GAO 

United States Government Accountability Office

Report to Congressional Requesters

SUPPLY CHAIN 

SECURITY 

Feasibility and CostBenefit Analysis 

Would Assist DHS and 

Congress in Assessing 

and Implementing the 

Requirement to Scan 

100 Percent of U.S.-

Bound Containers 

October 2009 

GAO-10-12 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2009

SUPPLY CHAIN SECURITY 

Feasibility and Cost-Benefit Analysis Would Assist 

DHS and Congress in Assessing and Implementing

the Requirement to Scan 100 Percent of U.S.-Bound 

Containers

Highlights of GAO-10-12, a report to 

Congressional Requesters 

U.S. Customs and Border 

Protection (CBP), within the 

Department of Homeland Security 

(DHS) is responsible for, among 

other things, the security of cargo 

containers shipped to the United 

States. In fiscal year 2008, 611 ports 

shipped a total of 9.8 million 

containers to the country. The 9/11 

Commission Act (9/11 Act) requires 

100 percent of U.S.-bound cargo 

containers to be scanned by 2012, 

and CBP has begun implementing 

the Secure Freight Initiative (SFI) 

to address this requirement. GAO 

was requested to assess CBP’s 

efforts to implement the 9/11 Act 

requirement. This report addresses 

(1) CBP’s progress at the initial 

ports participating in the SFI 

program, (2) CBP plans to 

implement SFI, (3) the extent to 

which CBP has estimated costs and 

conducted a cost-benefit analysis 

of 100 percent scanning, and 

(4) any challenges to integrating 

100 percent scanning with existing 

container security programs. GAO 

reviewed operating procedures for 

the SFI ports and analyzed cost 

data. GAO also visited six of the 

seven original SFI ports and spoke 

to officials from CBP, foreign 

governments, and private industry. 

What GAO Recommends

GAO recommends CBP complete a 

feasibility analysis, cost estimates, 

and a cost-benefit analysis, and 

provide these results to Congress. 

DHS partially agreed. It stated it 

has published reports addressing 

most of the recommendations, but 

GAO analysis revealed that these 

reports did not fully satisfy the 

recommendations’ intent. 

CBP has made limited progress in scanning containers at the initial ports 

participating in the SFI program, leaving the feasibility of 100 percent 

scanning largely unproven. Since the inception of the SFI program, CBP has 

not been able to achieve 100 percent scanning at any participating port. While 

CBP has been able to scan a majority of the U.S.-bound cargo containers at 

the comparatively low volume ports, it has not achieved sustained scanning 

rates above five percent at the comparatively larger ports. 

CBP has not developed a plan to scan 100 percent of U.S.-bound container 

cargo by 2012, but has a strategy to expand SFI to select ports where it will 

mitigate the greatest risk of WMD entering the United States. CBP does not 

have a plan to scan cargo containers at all ports because, according to agency 

officials, challenges encountered thus far in implementing SFI indicate that 

doing so worldwide will be difficult to achieve. However, CBP has not 

conducted a feasibility analysis of expanding 100 percent scanning, as 

required by the SAFE Port Act. Such an analysis could help both CBP and 

Congress determine the most effective way forward to enhance container 

security. Recognizing that its strategy will not meet the requirement to scan all 

U.S.-bound cargo containers, DHS plans to issue a blanket extension to all 

foreign ports by July 2012 to be in compliance with the 9/11 Act. DHS officials 

acknowledged that they may revisit this plan before the July 2012 deadline. 

CBP, while identifying some SFI program costs, has not developed a complete 

estimate of U.S. program costs because of the lack of a decision on a clear 

path forward. CBP has also not conducted any cost-benefit analysis which 

would include other economic costs, including those borne outside the United 

States, which would be important to any analysis of alternatives to achieving 

the 100 percent scanning requirement. While uncertainties exist, a cost 

estimate and cost-benefit analysis, consistent with federal best practices, 

could assist DHS and CBP in better communicating the magnitude of the costs 

and benefits to Congress and in designing a clear path forward for enhancing 

cargo container security.

