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86–994 PDF 2003

S. Hrg. 108–55

CARGO CONTAINERS: THE NEXT TERRORIST

TARGET?

HEARING

BEFORE THE

COMMITTEE ON 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MARCH 20, 2003

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

ARLEN SPECTER, Pennsylvania 

ROBERT F. BENNETT, Utah 

PETER G. FITZGERALD, Illinois 

JOHN E. SUNUNU, New Hampshire 

RICHARD C. SHELBY, Alabama 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

RICHARD J. DURBIN, Illinois 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JASON FOSTER, Senior Counsel 

JOYCE RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

JASON YANUSSI, Minority Professional Staff Member 

DARLA D. CASSELL, Chief Clerk 

(III)

C O N T E N T S 

Opening statement: Page 

Senator Collins ................................................................................................. 1

Senator Coleman .............................................................................................. 3

Senator Lautenberg .......................................................................................... 8

Senator Pryor .................................................................................................... 12

Senator Akaka .................................................................................................. 16

Senator Fitzgerald ............................................................................................ 17

Prepared statements: 

Senator Lieberman ........................................................................................... 45

Senator Carper ................................................................................................. 46

WITNESSES 

THURSDAY, MARCH 20, 2003

Hon. Asa Hutchinson, Under Secretary for Border and Transportation Security, Department of Homeland Security ............................................................. 4

Hon. Peter W. Hall, U.S. Attorney, District of Vermont ...................................... 21

Stephen E. Flynn, Ph.D., Senior Fellow for National Security Studies, Council 

on Foreign Relations ............................................................................................ 24

Captain Jeffrey W. Monroe, M.M., Director, Department of Ports and Transportation, City of Portland, Maine ...................................................................... 28

Michael O’Honlon, Senior Fellow, The Brookings Institution ............................. 32

ALPHABETICAL LIST OF WITNESSES

Flynn, Stephen E., Ph.D.: 

Testimony .......................................................................................................... 24

Prepared statement .......................................................................................... 70

Hall, Hon. Peter W.: 

Testimony .......................................................................................................... 21

Prepared statement .......................................................................................... 59

Hutchinson, Hon. Asa: 

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 53

Monroe, Captain Jeffrey W., M.M.: 

Testimony .......................................................................................................... 28

Prepared statement .......................................................................................... 76

O’Hanlon, Michael: 

Testimony .......................................................................................................... 32

Prepared statement .......................................................................................... 81

APPENDIX

Photographs (submitted for the record by Chairman Collins) ............................. 48

Chart entitled ‘‘Participation in CSI Among Top 20 Foreign Ports’’ (submitted 

for the record by Chairman Collins) ................................................................... 52

Responses to post-hearing questions for the record from: 

Hon. Hutchinson ............................................................................................... 84

Dr. Stephen E. Flynn ....................................................................................... 97

Capt. Jeffrey W. Monroe, M.M. ....................................................................... 103

Michael O’Hanlon ............................................................................................. 106

(1)

CARGO CONTAINERS: THE NEXT TERRORIST 

TARGET? 

THURSDAY, MARCH 20, 2003

U.S. SENATE, 

COMMITTEE ON GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 9:30 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Susan M. Collins, 

Chairman of the Committee, presiding. 

Present: Senators Collins, Coleman, Fitzgerald, Akaka, Lautenberg, and Pryor. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. Good morning. The Committee will come to 

order. 

As we convene this morning, our Nation is at war, and the threat 

level has once again been raised to orange, signifying a high risk 

of terrorist attacks on our Nation’s citizens. Today, the Committee 

on Governmental Affairs will focus on what many experts consider 

one of our greatest vulnerabilities: Our ports and the global cargo 

container system, in particular. 

There are some 12 million cargo containers in the worldwide inventory. These containers move back and forth among major seaports more than 200 million times a year. Every day, more than 

21,000 containers arrive at American seaports from foreign countries filled with consumer goods—from televisions to clothes to toys. 

In fact, about 90 percent of U.S.-bound cargo moves by container. 

We must ensure that these containers carry nothing more dangerous than sneakers or sporting goods, not ‘‘dirty bombs’’ or even 

Al Qaeda terrorists. This hearing will assess the progress being 

made so far toward that goal. 

Currently, the Bureau of Customs and Border Protection in the 

Department of Homeland Security inspects only a small percentage 

of cargo containers. Some are scanned with x-ray equipment; others 

are physically opened to verify their contents. Either way, the process is time-consuming and burdensome, and historically, Customs 

has been able to physically screen only about 2 percent of these 

containers. That may have seemed sufficient prior to September 11, 

2001, but we now realize that the stakes are much higher. 

For example, one news report last week suggested that some intelligence officials have a growing fear that Osama bin Laden is obsessed with the idea of building a nuclear weapon and smuggling 

it into our country via a contain ship. 

2

Whether the threat is nuclear, chemical, or biological, and 

whether it comes from a terrorist network such as Al Qaeda or a 

terrorist state such as Iraq, cargo containers offer a frighteningly 

simple and anonymous way to smuggle weapons of mass destruction into the United States. They arrived by sea, by road, and by 

rail. Compared to the aviation industry, however, containerized 

cargo shipments are less regulated, less standardized, and far less 

secure. 

For years, criminals have used cargo containers to smuggle narcotics, firearms, and people into our country. Last year, for example, four men pled guilty for their involvement in a scheme that 

smuggled seven cargo containers packed with stowaways to West 

Coast ports on five separate occasions. Human trafficking is believed to be an $8-billion-a-year business. Containers have also 

been used to smuggle a wide array of contraband, including illegal 

firearms and drugs, into our country. 

Smuggling rings know how to exploit the vulnerabilities of the 

global container system. Based on a training manual seized in England, we know that Al Qaeda has targeted smugglers for recruitment. The training manual also instructed Al Qaeda members to 

look for new terrorist recruits among those seeking political asylum 

and employees at borders, airports, and seaports. 

Our challenge is to prevent terrorists from exploiting the global 

system for moving goods as a means for attacking our Nation. The 

good news is that our government has been working to anticipate 

and respond to this threat. Since September 11, the Bureau of Customs and Border Protection has nearly doubled the percentage of 

containers examined from fewer than 2 percent in 2001 to nearly 

4 percent in the first quarter of this year. 

Since most containers carry legitimate commerce, Customs officials are working to ensure that high-risk containers are targeted 

for inspection. Given that 96 percent of the incoming containers are 

not being inspected, however, and that it is not practical to inspect 

every container, the systems for targeting and screening cargo 

must be highly effective. I have questions about the system used 

to accomplish this task and the quality of the data on which it relies. 

In addition to increasing the number of inspections, the Department of Homeland Security has implemented important new programs to enhance container security. These programs, known as 

the 24-hour rule, the Container Security Initiative, and the Custom-Trade Partnership Against Terrorism, as well as Operation 

Safe Commerce, are well intentioned and designed to make us 

more secure. But do they? 

Today, we will evaluate how well these programs are performing. 

For example, we will hear testimony about Operation Safe Commerce, which began with a test shipment of a container of light 

bulbs from a factory in Slovakia to New Hampshire. This container 

was outfitted with tracking and intrusion detection equipment to 

test whether the widespread use of such technology was valid. 

Some officials were surprised that, despite crossing five international borders, the antenna, nest of wires, and power supply attached to the container raised no eyebrows. And you can see from 

3

1Photographs referred to appear in the Appendix on page 48. 

the photographs 1 we have the wires and other information sticking 

out from this container, which you would think might have caused 

an inspection of its contents. We will hear more about the results 

of that test in testimony today. 

The threat of an attack using cargo containers is serious and immediate. I look forward to learning from our witnesses about the 

progress that has been made so far and their ideas for implementing even better, long-term solutions for securing the global 

container system and reducing our vulnerability to this means of 

attack. 

I want to welcome the Senator from Minnesota, a very dedicated 

Member of this Committee joining us this morning. I know that he 

was presiding over the Senate late last night, and I appreciate his 

being with us. 

I would like to call upon him if he does have any opening comments that he would like to make. 

OPENING STATEMENT OF SENATOR COLEMAN 

Senator COLEMAN. Thank you, Chairman Collins, and just very 

briefly because I do want to hear the testimony and statement of 

the Secretary. 

One, I want to thank the distinguished Chairman for having this 

hearing now. As she has noted, the stakes have never been higher. 

The threats are very real and immediate, and as we all understand, the chain is only as strong as its weakest link. And all the 

things that we are doing across the board in terms of security, be 

it at airports and other places, there is a real issue on the minds 

of average citizens. I think people understand how we—I think 

they have a sense of understanding the enormity of the challenge, 

but people expect us to deal with it. And I would note, Chairman 

Collins, that this is not just an East Coast or West Coast issue. In 

Minnesota, we have the Port of Duluth on the Great Lakes, and 

this is a concern right in the heart of America. And so we are all 

deeply concerned at this time, and we are looking forward to this 

conversation and working together. 

Thank you, Chairman Collins, for having this hearing. 

Chairman COLLINS. Thank you very much. 

Our first witness this morning is Under Secretary Asa Hutchinson from the Department of Homeland Security. As the head of 

the Border and Transportation Security, Secretary Hutchinson is 

the government’s highest-ranking official with direct responsibility 

for protecting our Nation’s border and ports. Secretary 

Hutchinson’s responsibilities include the Bureau of Customs and 

Border Protection as well as the Transportation Security Administration. 

We are delighted to welcome you here this morning. We appreciate your being with us, and I would ask that you proceed with 

your testimony. 

4

1The prepared statement of Mr. Hutchinson appears in the Appendix on page 53. 

TESTIMONY OF HON. ASA HUTCHINSON,1 UNDER SECRETARY 

FOR BORDER AND TRANSPORTATION SECURITY, DEPARTMENT OF HOMELAND SECURITY 

Mr. HUTCHINSON. Thank you, Madam Chairwoman, Senator 

Coleman. It is good to be with the Committee today, and I want 

to thank you for this opportunity to testify on a very important 

subject. As hostilities have commenced in the Middle East, our 

prayers and thoughts are certainly with our men and women in 

service, but this hearing is important to reflect on the security of 

our homeland during this time and at other times in our Nation’s 

history. And I am pleased to be here on behalf of the Department 

of Homeland Security representing the Directorate of Border and 

Transportation Security. 

Let me first discuss the magnitude of the threat that the Chairwoman discussed this morning: That terrorists may use cargo containers as a means to transport weapons or people into the United 

States. And the fact is that nearly 6 million cargo containers arrive 

at U.S. seaports each year. That fact alone represents a challenge 

for homeland security and an opportunity to be exploited by those 

who wish us harm. 

Recent cases illustrate that cargo containers have been used to 

smuggle people, to smuggle cargo, and to smuggle narcotics, both 

here and to other countries. To illustrate this point in the area of 

narcotics, during the calendar year 2002, there were 32 cocaine and 

marijuana seizures in which containers, used in ocean transports, 

were utilized to transport narcotics. There were 19 shipments in 

which the cargo itself was used for concealment, and there were 13 

seizures in which the discoveries were that the container was used 

as a concealment technique, such as false walls or flooring. And 

these seizures occurred from Fort Lauderdale to Miami to Newark, 

New Jersey, to Charleston, South Carolina, to Baltimore. In Fort 

Lauderdale, 654 pounds of cocaine were hidden in a shipment of 

edible gelatin, commingled with legitimate cargo. In Fort Lauderdale, it was cocaine in a shipment of commercial starch. In Miami, 

it was in a front wall of a refrigerated container. In Newark, New 

Jersey, it was 3,000 pounds of marijuana concealed inside a shipment of cola nuts. In Charleston, it was a shipment of furniture involved. In Baltimore, it was another shipment of furniture. 

But it was just not narcotics. If you look at arms smuggling, you 

broaden it to a worldwide environment. In January 2002, Israeli 

forces seized the Tonga-registered vessel CORINNE A in international waters in the Red Sea, and discovered aboard the vessel 

were 83 canisters filled with weapons ranging from Strella SA–7 

man-portable surface-to-air missiles to anti-tank mines. These canisters were hidden in crates and obscured by other cargo. 

In addition to the arms and narcotics smuggling, you have, as 

the Chairman pointed out, the human smuggling via containers. In 

January 2000, 18 illegal Chinese aliens were discovered in a container arriving at the Port of Seattle from Hong Kong aboard a vessel. Three of the smuggled aliens were found dead inside the 40-

foot soft-topped container. That illustrates the danger in how they 

are utilized. 

5

1 Chart entitled ‘‘Participation in CSI Among Top 20 Foreign Ports’’ (submitted by Chairman 

Collins) appears in the Appendix on page 52. 

On March 22 of last year, Canadian authorities captured three 

Romanians after having been found in a container of liquor on 

board the ZIM EUROPA, which had arrived in Halifax from Spain. 

The ultimate destination of the cargo was the United States, destined for the New York-New Jersey container terminal. 

In March of last year, in Savannah, Georgia, the Georgia Port 

Authority Police contacted Savannah authorities in reference to a 

suspicious container at the Port of Savannah. In this instance, a 

container was observed to have been compromised and that it had 

no seal as well as other physical abnormalities. A closer inspection 

of it indicated that the seal was missing, and it was determined 

that an individual most likely entered the container in Italy and 

left when the container arrived in Spain. And ultimately the destination, again, was Savannah, Georgia. 

In October 2001, an Egyptian was detained in an Italian seaport 

and there was wide media publicity about this particular apprehension. This came about because the police report reflected an Egyptian individual named Farid Rizk, found in a container that left 

Port Said, Egypt, and arrived in Italy. The container found—he 

had Canadian passports, maps, cell phones, laptop computer, airline tickets, and Thai Airlines security passes. All of these goods 

led to the perception that the individual was more than a simple 

stowaway. 

From these incidents, it is evident that there are vulnerabilities 

in our sea cargo container systems that have the potential for exploitation by terrorists. In fact, most experts believe that a terrorist 

attack using a container is likely. And so the logical question is: 

Well, what is our strategy to deal with this vulnerability? 

The first part of our strategy is the Container Security Initiative. 

I want to applaud Commissioner Robert Bonner for his aggressive 

approach to this initiative, the development of it, and the implementation of it. Under CSI, we are identifying high-risk cargo containers and partnering with other governments to pre-screen those 

containers at foreign ports before they are shipped to our ports. 

The four key elements of the Container Security Initiative are: 

First, to identify the high-risk containers; second, to pre-screen 

those high-risk containers at the foreign port before they are 

shipped to the United States; third, we use technology to prescreen those high-risk containers; and, fourth, we desire to use 

smarter, tamper-evident containers, which can be inspected more 

easily to determine whether they have been tampered with. 

The goal for the first phase of CSI was to implement the program 

at as many of the top 20 container ports in terms of volume of 

cargo shipped to the United States as possible. Within 1 year of the 

announcement of CSI, 18 of the top 20 ports agreed to participate.1

The second part of the strategy is the implementation of the 24-

hour rule. Because CSI requires us to identify and pre-screen highrisk containers before they leave foreign ports, the advanced transmission of complete and accurate cargo manifest information on all 

arriving vessels is essential to achieving success. U.S. Customs 

issued a final notice on advanced manifest regulations on October 

6

31 of last year, requiring the presentation of accurate, complete 

manifest information 24 hours in advance of loading the container 

on the foreign port. This rule is a huge leap forward in our container-targeting capabilities, largely eliminating the old manifest 

data standards that included vague descriptions of cargo, such as 

‘‘FAK,’’ which meant freight of all kinds, and at the same time providing the data before the container is loaded. 

