastructure. The Hollings bill closes some.
Our bill closes others.
I think our first step is to support the Hollings bill and
then to move forward, and, Madam Chairwoman, I look forward to
working with you and salute your leadership on this issue so we
can make our ports safe.
And with that I would just ask unanimous consent that my
entire statement be read in the record.
Chairperson Feinstein. Absolutely.
Thank you very much, Senator Schumer. I look forward to
working with you, and, you know, I think we should have a
hearing in this committee if your bill comes to this committee,
and also we will have some of the questions hopefully that I
have and you have answered today by some of the experts, and we
might even be able to add to it as well. So thank you very
much. I appreciate it.
And I appreciate the courtesy of you and the witnesses
because of the schedule.
Chairperson Feinstein. Happy to do it.
Senator Schumer. Thanks.
Chairperson Feinstein. Captain Schubert, please.
STATEMENT OF WILLIAM G. SCHUBERT, MARITIME ADMINISTRATOR,
DEPARTMENT OF TRANSPORTATION, WASHINGTON, D.C.
Captain Schubert. Thank you. Madam Chair, good afternoon
again, and with your permission, I would like my written
statement submitted for the record.
Chairperson Feinstein. So ordered.
Captain Schubert. And I have some brief comments.
I am Captain William Schubert, Maritime Administrator, and
I am pleased to be here today to address the important issue of
port security on behalf of the Department of Transportation.
The Department of Transportation has always sought to
maintain secure transportation within every mode. We continue
to do so today with greater sense of urgency and direction
through the newly created Transportation Security Agency, or
TSA.
My own agency, the Maritime Administration, has
historically played a critical role in port development and
security. One of our duties has been to provide security
guidance to the commercial ports in the U.S. and coordinate
Government and maritime stakeholders in their security efforts.
MARAD co-chaired the Presidential Commission on Crime and
Security in U.S. Seaports, and as Chair of the National Port
Readiness Network, MARAD plays a lead role with the military in
assuring port security and protection of critical
infrastructure during a mobilization.
Today, I would like to address several recent developments
led by Secretary Mineta in the area of port security in which
DOT has been actively involved--grants for the improvement of
port infrastructure, cargo and container security,
credentialing for transportation workers, and the availability
of maritime insurance against terrorism-related losses. Admiral
Venuto will then brief the committee on specific Coast Guard
initiatives to secure our ports and protect shipping.
As you know, the Department of Defense Appropriations Act
for fiscal year 2003 appropriated $93.3 million to the
Transportation Security Agency to award competitive grants to
critical national seaports to help finance the cost of
enhancing port facility security. Such grants are to be awarded
based on security assessments as determined by the Under
Secretary of Transportation for Security, the Administrator of
the Maritime Administration, and the Commandant of the Coast
Guard.
Discussions between TSA, MARAD, and the Coast Guard
resulted in an agreement that MARAD and the Coast Guard would
work cooperatively on behalf of TSA to administer the emergency
seaport security funding contained in the act. Secretary Mineta
has just approved our implementation plan. We will soon begin
to award grants based on the most urgent homeland security
needs. Preference will be given to ports that have already
begun demonstrated port security enhancements.
Madam Chair, if you are interested, during the question-
and-answer period, I do have a brief overview of how that grant
program will be administered, if you are interested.
Chairperson Feinstein. I am very interested. If you want to
go into it now, please feel free to.
Captain Schubert. Sure. We do have handouts of this chart.
When this Department of Defense appropriation of $93.3
million came about, we at the Coast Guard and the Maritime
Administration and the TSA worked diligently to put together a
plan of implementation to award these grants. We recognized
that the grants were done on an emergency basis or to handle on
a priority basis things that would be considered urgent for
port security.
So with that in mind, we have come up with this time line
of which we are already past the decision memo, which has been
approved by the Secretary, the selection outline, which has
also been completed, and we have drafted a broad agency
announcement which will be released tomorrow to the public.
After tomorrow, we will have approximately a 20-day
application period. We have developed a way that applications
can be filed and submitted over the Internet without any paper
or time loss.
Chairperson Feinstein. By port authorities?
Captain Schubert. Port authorities would be eligible to
submit an application in this process, yes, ma'am.
We also will furnish the committee, if you would like, a
copy of the broad agency announcement once it is released
tomorrow.
After a 20-day application period, all the applications are
due on March 27th. The Maritime Administration regional
directors and primarily the captains of the port, which will
really have the final say-so, will review these applications on
a regional basis and prioritize them.
Then after that happens, headquarters will review and
prioritize those applications. That will take approximately 25
days. And then the recommendation will be forthcoming, and the
selection board, which will be myself, the Commandant, and a
representative from TSA, will review the recommendations. And
if everything goes correctly by June 11th, the grants will be
awarded.
I will also add that we have targeted approximately 10
percent of the $93.2 million will go towards proof-of-concept
type of applications. These would be not research and
development so much, but for the implementation technology that
might not have been used before.
Chairperson Feinstein. Thanks very much.
Captain Schubert. The events of September 11th have
highlighted the vulnerability of our international container
shipments to acts of terrorism, with more than 12 million TEUs
arriving on our shores yearly. Prior to September 11th, the
Department's primary concern was the efficient movement of
these containers through the transportation system. Clearly,
the advent of just-in-time business processes and the use of
the transportation system as a rolling inventory has tied the
marine transportation system to the economic vitality of this
country.
It only follows that a serious disruption of this system
could have devastating effects on our economy. In recognition
of this fact, the Department established an interagency
Container Working Group in December to make system improvement
recommendations through a well-honed security lens, balancing
national security interests with economic efficiency.
Another area of concern is the issue of identifying and
credentialing employees who have access to ships, ports,
terminals, and cargos. This includes everyone from the point of
origin to the ultimate destination. As a result, the Department
established a Credentialing Direct Action Group, known as a
CDAG, co-chaired by MARAD, to examine the feasibility of an
identification card for all transportation workers and other
persons who require access to secure areas of transportation
facilities.
The primary goal of the CDAG is to fashion a nationwide
security program that verifies the identity of transportation
workers, validates their background information, assists
transportation facilities in managing their security risk, and
accounts for personal access to transportation facilities and
activities of authorized personnel.
This has been a joint public-private effort. The CDAG has
made a concerted effort to seek out the advice of
transportation experts in devising this program. They
understand that industry support is key to the success of this
effort.
My last point concerns the availability of insurance for
terrorism risk in the maritime industry. For ships generally,
the market is providing insurance against losses from terrorist
attacks. But the cost of insurance has escalated 200 to 300
percent since 9/11. For cruise ships, the cost is up 1,000
percent. Even as premiums were going up, however, the insured
loss coverage was reduced by underwriters.
Turning to land-based assets, like buildings and ports, the
news is very different. Reinsurance renewals fell due on
January 1st, and reinsurers excluded terrorist risk. Such
coverage is available from primary insurers, but coverage is
very limited, and the cost is prohibitive.
The Department of Transportation does not need to be
convinced that port security is a good idea. We have recognized
it as a critical component of our maritime industry and our
national security for many years. Nevertheless, achieving
appropriate levels of security in our seaports and seeking to
educate our international partners as to the need and benefits
of seaport security is no small undertaking.
DOT is aggressively pursuing all aspects of transportation
security in all modes, utilizing our own resources and tapping
the best minds in the industry and labor. We look forward to
working with you and the Members of Congress to protect our
citizens and grow the economy.
I want to thank you again for inviting me here today, and
now I would be happy to answer any questions you or other--
well, no other committee members are here. Thank you.
[The prepared statement of Captain Schubert follows:]
Statement of William G. Schubert, Maritime Administrator, United States
Department of Transportation
Good Afternoon Madam Chairman and members of the Subcommittee. I am
Captain William G. Schubert, Maritime Administrator. I am pleased to be
here today to address the important issue of seaport security on behalf
of the Department of Transportation.
The Department of Transportation (DOT) has always sought to
maintain secure transportation within every mode. We continue to do so
with a greater sense of urgency and with more focus through the newly
created Transportation Security Administration.
My own agency, the Maritime Administration (MARAD), has always
played a critical role in port security. One of our duties is to
provide port security guidance to the commercial ports in the United
States and to coordinate government and commercial port stakeholders in
their security efforts. MARAD Co-Chaired the Presidential Commission on
Crime and Security in U.S. Seaports, and, as Chair of the National Port
Readiness Network, plays a lead role with the military in assuring port
security and protection of critical infrastructure during mobilization.
We have developed an Inter-American Port Security Training Program in
which nearly 300 port personnel have been trained in the Western
Hemisphere, and the Merchant Marine Academy at Kings Point provides
security training to industry. We have also been working with the port
community to advance uses of technology that have positive security
benefits both within the port and through its landside intermodal
connections. I welcome the opportunity to continue our efforts to
improve port security.
Today, I would like to address several recent developments led by
Secretary Mineta in the area of port security in which DOT has been
actively involved--grants for the improvement of port infrastructure,
cargo and container security, credentialing for transportation workers
and the availability of maritime insurance against terrorism-related
losses. Admiral Venuto will then brief the Committee on specific Coast
Guard initiatives to secure our ports and protect shipping.
Grant Program for Improvement of Port Infrastructure
As you know, the Department of Defense Appropriations Act for FY
2002 (Act) appropriated $93.3 million to the Transportation Security
Administration (TSA) to award competitive grants to critical national
seaports to finance the cost of enhancing facility and operational
security. Such grants are to be awarded based on the need for security
assessments and enhancements as determined by the Under Secretary of
Transportation for Security, the Administrator of the Maritime
Administration, and the Commandant of the Coast Guard (USCG).
Discussions among TSA, MARAD, and the USCG resulted in agreement
that MARAD and the USCG would work cooperatively, on behalf of TSA, to
administer the emergency seaport security funding contained in the Act.
MARAD and the USCG have met, and we expect final approval of our
implementation plan very quickly.
MARAD and USCG will act as ``agents'' of TSA for the distribution
of grants from the $93.3 M appropriation. The final grant approval body
will be a board consisting of the Under Secretary of Transportation for
Security, myself as Administrator of the Maritime Administration, and
the Commandant of the Coast Guard, or our representatives.
Determination of grant awards will be based on consideration of the
most urgent needs from a homeland security perspective. It is
anticipated that initial awards will commence in June 2002. We are
moving very quickly to put this money to work.
We intend to use a small amount of this money to fund ``proof of
concept projects''; we will focus on critical seaports. Preference will
also be given to ports that have already begun port security
enhancement through some demonstrated action.
Cargo and Container Security
An analysis of our transportation system in the aftermath of the
events of September 11, 2001 clearly laid bare the susceptibility of
container shipments as a delivery system for an enemy's weapons, with
over 12 million TEU's/year arriving at our shores. Prior to September
11th, from a DOT perspective, our primary concern was the efficient
movement of these containers through the transportation system. The
advent of just-in-time business processes and the use of the
transportation system as a rolling inventory tied the transportation
system even more integrally into the economic vitality of this country.
In order to address the security issues surrounding the movement of
marine cargo containers through the international, intermodal
transportation system, an interagency Container Working Group was
established in December 2001. The effort is co-chaired by the
Departments of Transportation and Treasury (U.S. Customs). The
Container Working Group's activities are focused in four subgroups:
Information Technology, Security Technologies, Business Practices, and
International Affairs. Just this month, the Working Group provided
recommendations to the Office of Homeland Security on Ensuring the
Security of Cargo Container Transportation. Recommendations addressed
improving the coordination of government and business efforts as they
relate to container security; enhancing data collection; improving the
physical security of containers; initiating activities on the
international front; and considering all possible uses of advanced
technologies to improve the profiling of containers and to increase the
physical security of containers.
Even with our best efforts, our current transportation system is
groaning under capacity constraints and congestion in many ports is
increasing. To further complicate matters, container traffic, even with
the current economic slowdown, is predicted to double in the next
twenty years. Improving efficiency is one of the key ways to help solve
these capacity and congestion problems. Yet efficiency improvements
must now be looked at through a security lens. Our transportation
system will need to operate both efficiently and securely. These twin
goals of efficiency and security need to be addressed simultaneously.
We are working jointly with U.S. Customs, exporters, importers,
carriers, and governments to establish business and security practices
which will push the nation's virtual borders outward to the point of
loading of the containers. Security must be established before the
vessel carrying the container or cargo begins its international travel.
Technology and information are also essential to container security.
For that reason, we strongly support the accelerated implementation of
the U.S. Customs ACE and Integrated Trade Data System (ITDS) to bring
it online as quickly as possible.
Credentialing for Transportation Workers
Security background checks and credentialing of all who move or
have access to cargoes has never been more important. This includes
everyone from facilities and conveyances to the destination warehouse.
Thus, the Department established an interagency ``Credentialing Direct
Action Group'' (CDAG), co-chaired by MARAD, to examine the feasibility
and process for conducting background checks and issuing an
identification card for all transportation workers and other persons
who require access to secure areas of transportation facilities.
The primary goal of the CDAG is to fashion a nationwide
transportation worker identity solution that verifies the identity of
transportation workers, validates their background information, assists
transportation facilities in managing their security risks, and
accounts for personnel access to transportation facilities and
activities of authorized personnel. The CDAG is primarily concerned
with private-sector transportation workers, and has held numerous
meetings that have included many representatives from the
transportation industry and transportation labor. Such outreach efforts
are necessary. They are experts in transportation, and we have found
they are anxious to contribute their knowledge to solving the difficult
issues surrounding personnel identification. We are building industry
buy-in at the front end to ensure the success of this effort.
The most difficult issue is to define the appropriate levels of
security for the broad spectrum of transportation facilities and
operations and how these should be applied. There have also been some
concerns regarding the anticipated background check process. Various
models are being investigated by several groups to try and improve
responsiveness, lower cost and improve consistency over present
practices for credentialing. We also face the privacy issues presented
by the collection and maintenance of databases containing personal
information.
The CDAG has already developed a functional requirements document,
which identifies the principal attributes that a credentialing system
must have to achieve the interoperability necessary to reach across the
transportation industries. This document has been shared with many of
the major transportation industry associations. They have begun to
provide their comments.
Under a maritime cooperative program called the Ship Operations
Cooperative Program (SOCP) that is administered by the Maritime
Administration, industry, in partnership with multiple government
agencies, is currently working to evaluate and test a Mariner
Administrative Smart Card credentialing system to reduce fraud, track
mariner training, facilitate shipboard sign on/sign off and enhance
shipboard security. The Smart Card Administrative Project started in
October of 2000 and is a 50/50 cost sharing initiative between the 43-
member SOCP and the Maritime Administration.
As a result of the September 11, 2001 events, added emphases within
the project are being placed on the potential of smart card
applications for addressing security concerns. Members of the
cooperative including MARAD and USCG are engaged internationally with
the International Maritime Organization, International Labor
Organization, International Transport Workers' Federation and others to
discuss security and credentialing issues. In addition, SOCP is
coordinating with DOT entities that are currently working maritime
security issues to ensure the project is in line with currently
discussed directions. SOCP is working closely within DOT, and with
other agencies including the General Services Administration, to ensure
interoperability through standardization. This project has the
potential for demonstrating the effectiveness of smart card technology
to improve efficiency, reduce fraud and increase security in the
maritime industry.
Insurance Against Terrorism-Related Losses
The Merchant Marine Act, 1936 (Act), authorizes the Secretary of
Transportation to ensure the availability of adequate insurance for
vessels engaged in the waterborne commerce of the United States. This
authority, delegated to MARAD, provides coverage for vessels, their
cargoes, crews, and third-party liabilities against war risks,
including acts of terrorism, if commercial insurance is not available
on reasonable terms and conditions. The insurance may be made available
to both U.S. and foreign flag vessels.
There are two basic forms of war risk insurance. Section 1202 of
the Act addresses commercial vessels in commercial trade while, Section
1205 pertains to vessels that are under charter or in the employ of the
Department of Defense. Recently, President Bush authorized DOT to
provide war risk insurance under Section 1202. The insurance is
available for areas currently excluded in commercial war risk trading
warranties: the Persian or Arabian Gulf and adjacent waters, Israel,
Lebanon, Gulf of Aqaba and the Red Sea, Yemen, Pakistan, Oman, Syria,
and Egypt. Authority under Section 1205 for the Middle East has
remained in effect since it was authorized by Then-President Bush in
August 1990. Since February 20, 2002, MARAD has written Section 1205
insurance on five vessels in the employ of the Military Sealift
Command.
Although the combined losses arising out of the attacks of
September 11th are estimated in the tens of billions of dollars, we are
seeing an excellent response all across the insurance industry in
responding to the coverage of these losses. While the losses are of
catastrophic proportions, the industry is financially sound and most
property/casualty insurers are highly reinsured with major reinsurers
with excellent reserves.
The insurance industry has taken a major hit as a result of
September 11th events and what we are seeing is a major restructuring
of terrorism risks. Many primary property/casualty insurance coverages,
which would include port infrastructure, had reinsurance renewals on
January 1st of this year and it appears that most reinsurers have
excluded terrorism risks from their renewal coverage. A few major
primary insurers are offering to write terrorism risks on fixed
property, but with very limited cover (up to $50 million on some risks)
at very, very high premiums. As a result of this, we have been advised
by a number of insurance brokers and underwriters that upon insurance
renewal many companies and properties are underinsured or uninsured for
terrorism risks.
The situation is somewhat better with regard to vessel insurance,
where terrorism risks are generally covered under the war risk policy.
Terrorism coverage is still available for vessels and cargoes, but the
cost has increased significantly. For example, war risk underwriters
issued cancellation notices on war risk policies on all vessels
worldwide on September 19th, (which they were permitted to do under
their seven-day cancellation clauses). They reinstated these policies
on September 26th with increases of annual premium of 200 to 300
percent on most fleets, except for cruise vessels, which we understand
faced a 1,000 percent increase in annual premiums. In addition, war
risk underwriters published new excluded zones, extending from Egypt to
Pakistan, where vessels and cargoes may not enter without paying
thousands or even hundreds of thousands of dollars of additional
premium. Marine war risk/terrorism insurance is still available from
the commercial market, although at much higher premium rates and with
much more limited coverage on the liability side since September 11th.
The Protection and Indemnity Clubs, a mutual arrangement of shipowners,
which provide vessel liability coverage, now limit coverage for
terrorism risk as of February 20th to $200 million per vessel--an
amount far lower than previously. Vessels and cargoes are still moving
worldwide, but the cost is higher and the terms more limited. In
addition, we understand that one of the mutual clubs that provides
insurance for terminals, stevedores, port authorities and transport and
logistics companies for handling equipment and property was able to
reinstate terrorism cover as of February 1st, but it is not clear on
what terms or cost.
In summary, insurance covering risks of terrorism is still in a
state of flux and we expect this to continue for some time to come.
Conclusion
The Department of Transportation does not need to be convinced that
port security is a good idea. We have recognized it as a critical
component of our maritime industry and our national security for many
years. Nevertheless, achieving appropriate levels of security in our
seaports and seeking to educate our international partners as to the
need and benefits of seaport security is no small undertaking. DOT is
aggressively pursuing all aspects of transportation security in all
modes utilizing our own resources and tapping the best minds in the
industry and labor.
I would be happy to answer any questions you or the other Committee
members may have.
Chairperson Feinstein. Thanks very much, Captain Schubert,
and we will do the questions after we hear from the other two
witnesses.
Next is Ms. Tischler. Welcome.
STATEMENT OF BONNI TISCHLER, ASSISTANT COMMISSIONER, OFFICE OF
FIELD OPERATIONS, UNITED STATES CUSTOMS SERVICE, WASHINGTON,
D.C.
Ms. Tischler. Madam Chairwoman, thank you for your
invitation to testify before the subcommittee today. I bring
you Commissioner Bonner's regards and his apologies. We have
appropriations hearings tomorrow, and he is up to his eyebrows
in alligators. But he does extend our invitation to you to
visit with us, perhaps, at your convenience in one of the ports
in California, and you can see firsthand how we target seaport
cargo.
Since September 11th, Commissioner Bonner's top priority
for the Customs Service has been responding to the terrorist
threat at our land borders, seaports, and airports. His highest
priority is doing everything we can reasonably and responsibly
to keep terrorists and terrorist weapons from entering the U.S.
Our Customs inspectors, canine enforcement officers, and
special agents are doing just that: protecting and defending
our country against the terrorist threat at all of our ports of
entry.
Since September 11th, Customs has been at a Level 1 alert
across the U.S. at all border entry points. Level 1 requires
sustained, intensive anti-terrorist questioning and includes
increased inspections of travelers and goods at every port of
entry. Because there is a continued threat that international
terrorists might attack again, we remain at Level 1 alert to
this very day, and we will be doing a Level 1 alert for the
foreseeable future.
Commissioner Bonner has implemented around-the-clock
coverage by at least two armed Customs officers at every
Customs location, even at low-volume crossings along our
Northern border. Customs inspectors are in many places working
12 to 16 hours a day, 6 and 7 days a week.
To help ensure that Customs develops a coordinated,
integrated counterterrorism strategy for border security,
Commissioner Bonner established a Director of Anti-Terrorism,
reporting directly to him and responsible for the coordination
of Customs anti-terrorism efforts.
In an operational context and to support our Customs
officers in the field, he and I have established the Office of
Border Security, which reports to me. The mission of that
office is to develop more sophisticated and complex anti-
terrorism targeting techniques for passengers and cargo in each
border environment and to provide a single point of contact for
events taking place in our field.
In establishing our priority to prevent terrorists and
terrorist weapons from transiting our borders, we believe that
Customs must also do everything possible to push the border
outwards. We must expand our perimeter of security away from
our national boundaries and towards foreign points of
departure.
Any effort to push the border outwards must include the
direct involvement of the trade community. Commissioner Bonner
established the Customs-Trade Partnership Against Terrorism, or
C-TPAT, as we call it, to build on past, successful security
models between Customs and the Trade that were expressly
designed to prevent legitimate commercial shipments from being
used to smuggle narcotics.
Another core area in these efforts is the implementation of
the Container Security Initiative, or CSI. As you know, one of
the stated goals of current terrorist organizations has been
not only to target American lives but to target the American
economy.
The vast majority of world trade, about 90 percent, moves
in containers, much of it carried on oceangoing container
ships. Nearly half of all incoming trade to the U.S. by value--
about 46 percent--arrives by ship and most of that is in
containers.
If terrorists were to succeed in concealing a weapon of
mass destruction, even a crude device, among the tens of
thousands of containers that enter U.S. ports every day, the
devastation would be horrible and impossible to contemplate.
And the impact on our global economy would be severe. As the
primary agency for cargo security, I believe U.S. Customs
should know everything there is to know about a container
headed for this country before it leaves a foreign port, such
as Rotterdam or Singapore. Customs wants that container pre-
screened there, not here.
The effective use of technology depends largely on good
targeting, for which we require advance information. Much has
been said regarding Customs examining 2 percent of incoming
cargo to the U.S. To some, the overall number of examinations
may seem surprisingly low in proportion to the vast amount of
trade we process. But the percentage of examination varies by
associated risk, and it is important to note that the cargo
Customs selects for intensive inspection is not chosen
randomly. It is the result of a careful screening process, a
process that uses information culled from a vast database on
shipping and trading activities known as the Automated Manifest
System. Using targeting mechanisms that operate within this
system and information derived from our enforcement databases,
we are able to sort through cargo manifests provided to Customs
by shippers and carriers and choose those shipments that appear
unusual, suspect, or high-risk. It is a system that has served
us well, but one that definitely can be tweaked up.
Currently, the submission of advanced shipping manifests to
Customs is voluntary. We cannot rest our Nation's security on
the vagaries of haphazard advance information that is often
incomplete and sometimes inaccurate. Timely, accurate, and
complete information is vital to this Nation's security, and we
should mandate that it is provided in advance.
Madam Chairwoman, I could just skip to my summation here or
complete this, and may I submit this for the record?
Chairperson Feinstein. Absolutely.
Ms. Tischler. Thank you so much.
In conclusion, the terrorists have already exploited one
key component of our transportation system: commercial
aviation. It is not at all unthinkable that they would seek to
target others, including maritime trade. We believe our
seaports and the system of global trade they support are
vulnerable, and we believe that the U.S. and the Customs
Service must act now to address this threat.
Thank you very much for the opportunity to testify before
you today.
[The prepared statement of Ms. Tischler follows:]
Statement of Bonni G.Tischler, Assistant Commissioner, Office of Field
Operations, United States Customs Service
Senator Feinstein thank you for your invitation to testify before
this Subcommittee today. Since September 11th, Commissioner Bonner's
top priority for the Customs Service has been responding to the
terrorist threat at our land borders, seaports and airports. His
highest priority is doing everything we reasonably and responsibly can
to keep terrorists and terrorist weapons from entering the United
States.
Through our Customs Inspectors and Canine Enforcement Officers, and
Special Agents we are doing just that: protecting and defending our
country against the terrorist threat at all our ports of entry,
including our seaports.
Since September 11th, Customs has been at a Level One alert across
the country--at all border entry points. Level 1 requires sustained,
intensive anti-terrorist questioning, and includes increased
inspections of travelers and goods at every port of entry. Because
there is a continued threat that international terrorists will attack
again, we remain at Level 1 alert to this day and will be at Level 1
for the foreseeable future.
