Expert Testifies that DHS Must Incentivize Trade to Take Lead in Cargo Security

DHS' Cargo Security Efforts Fall Short on Four Counts

According to Flynn's testimony:

"Despite the limited resources involved, the U.S. Department of Homeland Security has generally been overstating what they have been accomplishing when it comes to cargo security. Their efforts fall short on four counts:

1. Data is unreliable. The data that CBP relies on for identifying suspicious cargo is too unreliable to support the "risk management" methodology it employs, although its new proposed '102' regulation is a positive step towards addressing this problem.
2. Most exams are still in U.S. The Container Security Initiative arrangement in place at 58 ports around the world can support only a tiny percentage of pre-loading inspections of U.S.-bound containers that are evaluated as suspicious. This means that the majority of containers that CBP's targeting algorithm identifies as sufficiently anomalous to warrant an examination continue to be carried out primarily upon arrival in the U.S.
3. Radiation detection ineffective against shielding. The radiation monitors that have been deployed at U.S. ports to evaluate the risk that cargo may be carrying nuclear weapons or materials are ineffective in detecting shielded highly enriched uranium (HEU), a nuclear weapon, and a shielded radiation dispersal device (i.e., dirty bomb).
4. No credible plan for managing the aftermath. The U.S. government lacks a credible plan for managing a major security breech. In June 2007, [DHS] Secretary Chertoff rolled out 'The Strategy to Enhance International Supply Chain Security' that includes a chapter that outline[s] a response and recovery plan in the aftermath of a major security incident involving a U.S. port. The plan makes no mention of coordination with overseas port authorities and marine terminal operators, ocean carriers, or even Mexico and Canada."

C-TPAT Companies are Attractive Terrorist Targets

Flynn also stated that:

"Since 9/11, the agency has built on that model [the "known shipper" model] by extracting a commitment from shippers to follow voluntary supply chain security guidelines outlined in the Customs-Trade Partnership Against Terrorism (C-TPAT). As long as there is not specific intelligence to tell inspectors otherwise, shipments from C-TPAT companies are viewed as presenting little risk.

The problem with this approach is that what may have made sense for assessing the risk of crime or regulatory noncompliance does not automatically translate to combating

determined terrorists...

First, it is likely to be a one-time operation and most private company security measures are not designed to prevent single event infractions. Instead, corporate security officers try to detect infractions when they occur, and conduct credible investigations after the fact that support imposing sanctions in order to foster a culture of compliance within the workplace.

Second, terrorists are likely to find it particularly attractive to target a legitimate company

with a well-known brand name precisely because they can count on these shipments entering the U.S. with a only a cursory look or no inspection at all."

DHS Must Incentivize Trade to Take Lead in Cargo Security

Flynn concluded that:

"The conventional wisdom that security within the global transportation and logistics system is more of a public sector responsibility than a private sector one is wrong. This conventional wisdom persists in no small part because Congress and U.S. enforcement agencies want to be in the driver's seat in managing the security imperative. In practice this translates into "public-private" partnerships involving the public sector setting the requirements and the private-sector being asked to cheerfully embrace the costs of complying with them.

This process needs to be reversed. For the intermodal transportation industry and companies with supply chains that rely on the industry, cargo and container security has

become an important business continuity risk. They must be provided with the incentives for taking the lead in developing solutions that manage that risk while government plays a support role."

(See ITT's Online Archives or 04/07/08, 04/08/08, 04/10/08, 04/16/08, 04/17/08, and 04/18/08 news, 08040705, 08040805, 08041005, 08041605, 08041710, and 08041810, for BP summaries on testimony by the CBP Deputy Commissioner at this hearing.)

Flynn's testimony (dated 04/02/08) available by emailing documents@brokerpower.com.