In some instances in the past, the government did not have a detailed description of a container’s contents until 10 days after arrival in the United States. This has dramatically changed. Now we 

can identify high-risk containers prior to the ship leaving the foreign port. 

But if the high-risk containers are identified after they have set 

sail for the United States, Customs and Border Protection makes 

a determination on their level and source of risk. And depending 

upon that assessment, protocols have been established for working 

with a variety of agencies, such as the Coast Guard, to take appropriate steps to intercept the cargo. For example, when a determination is made that the cargo should not reach U.S. shores, Customs 

and Border Protection works with the Coast Guard to ensure that 

the cargo is screened and examined, including the possibility of 

conducting examination prior to entering a port. 

Another link in our strategy is the Customs-Trade Partnership 

Against Terrorism. It is called C–TPAT, and the C–TPAT program 

developed and started in January of last year is an initiative designed to further reduce the risk. It does so by improving security 

along the entire supply chain and not just at the foreign seaports. 

By partnering with the trade community—U.S. importers, customs 

brokers, carriers, shippers and others—we can better protect the 

entire supply chain against potential exploitation by terrorists or 

terrorist weapons. 

So far, over 2,000 companies have signed an agreement with 

Customs and Border Protection to conduct a comprehensive self-assessment of their supply chain security and to improve that security from foreign loading docks to U.S. borders and seaports. Using 

C–TPAT, security guidelines developed jointly with Customs and 

Border Protection and the trade community have been implemented. 

We have other additions to our protective measures. One of those 

is a broader initiative called Operation Safe Commerce that the 

Transportation Security Administration has the lead in. It is a public-private partnership dedicated to finding ways to protect commercial shipments from threats of terrorist attack, illegal immigration, and other contraband, while minimizing the economic impact 

upon the vital transportation system. 

This program develops and tests technology and systems to improve container security, consistent with the principles and security practices of ongoing programs. The OSC, Operation Safe Commerce, has an executive steering committee that includes the Department of Transportation, TSA, the Coast Guard, the State Department, the Commerce Department, the Justice Department, and 

the Homeland Security Council. And so it is a broad, multi-agency 

effort to improve the safety of our commerce. 

7

Let me conclude by thanking Chairman Collins and the Members 

of the Committee for this opportunity to testify. I will be looking 

forward to my continued discussion and work with this Committee. 

Chairman COLLINS. Thank you very much, Secretary Hutchinson. 

When we look at a container ship, we often now worry that one 

of the containers may include the makings of a dirty bomb. But the 

case that you cited suggests that, as we are tightening security at 

our borders, one of those containers may actually be a means for 

a terrorist to get into the United States. And I would like to show 

the picture of the container that you referred to that the Egyptianborn Canadian, Mr. Rizk, was found in. 

As you can see, he had with him airport security badges, phone 

cards, maps of airports, computers, and a satellite phone. 

Now, those don’t strike me as the typical possessions of a stowaway, an illegal immigrant who may be coming to this country illegally in search for a better life. And his container was headed from 

Egypt to Montreal, I believe. 

What has happened with this case, if you can disclose to us and 

bring us up to date? Is there concern that Mr. Rizk may have connections to Al Qaeda or another terrorist group? 

These containers have been used for years by smuggling rings to 

bring illegal immigrants into the United States. Is there evidence 

or do you have concern that terrorist groups or others who may 

wish to do us harm may tap into the knowledge of these smuggling 

rings to bring terrorists into our country via containers? 

Mr. HUTCHINSON. Thank you, Senator, and the case that you 

cited is a perfect illustration as to the sophistication of some of the 

smuggling operations through container ships and container cargo. 

Clearly, in this instance, with the cell phones, with the false documents that were available, there was a lot of preparation that went 

into this. 

This was a case that was investigated by those overseas, and although there was extraordinary concern because of the potential 

connection to terrorist organizations, it is my information that ultimately—the Italian police did warrants, did searches, continued 

the investigation and determined that there was no known connection between Rizk and Al Qaeda or any other terrorist organizations, and they have closed their inquiry. 

But despite that ultimate finding, it shows that there is sophistication in this network and that, as you pointed out, when there 

are organizations that will conduct this type of smuggling, terrorists are looking for opportunities to contract out, to find available 

means to move terrorists as individuals or their weapons through 

commerce into the United States or to other destinations. And so 

it raises our level of concern because this is something that can be 

exploited by those that wish to do our country harm. 

Chairman COLLINS. By the time a container carrying a weapon 

of mass destruction arrived at a U.S. port, an inspection at that 

point is too late. And that is why I commend you and the Department for initiating the CSI program of placing Customs personnel 

in overseas ports to pre-screen containers before they come here. 

We really need to get to the point of origin, because if we wait until 

8

they are already in the American port, the damage may already be 

done. 

According to the last information provided to the Committee, we 

currently have CSI teams from Customs stationed in 6 of the 20 

largest foreign ports. I believe they are in the Netherlands, France, 

Belgium, Singapore, and two in Germany, and I have a map showing the locations. And those ports represent about 21 percent by 

volume of containers shipped to the United States. 

One of the concerns I have is that many of the mega-ports that 

are part of the system now are in lower-risk areas of the world. Do 

you anticipate an expansion of the CSI program to ports where 

there is a higher risk of terrorist exports, for example, in the Middle East and Africa? 

Mr. HUTCHINSON. Yes, we do. This is CSI Phase 1 in which 18 

of the 20 mega-ports have been signed up. But as you pointed out, 

only six of the ports have really been fully deployed and the program has been completely implemented. We want to move to the 

other ports that have been signed up. That is being aggressive pursued. And then, second, we want to expand it beyond the 20 megaports to other ports in areas of concern so that we can get the remaining percent of the cargo. 

I would emphasize, though, that notwithstanding the CSI only 

being in the mega-ports right now, the 24-hour rule is applicable 

everywhere. And so we will have advance information on all cargo 

coming to the United States so that it can be analyzed. But we do 

hope to expand the program as we are capable of doing so to these 

other areas of concern. 

Chairman COLLINS. Thank you. My time has expired. Senator 

Lautenberg. 

OPENING STATEMENT OF SENATOR LAUTENBERG 

Senator LAUTENBERG. Thank you very much, Madam Chairman. 

Madam Chairman, you had suggested initially that you weren’t 

going to take opening statements. Has anything changed? 

Chairman COLLINS. If you would like to take a few minutes to 

make an opening statement. 

Senator LAUTENBERG. I would try to participate in the discipline 

that the stern Chairman has issued here and just to say that I ask 

unanimous consent that my full statement be placed in the record. 

Chairman COLLINS. Without objection. 

Senator LAUTENBERG. First of all, Mr. Hutchinson, you don’t look 

any the worse for wear since you have taken this job. You must get 

awful tired crawling around these containers looking for things. 

But it is amazing that people can set up housekeeping in a container. Our Port of Newark and the New York harbor, New YorkNew Jersey harbor is a recipient, I think, one of the largest recipients of containers in the country. And how we stay on top of that 

has often kind of puzzled me because before I came to the Senate, 

I was a Commissioner of the Port Authority in New York-New Jersey. And we have always been concerned with security. 

Let me ask you this: When our inspectors or when the inspection 

process is underway, what are we looking for? Are we primarily 

targeting weapons, threats to our security? I know these people 

9

have a lot of responsibilities that have been considerably enlarged 

since the days that terrorism assaulted our shores. 

Do you look for dutiable items? Do you look for smuggling? Do 

you look for drugs? What is the mission of the inspection or the inspectors? 

Mr. HUTCHINSON. Thank you, Senator Lautenberg. And, first, I 

want to remark that I had a wonderful time visiting the Port of 

Newark. I was there and saw the enormous volume of containers 

and the work that had to be done. And I was very impressed with 

the targeting approach that had been implemented at that port. I 

think it is on the leading edge of what we need to do nationwide. 

But what we are looking for in our targeting approach are anomalies. We have a scientifically based, rules-based system in which 

certain criteria are asked, looking at the cargo manifest, where it 

is coming from, the nature of the cargo, the shipper, the transporters that are involved, the manufacturer, and their record of integrity for shipments. All of these things plus a whole host of other 

matters are used to target particular shipments. 

This whole program is designed to go after weapons of mass destruction, terrorist activities. Obviously, when you go after that, 

you find a whole host of things in suspicious cargo, including narcotics. But the CSI program is designed to go after the security 

matters that impact our Nation, and that is the focus of that. And 

the basis of the targeting would be that rules-based system that 

will identify those anomalies and give suspicion that creates a high 

risk of the cargo, and then it would be searched electronically, xrayed, as well as manually if necessary. 

Senator LAUTENBERG. We must have a continuing research program for improving containers security. I know that, for instance, 

we are doing a lot of work on explosive-resistant cargo containers 

for aircraft. And when one looks at this housekeeping that Mr. 

Rizk set up there, you wonder how he could endure under any circumstances. But I think that technology can be a lot of help there, 

simple things such as motion detection and what have you, or air 

purifying or de-purifying, whatever the term is. But you have an 

enormous task. 

The screening detection devices, are they being used at ports that 

ship to us, non-U.S. ports, obviously? Is that kind of equipment 

being used in those places? 

Mr. HUTCHINSON. Yes, indeed. In fact, the good thing about the 

ports that sign up for the Container Security Initiative is that they 

are required to do the inspections as necessary for the at-risk cargo 

at the foreign port. And so as our Customs and Border Protection 

inspectors are overseas at the Port of Rotterdam, working with the 

Dutch inspectors, they will identify suspicious cargo. Then it will 

go through x-ray, gamma ray machines, depending on what the 

level of concern is, and manually inspected if necessary. And the 

cost of that is borne by the foreign port, the inspection and of the 

equipment. 

If information comes to us after it leaves the foreign port, then 

that triggers further examination, exploration of the suspicious 

cargo, and confronting it off our shores. And so, again, we have the 

layered approach that puts the protection further out and gives us 

more time to work with the at-risk cargo to determine its nature. 

10

Senator LAUTENBERG. I assume that there are ports where the 

risks are much higher for smugglers, terrorists, etc. Are we able to 

cover those ports as efficiently as we would like? In many of those 

countries, their laws are not scrupulously observed. What do we do 

to protect ourselves against those higher-risk shipping points? 

Mr. HUTCHINSON. Well, there are ports out there that do not 

have the sophistication of detection equipment. They do not have 

the investment that is made. They do not have the background 

checks for the port workers. These are ports that are a much higher risk. 

What we have to do is to make sure that we give them incentives 

if they want to bring goods into the United States and export goods 

here; then they are going to have to upgrade their systems. And 

if we do not get the cargo information in advance, they will increase the level of risk, the level of inspections, and the delays as 

they bring goods on. And so as time goes on, we hope that there 

will be greater international standards at these ports, and the 

international community will put pressure on these ports that are 

not up to the international standards that we expect. 

Senator LAUTENBERG. Thank you very much, Madam Chairman. 

I appreciate it. 

[The prepared statement of Senator Lautenberg follows:]

PREPARED STATEMENT OF SENATOR FRANK R. LAUTENBERG 

More than six million cargo containers enter U.S. ports each year. A large container ship can carry more than 3,000 of these cargo containers, hundreds of which 

may be off-loaded at individual ports. Once off-loaded from ships, the containers are 

transferred to rail cars, tractor-trailers, or barges for inland transportation. 

Container ships are a growing segment of maritime commerce and the focus of 

much attention because they are particularly susceptible to terrorist infiltration. For 

years, drug traffickers and unscrupulous companies seeking to evade tariffs have exploited lax cargo container security at our ports to smuggle their goods into the 

United States. Terrorist organizations could easily partner with these smugglers to 

move explosives, dangerous chemicals, biological agents, nuclear or radiological devices, or the benign precursors for any of these materials into the country undetected. 

The newly-created Bureau of Customs and Border Protection (BCBP) analyzes 

cargo manifest information for each container to determine which ones need closer 

inspection. At present, only two percent of all cargo containers are subject to ‘‘target 

inspection.’’

Shortly after the horrific events of September 11, 2001, Stephen Flynn painted 

a vivid and chilling picture in testimony before this Committee about how a weapon 

of mass destruction (WMD) could be smuggled into Port Newark and the extent of 

the devastation and havoc it could wreak if detonated there. 

The New York/New Jersey Port is one of the top five domestic ports in terms of 

commercial and military significance. It is the 10th largest port in the world in 

terms of cargo tonnage and 14th with regard to the numbers of containers shipped. 

The Port’s role is essential to our nation’s commerce—in 2001, it handled $82 billion 

worth of cargo, or 58 percent of the market share of all the ports along the U.S. 

Atlantic Coast. It is the largest in the U.S. in both petroleum and automobile shipments and it supports 229,000 jobs. 

The Port Authority is a marvel of intermodal transportation infrastructure, facilitating the efficient movement of passengers and freight in a manner not duplicated 

anywhere in the world. But the high concentration of goods and people in such a 

limited area also poses unique security risks. As Mr. Flynn pointed out, within one 

mile of the container terminal at Port Newark are the Northeast Rail Corridor, the 

New Jersey Turnpike, and Newark International Airport. If all of these major components of our nation’s transportation system were simultaneously crippled by a 

WMD smuggled into the Port and detonated, the effects on our country’s travel and 

commerce would be disastrous. 

11

The January 2001 report of the U.S. Commission on National Security in the 21st 

(the so-called ‘‘Hart-Rudman Commission’’) described the worst-case scenario of a 

terrorist attack using a cargo container:

If an explosive device were loaded in a container and set off in a port, 

it would almost automatically raise concern about the integrity of the 

21,000 containers that arrive in U.S. ports each day and the many thousands more that arrive by truck and rail across U.S. land borders. A threeto-four week closure of U.S. ports would bring the global container industry 

to its knees. Megaports such as Rotterdam and Singapore would have to 

close their gates to prevent boxes from piling up on their limited pier space. 

Trucks, trains, and barges would be stranded outside the terminals with no 

way to unload their boxes. Boxes bound for the Untied States would have 

to be unloaded from their outbound ships. Service contracts would need to 

be renegotiated. As this system became gridlocked, so would much of global 

commerce.

It is evident, therefore, that the security of cargo containers is crucial not only 

to the employees and nearby residents of the Port of New York/New Jersey, or any 

other port facility in the U.S., for that matter. Since it is not possible to inspect 

every one of the six million containers which are handled at our ports every year, 

we need to be sure that our security efforts are effectively coordinated and thorough. 

As a former Port Authority Commissioner, I understand the scope of the challenge 

which exists when it comes to inspecting cargo containers. Considering what is at 

stake and the resources available, I believe it is imperative that Federal agencies 

take leadership roles in coordinating security activities—including container security—at our ports. 

Thank you, Madam Chairman.

Chairman COLLINS. Thank you. Senator Coleman. 

Senator COLEMAN. Thank you, Chairman Collins. 

I must admit, Mr. Secretary, I am rather daunted, a little overwhelmed by the enormity of the responsibility you have and the 

difficulty in fully addressing it. And I applaud—you know, I understand we have the use of technology. These are not kind of random 

searches. You are kind of looking ahead. But I must say that my 

State, like the Chairman’s State, is a border State. There are vast 

expanses of my State where, by car or by boat, you could get across 

and nobody would know, and that is a reality. And so I am troubled, and I know that the Chairman faces that same reality. 

Saying that, two observations, two questions, and a little eclectic. 

