McLean's - American Shipper

TRANSPORT / PORTSa record $68.5 billion in January.The UAE is one of the few countrieswith which the United States actually hasa trade surplus.Increased consultations and public disclosureare a problem because of the potential forleaks that could make investors wary aboutgoing through the CFIUS process, accordingto Treasury and industry officials.Giving Congress a direct role in the decision-makingprocess would be an even biggermistake, said William Reinsch, president ofthe National Foreign Trade Council and formerundersecretary of the Export Administrationin the Clinton administration responsiblefor the dual-use export control program.The Exon-Florio provision was writtenduring a period of paranoia about Japaneseacquisitions, “but its drafters neverthelessunderstood very well that it made no sensefor Congress to review and opine on specificinvestments.“That would be micro-management in theextreme that would guarantee the injection ofpolitical criteria into a process that should bebased strictly on national security,” he said.Port security becomes priorityOnslaught of bills attempt to address vulnerabilities.More than four years afterthe Sept. 11, 2001 attacks,the U.S. governmentis still trying to implementa comprehensive maritime securitystrategy for port facilities, vessels,crews and cargo to prevent a largescaleattack on a port or major citythat could shut down commerce foran extended period.Cargo entering the United Statesis subject to 24-hour notificationprior to lading at a foreign port, overseasinspection at any of the 43 portsparticipating in the Container Security Initiative,and extra private sector controls whenbeing shipped by companies participatingin the Customs-Trade Partnership AgainstTerrorism, as well as port and vessel securityclearances from the Coast Guard.Lawmakers used the vulnerability of theports against the president, claiming thatsecurity was too poor to introduce anotherelement of uncertainty in the form of astate-owned company from Dubai.“If port security is not a top priority forour own government, how can we everexpect it to be a priority for a foreigngovernment,” said Sen. Edward Kennedy,D-Mass., during a Feb. 23 Armed ServicesCommittee hearing.The Dubai Ports World controversy gavelife to many new or existing pieces of legislationaddressing various aspects of portand cargo security, and sent shivers throughsome industry groups that recent efforts tostreamline cargo clearance at the nation’sborders would be trampled under a floodof heavy-handed regulations.Department of Homeland Security officialssaid they negotiated commitmentsfrom DP World that Dubai would continue toparticipate in the Container Security Initiativeand the Megaports Initiative, and that P&O’smembership in the voluntary Customs-TradePartnership Against Terrorism program thatencourages the use of security best practices,would transfer to DP World.Under CSI, U.S. Customs andBorder Protection officers arestationed in overseas ports totarget suspicious containersfor inspection by the hostcountry. Dubai Customsis also in the process of installingfour container-sizeradiation detection machinesloaned by the Department ofEnergy under the Megaports program.C-TPAT is a program that provides reducedinspection levels for shippers who tighteninternal shipping controls and demand similarsecurity measures by their manufacturing andtransportation providers.But those assurances did not providemuch comfort to lawmakers who insistedthe programs are largely ineffective becausefew containers are actually inspected overseas,and the supply chain security programfunctions as an honor system that largelybased on paper-based reviews.Critics of the Bush administration’sprogress on port security say that while theCoast Guard and CBP are well intentioned,they have not been given the resources toeffectively carry out security programs putin place after the 9/11 attacks.The Coast Guard, for example, has only 20inspectors, 13 for all of Europe, Africa, LatinAmerica and Central America and seven forAsia. This means foreign ports do not getfrequent checks to make sure they meet internationalmaritime security requirements,according to Stephen Flynn, an authority onborder security and a senior fellow at theCouncil on Foreign Relations.“There are more TSA security agentsat one security checkpoint (at LaGuardiaAirport) than the Coast Guard has receivedfor the entire inspection system. This is nota credible system,” he said at a recent Househearing.Several pieces of port security legislationthat languished in Congress nowhave considerable momentum, and manycommittees are expected to start passingbills in this area by April. Many measuresfocused on expanding port security grantsand requiring significantly higher levels ofcargo inspections.Republican Reps. Duncan Hunter, thepowerful chairman of the House ArmedServices Committee, and Jim Saxton, R-N.J., co-authored an anti-DP World billthat includes a provision to scan all cargocontainers and trucks entering the UnitedStates for terrorist weapons.Hunter said on C-SPAN’s WashingtonJournal program that the United States hasthe technology to do an X-ray exam of everyocean container or truckload exiting a U.S.sea or land port.“We need to have a directive to portdirectors that they need to figure out aconfiguration for their port to be able to doa screening of these cargo containers as theycome off the ships or come off the trucks.Either do that at the port — if they haven’tdone that earlier at the country of origin— or let’s find somebody who can,” he saidin a direct shot at CBP, which is responsiblefor inspecting cargo imports.CBP currently uses automated X-rayor gamma ray imaging systems to inspectabout 5 percent of all containers enteringthe country. Some of the inspections aredone by foreign customs as part of CSI.The DHS uses a risk-based managementapproach that relies on advance shippingdocuments and intelligence to target shipmentsthat score high on a computer analysisfor non-intrusive imaging or, if necessary,physical inspections.“We could easily have one of these hightechwand systems that will allow trucks tocome through at a couple of miles an hour.So while they are doing their paperwork,we could have them X-rayed. We could dothat. That’s something that a port directorwho is aggressive and creative could do,”Hunter said.“He could figure out how to get thosemachines in there, how to configure themso you could pull those trucks through. Youwouldn’t stop commerce in the least, andthat’s the one time when everybody is linedup on the same road and they are all in arow and you can bring them through likecattle coming through a chute and inspectthem,” he said.At a hearing March 2, Hunter said importersshould pay a fee to cover the cost ofAMERICAN SHIPPER: APRIL 2006 85