    Undeclared Hazardous Materials: New DOT Efforts May Provide
    Additional Information on Undeclared Shipments (29-MAR-06,
    GAO-06-471).

    More than 3 billion tons of regulated hazardous materials
    (hazmat)--including explosive, poisonous, corrosive, flammable,
    and radioactive materials--are transported in the United States
    each year. When these materials are properly packaged, labeled,
    and stowed, they can be transported safely, but when they are
    not, they can pose significant threats to transportation workers,
    emergency responders, and the general public because of the
    potential for accidents and incidents. Moreover, since the
    terrorist attacks of September 11, 2001, the security of such
    shipments, especially those that can be used as weapons of mass
    destruction, has attracted the attention of the transportation
    community, government officials, and emergency responders. In the
    wrong hands, hazardous materials could pose a significant
    security threat, and it is likely that terrorists who seek to use
    hazardous materials to harm Americans would move those materials
    as undeclared shipments. Federal officials are aware that
    undeclared shipments of hazmat occur and can have serious
    consequences. Federal hazmat experts believe that the most
    frequent explanations for undeclared shipments are (1) shipper's
    lack of knowledge--an unawareness or misunderstanding of the
    requirements for properly declaring and transporting hazmat--and
    (2) economic--an attempt to avoid additional costs that may be
    associated with shipping regulated hazmat, including special
    placarding, packaging, additional training, and insurance. To the
    extent that such undeclared shipments are discovered, the
    discovery typically occurs in one of the following ways: as a
    result of an accident or incident, during a routine cargo
    inspection, or when a tip is provided to officials. Two federal
    departments are involved in discovering undeclared hazmat
    entering the United States--Homeland Security (DHS) and
    Transportation (DOT). DHS--primarily through the Coast Guard and
    Customs and Border Protection--seeks to ensure the security of
    hazmat by reducing threats to transportation infrastructure and
    operations. DOT's Pipeline and Hazardous Materials Safety
    Administration has the primary responsibility for regulating the
    safe and secure transportation of hazmat, and other modal
    administrations--most notably the Federal Railroad
    Administration, Federal Aviation Administration, and Federal
    Motor Carrier Safety Administration--are responsible for
    enforcing compliance with regulations once hazmat has entered the
    U.S. transportation system. A good understanding of the frequency
    and impact of undeclared hazmat shipments is essential to
    identifying the extent of the problem and developing regulations
    and programs to mitigate the risk involved. The Safe,
    Accountable, Flexible, Efficient Transportation Equity Act: A
    Legacy for Users (SAFETEA-LU) requires that we review existing
    options and determine additional options for discovering the
    amount of undeclared shipments of hazardous materials entering
    the United States. To respond to this mandate, this report (1)
    describes the current federal approach for discovering the amount
    of undeclared hazmat entering the United States, (2) identifies
    efforts under way to enhance the existing approach, and (3)
    determines whether any additional options could be employed.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-471
        ACCNO:   A50318
      TITLE:     Undeclared Hazardous Materials: New DOT Efforts May
    Provide Additional Information on Undeclared Shipments
         DATE:   03/29/2006
      SUBJECT:   Cargo security
    	     Federal regulations
    	     Hazardous substances
    	     Inspection
    	     Shipping industry
    	     Transportation
    	     Security threats
    	     Transportation of hazardous substances

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    GAO-06-471

         * Report to Congressional Committees
              * March 2006
         * UNDECLARED HAZARDOUS MATERIALS
              * New DOT Efforts May Provide Additional Information on Undeclared
                Shipments
         * Contents
              * Results in Brief
         * Review of Undeclared Hazmat Entering the United States

    Report to Congressional Committees

    March 2006

    UNDECLARED HAZARDOUS MATERIALS

    New DOT Efforts May Provide Additional Information on Undeclared Shipments

    Contents

    March 29, 2006Letter

    The Honorable Ted Stevens Chairman The Honorable Daniel K. Inouye
    Co-Chairman Committee on Commerce, Science and Transportation United
    States Senate