CPB faces a number of potential challenges in integrating the 100 percent 

scanning requirement into its existing container security programs. The 100 

percent scanning requirement is a departure from existing container security 

programs in that it requires that all containers be scanned before CBP 

determines their potential risk level. Senior CBP officials and international 

trading partners say this change differs from CBP’s current risk-based 

approach based on international supply chain security standards. Our work 

also indicates that the 100 percent scanning requirement could present 

challenges to the continued operation of existing container security 

programs—depending upon how the SFI program is implemented and 100 

percent scanning is achieved. Some foreign governments have stated they may 

adopt a reciprocal requirement that all U.S. origin containers be scanned, 

which would present additional challenges at domestic U.S. ports.

View GAO-10-12 or key components. 

For more information, contact Stephen 

Caldwell at 202-512-9610 or 

caldwells@gao.gov. 
Page i GAO-10-12 

Contents 

Letter 1

Results in Brief 6 

Background 11 

CBP’s Progress with SFI Implementation and Operation to Date 

Has Been Limited, Leaving the Feasibility of 100 Percent 

Scanning Largely Unproven 20 

CBP Plans to Improve Container Security Through Two Initiatives, 

but These Plans Will Not Achieve 100 Percent Scanning and Will 

Require a Process to Grant Extensions to Non-Compliant Ports 28 

CBP Has Not Identified Total Program Costs of SFI 

Implementation or Conducted a Cost-Benefit Analysis to Assist 

in Evaluating Alternatives to Achieving the 100 Percent Scanning 

Requirement 32 

Requirement for 100 Percent Scanning Creates Potential 

Challenges for CBP that May Hinder the Continued Operation of 

Existing Container Security Programs and Raises Concerns with 

International Partners 39 

Conclusions 47 

Recommendations for Executive Action 47 

Agency Comments and Our Evaluation 48 

Appendix I Objectives, Scope, and Methodology 54 

Appendix II Comments from the Department of Energy 58 

Appendix III Comments from the Department of Homeland 

Security 60 

Appendix IV GAO Contact and Staff Acknowledgments 63 

Related GAO Products 64 

 Supply Chain Security 
Tables 

Table 1: Description of DHS and DOE Cargo Security Initiatives 13 

Table 2: Information on Ports Initially Agreeing to Participate in 

the SFI Program 23 

Table 3: Data on Containers Scanned and Container Volume at SFI 

Ports 25 

Table 4: Costs Incurred by DHS and DOE to Implement and 

Operate SFI Program, through June 2009 34 

Figures 

Figure 1: Overview of Key Participants Involved in Shipping 

Containers in the International Supply Chain 12 

Figure 2: World Map Indicating the 157 WCO Customs 

Administrations That Have Signed Letters of Intent to 

Implement the WCO SAFE Framework 16 

Figure 3: Examples of Scanning Equipment Used at SFI Ports 18 

Figure 4: Example of Scanning Outputs and Equipment at SFI Ports 21 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page ii GAO-10-12 Supply Chain Security
Page 1 GAO-10-12 

 

United States Government Accountability Office

Washington, DC 20548 

 

October 30, 2009 

Congressional Requesters 

Concerns about the ability of terrorists to smuggle weapons of mass 

destruction (WMD) inside cargo containers bound for the United States 

have heightened since the terrorist attacks of September 11, 2001.1

Oceangoing cargo containers play a vital role in the movement of cargo 

between global trading partners. In fiscal year 2008, 611 foreign ports 

shipped a total of 9.8 million cargo containers to the United States. 