One is on the labor side, and that is, it appears to me that your 

tasks and the functions of what folks were doing pre-September 11 

are probably very different today, that your focus: Before it was national, now we are looking at international, placing people in other 

areas. Do you have the flexibility in terms of labor rules and everything else to move people quickly, to have them take advantage of 

new technologies, to shift work assignments? Are there any issues 

there of which we should be aware? 

Mr. HUTCHINSON. Congress gave a substantial amount of flexibility in the Homeland Security Act, and so in moving people for 

national security reasons, we have that capability. In the implementation of technology, we have that flexibility. 

What we do, which is the correct obligation for us, when it comes 

to new technology or new assignments, we have a responsibility to 

engage in substantial training, and those issues, if there is union 

representation, we discuss those with them and we make sure that 

those agreements are fulfilled. 

But we are pleased with the flexibility that we have. We are reviewing all of our personnel rules between now and the end of November when a report is due to Congress, and so we will be able 

12

to answer that more specifically as to what reforms we are making, 

adjustments we are making, and any additional needs that might 

be there. 

Senator COLEMAN. Because I think this is an important issue, 

and we need to know very quickly. These are challenging times, 

and having flexibility in the interest of national security is, I think, 

of the utmost importance. 

The other area of concern is U.S. companies located abroad. I 

presume we—and I am looking to the private side, perhaps advice 

you could give them. They probably get a lot of packages of things 

from foreign contractors shipping to them in containers. Are we 

working with the private sector in terms of their own kind of 

standard of care or standard of sensitivity? Are we training our 

folks? It may get past your folks, but are there things that folks 

on the private side can do if they were better educated? 

Mr. HUTCHINSON. Absolutely. And they are a critical part of the 

partnership. We can target and we can inspect, but unless there is 

integrity in the supply chain and that the manufacturers, the shippers, take responsibility for their own containers and the integrity 

of the shipments with proper seals, then all that we do really 

would have a minimal impact. It has to be complemented by the 

integrity of the supply chain. 

So what we are doing in that arena? Two thousand businesses 

have signed up in partnership with Customs and Border Protection 

in the arena of improving the supply chain, providing the protections, implementing best practices, and doing self-assessments of 

their own security. 

In addition, through the Transportation Security Administration, 

they have Operation Safe Commerce, which is a partnership with 

private business. Congress gave $105 million in grants for port security, with $28 million in grants for private industry to do assessments, to implement good practices in reference to those supply 

chains. So it is a recognition that we just can’t get it done without 

their partnership, and they have really stepped up to the plate as 

well. 

Senator COLEMAN. I would hope they would be working with 

folks like the chambers of commerce and the National Association 

of Manufacturers and the trade groups and others to really involve 

them in this, because your point was—in my very brief preliminary 

comments, we are only as strong as the weakest link of the chain. 

And they are clearly part of the chain, and I would hope that we 

fully engage them. 

Thank you, Chairman. 

Chairman COLLINS. Thank you very much. Senator Pryor. 

OPENING STATEMENT OF SENATOR PRYOR 

Senator PRYOR. Thank you, Madam Chairman. Always good to 

see you, Asa, and I am glad you are before this Committee today. 

Let me start by just saying that I know that this is a new program. There is always some trial and error in any new program. 

How is it working? 

Mr. HUTCHINSON. It is working well, and I say that with reservation because, as Senator Coleman pointed out, it takes a vast 

amount of cooperation in the private sector to make this work. But 

13

I am fully convinced that it is the right strategy, and I think that 

is the first test. The right strategy is to build with our private partnership, the private sector, and to expand these inspections overseas to get more information in advance. 

There is much more that needs to be done. As Senator Collins 

said, we have got to bring on some of the other ports that are of 

a greater concern. But it is the right strategy, I am convinced of 

that. There are instances in which we have detected suspicious 

cargo; we have stopped it coming into the United States. And I 

think it is a strategy that will have proven results in the future 

as well. 

Senator PRYOR. It sounds like you have identified some areas 

that we need to work on, some areas where we need to improve. 

Could you tell the Committee about a few of those please? 

Mr. HUTCHINSON. Thank you, Senator Pryor. The areas that we 

have to work on are the supply chain and the integrity of the containers themselves. We have a working relationship with Johns 

Hopkins Applied Research Center that is doing examination of containers and how private industry can better protect in a cost-effective manner the integrity of the shipments. We have to work on the 

port workers in the sense of improving our background checks 

there. TSA is working on a transportation worker identification 

card program where there would be one background check done. 

They don’t have to have a whole host of cards and security clearances, but one that would work in whatever transportation sector 

they would be in. This is in the initial phases, and we have to move 

that forward. 

The other challenge, if I might just elaborate on one more? 

Senator PRYOR. Sure, go ahead. 

Mr. HUTCHINSON. This 24-hour rule for cargo applies to the exports coming into our country, the air and sea shipments. But we 

have not moved it to all modes of transportation, and so in Arkansas, for example, the trucking industry is a huge issue. They are 

very concerned about this, as well as the rail industry, so we have 

to have advanced manifest notice as well. But 24 hours doesn’t 

work when it is on-time delivery, and so we are having to work 

with them. We are hearing comments of industry as to what kind 

of advance manifest information is workable in those other modes 

of transportation. 

Senator PRYOR. Good. Well, as you identify those areas—and it 

sounds like you have a few already on your plate. But let us know 

as a Committee how we can help make our ports more secure. I 

know sometimes it boils down to money. Sometimes you may need 

more authority in one way or another. Or sometimes you just may 

need more time to allow things to work themselves out. 

I think I can speak for our Chairman here that we all want to 

make our ports as secure as possible, and we want to give you the 

tools you need to do that. 

Mr. HUTCHINSON. Thank you, Senator Pryor. I look forward to 

working with you. 

Chairman COLLINS. Thank you, Senator Pryor. 

Just a couple more questions, Secretary Hutchinson. When Customs inspects containers, it often uses detection equipment rather 

than physically inspecting the container. 

14

First of all, I assume that it is not really practical to physically 

inspect 6 million containers coming into our country. Is that an accurate assumption? 

Mr. HUTCHINSON. That is an accurate assumption. 

Chairman COLLINS. A November 2002 General Accounting Office 

report found that the radiation detection pagers used by Customs 

had limited range and that they were unable to detect weaponsgrade radioactive material. 

Could you tell us what improvements you are making in getting 

the detection equipment up to par and able to detect threats such 

as that? And could you respond specifically to the GAO report? 

Mr. HUTCHINSON. What is important to remember is that the 

personal radiation detectors are not a cure-all to detect all harms 

coming into our country. It is just simply one tool that is used, and 

it has to be complemented by many other tools. 

We are working with the laboratories as additional information 

and improvements become available. We are listening to them in 

terms of our technology and having better training of our inspectors that use this equipment. 

Also, Senator, we are deploying—we are not just relying upon 

the personal radiation detectors, but we are deploying portable radiation detectors in the larger ports of entry and at our seaports. 

Thirty have been deployed now. I think there is another $60 million in that type of technology that is in future budgets. So we are 

moving the larger pieces, the more sophisticated radiation detectors 

out as soon as we can. 

Chairman COLLINS. ABC News did a test of the system in which 

they successfully shipped 15 pounds of depleted uranium inside a 

lead-shielded tube the size of a can of soda, and it was packed in 

a commercial shipping container among Turkish horse carts and 

vases. 

It is my understanding that shipment was targeted for inspection 

by Customs, but after an x-ray examination was allowed to continue, and that, again, raises concern about the sensitivity of the 

detection equipment. 

Could you respond to that case as well? 

Mr. HUTCHINSON. Well, first, I think it is a sign of success that 

it was targeted for inspection. It means that there is at-risk cargo 

that we correctly identified as cargo that should be inspected. 

Second, if it had been dangerous radioactive material, it would 

have been detected by the equipment that did the screening. But, 

in fact, obviously ABC News is not going to put radioactive material into a shipment, and so they put harmless material in it that 

had been deactivated. And so it was not sufficient to be picked up 

by the equipment. I think that point is conceded. 

If that material had been harmful, it would have been detected 

by our radiation equipment, and then it would have been subject 

to further examination. 

Chairman COLLINS. I want to follow up on a point that Senator 

Lautenberg made about using technology to help us track containers, because even if we do appropriate screening at the port of 

departure, we need a way to monitor the containers en route to 

make sure they are not tampered with. 

15

Could you give us some assessment of whether or not—where are 

we on the technology as far as using tamper-proof, self-tracking 

containers so that we could seal them at the port of departure and 

monitor them en route to American ports to ensure that they have 

not been tampered with or diverted? 

Mr. HUTCHINSON. Well, really, the technology is there. You can 

make a container tamper-proof, or at least where it is clear if it has 

been tampered with, there is evidence of that. And there is technology for the GPS transponders. So that you can track each container as it goes through the shipment process. They use this to a 

large extent in the trucking industry. 

I think the issues would be whether the technology is affordable 

and cost-effective by industry and whether you can put such a huge 

mandate on them that would be very difficult for them to meet. 

And so that is what we are working in partnership with industry 

to explore as to what is the right tamper-proof or secure container 

seal and then, second, whether there should be any additional type 

of tracking system for those containers. 

Chairman COLLINS. Thank you, Mr. Secretary. Senator Coleman. 

Senator COLEMAN. Chairman Collins, just two questions, and actually following up on the last comment about the additional technology and other things. 

The airline industry has come to us and talked about the increased costs of security and has raised the question as to who 

shoulders that responsibility. What are we facing in terms of dealing with the private sector on us saying there are improved forms 

of technology and equipment, but obviously there are cost impacts? 

Are they coming to us, coming to the government and saying you 

have got to pay for that or share that burden? 

Mr. HUTCHINSON. Yes. They are coming to us, and they are coming to you. But that issue is there, and it is a shared cost. The responsibility for homeland security is a national one that is shared 

by every level of government and the private sector. So we have to 

negotiate and work through those balances. It is not our objective 

to put such stringent mandates on the airline industry that they 

can’t operate. That doesn’t accomplish what we want, and I know 

that is your objective. 

But one of the illustrations would be in the airports. We have the 

baggage screening devices and the equipment present, but they are 

in a very inefficient and cumbersome place that was really not designed to have those huge equipment processes there. And they 

need to move those, and there are going to be millions and millions 

of dollars in expense to accomplish that. The airports are concerned 

about them having to take that burden on. The airlines, of course 

whenever you are looking at the concern about MANPAOS, landto-air missiles that could attack our commercial aircraft, and there 

are sensors that could be put on aircraft, but it is so hugely expensive, nobody could afford to buy a ticket. 

And so we have to balance this and what is needed for the appropriate level of security. 

Senator COLEMAN. In a similar light, again, talking about the 

money, we are certainly going to our trading partners and talking 

about things that they have to do. They are an important part of 

this process. In those discussions, are folks coming back to us, 

16

again, in terms of additional support? Talk to me a little bit about 

that. 

Mr. HUTCHINSON. Our international partners? 

Senator COLEMAN. International partners. 

Mr. HUTCHINSON. Tremendous response. If you look at it, the European ports signed up very quickly on it. They did it partly for the 

United States and our ability, but also they saw it as a means to 

improve the security of their own ports and also to stay competitive, to make sure that the cargo coming from that particular port 

didn’t get held up. So it is to everybody’s advantage to cooperate 

in this program. The international partners have been very supportive. 

The only concerns that have been expressed, the European Union 

expressed some concern that we were negotiating with the individual ports rather than the European Union as a whole. We are 

sorting through that. And then there have been some privacy concerns expressed, but these issues are being addressed in a very cooperative fashion. 

Senator COLEMAN. One last question, Chairman Collins. 

We are talking a lot about focusing on stuff coming from outside 

in. I presume that we have to be looking at what we are shipping 

out to our partners, are they coming back to us? Are they talking 

about our standards? And what are we doing in terms of addressing their concerns about the stuff that we are shipping? Is this a 

two-way street? 

Mr. HUTCHINSON. It is. Probably our concern maybe is a little bit 

greater than their concern. But there have been a number of instances in which they ask for reciprocal treatment. Japan is a good 

example. When their ports signed up, they wanted to have not just 

our Customs inspectors located in their ports, but they wanted to 

have inspectors in our ports looking at our outbound shipments. 

We agreed to that readily, and so we do treat this as a reciprocal 

relationship. And they have an interest in that. 

Canada is a perfect example. We have our inspectors located in 

Montreal and Vancouver. They have their inspectors located in 

Newark and in Miami. And so it is a very productive relationship, 

and I think that will increase. 

Senator COLEMAN. Great. Thank you, Mr. Secretary. Thank you, 

Chairman Collins. 

Chairman COLLINS. Thank you. Senator Akaka. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you very much, Madam Chairman. I want 

to add my welcome to Secretary Hutchinson. 

Mr. HUTCHINSON. Thank you. 

Senator AKAKA. Good to see you again, and good to see you on 

the Hill. 

I also want to say personally thanks for the work you did before 

you entered this office. 

Mr. HUTCHINSON. That is very kind of you. 

Senator AKAKA. Madam Chairman, I would like to make a statement if there is time. It will be your call. I will have some questions. 

Chairman COLLINS. Certainly. 

17

Senator AKAKA. I regret that I was not present for your opening 

statement. However, I would like to take this opportunity to say, 

Madam Chairman, that I commend you for holding this hearing. 

The citizens of Hawaii and our State’s economy are heavily dependent on imported goods. This vulnerability was demonstrated 

during the days following September 11 when the delivery of essential medicine and mail was halted because all airlines and their 

cargo were grounded. That was a serious problem, 98 percent of the 

goods imported into Hawaii are transported by sea. 

As you can see, shipping container security is critical to Hawaii. 

Honolulu Harbor receives more than 1 million tons of food and 

farm products and over 2 million tons of manufactured goods per 

year. In 2002, Honolulu received 1,300 overseas ships and about 

300,000 containers. In 2002, over 8 million tons of cargo arrived at 

Honolulu Harbor alone. The State’s heavy reliance on shipping 

products makes it uniquely vulnerable to disruptions in the normal 

flow of commerce. This reliance underscores Hawaii’s need for better surveillance and detection equipment. 

Earlier this week, the Coast Guard raised the threat level at 

Honolulu Harbor in response to the war in Iraq. A number of proposals will be discussed this morning to improve shipping container 

security. However, I feel that more needs to be done. 

According to the American Association of Port Authorities, U.S. 

ports received only 10 percent of the funding needed to improve 

port security and enhance shipping container security. Also, more 

Federal dollars are needed for research and development of bomb 

detection equipment to assist the Coast Guard and local law enforcement to detect dangerous material and to prevent a potential 

crisis before it occurs. 

Madam Chairman, I want to thank you again for holding this 

hearing. I will be with you and doing all we can as we consider 

these proposals toward improving shipping container security and 

personally address Hawaii’s unique challenges as well. Thank you, 

Madam Chairman. 

Chairman COLLINS. Thank you very much, Senator. Senator Fitzgerald. 

OPENING STATEMENT OF SENATOR FITZGERALD 

Senator FITZGERALD. Thank you very much, Madam Chairman, 

and thank you Secretary Hutchinson for being here. I would like 

to thank the Chairman for holding this hearing on the important 

issue of cargo container security. I also would like to welcome Secretary Hutchinson and the other witnesses who will be here today. 

The scope of this issue cannot be understated. Approximately 90 

percent of the world’s cargo moves by container. Each year, over 48 

million full cargo containers move between seaports throughout the 

world and more than 16 million containers arrive in the United 

States by ship, truck, or rail. 