    The Honorable Don Young Chairman The Honorable James L. Oberstar Ranking
    Democratic Member Committee on Transportation and Infrastructure House of
    Representatives

    More than 3 billion tons of regulated hazardous materials
    (hazmat)-including explosive, poisonous, corrosive, flammable, and
    radioactive materials-are transported in the United States each year. When
    these materials are properly packaged, labeled, and stowed, they can be
    transported safely, but when they are not, they can pose significant
    threats to transportation workers, emergency responders, and the general
    public because of the potential for accidents and incidents. Moreover,
    since the terrorist attacks of September 11, 2001, the security of such
    shipments, especially those that can be used as weapons of mass
    destruction, has attracted the attention of the transportation community,
    government officials, and emergency responders. In the wrong hands,
    hazardous materials could pose a significant security threat, and it is
    likely that terrorists who seek to use hazardous materials to harm
    Americans would move those materials as undeclared shipments.1

    Federal officials are aware that undeclared shipments of hazmat occur and
    can have serious consequences.2 Federal hazmat experts believe that the
    most frequent explanations for undeclared shipments are (1) shipper's lack
    of knowledge-an unawareness or misunderstanding of the requirements for
    properly declaring and transporting hazmat-and (2) economic-an attempt to
    avoid additional costs that may be associated with shipping regulated
    hazmat, including special placarding, packaging, additional training, and
    insurance. To the extent that such undeclared shipments are discovered,
    the discovery typically occurs in one of the following ways: as a result
    of an accident or incident, during a routine cargo inspection, or when a
    tip is provided to officials.

    Two federal departments are involved in discovering undeclared hazmat
    entering the United States-Homeland Security (DHS) and Transportation
    (DOT). DHS-primarily through the Coast Guard and Customs and Border
    Protection-seeks to ensure the security of hazmat by reducing threats to
    transportation infrastructure and operations. DOT's Pipeline and Hazardous
    Materials Safety Administration has the primary responsibility for
    regulating the safe and secure transportation of hazmat, and other modal
    administrations-most notably the Federal Railroad Administration, Federal
    Aviation Administration, and Federal Motor Carrier Safety
    Administration-are responsible for enforcing compliance with regulations
    once hazmat has entered the U.S. transportation system.

    A good understanding of the frequency and impact of undeclared hazmat
    shipments is essential to identifying the extent of the problem and
    developing regulations and programs to mitigate the risk involved. The
    Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
    for Users (SAFETEA-LU) requires that we review existing options and
    determine additional options for discovering the amount of undeclared
    shipments of hazardous materials entering the United States.3 To respond
    to this mandate, this report (1) describes the current federal approach
    for discovering the amount of undeclared hazmat entering the United
    States, (2) identifies efforts under way to enhance the existing approach,
    and (3) determines whether any additional options could be employed.

    To address these objectives, we interviewed and obtained information from
    a wide range of federal agencies and other sources, including the Pipeline
    and Hazardous Materials Safety Administration, Federal Railroad
    Administration, Federal Aviation Administration, Federal Motor Carrier
    Safety Administration, and the Office of the Secretary of Transportation
    within DOT. We also contacted the Coast Guard and Customs and Border
    Protection within DHS. We reviewed federal hazmat law and regulations,
    prior studies on the transportation of hazmat, and DOT hazmat incident
    reports for 2005. We also observed hazmat inspections and multiagency
    cargo and truck inspections. We conducted our work from October 2005
    through January 2006 in accordance with generally accepted government
    auditing standards. On January 25, 2006, we briefed your staff on the
    results of our work. Appendix II contains the materials we presented at
    that time.