Balancing security concerns with the need to facilitate the free flow of 

commerce remains an ongoing challenge for the public and private sectors 

alike. While U.S. Customs and Border Protection (CBP), within the 

Department of Homeland Security (DHS), has maintained that the 

likelihood of terrorists smuggling WMD into the United States in cargo 

containers is relatively low, the consequence of such an action could be 

devastating. For example, studies have estimated costs of a WMD attack at 

a U.S. port to range from $58 billion to as high as $1 trillion.2

In the federal government, CBP is responsible for overseeing oceangoing 

container security and reducing the vulnerabilities associated with the 

supply chain—the flow of goods from manufacturers to retailers. As CBP 

performs this mission, it maintains two overarching and sometimes 

conflicting goals—increasing security while efficiently facilitating 

legitimate trade and commerce. CBP has developed a layered security 

strategy to address container security concerns. Core components of the 

layered security strategy include analyzing information to identify 

containers that may be at high-risk of transporting WMD, working with 

host governments to examine high-risk containers at foreign ports, and 

providing benefits to companies that comply with predetermined security 

measures. In addition to CBP’s layered programs, the Department of 

Energy (DOE) provides radiation detection equipment to foreign 

governments to prevent terrorists from smuggling WMD in cargo 

containers through foreign seaports. Related to these U.S. container 

1

 For the purpose of this report, WMD generally refers to radiological or nuclear materials. 

2

 See M. Gerencser, J. Weinberg, and D. Vincent, Port Security War Games: Implications 

for U.S. Supply Chains, (Booz, Allen, and Hamilton, 2002) and C. Meade and R. Molander, 

Considering the Effects of a Catastrophic Terrorist Attack, (Rand Center for Terrorism 

Risk Management Policy, 2006). 

 Supply Chain Security 
 

security programs, CBP has worked through the World Customs 

Organization (WCO) to develop and promote implementation of the SAFE 

Framework of Standards for supply chain security, which as of June 2009, 

157 countries have agreed to implement.3

To further address container security concerns, Congress passed, and the 

President signed, the Security and Accountability for Every (SAFE) Port 

Act in 2006.4

 The SAFE Port Act requires that pilot projects be established 

at three ports to test the feasibility of scanning 100 percent of U.S.-bound 

containers at foreign ports.5

 To fulfill this requirement and determine the 

overall feasibility and efficacy of 100 percent scanning, in December 2007, 

DHS, the Department of State, and DOE jointly announced the formation 

of the Secure Freight Initiative (SFI) pilot program. In August 2007, 2 

months before the SFI pilot began operations,6

 the Implementing 

Recommendations of the 9/11 Commission Act of 2007 (9/11 Act) was 

enacted,7

 which requires, among other things, that by July 2012, 100 

percent of all U.S.-bound cargo containers be scanned before being placed 

on a vessel at a foreign port, with possible extensions for ports at which 

certain conditions exist.8

 While foreign ports are not required to 

participate, the 9/11 Act scanning requirement provides that cargo 

 

3

 The WCO is an independent international organization whose mission is to enhance the 

efficiency and effectiveness of customs administrations. 

4

Pub. L. No. 109-347, 120 Stat. 1884. 

5

 6 U.S.C. § 981. A similar requirement was enacted that same year by the Department of 

Homeland Security Appropriations Act, 2007 (Pub. L. No. 109-295, 120 Stat. 1355 (2006)) 

and is codified at 6 U.S.C. § 981a. Both statutes specify scanning as examination with both 

radiation detection equipment and non-intrusive imaging (NII) equipment. 6 U.S.C. §§ 

981(a), 981a(a)(1). This scanning is done in order to identify radiation being emitted from a 

container and anomalies in a container’s image which could indicate the presence of 

shielding material, respectively. 

6

 To address the requirements of the SAFE Port Act, the SFI program became operational 

in October 2007 at three ports: Qasim, Pakistan; Puerto Cortes, Honduras; and 

Southampton, United Kingdom. 

7

Pub. L. No. 110-53, § 1701(a), 121 Stat. 266, 489-90 (amending 6 U.S.C. § 982(b)). 