Last year, I raised the issue of air cargo security on a number 

of occasions during Senate consideration of this issue. While the 

Federal Government has taken some steps, I believe that much 

more can be done to secure cargo in all modes of transportation. 

The U.S. Customs Service reports that trade volume moving 

through the 102 seaports of the United States has nearly doubled 

18

since 1995. In 2001, U.S. Customs processed more than 214,000 

vessels and 5.7 million sea containers. 

In addition to considering the sheer number of containers, it is 

also important to consider the flow of trade as it impacts our economy. More than $1.2 trillion in imported goods passed through our 

country’s ports of entry in 2001. Almost half of the incoming U.S. 

trade by value arrives by ship. 

The issue of cargo container security is of special importance to 

my home State of Illinois. Chicago is one of the Nation’s major 

transportation hubs where Federal highways, major railroads, and 

trans-ocean shipments intersect. The Port of Chicago is a vital link 

for shipments from the Atlantic Ocean which traverse through the 

St. Lawrence Seaway and continue on by truck throughout the region or by barge down the Illinois and Mississippi Rivers to the 

Gulf of Mexico. 

If a terrorist were to smuggle a weapon of mass destruction into 

any one of our Nation’s ports in a cargo container, the effects would 

be devastating to area residents, our infrastructure, and our economy. In fact, on March 10, the Chicago Tribune reported on a war 

game conducted by government and industry officials which involved the explosion of a so-called ‘‘dirty bomb’’ in downtown Chicago. In the war game scenario, the bomb was hidden in a shipping 

container which entered through an East Coast port. 

After the terrorist attacks of September 11, it quickly became apparent that the Federal Government needed to do more to ensure 

the safety of cargo containers entering our country. I commend the 

administration for launching the Container Security Initiative, 

known as CSI, in January 2002. Under the CSI program, Customs 

officials are stationed in foreign ports and work with local inspectors to pre-screen containers before they arrive at U.S. ports. 

In addition, the National Strategy for Homeland Security, released by the White House in July 2002, also highlighted container 

security as a major initiative for improving border and transportation security. 

I understand that CSI agreements have been concluded with a 

number of foreign governments which have so-called mega-ports 

that process the vast majority of cargo containers. I look forward 

to hearing from the witnesses about the current status and effectiveness of the CSI program and how these CSI agreements will 

help increase the security of cargo shipments bound for the Port of 

Chicago and other ports throughout the United States. 

I also look forward to hearing how the three primary Federal 

agencies that are responsible for protecting our seaports and shorelines from weapons of mass destruction—the Coast Guard, Customs Service (now part of the Bureau of Customs and Border Protection), and the Transportation Security Administration—are coordinating within the new Department of Homeland Security. 

Thank you, Chairman Collins. 

Chairman COLLINS. Thank you very much. 

Senator Akaka, it is my understanding you do have a few questions for Secretary Hutchinson. 

Senator AKAKA. Yes, thank you very much, Madam Chairman. 

Mr. Secretary, as I noted in my statement, the citizens of Hawaii 

are heavily dependent on shipped goods. The State of Hawaii reVerDate 0ct 09 2002 10:04 Jun 25, 2003 Jkt 086994 PO 00000 Frm 00022 Fmt 6633 Sfmt 6601 C:\DOCS\86994.TXT SAFFAIRS PsN: PHOGAN
19

quested $3.24 million in TSA grant funding for port security and 

has currently received $775,000. This amount represents less than 

one-quarter of the funding Hawaii indicates it needs to meet security mandates identified in a Coast Guard vulnerability assessment. 

How can we ensure that a State such as Hawaii receives the 

funding needed to meet its unique port security needs? 

Mr. HUTCHINSON. Thank you, Senator, and Hawaii probably 

more than anyone is dependent upon the reliability of the ports 

and the security of the ports. And in reference to the potential 

grant funds, there will be another round of port security grant 

funds that are available through the Transportation Security Administration. There was $105 million available for vulnerability assessments and infrastructure improvements. And so I am sure that 

your leadership in Hawaii will be applying and probably have already applied for those funds. And I am sure that they will receive 

a high priority, as they should. 

Senator AKAKA. As I mentioned, Hawaii is unique. Port security 

is critical, and exclusively Hawaii almost exclusively relies on shipping for life-essential goods. However, unlike many U.S. mainland 

ports, Hawaii cannot rely on alternative transportation such as rail 

or trucking. 

What is your plan to respond to a terrorist attack where there 

are limited means of alternate transportation in such a place as 

Hawaii? 

Mr. HUTCHINSON. We have to recognize the uniqueness of Hawaii, and the plan should not be the same plan that works for New 

York or Washington State. And that is the reason that your State 

has developed their own homeland security plan in order to make 

sure there is adequate cooperation among the agencies and a proper response is coordinated. 

It is based upon that plan that is individualized for Hawaii that 

we are able to put forth the funding, whether it is ports but even 

more significantly to the equipment and the first responder money. 

And so we are working through our agencies there, from the Coast 

Guard to Customs and Border Protection, to Immigration and other 

agencies, working with your State officials to make sure the plans 

are technically right and provide the support that is needed. But, 

clearly, it is a different circumstance in Hawaii. We recognize that, 

and we applaud the efforts of your State officials to develop a plan 

that is suitable for your State and the needs there. 

Senator AKAKA. I really appreciate your response. Thank you 

very much. 

Chairman COLLINS. Thank you very much. 

Senator Fitzgerald, we have held Secretary Hutchinson here for 

quite a while, but do you have some questions you would like to 

ask? 

Senator FITZGERALD. Real quickly. Thank you very much. 

Mr. Hutchinson, the Customs Service launched the CSI program 

last year. What impact, if any, has the reorganization of the Customs Service within the Department of Homeland Security had on 

the progress of implementing the CSI program? 

Mr. HUTCHINSON. It has had a neutral effect in terms of any adjustments. The reorganization that we have accomplished focuses 

20

all the border agencies, from Border Patrol to all the inspection 

services combined into Customs and Border Protection. And so 

there is a clear chain of command and clear mission for that particular bureau of Customs and Border Protection. And so there is 

no negative impact. The message is we want to make sure this has 

the highest priority and the implementation is completed. 

I actually think that there is a positive impact because the mission is clearly defined. For example, the enforcement side of the investigative agencies is separated out. And so Commissioner Bonner 

can focus extraordinary energies on this in the implementation of 

it, and I think it is going to march forward with really increased 

energy. 

Senator FITZGERALD. Well, thank you very much, and in light of 

the time you have spent before this Committee already, I would 

yield back to the Chairman. Thank you very much for being here 

today. 

Mr. HUTCHINSON. Thank you, Senator. 

Chairman COLLINS. Thank you very much. I would now like to 

welcome our second panel of witnesses. 

Peter Hall is the U.S. Attorney for Vermont. Mr. Hall co-chaired 

a law enforcement coordinating committee of State, local, Federal, 

and Canadian law enforcement officials that conducted the first 

real-world test of smart container tracking and intrusion detection 

technologies. 

Dr. Stephen Flynn is a senior fellow for national security studies 

at the Council on Foreign Relations. He is a retired U.S. Coast 

Guard commander and an expert in homeland security and border 

control. He also has served as director of the Independent Task 

Force on Homeland Security Imperatives, co-chaired by former Senators Gary Hart and Warren Rudman, which produced the report 

‘‘America: Still Unprepared—Still in Danger.’’

Captain Jeffrey Monroe is the director of Ports and Transportation for the City of Portland, Maine. He supervises the operations 

at Portland’s marine facilities, the Portland International Jet Port, 

and coordinates the city’s surface transportation programs. Previously he served as deputy port director for the Massachusetts 

Port Authority, executive director of Governor Weld’s Commission 

on Commonwealth Port Development, as a professor at the Massachusetts Maritime Academy, and as a master in the U.S. Merchant 

Marine. 

Dr. Michael O’Hanlon is a senior fellow in foreign policy studies 

at the Brookings Institution. From 1989 to 1994, he worked in the 

National Security Division of the Congressional Budget Office. He 

recently co-authored a book entitled ‘‘Protecting the American 

Homeland: A Preliminary Analysis.’’

I want to welcome all of you today. I look forward to hearing 

your statements. I would ask that you limit your testimony to 10 

minutes each so that we have ample time for questions and answers. And your full written statements will be entered into the 

record. Mr. Hall, we will begin with you and welcome. 

21

1The prepared statement of Mr. Hall appears in the Appendix on page 59. 

TESTIMONY OF HON. PETER W. HALL,1 U.S. ATTORNEY, 

DISTRICT OF VERMONT 

Mr. HALL. Thank you, Chairman Collins, distinguished Members 

of the Committee. It is a privilege and an honor to be asked to testify before this Committee concerning cargo container security and 

an interagency, intermodal, and international initiative for cargo 

container security called Operation Safe Commerce-Northeast. 

As brief background—and I won’t go through my entire statement because I know it is on file with this Committee—since the 

early 1980’s and the advent of the Law Enforcement Coordinating 

Committees, sponsored by DOJ and the U.S. Attorney’s Offices, 

there has been an expansive, cross-border effort in the Northeastern United States and Eastern Canada, and really this includes the States of Maine, New Hampshire, and Vermont, and 

northern New York and western New York as integral partners in 

this on our side of the border; Ontario and Quebec and New Brunswick on the northern side of the border. 

We came together regularly to share working intelligence information at all levels of law enforcement—local, State, provincial, 

and Federal—and to discuss and address issues of common concern. 

It was against this backdrop and out of this culture of cooperation, which really has been going on for two decades, at least, that 

Operation Safe Commerce, the first one to take that moniker, was 

born in August 2001, a month before the events of September 11, 

2001. The group was aware historically from our work together 

that drug shipments came into the Port of Montreal. For many of 

us, that is our port, and, Senator Fitzgerald, I would just add as 

an aside that in many respects it is your port as well for Illinois 

because much of the cargo container traffic that comes into your 

area comes into North America through the Port of Montreal and 

the Port of Halifax, as you already know. 

Operation Safe Commerce-Northeast first manifested itself as a 

loose-knit working group that evolved from a cross-border intelligence-sharing group comprised of law enforcement representatives principally from northern New England, northern New York, 

Quebec, and eastern Ontario. The original aim was to guard the 

cargo container supply chains against the insertion of materials not 

listed on the container manifest—that is, smuggling—and the extraction of materials from the container manifest as it was in transit. 

The purpose of OSC-Northeast was to begin identifying where injection and removal points for a cargo container occurred in a simple cargo container supply chain and to begin testing some possible 

technologies to detect intrusions and to track the container for 

anomalies. Coming together to start the process of addressing the 

potential devastating impact on world commerce, which had been 

described to us at our first meeting by then-Commander Flynn, 

who is now here, of course, on this panel to testify before you, were 

representatives from the Northeastern United States of the following agencies, and many of them have been moved into the Department of Homeland Security, but, principally, the U.S. Customs 

22

Service, the U.S. Coast Guard, U.S. Immigration and Naturalization, U.S. Attorney’s Office, and U.S. Marshals Service. 

Important to this and really key to our public-private partnership and the philosophy underlying the operation that we undertook were the State economic communities, and at this point, particularly those of New Hampshire, and through their State economic development office, members of the private sector. And we 

would certainly like to note the participation here of Osram-Sylvania, who really, out of a sense of patriotism and nothing more, 

volunteered their supply chain to be analyzed in what, of course, 

is a relatively simple milk run, an easy supply chain, since it starts 

with them, originates with them, and ends up with them. 

The U.S. Attorneys for the Districts of New Hampshire—that is, 

my colleague, Thomas Colantuono—and Vermont, together we appointed a joint Law Enforcement Coordinating Committee Subcommittee, and I think uniquely here we had it tri-chaired by each 

of us, and by the then-Governor of New Hampshire. I will note that 

the current Governor of New Hampshire has agreed to follow up 

and sit as a tri-chair of our LECC working group and our committee. 

Operation Safe Commerce, as conceived a year ago, had a single 

mission, and this was one evolved by the working group, and I 

would just like to read it for you: 

‘‘Operation Safe Commerce represents a comprehensive coalition 

of Federal agencies, State governments, and private sector businesses committed to the concept of enhancing border and international transportation security without impeding free trade and 

international commerce. Operation Safe Commerce gathers and 

provides information and assists in collaborative efforts to develop 

new models for international freight monitoring and transportation 

that maintains open borders and facilitates commerce while improving security.’’

As a working group, we reminded ourselves on a regular basis 

that we had come together in substance ‘‘on a spit and a handshake.’’ We were there because we wanted to work together, and 

we knew the importance of this project. Agency egos were ‘‘checked 

at the door,’’ and that grew out of the culture that we already had 

in place, thankfully, up in our neck of the woods, Madam Chairman. 

The group came together by telephone conference and face-to-face 

meeting, first, to assist the Volpe Transportation Center, which 

provided the work and analysis and really ran—they were the 

working partner that ran the project for us—in refining the parameters of the proposed demonstration project; and, second, we came 

together to push the project along and oversee it as it was undertaken; and, finally, we with Volpe reviewed and analyzed their reports, and we assisted in the preparation of the final report, which 

I understand has been released by Volpe for restricted distribution 

and is available to this Committee, Madam Chairman. 

Throughout the process, our aim was to look at a prototype and 

to support and guide a process that would begin gathering data 

which could then be used to promulgate regulations and to set new 

standards for secure international transportation of cargo containers. Phase One was accomplished in two parts, both of them inVerDate 0ct 09 2002 10:04 Jun 25, 2003 Jkt 086994 PO 00000 Frm 00026 Fmt 6633 Sfmt 6601 C:\DOCS\86994.TXT SAFFAIRS PsN: PHOGAN
23

volving cargo containers, as I said earlier, used to ship automobile 

light bulbs from the Osram-Sylvania plant in Nove Zamke, Slovakia, and they went via the Port of Hamburg, Germany, to the 

Port of Montreal in Canada, across the U.S.-Canadian border at 

Highgate Springs, Vermont, and ended up at their final destination 

point at the Osram-Sylvania plant in Hillsboro, New Hampshire. 

The first phase of the report or the first phase of the work was 

the Volpe team studying an actual supply chain, seeking to understand and report the way in which the cargo container that they 

studied was handled and the various potential problems for intrusion that could occur along the route. Second, Volpe put instrumentation and monitoring devices on another container to determine 

whether it could be tracked and monitored effectively with commercially available technology. The technology used is described in 

much more detail in their report, but, briefly, it involved global positioning satellite technology, tracking and multi-node downloads, 

with transmission of data from those nodes to a central point at 

Volpe headquarters; so important to understand is that it was not 

real-time data. We were not tracking the cargo containers that 

moved from point to point. We were getting information after the 

cargo container had moved, letting us know where it had been. 

There were also installed a series of sensors which detected light 

changes inside the container and detected possible intrusions 

through magnetic sensors similar to those used in a home security 

system. There was also an electronic seal—this was independent of 

the sensing operation—which was on the exterior door of the container, and that could contain information about whether it had 

been opened a number of times, although it did not transmit that 

data. 

The intrusion data monitored by the interior sensors and the 

GPS tracking data were downloaded at nodes, as I said, and transmitted back. These nodes were at the departure point, at the port 

entryways in Hamburg, Germany, at the Port of Montreal, and at 

the port of entry at Highgate Springs, Vermont, and, finally, at the 

receiving point in Hillsboro, New Hampshire. 