As part of Commissioner Bonner's response, Customs has implemented
round-the-clock coverage by at least two armed Customs officers at
every Customs location, even at low volume crossings along our northern
border. To this day, Customs inspectors are, in many places, working 12
to 16 hours a day, six and seven days a week.
To help ensure that Customs develops a coordinated, integrated
counter-terrorism strategy for border security, Commissioner Bonner
established a new Office of Anti-Terrorism.
In an operational context and to support our Customs officers in
the field, we have also established the Office of Border Security. The
mission of that office is to develop more sophisticated anti-terrorism
targeting techniques for passengers and cargo in each border
environment and provide a single point of contact for events taking
place in our field.
In approaching our primary priority to prevent terrorists and
terrorist weapons from transiting our borders, we believe that Customs
must also do everything possible to ``push the border outwards.'' We
must expand our perimeter of security away from our national boundaries
and towards foreign points of departure.
Any effort to ``push the border outwards'' must include the direct
involvement of the trade community. The Customs-Trade Partnership
Against Terrorism, or ``C-TPAT,'' builds on past, successful security
models between Customs and the trade that were designed to prevent
legitimate commercial shipments from being used to smuggle illegal
drugs
Another core area in these efforts is implementation of the
Container Security Initiative, or CSI. As you know, one of the stated
goals of current terrorist organizations has been not only to target
American lives, but to target the American economy.
The vast majority of world trade--about 90%--moves in containers,
much of it carried on oceangoing container ships. Nearly half of all
incoming trade to the United States by value--about 46%--arrives by
ship, and most of that is in containers.
If terrorists were to succeed in concealing a weapon of mass
destruction, even a crude nuclear device, among the tens of thousands
of containers that enter U.S. ports every day, the devastation would be
horrible to contemplate. And the impact on our global economy would be
severe. As the primary agency for cargo security, I believe U.S.
Customs should know everything there is to know about a container
headed for this country before it leaves a foreign port, such as
Rotterdam or Singapore, for an American port. Customs wants that
container pre-screened there, not here.
The effective use of technology depends largely on good targeting,
for which we require advance information. Prior to September 11th,
Customs examined about 2% of incoming cargo to the U.S. That percentage
is significantly higher now. However, to some the overall number of
examinations may still seem surprisingly low in proportion to the vast
amount of trade we process. Yet it is importation to note that the
cargo Customs selects for intensive inspection is not chosen randomly.
It is the result of a careful screening process, a process that uses
information culled from a vast database on shipping and trading
activities known as the Automated Manifest System. Using targeting
systems that operate within AMS, we are able to sort through the cargo
manifests provided to Customs by shippers and carriers, and chose those
shipments that appear unusual, suspect, or high-risk. It is a system
that has served us well, but one that can and must serve us much better
in light of September 11th.
Currently the submission of advanced shipping manifests to Customs
is voluntary. We cannot rest our Nation's homeland security on the
vagaries of haphazard advance information that is often incomplete and
sometimes inaccurate. Timely, accurate, and complete information is
vital to homeland security and we should mandate it is provided in
advance. Current legislation, such as S.1214 takes us a major step
closer to where we ultimately need to be, particularly for the CSI--and
that is to have full information on incoming cargo before it even
leaves the foreign port.
As part of our immediate response to September 11th, Customs
promptly sought, and the Congress promptly enacted, legislation that
made the submission of data on incoming passengers to Customs' Advanced
Passenger Information System mandatory for all airlines. That law was
passed last November as part of the Aviation Security Bill. Initially,
the Commissioner ordered all international airlines flying into the
U.S. from abroad to submit advance passenger information to Customs, or
face 100% inspection of people and goods departing their flights. This
enabled Customs to better secure advance passenger information on all
incoming international flights before the new law took effect.
Beginning with the mega-ports that export to the U.S., we should
establish a new international security standard for containers in order
to protect this vital system of global trade. The core elements of the
CSI are the following:
First, we must establish international security
criteria for identifying high-risk cargo containers that
potentially pose a risk of containing terrorists or terrorist
weapons.
Second, we must pre-screen the high-risk containers at
their port of shipment--in other words before they are shipped
to the U.S.
Third, we must maximize the use of detection
technology to pre-screen high-risk containers. Much of this
technology already exists and is currently being used by the
U.S. Customs Service.
Fourth, we must develop and broadly deploy ``smart''
boxes--smart and secure containers with electronic seals and
sensors that will indicate to Customs and to the private
importers or carriers if particular containers have been
tampered with, particularly after they have been pre-screened.
As you can glean from this list, technology and information are
essential to a successful container security strategy, and to our
counter-terrorist mission in general. And to put it simply, the more
technology and information we have, and the earlier in the supply chain
we have them, the better.
I also look forward to the completion of the Automated Commercial
Environment, or ACE, which as you know is an extremely important
project for the Customs Service. ACE, our new system of trade
automation, offers major advances in both the collection and sorting of
trade data.
We are also working with the Canadian and Mexican governments to
improve information exchange and adopt benchmarked security measures
that will expand our mutual borders and reduce the terrorist threat to
most of the North American continent.
The terrorists have already exploited one key component of our
transportation system: commercial aviation. It is not at all
unthinkable that they will seek to target others, including maritime
trade. We believe our seaports and the system of global trade they
support are vulnerable, and we believe that the U.S. and the Customs
Service must act now to address this threat. Thank you.
Chairperson Feinstein. Thank you very much.
I am delighted to be joined by the ranking member, Senator
Kyl of Arizona, with whom I have worked closely for a number of
years now. Senator, do you wish to make a statement at this
point?
STATEMENT OF HON. JON KYL, A U.S. SENATOR FROM THE STATE OF
ARIZONA
Senator Kyl. Madam Chairman, I would like to put my
statement in the record. It says very nice things about your
calling this hearing today, and I would love to repeat that to
everybody. In the interest of time, I will simply say that I
thank you very much for holding a hearing on this very
important topic. I appreciate our witnesses' being here, and I
will just put that in the record.
[The prepared statement of Senator Kyl follows:]
Statement of Hon. Jon Kyl, a U.S. Senator from the State of Arizona
Senator Feinstein, thank you for calling today's hearing on
protecting our nation's seaports against terrorism. Even before the
tragic events of September 11, this subcommittee concerned itself with
the protection of Americans from terrorist acts within our shores. I
know both of us have worked to address the problem of identifying
terrorists and stopping them from entering the United States. However,
I do not believe that the public is aware that our seaports offer
access points for terrorists and their weapons, including weapons of
mass destruction, to enter our country with relative ease.
In October, Italian police discovered a suspected Al Qaeda
operative hiding inside an ocean container. The container was equipped
with a bed, toilet, satellite phone, computer, camera, airport maps,
and airport security passes for Canadian, Thai, and Egyptian airports.
All the necessary elements for another senseless act of terrorism were
present. Thankfully, this terrorist was intercepted in time.
The U.S. Custom service states that only two percent of the 5.5
million cargo containers that entered our seaports in the year 2000
were ever inspected. But it is also important to recognize that, of the
two percent of truck-sized containers that were inspected, many were
not inspected until they reached their final destination. This means
that a container may arrive in the port of Los Angeles and travel
across the United States by rail or truck and not be inspected until it
reaches the East Coast.
We are now aware of the economic fallout from the destruction of
the World Trade Center towers by terrorists. The closing of any of the
12 major American seaports would also have severe economic effects, not
only locally but throughout the nation. It is increasingly important
that local, state, federal, and private entities make a coordinated
effort to render our seaports safe.
I don't want to give the impression that Congress and the
administration are not working on this issue. More that one-third of
the 8,000 Coast Guard reservists have been called back to duty. This is
a substantial call-up for an agency the size of the U.S. Coast Guard.
The Coast Guard has boarded over 6,000 ships since the September 11
attacks, and 112 ``security zones'' have been established around port
installations, commercial vessels, coastal power plants, and other
infrastructure. In addition, the Senate passed the Port and Maritime
Security Act of 2001. This Act is intended to examine the problem of
port security, coordinate resources, authorize appropriations for
equipment, and increase criminal penalties. However, we must always
look to do more.
We have a very distinguished group of witnesses before us today. I
am interested in examining with them how we can inspect a greater
proportion of these containers without delaying the movement of goods
through our ports, and what assistance Congress can provide to reach
our objective of protecting our seaports, economy, and citizens.
Again, I would like to thank Senator Feinstein for holding this
hearing today. We have always had an excellent working relationship and
I look forward to examining this issue with her, with the skillful
assistance of these witnesses.
Chairperson Feinstein. Thank you.
Admiral please?
STATEMENT OF REAR ADMIRAL KENNETH T. VENUTO, DIRECTOR OF
OPERATIONS POLICY, UNITED STATES COAST GUARD, WASHINGTON, D.C.
Admiral Venuto. Madam Chairman, Senator Kyl, thank you for
inviting the Coast Guard. Admiral Loy sends his regards.
I have a written statement that I would like to present for
the record, and I have also a few verbal comments.
The Coast Guard is a unique organization. It is a military
organization with maritime responsibilities, and it is a multi-
missioned service that has got unique civil law enforcement
authorities. It is the principal agency responsible for
maritime homeland security and for port security of the
country.
I would like to just review for a few minutes some of the
things that the Coast Guard did immediately following the
tragic events of 9/11 because they have a bearing on the sense
of this hearing.
The Coast Guard provided a massive response right after the
events of 9/11 to protect and secure the ports, waterways, and
coastal areas of the United States. We still are maintaining a
heightened level of security throughout our waterways.
We recalled from other missions 55 cutters, 42 aircraft,
hundreds of small boats. We recalled port security units four
of them that are reserve units, to provide heightened port
security in New York, Boston, Seattle, and Los Angeles/Long
Beach in particular.
Our Captains of the Port restricted vessel traffic and
actually had some port closures during the time period. We
implemented security zones around critical infrastructure on
the waterside as well as high-value critical vessels.
To give you a sense, prior to 9/11, we roughly had about 12
security zones throughout the United States in one given time.
Today, ma'am, we have 130 security zones going on on a daily
basis, or more.
We implemented a 96-hour advance notice of arrival for
ships coming from foreign ports to our country to provide a
crew list as well as a sense of what their cargo was.
We provided vessel escorts to vessels which were considered
to be of high interest or high value. We did joint interagency
boardings on some of those vessels to make sure that everything
was okay.
We implemented a prototype sea marshal program to ensure
the internal security of vessels that could be used as
potential weapons in our port areas in San Francisco and Los
Angeles/Long Beach. We have extended the sea marshal program to
roughly ten ports in the United States today, and we have done
that by the call-up of reserves.
Just to give you a sense of the reserve call-up, there are
8,000 reservists in the Coast Guard Reserve. We called up 2,700
as a result of the events of 9/11. We currently still have
almost 1,900 on active duty today.
Essentially, before 9/11, the Coast Guard's level of effort
in our port security mission was around 2 percent. As a result
of 9/11, we surged to almost 58 percent of a level of effort
towards port security, which in the long run was not
sustainable. Since then, as we have developed a more balanced
approach, we have a level of effort, of total Coast Guard
effort of about 21 percent of our mission requirements going to
port security today.
We have reached out to the Navy in partnership. We have
today 13 Navy coastal patrol boats helping us do port security
mission areas. We have also reached out to the Office of Naval
Intelligence in a joint intelligence and information operation
out of Suitland in our Intelligence Coordination Center.
We have reached out to the International Maritime
Organization. Last November, the Commandant personally went to
the IMO and submitted a resolution for better international
maritime security, and, Madam Chair, I have for your
information a summary of the latest Intercessional Working
Group that met in a special session. The results of that are
provided to you and the members of the committee.
The Commandant developed a ports, waterways, and coastal
security strategic plan that essentially has the efforts of
pushing our border outwards in kind of a layered defense,
viewing our border as a continuum, basically originating from
the country of origin all the way here to the United States.
Our level of effort is to provide an appropriate and heightened
level of security in our port areas, yet at the same time
facilitating commerce.
The Commandant has set five strategic goals: to build
Maritime Domain Awareness, which is basically intelligence and
information sharing in an interagency effort; to control the
movement of high-interest vessels that ply our coastal areas
and our ports; to enhance our presence through deterrence and
response capabilities by having more harbor patrols and folks
at our marine safety offices being able to do more security
inspections of high-value facilities; to protect our critical
infrastructure and to enhance Coast Guard force protection; and
to improve domestic and international partnerships.
The Commandant is in the process of developing a multi-year
resource plan, and the Coast Guard appreciates the emergency
response supplemental that was passed by the Congress in fiscal
year 2002 to help us along in that process. And we seek your
support for the President's budget because it is the first year
of that 3-year plan in order to provide an appropriate level of
resources to help in our port security efforts.
I could go on, ma'am, about the value of our port areas.
You did it very articulately in your opening comments about the
value of our ports areas to our economy. Basically, our ports
contribute about $1 trillion to the gross domestic product of
this country, and there are 361 ports in the country, 95,000
miles of coastline, 25,000 miles of inland waters, 3.4 million
square mile exclusive economic zone, and we recognized that we
have got the principal responsibility to ensure its security.
We have focused on--we can't do that alone. It requires
partnerships with other Federal agencies, State and local
authorities and agencies, private sector partnerships, as well
as international partnerships. And we look forward to
continuing in that effort.
Thank you, ma'am.
[The prepared statement of Admiral Venuto follows:]
Statement of Rear Admiral Kenneth T. Venuto, Director of Operations
Policy, United States Coast Guard
Good afternoon Madam Chairman and distinguished members of the
Subcommittee. As Director of Coast Guard Operations Policy, I thank you
for the opportunity to appear before you today to discuss the Coast
Guard's maritime security strategy following the attacks of September
11th.
It has been said that the future has a way of arriving unannounced.
The future arrived suddenly, violently and without warning on a clear
day in September. In past years, our view of national security was
projected mainly abroad, rather than within our own borders. Today, we
suffer under the constant threat of terrorism as a means of coercion or
retaliation, as much of the world already has, a reality that will no
doubt continue well into the future.
Prior to September 11th, the Coast Guard's efforts were directed
toward executing and enhancing maritime safety and security,
environmental protection, and homeland defense in addition to our other
normal peacetime missions. However, September 11th marked a change in
the comfort and confidence our Americans citizens had in their security
and safety. Yet despite the obvious presence of the unseen enemy, the
Coast Guard engaged in a massive response effort to protect our ports
and Marine Transportation System. We also immediately escalated our
force protection condition to protect our own people and facilities.
The unique nature of the Coast Guard, as an agile emergency response-
oriented organization within the Department of Transportation, allowed
us to immediately increase our security posture, using existing active
duty, reserve, civilian, and auxiliary personnel; as well as units,
ships, boats and aircraft. One of the biggest lessons learned from
September 11th is that the nature of the threat facing all nations has
changed dramatically. What we saw on September 11th was were hijackers
taking over commercial flights for the sole purpose of turning them
into human guided weapons of mass destruction. We must translate that
thought pattern and recognize the vulnerability of our maritime
environment. We must change our assumptions underlying maritime
security.
As a nation that depends so heavily on the oceans and sea lanes as
avenues of prosperity, we know that whatever action we take against
further acts of terrorism must protect our ports and waterways and the
ships that use them. The Marine Transportation System of the United
States handles more than 2 billion tons of freight, 3 billion tons of
oil, transports more than 134 million passengers by ferry, and
entertains more than 7 million cruise ship passengers each year. The
vast majority of the cargo handled by this system is immediately loaded
onto or has just been unloaded from railcars and truckbeds, making the
borders of the U.S. seaport network especially vulnerable.
Preventing another attack requires an understanding of the maritime
dimension of Homeland Security and constant vigilance across every mode
of transportation: air, land, and sea. The agencies within the
Department of Transportation, including the U.S. Coast Guard, Federal
Aviation Administration, Federal Highway Administration, Federal Motor
Carrier Safety Administration, Federal Railroad Administration, Federal
Transit Administration, the Saint Lawrence Seaway Development
Corporation, and the Maritime Administration (MARAD), touch all three
modes of transportation and are cooperatively linked. This is
especially true of the maritime mode. Ensuring robust port and maritime
security is a national priority and an intermodal challenge, with
impacts in America's heartland communities just as directly as the U.S.
seaport cities where cargo and passenger vessels arrive and depart
daily. The United States has more than 1,000 harbor channels, 25,000
miles of inland, intracoastal and coastal waterways, serving 361 ports
containing more than 3,700 passenger and cargo terminals.
Simply stated, the Marine Transportation System is a complex
transportation network, as is clearly evident in ports across the
nation. These port complexes continue to grow at an amazing rate.
Current growth predictions indicate that container cargo will double in
the next 20 years. The biggest challenge facing our Marine
Transportation System is how to ensure that legitimate cargo is not
unnecessarily delayed as we and other nations introduce enhanced
security measures against some very real and potent threats. The
importance of the U.S. Marine Transportation System and the priority
placed upon it by the Department of Transportation cannot be
overstated.
I am very proud of the job our Coast Guard men and womean have been
doing to deter potential future terrorist attacks in the maritime
arena. Our people are working long hours, and 25 percent of our total
Reserve population has been placed on active duty. In many ports,
reserve members have been recalled to assist in a myriad of port
security mission, such as the boarding and escorting of high interest
vessels. However, this posture is not sustainable. . .nor is it an
efficient or effective use of resources. Our challenge for the future
is to determine what the new normalcy represents in terms of mission
requirements and associated operational activity, while also ensuring
that the Coast Guard is able to provide forces to meet its many
responsibilities. While the most pressing security challenges have been
met with existing authorities, we now must work to build a network of
protections-one that transforms what has been a rapid response into a
sustained effort that recognizes heightened ports, waterways and
coastal security as a part of normal operations. In addition, marine
security depends on the users of the maritime transportation system,
including shippers and operators, and affects the trade corridors they
use.
The intermodal aspect of the Marine Transportation System requires
the Department of Transportation and its agencies with a stake in the
system to take a coordinated approach in addressingto address the
expansive security requirements. Through interagency collaboration and
extensive partnering with public, private, domestic and international
entities, tremendous steps have been taken to address close the
strategic gaps between the current and desired level of protection for
our nation's ports and waterways. A key in this local outreach effort
has been the continued engagement by the Captains of the Port with the
private sector through such forums as the Port Readiness and Harbor
Safety Committees. The teamwork and desire of the community to
significantly enhance maritime security is exemplary. Equally important
are partnering efforts with the international community. Recognizing
that the maritime sector of the world's economy is the most valuable
and the most vulnerable, at a recent International Maritime
Organization meeting in DecemberFebruary, the Coast Guard proposed the
development of concrete actions that will enhance maritime security
worldwide. These proposed international recommendations are key in
intercepting threats before they reach our borders, thus extending the
borders of our domain awareness, an awareness that was lost leading up
to the attacks of September 11th.
While effective ports, waterways and coastal security is built upon
the principles of awareness, prevention, response, and consequence
management, the primary objectives are awareness and prevention, since
we hope to avoid any need for future consequence management. Awareness
helps focus resources and provides efficiency to prevention. Prevention
places a premium on awareness, detecting, identifying, and tracking
threats to our ports, waterways and coastal security. However, once
terrorists or the means of terrorism are on the move towards or within
the United States, the nation must have the means to detect and
intercept them before they reach our borders and our transportation
system. While there are no guarantees, there is good reason to believe
that we can improve our national ability to detect potential threats
through effective use of information. Exploiting available information
to separate the good from the bad, and then stop the bad, is the heart
of the Coast Guard developed Maritime Domain Awareness concept and
overall Ports, Waterways and Coastal Security Strategy. This strategy
must facilitate legitimate maritime commerce, which is supposed to
double in the next 20 years, while filtering threats by using real time
intelligence.
The goals of the Coast Guard's Ports, Waterways and Coastal
Security Strategy will be to:
Build Maritime Domain Awareness.
Control movement of High-Interest Vessels
Enhance presence and response capabilities.
Protect critical infrastructure and enhance USCG force
protection.
Conduct Domestic and International Outreach.
In summary, the Department of Transportation mounted a significant
and rapid response to this severe and unexpected threat. Notably,
maritime trade, which is critical to this country's economic strength,
continues to move through ports with minimal interruption. It is no
surprise that sustaining mobility will come at a higher cost to all of
us. But the reality is that we live in a country that prides itself on
the openness of its democracy, so we remain at risk to attacks of
terrorism. It is incumbent upon our government to minimize this risk.
With your support, the Coast Guard shall meet this challenge and ensure
that our nation's Marine Transportation System remains the very best in
the world.
Chairperson Feinstein. Thank you very much, Admiral.
We will begin the questions now, and let me begin with a
brief statement. I really question the effort to stretch out
our ports--I have lost the right words, but to stretch out our
ports so that the inspection is done at the port of origin
rather than at the port of delivery. I think we open ourselves
to a huge loophole if we do that. I would not bet on a port in
Pakistan really not being subject to bribery, to inspect a ship
rented by Osama bin Laden that might contain a nuclear device
in it. No way, no how would I ever think that that could be
protected against, because I don't. So I think the only
protection is our own port structure.
Now, I would like to read a scenario. A suspicious ship is
heading toward United States waters. It is carrying a type of
cargo not found in its home port or its recent ports of call.
Some of its crew are on an intelligence watch list because they
are suspected of having links with radical Islamic
organizations. And the ship is scheduled to arrive on the same
day as a tanker carrying highly volatile fuel.
According to national security expert Stephen Flynn,
despite these red flags, this highly suspicious ship could
still enter U.S. waters without being stopped or examined
because information about the ship is scattered in bits and
pieces throughout different agencies and, thus, no one is able
to see the big picture--similar, Senator to what we have talked
about before.
So my question to any or all of you is: Is there a system
in place to gather, compile, and analyze information from
different agencies? You have mentioned the passenger manifest
and crew manifest, but forget that. Is there a system in place
that is interoperable to manage data, to be able to pick out a
suspicious ship, and then, second, keep it from entering an
American port?
Admiral Venuto. Let me answer at least part of that
question.
First of all, I think there is no current system that looks
at everything right now. We don't have an integrated
information system per se. We in the maritime arena are
beginning to develop that. The ideal situation would be that we
get all the information electronically, both on the crew, the
passengers, the cargo, it was all visible, and that the various
agencies who had responsibility for whatever element that is--
whether it is the Coast Guard, whether it is the Customs
Service, whether it is INS--could be able to get the
information they need from that particular database.
Chairperson Feinstein. You get intelligence data, FBI data,
NSA data?
Admiral Venuto. We get some of that, ma'am. Today we do. We
require, as I said before, this 96-hour notice of arrival. What
we get with that, of course, every ship is required to report
their arrival 96 hours before, and they have to provide the
crew list to us as well as----
Chairperson Feinstein. Can you stop the ship?
Admiral Venuto. We can prevent it from entering port if
they don't get our permission, and we have, in fact, stopped
vessels from coming in, told them that they had to stay out.
We had a recent case on the West Coast, out in Hawaii,
where a ship wanted to come in for whatever reason, and they
wanted to come in before the 96-hour notice of arrival, and we
told them they could not until they provided us the crew list
so we could run it through our intelligence database, which we
run with the Navy, and we check on the crew to see whether they
have any particular----
Chairperson Feinstein. Would you get information, for
example, about a ship that Osama bin Laden may have rented or
in some way controlled or leased? ``Leased'' is the same thing
as renting.
Admiral Venuto. It depends on how much intelligence
information we have on----
Chairperson Feinstein. I bet the answer is no.
Admiral Venuto. Yes, you may not. You know, one of the
things, if you notice, one of the issues that we brought up at
IMO was visibility of ownership on ships.
Chairperson Feinstein. What is IMO?
Admiral Venuto. It is the International Maritime
Organization. It is the organization that regulates
international standards of shipping throughout the world. We
have used it primarily--it was primarily as a safety
organization, and through U.S. efforts we have brought up the
safety standards of the international fleet throughout the
world.
Chairperson Feinstein. But you get no intelligence----
Admiral Venuto. But we get no intelligence from them. The
issue would be if--you may not have visibility of ownership.
You may not have visibility of who, in fact, is using the ship
to have their cargo come in currently. You may not have that.
But Customs runs the cargo dimensions of it more. I am not as
qualified to answer that particular question.
Chairperson Feinstein. We have worked together on trying to
make this data more interoperable between agencies, and the
area that we haven't yet encountered is the seaport. And it
seems to me that you ought to have intelligence data because
this is the only way you are going to be able to prevent
something from coming in, is some suspicion that is checked out
as being, what they say, a good source so that you can take
some action.
Senator Kyl, Senator Schumer pointed out his deep concern,
and I know that you share it, and I share it, too, and that is
that there may 1 day be a nuclear device aboard one of these
ships, and we don't have the equipment to really understand
that once the ship comes in. So you have got to figure once the
ship comes in, it is too late. So you have got to stop the ship
from coming in.
Now, how do you do that? Intelligence.
Ms. Tischler. Senator Feinstein, if I might?
Chairperson Feinstein. Yes.
Ms. Tischler. I know that my colleague has something he
wants to talk to you about, but I would just like to comment.
So much of our sorting capability is based on advance
information that we don't have because it is not enough in
advance.
It is Customs' position--and Senator Hollings and Senator
Kyl and you have been very helpful in trying to see that the
industry got us information enough in advance to even do the
targeting. It is our premise that we need the information from
the trade on point of departure from wherever it is they are
coming from.
Chairperson Feinstein. You don't get that now?