8

 The 9/11 Act scanning provision includes possible extensions for a port or ports for which 

DHS certifies that at least two out of a list of specific conditions exist. Among others, these 

conditions include (1) adequate scanning equipment is not available or cannot be 

integrated with existing systems, (2) a port does not have the physical characteristics to 

install the equipment, or (3) use of the equipment will significantly impact trade capacity 

and the flow of cargo. See 6 U.S.C. § 982(b)(4). The entire set of conditions is discussed in 

more detail later in this report. 

Page 2 GAO-10-12 Supply Chain Security
 

containers loaded on a vessel in a foreign port that have not been scanned 

are not to be allowed into the United States. This replaced a similar 

provision in the SAFE Port Act that called for 100 percent scanning but did 

not have a deadline for full implementation of the scanning requirement. 

The 9/11 Act did not, however, specify who is to conduct the container 

scans or who is to pay for scanning equipment or operations and 

maintenance. According to CBP officials, with the passage of the 9/11 Act, 

efforts to implement 100 percent scanning at participating ports changed 

from a pilot test of the operational feasibility of scanning 100 percent of 

U.S.-bound containers to an initial phasing in of the 100 percent scanning 

requirement.9

Both DHS and CBP, as well as foreign governments and customs 

organizations, have expressed serious concerns regarding the feasibility 

and efficacy of the 100 percent scanning requirement. In April 2009, the 

Acting Commissioner for CBP testified that much had been done to 

enhance the security of cargo containers relative to other modes of 

transportation, and added that the area of maritime security should not be 

overemphasized to the detriment of other transportation modes. He also 

emphasized that the threat of a significant nuclear weapon in a container 

remains remote and requested that the scanning requirement be 

thoughtfully reconsidered by Congress. In January 2009, the Secretary of 

the Department of Homeland Security also stated that any requirement 

regarding container scanning from Congress must be achievable and 

affordable and noted that the July 2012 deadline for 100 percent container 

scanning appeared to be unattainable. In April 2009, the Secretary 

determined that CBP would focus deployment of the SFI program to 

foreign locations of strategic importance in a way that will maximize 

security benefits given its limited resources. In addition to DHS’ concerns 

that the requirement to scan all U.S.-bound cargo containers cannot be 

met, foreign governments and customs organizations have expressed their 

opposition to the requirement. For example, in June 2008, members of the 

WCO unanimously endorsed a resolution expressing concern that 

implementation of 100 percent scanning would be detrimental to world 

trade and could result in unreasonable delays, port congestion, and 

international trading difficulties.10 Similarly, in May 2008, the European 

 

9

 In addition to the three initial ports selected for the SFI Program, CBP also pursued four 

additional ports, the Port of Hong Kong; the Port of Busan, Korea; the Port Salalah, Oman; 

and the Port of Singapore for participation in the program. 

10 The United States abstained from the vote. 

Page 3 GAO-10-12 Supply Chain Security
 

Parliament issued a resolution calling for the United States to repeal the 

100 percent scanning requirement. 

In response to your request, we are providing you with information on 

CBP’s efforts to implement the SAFE Port and 9/11 Acts. This report 

addresses the following questions: 

• What progress has CBP made toward implementing 100 percent 

scanning at the initial ports participating in the SFI program? 

• What planning efforts has CBP made to address the requirement to 

scan all U.S.-bound cargo containers by July 2012? 

• What are the estimated costs to date of the SFI program, and to what 

extent have future implementation costs been estimated? 

• What challenges, if any, does CBP face in integrating the 100 percent 

scanning requirement with its existing container security programs? 

To address these questions, we compared data on the volume of U.S.-

bound cargo containers and the number of containers scanned at SFI ports 

to the scanning requirement set forth in the 9/11 Act. After speaking with 

CBP officials to resolve inconsistencies with the scanning data, we 

determined that the data provided were sufficiently reliable for our 

purposes. We reviewed available CBP documentation on expanding the 

SFI program, including the SFI program management plan and 

implementation strategy, and assessed it against A Guide to the Project 

Management Body of Knowledge.