By and large, the equipment worked well and provided information at each of the nodes that was subsequently transmitted to 

Volpe. So we knew at least with the technology that was being tested on this one run that it did work. There were some problems 

with gathering data transmitted from the entryways at the Port of 

Hamburg. There were two choices for entryways, and that is always going to be the case in many of the ports because they are 

easily accessed. 

The test runs informed our working group that there is a basis 

for continuing to explore both container tracking and container intrusion. Our group, however, always saw itself as a vehicle for providing this data that we gathered, or that was gathered under our 

direction, to regulatory bodies within the United States and, 

through them, to entities throughout the world, which could be 

used for setting standards to ensure greater safety from intrusion 

in the handling and transportation of cargo containers. Indeed, in 

proposed Phase Two, Operation Safe Commerce-Northeast is 

partnering with Lawrence Livermore National Laboratory to test 

additional intrusion detection devices within the container and 

24

1The prepared statement of Mr. Flynn appears in the Appendix on page 70. 

monitoring and detection equipment to be used in moving cargo 

containers at the ports. 

In this proposal, the ports of Halifax and Montreal, for reasons 

that I articulated earlier, are proposed sites. We recognize in our 

region that we have one large area that is in many ways interconnected economically and certainly through our cooperative law 

enforcement arrangements. And the Ports of Montreal and Halifax 

are integral to the transportation of international cargo into our 

area economies, and as I pointed out earlier, all the way into the 

heartland. 

Let me just note our conclusions here. The project Operation Safe 

Commerce initiatives are complementary to and intended to build 

upon the Container Security Initiative and C–TPAT programs that 

are now in place. Almost invariably, however, extending the analysis and effectuation of security for cargo containers from point of 

origin to point of destination will go beyond dealing with the participants who are enrolled in C–TPAT and CSI. Container handling 

standards and technology solutions must ultimately affect manufacturers, shippers, freight haulers, terminal operations, shipping 

lines, warehouse operators, and the like, as well as government 

regulatory agencies. 

We have expanded our approach to include definitely the U.S. 

Attorney’s Offices from Maine as well as northern New York, western New York, and Massachusetts. So we work as a loose-knit 

group. We stay in touch with each other on this important initiative in the container committee, and, Madam Chairman, that concludes my prepared remarks, and I look forward to answering 

questions when they are posed. 

Chairman COLLINS. Thank you, Mr. Hall. Mr. Flynn. 

TESTIMONY OF STEPHEN E. FLYNN, Ph.D.,1 SENIOR FELLOW 

FOR NATIONAL SECURITY STUDIES, COUNCIL ON FOREIGN 

RELATIONS 

Mr. FLYNN. Thank you. Good morning, Madam Chairman. Thank 

you so much for having me here today. I started my Coast Guard 

career on a cutter out of Portland, Maine. 

Chairman COLLINS. Good training. 

Mr. FLYNN. That is where I got my sea legs. And, Senator Coleman, I am delighted to appear before you as well, and also to share 

this witness panel with Peter Hall, who really is, I think, just the 

model of the kind of leadership that is ultimately going to get us 

where we want to go, taking this at a local level and really mobilizing this coalition and pulling people together who don’t normally 

talk to each other. That is the extraordinary story of Operation 

Safe Commerce, and its success is largely due to the extraordinary 

efforts of Peter Hall. 

I would like to submit my written testimony for the record and 

use the opportunity here orally to do three things: First, to reinforce the stakes that are involved with this cargo container security 

problem; second, give a framework of where we should be; and finally, to offer a brief assessment of where we are. 

25

The bottom line is anybody in the world right now who has $1,600 to $3,000 and 30 tons of material can order a box, have it 

delivered to their home or to their workplace. They can load it to 

the gills, close the doors, put a 50-cent lead seal on it, and it is off 

to the races. There is no requirement that there be any adult supervision at that loading point. There is no requirement that the 

container even be sealed. It is done as a normal commercial practice in order to ensure a handoff from one conveyor to another. But 

it is not formally required. There is no requirement that in any of 

the handling of the container by a truck or a train or a ship or anywhere in the terminal that anybody exercise any form of protocol 

of due diligence. Some companies do for commercial reasons, but 

there is no requirements that they do so. 

We built the intermodal transportation system for efficiently, reliability, and low-cost, and it has achieved these magnificently. It 

has been a major fare behind U.S. competitiveness. The ability to 

outsource the way companies do today, to maintain the razor-thin 

inventories, to go from design to production, to get products to the 

consumer in incredibly compressed production cycles has been built 

around a revolution in transportation that basically attributable in 

small part to this box. 

But the essence of the problem is, of course, that there was no 

security built into that revolution. And the opportunity, as you 

have laid out, Madam Chairman, of what we have seen from the 

crime sectors, something I have been following for the last decade, 

suggests that moving to a more nefarious purpose, a terrorist attack with weapons of mass destruction, is a high risk. 

The consequence of that is not just simply that we have a potential weapon of mass destruction going off in the United States with 

the loss of life and the destruction that could wreak. Another, probably even more daunting consequence is the reality that we are 

still struggling to come to grips within regards to terrorism, and 

that is, when we have these acts, as we saw with the airline attacks on September 11, as we saw with the anthrax mailings, as 

we saw also last fall with the Washington area sniper attacks, the 

assumption by the general public when these incidents take place 

is of generalized vulnerability, unless the government can prove 

otherwise. It creates an enormous challenge for re-establishing 

public confidence when you have these incidents in these critical 

sectors. 

So the core issue that we are wrestling with in terms of where 

we need to be is what would the President of the United States 

say, after we had a catastrophic event, to reassure the American 

public that the 20 million containers that washed across American 

shores or crossed American borders, last year, in a truck or a train 

or on a ship, in fact, don’t pose a similar risk. And it would have 

to be sufficiently credible that the public would say: That is OK, 

I am willing to let that trade keep running; I am not feeling that 

my neighborhood is at risk. 

If we had to shut down this system for just 3 weeks, the entire 

global container system would grind to its knees. What would happen is overseas ports would have to close the gates to all incoming 

trucks and trains because, otherwise, it would turn the port virtually into concrete. So all those chassis would be stuck outside the 

26

gate. All the ships that are loaded with U.S.-bound goods would 

have to be brought back to the piers and have things offloaded and 

reloaded. All the contracts built around time would have to be renegotiated. In 3 weeks, the entire system basically comes undone 

and 90 percent of the world’s freight stops moving. And that is the 

assembly lines of most of our major manufacturers, and that is the 

warehouses of most of our modern retailers. Those are the stakes 

that are involved here. 

Right now, it is hard for me to imagine if we have an incident 

involving the containers that we will not face the challenge of turning off the system and that we will have a huge challenge from a 

public confidence standpoint to restore public faith in a truck sector, rail sector, and a maritime sector that is so critical to our economy. 

Where do we need to be? We need to be, it seems to me, in a 

position where we can do two things: We have to have confidence 

that when something is loaded into this intermodal transportation 

system it is legitimate and authorized; and we have to have confidence that when it is on the move it has not been intercepted or 

compromised. Because if you can’t do those two things, there is no 

such thing as risk management. You cannot say because you are 

periodically dabbling in checking 2–5 percent of the containers, 

whether overseas or here, that 96 percent or more of the remaining 

boxes can just slide by when you have no basis to say that there 

was controls at the outset that you can have confidence in, or that 

when it was handed off from a truck, to a train, to a ship, and 

stood around at the various depots, that somebody couldn’t have 

caused mischief, especially within a high-terrorist threat environment. 

So where we must be is where we can accomplish those things 

by initiating some standards where if you want access to the global 

intermodal transportation system, there are some certain practices 

that you need to do, and those need to be audited periodically. It 

doesn’t necessarily have to be a public auditing, but somebody 

needs to be able to check to make us comfortable with that. 

The second part is we need to be able to track things as they 

move through the system, and we need to be able to have a sense 

of the integrity. But just the tracking is key for doing three things. 

If we have intelligence, which we hope we might have, given this 

20 million, needle-in-a-haystack problem, we would have to be able 

to act on that without disrupting the whole system. If we had a 

case where we had a CIA operative attached to the Al Qaeda network and they witnessed the loading of a weapon of mass destruction in a box, heading in a lorry down to Karachi, and that is the 

only piece of intelligence we had, and we can’t find the box, it is 

an incoming, we would have to shut down the whole system. That 

is unacceptable. You have to have a means to act on that intelligence when you have it. 

But the facts are we are not often going to get that intelligence. 

Most of it is going to be done from what is called in the regulatory 

world pattern recognition. What we know about capable terrorists 

and capable criminals is they try to blend in, just like the terrorists 

did on September 11. They try to blend in as normal market actors, 

27

but they almost never get it right because they are not normal 

market actors. 

And so if there is sufficient transparency through documentation 

and a clarity of control, you can pick out things that allows the targeting to be good targeting and, therefore, check things that pose 

a risk and have confidence that low risk is, in fact, low risk. 

But a final critical point of this exercise is the need for forensics. 

It goes back to public confidence. Let’s look at aviation safety. We 

put black boxes in planes for the purpose of being able to diagnose 

the problem if they fall out of the sky. If every time a plane fell 

out of the sky the President of the United States and the aviation 

industry shrugged and said, well, it doesn’t happen too often, only 

barnstormers would be flying in planes today. 

The reality is doing forensics to figure out how something happened in this industry would be an investigator’s nightmare, as I 

am sure Mr. Hall probably would attest. That means in the interim, all the conspiracy theories, concerns, and so forth would 

start to surface. So by building through the data trail, by building 

through the tracking and so forth the means to do the forensics, 

‘‘how did it happen,’’ if you could identify it was a truck exploiting 

front companies that sent it from Karachi, you wouldn’t have to 

close the border between Canada and the United States and cut 

the flow of GM parts. You would be able to localize what the disruption was. 

But where are we right now? We are in a situation where we 

have got three good building blocks in the programs we talked 

about this morning, but they all have limits. The Container Security Initiative is highly promising because it allows for the targeting at the loading point. But there are 16 U.S. Customs officers 

currently assigned overseas, as we pointed out, in six ports. This 

has not revolutionized, given the number of boxes, our ability to inspect. It has provided the means for coordination in the port, but 

the challenge still is: What is the targeting? How good is it? And 

is it built primarily around manifest information, which historically 

is the most unreliable data in the whole commercial trade system? 

We need to drill down on this targeting issue. 

I would say one thing that I would encourage the Committee to 

consider is asking the GAO or directing Customs to do a test. Randomly pull out 100 containers and see how many problems there 

are, and then using your targeting criteria, how many are you finding? If you are finding through the random process things you 

never would have targeted are still problems, then that would suggest that you need to continue to refine, as I know they are trying 

to do, their targeting data. But this whole credibility is built 

around the capacity to do good targeting, and we have to make 

sure that is the case. 

The C-TPAT has the very laudable goal of engaging the private 

sector, but there is no auditing of the system. Everybody who 

signed up, the 2,000-plus companies, knows that U.S. Customs 

does not have the manpower to come check the books. There is no 

requirement that they periodically adapt or review their self-help, 

self-enforcement mechanisms. You have got to give this thing some 

teeth if it is going to be credible, and Customs needs to have the 

28

1The prepared statement of Captain Monroe appears in the Appendix on page 76. 

resources put in place, the controls—it is trust but verify, as we did 

in the arms negotiation field. 

Finally, OSC, I think, has a great deal of promise because it 

helps us to be able to really go back to the full supply chain, brings 

in a lot of the stakeholders to be able to really get us to drill down 

to the vulnerability, but also test what is commercially viable in 

terms of processes and in terms of technology. But the end game 

must be not lots of tests. The end game must be to work towards 

having international standards that introduce security into the 

global container trade that underpins global commerce. This is a 

high-stakes issue to which we are dedicating very few resources. 

When we comparatively look at that, the Secretary of Defense 

testified before the House Appropriations Committee in February 

that he is spending $5 billion more each year on protecting U.S. 

bases, 20 percent of which he doesn’t need because he doesn’t have 

the force structure for them. So he said he is wasting $1 billion 

protecting U.S. bases, and the total budget we are talking about 

here for port security this year is $104 million. It seems like we 

have got our priorities a little out of whack. 

Thank you, Madam Chair. 

Chairman COLLINS. Thank you very much, Mr. Flynn. Captain 

Monroe. 

TESTIMONY OF CAPTAIN JEFFREY W. MONROE, M.M.,1 DIRECTOR, DEPARTMENT OF PORTS AND TRANSPORTATION, CITY 

OF PORTLAND, MAINE 

Captain MONROE. Good morning, Madam Chairman and distinguished Members of the Committee. I want to thank you for the 

opportunity to come before you today and, in particular, to thank 

you, Senator Collins, for all of the attention that you have paid to 

port security and to transportation security back home. 

In the 18 months since September 11, we have come a long way 

in securing our Nation’s transportation system, particularly in 

aviation. The Transportation Security Agency has successfully 

managed the hardening of our aviation facilities on an accelerated 

schedule. They have supervised the installation of scores of screening devices and the training of thousands of new employees, and 

we commend their efforts. But now as the TSA turns its attention 

to seaports, it faces an even more difficult task. Our ports remain 

critically vulnerable. While we have made great strides in the area 

of port security, particularly in managing our international cruise 

ship passenger trade, we must still find solutions to the most serious problems on the waterfront besides container security which include: The lack of coordination between agencies regulating seaport 

commerce; a lack of standardization of procedures between and 

within agencies; a continuing lack of intelligence information available to port managers; agreements on manner, amounts, and 

sources of funding; and, finally, a long-term solution for providing 

qualified and well-trained personnel for port security programs. 

I would like to preface my comments by saying that I am in complete agreement with those who have advocated pushing back the 

Nation’s borders when it comes to container security. We all underVerDate 0ct 09 2002 10:04 Jun 25, 2003 Jkt 086994 PO 00000 Frm 00032 Fmt 6633 Sfmt 6601 C:\DOCS\86994.TXT SAFFAIRS PsN: PHOGAN
29

stand that by the time something is found at the pier, it is already 

too late. We support the Container Security Initiative and the Customs Trade Partnership Against Terrorism. But these programs 

must be expanded quickly and immediately. 

Monitoring the supply chain and making brokers, freight forwarders, and carriers assume a new level of responsibility is critical. U.S. Customs must be the primary Federal agency that monitors the activities of carriers, brokers, and stevedoring companies 

that work in multiple ports. 

We fully support programs to harden our continental borders and 

propose the establishment of marine border crossings. Canada is 

our closest neighbor and, working together, our two nations must 

establish a set of procedures for cross-border commerce that allows 

that cargo to move quickly between our countries while establishing a joint continental boundary to protect our respective nations. I am encouraged by the exchange of Federal officers in some 

of our major ports where U.S.-bound cargo arriving in Canadian 

ports can be pre-screened and Canadian cargo arriving in U.S. 

ports is similarly handled. 

We also support tightening the loophole on the difference between an entry port and the point where the shipment reached 

U.S. territory. Cargo containers can no longer be allowed to continue their journey by highway or rail without declaration of their 

contents or being screened. Some of this cargo moves through the 

heart of our major population centers in bond before it is ever 

cleared or looked at by Customs. 

Cargo that is leaving the United States also needs to be checked 

as part of an international effort. We support the new 24-hour rule, 

but we note that it will be extremely difficult for agricultural, seafood, and other suppliers of perishable products to strictly comply 

due to the fact that often these products go from harvest to the 

dock through a just-in-time delivery system. The handling of agricultural and similar products must be managed in a different but 

equally secure means. 