Ms. Tischler. We don't get it--we get it--it is not
mandatory. It is voluntary. And although we have a lot of
helpers in the community and we do get quite a bit of
information, the fact is that we don't get it in most cases
timely enough. We don't get it complete enough. We don't get it
accurately enough. We would like to lay down the data
requirements from a uniformity perspective that we need every
time so that the agencies can sort.
With that in mind, I know the legislation pieces that are
out there. One of them--I think it is Senator Hollings' bill--
addresses a 5-day lag time, which is okay if you are coming
from Europe or from Asia, but if you are coming in from
Venezuela or the Caribbean, they get there faster than they
actually have to submit the manifest data.
And just to add on to my colleague from the Coast Guard, we
do get intelligence information. We have jointly boarded ships,
Customs has with the Coast Guard and the FBI based on
information received from our sister agencies in the
intelligence community. And the only thing that is driving us
right now is that need for advance information, the
intelligence from the community, and the technology to actually
sort the containers when they show up on our shores.
We do have radiation detecting capabilities, but think of
this: What if--and probably it will come shielded. So it is our
contention--we have radiation pagers that our inspectors have
that work pretty well if there is a radiation source. If it is
shielded, it is not going to pick it up. So I think we need
lead detectors. And I am not trying to be facetious, but we
sort of have to expand our universe in terms of the technology
that is available to all the agencies that are pitted against
the problem.
We have radiation portal devices that have been used on the
Russian border, actually, against smuggled nuclear material in
one lane of traffic. We asked if it could be stretched to a
cut, like, for instance in Miami. I am a Miami girl. Government
cut is where all the boats come in through when they are going
to Dodge Island. It would be so much better to be able to sort
a large vessel all at one time to see if there was a radiation
source on the vessel before it got to the dock, if the Coast
Guard missed it out at sea. And they need their own portable
radiation detectors in order to really help.
But right now, some of the technology is in the works
through DOE and their labs and some of it is in the works
through DOD, and they are sharing with us so that we are trying
to work on commercializing these pieces of equipment, which we
would be glad to show you at your convenience if you come down
to the port at--Los Angeles seaport or Oakland. And I think
that is the answer.
So it is really a meld of the intelligence, the sharing of
information, the databases themselves, the advance information.
That 2 percent figure that we were talking about is based on a
sorting of high-risk cargo. And at L.A. seaport, I know----
Chairperson Feinstein. You know where I am going, because I
have been through the border stuff now for 10 years since I
have been here. Everything has been to speed trade: Let it go
through, ask questions later. And we are now in an era where we
can't do that.
Where I think we should go is how do we set the dynamic
whereby private companies know they have to do greater
diligence with respect to what goes on a ship because that ship
may well be stopped and sit offshore for a month while the
Coast Guard or some other agency goes through it bit by bit by
bit if they don't do that due diligence.
And I agree with you on the shielding. I agree with you on
the cost of the X-rays. I am very worried that--Port of Long
Beach will speak for itself, but I know the inability--I talked
to Customs people in Los Angeles. I know how overstressed they
are and undermanned, and the load is just tremendous.
So my feeling is to create a situation whereby the
companies that do the loading aren't going to take the risk of
a ship getting stopped as a first step.
I want to give Senator Kyl a chance, but did you want,
Captain Schubert----
Captain Schubert. Yes, I would like to make a few comments.
Chairperson Feinstein. And then Senator Kyl.
Captain Schubert. First of all, I don't think any of the
panelists have any disagreement with you whatsoever about
increasing--that we need to increase the level of security in
our ports. But when it comes to cargo security, especially, and
the way intermodal operations work today, all of the agencies
here--the Coast Guard, Customs, the Department of
Transportation, the modal administrators, all agree that when
it comes to cargo coming from international ports, we must have
some form of prescreening in the foreign ports.
Now, we have a Container Working Group where all three
agencies have worked together on this issue, and we have
identified a working plan both short term and long term to
address this issue. And I am very confident that we will have a
combination of technology, more inspections in foreign ports,
not necessarily by U.S. Government people, but we need to be
able to profile the cargo before it is loaded on the ship.
Chairperson Feinstein. Who does the inspections in foreign
ports? And how many foreign ports would this be?
Captain Schubert. Well, there are a number of foreign
ports, but there are something like 12 transshipment ports,
major transshipment ports, before, you know, the cargo comes to
the United States. We are talking about containers now that
represent probably 80 percent of the cargo coming to the United
States.
So I know it seems like a lot of ports, but we are really
concerned about the ports just prior to leaving to come to the
United States. Some cargo might be transshipped several times
through several countries, for example. But the point is--and
the best illustration that I have given many, many times since
9/11 is when we had the tragic events of 9/11, Secretary Mineta
basically brought down the whole airline industry for 4 days to
make sure that each plane was checked for safety and that there
wasn't any more terrorists on the planes. And that took 4 days
before we could get the system back up and operating again.
If we had a similar situation with a container where we had
a credible threat, all we knew is that there might be ten
containers coming from ten different directions with a dirty
bomb or some other weapon of mass destruction in it, and we had
to shut down our ports and our intermodal system to do the same
thing that we did on the air side, we would have to shut our
system down for 4 months. That is by some estimates, up to 4
months, just to check all the containers. If anything can bring
our economy down, that can.
So we need to have a combination and several layers of
security in the ports, on the ships, and also some sort of
preclearance of cargo before it is actually loaded on the ship.
And that is something that I think all three agencies here,
plus listening to the stakeholders--the carriers, the shippers,
they all agree that we need to come up with an efficient system
that can do that to increase security.
Chairperson Feinstein. Thanks very much.
Senator Kyl. Thank you. Obviously, there is just a lot that
is going to have to be done to maintain our commercial
activities, but at the same time begin to deal better with
terrorism than we have in the past. And obviously, too, any
suggestions that you all have that we can help on I think would
be very welcome.
In that regard, it is pretty clear that this is going to
cost a lot of money, and particular, Commissioner Tischler, let
me ask you: What would be the effect of taking the Customs user
fees away from the Customs Service in terms of your ability to
perform this task?
Ms. Tischler. My personal opinion is it would severely
hamper us. I know that there is a lot of controversy about the
user fees. I know that the big user fees that go into the COBRA
fund, for instance, pay for some of our people, about 1,200 of
them, and pay for all of the overtime and quite a bit more. And
so we are--for instance, if that one sunsets--and it is
supposed to sunset September 30, 2003--we would be severely
hampered in how we operated. Most of the overtime--all of the
overtime that is being done by the inspectors now has really
depleted the fund since 9/11. So as just a personal sentiment,
because we have been struggling with the whole COBRA concept
for the last 2 years as if it might sunset in 2003, it would
put a big crimp in our activities.
Senator Kyl. I think--correct me if I am wrong--that the
biggest single--and I know there are several different funds,
but the biggest is the merchandise processing fee fund.
Ms. Tischler. Yes, sir.
Senator Kyl. And I have a figure for that of, in the year
2001, $957 million, so just under $1 billion. And I realize
that this is scored against Customs. Technically it goes into
the general fund, but if you were to not have the benefit of
that in your appropriations, I presume it would be fairly
devastating, would it not?
Ms. Tischler. It would absolutely be devastating. I think
our total budget is closing in on $3 billion thanks to Congress
and the administration. So to take that much out, if it were as
the offset, would be truly devastating.
Senator Kyl. Right. Now, you mentioned offset. The reason I
bring this up is that at least one suggestion is that the way
to pay for about $15 billion in subsidies in the energy bill
from the Finance Committee is to apply these Customs user fees.
And I have tried to make the point that that is not probably a
good idea, and I made that point to Governor Ridge today as
well. And I am sure that if that is still an idea that is out
there, you will want to make sure that folks understand the
implications of it were that to be done.
Ms. Tischler. Yes, sir. I will refer it to our Office of
Finance, who I am sure will talk to OMB on the scoring issues.
Senator Kyl. It is not just a matter of on the scoring
issues. It is a matter of Congress deciding to take those fees
and put them to another object here, in this case, the energy
bill.
Ms. Tischler. Right, sir. I understand.
Senator Kyl. Okay. Thanks.
I need to apologize to everyone. Not only was it a bad time
at the beginning, but I also have a 4:15 that I did not realize
earlier. And so I am not going to be able to spend as much time
with all of you as I would like, but I don't want you to infer
from that that I am not just as interested as Senator Feinstein
is in trying to figure out ways to deal with this problem.
We have got a bill now that deals with individuals
traveling to the country from abroad. In some respects, that is
easier to deal with. In other respects, it is not. But we need
to do the same thing here with regard to cargo. And just as we
do with people, we don't want to slow them down. We want to get
as many people coming to the United States as possible. But
since they are our guests, we also want to make sure that none
of them are unwanted guests. And that same thing goes for any
cargo, of course.
So, again, I regret that I can't stay here. I have read all
of your testimony, and I regret that I won't hear the other
panel. But, again, Madam Chairman, I thank you very much for
your continued interest in this subject, and I look forward to
working with you on ways that we can improve the ability to
detect material that shouldn't be coming into the country.
Chairperson Feinstein. Thank you very much. Thank you.
Before we move on to the other panel, I want to just ask,
this business of having cargo checked in other ports before it
comes on, and you mentioned that check would be confined to the
12 largest----
Captain Schubert. No, I didn't. I didn't----
Chairperson Feinstein. You said that ports that handle a
large percent are really 12 of them, so I just gathered from
that that you were saying----
Captain Schubert. We could start with the major ports, and
this is an issue that----
Chairperson Feinstein. Does that include Karachi?
Ms. Tischler. No.
Chairperson Feinstein. No? See, there----
Captain Schubert. Karachi wouldn't be----
Chairperson Feinstein. Pardon me?
Captain Schubert. Karachi wouldn't be one of the 12 ports,
no, ma'am.
Chairperson Feinstein. Well, there is your weak link.
Captain Schubert. Right. But what we need in the industry
today--and I am speaking from my 27 years of experience in both
being a ship's captain and sailing on ships, handling over $7
billion in exports for both freight forwarders and shippers. I
really do understand how complex the industry is, and knowing
that I can still make this next statement very confidently: The
industry needs more discipline than it has had in the past. We
have cases now, for example, the way the industry works today,
where a container can be loaded on a ship and be halfway across
the Atlantic Ocean before anybody gets any documentation on
what the container is, what is in the container. That simply
can't continue to be a business practice that we can accept.
What we are talking about--and I am really getting more
into the Customs issue here, but it is reporting, mandatory
reporting of what is said to be in the containers. And from
that information and the history of the shippers that are out
there, you could put together a profiling to determine what
containers really need to be inspected, what containers don't
have to be inspected.
This is just an important element of adding security to our
maritime system. It does not in any way take away from the
importance of what you said earlier about improving the
security in our ports. It is just another layer that has to be
thrown in there, and it is something that is absolutely
necessary, in my opinion.
Chairperson Feinstein. I appreciate that, and it is not up
to me to argue. If the administration wants to move in this
direction, that is up to the administration, certainly. But I
would like you--I have very deep concerns about it because I
think it will just create a--you know, we know there are--I
won't say how many, but there are a number of missing tactical
nuclear weapons. We know that there is access to all of this
stuff. And, you know, my goal is to keep it out of this
country, and the only way I know to do it is to secure our
ports to be able to keep it out. And I have always very deeply
believed if it comes to commerce or if comes to protection of
our people, the protection of our people comes first.
And I have got news. I don't mind having our ports shut
down for 4 months if it is going to prevent a nuclear weapon
from coming into this country. For me, that is a piece of cake.
I mean, you do it.
When I was mayor of San Francisco, I told my airport
director, who is now director of the airport in Toronto, if a
bomb ever leaves here on a plane, don't show up, you don't have
a job the next day. And, you know, you have got to make your
people move and understand and really work, and at the time we
even had bogus dogs at the airport. They weren't real dogs--I
mean trained to sniff bombs. And that was San Francisco
International Airport.
Now, that was a long time ago. Things have changed a lot
since then. But I don't think there is anything that replaces
vigilance at our ports or keeping dangerous ships out of our
ports. And by dangerous ships, I mean where your intelligence
alerts that there is a problem. Then you delay it and you see
that there is nothing aboard that ship.
Anyway, does anyone have anything else they want to say?
Admiral Venuto. Could I just say, Madam Chairman, just a
few things?
Chairperson Feinstein. Sure.
Admiral Venuto. I think what we are trying to describe here
is a risk management kind of regime where we try to establish
security protocols in partnership with other agencies, with the
private sector, and with international partners that are
legitimate traders. And if you establish that system of
protocols, that helps you then to focus the resources that we
have on those suspect areas you talk about, where if we have a
system of protocols with the 12 major ports that we trade with
and everybody abides by the system of security protocols, then
we can focus our efforts on those more suspect ships and
containers and shippers that don't have the same system of
protocols.
Just as our intelligence agencies--I mean, we have, we say,
high-interest vessels. I can't really go into the information
as to what classifies a high-interest vessel because it is
classified. But we recognize that there are certain areas of
the world, certain crew members, et cetera, that we need to
focus on, and that helps us take our scarce resources and focus
in that area.
If you look at joint inspection areas, one of the protocols
that we would like to set up is to actually have inspectors in
other countries, U.S. inspectors, or U.S. inspection of their
security procedures--and they would do the same to us; it would
have to be a partnership--in those areas. So it is a matter of
profiling the right suspect vessels with our scarce resources
to do that, recognizing that it is a risk management regime.
Chairperson Feinstein. Thanks very much, Admiral. I
appreciate it. Thank you very much for being here. We will move
on to the second panel.
Thank you very much for being here. And if I may, because
there are five people, perhaps I will do the introductions
seriatim, one by one. Let me find my introduction list here.
The first witness is Richard Steinke from the Port of Long
Beach, California. He is the executive director of the port,
the busiest port in the United States and, with the Port of Los
Angeles, the third largest port complex in the world. During
his 5 years there, container volume passing through the port
increased by 30 percent, and last year alone, nearly $200
billion in cargo passed through that port. Mr. Steinke is also
the chairman of the board of the American Association of Port
Authorities, an alliance of more than 150 port authorities in
the United States, Canada, the Caribbean, and Latin America.
Welcome, and we will be very interested in what you have to
say.
STATEMENT OF RICHARD D. STEINKE, CHAIRMAN OF THE BOARD,
AMERICAN ASSOCIATION OF PORT AUTHORITIES, AND EXECUTIVE
DIRECTOR, PORT OF LONG BEACH, LONG BEACH, CALIFORNIA
Mr. Steinke. Thank you, Madam Chair, and thank you for this
opportunity to address you on the important matter of port
security. Enhancing security is the top priority for America's
ports today.
Safety and protection have been of paramount concern to the
Port of Long Beach. Prior to the events of September 11th, our
focus, as well as many other ports, was primarily on crime
prevention, with an emphasis on cargo theft. Following the
tragic terrorist attacks on the World Trade Center and the
Pentagon, the focus of our efforts to protect the port and
facilitate commerce and the free flow of goods has been
broadened to include prevention and response to acts of
terrorism.
Besides being one of the busiest ports in the world, the
Port of Long Beach as well as the Ports of Oakland and San
Diego in California represent part of the National Port
Readiness Network. This designation by the Maritime
Administration requires the port to be prepared and ready 24/7
to respond to national emergencies whether they are military or
civil in nature. Our deepwater entryway is a Federal
navigational channel that must remain clear and operational at
all times so that ships carrying strategic cargo can enter or
exit the port unimpeded.
The roadways and railways leading to these load-out centers
must be adequately secured also to provide for movement of
goods and people. While the Port of Long Beach's role in
responding to national emergencies is a major one
strategically, each and every port in the United States has the
potential for playing a significant part in the security of
this country by serving as a conduit for a sound national
economy.
Long before the events of September 11th, the port realized
a need for maintaining the highest levels of security possible.
To that end, the Port of Long Beach has proactively developed a
port security plan to create and maintain a level of security
that might serve as a model for the maritime industry.
Over the last decade, the Port of Long Beach has created a
Port Crime and Security Committee, made up of industry
stakeholders, terminal operators, Federal, State, and local law
enforcement agency representatives, and terminal security
officials. We meet on an ongoing basis to discuss issues
related to crime, safety, and security. These meetings shape
the infrastructure and open lines of communications among
industry and law enforcement responsible for the safety of the
people who work in the ports and the security of the cargo that
move through it. Since September 11th, we have been operating
at a heightened security level. We have increased the number of
committees and task forces to address the expanded needs and
new charge for greater protection of our port.
Greater security is not limited simply to the movement of
cargo through the port. Every capital project that we undertake
now has a new element built into it. Our plans for a new bridge
or pier, widening of a channel, or erecting a crane all now
must include considerations for security enhancements. We have
recently completed a detailed security assessment of our
waterfront facilities, including the Port Harbor Patrol, Long
Beach Police Department, and the U.S. Coast Guard, and expect
that this assessment will suggest additional improvements and
upgrades. Those refinements will require funding not heretofore
anticipated.
Basically, what I am saying is the new demands for security
will require new sources of fundings. Funding considerations
should be given to supplement the manpower needs of the
participating Federal and local law enforcement agencies. We
especially would like to emphasize our support for increased
funding for the U.S. Coast Guard and the U.S. Customs Service.
Approximately 35 percent of all waterborne cargo containers
that come into the United States come through the Los Angeles/
Long Beach Port Complex, so the workload of these two agencies
is many times above the level expected of them in other ports
throughout the country.
The Port of Long Beach believes there needs to be increased
funding for U.S. ports and Federal agencies, as well as a
proper balance of dollars and personnel to the ports with the
greatest cargo volumes and vulnerabilities.
It is my honor to serve as chairman of the American
Association of Port Authorities. AAPA strongly supports Federal
programs aimed at protecting America's seaports from acts of
terrorism and other Federal crimes. Following September 11th,
ports took immediate action and have invested millions of
dollars to heighten security at their facilities. AAPA believes
increased funding is required for the Federal agencies to take
the lead on maritime security such as the U.S. Coast Guard and
the U.S. Customs, as I noted previously.
In addition, America's public ports need Federal financial
help to implement security enhancements in a timely and
effective manner. The $93.3 million provided by Congress is a
good first step, but significantly more money will be needed.
Because each port has unique characteristics, a one-size-fits-
all approach does not work. Seaport security should be
coordinated at the local level, working with the U.S. Captain
of the Port to establish local security committees and develop
appropriate security measures based on threat and vulnerability
assessments.
There are a number of other initiatives that could be
examined in a review of seaport security issues as they relate
to international maritime traffic into and out of ports.
Automatic Identification Systems that provide a ship's
identity, position, course, and speed, seafarer identification
and background check, port-of-origin container examinations, as
we have talked about before, are all items that need further
investigation.
I would be remiss if I did not make special note of the
exemplary job done by the Coast Guard following the tragic
events of September 11th. They deserve recognition for taking
the lead in exerting positive control over the port at a time
when confidence and assurance were needed. The Coast Guard
continues to play an instrumental role in our efforts to keep
our people at the Port of Long Beach and the other ports in the
United States safe.
In closing, I thank you, Madam Chair, and the members of
the Senate Judiciary Committee on Technology, Terrorism, and
Government Information for your interest and concern in seaport
security issues.
Thank you.
[The prepared statement of Mr. Steinke follows:]
Statement of Richard Steinke, Chairman of the Board, American
Association of Port Authorities, and Executive Director, Port of Long
Beach
Madam Chair, members of the committee. Thank you for this
opportunity to address you on the important matter of Port security.
Enhancing security is the top priority for America's ports today.
Safety and protection have been of paramount concern to the Port of
Long Beach. Prior to the events of September 11, our focus was
primarily crime prevention with an emphasis on cargo theft. Following
the tragic terrorist attacks on the World Trade Center and the
Pentagon, the focus of our efforts to protect the Port and facilitate
commerce and the free flow of goods has been broadened to include
prevention and response to acts of terrorism.
Besides being one of the world's busiest seaports, the Port of Long
Beach (as well as the Ports of Oakland and San Diego in California) is
part of the National Port Readiness Network. This designation by the
Maritime Administration requires the Port to be prepared and ready 24/7
to respond to national emergencies whether they are military or civil
in nature. Our deepwater entryway is a federal navigational channel
that must remain clear and operational at all times so that ships
carrying strategic cargo can enter or exit the Port unimpeded.
The roadways and railways leading to these load-out centers must be
adequately secured to provide for movement of goods and people. While
the Port of Long Beach's role in responding to national emergencies is
a major one strategically, each and every port in the United States has
the potential for playing a significant part in the security of this
country by serving as a conduit for a sound national economy.
Long before the events of September 11, the Port of Long Beach
realized a need for maintaining the highest levels of security
possible. To that end, the Port of Long Beach has proactively developed
a port security plan to create and maintain a level of security that
might serve as a model for the maritime industry.
Over the last decade, the Port of Long Beach created a Port Crime
and Security Committee. Made up of industry stakeholders; terminal
operators; federal, state, and local law enforcement agency
representatives; and terminal security officials; we meet on an ongoing
basis to discuss issues related to crime, safety and security. These
meetings shaped the infrastructure and opened lines of communications
among industry and law enforcement responsible for the safety of the
people who work in the ports and the security of the cargo that move
through it. Since September 11, we have been operating at a heightened
security level. We have increased the number of committees and task
forces to address the expanded needs and new charge for greater
protection of our port.
Greater security is not limited simply to the movement of cargo
through the Port. Every capital project that we undertake now has a new
element built into it. Our plans for a new bridge or pier, widening of
a channel, or erecting a crane all now must include considerations for
security enhancements. We have recently completed a detailed security
assessment of our waterfront facilities, including Port Harbor Patrol,
Long Beach Police Department, and the U.S. Coast Guard, and expect that
this assessment will suggest improvements or upgrades. Those
refinements will require funding not heretofore anticipated.
Basically, what I am saying is that the new demands for security
will require new sources of funds. Funding considerations should be
given to supplement the manpower needs of the participating federal and
local law enforcement agencies. We especially would like to emphasize
our support for increased funding for the U.S. Coast Guard and the U.S.
Customs Service. Approximately 35% of all waterborne cargo that comes
into the United States comes through the Los Angeles/Long Beach Port
Complex, so the workload of these two agencies is many times above the
level expected of them in other ports throughout the country.
The Port of Long Beach believes there needs to be increased funding
for the U.S. ports and federal agencies, as well as a proper balance of
dollars and personnel to the ports with the greatest cargo volumes and
vulnerabilities.
It is my honor to serve as Chairman of the American Association of
Port Authorities. AAPA strongly supports federal programs aimed at
protecting America's seaports from acts of terrorism and other federal
crimes. Following September 11, ports took immediate action and have
invested millions of dollars to heighten security at their facilities.
AAPA believes increased funding is required for the federal agencies
that take the lead on maritime security, such as the U.S. Coast Guard
and U.S. Customs as I noted previously.
In addition, America's public ports need federal financial help to
implement security enhancements in a timely and effective manner. The
$93.3 million provided by Congress is a good first step, but
significantly more money is needed. Because each port has unique
characteristics, a one-size-fits-all approach does not work. Seaport
security should be coordinated at the local level, working with the
U.S. Coast Guard Captain of the Port to establish local security
committees and develop appropriate security measures based on threat
and vulnerability assessments.
There are a number of other initiatives that could be examined in a
review of seaport security issues as they relate to international
maritime traffic into and out of the ports. Automatic Identification
Systems (AIS) that provide a ship's identity, position, course and
speed, seafarer identification and background check, port of origin
container examinations, are all items that need further investigation.
I would be remiss if I did not make special note of the exemplary
job done by the Coast Guard following the tragic events of September
11. They deserve recognition for taking the lead in exerting positive
control over the Port at a time when confidence and assurance were
needed. The Coast Guard continues to play an instrumental role in our
efforts to keep our people and the Port of Long Beach safe.
In closing, I thank you Madam Chair and all the members of The
Senate Judiciary Subcommittee on Technology, Terrorism and Government
Information for your interest and concern in seaport security issues.
Chairperson Feinstein. Thank you very much, Mr. Steinke.
Amanda DeBusk, welcome. Amanda DeBusk is the former
Commerce Department Assistant Secretary for Export Enforcement.
She was head of a 165-person organization in charge of
enforcing U.S. export controls and international trade
negotiations and initiatives. She is a former Commissioner on
the Interagency Commission on Crime and Security in U.S.
Seaports.
Welcome.
STATEMENT OF F. AMANDA DEBUSK, FORMER ASSISTANT SECRETARY FOR
EXPORT ENFORCEMENT, DEPARTMENT OF COMMERCE, AND FORMER
COMMISSIONER, INTERAGENCY COMMISSION ON CRIME AND SECURITY IN
U.S. SEAPORTS, WASHINGTON, D.C.
Ms. DeBusk. Thank you very much.
Today, I would like to highlight some of the
recommendations of the Seaports Commission and, in particular,
to talk about some of those recommendations that were not
completely addressed in the Port and Maritime Security Act that
passed the Senate this past December.
Let me begin by providing some context for the Commission's
study. The Seaports Commission was looking at terrorist threats
in connection with the new millennium. We were concerned about
how wide open our seaports are compared to our airports. In
most cases, there is easy access to the seaports.