11 We obtained available data on costs for 

operating the SFI program as reported by CBP and DOE, which we 

determined to be sufficiently reliable after assessing how CBP and DOE 

collect and manage cost data. We assessed CBP’s cost estimates for 

further implementation of the SFI program using the GAO Cost 

Estimating and Assessment Guide.

12 We reviewed the need to do a costbenefit analysis using criteria in DHS’ Cost-Benefit Analysis Guidebook13

 

11 The Project Management Institute, A Guide to the Project Management Body of 

Knowledge©, (Newton Square, Pa.: 2008). 

12 GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009). 

13 Department of Homeland Security, Cost-Benefit Analysis (CBA) Guidebook, Version 2.0 

(February 2006). 

Page 4 GAO-10-12 Supply Chain Security
 

and Office of Management and Budget (OMB) Circulars.14 We reviewed 

bilateral and multilateral efforts to enhance container security, such as the 

WCO SAFE Framework of Standards. We conducted site visits at six of the 

seven foreign ports that have been involved in the SFI program, and spoke 

with foreign government, CBP, and terminal operator officials during these 

visits.15 While the results of these site visits and interviews cannot be 

generalized across all ports that ship cargo containers to the United States, 

by observing operations at six of the seven ports involved with the SFI 

program to date—Busan, South Korea; Puerto Cortes, Honduras; Salalah, 

Oman; Southampton, United Kingdom; Hong Kong; and Singapore—we 

gained an understanding of the factors and challenges associated with 

implementing SFI at foreign ports. In addition, we met with CBP, DOE, 

and State Department officials who have program responsibilities for SFI 

and other programs that are part of the U.S. government’s layered 

maritime cargo container security strategy. Further, we met with 

representatives from the WCO and European Commission, and officials 

from seven foreign governments, five of which contain an SFI pilot port, to 

discuss multilateral and bilateral efforts to promote supply chain security. 

We also spoke with six members of CBP’s Customs Trade Partnership 

against Terrorism (C-TPAT) program.16 Our interviews with these trade 

industry representatives were based on a nonprobability sample, so while 

they are not generalizable to the entire maritime trade industry, they 

provide insight into the relationship between the SFI and C-TPAT 

programs. We met with CBP officials at domestic ports, as well as 

domestic port authorities to understand the impact of a reciprocal 

scanning requirement. As appropriate, we also relied on our prior body of 

work on container security conducted over the last several years (see list 

of Related GAO Products at the end of this report). 

We conducted this performance audit from August 2008 through October 

2009 in accordance with generally accepted government auditing 

 

14 See Circular No. A-11 Preparation, Submission, and Execution of the Budget (August 

2009); Circular No. A-94 Guidelines and Discount Rates for Benefit-Cost Analysis of Federal 

Programs (October 1992); and Circular A-4 Regulatory Analysis (September 2003). 

15 Due to ongoing security concerns, we did not conduct a site visit at Port Qasim, Pakistan. 

Instead, we observed CBP’s remote operation of the SFI program in Qasim from the 

National Targeting Center-Cargo (NTC-C) in Virginia. 

16 Through C-TPAT, CBP develops voluntary partnerships with members of the trade 

community where private companies agree to improve the security of their supply chains in 

return for various benefits, such as a reduced likelihood that their containers will be 

examined. 

Page 5 GAO-10-12 Supply Chain Security
 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. A detailed discussion of 

our scope and methodology is contained in appendix I. 

CBP has made limited progress in working with the initial seven SFI ports 

to ensure the scanning of U.S.-bound container cargo, and the feasibility of 

100 percent scanning remains largely unproven. CBP and DOE have been 

successful in integrating images of scanned containers onto a single 

computer screen that can be reviewed remotely from the United States. 