While we applaud the efforts of Congress and Federal agencies 

as they promulgate new rules for security and safe operations, we 

find ourselves in the unique position of acting as mediators between various rulemaking bodies. This situation cannot continue. 

On my desk, I have a plethora of paper designed to help me secure 

the port. These rules cover everything from the height of fences to 

the height of lettering on badges. They are issued by agencies without regard or knowledge of what other agencies are regulating. I 

fully understand that we are in a transitional phase as we design 

and implement our new Department of Homeland Security, but one 

of our first priorities must be the coordination between these agencies. 

In addition, the application of rules and standards must be the 

same in every port. Washington must educate their regional and 

field personnel how new regulations are to be applied and how to 

account for port differences. Field personnel must understand that 

there is a balance between the flow of commerce and the security 

of our borders. If that balance cannot be achieved, then those who 

seek to harm this Nation have found their success. There must be 

regulatory consistency between our seaports. 

30

I believe that our Federal, State, and local government agencies 

need to work together under the direction of the Federal Government and that industry representatives must be included as equal 

partners in determining what will work best locally. 

There also needs to be a significant effort within the new Department of Homeland Security to assess measures and response. Port 

commerce is not just about ships and piers. It includes trucks, rail, 

aviation, and a host of other transportation infrastructure that 

must be included in determining what will work best. To that end, 

I propose that the Transportation Security Administration establish a Coordination of Seaport Threat Reduction Task Force which 

would include officials from the various rulemaking bodies such as 

Customs and the Coast Guard, but would also include a number of 

port operations personnel representing a broad spectrum of U.S. 

ports and members from the aviation, rail, and trucking industries. 

The task force would advise the Secretary of Homeland Security 

through the TSA regarding threats and actions focusing specifically 

on analysis of alternatives and solutions, review of plans, timelines 

for implementation, and standardization of methodologies. 

This mediation and coordination of Federal agencies must be 

done in Washington and not at the local level. Protocols and procedures must be uniform through the system. Local decisionmaking 

cannot be incompatible from one geographic location to another, 

and quality controls must be put in place and closely monitored. 

The task force should also assist with the periodic examination 

of the mission effectiveness of the agencies that impact ports under 

Homeland Security. They would also ensure that all types of 

ports—including seaports, airports, railports, and highway border 

crossings—are dealt with in the exact same manner. 

Many of our smaller municipally-owned ports cannot begin to 

comply with the new rules, regulations, and requirements that are 

being proposed or implemented by various agencies. Towns and cities throughout this country are in dire financial condition, and 

many ports are still paying the bills from September 11 that will 

not be reimbursed. Port security is a national issue. Local taxpayers are unable to shoulder this additional burden and should 

not be expected to. The ports in Maine alone are struggling to keep 

their business and can ill afford to lose the many jobs associated 

with maritime activities. 

Ultimately, we are concerned that new concepts that may come 

out of our desire to solidify our borders may put smaller ports at 

a disadvantage. Some agencies have suggested that the number of 

container ports should be consolidated and that small feeder ports 

should be eliminated so that screening resources can be concentrated in the mega-ports. The distribution of feeder ports has 

been an asset to regional and local economies. We should encourage 

the ‘‘Short Sea’’ Initiative of the Maritime Administration and optimize use of water transportation along our U.S. coastline, keeping 

containers out of population centers and off our highways and rails 

until absolutely necessary. Only 70 percent of container traffic is 

concentrated in just a few ports in this country. That, in itself, 

makes mega-ports potential targets. I believe that smaller feeder 

ports have a better opportunity to identify a shipment that is potentially threatening. The Marine Transportation System should 

31

deliver cargo to geographic areas by water, reducing highway congestion as well as enhancing safety and security. Every port that 

currently handles containers should be equipped with the proper 

screening equipment and trained personnel to meet new security 

requirements. 

We must also develop a new generation of qualified professionals 

who can maintain those efforts far into the future. All of our Federal agencies are working hard to meet their newly expanded security missions. Personnel resources are getting scarce. I believe that 

we should support the inclusion of new educational programs at 

our maritime academies to prepare young men and women to take 

up the responsibilities in our ports and Federal agencies and that 

we should support the development of a U.S. Merchant Marine Reserve to utilize the expertise of those who are willing to help not 

only in the defense of our Nation, but also the protection of our seaports. Merchant mariners are an untapped area of great expertise 

that we have not availed ourselves of to date. 

With all of the new and increased focus on container traffic, I do 

not believe that our enemies will be able to deliver a weapon of 

mass destruction through a single shipment over water. I do believe, however, that through multiple conduits, such as seaports, 

airports, and border crossings, terrorists will be able to ship component parts that are disguised as regular cargo and can be assembled later to create a weapon that would be a significant threat to 

our Nation. Strict control of the chain of movement and good intelligence are the only defense we have against such an effort. We 

must look at our transportation industry and make an effort to ensure that those who are in critical positions are legitimate. The 

aviation industry was able to develop a system of screening airport 

personnel through a coordinated Federal database. That system 

must be extended, without exception, to all maritime and transportation workers. We cannot afford any more delays in instituting a 

Federal credential for transportation workers. We must also look at 

shippers, carriers, brokers, and freight forwarders to ensure they 

have every safeguard in place and that they have the support of 

our Federal agencies in coordinating efforts in screening shipments, and all of these people need to be trained. 

In 2001, I supported Senator Snowe’s legislation to create a unifying Federal agency to oversee all sectors of transportation, which 

eventually became the TSA. I envisioned its primary mission as 

just such coordination and an agency that can respond rapidly to 

our Nation’s transportation needs in times of crisis. It is time for 

the TSA to begin its active participation in our seaports. 

We have come a long way in 18 months, but the task is far from 

over, and our efforts must be coordinated and the responsibility 

shared for protecting our seaports as well as the entire transportation system. Every step we take puts up one more barrier to 

those who would seek to do us harm. Every step we take must also 

be measured so that the reaction to that threat is not so draconian 

that the mere possibility of a potential attack achieves more in impact than any single assault ever could. It is indeed the responsibility of every one of us at every level of our transportation system 

to ensure that we are working together as a team to protect our 

way of life while we seek to protect our Nation. 

32

1The prepared statement of Mr. O’Hanlon appears in the Appendix on page 81. 

Thank you. 

Chairman COLLINS. Thank you very much, Captain. Mr. O’Hanlon. 

TESTIMONY OF MICHAEL O’HANLON,1 SENIOR FELLOW, THE 

BROOKINGS INSTITUTION 

Mr. O’HANLON. Thank you, Senator Collins, Senator Coleman. It 

is an honor to appear today. I would like to speak in just a couple 

of broad terms about overall budget resources and try to be fairly 

brief and just give a couple of thoughts. 

The broad message that I have is that the kind of work being 

done by my colleagues here on this panel and their previous associates is not yet adequately funded, in my judgment, and I think to 

put it in different terms, institutions like the Coast Guard and 

Customs now as part of the new Customs and Border Protection 

Directorate just aren’t big enough. They aren’t big enough for the 

new set of tasks. A lot of the new technologies and new procedures 

are promising, will allow us to do more with the same number of 

people, but we actually need to make these institutions bigger. And 

I want to concentrate on Customs, but let me first say a brief word 

about the Coast Guard. It is just the same spirit of calculation, a 

very rough, sort of back-of-the-envelope calculation about how large 

might these agencies have to become. 

The Coast Guard, as you know, is now doing 25 or 30 percent 

of all of its mission work in the area of homeland security. Prior 

to September 11, that number was very small. So it has essentially 

added 25 percent additional missions to an existing portfolio that 

I think all of us want to protect for the previous missions of boater 

rescue, environmental protection, and so forth. 

How is the Coast Guard managing? It was already underfunded, 

already operating aging equipment. How is it managing to do all 

this new work without a much bigger workforce? Well, at least it 

is getting more resources to buy the equipment it needs. As you 

know, the Deep Water Project and other kinds of modernization efforts are now being properly funded. The Coast Guard budget has 

gone up quite a bit since September 11. However, the size of the 

Coast Guard has not gone up very much. It has gone up just a little over 10 percent. And if you compare that 10 percent to the 25 

percent additional missions that are being asked of the Coast 

Guard, I think we have a mismatch. So just in very rough terms, 

I am sure there are ways to do some of these homeland security 

missions more efficiently, and we will figure some of them out. And 

maybe we don’t need the Coast Guard to increase in size by 25 percent, but it has got to go up in size by more than the roughly 4,000 

people that have been added to its end strength or the 3- to 5-percent increase in the number of assets that it operates, the number 

of boats, the number of airplanes. These numbers have gone up 

very slightly, and it is not enough. 

And so in my testimony, I try very roughly to estimate what size 

Coast Guard might be adequate for the new needs we are asking 

it to carry out today, including port security, coastal waterway security against terrorist attack, and I estimate roughly another 

33

5,000 to 7,000 more people and maybe another $1 billion a year in 

rough terms are needed, including more boats and more airplanes. 

But that is the Coast Guard piece. I want to spend a little more 

time now on the Customs piece, with a similar sort of broad, rough 

calculation. And I don’t know nearly as much about these agencies 

as my distinguished colleagues, so I am giving you a very rough 

way to sort of ballpark this number. I am sure my numbers are 

wrong. I am sure there are more efficient ways to do these things. 

But what I am struck by is that if you just do a crude estimate 

and you compare the needs to what we are actually funding today, 

there is a huge gap. And the incremental increase in some of these 

agencies’ size does not seem commensurate with the new demands 

we are placing upon them in the area of cargo inspection that Customs used to do, Customs and Border Protection Bureau now performs. 

As you know, we used to have about a $2.5-billion-a-year budget 

for that function, for all Customs functions, I should say, and about 

20,000 people were performing these tasks. And that was good 

enough to inspect 2 or 3 percent of all the cargo coming into the 

country. Steve Flynn and others have been instrumental in pushing some new ways to do these things more efficiently, figure out 

which ships we have to best inspect using new technology. You 

were asking earlier about nuclear detectors. All those things will 

help, but as Commander Flynn also pointed out, it is just not going 

to be good enough because intelligence is not going to be good 

enough that you can get by inspecting only 2, 3, 4, or 5 percent of 

all the cargo coming into the United States. 

The people I have talked to—and this is very impressionistic, but 

they tend to think you have to get up into the ballpark of doubledigit percentages. You have got to be inspecting 10, 15, probably 

20 percent of cargo coming into the United States, and if you combine that with all the source-to-shipping tracking that is being proposed, all the new technologies, maybe you have a good enough inspection system to start to have some robustness. 

So let’s say we should go up to about 15 percent as the amount 

of cargo that we inspect. If that is your goal, and today we are inspecting, let’s say, roughly 3 to 4 percent, that tells me that Customs is about one-fourth the size it should be, or I should say the 

traditional role performed by Customs now being performed by the 

broader bureau inside DHS. 

Again, I am sure that number is wrong. I am sure there will be 

clever, innovative, new ways to inspect cargo with fewer people per 

container using technology, using other new procedures. But to me 

it looks like you have got to increase by several-fold the size of your 

workforce and the number of people involved in this. I said before 

Customs had 20,000 people in the old days. Some of those people 

were doing internal pursuit of smugglers, so it wasn’t all about border security. But if 10,000 to 15,000 of those people were primarily 

focused on inspecting cargo as it came into the United States, I 

think that number needs to be up in the range of 30,000, the number of people who are doing cargo inspection. The number we had 

before September 11 needs to increase by something like 10,000 or 

15,000 people. These are not huge numbers, especially by comparison to DOD or certain other kinds of government agencies, but they 

34

are still very big compared to what is happening so far because the 

Bureau of Customs and Border Protection is increasing in size by 

just 10 percent. And it looks to me like it has to double or maybe 

triple. 

So I think, instead of increasing the number of people doing 

cargo inspection by a few thousand, we have got to increase that 

number by 10,000, 15,000, or 20,000. Again, I am sure my specific 

numbers—and I am couching them in broad terms because I don’t 

have very precise ways of making the estimates. I am sure that my 

approach isn’t quite right. But it is still illuminating that if you 

just do a back-of-the-envelope calculation, you compare the fact 

that we should be increasing, I think, the inspection rate by three 

or four times what it is today, we are only adding 10 percent to 

Customs’ workforce, there is a big mismatch. And I think the Customs part, the cargo inspection part of this new bureau needs another budget increase of more than $1 billion a year, maybe in the 

area of $1.5 billion a year, and, again, 10,000 or more additional 

employees to do the job right. 

So that is just a broad way of looking at these problems, and my 

final word, it is part of the broader Brookings study that we have 

done that suggests a homeland security budget of roughly $50 billion a year. To us that looks like the right order of magnitude for 

what the Federal homeland security requirement really should be 

which is in contrast to the $41 billion proposal of the administration. That is in the right direction, but we think it is still probably 

about $10 billion a year shy for the reasons like the ones I have 

just mentioned this morning. 

Thank you. 

Chairman COLLINS. Thank you for your testimony. 

Mr. Flynn, you have written a lot about the economic impact of 

a possible attack using a container. Could you expand on that? 

After the attacks on our Nation of September 11, we lost 3,000 

lives. It stunned the Nation. It sparked an economic downturn. But 

it did not cripple the economy. If 90 percent of U.S.-bound cargo 

arrives by container, what would be the impact if we had an attack 

using our cargo system? 

Mr. FLYNN. There aren’t hard numbers, of course, that give us 

a sense of that because of this elusive—how do you restore public 

confidence and what time would that take? There are the mechanics of just when you turn your system off, it is hard to turn it back 

on again for some of the reasons I have just outlined. 

But in the case of aviation after September 11, we grounded, of 

course, all the planes. We went through every single plane to verify 

there was no terrorist or means of terrorism on the planes before 

we restarted. That took 3 days. 

If you had to do it in surface transportation, intermodal transportation, just stop, freeze, and check, you are talking a minimum of 

about 6 months. That obviously is something that this country 

couldn’t afford to do. But you are faced with this dilemma. If you 

had a box go off, potentially tens of thousands of people’s lives lost. 

So people are looking in their streets, in their neighborhoods, and 

they are seeing rail cars come through as they come right by this 

Capitol Building here, or they are seeing trucks that are coming by, 

and they are saying: Where do these things come from? Who has 

35

checked them? What has happened here? And how do we have confidence something as horrific over there—and, of course, the other 

challenge the President will immediately face is all this chatter will 

start rising up. All the stuff that has been discounted by intelligence officials up to this point as perhaps not credible now will 

all be surged forward because we have this clear incidence. 

So there will be this great uncertainty. There will be a lot of public concern and angst, and there will be an accountability. OK, 

what is it that we have out there that should make me feel comfortable about this train, truck, or ship coming into my port or 

across my border crossing, or into my city or town? 

And my concern is that when you can’t point to much beyond 

what we have, which is, as I laid out here, well, we have a few 

guys overseas, they checked about 1 percent with their allies, with 

the seals. We are still deliberating if we should go from a 50-cent 

lead seal to a dollar one. Some people are talking about the electronics. We haven’t quite got the standards down, but 5 years from 

now we will have something before the international standards organization. This is not the basis for building much confidence. 

So what happens? What happens is we know that companies like 

Wal-Mart, basically, you know, live off of a—there is no warehouse 

in the back of the store. This is the most profitable corporation in 

our country, and it basically depends upon a supply chain getting 

goods there. The GMs and the automotive companies, Ford, they 

basically require that—they are ordering 10 times a day shipments 

often coming across the Canadian border into the United States. 