Criminal activity at the seaports is a big problem. The
Commission found significant criminal activity was taking place
at most of the 12 seaports surveyed. One of the cases my former
office investigated involved a riot control vehicle that was
exported to China as a fire truck. The vehicle was huge. It
resembled a tank, and it had a turret on the top for spraying
pepper gas. It was exported in a container, and at the time no
one knew what was inside that container. So if someone can
smuggle a tank through a seaport, it does not make us feel
secure about catching chemical weapons or a nuclear bomb.
Chairperson Feinstein. Did it come from a California port?
Ms. DeBusk. Yes, it did.
Chairperson Feinstein. I won't ask--or shall I ask which
one?
Ms. DeBusk. Los Angeles.
Chairperson Feinstein. Thank you.
Ms. DeBusk. The Commission found that the state of security
at seaports generally ranged from poor to fair, with a few
exceptions where the security was good. The Commission made
recommendations that, if implemented, would go a long way in
combating terrorism at our seaports. I will discuss
recommendations on physical security, cargo security, and data
needs, something that you had touched upon.
First, concerning physical security, the Commission
provided recommendations on minimum physical security standards
covering fences, lights, gates, restrictions on vehicle access,
restrictions on carrying firearms, the establishment of a
credentialing process, considering criminal background checks
for those with access to sensitive areas of the port, and
development of a private security officer certification
program.
The Port and Maritime Security Act provides for the
development of Maritime Facility Security Plans that would
address these needs. However, to develop and implement these
plans, which are very complex, would take a long time. While
there is authority for interim measures, there is no standard
for these interim measures. An alternative might be to
immediately put in place standards identified by the Commission
and permit waivers if a seaport had a good reason not to
implement a particular requirement. That would move us along
more quickly.
For example, we could put in place a restriction on
carrying guns at seaports. It makes no sense to prohibit nail
clippers at airports but allow guns at seaports. Of the 12
seaports surveyed by the Commission, not a single one
restricted firearms. And to my knowledge, this situation has
not changed.
Chairperson Feinstein. Could you explain that? When you say
firearms, your officers would carry firearms.
Ms. DeBusk. That is exactly right.
Chairperson Feinstein. But what do you mean by restricting
firearms?
Ms. DeBusk. Suppose that I, private citizen, Amanda DeBusk,
decided to stroll down to the port, I could have my gun with
me.
Chairperson Feinstein. Interesting.
Ms. DeBusk. Exactly right. This would seem something that
is so basic that it is--it was pretty amazing to us that not a
single seaport had that restriction.
Chairperson Feinstein. None of the major seaports had any
restriction on anybody walking in with a gun?
Ms. DeBusk. That is correct. You are correct.
Chairperson Feinstein. Thank you.
Ms. DeBusk. So certainly the Seaport Commission, which was
composed of officials from law enforcement agencies,
recommended that arms at the seaport be restricted to law
enforcement personnel.
Another example of a basic security requirement that could
immediately be implemented is a restriction on private vehicle
access to the ports. At many ports, access is uncontrolled. At
one of the ports I visited, we saw a line of vehicles parked
right beside the vessel. We were told that these were the dock
workers' vehicles parked there for convenience. At the time, we
were concerned that the vehicles could be hiding places for
smuggled drugs. Today we must consider the possibility that a
car bomb or a dirty nuclear weapon could be hidden in those
vehicles. So, once again, that is something that could be
implemented immediately.
Now I would like to turn to recommendations concerning
cargo security. We need better information about cargo
transiting the ports. On the import side, the information is
often vague, and import entries may be filed 5 days after
arrival. On the export side, information is likewise often
vague and is required 10 days after export. As the Seaports
Commission noted, consolidated shipments often contain no
information on what is included in a container, listing the
cargo as ``various'' or ``assorted merchandise.''
The Port and Maritime Security Act would tighten up on the
timeliness by requiring information on imports to be provided
prior to importation and information on exports to be provided
within 24 hours of when cargo is delivered to the marine
terminal operator. However, the legislation does not address
the specificity of the information, which goes to comments from
the earlier panel about targeting. A concern with providing
more detailed information is that it would allow high-value
cargo to be targeted for theft by those with access to the
information.
One solution might be to tighten up on existing
requirements. The Seaports Commission studied compliance. In a
1999 study, Customs found a 53 percent discrepancy rate for
ship manifests in terms of the number of containers on board.
Over half of the vessels had either more or fewer containers on
board than were reported.
There are also numerous instances of people being smuggled
in containers. You told us about the Al-Qaeda operative, Farid.
Unfortunately, it is a common occurrence for illegal aliens to
be smuggled into the United States in containers. The Seaports
Commission catalogued literally hundreds of these situations.
It used to be that these individuals were smuggled relatively
short distances, but now they are coming long distances. In Los
Angeles, Immigration arrested 30 illegal aliens in containers
that had come all the way from China.
Clearly, we do not have a handle on how many containers are
transiting our seaports or on what is in those containers. The
Seaports Commission found that lax compliance and non-
compliance may be related to penalties. The maximum penalty for
incorrect information is $1,000. The Seaports Commission noted
that carriers appear to treat the penalties as a cost of doing
business. If the Congress legislated higher penalties,
compliance probably would improve.
Last, I would like to mention data issues, starting with
the basics. In analyzing crime at the seaports, the Seaports
Commission encountered a lack of data. The Commission
recommended that databases be modified to ensure the collection
and retrievability of data relating to crime at the seaports.
The Port and Maritime Security Act does not address this issue.
The Congress could task an agency with responsibility for data
gathering and provide the resources. With better data, law
enforcement agencies could identify patterns and weaknesses at
particular ports.
I would like to close with a statement in the Commission's
report: ``A terrorist act involving chemical, biological,
radiological, or nuclear weapons at one of these seaports could
result in extensive loss of lives, property, and business,
affect the operations of harbors and the transportation
infrastructure, including bridges, railroads, and highways, and
cause extensive environmental damage.''
We need to take action now to reduce the risk of future
catastrophes. Thank you for inviting me to testify.
[The prepared statement of Ms. DeBusk follows:]
Statement of F. Amanda DeBusk, Former Assistant Secretary for Export
Enforcement, United States Commerce Department
Chairman Feinstein, Senator Kyl, members of the Committee, I am
honored to be here today. I am speaking to you as a former Commissioner
on the Interagency Commission on Crime and Security in U.S. Seaports.
President Clinton established the Commission by Executive Memorandum on
April 27, 1999. I served on the Commission as the Commerce Department
representative in my capacity as Assistant Secretary for Export
Enforcement.
Senator Bob Graham was instrumental in the creation of the
Commission. Chairman Feinstein testified before the Commission on
February 16, 2000 at a hearing in San Francisco. Senators Hollings and
Graham introduced legislation implementing many of the Commission's
recommendations. That legislation passed the Senate on December 20 as
the Port and Maritime Security Act of 2001.
Today I would like to highlight the Commission's recommendations
that are most important for this Committee and that are not completely
addressed in the Port and Maritime Security Act. Let me begin by
providing some context for the Commission's study. The Seaports
Commission was looking at terrorist threats in connection with the
events celebrating the New Millennium. We were concerned about how wide
open our seaports are compared to our airports. In most cases, there is
easy access to the seaports.
Criminal activity at the seaports is a big problem. The Commission
found that significant criminal activity was taking place at most of
the 12 seaports surveyed. One of the cases my former office
investigated involved a riot control vehicle that was exported to China
as a fire truck. The vehicle resembled a tank and had a turret for
spraying pepper gas. It was exported in a container, and no one knew at
the time of export what was inside. If someone can smuggle a tank
through a seaport, it does not make us feel secure about catching
chemical weapons or a nuclear bomb.
The Commission found that the state of security at seaports
generally ranged from poor to fair, with a few exceptions where the
security was good. The Commission made recommendations that, if
implemented, would go a long way in combating terrorism at our
seaports. I will discuss some recommendations on physical security,
cargo security and data needs.
First, concerning physical security, the Commission provided
recommendations on minimum physical security standards covering fences,
lights, gates, restrictions on vehicle access, restrictions on carrying
firearms, the establishment of a credentialing process, considering
criminal background checks for those with access to sensitive areas of
the port, and development of a private security officer certification
program. The Port and Maritime Security Act provides for the
development of Maritime Facility Security Plans that would address
these physical security issues. To develop and implement these complex
plans is likely to take a long time. While there is authority for
interim security measures, there are no standards for these measures.
An alternative might be to immediately put in place minimum standards
identified by the Commission and permit waivers if a seaport had a good
reason not to implement a particular requirement.
For example, we could immediately put in place a restriction on
carrying guns at seaports. It makes no sense to prohibit nail clippers
at airports, but allow guns at seaports. Of the 12 seaports surveyed by
the Commission, not a single one restricted firearms. To my knowledge,
this situation has not changed. The Seaports Commission, composed of
officials from federal agencies involved in law enforcement at the
seaports, recommended restrictions on firearms except for law
enforcement personnel.
Another example of a basic physical security requirement that could
be immediately implemented is the restriction on private vehicle access
to the ports. At many ports, access is virtually uncontrolled. At one
of the ports I visited, we saw a line of vehicles parked right beside
the vessel. We were told that these were the dockworkers' vehicles
parked there for convenience. At the time, we were concerned that the
vehicles could be hiding places for smuggled drugs. Today we must
consider the possibility that a car bomb or a ``dirty nuclear weapon''
could be hidden in those vehicles.
Now I would like to turn to recommendations concerning cargo
security. We need better information about cargo transiting the ports.
On the import side, information is often vague and import entries may
be filed 5 days after arrival. On the export side, information is
likewise often vague and is required 10 days after export. As the
Seaports Commission noted, consolidated shipments often contain no
information on what is included in a container, listing the cargo as
``various'' or ``assorted merchandise.''
The Port and Maritime Security Act would tighten up on timeliness
by requiring that information on imports must be provided prior to
importation and information on exports must be provided within 24 hours
of when cargo is delivered to the marine terminal operator. However,
the legislation does not address the specificity of information. A
concern with providing more detailed information is that it would allow
high value cargo to be targeted for theft by those with access to the
information.
One solution might be to tighten up on existing requirements. The
Seaports Commission studied compliance issues. In a 1999 study, Customs
found a 53% discrepancy rate for ship manifests in terms of the number
of containers on board. Over half of the vessels had either more or
fewer containers on board than were reported.
There are numerous instances of people being smuggled in
containers. Customs Commissioner Bonner reported in a recent speech
that Italian authorities found a suspected Al Qaeda operative locked in
a shipping container bound for Canada. Inside the container, the
suspect had a bed, a bathroom, airport maps, security passes and an
airport mechanic's certificate.
Unfortunately, it is a common occurrence for illegal aliens to be
smuggled into the United States in containers. The Seaports Commission
catalogued literally hundreds of these situations. It used to be that
these individuals were smuggled relatively short distances, mainly into
the Port of Miami, but this is not the case any more. In Los Angeles,
Immigration arrested 30 illegal aliens in containers that had come all
the way from China.
Clearly, we do not have a handle on how many containers are
transiting our seaports or on what is in those containers. The Seaports
Commission found that lax compliance and non-compliance may be related
to penalties. The maximum penalty for incorrect information is $1000.
The Seaports Commission noted that carriers appear to treat the
penalties as a cost of doing business. If the Congress legislated
higher penalties, compliance probably would improve.
Last, I would like to mention data issues. In analyzing crime at
the seaports, the Seaports Commission encountered a lack of data. The
Seaports Commission recommended that databases be modified to ensure
the collection and retrievability of data relating to crime at the
seaports. The Port and Maritime Security Act does not address this
issue. The Congress could task an agency with responsibility for data
gathering and provide the necessary resources. With better data, law
enforcement agencies could identify patterns and weaknesses at
particular ports.
I would like to close with a statement in the Commission's report:
``A terrorist act involving chemical, biological, radiological, or
nuclear weapons at one of these seaports could result in extensive loss
of lives, property and business, affect the operations of harbors and
the transportation infrastructure, including bridges, railroads and
highways, and cause extensive environmental damage.'' We need to take
action now to reduce the risk of future catastrophes. Thank you for
inviting me to testify on this important subject.
Chairperson Feinstein. Thank you. Excellent testimony, and
we will talk to you more in our Q&A period.
Let me just go on and introduce now Mr. Kim Petersen of the
Maritime Security Council. He serves as the executive director
of the Security Council. He has over 22 years of experience in
domestic and international security and anti-terrorism
activities. He has directed operations for former U.S.
Secretaries of State Henry Kissinger and Alexander Haig and
served as the senior staff member in both the United States
Senate and the Defense Department.
Welcome, Mr. Petersen.
STATEMENT OF KIM E. PETERSEN, EXECUTIVE DIRECTOR, MARITIME
SECURITY COUNCIL, FORT LAUDERDALE, FLORIDA
Mr. Petersen. Thank you, Madam Chair. As the executive----
Chairperson Feinstein. And before you start, what we are
really interested in--and maybe this might--are suggestions.
You know, Ms. DeBusk did it, things we might do legislatively
to tighten up our system. So if you have----
Mr. Petersen. I have lots of them.
Chairperson Feinstein. Good.
Mr. Petersen. As the executive director of the Maritime
Security Council, I am pleased to have the opportunity to
address the committee today and relate the views and concerns
of our membership. I also ask that my written testimony be
entered into the record, and I will provide a few brief
remarks.
Chairperson Feinstein. It will. Thank you.
Mr. Petersen. As background, the Maritime Security Council
was created in 1988 to address the many security concerns of
the U.S. and international maritime community. We are a member-
driven organization representing 65 percent of the world's
shipping that works closely with United States Government
agencies concerned with maritime security and counterterrorism.
Our mission is to advance the security interests of the
international maritime community against terrorists and other
transnational criminal threats.
In addition to being the principal clearinghouse for the
exchange of information between its carrier members, the MSC
also acts as a liaison with regulators and governments offering
vital intelligence on crimes at sea and information on security
conditions in foreign ports. The Maritime Security Council has
been designated as a maritime security advisor to both the U.S.
State Department and Interpol, the international police
organization.
It is important to acknowledge that the maritime industry,
both the sea carriers and the ports, have been working for
years to address the issue of crime and security in the
maritime environment. The passenger cruise industry
unilaterally developed and implemented security control and
accountability measures designed to mitigate or deter criminal
activity through the identification and exclusion of
unauthorized personnel. Some States, most notably Florida, had
begun extensive port security programs that have become models
for the rest of the Nation.
However, subsequent to the terrorist attacks of September
11, the maritime industry's focus changed from mitigation of
criminal activities to the prevention of terrorism. This has
had the effect of directing resources at a new and more complex
threat while at the same time providing viable safeguards
against criminal concerns, such as container theft, drug
smuggling, and conspiracies to bring in illegal aliens.
While it is readily accepted that our seaports are a
critical component of the U.S. national infrastructure, a clear
understanding of how these engines of commerce are protected is
not so readily appreciated. What is of surprise to many is that
it is not the Federal Government that is providing security for
the Nation's seaports but, rather, it is local governments and
port authorities coupled with local law enforcement and private
security companies. Were it not for local governments
protecting the seaports themselves, Federal agencies such as
INS, Customs, and the Coast Guard would not be able to perform
their mission. Therefore, it is of significant concern to the
Maritime Security Council that the extraordinary needs of port
authorities and local governments for funding to perform
fundamental security operations not be overlooked when monies
for security enhancements and recurring operational costs are
being allocated. Absent State-directed funding and Federal
reimbursements for completed security capital improvements, we
can expect that many ports will simply be unable to meet the
many ongoing challenges created as a consequence of the
horrible events of September 11.
As I testified before the U.S. Senate's Commerce Committee
in October, it would be a catastrophic mistake for us to
consider U.S. borders and coastlines as our first line of
defense against foreign-based foes. In addition to enhancing
domestic seaport security measures, the Maritime Security
Council believes it is critical to push back the boundary of
homeland security to foreign ports of origin. Particularly in
an age of increasingly available weapons of mass destruction,
it must be seen as a dangerous policy to await the arrival of
suspicious cargo into an American seaport before it is
subjected to a first round of scrutiny.
I understand your concerns, Madam Chair, about the
potential of container inspections being subverted in ports
such as Karachi. It is, therefore, our recommendation that a
program analogous to the Federal Aviation Administration's
Foreign Airport Security Assessment Program be developed and
funded. A Foreign Seaport Assessment Program in tandem with a
prescreening program, as recommended by U.S. Customs and the
Maritime Administration, would need to identify those ports
that fail to meet minimum security standards with such
standards being agreed to through the UN's International
Maritime Organization. The next critical element would be for
the U.S. to spearhead a program that would provide technical
assistance and, where necessary, financial help to those ports
that serve as potential points of origin for those bent on
harming American interests.
The Maritime Security Council recommends to this committee
that every port of origin with ships bound for a U.S.
destination should be audited at least once every 3 years, with
non-compliant ports being audited annually until they reach
compliance. Implementation of this program, and the sanctions
that would become a part of it, will create a self-sustaining
financial incentive for compliance with these new international
port security standards.
In conclusion, the Maritime Security Council thanks you,
Madam Chairwoman, and the other members of the subcommittee for
the opportunity to provide this testimony. We stand prepared,
as we always have, to assist the committee and its staff in
these important efforts, and we will be dedicating a
significant portion of the International Maritime Security
Conference, which we are holding in Fort Lauderdale on March
6th through 8th, to discuss the issues raised in this hearing.
Thank you.
[The prepared statement of Mr. Petersen follows:]
Statement of Kim E. Petersen, Executive Director, Maritime Security
Council, Fort Lauderdale, FLorida
Thank you Chairman Feinstein and members of the Committee. As the
Executive Director of the Maritime Security Council, I am pleased to
have this opportunity to address the committee today to relate the
views and concerns of our membership.
Background
The Maritime Security Council was created in 1988 to address the
many security concerns of the US and international maritime community.
We are a member-driven organization that works closely with United
States government agencies concerned with maritime security and
counterterrorism. Our mission is to advance the security interests of
the international maritime community against terrorist and other
transnational criminal threats. The MSC represents maritime interests
before government bodies; works in partnership with industry and
government; disseminates timely information to its members; encourages
the development of industry-specific, task-appropriate security
technologies; and, convenes conferences and meetings for the
membership.
The MSC has established partnerships with a number of these
agencies to prevent or respond to a wide range of transnational
criminal activities, including terrorism, illegal drug trafficking,
piracy, theft, and trafficking in human cargo.
In addition to being the principle clearinghouse for the exchange
of information between its carrier members, the MSC also acts as a
liaison with regulators and governments offering vital intelligence on
crimes at sea, and information on security conditions in foreign ports.
The Maritime Security Council has been designated as a maritime
security advisor to both the US State Department, through its Overseas
Security Advisory Council, and Interpol, the international police
agency. As a consequence of these roles, the MSC was called on to
assist in the development of US Sea Carrier Initiative and Super
Carrier Programs and was instrumental in helping develop sections of
the Port, Maritime, and Rail Security Act of 2001.
Maritime Industry Actions
It is important to acknowledge that the maritime industry, both the
sea carriers and the ports, have been working for years to address the
issue of crime and security in the maritime environment. The passenger
cruise industry unilaterally developed and implemented access control
and accountability measures designed to mitigate or deter criminal
activity through the identification and exclusion of unauthorized
personnel. Some states, most notably Florida, had begun extensive port
security programs that have become models for the rest of the nation.
However, subsequent to the terrorist attacks of September 11, the
maritime industry's focus changed from mitigation of criminal
activities to the prevention of terrorism. This has had the effect of
directing resources at a new and more complex threat, while at the same
time providing viable safeguards against criminal concerns, such as
container theft, drug smuggling, and conspiracies to bring in illegal
aliens.
Threats and Challenges to Maritime Homeland Security
While it is readily accepted that our seaports are a critical
component of the US national infrastructure, a clear understanding of
how these engines of commerce are protected is not so readily
appreciated. What is of surprise to many is that it is not the federal
government that is providing security for our nations seaports, but
rather it is local governments and port authorities coupled with local
law enforcement and private security companies. Were it not for local
governments protecting the seaports themselves, federal agencies such
as INS, Customs, and the Coast Guard would not be able to perform their
mission. Therefore, it is of significant concern to the Maritime
Security Council that the extraordinary needs of port authorities and
local governments for funding to perform fundamental security
operations necessary not be overlooked when monies for infrastructure
security enhancements and recurring operational costs are being
allocated. Absent state-directed funding and federal reimbursements for
completed security capital improvements, we can expect that many ports
will simply be unable to meet the many challenges created as a
consequence of the horrible events of September 11.
Maritime Homeland Security: Where Does It Begin?
As I testified before the US Senate's Commerce Committee in
October, it would be a catastrophic mistake for us to consider US
borders and coastlines as our first line of defense against foreign-
based foes. In addition to enhancing domestic seaport security
measures, the Maritime Security Council believes it is critical to push
back the boundary of homeland security to foreign ports of origin.
Particularly in an age of increasingly available Weapons of Mass
Destruction, it must be seen as a dangerous policy to await the arrival
of a suspicious cargo into an American seaport before it is subjected
to scrutiny.
A program analogous to the Federal Aviation Administration's
foreign airport security assessment program needs to be developed and
funded. A foreign seaport assessment program would need to identify
those ports that fail to meet minimum security standards with such
standards being agreed to through the UN's International Maritime
Organization. There is presently movement in that direction by the US
Coast Guard, the Department of Transportation, and organizations such
as the Maritime Security Council in meetings with the IMO in London.
The next critical element would be for the US to spearhead a program
that would provide technical assistance and, where necessary, financial
help to those ports that serve as potential points of origin for those
bent on harming American interests.
The Maritime Security Council recommends to this Committee that
every port of origin with ships bound for a US destination should be
audited at least once every three years, with non-compliant ports being
audited annually until they achieve compliance. Implementation of this
program, and the sanctions that would become a part of it, will create
self-sustaining financial incentives for compliance with these new
international port security standards.
Training and Certification of Maritime Security Professionals
The Maritime, Port and Rail Security Act of 2001 creates a
mechanism for establishing training and certification standards for
maritime security professionals. It creates the Maritime Security
Institute, under the direction of the Federal Law Enforcement Training
Center, as an international center for training and certification. This
program would also be open to foreign personnel responsible for
managing port or vessel security operations. The Maritime Security
Council is proud to have been instrumental in this component of the Act
and we believe it will prove to be one of the significant legacies of
this legislation.
Conclusion
The Maritime Security Council thanks you, Madam Chairwomen and the
other members of the Committee for the opportunity to provide this
testimony. We at the MSC stand prepared, as we always have, to assist
the Committee and its staff on its important efforts, and we will be
dedicating a significant portion of our International Maritime Security
Conference, being held in Ft. Lauderdale, March 6-8, 2002, to discuss
the issues raised in this hearing.
Thank you.
Chairperson Feinstein. Thank you very much. I have got a
burgeoning question, but I will wait.
It is a pleasure for me to welcome Mr. Rob Quartel of
FreightDesk Technologies. He is the chairman and CEO of this
company. The company is a leading provider of Internet-based
cargo applications for international cargo management. He is
also a former member of the United States Federal Maritime
Commission and is recognized as an expert in international
maritime and U.S. national transportation policy.
Mr. Quartel, if you would do the same thing, if you could
enter your statement in the record and just kind of talk on
where you see the picture and what you think could be done to
be helpful.
STATEMENT OF ROB QUARTEL, CHAIRMAN AND CEO, FREIGHTDESK
TECHNOLOGIES, INC., AND FORMER MEMBER, UNITED STATES FEDERAL
MARITIME COMMISSION, MCLEAN, VIRGINIA
Mr. Quartel. That would be great. Do you have a copy of the
slides, Senator?
Chairperson Feinstein. I do not.
Mr. Quartel. I wonder if there is a way we can get this so
you can see it. But I would like to enter the statement into
the record.
Let me begin by saying I endorse almost all of the actions
that people on this panel and the earlier panel have talked to
about what you do about a port, and I think we all have seen
each other in different contexts.
When I walked in here, I said to Deputy Commissioner
Tischler, who I had not met--and I was glad to meet her--that I
was the author of the concept, or at least the first person----
Chairperson Feinstein. Oh, you are the author of pushing
the borders----
Mr. Quartel. Pushing the border back.
Chairperson Feinstein. Oh, you have a doubting Tomasina
here.
Mr. Quartel. Well, she said she was the author. She said
she had thought of it first, and after that, I think I will let
her be the author.
Chairperson Feinstein. Oh.
Mr. Quartel. But, in point of fact, it is something that
woke me up in the middle of the night, not long after September
11th, thinking about the volume of trade, how it actually
operates, and really that is kind of what I would like to talk
about today.
I am going to skip through a couple slides because I think
it goes to this. Everything that people have talked to in terms
of technology--seals, all of that kind of stuff--I endorse. But
let me just say that you can seal containers, you can inspect
the ports, you can put more guards, you can get rid of guns,
you can do all of the physical things to a port; but none of
that would stop a weapon of mass destruction from going under
the Golden Gate Bridge and blowing up. It is a little bit like
a ball player with a mitt and another guy with a hand grenade.
The port is the guy with the mitt. Do you want to be the guy
with the mitt? Is that going to stop the hand grenade?
The game here, the technology, is to stop the hand grenade
before it ever gets lobbed at the port, and I think that is why
it is a combination of technologies. It is a net to capture if
it gets to the port, it is the technology to stop it----
Chairperson Feinstein. Let me stop you, because this thing
seems so flawed to me because you can't--if you do, let's say,
12 ports, the big ports----
Mr. Quartel. That is not enough.
