Maritime security has moved to center stage at ports across the United States. A number of government and private sector initiatives are under way to ensure the smooth transportation of commerce in today's uncertain times.

Before September 11, 2001, the biggest issue facing the maritime industry

was the constant battle to combat cargo theft. Today, the focus has shifted to protecting U.S. ports against terrorism and ensuring the smooth flow of commerce throughout the world. More than $2 billion dollars worth of cargo enter the United States everyday, according to maritime industry representatives. The economic impact of a halt to the U.S. maritime transportation system is unimaginable. The most recent concern of shippers and port authorities is terrorists putting weapons of mass destruction into a container, then detonating it in a port or a city.

The agencies largely responsible for protecting our ports include the U.S. Coast Guard, the Department of Transportation and U.S. Customs, all of which are now focusing on how to best address the threat of terrorism to U.S. vessels and ports.

Under the Port, Harbor and Coastal Facility Security section of the Ports and Waterways Safety Act, the Secretary of Transportation has the authority to "take actions to prevent or respond to an act of terrorism against a vessel or any public or commercial maritime structure."

The Coast Guard's efforts have mainly focused on shipboard safety, environmental compliance, prohibiting drug trafficking, and cargo theft; while Customs is charged with inspecting all cargo that enters the United States.

"Today, a ship at terminal is likely to be inspected by the Coast Guard, its cargo inspected by Customs and its crew members interviewed by the Immigration and Naturalization Service," notes Forrest Booth, Of Counsel at Cozen O'Connor in San Francisco, during a presentation on maritime and port security at the Pacific Admiralty Seminar in October.

In the past year, at least nine bills have been introduced in Congress addressing port and maritime security, but just one has passed into law. The Enhanced Border Security and Visa Entry Reform Act of 2002, dealing mainly with immigration issues, was passed in May 2002. Efforts between the private sector and government have fared somewhat better.

In November 2001, the Customs Trade Partnership Against Terrorism (C-TPAT) was formed as a joint government-business initiative to offer businesses an opportunity to play an active role in the war against terrorism. Manufacturers, shippers, transportation, and distribution companies joined forced with U.S. Customs to become "low-risk" importers and take steps to secure cargo against terrorism.

Businesses that apply to participate in C-TPAT are required to implement security policies and procedures, conduct periodic self-assessments and communicate C-TPAT guidelines to other companies in their supply chain. In exchange for implementing these security policies and procedures, Customs will provide participating companies with significant benefits, including giving their cargo the "fast lane" through the border, a reduced number of inspections, assigned account managers, reduced wait times, and a chance to self-police. In addition, the C-TPAT initiative strives to push container integrity back to the point-of-origin by placing U.S. Customs officials in foreign ports of loading.

Initially, seven companies agreed to participate in C-TPAT, including BP America, Daimler Chrysler, Ford, General Motors, Motorola, Sara Lee Corp., and Target. Today, more than 700 companies have signed on.

"C-TPAT initiatives were driven largely by auto manufacturers, whose shipments were slowed down at the borders after September 11, so much so that many of their factories closed down," explains Barry Wilkins, director of global transportation and supply chain security at Pinkerton and a member of the Transportation and Distribution team that assisted in writing the C-TPAT guidelines. "This initiative recognizes that Customs can provide the highest level of security only through close cooperation with the ultimate owners of the supply chain-importers, carriers, brokers, warehouse operators, and manufacturers.

"By signing on to this program," Wilkins continues, "corporate executives have moved supply chain security to the boardroom, providing additional resources and the ability to significantly decrease the risk of cargo loss from theft and reducing the threat of terrorism. The process is not that ominous to go through, and most of the companies involved already have a supply chain security program in place. Overall, it's not that costly to implement, and is absolutely necessary in today's world," he stresses.