    Results in Brief

    The federal government has no specific program aimed at discovering the
    amount of undeclared hazmat entering the United States; undeclared hazmat
    is discovered mainly through inspection and regulatory efforts directed
    primarily at imported cargo. The two main departments involved in these
    efforts-DHS and DOT-play complementary roles. DHS finds undeclared hazmat
    through various programs and technologies for screening cargo entering the
    United States. For example, DHS has a container security initiative in
    which DHS staff work within host countries to prescreen high-risk
    containers, as well as use X-ray technology to screen trucks and
    containers as they enter the United States. DOT, on the other hand, finds
    undeclared hazmat while enforcing compliance with hazmat
    regulations-through inspections and penalties-for shipments that are in
    the nation's transportation system. DOT officials inspect hazmat cargo to
    ensure proper paperwork, marking, labeling, and packaging; provide
    technical assistance intended to enhance the security of hazmat carriers;
    and issue security planning and training requirements for hazmat
    employees. Under this approach, however, information about the amount of
    undeclared hazmat entering the United States is limited. Neither DHS nor
    DOT could provide data about the amount of undeclared hazmat entering or
    discovered entering the country, even though their subordinate agencies
    maintain inspection databases.4

    DOT has two new efforts under way that officials expect will enhance the
    current approach for discovering undeclared hazmat entering the United
    States:

    o Under SAFETEA-LU, DOT received enhanced authority to discover hidden
    shipments of hazmat. DOT expects to complete the rule-making process for
    implementing this expanded authority in late 2006, but the effective date
    is uncertain.5 The new authority allows DOT inspectors to open and inspect
    cargo when they have "an objectively reasonable and articulable belief
    that the package may contain a hazardous material." Previously, they could
    not generally open and inspect packages without a warrant or the shipper's
    consent.

    o In an attempt to quantify undeclared hazmat incidents and discoveries,
    DOT now requires individuals who discover undeclared hazmat in
    transportation to self-report the discovery. To implement this
    requirement, which began on January 1, 2005, DOT revised its hazardous
    materials incident reporting form (Form 5800.1).6 Data collected through
    this form can help in defining the extent of the problem and in developing
    programs to mitigate the risk of undeclared hazmat. Approximately 1,000
    undeclared hazmat incidents were reported in 2005, with 70 of those
    involving undeclared shipments entering the United States.7

    Although additional options exist for discovering undeclared hazmat
    entering the United States, each additional option, such as increasing the
    scope and frequency of inspections, poses costs that would need to be
    evaluated within the context of (1) the likely benefits of the additional
    efforts and (2) the comparative risks posed by undeclared hazmat relative
    to other types of threats. At this time, however, data for evaluating
    additional options and costs is limited. There may be ways to utilize the
    inspection data currently collected by DOT's modal administrations and DHS
    agencies to provide additional information about the amount of undeclared
    hazmat entering the United States. However, according to DOT and DHS
    officials, the inspection data currently collected and reported is not
    designed to identify discoveries of undeclared hazmat. For example, data
    recorded by the Federal Motor Carrier Safety Administration includes such
    violations as "no placards/markings when required" or "no shipping
    papers"; while these may indicate the presence of undeclared hazmat, there
    is no violation category or data collected specific to discoveries of
    undeclared hazmat. Finally, DOT has recently revised its data collection
    tool and received new inspection authority, and more time is needed to
    observe and evaluate the impacts of these efforts on discovering the
    amount of undeclared hazmat entering the United States before pursing
    additional options.

    We requested comments on a draft of this report from DOT and DHS. DOT
    offered a number of technical comments that were incorporated, as
    appropriate. DHS did not provide comments on this report.

    We are sending copies of this report to committees with jurisdiction over
    the transportation of hazardous materials, the Secretary of Homeland
    Security, and the Secretary of Transportation. We will also make copies
    available to others on request. In addition, the report is available at no
    charge on the GAO Web site at h  ttp://www.gao.gov.

    If you or your staff have any questions about this report, please contact
    me at (202) 512-8984 or h  eckerj@gao.gov. Contact points for our Offices
    of Congressional Relations and Public Affairs may be found on the last
    page

    of this report. Key contributors to this report include Randall
    Williamson, Assistant Director; Heather MacLeod; Stan Stenersen; Friendly
    Vang-Johnson; and Pamela Vines.

    JayEtta Z. Hecker Director, Physical Infrastructure Issues

    Review of Undeclared Hazmat Entering the United States Appendix I

    (544113)
    *** End of document. ***