Chairperson Feinstein. It is a signal to everybody. You
don't ship a tactical nuclear weapon through a big port. You go
to a small port. So, I mean, how does this solve anything by
pushing the borders back?
Mr. Quartel. Well, you are exactly right, but I think we
need to define what we mean. We don't mean physically pushing
the border back, and I don't think most people mean actually
inspecting a container.
If you take a quick look at this first slide, this is what
international trade looks like. Typical international trade has
in it 20 to 30 parties, 30 to 40 documents. It spews data, a
couple hundred data elements all across the process. And I
think if you want to deal with a container coming in with a
bomb, you have to think about it as a piece of the process.
The Coast Guard has defined what they call maritime domain
awareness, which is being aware of the domain around the port,
all critical, all important. When I think about international
trade, there are really five domains. There is the beginning of
the cargo, when you have got manufacturers and other people who
are putting it in the container and moving it to a port of
lading overseas. You have got that port, which has security
issues. You have it in motion, over the ocean or in the air, or
anything else. You have the port of discharge in Los Angeles,
for example. And then you have an inland movement, and really
what we are talking about here is a piece of the onion. You
know, this is a process like an onion. There is one thing you
do, then another thing you do, then another thing you do, layer
on layer on layer.
The quickest, frankly easiest thing you can do is to start
to capture information, not just data but information on a
cargo. And you can do that from the minute someone orders it.
Every purchase overseas generates a purchase order from someone
in the United States. And, Senator, this is the kind of stuff
that is not now done.
If you want to export something to Osama bin Laden, there
is a denied party list that says you can't do it----
Chairperson Feinstein. He is not going to buy a tactical
nuclear weapon at Wal-Mart.
Mr. Quartel. Right.
Chairperson Feinstein. You know, he is going to buy it from
some Russian black marketeer.
Mr. Quartel. Absolutely. But if I wanted to export
something to him from the United States, he is on a denied
list. And I am simplifying it. But there is no comparable list
that says he couldn't send it to us. So that is kind of a first
level of data check and kind of the data concept. This is not
just stopping it at the port. The data concept is to start
gathering commercial intelligence which can tell you about the
container, the shipments in it, the people who touched it, who
paid for it, where it went, where it is going. For example, the
kind of stuff I would want to know before it ever got to the
United States is not whether necessarily it originated in
Karachi, but did it originate in Malaysia via Indonesia where
you have Muslim dissidents, slipped into the mainstream of one
of these 12 ports, by the way, you know, one of the biggest
ports shipping to California, and it is somehow going to get on
a train, once it gets through the port, and go all the way to
New York and go by Yankee Stadium when the President of the
United States is throwing out the ball.
So it is not just the what of it that you want to capture
in data, and the contents. It is also the situation. And the
only way you can do that is by capturing a set of commercial
information and a set of law enforcement and national security
information.
And you asked the question, correctly, do we have a single
place in the United States Government that captures and
processes this data, and the answer is no. You know, you have
got Customs. You have got DOT. You have got Coast Guard. You
have got Office of Naval Intelligence. You have got DOD. You
have got all of these guys taking a little piece of the
problem----
Chairperson Feinstein. They are all afraid to say it isn't
adequate now.
Mr. Quartel. Right, absolutely. So when I look at it, you
create a commercial database which plugs into the commercial
system. Remember, it is spewing data; every piece of data you
would ever need is available somewhere before it ever hits the
first ship.
You want to put together law enforcement and national
security data----
Chairperson Feinstein. You are talking about contraband
data now?
Mr. Quartel. No. This is data on the situation. For
example, Customs captures the manifest, the ship manifest. Half
of what is on a ship is called FAK, ``freight all kinds,''
which means that it was placed there, it doesn't say what is in
the container. And in the other half of the data, it is wrong
half the time. Okay? So to collect the ship manifest, I would
have before this hearing said it is great, it at least tells
you what is supposed to be on the ship. Well, 53 percent of
that doesn't--you know, is wrong, too.
On the other hand, if you capture a purchase order, it
tells you who bought it and who paid for it and what it is they
wanted to get and when they wanted it shipped and who they were
going to have it moved by. If you capture the transportation
data, you can find the truck that was hired out of Malaysia to
move it to the rail, the rail that was hired to move it to the
ship, the ship--okay, you have got the ship, Customs and Coast
Guard, Coast Guard has data on who owns the ship and who all
these guys are. It is not in one place, but that is the
process.
Chairperson Feinstein. But there is no purchase order on
this stuff we are talking about.
Mr. Quartel. Everything, everything in international trade,
originates with a purchase order. The issue is that the purpose
order, yes, is falsified. So what you have to do--and this, you
know--I collect data. I am not the guy who would run the
algorithm. But what we know is that if you--here, I will give
you another quick chart here, and I will shut up so you can get
to the other people here. But you may have a cargo listed as
steel rebar out of Poland. Other data will tell you that steel
rebar is not made in Poland. That is a very simple check. So
you know that that is a falsified purchase order or falsified
manifest or bill of lading.
Chairperson Feinstein. Now, who knows that? Who is getting
that data? The port?
Mr. Quartel. Customs could know--well, no one gets all this
data right now, except the shipper. Kind of one of the messages
I would like to get to you and the Congress is that shippers
and buyers and sellers in international trade--and this is how
I make my living, and other companies like us. They want
visibility. They want to know that they are going to get what
they ordered, that it is going to get there when they want it.
They want to know that it is using the transportation they have
selected. They may have negotiated a contract. Eighty percent
of what goes on there is actually subcontracted out to freight
forwarders and third-party logistics providers. They want the
same information.
So people are gradually wanting all the information in the
commercial sector that I believe the Government would need to
be able to profile a cargo.
So if I have one message, it is that all the data is there
to be able to make decisions. It is not all caught in one
place, but it is being generated by the commercial process, and
the Government can get engaged in it. So when we talk about
profiling, profiling just helps you select which ones you want
to inspect in Rotterdam and whether you have a Customs guy
doing it or whether you have the Dutch doing it or somebody
else. It gets you to a point of intercept, okay? And that is
really where you want to stop it. That is the way you are going
to protect the U.S. port.
I would be happy to talk to all of this in all detail. I
have, you know, charts on when the data comes in and everything
else. But a notion of profiling is not that that is the end.
That is really the beginning. It is trying to stop the guy from
throwing it.
Chairperson Feinstein. So you are saying that nothing gets
on a ship without a purchase order, and if it is an illicit--if
it is contraband of any kind, the purchase order is forged, and
that the key is to get at the forgery.
Mr. Quartel. Right. That is correct. You want to get at----
Chairperson Feinstein. I want to ask--but we have a vote,
and I have about 10 minutes to get to the vote. What I would
like to do, if we could, is hear from Mr. Upchurch, and then
take a brief recess, and then come back, because it is just us,
and have an opportunity to discuss this. And I would like your
reaction to that purchase order issue, Mr. Steinke, if we
could. So let's just move on to Mr. Upchurch.
[The prepared statement of Mr. Quartel follows:]
Statement of Rob Quartel, Chairman and CEO, FreightDesk Technologies
and Former Member, U.S. Federal Maritime Commission
I would like to thank the members of this Committee for their
invitation today. I'll begin with an assertion that I think should be
made policy:
Every container destined to enter or pass through the
United States should be treated as a potential weapon of mass
destruction; every ship that carries it as a delivery device;
and every port and point inland as a potential target.
While the discussion here today focuses on protecting the port--
natural given the legislation before the committee--the port, frankly,
is the least of the problem.
Yes, it's important to protect the security of the physical
infrastructure, yes we have to worry about the safety of specialized
vessels and guard against attacks like those which took place on the
USS Cole, yes, the technology for sealing and tracking containers is
important. But in terms of the system of intermodal international
trade--shipping, moving goods around the world in international trade--
the port of entry is just one--not even the most important--piece of
the puzzle.
If you think about trade as a process of integrated pieces, then
the port should be considered the point of last--not first--resort in
our war on trade terrorism.
To be blunt about it, nothing we have heard discussed today--
whether it's electronic seals or port inspections or beefed up patrols
or biometric-aided identification cards or GPS or other physical
tracking devices on containers or earlier reporting of a ship manifest
or neutron scanning 2 percent or 20 percent of all containers going to
the United States--whatever--has more than a small probability of
stopping a determined terrorist from slipping a lethal shipment into
the mainstream of international commerce and driving it under the
Golden Gate Bridge to an end that none of us would like to see.
That's because the action starts well before the port.
So, focusing on stopping a weaponized cargo at the US port is too
little, too late: The port is a potential target, not just a gateway.
Ports have little interaction with cargoes other than to lift them off
or on the ship, to store them, or to serve as a border funnel for
customs activities. Their job is in some respects no different than
that of a rail yard or similar intermodal exchange node. They are
either efficient pass-throughs, propelling cargoes on their way to
their final destination--or, they may become bottlenecks, driving some
20 percent of the national economy into the ground.
If we can't allow a weaponized container in a port, neither can we
allow it on the ship, the principal means of delivering goods in
intercontinental trade to the United States. Ships suspected to carry
these weapons--some ships of which today carry the equivalent of 6500
or more containers--can only be turned back to the point of
embarkation--not stopped, searched, and accessed for removal of an
8x8x48 foot 20-ton container while on the high seas
Interdiction of terrorist activities really needs to
begin at the beginning--with the shipper and his customer, at
both the physical and transactional start of an order.
While I fully support the measures designed to protect our seaports
contained in this legislation, I suggest to this committee that the
first line of defense in the future isn't the traditional physical
border the port represents, but a new technology border--a virtual,
electronic border--that we need to push back overseas.
So, when we talk about technology in this hearing, I think we have
to talk about information technology, first--because THAT is the first
line of defense for our ports.
The fact of the matter is that we can't inspect every one of the
17,000 containers that end up in the United States on any given day,
either here or in the overseas ports in which they originate, without
destroying the fabric of our economy. But we CAN create a hierarchical
approach combining physical inspection, human trust procedures and a
new process of early electronic inspection employing the latest in
information technologies.
Why is this electronic border a necessary approach? If I can, let
me turn your attention to a couple of slides.
This first slide illustrates a key point: International trade is a
tremendously complex business. A typical trade will have as many as 20-
25 involved parties--buyers, sellers, inland transporters on both sides
of the ocean, ocean and other water carriers, middlemen, financiers,
governments and others--and will generate 30-40 documents. Some 6
million containers, many carrying cargoes for multiple owners and
valued on average at $60,000 each, entered the US in the year 2000, on
ships carrying from 3-6000 containers each. If we were to add a
physical inspection to one of the very large ships carrying these
cargoes to the US through the world's hub ports--the Regina Maersk, for
example--a single hour's delay per 20-foot container would add from
150-250 man-days (roughly 1\1/2\ to 3 man-years of work shifts) to the
time it took to offload the 6000 containers riding that one ship.
Literally millions of people and hundreds of thousands of companies
worldwide are engaged in the business of moving cargoes
internationally. In the US alone, there are an estimated 400,000
importing and exporting companies, 5,000 licensed forwarders and
customs brokers, perhaps as many as 40,000 consolidators large and
small, and millions engaged in the transportation industry. Worldwide,
there are at least in theory some 500 ocean carriers--although probably
10-15 carry 90 percent of cargoes shipped between continents--an
estimated 50-70,000 forwarders and tens of thousands more
intermediaries, not to mention several million companies moving goods.
This is a process that literally spews data--data on the contents,
on who touched the cargo, who paid for it, where it's been, where it's
going.
And it's a process into which commercial shippers--the people who
own, buy, or sell a cargo--tap into daily, in one form or another, to
collaborate on transportation and financial transactions, to exchange
documents, to meet regulatory requirements of the various jurisdictions
in which they operate, in addition, of course, to documenting the basic
buy-sell transaction that begins the shipment.
So, when I look at what technology you need to protect a US port, I
look back to the beginning of the process, before the port, before the
ship, before the port of embarkation, before even sealing the
container. I look to the buy-sell transaction and the purchase order
that is generated from it. Then I look to the manufacturer or supplier
overseas, his manufacturing and supplier processes, how and where he or
a consolidator somewhere loads the container, when and how it was
sealed, how it was moved, who touched it, who paid for it--and even
where it might be going once the cargo reaches the United States. For
the most part, every bit of that data is available--somewhere and in
some form, but not necessarily captured in one place by the private
sector, and certainly not by the US government--but there nonetheless,
before the cargo ever gets loaded onto a ship bound for a US port.
Throughout this process, the shippers of the goods are for the most
part physically out of control of the trade. They've hired freight
forwarders or consolidators or third party logistics companies to
handle the business because their expertise is in the manufacturing,
marketing, and sale of the product. All they really care about at the
gross level is that they get exactly what they ordered--no more and no
less--and that it gets there at the time and price promised. Some have
created intelligent order systems, spent millions of dollars on
enterprise resource planning and automated customer service systems,
and others have acquired or constructed internally services like those
offered by my own company which allow them to track, measure, and steer
the progress of their goods through the transportation chain, either
physically or in terms of process and paperwork, the latter actually
being more important in the manufacturing process than where something
actually is. As long as they know it's on course, are apprised of
delays, have the ability to re-plan a move or a manufacturing process
in the event of a supply chain problem--than they are satisfied. That's
really all they need.
The focus of logisticians and companies--particularly American
companies--over the last several decades has been on making that flow
faster, cheaper, more transparent, and faster yet. Our success at that
provides an enormous competitive advantage to many of our companies and
makes a huge contribution to the reduction in the cost of numerous
articles and products crucial to everyday life in the United States.
Some in the government have suggested that, as in aviation,
security rather than speed might provide the competitive edge for ports
in the US in the future.
With all due respect, speed and cost were the two most important
criteria for the selection of ports and transportation before September
11--and they will, for all but a handful of shippers--continue to be
the most important criteria in the future.
There is a reason for that: Speed equals money.
Because the manufacturing system knows that, logistics costs have
steadily declined from 25 percent to lower than 15 percent of GDP over
the last 20 years. Carrying costs associated just with inventory at
rest--goods in storage, the response of a manufacturer to uncertainties
in the supply chain--in 2000 amounted to nearly $400 billion. A number
of experts have estimated that just a five percent addition to the
logistics process--thus causing an increase in inventories, the
response industry will have to take in order to make up for slow
processing times--would cost the economy an additional $75 billion
annually. That's the equivalent, by the way, of some 75,000 jobs lost,
not counting the multiplier effect of these wholly non-productive costs
Introducing uncertainty, slowing down cargoes through physical
inspection of every container and every box inside it, otherwise
derailing the transportation system, is exactly the opposite of what we
should do if our goal is to maintain a healthy American economy.
So, the most critical piece of the technology solution to guarding
our ports, in my mind, is this: Profile cargoes, just as we profile
people in the passenger airline industry, before they ever get on the
ship--or plane, truck, or train--bound for the United States and its
ports.
The data that the private sector uses to make its processes more
efficient is the same data that the United States government needs to
understand the commercial processes underlying a cargo profiling
process.
My second slide talks to that process, but in short form, it's
pretty straightforward.
In the profiling scheme that I have suggested, commercial data
would: (1) Be captured prior to loading of a container on a ship,
train, plane, or truck in international commerce, from the shipper,
consignee, intermediary, banks, and all others that had an interest in
or touched or processed the shipment; (2) Combined with certain
relevant law enforcement and national security information; and, (3) Be
processed through a form of artificial intelligence (including
evolutionary computing) to provide a ``profile'' for every container
and shipment within it. The profiling process would generate a ``go-no
go'' decision driving further actions--loading on a carrier, physical
inspection, further profiling, etc.
The profile would be based not only on what the cargo was said to
be, but where it came from, its likelihood of being what it is stated
to be, who handled it from packing through transport to a port, who
would be handling it afterwards, where it had been and where it was
going, who had a financial interest in it, etc. The algorithm would
need to consider not only fact-based data (eg, what the product was and
who touched it), but situational data--eg, a container originating in
an unstable country and passing by Yankee Stadium on the day and hour
the President was scheduled to throw out the first ball.
Based on some probability calculus, the air, ocean, train, or truck
carrier could be told that the government either felt the cargo was
safe to carry--or--that further investigation, including perhaps a
physical inspection, was necessary. If a carrier then loaded the cargo
deemed safe and was later told enroute that the cargo might require
further investigation, then the carrier--having cooperated with the USG
on the pre-release process--should be held harmless from further
government sanctions, although it might well have to divert the vessel
prior to or on arrival in a US port. (Indemnification here is a form of
positive coercion that avoids the extraterritoriality issue.)
If a carrier received notification that a shipment was suspect
prior to loading, it should then be required to arrange to have the
cargo physically screened, or disclose why not. Screening could be
carried out by U.S. Customs officials stationed in overseas points,
foreign officials subject to bilaterals and some level of performance
auditing, or by the companies themselves, again subject to performance
auditing and rigorous procedural standards. The actual inspection could
take several forms, ranging from passively examining the container
(neutron scanning, motion detection, etc), to employing radiological
and chemical ``sniffers,'' to breaking the seal and opening it up.
Each of these methods has costs, risks, and probabilities
associated with it and would be employed differentially against the
perceived calculated risk. Screening might, in many cases, consist
merely of re-checking documentation for inconsistencies and
communicating with those who provided the documents to clarify the
issue. Breaking a seal would, however, require some form of
indemnifying the carrier, including possibly an entry order to do so
from US Customs. None of these actions, however, have to involve a
foreign government. The United States has the authority to deny entry
of vessels that it deems of risk to itself, and to deny entry of goods
deemed illegal. Providing process incentives to carry out the
inspection prior to leading the port or embarkation is a legitimate,
effective form of positive coercion. In the end, however, there is no
doubt that the support of foreign trading partners and international
organizations should be solicited, if only because our leading trading
partners are themselves potential targets and will no doubt feel the
need for reciprocal protections.
This raises other issues, of course, one being the question of
whether or not we would need to place US Customs inspectors inside
foreign ports of embarkation. My answer is: Maybe yes, maybe no. US
government agencies frequently place inspectors, expeditors, and agents
inside the premises of companies in the continental United States,
sometimes with and sometimes without the invitation of the private
companies involved. Companies often place employees whose job it is to
ascertain quality, manage logistics, and to perform other expediting
services in the home facilities of suppliers or customers, again at the
invitation of the parties. US Customs inspectors could certainly be
stationed inside the facilities of major carriers and manufacturers
overseas, at their invitation, without generating an official response
from a foreign government, in order to provide processing capabilities.
Carriers and manufacturers that did this--whether by invitation or by
USG mandate--could legitimately be considered ``trusted parties'' and
receive ``fast lane'' treatment on arrival in Customs in the United
States, assuming that proper cargo security procedures were employed
across the length of the supply chain.
The bottom line, however, is that this is NOT about inspecting the
majority of containers or shipments. The goal, in fact, is to use
information technology to substantially reduce the need to physically
inspect containers, and to do so at a point in the logistics process
that is the least damaging to it economically, and at which diversion
of a contaminated cargo can be safely accomplished without delaying
other cargoes.
Nor, by the way, is this about enforcing US customs compliance
rules overseas--something that frequently seems to be mistaken for the
prevention of terrorism in many of the proposals placed on the table.
This is about determining which cargoes might be a threat to the United
States and its citizens, not about whether or not US tariff rules are
complied with. The latter has only a little to do with helping to
ascertain the former, which is largely a function designed for revenue
capture. Not only are these not the same things, but, treating this
process as a means of enforcing customs rules could actually undermine
the anti-terrorism effort. A legal cargo can become a lethal cargo
under the proper circumstances. Thus, treating this as a customs
compliance problem not only doesn't solve the problem, it actually
lulls the public and the USG into a dangerously false sense of
security.
There are three important attributes to this solution and the
approach I suggest. First and foremost, it taps into the existing
commercial trade management process and leverages existing
relationships into a new holistic structure. Second, it is potentially
fully independent of the need for international cooperation, as it
requires only the compliance of the US-side of the equation,
particularly if process compliance was specifically designated to be
the responsibility of the buyer, a suggestion I have made elsewhere.
And, finally, it is an approach that makes the greatest use of the
technologies being developed by the private sector for use by
commercial customers in a normal but obviously complex operating
environment.
All of this is easy to suggest, of course, and somewhat more
difficult to implement.
But, to give you an idea of where we actually stand, four existing
commercial documents already reported in one form or another to Customs
and the Coast Guard can provide much--but not all--of the data that
would allow us to profile a cargo based on contents, involved parties,
and transport mode and path prior to its ever getting on a ship: (1)
The Shippers Letter of Instruction; (2) Commercial Invoice; (3)
Certificate of Origin; and (4) The carrier's Bill of Lading. To that I
would add (5) financial data, perhaps captured through Letters of
Credit or bank reporting; (6) Inland transportation leg information not
now captured by ocean carriers or the government, on both sides of the
supply chain; and perhaps additional information.
On the commercial side, database structures already exist that are
designed to integrate data from disparate sources (for example, EDI
transmissions, faxes, the web, and email) and that, in computer
parlance, allow you to instantiate a fully attributed shipment. Why a
shipment? Because trade moves in shipments, first, and only then in
containers. From the standpoint of profiling, shipment records need to
be fully attributed--meaning that they need to contain detailed
information about the shipment including all of the parties that are
involved in the transaction, the route/itinerary of the shipment, the
items that are contained in the shipment, the events/status of the
shipment and its financial terms and any other information that was
thought necessary. And, the system needs to be able to collect, process
and integrate this data and to provide the required normalized data
elements to support container and risk profiling in support of Homeland
Security.
Collecting and managing the commercial data isn't rocket science,
although not a lot of us do it. But it is what the private sector is
beginning to look for today.
Analyzing the data IS rocket science, however. But, again, the
required processes are already in use inside the government and the
commercial sectors alike--in everything from looking for illicit drug
traffic to screening genetic samples for new drugs for medical
purposes.
Without going into a lot of detail, the analytical process should
be designed at the simplest level to check against lists--Denied Party
Screening, for example; and at the most complex level to think, to
learn, and to detect deviations from what we know in our own experience
is normal in the operations of international transportation and
manufacturing--anomalies captured in rules and facts which may pertain
to both specific and general information, relationships between data,
expectations and other expertise. Items that violate expectations or
otherwise contradict human expertise are considered to be more
suspicious.
But, of course, cargo profiling is only part of the solution. As
should be evident from the above description, this is an onion, with
numerous layers. At varying stages across the process we have to layer
on passive and physical inspection, physical protection of the ports,
protection of the cargo integrity from the basic risks of international
transport--spoilage, tampering, theft--the ability to interdict
specific cargoes, tracking and visibility solutions, many of which we
have heard about today--that allow us to maintain not only the
integrity of the cargo but of the transport system itself once a cargo
is in motion.
Cargo profiling is an approach and a system that I believe that the
Transportation Security Administration at the US Department of
Transportation already has the authority to implement--a question
separate from whether or not they have the dollars to do so. (I would
note that profiling would certainly cost far less and take less time to
implement than a full system of inspections, electronic seals, etc.)
TSA needs the support, almost in a sub-contracting role, of the US
Customs Service, the US Coast Guard, the various modal agencies, and,
perhaps the US Department of Commerce alike. The data base process
could perhaps ultimately be embedded into and as an extension of the
Automated Customs Enforcement (ACE) system that Customs is currently
building--but which is scheduled to take another five years to deliver.
The US Coast Guard and other national security and defense agencies
also have extensive law enforcement and national security data base
efforts going on, and numerous government data bases could be tapped
through the new process for relevant data without violating the need to
maintain the competitive position of individual companies and due
process for the parties involved.
I don't believe, however, that we should or need to wait that long
to implement a robust, commercially relevant, profiling solution. We
should be looking--today--at other USG data bases, including the so-
called ITDS system being developed several years ago at Treasury,
outside of Customs, as a possible stopgap; and, we should be looking to
the private sector as well for information technology accelerators.
Several groups of commercial and governmental players have suggested
demonstration projects that would cover ports and inland movements on
both sides of the traffic on both the East and West Coasts, using
commercially available information technologies and real-world data and
cargo movements.
As a general comment here, I believe strongly that a critical issue
here will be to obtain voluntary--not just mandatory--commercial
compliance with all of the parties in the commercial transaction. Many
of the processes covered here are outside the domain of US law
enforcement. We can't today make foreign suppliers abide by all of
these rules, but we can certainly tell their US customers--today--that
they may face delays unless they know their sources and can validate
cargo and process integrity. We can't today tell a foreign port that it
has to purchase millions of dollars worth of screening devices for the
cargoes destined for the US which our screening picks out as suspect,
but we can--today--certainly negotiate procedural agreements through
the IMO and individual American ports and distribution arms can provide
speed incentives for those that work with us. The ocean carriers barely
make 1-2 percent ROI, so they will only be driven into bankruptcy if we
require that they purchase screening machines and add hundreds of new
security personnel, but we may be able to help them through the
imposition of a user charge on all cargoes going through US ports, a
portion of which is used to offset their additional costs. We can't
today mandate that the carriers for which the US is only one of several
stops profile all of their cargoes before sailing; but we can no
doubt--today--find a way to say that if we determine that a cargo is
found to be suspect the entire ship will be turned back because we
won't risk the US port.
