100 Percent Stalled

R.G. Edmonson
Journal of Commerce
December 14, 2009

There is a serious delay at the container screening line. Born in the aftermath of the September 11 terror attacks, the idea of scanning 100 percent of cargo containers coming into the country is stalled behind technology and political reality.

Some members of Congress who enthusiastically pushed it in 2007 are having buyer’s remorse. Department of Homeland Security officials say they won’t make a July 2012 congressional deadline to have all ocean containers bound for the U.S. scanned before they’re loaded about ships at foreign ports.

All the while, critics worry about security gaps in the national intermodal transportation system, and the status quo can only sustain fears that terrorists will find the system a soft target.

DHS Secretary Janet Napolitano on Dec. 2 told the Senate Commerce Committee there are more immediate and insurmountable gaps in the government’s ability to bring the idea into the real world of cargo transport, saying 100 percent scanning faces enormous costs, is not yet feasible technologically and that foreign governments oppose the program.

A longtime supporter of the scanning program, Commerce Chairman John D. Rockefeller IV, D-W.Va., said he now believes Congress should reconsider. “I don’t think we have any choice. I don’t want to do it, but it’s something that can’t realistically, and in some ways responsibly, be done,” he said, “and in some cases does not need to be done.”

It was the latest sign that the questions over cargo screening that lawmakers thought they had pushed off to container terminals around the world have bounced right back to Washington, with shippers and cargo handlers caught in arguments between Congress and the DHS over what’s needed and what’s possible.

The House Appropriations Committee in June approved $162 million for overseas container scanning in the fiscal 2010 DHS budget. The committee admitted the DHS would not likely meet the 2012 deadline, but urged the DHS and Customs to press on, to “strengthen the overseas operation to monitor and target cargo, and to develop better technology to accomplish this mission.

“However, assuming that 100 percent overseas scanning is not likely soon, if ever, to be achieved, it is not clear what mix of measures the department assumes it should work toward to take its place,” the committee said. Members gave Customs a Jan. 15, 2010, deadline to report on its plans, a deadline later extended to Feb. 15.

That will almost certainly not be the last time lawmakers extend a deadline involving cargo security.

Nearly three years ago, Democrats who took control of the 110th Congress made the Implementing Recommendations of the 9/11 Commission Act their No. 1 piece of legislation. The law included the 100 percent scanning requirement, although the commission’s report was silent on the subject.

Container security was a campaign issue in the 2006 elections. Embodied in law, it became a useful weapon to prod the Bush administration’s shortcomings on homeland security. Three years later, most of 100 percent scanning’s most vocal supporters on Capitol Hill have turned their attention to other homeland security issues. Some members of Congress may agree with Rockefeller’s assessment, but even Rockefeller said he did not intend to introduce legislation to repeal the requirement.

Security experts say the argument takes attention away from real supply chain security improvements that could be implemented, including the use of tracking tools and information technology.

“The 100 percent requirement has distracted us from the broader imperative to evolve a risk management system that keeps pace with the nature of the threat and the importance of the overall system,” said Stephen E. Flynn, senior fellow in national security at the Council on Foreign Relations. “Standing still is not a good option. We have a pretty comprehensive critique of the existing risk management tools. That’s not to say they’re bad tools, but they have well-documented limitations.”

Flynn was one of the authors of a study released in March by the Wharton School at the University of Pennsylvania that said Customs could not meet the 100 percent under its existing program.

“We’ve heard almost exclusively from CBP that the cost of more scanning is prohibitive,” Flynn said. At the same time, Customs has downplayed the cost to importers and carriers of collecting additional commercial data, the “10+2” cargo information that will be mandatory in January. “We learned that in large ports, counterintuitive as it sounds, it may turn out that it costs less to collect imaging data than to collect lots of additional commercial data,” he said.

In 2006, a Republican-controlled Congress passed the SAFE Port Act, which called for a pilot program to test the 100 percent scanning idea. Results have been mixed, and in no case has Customs hit the 100 percent mark, said Stephen L. Caldwell, director of maritime security issues for the Government Accountability Office.

Of the five ports selected for the pilot program, the highest scanning rate was 86 percent, Caldwell said. The pilot ports have relatively low throughput rates, where scanning was not likely to disrupt the flow of containers. If they were the low-hanging fruit, how could Customs manage the program at ports with higher volumes?

But the 2007 law turned what was supposed to be a feasibility exercise into a must-do program with a deadline. “The part about the pilot study, to determine if 100 percent scanning is the way forward and how to do it, got lost in the shuffle,” Caldwell said.

In October, the GAO criticized Customs for not doing adequate feasibility or cost-benefit analyses of 100 percent scanning, even though it also acknowledged that the agency was not likely to meet the 2012 goal.

“How you define feasibility is important, because there is technology to do this on an individual container basis. What there isn’t is a technology that works with the just-in-time supply system that we have,” Caldwell said. “It’s more about practicality. What are the alternatives out there? What will they buy you in terms of security, and which is the way you want to go?”

Caldwell said Customs’ cost analysis focused too narrowly on the government’s costs of doing the program. “CBP never really looked at some of the other costs — to shipping, to other governments, or consumers, and that’s why we called for the cost-benefit analysis,” he said.

Before the Senate panel, Napolitano estimated it would take some $8 million per year to maintain 100 percent scanning across each of the 2,100 trade lanes to the U.S. from some 700 foreign ports. An overestimate, Caldwell said.

“That assumes that all the current 2,100 lanes would continue to ship to the U.S., and the U.S. would be providing all the infrastructure to do the scanning,” Caldwell said. “There would be a lot of unintended consequences if this were actually put in place.” U.S.-bound cargo would likely be detoured through large ports equipped with scanning equipment. “The effect on small ports and ports in developing nations could be pretty dramatic,” he said.

Customs referred questions about 100 percent scanning to the DHS public affairs office. DHS officials did not respond to requests for comment.

At U.S. gateways, however, freight handlers still are wondering how they can respond to the government requirements.

“It seems to me that we could be doing a great deal more than we’re doing now,” said John Holmes, deputy executive director for operations at the Port of Los Angeles. “I’m not going to refute that the technology needs to advance. The question is should we be forcing the technology more than we are?

“You know that in our lifetimes we’ve seen problems solved that nobody thought could be solved,” Holmes said. Improved scanners are “not small potatoes, but it’s not of the scope of building nuclear aircraft carriers or F-22 strike fighters.”

Holmes said right now less than 1 percent of the containers arriving at Los Angeles from Singapore are scanned in advance. “When you’re sitting at the gateway of trade between the U.S. and Asia, you’re certainly more impatient than some people when you say there are technological challenges,” Holmes said, “but shouldn’t we be doing more than we are now?”

Right now, Congress is focused mostly on keeping U.S. ships and ports from harm, Flynn said. “The extent that CBP is not even close to meeting that intent strikes me as a very soft position to be in, if it wants Congress to back down on 100 percent scanning,” he said.

“It comes down to the core: There won’t be a change in the law, and we will continue to document the shortcomings of the approach, and there is no confidence in the existing system,” Flynn said.

The soft economy “will be an excuse for inertia, and it guarantees that if something does happen, we’ll end up with a very draconian response driven by the political impulse of the moment. Or we’ll end up with a profound disruption of the system that we’ll then have to sort out. Or both.”

Contact R.G. Edmonson at bedmonson@joc.com.

http://www.joc.com/node/415223