They have also been able to use these initial ports as a test bed for new 

applications of existing technology, such as mobile radiation scanners. 

However, the SFI ports’ level of participation, in some cases, has been 

limited in terms of duration (e.g., the Port of Hong Kong stopped their 

participation in scanning after approximately 16 months) or scope (e.g., 

the Port of Busan, Korea allowed scanning in only one of the eight 

terminals). In addition, one port has withdrawn from the SFI program and 

another port has yet to begin scanning operations. Furthermore, since the 

inception of the SFI program in October 2007, no participating port has 

been able to achieve 100 percent scanning. While 54 to 86 percent of the 

U.S.-bound cargo containers were scanned at three comparatively lowvolume ports that are responsible for less than 3 percent of container 

shipments to the United States, sustained scanning rates above 5 percent 

have not been achieved at two comparatively larger ports—the type of 

ports that ship most containers to the United States. Scanning operations 

at the initial SFI ports have encountered a number of challenges—

including safety concerns, logistical problems with containers transferred 

from rail or other vessels, scanning equipment breakdowns, and poor 

quality scan images. Both CBP and GAO had previously identified many of 

these challenges, and CBP officials are concerned that they and the 

participating ports cannot overcome them. Thus, the feasibility of 100 

percent scanning remains largely unproven. 

Results in Brief 

CBP has planned two initiatives to improve container security; however, 

neither initiative would achieve the 9/11 Act requirement to scan 100 

percent of all U.S.-bound cargo by July 2012. The first initiative, the 

“strategic trade corridor strategy,” would involve scanning 100 percent of 

U.S.-bound containers at selected foreign ports where CBP believes it will 

mitigate the greatest risk of WMD entering the United States. The 

Secretary of Homeland Security approved this strategy and, according to 

Page 6 GAO-10-12 Supply Chain Security
 

CBP, it is in negotiations with foreign governments to expand SFI to ports 

in those countries. Because negotiations are ongoing, details on the 

number of ports involved are not yet finalized. The second initiative, 

known as the “10+2” program, requires importers to provide 10 data 

elements and vessel carriers to provide 2 data elements on containers and 

their cargo to CBP, adding to the information available to CBP and 

improving its ability to identify containers that may pose a risk for 

terrorism for additional scrutiny—such as scanning or physical inspection. 

CBP believes the strategic trade corridor strategy, combined with its 

recently implemented 10+2 program, will enhance cargo container 

security. Based on discussions with DHS and CBP officials, it is unclear 

whether DHS intends for the strategic trade corridor strategy and 10+2 

program to be implemented in lieu of the 100 percent scanning 

requirement or whether it is the first phase of implementation at all ports 

worldwide. While the strategic trade corridor strategy and 10+2 may 

improve container security, they do not achieve the legislative requirement 

to scan 100 percent of U.S.-bound containers. According to CBP, it does 

not have a plan for full-scale implementation of the statutory requirement 

by July 2012 because challenges encountered thus far in implementing the 

SFI program indicate that implementation of 100 percent scanning 

worldwide by the 2012 deadline will be difficult to achieve. However, it 

has not performed a feasibility analysis of the SFI pilot and expanding 100 

percent scanning to other foreign ports as required by the SAFE Port Act. 

Furthermore, best practices for project management call for the feasibility 

of a program to be considered early on, which can be done through 

evaluating alternatives. The analysis should consider the scope, objectives, 

time line and resources needed to achieve 100 percent scanning to 

determine if it is feasible and if so what is the best way to achieve it, or if it 