In closing, I'd like to reiterate the point with which I began: US
ports aren't the first line of defense but almost the last.
This Committee and this government have a real obligation to see
that no weaponized container ever makes it to the port, period. They
have an obligation to protect the integrity of cargoes once entered,
and they have an obligation to their customers--the failure of which to
provide will destroy their commercial viability and that of the general
economy--to provide a speedy, low-cost transportation move. I believe
we have the technical means to tap into the commercial process, to
profile shipments and containers, and thus, in concert with other
actions, to see that no container intended to be used as a terrorist
device ever gets on a ship, a plane, a truck or a train bound for the
United States. We have the technology to do it, but the process starts
well before a container ever reaches a port.
Members of this Committee: When the aviation system went down on
September 11, we already had a security system, as imperfect as it was,
in place, which could be re-booted three days later at a higher state
of readiness.
However--If a container blew at a port or somewhere else in the
international transportation chain ending in the United States, this
nation and its leaders would have no choice but to shut down the entire
system of trade with our country. We have no security system in place
in our international trade system comparable to that which pre-existed
in passenger airline travel that we can re-boot. We have nothing at all
in place to properly secure over $2 trillion in trade and the millions
of American jobs associated with it. Electronic seals, tracking,
additional port security--none of that will solve that problem
adequately. We DO have the technology available to begin to profile
shipments aimed at the United States, today. It's not the complete
solution, but it's an appropriate start.
Again, I appreciate the Committee's time, and would be glad to
discuss it further.
SEVEN THINGS WE COULD BE DOING NOW TO PROTECT OUR PORTS:
1. We should begin the process of moving to pre-movement data
filing on the entire shipment process, including not only customs
compliance filings, but transportation and financial data. And, we
should begin immediately to tighten the document process. Mandating
reporting of a manifest four days out is only marginally useful. Better
would be to mandate filing of all ship manifests for vessels with
cargoes bound for the US at least 24 hours prior to embarkation from a
foreign port, even if only in incomplete form, with confirmation at
final departure. The reality of the ship manifest is that it is useful
only to document what is believed was loaded on a ship or plane, as a
chain of custody certification. Over half of what moves on ships moves
``FAK'' (Freight All Kinds), meaning that the carrier has no idea what
is in the containers it carries. Of the remaining manifest data, at
least half is likely to contain inaccuracies. Nevertheless, requiring
pre-departure filing of a ship manifest will have a certain ``Hawthorne
Effect'' on the process, meaning that paying more attention to it would
induce behavioral changes in the process--ranging from fostering
mistakes by individuals attempting to circumvent the process, to
exposing inconsistencies in data filings, to reducing errors among
those attempting to comply legally because of the presumed additional
scrutiny by government officials.
2. Shippers or consignees or their agents should be made legally
responsible for complying with all data mandates on a timely basis. We
should consider the immediate implementation of a purchase-order entry
system, in which individuals purchasing goods from overseas should file
a notification of the purchase and expected entry date and related
parties early in the process; and they should perhaps in return be
given an import number against which all subsequent data and
documentation is filed. This is not a suggestion for an Import License,
which would require a new bureaucracy, but simply the assignment of a
number for later data and cargo tracking.
3. We should make better use of intermediaries in the international
trade process. Over 80 percent of all cargoes in international trade
are outsourced in whole or in part to freight forwarders, customs
brokers, NVO's, consolidators, 3PL's and other who are expert in the
process. Most of these parties are already licensed by the US Federal
Maritime Commisson; and their numbers are small (4000 forwarders, for
example), so their activities could be monitored. Licensing procedures
should be intensified, perhaps including the addition of background
checks; and the licensing and oversight of these regulated entities
moved to the US Customs Service where there are more and better
resources for this activity. Forwarders and other licensed entities
should be enlisted today, and issued a set of procedural scrutinizes
NOW that would allow them to become part of the ``watch'' process.
4. The US should consider adopting and mandating the use of the
International Bill of Lading owned by the International Freight
Forwarders Association (FIATA) as a means of introducing consistency
into cargo documentation.
5. We should mandate conversion to electronic data transmission
(whether by EDI, web, etc) from all modes and players in the
transportation and trade process by a date certain.
6. The Transportation Security Administration in DOT should
formally, publicly be placed in charge of the profiling and
international trade process. Transportation is the one constant in an
international movement. The USCG, Customs, and the Office of Naval
Intelligence should be enlisted as ``sub-contractors'' for various
parts of the program. The US Department of Commerce should be
considered as the point at which the PO Entry System is filed, and the
place from which a ``go-no go'' decision is conveyed from the USG to a
commercial carrier.
7. We should begin immediately to test implementation of a
container profiling process that originates overseas, using
commercially available data base structures, algorithms, and knowledge.
The data issues contained in aggregating information on a cargo, its
movements, the players that touch it, across multiple modes and legs,
and transmitted by the variety of electronic and non-electronic means,
have already been solved in large part by the private sector seeking to
obtain transportation and supply chain visibility and control.
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Chairperson Feinstein. Mr. Upchurch is the president and
CEO of SGS Global Trade Solutions. They operate in 140
different countries. SGS inspects a significant amount of
containerized cargo bound for the United States and other
countries around the world, and he is testifying today as Chair
of the Safe Trade Committee of the Global Alliance for Trade
Efficiency.
Thank you very much and welcome.
STATEMENT OF CHARLES W. UPCHURCH, PRESIDENT AND CEO, SGS GLOBAL
TRADE SOLUTIONS, INC., AND REPRESENTATIVE, GLOBAL ALLIANCE FOR
TRADE EFFICIENCY, NEW YORK, NEW YORK
Mr. Upchurch. Thank you, Madam Chair.
Madam Chair, in the interest of time and also in the
interest of your own personal request to cut to the chase and
propose some solutions, I will disregard much of my prepared
oral testimony and address some of your specific concerns.
Chairperson Feinstein. Good.
Mr. Upchurch. Many of the witnesses here today have talked
about the need for layers in security, and I believe that there
is a consensus that that is required. I believe we all agree
that our ports need to be strengthened, and we need to follow
through on your own recommendations to be able to detect
contraband or weapons of mass destruction as they come into the
port. But the need to push back the border, the need to add
additional layers as supplementary pieces is also very
important.
I think it is very important, the proposal of Commissioner
Bonner, to go to the ten largest megaports with the latest
technology in container scanners and also with the latest risk-
profiling techniques and to check containers on a risk
management basis. This is very important. It is also very
important in the private sector, particularly with the
shippers, but also with the manufacturers, the carriers, et
cetera, to introduce supply chain security standards and to
implement those vigorously and to audit those so that another
layer of security can be added.
The point and the recommendation that I wanted to give you
today is that there is another layer that can be added. It is
possible to inspect every container in Karachi or in Kuala
Lumpur or in Yemen and to verify the integrity of the
container, to----
Chairperson Feinstein. By a person that you are 100 percent
sure has not been bribed?
Mr. Upchurch. Yes, that is possible to put that level of
check in. That is what companies like my own do. We do operate
global mandates for governments. I have managed these programs
for the last 16 years. They do include container security. We
do go to inordinate lengths to audit our personnel, to do
background, to carry out security, to frequently intervene at
every instance. And then that is not enough. We also have to
check the container again after it has been inspected to see if
there are signs of tampering.
Is it possible to be 100 percent sure? Probably not. But is
it possible to be fairly sure? Is it possible to take great
measures and to add another layer of security? Yes, it is.
Unfortunately--please go ahead.
Chairperson Feinstein. See, I am still deeply troubled that
we are going to spend all this money to get this ``push the
border back'' whereby it is going to touch maybe 80 percent of
the cargo coming through 12 ports, but that is going to leave
all these other ports all over the world essentially untended,
which is exactly where this is going to go, I mean where a
device is going to go.
Mr. Upchurch. Which is why I am proposing today that you do
add this other layer in, that you are able to extend the U.S.
Government through a global network into these other small
ports by accrediting the private sector to work with the
Government to act on their behalf. This can be done through
accreditation programs. Accreditation programs even generate
royalties that help fund the very stringent control that the
U.S. Government would have to place on the private sector as
they carry this out.
The private sector works through existing legal entities in
every country, and they are able to carry out this work without
the need for any bilateral agreement, so it can be implemented
very quickly.
The private sector can invoice the foreign exporter,
meaning there is no cost to the U.S. Government to implement a
program like this. Technology is required because once--and
having managed many of these programs and I have seen many
things, particularly in Southeast Asia where container fraud is
raised to an art form, technology is required. it is important
once the integrity of the container is checked, the goods are
verified that there are no prohibited goods being loaded into
the container, it is sealed. But it is important to have
technology in that container in the form of a transponder with
sensors that will detect entry, unauthorized entry into the
container, such as changes to light and air pressure. Because
once an inspector leaves in the port of Karachi or wherever,
then it is possible to enter that container again without
breaking the seal, and it is very difficult to detect. And that
is where the technology would help greatly. With GPS it can be
tracked consistently throughout the voyage, from the time the
inspector leaves until it arrives in the U.S. port. And these
sensors are very reliable, and they will detect if anyone has
entered that container, whether they have manipulated the door
or they have chosen to just simply cut out a panel and re-weld
it and repaint the container.
Chairperson Feinstein. Is it possible to make one of those
sensors a radiologic sensor?
Mr. Upchurch. Yes, of course it is. Once you have a
transponder unit, you can put any type of sensor on it that you
want. I have mentioned two, which are changes to light and air
pressure, because those are the easiest to detect entry into a
container. But you could have other sensors on the transponder,
including a radiological sensor.
Chairperson Feinstein. Is the transponder inherent in the
structure of the container? I once went to Evergreen in Taiwan
where I saw them produce a container 24 hours a day, you know,
every minute a new container came off the line. Are these built
in or are they added?
Mr. Upchurch. They have to be added. In order to carry
out----
Chairperson Feinstein. Doesn't that make them vulnerable,
then?
Mr. Upchurch. Well, they have to be--they may be added at
the time that the inspector comes. He may add them himself. It
may be that the Government and the private sector and the
shipping companies work together to ensure that containers that
have these transponder units that are verified at the time of
inspection are available.
In order to implement a program like this, legislation is
required that mandates that containers coming to the United
States are inspected at the time of loading. This is a critical
aspect, because we promote trade-efficient, cost-effective, and
quickly implemented programs. Once a container is looked at
during the normal flow of trade, which is when the shipper is
actually moving the goods into the container, then there is a
very trade-efficient process. The Government would have to
implement a regulation, legislation, requiring that the
containers are inspected at the time of loading in the country
of origin. They would likely want to exempt low-risk countries
so that you are only targeting high-risk countries as one layer
in this multi-layer onion that my friend Rob has described.
This is just one layer, but it is a very important layer. It is
the most secure foundation layer that you can place, and that
is to look at every single container coming from high-risk
countries and then to track those containers to make sure that
they are not entered into again. And if you put up a piece like
that with the other layers, which are the supply chain security
standard that normal trade would need to implement and that
needs to be audited, with the verification in the major
transshipment ports that is based on risk management, and with
the strengthening of the U.S. ports that you are advocating,
then you begin to have a very good border security strategy.
Chairperson Feinstein. And this would be financed
essentially through fees paid by the countries to have their
ports certified?
Mr. Upchurch. By trade.
Chairperson Feinstein. By countries or companies?
Mr. Upchurch. Companies. Trade, private trade, private
sector would pay for this. These types of programs exist today.
There is a WTO agreement that governs these types of programs
that ensure the right of every country in the world to
implement these types of trade programs that require inspection
prior to shipment. Today alone there are several hundred
shipments from the United States that are being inspected by
the private sector on behalf of foreign governments to meet
their particular needs. Those are often involved in Customs
compliance programs. This is a security compliance program, but
it is the same thing in terms of the WTO agreement that governs
this. So it is possible for----
Chairperson Feinstein. Let me ask you, how many companies
are there in the world in these ports that you would have to
secure their cooperation and participation?
Mr. Upchurch. What do you mean by how many----
Chairperson Feinstein. Well, you said the companies
essentially would do this.
Mr. Upchurch. Well, there are within GATE, which is the
Global Alliance for Trade Efficiency, some of our members are
service providers, and there are inspection companies and
technology providers that have global networks. There are not
many of them, but there are enough of them that would allow the
U.S. Government to set up an accreditation program and to
control those that they accredited to carry it out. They have
offices in every single country in the world and every port in
the world.
Chairperson Feinstein. You see, the thing that worries me
about all of this, it is sort of like when I went to the border
between San Diego and Mexico and watched the thousands of
trucks pound through, and there are people, and yet all it
takes is for one agent to get bribed by a drug cartel to turn
his head and wave a truck through. Bottom line, your
technology--and I appreciate that, but the bottom line, it
comes down to the human. And I am his appointing authority. I
am going to pick up the phone and said, Richard, you let a bomb
come into the Port of Long Beach, you know, don't show up the
next day, you don't have a job. Or what are you going to do to
assure me that a bomb isn't going to come into Long Beach? How
can he ensure with that kind of system? He can't.
Mr. Upchurch. It is difficult, but the private sector does
have a risk to manage itself. Typically, for every five
inspectors there is an auditor, and there is an enormous amount
of--there is an internal security department that not only does
internal investigation but does external investigation. Private
sector security inspection companies have to carry out
investigations of companies. They have to put together risk
management databases of all of the non-compliant companies that
they come across. And that is the type of information that can
be shared with the U.S. Government. These companies can be the
eyes and ears of the U.S. Government on the docks of Karachi,
which is something that is very difficult to do today.
[The prepared statement of Mr. Upchurch follows:]
Statement of Charles W. Upchurch, President & CEO, SGS Global Trade
Solutions, Inc., Washington, D.C.
Madame Chair and distinguished members of the Senate Judiciary
Subcommittee on Technology, Terrorism and Government Information.
My name is Charles Upchurch and I am President and CEO of SGS
Global Trade Solutions, Inc., headquartered in New York. I am also a
member of the Global Alliance for Trade Efficiency, known as GATE. GATE
is a multi-national not-for-profit organization focused on improving
the efficiency and security of trade. GATE represents technology
solution providers, inspection and certification companies, shippers,
financial institutions, Fortune 500 companies, manufacturers, importers
and exporters.
GATE maintains close and cooperative relationships on customs and
trade-related issues with the World Customs Organization, the World
Bank, the European Union, and the Office of the US Trade
Representative.
I have been asked today to offer you trade efficient
recommendations and solutions for the protection of US ports including
the necessary existing technology.
In protecting US ports, technology plays an important role in what
we believe is at least a three step process. The first step is to carry
out a security inspection of the container at the time of loading; the
second is to seal the container; and the third, or final step being the
use of global tracking technology to monitor the cargo while in
transit.As the Subcommittee is aware, the shipment of goods in
containers represents a significant security risk as they can hide
weapons of mass destruction from easy detection. Inspecting containers
upon arrival is already too late in the supply chain for this
particular risk. US Customs Commissioner Robert Bonner has recently
outlined a four step plan to minimize this risk: establishing
international criteria for containers, pre-screening high risk
containers, maximizing the use of detection technology, and the
development of ``smart boxes'' with electronic seals and sensors.
We support these recommendations which include figuratively
extending America's borders to allow for the security inspection of
cargo prior to shipment. However, the potential exists that these
efforts to improve container security would incur a very high cost to
the government, would take a significant amount of time to implement
due to the negotiation of bilateral agreements and would likely hinder
trade efficiency by requiring changes to current trade patterns and
processes. We would like to propose ideas that will strengthen these
recommendations to improve container security while avoiding the
potential problems.
It is our recommendation that the Subcommittee consider
establishing a solid foundation for container security by requiring in
high risk countries compulsory security inspection at the time of
loading goods into the container. This is not only the most secure
method of pre-screening high risk containers but it is also the least
disruptive to trade as it occurs within the normal logistics process.
If a container has not been inspected at loading, pre-screening would
require either scanning or unloading the container in a port area.
Scanning containers is a useful complementary tool but has limitations
in its effectiveness as a sole solution and unloading/reloading
containers is very expensive.
Once a container has been inspected and sealed at the time of goods
loading there is still the risk that weapons of mass destruction can be
introduced into the container. There are many ways to enter a container
without breaking the seal while evading detection. It is therefore
critical to monitor containers after inspection and sealing to detect
any unauthorized entry prior to arrival in the USA.
Cost effective technology exists to track individual container
shipments and is already in use to track vehicles today. Small
inexpensive GPS transponder units can be installed inside containers
with sensors to detect any changes, such as to light and air pressure,
that would indicate entry. The transponders would be continually
monitored by information technology and an alert will only be generated
for intervention when a sensor indicates container integrity has been
compromised prior to arrival in a US port.
The most cost effective and the quickest way for the US Government
to create a program of compulsory inspections in high risk countries is
to accredit private sector security inspection companies and technology
solution providers. Private sector security inspection companies
operate through existing legal entities in all countries and can
inspect cargo at the time of container loading within the normal
pattern of trade. They can also invoice the foreign exporter for the
cost of the container security inspection and monitoring. The US
Government can establish sufficient criteria to accredit appropriate
service providers. Accreditation usually generates a royalty payment
which could fund the strong control to be exercised by the US
Government over the service providers.
The program I have outlined can only be implemented by introducing
legislation that requires compulsory security inspection in the country
of exportation of all containers destined for the USA. Under this
program, the government would likely elect to exempt countries that are
considered low risk threats. This would provide flexibility in the
program and focus the compulsory inspections only on high-risk
countries.
The Subcommittee may be aware that entrusting security inspections
to the private sector has already been recommended by a working group
composed of representatives of the Department of Transportation and the
US Customs Service in a report to Secretary Mineta, Secretary O'Neill,
and Governor Ridge.
We applaud the Subcommittee on its efforts to introduce technology
into container and port security. On behalf of GATE we request that the
Subcommittee consider the concept of compulsory container security
inspection and the use of accredited private sector service providers
in protecting US ports.
Thank you for your time and I will be pleased to answer any
questions you may have.
Chairperson Feinstein. I am going to take a brief recess.
If you don't mind staying a little bit, I will just be 5
minutes, and I am going to ask Ms. DeBusk to say whether she
thinks that is workable when I come back.
Ms. DeBusk. Sure, I will be glad to.
Chairperson Feinstein. Thank you very much.
[Recess 5:15 to 5:35 p.m.]
Chairperson Feinstein. Now, because we are small and
intimate, we can perhaps just talk for a few minutes. I saw the
gentleman that had to leave, and I am glad he has offered to
provide help, and I wanted to ask all of you to provide help to
Senator Kyl's staff and my staff and see if we can't put
something together.
Ms. DeBusk, let me ask you this question: There is no
government that I know of that has tried more to prevent the
shipping of illegal immigrants in containers than the Chinese
Government, and yet they have failed to do so. As late as 3
weeks ago, a container, I gather, came into Los Angeles with
illegal immigrants aboard.
If the Chinese Government, with all of their resources,
can't stop this illegal traffic, what would lead you to believe
that we can create a system that would stop somebody from
putting a bomb on one of these containers? And so maybe you
could respond. Maybe you could respond to this issue with that
in mind.
Ms. DeBusk. Sure, I would like to do that, and thank you
for the question.
First of all, I think you hit the nail on the head when you
were suggesting that a solution had to be comprehensive, not
just 12 ports. And let me just give you a real-life example of
a situation here in the United States.
The Port of Miami had a major problem with stolen autos.
Chairperson Feinstein. Stolen?
Ms. DeBusk. Autos, and they were being exported from the
Port of Miami down into the Caribbean. And there were all sorts
of stolen autos that were being put in these containers and
exported. So they got one of these fancy X-ray machines, these
VAC machines, and they started X-raying those containers. All
of a sudden they had no more stolen autos, but guess what? Port
Everglades, which did not have one of these fancy X-ray
machines, all of a sudden had a major problem with stolen
autos.
So if you want to have a solution that is based on
technology or inspections or anything along these lines, it has
to be comprehensive because, otherwise, the bad guys will just
go to the weak link in the chain there.
The second thing that I wanted to comment on is that
ensuring the integrity of inspectors is a really difficult,
difficult thing to do if you are thinking about people in
foreign countries who are inspecting things at foreign ports.
This issue came up when I was in Government at the Commerce
Department. The question was whether we should let private
inspectors check on how U.S. technology was being used in
foreign countries. And our decision was negative. We said, no,
the only inspection that is going to count for us is an
inspection by a U.S. agent. And that is not because we didn't
want to rely on information from our foreign counterparts, but
just based on experience there are just lots of things that can
go wrong in foreign countries.
The other issue that would have to be looked at very
closely is who is the client and who is paying the bill,
because, once again, if there is an inspection agency who is
being paid by the shipper and they discover at tremendous
problem--there is, in fact, a nuclear bomb in that container on
that vessel--it is unlikely they are going to want to go to the
U.S. Government with that information because, otherwise, their
client is going to be left with an oceanliner that nobody is
going to use. Who wants to be using an oceanliner where you can
put nuclear bombs on it?
So there is also an inherent conflict of interest that
would have to be addressed there in terms of who is paying the
bill for these inspections.
Chairperson Feinstein. Gentlemen, any comments?
Mr. Quartel. Can I comment on anything?
Chairperson Feinstein. Sure. Why not?
Mr. Quartel. If I can go back to some of what was said,
too, I also agree with Amanda on this, but what I also would
not endorse is the notion that you do 12 ports or 10 ports. I
think the reality is that we get cargos in 300-some ports in
the United States, and it is sent from several thousand points
of origin globally. And the beauty of data and commercial
systems and trade is that it doesn't have to be port or
anything else specific. If something is coming to the United
States, you can know who ordered it and paid for it. You can
know where it was manufactured, and in Asia----
Chairperson Feinstein. Take the containers with people in
them.
Mr. Quartel. You can know that that container originated--
--
Chairperson Feinstein. How? How? Coming from China, how do
you know?
Mr. Quartel. Well, you know, these are--I don't have every
answer, but I know that a container from China with people in
it, you can know it is coming out of Tianjin where these people
may have originated 90 percent of the cases. So that says you
want to inspect containers coming out of Tianjin. Or----
Chairperson Feinstein. Don't you think the Chinese are
doing that?
Mr. Quartel. Who knows what the Chinese are doing? And I
don't mean to be flip, but I really honestly, Senator--you
know, they are very technologically backwards. They substitute
labor for technology probably too often. They are notoriously
corrupt in all of these things. So I don't think you or any of
us can assume that they are doing all the things that we would
do as a government to stop it.
But, for example, you would know who the freight forwarder
was or the consolidator who packed the container before it was
sealed. That is all information that is contained in a
transaction, and it can be reported somewhere. And really all
we are suggesting in our notion of data collection is that you
have data on every transaction, every place it has been,
everybody who touched it.
Chairperson Feinstein. Well, let me interrupt you, just in
the interest--you are then suggesting a kind of international
agreement with participating nations or participating ports,
however you want to do it, but it would be some kind of
agreement that everybody would enter into?
Mr. Quartel. I think you could do it much more simply than
that. I don't think it matters what any other international
government thinks. The reality is that if you told the American
shipper who ordered the cargo to be sent to the United States--
and every cargo coming here is bought by an American
somewhere--that it is his responsibility to see that that cargo
is secured and that he is responsible for seeing these 19
different data elements, including all the transportation, all
the handling, all the finances, all the so-and-so, and report
it to some authority in the United States Government before it
ever gets on a ship or a train or a plane, or whatever----
Chairperson Feinstein. Supposing it is half a container
sent to Joe Dokes, Joe Dokes is just an individual----
Mr. Quartel. It is not actually the container. The reality
is you want to go as far down as a shipment. A single container
could contain 20 different shipments from 20 different owners.
Chairperson Feinstein. Okay. So these owners are just
private individuals.
Mr. Quartel. Absolutely. And, you know, one of the things I
would suggest, if you want legislative suggestions, I think one
of the things you could think about--we already have an export
license requirement. You could well have a requirement for some
form of import identification based on a purchase order. As
soon as you ordered something from overseas, you filed a
purchase order. Now, I am not saying you create a license
requirement with a lot of bureaucrats. But even that, giving
someone an identifier for every transaction coming into the
United States from the very day it was ordered will make the
process more simple and have more discipline.
Chairperson Feinstein. That is not a bad idea, actually.
Mr. Quartel. There are a number of things you can do like
that. But, you know, in the end it comes on to the U.S.
importer. Eighty percent of all transactions in trade are
outsourced to freight forwarders, Customs brokers, and third-
party logistics providers. But in the United States they are
all licensed. So there are 4,000 or 5,000 of those licensed by
the FMC, Federal Maritime Commission, where I used to sit. I
would move the licensing requirement and I would move them to
Customs. I would tighten up the licensing requirements. I would
probably do background checks on freight forwarders and say, If
you are moving the cargos, you need to know who you are dealing
with on the other side.
So, again, it is layers and layers, but there are some very
specific things you can do. A freight forwarder today will
typically know who he is dealing with overseas, and if he
doesn't, then he sort of watches the transaction and he himself
will probably check the container or ask one of his Customs
agents----
Chairperson Feinstein. Is there any shipment that comes in
without a freight forwarder?
Mr. Quartel. Yes, probably 20-some percent have--20, 25
percent have internal company freight forwarders and things
like that. But you could mandate that a licensed party be
involved with it.