Proposed Legislation

Beginning in 2000, the National Cargo Security Council, the Inland Marine Underwriters Association (IMUA) and the American Institute of Marine Underwriters (AIMU) undertook an effort to support legislation introduced by Sen. Ernest F. Hollings (D-S.C.) and Sen. Bob Graham (D-Fla.) to combat cargo theft and ensure greater security for U.S. seaports. That legislation eventually became the Port and Maritime Security Act of 2001. Following September 11, domestic cargo theft took a back seat and the act evolved into its current focus on terrorism and port security.

"U.S. ports are one of the most vulnerable areas of security concerns," says Ron Thornton, president of the IMUA. "We're now focusing on security issues, egress and entrance to U.S. ports, education and training of transportation service providers, and reducing interruptions to the flow of cargo. Before September 11, cargo theft focused on stealing commodities for their economic value. Today, we have to be concerned about stolen items being used for potential terrorist acts, such as fertilizer being used to create explosives. We're looking at any weaknesses in our ports and aiming to close any gaps through legislation or administrative requirements."

While the focus on cargo crime has shifted, "what many people haven't recognized is that such crime is economic terrorism," notes Peter Scrobe, vice president of loss control services at AIG in New York and vice chairman of the National Cargo Security Council. "Commerce keeps the economy moving, and any interruption in the flow of commerce significantly effects the economy."

Before September 11, less than 2 percent of all cargo containers entering the United States were inspected, according to industry sources. While that number has begun to increase, there is still much work to be done.

"The legislation proposed by Congress reflects a wide-ranging effort to dramatically and permanently improve maritime and port security," says Booth of Cozen O'Connor. The Port and Maritime Security Act of 2001, passed by the Senate in December 2001, and the corresponding Maritime Transportation Antiterrorism Act of 2002, passed by the House of Representatives in June 2002, were referred to a joint House-Senate conference committee to draft a comprehensive compromise bill, which has yet to be passed.

The proposed legislation gives significant attention to the development of antiterrorism plans on a local, national, and individual vessel and facility basis, notes Booth and colleague Larry Altenbrun, an associate in the Seattle office of Cozen O'Connor, at the Pacific Admiralty Seminar. "Cargo security is an important part of an overall maritime security program," stressed Booth. "The proposed legislation addresses cargo security in a number of ways, including screening and detection equipment, research and development of better technology to screen cargo, improved cargo tracking, increased inspections of cargo, and international cooperation. The manual inspection of cargo and the development, implementation and regulation of electronic seals or anti-tampering devices is also critical."

Liability Concerns

While Booth commends the efforts of U.S. Customs and shipping operators involved in the C-TPAT program, he worries about potential liability issues for private-sector employers. "If containers passing through Customs get less scrutiny under the C-TPAT program and terrorists manage to get into these containers and ultimately cause damage, it could create a significant risk for the shipper," he warns. "The shipper bears equal responsibility for what went wrong because they're involved in the program."

As a result, he encourages risk and security managers to conduct a thorough risk assessment, implement an in-house security team or department, make sure the ship's officer has primary responsibility for cargo security, and implement an up-to-date security manual including seaside and shoreside policies.

"We need to know where our vulnerabilities are," says Booth. "Terrorists are very clever, and will look for any vulnerabilities and exploit them. Because different ports are set up in different ways, there is no uniform solution. It's important to develop a specific plan at each port in order to implement an adequate level of security."

While the cost of implementing these proposed government initiatives has been a major sticking point in the passage of maritime antiterrorism legislation, shippers and port authorities are taking positive steps to improve supply chain security and reduce cargo theft and tampering, says Tom Sheets, chairman of the National Cargo Security Council and director of corporate security at CNF Transportation in Portland, Ore. "The C-TPAT program is a good starting point, but more needs to be done. The cost of implementing these programs shouldn't solely be the responsibility of the carriers."

In order for these early initiatives to succeed, "the government must provide substantial funding in the form of loan guarantees and direct grants to assist the private maritime industry in updating its security infrastructure," stresses Booth. The future of maritime and port security depends on it.

Mindy W Toran can be reached at mrtoran@comcast.net.