is not feasible, what are the other alternatives. Given the challenges 

encountered in implementing SFI at the initial ports, such an analysis 

could help CBP and Congress determine the most effective way forward to 

enhance container security. Further, senior DHS and CBP officials 

acknowledge that most, if not all foreign ports, will not be able to meet the 

July 2012 target date for scanning all U.S.-bound cargo, and DHS will need 

to issue extensions to such ports to allow the continued flow of commerce 

and still comply with the 9/11 Act. DHS officials told us that the 

department had made a decision to grant a blanket extension to all foreign 

ports rather than on a port-by-port basis since some of the conditions 

listed in the 9/11 Act as a basis for granting extensions can be applied 

systemically to all ports. Specifically, DHS believes the last two 

conditions—that the use of the equipment would significantly impact trade 

capacity and the flow of cargo, and that scanning equipment does not 

adequately provide automatic notification of an anomaly in a container—

Page 7 GAO-10-12 Supply Chain Security
 

could apply to all foreign ports and, thus, warrant the use of a blanket 

extension because two conditions are sufficient to justify an extension 

under the statute. DHS officials acknowledged that this plan for 

extensions could be revisited if there are significant changes (e.g., 

advancements in scanning technology) before the July 2012 deadline. 

CBP and DOE have tracked some information on their own costs for 

implementing SFI—about $100 million to date—but CBP has not 

developed a comprehensive estimate for future U.S. program costs, or 

conducted a cost-benefit analysis that compares the costs and benefits of 

the 100 percent scanning requirement with other alternatives, such as the 

strategic trade corridor strategy. The SAFE Port Act requires CBP to 

report on costs for implementing the SFI program at foreign ports, but 

CBP has not yet estimated total U.S. program costs because of both the 

lack of a decision by DHS on a clear path forward and the unique set of 

challenges that each foreign port presents. While uncertainties exist 

regarding a path forward for the program, a credible cost estimate 

consistent with cost estimating best practices could better aid DHS and 

CBP in determining the most effective way forward for SFI and 

communicating the magnitude of the costs to Congress for use in annual 

appropriations. In evaluating the 9/11 Act, the Congressional Budget Office 

assumed that foreign ports would pay for implementing the scanning 

systems at their ports; however, CBP and DOE have paid the majority of 

SFI costs for operating the SFI program to date. The SAFE Port Act and 

9/11 Act do not address the issue of who is expected to pay the cost of 

developing, maintaining, and using the infrastructure, equipment, and 

people needed for the 100 percent scanning requirement, but 

implementing the requirement would entail costs beyond U.S. government 

program costs, including those incurred by foreign governments, private 

terminal operators, and could result in higher prices for American 

consumers. CBP has not estimated these additional economic costs, 

though they are relevant in assessing the balance between improving 

security and maintaining trade capacity and the flow of cargo. Both the 

Office of Management and Budget and DHS guidance cite cost-benefit 

analysis as a key practice for agencies to use in making decisions and 

allocating resources. Conducting a cost-benefit analysis would allow CBP 

to evaluate the costs and benefits of achieving 100 percent scanning as 

well as other alternatives for enhancing container security. Such an 

analysis could provide important information to CBP and to Congress to 

determine the most effective way forward to enhance container security. 

CBP faces a number of potential challenges in integrating the 100 percent 

scanning requirement with its existing container security programs as it 

Page 8 GAO-10-12 Supply Chain Security
 

may hinder the continued operation of such programs, and its 

international trading partners have raised concerns regarding, among 

other things, the effectiveness of the 100 percent scanning requirement. 

The scanning requirement is a departure from existing container security 

programs because it requires CBP to apply the scrutiny of scanning to all 

containers rather than conducting analyses to determine the containers’ 