Chairperson Feinstein. In other words, that no----
Mr. Quartel. And Amanda, I know, has some thoughts on it.
Chairperson Feinstein [continuing]. Shipment comes into the
United States that doesn't have a freight forwarder?
Mr. Quartel. Or other licensed agent of the Government
involved in the process.
Ms. DeBusk. One of the other things to think about is if
you want to start doing things abroad, looking at those
containers abroad or checking to see if Chinese individuals are
in those containers, spot checks are a wonderful thing. Given
limited resources, it is, you know, impossible for the United
States Government to all of a sudden hire enough agents to go
abroad to every single port. But spot checks are beautiful
things, and it definitely increases compliance immensely
because when you know that there is, you know, a one in 10
chance or a one in 50 chance, or whatever it is, that you may
be caught, it certainly provides strong deterrence. So a
combination of cooperation with foreign officials, with private
sector inspections, backed up by spot checks by U.S. Government
officials would certainly, you know, move the ball forward in
terms of our security.
Mr. Quartel. I wonder if I could make one other quick
addition to all of that, too, which is, I think the other
concept that is really important to bear in mind is that a
legal cargo that comes to the United States legally can become
a lethal cargo in the right circumstances.
Chairperson Feinstein. Say that again? A legal cargo can
become an illegal cargo?
Mr. Quartel. Can become a lethal cargo.
Chairperson Feinstein. Lethal. Thank you.
Mr. Quartel. And by that--for example, we have talked an
awful lot about radiation, but, for example, fertilizer or
fertilizer-type chemicals are legal. I don't know all the terms
and conditions, and there are conditions that would bind it.
But it is legal to bring those kinds of things into the U.S.
Now, it would be documented. Customs would say it is fine.
Frankly, you could probably inspect it, and nothing is in it.
But let's say a sailor on a ship on the water puts a blasting
cap and a GPS on it, and all of a sudden it still legal, but it
is lethal.
Now, a container can hold 12 to 13 times as much fertilizer
as Timothy McVeigh's bomb in Oklahoma City. So think about the
damage one container of a legal cargo could do.
Now, the beauty and power of information is----
Chairperson Feinstein. Right under a critical bridge coming
into a harbor or whatever.
Mr. Quartel. Yes, ma'am.
Chairperson Feinstein. Right.
Mr. Quartel. But the beauty and power of information is
that you not only want to know what it is, but you can also
think through the situation in which the shipment or cargo is
placed. Is it placed in a dangerous situation? Is it coming out
of someplace where, even though it looks good, you might want
to worry about terrorists or people in subterfuge and
subversion there?
So, you know, this is not a simple problem of analyzing it,
but I think the message on this is that the data to do it on
the commercial side is there. It is more than what Customs and
the U.S. Government gets today. And I think the law enforcement
data is beginning to be there and the national security data,
and I have been involved in talking with some of these
agencies, and they do have issues about how they talk to each
other. But it can be done.
Chairperson Feinstein. Do you have any comments, Mr.
Steinke?
Mr. Steinke. Madam Chair, I would make a comment in
agreement with----
Chairperson Feinstein. Could you move the mike down a
little bit? Thanks.
Mr. Steinke. With Rob, that there seems to be a disconnect
or a lack of integration about information in general, whether
it be on the Federal side with the myriad of agencies, be it
Customs, Coast Guard, FBI, INS, who have certain jurisdictions
within the ports or in the commercial environment with freight
forwarders, Customs brokers, shipping lines, shippers, et
cetera. Though I think the industry has tried, I don't see that
there has been that connection and integration of information,
and I think that is something----
Chairperson Feinstein. Do you get any information as the
chief executive of a huge port, do you get any kind of----
Mr. Steinke. Traditionally----
Chairperson Feinstein [continuing]. That something may be
awry on a ship?
Mr. Steinke. Senator, we do not get any information other
than what we may get through our fire department as far as
checking on hazardous cargo. Traditionally, the FBI or Customs
or the Coast Guard will not interact with the port because it
is not within our jurisdiction to know. And many times they
will specifically not want me as the CEO of that port to know
what the situation is. They may advise us that they may be
inspecting, you know, certain terminals on an ongoing basis
based on certain types of cargo profiles that they have
identified. But we are not intimately integrated with lots of
the functions that take place.
Chairperson Feinstein. Do you think that is a mistake?
Mr. Steinke. I think we need to have more information from
a port standpoint than we do now.
Chairperson Feinstein. I do, too. I mean, you ought to have
some kind of security clearance to be able to--you have no
security clearance?
Mr. Steinke. No, we don't. And, again, we have
traditionally seen ourselves historically as a transfer point
and part of this logistics chain. Local port authorities have
not set policy. We have been charged with the responsibility of
developing facilities so that terminal operating companies and
shipping lines can move cargo without delay from one point of
transfer to another, and that is the roles that we have seen
ourselves as U.S. ports in for, you know, the last several
years.
Chairperson Feinstein. See, I think that role is changing
because you have really become a guardian, too, and airports
have--the role has changed. They are not just passive entities
anymore in all of this. I think that is a real problem. Go
ahead.
Mr. Quartel. Well, and to that, I think--and Richard can
correct me, but the reality is that ports come in all sizes and
all forms of Government entities. Some ports are largely
private. Public ports within them, as you well know, have
private entities at various docks. Some ports are merged with
airports in terms of governmental authorities.
Chairperson Feinstein. But he runs the whole shebang.
Mr. Quartel. In LA/Long Beach.
Chairperson Feinstein. In LA/Long Beach. That is a huge
port.
Mr. Quartel. Right. So, yes, to that point in terms of
getting the information.
Chairperson Feinstein. Right. And I realize there are
little places, but big stuff----
Mr. Quartel. Well, but I think you made the point----
Chairperson Feinstein [continuing]. Is going to come in
there.
Mr. Quartel. Yes, ma'am. I think you were making the point
also about the security piece of that. We have a port in
Richmond, Virginia, up the James River. I don't know whether it
is public or private. I have a summer house on an island in the
Chesapeake, and there are 25 docks that a ship could come in
with a container, a small ship, mind you, but they could bring
a container in. Now, there is a Coast Guard station around the
other end of the island, but they are not necessarily going to
see it.
So, you know, there are all sorts of ways to subvert the
system.
Chairperson Feinstein. That is why you have to keep them
from coming in loaded with something.
Mr. Quartel. Yes.
Chairperson Feinstein. Well, it is a very interesting
problem, but really challenging. I would really like to find a
way to use technology, but also to use human beings to really
create a kind of network that is global that can protect our
citizens.
Mr. Quartel. That is right.
Chairperson Feinstein. And I wonder, would you all be
willing to work with our staffs, Senator Kyl's staff and my
staff, and see if we can't come together and be helpful in
this?
Mr. Quartel. Yes, I would be glad to do that.
Ms. DeBusk. Sure.
Chairperson Feinstein. I would really appreciate it.
Mr. Steinke. My pleasure.
Chairperson Feinstein. Is there anything else any of you
would like to say? No. Then thank you very, very much, and this
hearing is adjourned.
[Whereupon, at 5:51 p.m., the subcommittee was adjourned.]
[Submissions for the record follow.]
SUBMISSIONS FOR THE RECORD
Statement of R. A. Armistead, President and CEO, ARACOR
I am responding to your request for my thoughts regarding seaport
security issues and technology that is available to help mitigate the
threats at our nation's seaports.
Overview
Over 90% of United States international trade comes
through our nation's seaports.
Over 70% is shipped in sea cargo containers.
25 U.S. seaports account for 98% of all container
shipments.
The top 50 seaports in the United States account for
approximately 90% of all the cargo.
California ports rank high in terms of cargo handled. The ports of
Long Beach, Los Angeles and Oakland are among the top five ports in the
U.S. in terms of container throughput; Long Beach and Los Angeles
regularly rank in the top 10 in the world.
Seaports are generally uncontrolled facilities, where people can
freely enter and leave. For the most part, cargo passes through our
ports without being inspected. Reportedly, only 2% of incoming cargo
containers are inspected. Thus, duty avoiders, smugglers and terrorists
have a very high probability of shipping contraband into the U.S.
without detection. Once outside the seaport, a cargo container can end
up anywhere in the country without having been inspected or opened.
Therefore, the seaport is the most effective location for stopping
incoming contraband.
Virtually all cargo inspections are performed by customs
inspectors. They use dogs, drills and, in some cases, physical searches
involving unloading the cargo and subjecting individual items to
examination. However, dogs cannot smell ``duty fraud'' and are not
trained to detect weapons of terrorism. Drill samples provide a random
check and physical searches of large containers, which require two-to-
three person-days, are rarely done. Thus, even for the 2% of the
containers that are selected for inspection, there is some chance that
contraband will escape detection.
New Technology
There are reasons to believe that new technology that has recently
come on the market can help to mitigate the security threat represented
by cargo entering our nation's seaports. In particular, x-ray
inspection systems designed for use at seaports can:
See through the cargo and detect contraband even if
concealed behind false walls or in hollow structures.
Inspect a 20-foot container in less than 30 seconds.
Continuously inspect a line of containers and trucks.
Be augmented to automatically detect nuclear weapons or
special nuclear materials, even if shielded.
Thus, with the proper logistics, a high percentage of the cargo
could be inspected to protect against terrorism without severely
impacting the flow of commerce. It is highly unlikely that resources
will ever be sufficient for inspecting all of the entering containers.
Thus, inspection technology at our seaports should be considered as one
element in a layered defense. Other elements could include inspections
at the point of shipment, high-integrity seals, the profiling of
cargoes like done for airport passengers, etc.
The material that follows takes a closer look at seaport security
issues; reviews new technology that can assist in addressing the
threats; and looks at ``barriers'' that impede the introduction of this
technology.
Seaport Vulnerability
What does a terrorist look for in selecting a target? Probably,
such things as accessibility, the likelihood of success and the amount
or ``visibility'' of the loss the U.S. would suffer from a successful
attack.
California alone has three of the largest ports in the nation,
annually handling over 10 million containers carrying tens of billions
of dollars worth of goods. A terrorist attack that shuts down any of
these ports for even a few weeks would have enormous consequences to
California and the nation. Such events could include the sinking of a
ship in a shipping channel, the explosion of a small nuclear weapon or
dirty bomb at the port, or the release of a chemical or biological
contaminant. Both the Los Angeles and the Oakland-San Francisco areas
contain cities of high worldwide visibility with dense populations and
high-technology manufacturing centers. An attack on one of these cities
caused by weapons arriving by cargo container would also have
devastating consequences.
The events of September 11 awakened the nation to the fact that we
are under attack and our nation, which prides itself on the free flow
of people, goods and ideas, has many areas of vulnerability. At the
same time that our nation is attempting to address areas of
vulnerability, terrorist organizations are undoubtedly focusing on
detecting other areas that have not yet been addressed. The nation's
leaders have determined that spending tens of billions of dollars on
airport security is worthwhile, in spite of the economic impact. The
same resolve needs to be shown toward spending on security at seaports,
where the risk of catastrophe from imported terror could be even
greater than at airports.
If U.S. ports were secure, the nation would benefit in the
following ways:
Weapons of terrorism, such as explosives, special nuclear
materials and nuclear weapons would be prevented from entering the
country.
Billions of dollars worth of stolen cars, electronics,
computers, and other valuable goods would be intercepted before they
could be shipped out of the country.
Billions of dollars of additional duties and taxes would
be collected by detecting fraudulent manifests on imported goods.
Counterfeit goods would be prevented from entering the
country.
Illegal drugs, believed to be entering the U.S. by seain
increasing amounts, would be kept off our streets.
New Technology and Barriers to Use
New Technology: Over the last five years, several types of new
nonintrusive inspection systems have come on the market. These systems
employ x rays, gamma rays or neutrons to screen the cargo for
contraband. For the most part, the earliest use of such technology was
along the border with Mexico. At the time of implementation, only low-
energy x-ray inspection systems were available. Though only capable of
inspecting empty or lightly-loaded trucks, they were considered
appropriate at the time because of a flow of nominally empty trucks
coming from the border. However, these low-energy systems have little
or no application to seaports due to their limited cargo penetration.
In fact, existing low-energy inspection systems at the Mexican border
will have to be supplemented to improve security, if the open border
provisions of NAFTA go into effect.
At this time, Customs has several systems to choose from that offer
different combinations of price and performance. Our company (ARACOR)
manufactures the Eagle ' inspection system which combines
mobility, relocatability and the highest imaging performance of all the
systems. It provides cargo penetration that is almost a factor of two
times greater than its nearest competition and more than three times
that of the low-energy systems at the Mexican border.
U.S. Customs Service has made detailed measurements of the
performance of all of the available cargo inspection systems and graded
them into four ``performance levels.'' ARACOR's Eagle is the only
system that has been placed into level four, the highest performance
category. ARACOR is also working with the DoE National Nuclear Security
Administration and the DoD Defense Threat Reduction Agency to implement
combined x-ray and neutron technology for the specific detection of
drugs, explosives, special nuclear materials and nuclear weapons.
Barriers to Use: Are these new technologies being quickly
introduced into use at the nation's seaports? The answer is clearly no!
There are a number of reasons for the slow adoption rate
Resistance to New Technology: Since the beginning, Customs
inspectors have depended on their hands, experience, instincts and
dogs. To introduce new technology, such as x-ray inspection systems,
requires that the inspectors be convinced that the technology
represents an improvement. Some inspectors at ports may resist new
technology, which requires changes to established procedures and may
reduce their overtime pay. Moreover, they have to be trained how to
operate and maintain the systems and analyze the images.
Budgets: Although they provide a much greater inspection efficiency
and throughput, the new systems are relatively expensive. Customs has
not been given a budget that is adequate for adding the required number
of inspection systems to our seaports. Even if systems were only to be
placed at the 20 largest US ports, a considerable number of systems
would be required for inspecting a high percentage of the cargo. The
Port of Oakland has 11 separate terminals and Los Angeles has 28 or
more. Until recently, most of the available equipment budget has been
devoted to the southwest border. Even now, more attention seems to be
focused on the Canadian border than on the nation's seaports. It almost
appears that there will have to be an attack at a seaport before much
attention (and budget) is focused in that direction.
Mixed Jurisdictions: A number of separate ``groups'' must agree (or
be forced to agree) before the security threat at U.S. seaports can be
addressed.
1. The Administration and Congress: Airport security is our
nation's current focus. The seaport security issue cannot truly
be addressed until the national ``spotlight'' is focused on it
and an appropriate budget is allocated. Legislated milestones
for implementing seaport security improvements, such as those
in the airport security legislation, will ensure that the
necessary measures will be accomplished in a timely manner.
2. U.S. Customs: Customs will likely have primary
responsibility for implementing the ``will of Congress'' as it
pertains to seaport security. However, even after Congress
provides the budgetary authority, individuals at Customs must
take appropriate action. Experience to-date indicates a
reluctance to make decisions and take actions that may be
questioned. This overly cautious past performance suggests that
the move to introduce new technology will likely be made very
slowly. Once enabling legislation and budgets are in place,
empowered US Customs officials must take the necessary steps to
achieve the established objectives and meet the required
milestones.
3. New Organizations and Missions: The events of September 11
resulted in the establishment of new organizations, such as the
National Transportation Administration and the Office of
Homeland Security, and the revision of missions for other
organizations. For example, the US Customs Service has changed
its focus from interdicting drugs to protecting against
terrorism. The organizations affected by these changes are
still trying to determine how best to fulfill their missions
and combine their talents to work together in a coordinated
effort. Hopefully, the uncertainties inherent during this
transition period will not hinder effective decision-making and
implementation of new initiatives, such as seaport security.
4. Port Authorities: The primary goal of the Port Authorities
is to make money by attracting commerce. They fear that a slow
down in the handling of cargo due to inspection would result in
the loss of business. At the Mexican border, the US government
owns the property that is used for conducting inspections.
However, at seaports, Customs is only a tenant. Customs
officials have told me that they could not purchase Eagles
because Port Authorities would not agree to provide them space
for operation! In some cases, land at a port has been set aside
for Customs inspections but the location is so remote that the
efficiency and cost of inspections are severely impacted.
Legislation and/or persuasion are needed to enable Customs to
operate cargo inspection equipment at ports in a manner that
meets the national security requirements with minimal impact on
the flow of goods through the port.
5. Longshoremen's Union: The Longshoremen who work at the ports
must also ``buy into'' new operations, including cargo
inspection, which some may not welcome. In the past, they have
resisted the introduction of improved inspection technology and
allegedly perpetrated acts of equipment vandalism. A
Longshoremen's Union strike at one or more seaports could also
have a significant economic impact. Therefore, the
Longshoremen, have a major influence on port operations and
security and must be persuaded to join the nation's fight
against terrorism.
Can these barriers to use be overcome? The answer is definitely
yes! However, action must start at the top levels of government and
will definitely require a larger budget for equipment and inspectors.
I have tried to concisely put forth my views on several topics
related to seaport security. I hope this material will be of some use
to the Committee. However, there are additional details that could be
provided on each topic so, if more is desired, please do not hesitate
to contact me.
Statement of Hon. Maria Cantwell, a U.S. Senator from the State of
Washington
I want to thank Senator Feinstein for chairing this hearing and
providing this opportunity to discuss the vital issue of seaport
security.
Our nation's seaports lie at the heart of our economy and
transportation system. Yet, they also represent a significant point of
vulnerability in our national security. Of the over six million
shipping containers that enter the United States annually, only a mere
two percent are inspected. While inspecting every container entering
our ports would unquestionably bring our economy to a grinding halt,
the impact of a terrorist attack in our ports would be devastating.
This dilemma illustrates the need to discuss security alternatives
which integrate new ways of thinking and new technologies. To this end,
I look forward to hearing testimony from representatives of the
Department of Transportation, US Customs Service, and US Coast Guard
today. I also look forward to this Committee and the full Congress
considering several legislative proposals to strengthen seaport
security in the near future.
I was pleased by the Senate's passage of S. 1214, the Port and
Maritime Security Act of 2001, and I urge the House to consider this
important piece of legislation on the floor. This bill addresses the
need for increased security measures for shipping containers at the
point-of-origin. Focusing on point-of-departure and mandating advance
shipping manifests represent security measures that are proactive
rather than reactionary.
My home state of Washington boasts the largest locally controlled
port system in the world with over 70 ports ranging dramatically in
size, infrastructure, and purpose. In Washington, ports play an
integral role in our state's economy as the nexus for international
trade and a leading provider of high-quality jobs for our residents. In
fact, one out of every four jobs in Washington state is dependent upon
trade facilitated by seaports.
Securing these seaports and our ports nationwide is essential to a
functioning economy and public safety. It is an issue most deserving of
our attention, and I would like to thank Senator Feinstein again for
bringing it to the forefront today.
Statement of Anthony Acri, CEO, International Microwave Corporation
International Microwave Corporation (IMC) submits the following
testimony in response to the February 26, 2002, Senate Judiciary
Committee, Subcommittee on Technology, Terrorism and Government
Information, hearing on ``Securing Our Ports Against Terror:
Technology, Resources and Homeland Defenses.''
I want to thank Senator Feinstein for holding this hearing and
bringing national attention to this important issue. Our nation's
seaports have insufficient security and may be vulnerable to terrorist
attack. The tragic and unanticipated events of September 11 have
brought matters of national security into sharp focus. But the Senator
identified this problem two years ago when she said ``many of the
problems at seaports are due to insufficient federal oversight and lack
of personnel and technology. We should do more to combat crime and
fraud at seaports and reduce their susceptibility to terrorist
attack.''
Senator, you are right. Ports lack sufficient security, and
technology is the solution. This week's testimony made clear that the
primary area of port security concern is cargo and container
inspection. But, none of the witnesses focused on two emerging threats
that will be exacerbated by increasing inspection of arriving cargo:
(1) physical security at port facilities; and (2) the shortage of
security personnel. Increased inspection of shipping containers means
fewer personnel overseeing the physical security of port facilities.
Given these manpower limitations, the answer lies in the use of
technology.
Amanda DeBusk testified that a study by the Interagency Commission
on Crime and Security at U.S. Seaports (the ``Commission'') found that
significant criminal activity was taking place at most of the twelve
seaports surveyed. The Commission also found that the state of security
at seaports ranged from fair to poor. Over 12 million containers arrive
at U.S. seaports each year, and only one to two percent of all cargo is
inspected. In that small portion of inspected containers, law
enforcement officials have found secreted huge caches of illegal drugs,
contraband weapons, and illegal aliens.
To address this problem, regulators have been focusing on
increasing the inspection of containers and pre-screening cargo in
foreign ports of shipment. But Congress must consider what the
witnesses left unaddressed: increased oversight of containers may
decrease physical security of ports by drawing personnel away from
surveillance and security patrol of port grounds. Increased inspection
and oversight of containers may provoke a rise in theft at port
facilities, as lawbreakers seek to steal or retrieve smuggled
contraband. If facility integrity measures are not in place, there will
be nothing to deter such an increase in criminal activity.
In our opinion, effectively increasing port security will not work
unless improved security measures are deployed across all aspects of
port operation - cargo inspections accompanied by employee
credentialing, and increased physical integrity of port facilities.
As the Senator pointed out, most seaports lack basic security
technology, such as video surveillance, and do not even conduct
internal or perimeter vehicle patrols. At the Port of Oakland, one of
the nation's busiest ports, only one or two piers have 24-hour closed
circuit TV security, and most of the port remains unguarded at night
except for occasional visits by a lone Oakland policeman. The
Commission study recommended that seaports be governed by certain
minimum physical security standards covering fences, lights and gates.
As Rear Admiral Kenneth Venuto, U.S. Coast Guard Director of Operations
Policy stated in his testimony, effective port security ``is built on
principles of awareness. . . . Awareness helps focus resources and
provides efficiency to prevention.''
There is no better way to increase awareness and security than
adopting a comprehensive video surveillance program. Video surveillance
technology maximizes sight in a time of decreased personnel. America's
seaports need to install video technology currently used along our
borders that acts as a `force multiplier,'' allowing one person's eyes
to do the work of many.
For example, IMC's enhanced surveillance system is fast becoming
the most popular and widely accepted video monitoring system used by
government and private industry. IMC's system combines single or dual
long range day cameras and thermal imaging night cameras on customized
poles that can scan a twelve square mile area, 360 degrees, 24 hours a
day, in any kind of weather. Video signals are transmitted to a central
surveillance facility via microwave or fiberoptic cable, where security
personnel can manipulate remote cameras, monitor highresolution screens
for suspicious activity, and direct mobile forces. As an affixed or
portable system, IMC WatchTowers can be used in numerous capacities,
including protecting ports, bases, embassies, nuclear facilities,
airports, or borders. IMC's WatchTower system has become known as ``the
force multiplier'' because it enables security forces to use fewer
people to watch more territory and better supervise field response
teams.
In the fall of 2000, the Immigration and Naturalization Service
(INS) and the U.S. Border Patrol awarded IMC a $200 Million, four-year
turnkey contract to design, manufacture, install and maintain the
WatchTower system along U.S. borders. IMC's WatchTowers are securing
our borders from illegal aliens and drug trafficking while protecting
the safety of our federal agents and Americans living along the border.
A Texas Border Patrol Agent-in-Charge called IMC's WatchTower ``the
best technology I've ever seen in my entire career.'' Use of this
proven effective technology can easily be expanded from its current
employment by the U.S. Border Patrol to address the problem of securing
U.S. seaport facilities.
The U.S. Department of Transportation (DOT) will shortly begin
accepting applications from ports for grants to enhance seaport
security under the new Port Security Grants program administered by the
Maritime Association (MARAD) and the U.S. Coast Guard, on behalf of the
Transportation Security Administration (TSA). The grant category for
enhanced facility and operational security at ports, including physical
security, should not be minimized.
It is essential that America's ports are the safest, most secure
port facilities in the world. The ``emerging threat'' against the
United States has, in fact, emerged. In our opinion, the next emerging
threat to our nation will be the shortage of qualified law enforcement
personnel and the well-document lapses of civilian security employees.
Initiatives such as the Port Security Grants program should prioritize
the use of technologies that maximize the individual capabilities, such
as ``the force multiplier'' of the WatchTower system, where one person
can be the eyes of ten.
We thank the Committee for this opportunity to testify and are able
to meet with you to further discuss the national security and
information landscape, and how IMC has contributed to real security
solutions.
Statement of Michael Nacht,\1\ Professor, University of California,
Berkeley
Madame Chairperson, it is a privilege to submit this testimony for
inclusion in the Congressional Record.
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\1\ Michael Nacht is Dean and Professor of Public Policy in the
Goldman School of Public Policy at the University of California,
Berkeley. He is a member of the Threat Reduction Advisory Committee to
the Office of the Secretary of Defense where he chairs a panel on
Combating Terrorism Using Weapons of Mass Destruction.
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The events of September 11 and subsequent acts of bio-terrorism are
a startling wake-up call for the need to enhance the protection not
only of the American people, but of our vital industrial assets.
Protection of critical infrastructure has now been established as a top
priority of the Office of Homeland Security. A key element of this
infrastructure is our network of major port facilities. The ports that
ring the East, West and Gulf Coasts are vital economic engines whose
safe and smart operations are essential for American participation in
the global economy.
Still, more than five months after the terrorist attack, a great
deal needs to be done immediately if we are to safeguard these
facilities from terrorism and crime. It is essential to realize that
increasing the efficient operation of the ports will produce enhanced
security.