That stops within the space of about 3 hours. They just don’t have 

the parts to assemble cars. And that is true across the board for 

manufacturers. 

Many manufacturers are just-in-time—toys, for instance, are 

built around Hollywood promotions, around movies, and McDonald’s and so forth here. There is a window of about 2 weeks when 

you can sell a toy. If you have a delay, it is gone because the kids 

have moved on to something else, some other exciting thing. 

You have got basically—the core of our competitiveness, which 

has been a big part of it, has been low inventories, being able to 

very nimbly build things in a hurry, relying on vast networks of 

outsourcing. All that grinds to a halt. So it is our retail sector, it 

is our manufacturing sector, and plus all the workers of that service community that are dispossessed. 

All we can point to is the 10-day lockdown of the West Coast over 

the longshoremen’s strike last—if there ever was a wake-up call on 

this issue, it seemed to me that should have been one. But it was 

viewed just as a labor-management issue. But those 10 days, the 

estimates are on the order of about $20 to $30 billion of disruption. 

And it took a week for every day that you turn off the system to 

recover, just the mechanics, not the public confidence. 

I know I was a little long-winded on that, and there are not hard 

numbers, but that is a sense of the scale of what we are dealing 

with here. 

Chairman COLLINS. That is one reason I think this is such a 

tempting target for terrorists. Not only can they cause enormous 

loss of life, potentially, but they could cripple our economy, cripple 

the whole system of international trade. 

36

1The photographs referred to appear in the Appendix on page 48. 

Mr. FLYNN. And what we know is that is the stated goal of the 

Al Qaeda network. 

Chairman COLLINS. Right. 

Mr. FLYNN. It is to do just that kind of things. 

Chairman COLLINS. Right. Mr. O’Hanlon. 

Mr. O’HANLON. Senator, just very quickly, my colleague Peter 

Orszag, an economist, last year estimated the consequences of different kinds of terrorist attacks, and it is in our study. And this 

kind of a scenario that you are postulating was his No. 1 most potentially significant loss of economic activity, a container that 

winds up being the way in which a nuclear weapon or a major biological attack is generated in the United States. He estimated up 

to $1 trillion in potential economic damage—very rough estimate, 

and he would be the first to emphasize that. But it was top on his 

list of potential economic consequences of any and all terrorist attacks he could envision. 

Chairman COLLINS. Captain Monroe, you are on the front lines 

in operating a local port, the largest one that we have in Maine. 

Do you have a clear sense of who to go to in the Federal Government, who is in charge? Do you get clear and consistent guidance 

from the Federal Government? 

Captain MONROE. I have to say honestly it seems like every 

agency has got some level of responsibility, and it is really difficult 

sometimes to determine who really is in charge of the program. 

I find that the most effective way to do all of this in working 

with Federal agencies is to make sure we try to get everybody into 

the loop, which is an enormous effort. Many times we will have one 

agency talk to us and give us some guidance, ask us to do something, only to find out that it may not be consistent with what another agency would like us to do. 

It is creating an enormous amount of difficulty just getting people to talk and work with each other. 

Chairman COLLINS. That is of great concern to me because it is 

people like you who have to implement a lot of these programs in 

cooperation with Customs and with other agencies. And it seems 

to me that we are still having problems with coordinating, providing accurate information, and providing access to timely information so that you can do your job. 

Captain MONROE. I think one of the most significant problems 

we face is just a lack of intelligence, and obviously, we have heard 

the stated concerns about how we often find out from CNN a lot 

faster than we do from our own Federal Government as to what 

level of security threat we are at. But I find that just getting the 

information around from our Federal agencies is oftentimes disjointed. 

If we did not have the aviation sector to rely on, we would not 

get the information as far as we do. 

Chairman COLLINS. Thank you. 

Mr. Hall, before I yield to Senator Coleman, I want to go back 

to the case study that you conducted with the container that was 

shipped containing light bulbs from Slovakia to New Hampshire, 

and I want to put up the picture of the container.1

37

1The photographs referred to appear in the Appendix on page 48. 

It is my understanding—well, we have only to look at it to see. 

You have the tracking device, the light sensors. This had antennae, 

wires coming out of that. Were you surprised that all of this equipment didn’t prompt an inspection of this container? 

Mr. HALL. Clearly, we were, Madam Chairman. Let me just point 

out, the photograph on the right is actually a photograph of what 

is in behind the door which is in the photograph on the left.1 So 

if an inspector had been prompted to inspect the container because 

the inspector saw the antennae and the wire on the back end, that 

is what the inspector would have seen inside, I suspect prompting 

even more questions. They never got to look at those gizmos on the 

inside, which were really parts of the sensing equipment and transmitting equipment. 

Chairman COLLINS. Do you think that the antenna which was on 

the outside should have prompted an inspection? I mean, clearly, 

it sounds like the wires that I pointed to were concealed inside. But 

there is still unusual material on the outside of this container by 

the antenna. Do you think that should have prompted it? 

Mr. HALL. Absolutely, Madam Chairman. When we were reviewing the initial studies at an oral presentation from the Volpe Center right after the completion of the project, that fact alerted every 

law enforcement officer in the room, and we had representatives 

from Customs, Coast Guard, Marshals Service, and our offices. The 

antennae—our antennae went up, and we asked specifically that 

Volpe include that as one of the essentially unintended consequences of what they found out. We weren’t expecting to see that 

at all as an issue. 

Chairman COLLINS. And it is my understanding this container 

went through several ports. Is that correct? 

Mr. HALL. That is correct. It crossed, I believe, four international 

boundaries in Europe, went into a seaport, came back into a seaport in Montreal, cleared there, came over the port of entry from 

Canada into the United States. 

Chairman COLLINS. Thank you. Senator Coleman. 

Senator COLEMAN. Thank you, Madam Chairman. 

I have to say what a fabulous hearing this is. Both the distinguished Chairman and myself in the course of these discussions 

about homeland security often ask the question, What is the impact on the local level? And, for instance, when Secretary Ridge 

was here, we raised the questions about communications and have 

continued to do that. So I think it is important to get the local perspective, the grass-roots perspective. 

Captain Monroe, a specific question to you, though. Are you involved in the joint terrorism task forces? Because when the FBI 

folks were here, we talked about what was going on at the local 

level. It appeared that from their perspective—and I was both a 

former prosecutor and a mayor, and so I have had opportunity to 

work with these groups. But it appeared that the kind of grassroots basis for sharing of information, the framework was built 

around these joint terrorism task forces. Are you involved in those 

efforts? 

38

Captain MONROE. We are involved in, I can roughly estimate, no 

less than 24 committees right now that are currently looking at all 

of this, and there is an enormous amount of effort at the Federal, 

State, and local level, with people trying to look at security. Part 

of our reason and our concern is that all of these efforts need to 

be focused and brought together. 

Senator COLEMAN. It appeared to us that the singular focus, at 

least when we had the FBI and the CIA and others at these joint 

terrorism task forces, it is obvious that when you get back to the 

local level, that message has to be much clearer and much more 

focused and easier for all of us to understand. 

Commander Flynn, you talked about a test, and you indicated 

that it would take 100 cargoes and just kind of pull them out and 

just kind of see if there are any problems. What do you mean by 

problems? Assuming we were to try to have that test become a reality, what would folks be looking for? 

Mr. FLYNN. Well, the real issue here is that a risk management 

approach is having confidence that you are, in fact, pulling out of 

the queue all that which deserves an inspection, that is not compliant with the rules of commerce, so, therefore, might pose a risk. 

The only way, it seems to me, that you can have real confidence 

with what is in place is to routinely demonstrate that what you are 

not missing things in the low risk pool. 

The O.S.C. story is in part that of showing there are risks even 

with the ultimate trusted shipper. Osram-Sylvania couldn’t have 

been a better corporate citizen. It should be commended in the 

Rose Garden for their support in trying to help improve supply 

chain security. But Osram-Sylvania doesn’t exercise much in the 

way of control over what happens to this box as it moves through 

the system, and things could happen along the way, as they will 

be the first to attest as a part of this process. 

So what we need to be able to do, if we are going to stand up 

and tell the American people that we are checking the right containers, we have got to be able to point to how we are refining and 

working on that model. So for me, I guess what I would like as a 

comparison where we would periodically pull out 100 randomly. If 

you find that 5 or 10 of those are not compliant but only 3 of those 

would have hit your risk criteria, then you know you better go back 

and refine the criteria. 

What I am worried about is not subjecting to scrutiny a blanket 

statement that ‘‘we are getting the right ones, don’t anybody worry 

about it.’’

I think it also requires a focused oversight effort over how that 

algorithm, the rulemaking process is being evolved. What we know 

is that the system was set up for regulatory compliance. The automated targeting system Customs used was for regulatory compliance is built around cargo manifests. That is just not sufficient in 

the new security environment we are in, particularly when we only 

are going to inspect such a small percentage. So making that robust—there are efforts underway with the coordination with the 

Office of Naval Intelligence and with the Coast Guard and so forth 

to try to advance and improve this, but day-to-day inspectors sitting down there flipping through the manifests do not have access 

39

often to all the available data, and they are largely using an old 

system to make their targeting choices. 

Senator COLEMAN. You are really then raising two issues, as I 

understand it. One is the issue of is the system working, so we are 

saying we have got a system that is working, and you are saying 

we can measure that. But then I think you are raising a larger 

issue, and I am not sure how to address it, by the way, and that 

is the issue of confidence. It is not a matter of whether if it is working. If it is working, do people believe that it is working? Our whole 

system of criminal justice, the reason we are not out there in vigilante groups enforcing law ourselves, or the reason that we don’t 

cower in our homes when a murder takes place in our neighborhood is because we have confidence that those responsible will deal 

with it, even if we don’t deal with every case. 

And what I am hearing being said here, if we have one incident 

of some material being sent through our cargo system that causes 

loss of life, we are fearing a whole system shut down, even though 

in other places around the world where there are terrorist attacks, 

such as Israel, life goes on. What I am hearing is we are not prepared for that here, psychologically not prepared. We don’t have 

the level of confidence in the system, and as a result, we face shutdown. If we face shutdown, the consequences are enormous. 

So I think we have to be giving some thought not just to—this 

is why I asked about your test—not just finding out whether it is 

working, but then having some discussion of what are the things 

that we do to generate confidence that even if there is a problem, 

we don’t shut everything down. 

Mr. FLYNN. Yes, Senator. I guess the only thing I can point to 

as an example is aviation safety. In its earliest years, that is an 

industry that started with barnstormers. Only stunt people got on 

planes. What the industry had to do, turn around that image to 

make it commercially viable was to build safety into every aspect 

of the plane, and have a built-in as a response capability. That 

some kind of infrastructure now has to be built in the supply chain 

around in the face of the new security paradigm. And I think 

projects like Operation Safe Commerce are designed to pull all the 

right stakeholders together and to help build that system and build 

that confidence that there is a way to get to where we need to be. 

But, the resources are very limited, and we are not moving very 

fast. Operation Safe Commerce was a quarter-million-dollar investment. That is the total amount of money the U.S. Government has 

spent on doing a full supply chain analysis and testing whether 

these technologies even work. 

Senator COLEMAN. Very helpful. Thank you, Madam Chairman. 

Chairman COLLINS. Thank you very much, Senator. 

Captain Monroe, I want to get back to an issue that you touched 

on in your testimony, and that is, some people have suggested that 

all cargo go to the mega-ports and that the smaller ports be cut out 

of the process and that would somehow improve security. 

In addition to the devastating economic consequences of a decision like that on smaller ports, could you expand on your proposal 

that it actually might be better to do the opposite, to divert more 

cargo from the mega-ports to the smaller ports, which might have 

40

more time to do the kinds of inspections that we have been discussing today? 

Captain MONROE. Well, I will make it akin to an example in the 

aviation industry. Imagine if we had a problem and everybody decided to close all the small regional airports and put everybody 

through Logan Airport. The reality here is that the mega-ports 

have to deal with a much more significant volume of cargo, and 

that a lot of cargo does come into the United States right now and 

is immediately moved onto feeder services, whether it is barge or 

small ship. It moves up and down the coast. So a lot of it could not 

even have to go down through highway systems and whatever. 

That cargo could arrive in bond at the very small terminals, and 

then in turn, more of that cargo could be identified, inspected, and 

checked. 

Whether it is outbound or inbound doesn’t make any difference, 

and there has been a maritime transportation system initiative before the Federal Government for a number of years now, and it has 

never really gone anywhere, primarily because when focusing on 

that, we still move our containers mostly by rail or by truck 

through the system, and people don’t recognize the value of the 

Waterborne System. 

I think in many cases we are much more capable of looking at 

our boxes more effectively. We know, for example, that every container that comes off our feeder ship from Halifax, Nova Scotia, is 

looked at by a member of the International Longshoremen’s Association, primarily for damage, and the reason being that if there 

are any damages on the container, there are claims that are made. 

And when doing so, it is easy to look at that and see things that 

are abnormal. 

Now, for example, this antenna system, this array that was put 

on the outside of this container, probably would have been something that was picked up. Even though we have seen those things 

before, there have been a number of tests made for tracking containers through GPS transponder technology. But at the end of the 

day, somebody would have said there is something abnormal there. 

And when you involve only the Federal agencies, because a lot of 

times we say, well, that is just Customs’ job to do it, it isn’t. It is 

everybody on the pier. It is every longshoremen, every terminal operator, every stevedore, every port official, and every Federal agency who is down there on the dock looking. We should all be looking 

for those things. And I think we have a better capability by spreading that out and not just rely on Federal officers. 

The other thing, too, if we do have an attack on our transportation system, we are able to get that system up and running faster. After September 11, they closed the Port of New York, and in 

doing so a lot of mega-cruise ships had to be diverted to other 

ports. Ports like Boston and Portland, Maine, were able to absorb 

that. We were able to adapt the system. And I think we have that 

capability there, but putting all our eggs in one basket is not the 

right thing to do. 

Chairman COLLINS. Mr. Flynn, what is your opinion on the proposal to concentrate cargo in the mega-ports? 

Mr. FLYNN. Well, it is the tail wagging the dog. It is basically 

saying we have got a finite amount of inspection resources; thereVerDate 0ct 09 2002 10:04 Jun 25, 2003 Jkt 086994 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 C:\DOCS\86994.TXT SAFFAIRS PsN: PHOGAN
41

fore, we will reconfigure the entire global transportation system to 

conform to those available resources. I mean, this is madness. 

Yes, the non-intrusive inspection equipment is costly, $1 million 

for the package deal to install one of these screeners. But they need 

to be put in feeder ports. 

A core issue I have learned from focusing on the border security 

issue over the last decade is that the more inefficient you make a 

system, the less police-able it becomes. If you impose an inspection 

regime that essentially causes a fragmented market response you 

ceate more in security. I point to Laredo, Texas, as a perfect example of this. The drayage, the small truck owned by Mom and Pop 

operations, this is where old trucks go where they die. You have 

an incredibly transient labor force, about 300-percent turnover. All 

that trucking sector services the fact that you don’t take a longhaul truck and sit for 6 hours to go across the border and come 

back empty. 

So sometimes your security measure will create a more chaotic 

environment which will be more difficult to police. The corollary of 

that is the more efficient we make transportation systems, as long 

as there is sufficient oversight and can we have confidence in their 

integrity, you actually have a national security rationale to improve 

the bottlenecks. 

We should have been working on our ports for a long, long time. 

We are an island nation, effectively, when it comes to global trade. 

