Peril At The Ports
It only happened on paper, but war game underscores U.S. vulnerability to attack.
OLIVER B. PATTON
WASHINGTON EDITOR
Last Oct. 2, a truck hauling a container out of the Port of Los Angeles took a corner too fast and rolled over. The container broke open. Among its contents: 100 pounds of Cesium-137, a radioactive material used in X-ray machines, packed around 50 pounds of C-4 explosive — a "dirty bomb."
The same day, police apprehended three men who were lurking around the port of Savannah, Ga. One of the men was on the FBI's list of suspected terrorists.
When they heard about these developments, federal officials revealed that they had recently intercepted terrorist messages that referenced "deliveries" to the U.S. They hadn't said anything earlier because the information was too vague.
That day administrators at the two ports, working with the Customs Service and the Coast Guard, closed the ports and began a search of the facilities.
Then news came in that one of the Savannah suspects had been linked to the al Qaeda terrorist organization and, furthermore, had led interrogators to believe that he was supposed to pick up "supplies" at the port. On top of that, officials in Minneapolis reported that a shipping container from Thailand contained another dirty bomb.
In response, four days after the Los Angeles bomb was found, the Customs Service closed all U.S. ports and border crossings indefinitely.
No, you weren't asleep. This only happened on paper, in a war game sponsored by the consulting firm Booz Allen Hamilton and the business group The Conference Board. The "players" were federal transportation policymakers, the Customs Service and representatives of private industry, including the ports, insurance firms, consumer goods manufacturers, technology companies and transportation providers.
So far in the war game no bombs had exploded, but the damage was immense. Ports and borders were closed for 11 days. Foreign trade was shut down. The Dow Jones Industrial Average went into a 500-point tailspin. With deliveries cut off, fuel prices shot up. Factories began to close.
On the 12th day, the ports and borders were reopened, operating on a 24-7 schedule with the National Guard helping conduct inspections. The backlog of containers started to move.
Then there was an explosion in a rail car in Chicago, and Customs again shut down the ports and the border crossings.
It took another 10 days to get the ports and crossings open again. Even then, the war gamers estimated it would take another 26 days to clear the backlog of containers and 40 more days after that to get cargo flowing smoothly and factories running again.
The total cost to the U.S. was $58 billion.
The war game underscored a point that security experts have been making ever since Sept. 11, 2001. In the era of international terrorism, the national and global supply chain is a point of vulnerability. The participants learned that their initial responses created massive problems, and they struggled to find ways to quickly reopen the ports and borders.
"We discovered that it is easy to close a port in the event of a crisis, but it is extraordinarily difficult to deal with the consequences of closing," said Mark Gerencser, a vice president at Booz Allen Hamilton and manager of the game.
The participants who were trying to deal with this crisis found themselves struggling in three areas of conflict. They had to preserve security, and get the cargo moving at the same time. They learned that their short-term solutions often could not be sustained, but they did not have time to get long-term solutions in place. And they learned that domestic security is a foreign policy issue: Shutting down U.S. ports means shutting down global distribution. It may be, they concluded, that foreign trade representatives will have to become responsible for U.S. security.
Conclusions:
• Government and business need to make sure that security is an element in all decisions involving trade. There needs to be a forum where carriers of all types — truckers, railroads and ocean shippers — can communicate in time of crisis. And businesses need to plan for the unthinkable — otherwise it will overwhelm them if it happens.
• Government and business must work together. "The government needs to involve industry in designing its port security solution, so that it does not destroy businesses," said one participant.
• Port security begins at the point of origin. The closer a container gets to U.S. shores, the fewer security options are available.
• Manufacturers and transportation companies need new operating models that include security as a basic requirement. Just-in-time logistics will not work if the ports are closed: Manufacturers should consider domestic sources of production and bigger inventories.
• Protect global trade with end-to-end security, including tighter checks at the point of loading and at U.S. ports, container tracking and inspection, and fast processing for accredited shippers.
• Set up a single point of contact in the government for national port security.
Initiatives to implement some of these requirements already are under way. Container shippers are required, for example, to submit cargo manifests 24 hours before the container arrives. Congress passed legislation requiring tougher security at ports. Research is under way to create risk assessment systems for inbound containers.
Among the participants were AIG, Chiquita, Maersk, Motorola, Sara Lee Branded Apparel and senior policy analysts from the Department of Transportation, the Transportation Security Administration, U.S. Customs Service, the Office of Homeland Security and officials from various port authorities.
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