Failure to protect these facilities could have catastrophic
effects. For example, a chemical high explosive coated with radioactive
material that was detonated in a major port during peak work hours
would likely produce prompt fatalities far in excess of those at the
World Trade Center on September 11. And the psychological effects of
the attack-skyrocketing uncertainty worldwide about the safety of US
ports--would have a profoundly deleterious impact on US maritime trade
and therefore on the health of the entire national economy.
Consider the situation on the West Coast. The ports at Los Angeles
and Long Beach, Oakland, Seattle, Tacoma and Portland handle
containerized cargo that support nearly four million workers throughout
the United States. In 2000 almost $260 billion of containerized exports
and imports transited through these ports, creating total business
revenue of $723 billion, equivalent to 7% of the nation's gross
domestic product. Credible estimates suggest that international trade
between the United States and Asia will double in the next decade,
producing dramatic increases in these measures of economic activity,
assuming maritime trade remains unimpeded.
The ports face formidable challenges, however. These include
inadequate protection against terrorist attack and criminal activity; a
shortage of available land for expansion; large numbers of trucks
entering the ports that add significantly to road congestion and air
pollution and whose queues increase port vulnerability to terrorism and
crime; and inefficient use of available technologies and work practices
that reduce productivity in the container yards and cost the maritime
industry as much as $1 billion annually. But a number of feasible
modifications could be implemented drawing on existing operations at
ports in Singapore, Hong Kong, the Netherlands, the United Kingdom and
elsewhere.
The key point is that the utilization of existing simple and basic
technologies can facilitate the seamless flow of information,
eliminating errors and delays currently introduced by human
intervention. Both the security and the productivity of the ports would
be enhanced significantly if these technologies were applied and
existing work practices were modified.
Indeed much of what should be done at the West Coast ports is
already standard practice at some East Coast and Gulf Coast ports as
well as at many facilities abroad. What is needed, therefore, are not
radically new technologies or procedures.
If we fail to put into practice these easy-to-understand and easy-
to-implement technologies, we do so at our own peril.
A Snapshot of Current West Coast Port Operations \2\
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\2\ For a more detailed account of port operations and needed
adjustments see Michael Nacht, ``Working Smarter, Faster, Safer:
Technological Innovations and Adjusted Work Practices for Enhanced
Security and Productivity at West Coast Ports,'' October 26, 2001.
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There is no technological ``silver bullet'' that will magically
revolutionize port operations. But there are a number of applications
of existing technology that would collectively and over time have a
dramatic impact on the security and productivity of the ports.
Consider the basic elements of current West Coast port operations.
Each port has a number of terminals that are utilized by one or more
global carriers. About 20 operators have 50-80% of global capacity and
an even higher percentage of traps-Pacific capacity.\3\ Trucks, mostly
operated by independent trucking companies, arrive at the ports in
large numbers early on weekday mornings. Most carry container loads to
be placed on ships for export. They also pick up containers that have
arrived as imports. Some trucks arrive empty (called ``bobtails'') to
pick up containers.
---------------------------------------------------------------------------
\3\ The largest is Maersk-Sealand, a Danish firm that, at the
beginning of 2000, had 236 ships and carried more than 565,000 TEUs,
about 8% of the world fleet. Many of the carriers are privately owned,
some are government-backed, and still others are a combination. There
are numerous forms of cooperation among the carriers. Particularly
notable are ``alliances'' among carriers that foster customer focus,
produce cost advantages, and encourage sharing of facilities and
equipment. See Container Shipping Industry: Moving the Box-Shifting the
Paradigm, October 2000, Ing Barings Asian Regional Research. pp. 6-7.
---------------------------------------------------------------------------
At the gate to the terminal, the trucker provides information to a
clerk identifying himself, his load, and the load he plans to pick up.
If everything is in order, the clerk instructs the trucker where to
drop his container and where to pick up his new load.
Clerks have information stored in computers about the location of
containers in the yard that have been off-loaded from ships. If
everything is not in order, the trucker pulls off to the side to a
``trouble area'' where he works out with another clerk the issues that
have precluded him from entering the yard.
The amount of time the trucker has to wait to enter the yard is the
``queuing time.'' The amount of time the trucker spends in the yard
before leaving is the ``trucker dwell time.'' Productivity of the
terminal is directly related to the number of containers, or TEUs,
handled per area per unit of time, the minimization of queuing time,
and the minimization of trucker dwell time, among other measures.
In the meantime, the containers on ships are off-loaded by
stevedores who operate large, ship-to-shore gantry cranes. Some
containers are placed on wheeled chassis and are parked in the yard by
longshore tractor operators. Other containers are taken to specified
locations in the yard and stacked on the ground, usually three-to-four
high. Some of the containers are eventually removed from the yard by
trucks, usually for delivery to destinations not far from the port.
Others are placed on railroad cars for intermodal transportation to
destinations distant from the port.\4\
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\4\ Note that sometimes trucks take containers from the terminal to
locations for consolidation with other containers rather than for
delivery. Then these containers are loaded on to trains for transit
elsewhere. This process is known as ``transloading.''
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It is not unusual for containers to be misplaced. Containers in
this category are labeled ``unable to locate'' or UTL. In some West
Coast terminals it is estimated that 610% of the containers in the yard
are UTL.
Efficient movement of the containers in the yard and high-accuracy
knowledge of the location of each container obviously affects the dwell
time of truckers. If containers are left at the yard in excess of an
agreed period of time, the trucker is charged a fee (a ``demurrage'' or
late charge) that is either paid by the trucker or his employer.
What then is to be done? Here are six recommendations.
1. Trucker Identification and Registration System
Today, truck driver identification is determined by the clerk at
the gate, and is subject to the imperfections of human inspections. it
is the norm that only when the truck driver reaches the gate is his
identity made known. Driver identification is determined by the clerk
at the gate, and is subject to the idiosyncrasies of individual human
inspections. Instead, each driver should be issued a port-specific
picture identification card with driver license number, vehicle
registration, work permit, safety record, and insurance information.\5\
A registry should be established that holds this information for all
truckers permitted to enter the facilities of a given port.
---------------------------------------------------------------------------
\5\ See Thomas Ward, ``Improving Container Transport Security,''
September 2001.
---------------------------------------------------------------------------
2. Port Personnel Smart Card Authentication System
A smart card system using ``biometrics'' can perform identification
and authentication almost instantaneously using electronic fingerprint
identification, facial geometry, signature recognition and voice
recognition. Every port employee and trucker authorized to enter the
port area should be issued a smart card [a plastic card the size of a
credit card with a power computer chip embedded within it containing
relevant information (e.g., driver license number) and unique biometric
information (e.g., fingerprint)]. The chip would be programmed to
permit each individual access only to pre-authorized sector of the
port.
The system would have to be implemented in such a fashion as to
minimize interference with the rapid movement of the containers through
the yard, which is essential for high terminal productivity.\6\
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\6\ In general, implementation of systems to enhance security will
increase operating costs and could introduce new strains on deliveries.
See Claudia Deutsch, ``Agents of Recovery Under Stress,'' The New York
Times, October 9, 2001, pp. C1, C14.
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3. Trucker Appointment System
A number of ports worldwide, including some on the East Coast, have
introduced systems in which each container pick-up from or delivery to
the terminal is conducted on an appointment basis. An electronic record
of a planned pick-up or delivery would be provided to the gate control
personnel before the truck arrived at the terminal (``pre-filing of
information''). This record would include driver identification and
insurance information; pickup and delivery authorization; trucking
company identification; booking data; container identification; special
handling (for example, hazardous material identification or
refrigerated container setting) information; and seal numbers (all
containers currently are closed with traditional security seals that
can only be cut with extremely heavy bolt cutters to minimize
tampering). The record could be tied to a universal transaction number
that would be used to track container movement from origin to
destination.\7\
---------------------------------------------------------------------------
\7\ This system is not novel. It is already widely used by
warehouse personnel of major retail corporations in the United States
who handle large amounts of freight by truck each day.
---------------------------------------------------------------------------
Some trucks could be pre-authorized to proceed through the gate
without stopping. There are terminals in Los Angeles/Long Beach that
already use an elementary version of this system for ``bobtails''
(trucks with chassis but no containers). With this method bobtail
arrival is scheduled in advance by fax. When the bobtail approaches the
terminal it does not wait in the standard gate queue but travels along
a passing lane and enters the yard after the normal identification
security check without otherwise stopping, thus reducing appreciably
the overall queuing time for the terminal.
The appointment system should also be linked to an ``appointment
window.'' Drivers would have a specific 30-minute time, for example, in
which to enter the terminal. These appointment windows would be
established through internet communication in which truckers could
determine both the status of the container to be picked up and the
availability of an appointment at the marine terminal. If they were
running early or late, the driver would communicate with terminal
personnel by cell phone to determine if they could adjust their arrival
time. By staggering the arrival of trucks using a computer-generated
algorithm, there would be substantial reductions in road congestion
outside the terminal, queuing time, and dwell time.
Again, it is important to stress that reduction of road congestion
outside the terminal, queuing time, and dwell time all contribute to
increased security as well as enhanced productivity.
4. Electronically Read Tamper Evident Seals
Special security seals, termed ``electronically read tamper evident
seals,'' should be required for installation on all containers. Coupled
with a global positioning system connection, they could provide real-
time evidence of seal tampering to a container monitor at the
terminal.\8\
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\8\ Container security is a major problem in itself, related
closely to the security of ships as they enter port. This involves U.S.
Coast Guard operations and other issues that are not addressed in this
testimony.
---------------------------------------------------------------------------
5. Container Intelligence
Currently, painted markings are the only external form of container
identification. At most terminals, closed circuit television monitors
are used by gate clerks to read license plates and container numbers.
Still the waiting time at the gate can be appreciable.\9\ One
improvement would be to install optical character recognition (OCR)
readers at the terminal gates that would record the container number
and add it to the terminal's database. Alternatively, all containers
could carry electronic tags that emit signals received by antenna at
the gate and record the appropriate information. If the electronic tag
were connected to a differential global positioning system, the
location of the container once in the yard would be known with almost
perfect accuracy. Implementation of either approach would reduce
waiting time at the gate appreciably and lower the risk of mistakes
associated with a casual labor force (see 6. below).
---------------------------------------------------------------------------
\9\ In many instances, current work practices at the gate involve
unnecessary human involvement that is inefficient and time-consuming.
The system employed in many terminals is analogous to a bank customer
obtaining funds at an automatic teller machine, acquiring a receipt for
his transaction, but then having to go into the bank to have the teller
validate that the receipt is genuine.
---------------------------------------------------------------------------
At present the assignment of yard equipment at most terminals is
based on the experience and intuition of the longshoremen. With precise
knowledge of container location and the implementation of an
appointment system, the assignment of yard equipment could be optimized
with a straightforward, computer-generated algorithm.
To enhance container intelligence these measures must be coupled
with the screening of containers closer to the point of origin (not in
US ports). Measures to strengthen cooperation with ports worldwide have
merit and should be seriously considered.
6. Automated Dispatch Hall and Dedicated Work Force
For many years until today, the procedure for longshoremen work
assignments has been predicated on gathering workers each morning at a
central location within the harbor area, providing assignments to each
individual, and then scattering the workers throughout the port to
their particular workstations. This approach has three major
disadvantages: it is very time consuming, it leads to continuously
changing work assignments (a ``casual work force''), and it reduces
security since the current system makes it easier for non-authorized
personnel to enter the yard. Instead, an automated dispatch hall should
be established in which all workers are issued valid identification
cards and every effort is made in advance to match worker skills with
positions that need to be filled. Where at all possible, continuity
would be emphasized so that a dedicated, steady work force would be
deployed throughout the port area. Workers would know in advance where
they are to work, thereby eliminating the waiting time each morning
from arrival at the dispatch hall to arrival at the workstation. And
they would build up a pattern of consistency in their assignments that
would enhance their skills and provide more efficiency, predictability,
and productivity in container yard operations.
The Congress needs to exercise its vital watchdog role to ensure
that these recommendations are implemented as rapidly as possible. It
is not melodramatic to conclude that we procrastinate at our peril.
Statement of Port of Oakland
The Port of Oakland welcomes the opportunity to provide this
written testimony before the Senate Judiciary Committee's Subcommittee
on Technology, Terrorism and Government Information. We applaud the
Subcommittee for holding this important hearing. We at the Port of
Oakland are working diligently to improve security at our maritime
facilities in the wake of the terrorist attacks of September 11, 2001.
In conjunction with the U.S. Coast Guard and our maritime tenants we
have already instituted a number of new interim security procedures and
protocols, as well as begun planning for more permanent measures.
Since September 11t'', the U.S. Coast Guard has instituted a wide
range of security measures on all ships entering U. S. ports. In the
San Francisco Bay, these measures include the establishment a security
zone from the San Francisco Bay entrance seaward to 12 nautical miles.
Vessels are screened and profiled according to risk, with high-risk
vessels being boarded and escorted. Some vessels are also boarded and
escorted at random.
In addition, 1/2 mile security zones have been established in areas
of San Francisco Bay adjacent to San Francisco International Airport
and Oakland International Airport. Persons and vessels are prohibited
from entering these zones without permission from the local Captain of
the Port. The Bay Area Coast Guard Office was the first Coast Guard
Division to institute this new Sea Marshal program. It continues to
implement the program throughout the San Francisco Bay Area.
The Port of Oakland's terminal operators in the wake of the
September 11th attacks immediately implemented a wide variety of
terminal security and protective measures. These include:
1. Limiting access to facilities by visitors to vessels, tours,
port contractors
2. Scheduling appointments by vendors, contractors, suppliers
for needed vessel or terminal services.
3. Installing new security warning signs at gates and
entrances.
4. Enhancing gate security procedures to stop all private
vehicles, checking ID's
5. Preventing passengers in delivery trucks from entering the
facility.
6. Checking and verifying documentation of all hazardous cargo
before allowing entrance to facilities.
7. Increasing the number of roving security guards to check all
fenced perimeters as well as the waterside of the terminal.
Working with other ports on the West Coast, the Port of Oakland has
been working closely with the U.S. Coast Guard and its terminal
operators in further developing interim security guidelines that would
set minimum standards for all Port facilities in the U.S. Coast Guard's
Pacific Area [California, Oregon, Washington, Alaska, Hawaii and Guam].
The Port established a local Seaport Security Committee, inviting
terminal operators and shipping line representatives, the local Captain
of the Port, Port Pilots, local police, as well as representatives from
the U. S. Customs Service and the Immigration and Naturalization
Service (INS) to review and provide input as the guidelines were
developed. These interim guidelines were authorized on January 28, 2002
and will take effect over the next several months. It is anticipated
that these guidelines will remain in effect until permanent regulations
are published, we hope, in the next year.
The Seaport Committee is also exploring the feasibility of a new
identification system required for all port workers within Oakland and
San Francisco Bay, as well as working with the Oakland Police
Department to determine appropriate levels of increased patrol and law
enforcement presence within the Port area. The Port has also
volunteered to participate in a Maritime Administration-sponsored
smart-card identification system prototype evaluation.
Port staff and terminal management staff are updating facility
security plans and developing a listing of facility security
improvements that will be required to come into compliance with federal
regulations when fully implemented. The Port's operations staff in
cooperation with the Port's terminal operator tenants have completed a
physical survey of all marine terminal facilities and initiated service
requests to repair or upgrade fences and other physical security
measures as appropriate. The Port has also identified more major
security infrastructure projects that will be needed to enhance Port
security. These include:
----------------------------------------------------------------------------------------------------------------
Item Description Estimated cost million
----------------------------------------------------------------------------------------------------------------
1. Emergency communication system for U.S.C.G./Oakland Police/U.S. .30
Customs/ Terminal Operators/Port and Terminal-to Terminal telephone/
radio alert system.
2. Armored gates/spikes to prevent egress. 2.50
3. Radiation readers at exit gates. .70
4. Surveillance cameras and improved terminal security lighting, port- 12.30
wide; video surveillance of key entrance corridors to Port area.
5. Improving/replacing terminal fencing with k-rail/cables, fiber-optic 13.60
alert systems
6. Hardening/under grounding key high-voltage utility lines/port area 11.80
sub-stations.
7. Smart Card Access Control system and installation. 4.50
8. Augmenting Oakland Police emergency Response capability and 2.80
installation of Police sub-station in Port area.
9. Crash barriers/armored gates to prevent Access [high security 9.30
requirement]
10. Miscellaneous security enhancements Port-wide and construction 10.20
contingencies.
TOTAL ESTIMATED COST $68.00
----------------------------------------------------------------------------------------------------------------
Other California Ports costs have cited similar costs related to
additional security measures ranging from $25 million to more than $100
million depending on the size and activity of the Port.
Prior to September 11th the Port's security resources were
primarily invested in preventing crime and cargo theft. Since September
11th, our focus has changed to incorporate the potential threat of
terrorism. Perhaps the biggest challenge facing our industry in
addressing this security issue is the fact that there has not been a
clearly defined threat to the nations' seaports. Given the increasing
volumes of people and goods moving through our seaports, the U. S.
government and the international community has no credible way to
reliably detect and intercept illegal and dangerous people and goods
that move through our maritime and surface transport networks.
Seaports cannot be separated from the international transportation
system to which they belong. Ports are, in essence, nodes in a network
where cargo is loaded on or unloaded from one mode--a ship--to or from
other modes--trucks, trains, and on occasion, planes. Efforts to
improve security within the port, therefore, require that parallel
security efforts be undertaken in the rest of the transportation and
logistics network. Port security initiatives must be harmonized within
a regional and international context. Unilateral efforts to improve
security in California ports, for example, without similar efforts to
improve security in the ports of our neighbors will lead shipping
companies and importers to ``port-shop"; i.e., to move their business
to other market-entry points where their goods are cleared more
quickly. Finally, Ports should not be viewed as a primary line of
defense in an effort to protect the U.S. homeland. A credible security
system should identify and take the steps to preserve the flow of trade
and travel that allows California and the U.S. to remain open and
competitive in today's global market.
Regarding on-going drug interdiction efforts that Senator Feinstein
and the Subcommittee are examining, we can tell you that the number of
drug and weapon seizures at Bay Area seaports has not drastically
changed in the past year.
The U.S. Coast Guard and the U.S. Customs Service are the federal
agencies primarily responsible for drug interdiction. The Coast Guard
conducts inspections at sea, whereas the U.S. Customs Service actively
searches for drugs in containers that reach U.S. ports. Since September
11th, there have only been a few incidents of drug smuggling at the Bay
Area ports--two occurred in San Francisco. None have occurred in
Oakland.
It is our understanding that although there has been a decrease in
manpower devoted to drug interdiction at the U.S. Customs Service, due
to a new focus on security issues, the reduction has not taken away
from the U.S. Customs Service's commitment to intercepting illegal drug
shipments into the United States.
The California National Guard has recently been brought into this
effort. The Guard will be loaning a mobile container inspection machine
that searches for drugs and weapons (vehicle and cargo inspection
systems). We expect to have the use of this machine and six National
Guard personnel for the month of March.
The Port of Oakland thanks the Subcommittee and Senator Feinstein
for the opportunity to submit this testimony. We look forward to
working with you as we work to insure that our nation's ports as safe
as possible for the benefit of all the American people.
Statement of John H. Warner, Jr., PhD, Corporate Executive Vice
President and Director, Science Applications International Corporation
(SAIC), and James Winso, Corporate Vice President, General Manager
Security Products, Science Applications International Corporation
(SAIC)
After the September 11, 2001 terrorist attacks, SAIC completed an
internally-funded, fast-paced study to determine ways to improve our
country's port security and to deal with the millions of containers
entering our country each year. A team of experienced counter-terrorism
experts with domain expertise in weapons of mass destruction (WMD) and
maritime trade was convened for this study. This statement provides a
brief summary of the results of this study.
About 20 million containers enter the U.S. each year through our
port and border crossings. Approximately 40% of the containers entering
U.S. portsenter through the major California ports. Our study focused
on the WMD threats with emphasis on nuclear weapons, but with some
consideration of biological weapons also. We examined several threat
scenarios, global transportation, various security related
technologies, as well as institutional involvement and barriers for
improving port security. An overall system architecture for improved
port security was developed. Significant results are summarized below:
1. The problem is complex and an overall systems level approach is
needed with both short term and long term objectives.
2. There is a strong difference between the nuclear threat with
intended detonation in a harbor versus the nuclear threat for intended
movement of the weapon to another part of the country. Obviously, the
weapon intended for detonation in a harbor needs to be identified and
neutralized well prior to harbor entry and ship unloading.
3. Long term, and for threats for targets interior to the U.S.,
while non-intrusive inspection or intrusive inspection can take place
entirely in the U.S., some degree of cooperation of countries exporting
to the U.S. is important for vetting containers based on their history
and the identity of the people, organizations and countries involved in
transporting them to the U.S. Inspection, tagging, sealing and tracking
technologies are useful in such a process. A process could be
established to vet containers depending on the conditions of origin and
transport. The vetting process would determine which containers needed
the more disruptive, intrusive inspection at the U.S. port. Processes
to minimize disruption of trade for this concept were developed.
4. Long term, and for threats where the U.S. port is the target,
the above concept fails because high confidence is needed in
understanding which containers might be threats prior to entry into
U.S. waters. Inspection must occur either at the point of origination
or offshore from the U.S. Containers could be inspected by a certified
inspection agency at loading and then sealed externally or internally
or both. Non-certified containers would need 100% non-intrusive
inspection prior to entry into U.S. waters. This could be far more
disruptive to trade. By a suitable combination of rule making and
carrier operated inspection processes, economic incentives in the form
of ease of entry into U.S. ports, reduced trade violations and enhanced
revenue collection, such a concept could be made attractive and could
actually facilitate legal commerce. However, the ability to gain the
cooperation of trading partners for such inspections may 'require the
U.S. to reciprocate by inspecting all containers leaving the U.S. and
bound for agreement countries.
The above concepts need to be studied in far more detail and any
implementation would take time, as well as the cooperation of trading
partners. Obviously, some partners would be more cooperative than
others. However, recently the world went through the Y2K problem and
cooperation was achieved to insure that ships entering U.S. ports were
Y2K compliant prior to entry. Although a smaller problem, the
incentives were established to encourage safe operation and navigation
of ships in U.S. ports. The U.S. Coast Guard working with international
maritime organizations played a strong role in achieving this
cooperation.
The U.S. cannot afford to wait for a ``silver-bullet''
comprehensive solution to our port security problems before we act.
Short term, more non-intrusive inspection is important for containers
arriving in the U.S and this should be done as soon as possible. At
present, only a very small percentage of containers are inspected at
the U.S. entry ports due to the high manpower requirements for
physically unloading and reloading containers. Technologies and
products are available today, which, if properly used, could make
substantial improvements to U.S. port security without such high
manpower requirements.
As one example, SAIC produces the VACIS (Vehicle and Cargo
Inspection System) in our San Diego facilities. The U.S. Customs
Services has purchased over 80 VACIS units and has been implementing
them at an accelerated rate for the past three years. These non-
intrusive inspection systems have been deployed by U.S. Customs along
the land borders with Mexico and Canada and are also being deployed in
U.S. seaports. They have proven their effectiveness over the last
several years by enabling significant seizures of contraband entering
the U.S. The mobile VACIS version appears to be particularly well
suited to be used at U.S. ports, since the unit can be easily moved to
the ships being unloaded and the inspection time is minimum. Thus,
containers can be inspected without impacting the flow of commerce in
the ports.
Pioneered by the U.S. Customs Service in 1994, the SAIC VACIS
system has become the world's most advanced gamma-ray inspection system
for cargo containers (e.g., trucks, railroad cars, shipping containers,
etc.). VACIS uses naturally occurring gamma rays to inspect an entire
container in a matter of seconds even while the container vehicle is in
motion. The system emits a narrow, low intensity gamma beam that is
directed at a highly sensitive detector array. As this beam penetrates
a moving or stationary object, a computer generates a high-resolution
image of the container under inspection. SAIC's patented technique
allows reconstruction of this Radiographic Image of the contents of the
container with an extremely small amount of Ionizing Radiation (a
dosage equivalent to that received in one minute of aircraft flight).
This image is generated by custom software that was developed by SAIC's
image processing scientists and engineers specifically for this
application.
Designed for simplicity of operation and maintenance, all of SAIC's
modular gamma ray systems have a minimum of moving parts, easily
replaceable components and easy-to-use software. Each individual
component has been proven in countless commercial applications and, in
fact, the availability rate of the over 50 VACIS units deployed by U.S.
Customs has been demonstrated at over 95% over the last four years.
VACIS' simple yet effective design and proven operational success means
VACIS offers easy installation, reduced training time, with minimal
maintenance and repair. All of these features have supported U.S.
Customs ambitious program for implementing an effective cargo-screening
program.
Other technologies and products are available for sensing different
emissions or other characteristics associated with various threats. For
example, one version of VACIS will allow imaging while simultaneously
detecting radiation emitted from the container. Other sensors, with
various degrees of effectiveness, exist for chemical detection.
In summary, an overall systems level approach to the problem of
increasing our port security is important to achieve the proper degree
of security without causing strong barriers to commerce. Achieving long
term objectives will take time and effort. However, technologies are
available today to achieve major improvements in port security and meet
shorter-term objectives with only minor impact on the flow of commerce.
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