The kind of keystone cop Federal behavior at ports makes no economic sense, but it also creates shadows that bad guys can exploit. 

We have a security rationale to improve efficiency. So we should 

not even see this as a tradeoff. These are mutually reinforcing. A 

more efficient transportation system with the eyes and ears, the 

collective ones, applied to it is the kind of direction we need to go. 

And I would recommend that all this work being done on retooling 

at our transportation authorization acts must have this conversation going on in parallel. 

Chairman COLLINS. Mr. Flynn, I had one other question I want 

to get your answer to, and that is, the Customs system relies very 

heavily on the accuracy of the manifest in order to target containers for a physical inspection or a technological inspection. 

How accurate do you think manifests are? Do you have a concern 

in that area that leads you to propose the random review of certain 

containers? 

Mr. FLYNN. Well, I think you do periodic random reviews because 

they are necessary to ensure—there is some deterrent value, and 

they are also necessary to constantly refine your model. But they 

are, in fact, limited scale. You are relying primarily on this risk 

management analog, this matrix to choose what it is that you are 

looking at. 

The manifest traditionally has been the weakest link in commercial documentation. Basically, the common phrase used by carriers 

is ‘‘is said to contain,’’ because there is no time for a master to actually know what is actually in this box. He is stating that whoever 

his client is told him that this was a shipment of this or that, and 

all he is saying is that is what I think I have. 

You are talking about ports like Hong Kong and Singapore that 

have 5,000 trucks a day entering into a terminal with cargo. There 

42

are 120 movements an hour going onto that ship by three gartry 

cranes. The idea that you are somehow filtering all this is at the 

brow of the ship is unrealistic. 

So the manifest issue remains a challenging one for builing a 

credible targeting system. The 24-hour rule is getting at that saying we need some specificity in the manifest beyond ‘‘freights of all 

kind.’’ But there is a whole range of other commercial documentation in electronic form that any company must use to maintain 

their supply chain. 

The problem has been that, again, it is the tail wagging the dog. 

Customs has been built to basically look at cargo manifests; therefore, all the rest of the industry has been directed to adapt to that 

by giving information Customs needs to make its machinery work. 

Customs is not being malicious or draconian. It has an ancient system that hasn’t been well financed. The automated commercial environment is still 3 years away from being deployed. 

Now, there are means—there are efforts and initiatives underway in the Federal Government. Again, the Office of Naval Intelligence has been brought in on this, the Coast Guard is working 

on this. The real effort, though, must be to drill down to that commercial data from the purchase order, ideally. When we first know 

that something is going to happen, that gives us the ability to detect the abnormal behavior, to have the confidence when we target 

something as a potential problem that it is likely to be a problem. 

And so moving beyond the manifest, I think, is going to be absolutely essential. 

Chairman COLLINS. Captain Monroe, do you have any comments 

on that and, also, in general your evaluation of the programs that 

Customs has put in place? 

Captain MONROE. Well, let me talk about the manifest. This is 

something that was intentionally done, and the reason it was intentionally done is for many years organized crime targeted containers. So the more information that they had available to them, 

the more that shippers and the carrier community and the stevedoring companies eventually got to the point where they realized 

that the more vague we are, the less our chance of having a container or our cargo stolen. 

The technology exists to have very accurate manifests, and there 

is no reason that Customs can’t demand those manifests, particularly if the new automated Customs system for computer tracking 

is implemented. That information does not have to be made available to many folks who might be handling the cargo, but it certainly should be available to Customs, and it certainly should be 

available to the ports, because they at least will be able to measure 

what might be potentially dangerous to their community if those 

containers come through. And as I say, that is an easy fix. 

As far as Customs is concerned, I think they are certainly headed 

down the right path, and I have to agree with Dr. Flynn that we 

have grossly underestimated what it is going to take to make our 

ports secure and to make sure that we have the resources available. I think if you look at the nature of what the value of our marine transportation system and the amount of cargo we move 

through that system is, we are not really taking it as seriously as 

43

we did the aviation system. We know that cargo doesn’t vote, and 

that is part of the problem. 

The reality here is that unless we pay good attention to this, the 

programs that Customs wants to implement and the timeline they 

want to implement those programs on are not going to be accomplished effectively. So that is essentially the first step in moving 

this in the right direction. 

I honestly believe that Customs is headed down the right path. 

I sincerely hope that in doing so, in their zeal to get this closed in, 

that they do engage the industry. One of the problems we faced 

early on was the arbitrary decision that was made to have all containers bypass Portland and be cleared in Boston, and then those 

containers be brought back to us by truck. A lot of us raised our 

concerns when that happened, and it got put aside. But things like 

that cannot arbitrarily happen. There has to be an interchange. 

The best solutions for how to deal with seaport security and container security often lie with those of us who deal with it every 

day. 

Chairman COLLINS. Well said, and a good note on which to conclude this hearing. 

Mr. O’Hanlon, I want to thank you for bringing up the needs of 

the Coast Guard. Coming from the State of Maine, I am very aware 

of how stretched the Coast Guard is, and I am very concerned that 

we not jeopardize the traditional mission of the Coast Guard, which 

is so important in a fishing State like Maine. And we are making 

progress. The budget is up considerably. But your point about the 

number of Coast Guard members is a very good one. Providing 

more assets, providing more cutters is a step in the right direction, 

but the personnel are still very stretched. So thank you for raising 

that point. 

I want to thank all of our witnesses today for excellent testimony 

and to thank you for the thought and the expertise that you bring 

to bear on this subject. I believe this is our single greatest vulnerability, and it is going to take the collective wisdom of all of us at 

all levels of government and in the private sector as well in order 

to come up with solutions. So I very much appreciate your taking 

the time to be with us today. Thank you for your excellent testimony. 

The hearing record will remain open for 15 days. This hearing 

is now adjourned. 

[Whereupon, at 11:54 a.m., the Committee was adjourned.] 

(45)

A P P E N D I X 

PREPARED STATEMENT OF SENATOR LIEBERMAN 

Thank you, Madam Chairman, for holding this hearing today on a subject that 

should be of profound concern to anyone interested in safeguarding our nation from 

terrorist attack. 

The vulnerability of our ports—and in particular the vulnerability of containers—

to terrorist mayhem is one of the more sobering pieces of information to emerge 

from an array of security assessments conducted over the past few years. It is a vulnerability that the Federal Government—in partnership with state and local governments and the private sector—must turn to in earnest, with a commitment of adequate resources, to protect not just people and property, but the very hear to of our 

economy. 

We have a panel of knowledgeable witnesses here today—some like Commander 

Steve Flynn and Michael O’Hanlon who have established themselves as premier experts on maritime security and from whom we have received valuable advice in the 

past. I’m sure their testimony will once again aid the government’s efforts to prevent, prepare for, and respond in the event of a terrorist attack on our ports. 

Our ports and borders must be securely defended because they are our mail links 

to the global trade that has, without question, fueled our economic progress and provided all Americans with the highest quality of life in the world today. 

According to the second report on national security produced by former Senators 

Gary Hart and Warren Rudman, 11 million containers carry 90 percent of the 

world’s cargo today. Yet, there are no required security standards governing the 

loading or transport of containers. In fact, the architects of the inter-modal transportation revolution never really took security into consideration. Their priorities 

were lowering costs, and increasing the speed and efficiency of operations. They 

achieved their goals brilliantly, which, ironically, now leaves us open to peril. 

In December 2001, shortly after the shock of September 11, this Committee held 

a hearing on port security. One of the witnesses, F. Amanda DeBusk, a former commissioner of the Interagency Commission on Crime and Security at U.S. Seaports, 

laid out the challengers in coordinating port security. Most ports, she told us, are 

chartered by states or local government. Some are operated by public port authorities, some by private concerns. There were at least 15 federal agencies with jurisdiction at the seaports, in addition to state and local agencies and the private sector. 

Today, we have the Department of Homeland Security to coordinate this tangle of 

authority. But I hesitate to proclaim victory. 

Each day, five million tons of goods cross our borders by ship, truck, or train. 

Much of it arrives in the 21,000 containers that enter U.S. ports daily. The Administration tells us that only 3.7 percent of those containers are physically inspected, 

which means that, at any given time, authorities still have very little idea about 

the contents of thousands of multi-ton containers traveling on trucks, trains, or 

barges, on roads, rails, and waterways throughout the country. The cunning with 

which a terrorist might smuggle chemical, biological or even, nuclear weapons into 

one of those containers, without being detected, knows no bounds. And it would be 

foolhardy to doubt that an interruption of the flow of commerce would have anything but catastrophic consequences for all of us. 

Hypothetical scenarios have hinted at the potential impact of an attack through 

maritime trade. Listen to how one incident is played out by a group of experts from 

government and industry. On day one, an unknown number of dirty bombs enter 

the country through ship containers. One is found at the port of Los Angeles. And 

that port is closed. On day four, another dirty bomb is found while a container is 

being unloaded near Minneapolis. All ports and border crossings are closed, paralyzing the entire supply chain. 

46

On day five, the Dow is down 500 points. On day eight, fuel deliveries stop, gas 

prices skyrocket, and supply chains report inventory shortages and plant closures. 

On the 20th day, a freight car in Chicago explodes and half of all Fortune 500 companies issue earnings warnings. The experts conclude that port, shipping, and manufacturing activity will not return to normal for two months, at which point economic losses are estimated at $58 billion. 

It’s scary stuff. But we can prevent a scenario like I just described if Congress, 

the Bush Administration, and the private sector come to understand—before disaster occurs—the consequences of inattention, inaction, and under funding. 

The President’s FY 2004 budget, regrettably, does not reflect an understanding 

of the risks at hand. As is the case in general with homeland security funding, the 

rhetoric simply is not matched by hard dollar commitments. One of the most glaring 

gaps—the physical security of our ports—is ignored by the Administration completely. The President’s budget contains no money for even the most basic improvements—like perimeter fencing, security patrols, employee background checks—

which the Coast Guard has estimated will cost $4.4 billion. I believe $1.2 billion 

needs to be spent next year for these basic protections. 

The Administration has done a better job at inspecting high-risk cargo before it 

reaches our ports. Its Container Security Initiative, which we will hear more about 

from our witnesses today, stations Customs officers overseas to inspect containers 

before they begin their voyage to the U.S., though they will need technology on site 

to address the new task. Once again, however, the Administration is providing only 

a fraction of the money needed to ensure successs—$62 million for FY 04. I have 

called for an additional $100 million to expand this program to track containers as 

close as possible to their point of origin. 

The Coast Guard has made a heroic effort—through Operation Noble Eagle and 

Enduring Freedom—to step up port supervision and still fulfill its other mission. 

But it has done so using antiquated equipment and limited resources. Before September 11, we were on track to modernize the Coast Guard over a period of 20 

years, and the President has proposed spending $500 million in FY 2004 toward 

that effort. But that time frame and that level of funding is no longer practical. I 

have suggested an additional $700 million, for a total of $1.2 billion in FY 04, to 

complete the job in half the time. 

Finally, the Transportation Security Administration, which has concentrated so 

far on improving airline security, has virtually ignored the security of other transportation systems. Unfortunately, the Administration’s proposed TSA budget of $4.8 

billion is a 10 percent decrease from last year’s proposal. Only $85 million is requested for land security activities. I am urging an additional $500 million to restore the Administration’s proposed cuts and another $500 million specifically for 

freight and passenger rail security improvements. 

No matter how you slice it, we need to make significant investments just to begin

to bring our system of maritime trade security into the 21st century. With the vast 

volume of merchandise passing through our ports and over our borders, we simply 

cannot inspect every container by hand. But we need to continue to work with the 

private sector and state and local authorities to use advanced technologies to make 

sure that all containers are scanned, coded, logged, and tracked with a transponder, 

and have their contents verified, starting as close as possible to their point of origin. 

The best way to protect, ourselves, of course, is to stop terrorists before they act. 

But we have learned the hard way that we must also prepare for the worst. In the 

case of port security, that means directing people, technology, and yes, money, toward the goal of keeping dangerous materials from entering and traveling around 

the country. We have much work to do to get our entire system of importing and 

exporting to a point where it is not just efficient but physically and economically 

safe. I am hopeful that the testimony we hear today will put us on track toward 

a sensible an sound strategy to do just that. 

PREPARED STATEMENT OF SENATOR CARPER 

Thank you, Madam Chair. 

I’m pleased today that the committee is holding a hearing on cargo container security, an issue of great importance to my state. 

The Port of Wilmington in Delaware is the 20th busiest port in the country for 

container traffic. It is also the largest importer of food in North America, leading 

the way in shipments of fresh fruit, meat and juice concentrate. 

In the months following September 11, 2001, the federal government moved swiftly to upgrade the security of our aviation system. We’ve spent billions of dollars hiring an army of baggage screeners and other security personnel and putting them 

47

to work at airports across the country. I applaud the Transportation Security Administration for meeting the tough deadlines Congress set for them in the Aviation 

and Transportation Security Act. Today, a passenger getting on a plane at any airport in the country is screened by a federal employee and has every piece of their 

baggage checked for explosives and other dangerous items. 

The federal government has taken smaller steps in the area of port security. Programs like the Cargo Security Initiative and Operation Safe Commerce are promising, but only a fraction of the containers that enter U.S. ports each year are inspected by Customs agents. Inspecting every ship and every container is impossible 

but I’d like to hear from Secretary Hutchinson about what percentage of cargo Customs can reasonably be expected to inspect I’d also like to hear how effective the 

pre-screening that is taking place under CSI has been and whether programs such 

as the Customs-Trade Partnership Against Terrorism that depend on businesses policing their own supply chain can really be a substitute for more inspections. 

In talking about port security, however, we should not forget that the cargo that 

comes off of ships at our ports does not stay there. Some of it goes onto trucks that 

drive through our cities and neighborhoods. Some of it also goes onto trains. Unfortunately, the federal government has done very little to improve security in surface 

transportation. 

The Transportation Security Administration was tasked after September 11 with 

securing our entire transportation infrastructure, from aviation to ports to rail. Despite the progress the agency has made in aviation, however, only a fraction of its 

budget is dedicated to other modes. Of the $18 billion included in the president’s 

FY04 budget for the Department of Homeland Security’s Directorate for Border and 

Transportation Security, of which TSA is now a part, nothing at all is set aside for 

rail security. 

Last Congress, when this Committee, under Senator Lieberman’s leadership, reported out a bill to creating the Department of Homeland Security, it included an 

amendment I authored authorizing $1.2 billion in new rail security efforts. This 

amendment was stripped from the final bill, however, and subsequent efforts to pass 

a similar rail security package with my colleagues Senators McCain and Hollings 

were blocked. The 107th Congress came to a close without taking any meaningful 

steps to improve the security of our nation’s railroads or to protect the millions of 

Americans who travel by rail every day. 

For all of our commendable focus and attention on preventing future attacks 

against the aviation industry, it is unconscionable that we are unable to ensure that 

the roughly 25 million intercity passengers and many millions more that commute 

aboard our trains are as safe as the ones in our skies. 

To address this grave omission, Senator Hollings reintroduced his National Defense Rail Act this Congress. It provides funding for the Secretary of Homeland Security to conduct an assessment of rail security threats and to come up with steps 

railroads can take to protect rail infrastructure, stations, and facilities. The bill 

would authorize for the $515 million to undertake the assessments, addressing rail 

security threats or awarding grants to passenger and freight railroads to implement 

the Secretary’s recommendations. 

I hope that Undersecretary Hutchison can comment on this issue today and discuss how the Department plans to address of rail security.

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