potential risk level to determine whether scanning is needed. Senior CBP 

officials have stated that the 100 percent scanning requirement differs 

from the risk-based strategy it uses to identify containers that may require 

more scrutiny—such as scanning and physical inspection. Our work also 

indicates that the 100 percent scanning requirement could present 

potential challenges to the continued operation of other existing container 

security programs, depending upon how the SFI program is expanded and 

100 percent scanning is implemented. For example, at one of the pilot 

ports we visited, the continued operation of the SFI program reduced the 

willingness of the foreign government to work with CBP to identify and 

physically inspect containers under an existing bilateral program. The 

implementation of 100 percent scanning could also present challenges by 

reducing the willingness of private companies to partner with CBP to 

improve their internal security programs. For example, as a benefit, when 

importers currently partner with CBP through the C-TPAT program (and 

share information on their internal security practices), their containers 

generally receive less scrutiny. With the potential worldwide requirement 

to scan all U.S.-bound containers, regardless of the importer’s membership 

in C-TPAT, importers could lose one of the key benefits of participating in 

C-TPAT. The new requirement has also created challenges for CBP in its 

overall working relationships with foreign governments. Because of the 

global nature of the supply chain, international cooperation has been a key 

tenant of U.S. maritime security strategy and practices. However, the 100 

percent scanning requirement is being put forth solely by the United 

States, in contrast to some existing container security programs that were 

negotiated multilaterally or bilaterally with willing partners. Officials at 

international organizations and foreign governments we spoke with have 

raised concerns to CBP about 100 percent scanning, stating that that the 

new requirement is inconsistent with the risk-based strategy adopted in 

international standards for supply chain security that CBP uses in its 

existing programs. The officials also stated the new requirement will 

diminish security by reducing resources available to focus on high-risk 

containers. If the United States enforces the 100 percent scanning 

requirement, the European Commission has stated the European Union 

may impose a reciprocal scanning requirement. This could present further 

challenges to CBP. CBP officials and terminal operators at domestic U.S. 

ports we met with stated that they would have a difficult time meeting 

Page 9 GAO-10-12 Supply Chain Security
 

such a foreign-required scanning process and it could come at the expense 

of their ability to secure the United States from inbound containers that 

might contain WMD. 

To better position DHS to comply with the scanning provisions of the 

SAFE Port and 9/11 Acts, improve container security, and better inform 

Congress on CBP’s efforts to implement 100 percent scanning, we are 

recommending that the Secretary of Homeland Security, working with the 

Commissioner of CBP and in consultation with the Secretaries of Energy 

and State as appropriate (1) conduct a feasibility analysis of implementing 

the 100 percent scanning requirement in light of the challenges faced; 

(2) develop comprehensive and credible estimates of total U.S. program 

costs; (3) conduct a cost-benefit analysis (including all significant 

economic costs) of 100 percent scanning and alternative container 

security programs, and (4) report the results of the feasibility analysis, 

cost estimates, and cost benefit analysis to Congress, to assist DHS and 

Congress in addressing existing challenges and determining the best path 

forward to enhance container security. 

In commenting on a draft of this report, DHS stated that it concurred with 

three of our recommendations related to developing a feasibility analysis 

and a comprehensive cost estimate and providing the results of these and 

other analyses to Congress, but that it had already published reports that 

had addressed these recommendations. We disagree because our analysis 

of these reports reveals that DHS has not fully satisfied the intent of the 

recommendations as its reports do not include a feasibility analysis that 

includes specific elements required by the SAFE Port Act and its cost 

estimates are not comprehensive. DHS also said that it agreed in part with 

our recommendation that it develop a cost benefit analysis of 100 percent 

scanning, acknowledging that the recommended analyses would better 

inform Congress, but stated the recommendations should be directed to 

the Congressional Budget Office. While CBO does prepare cost estimates 

for pending legislation, we think the recommendation is appropriately 

directed to CBP. DHS’s comments are reprinted in Appendix III. CBP and 

the State Department also provided technical comments, which we 

incorporated as appropriate. 

Page 10 GAO-10-12 Supply Chain Security
 

Background 

Vulnerabilities of 

Containers in the 

International Supply 

Chain 

Ports are critical gateways for the movement of commerce through the 

international supply chain. The facilities, vessels, and infrastructure within 

ports, and the cargo containers passing through them, all have 

vulnerabilities that terrorists could exploit. Containers carrying goods that 

are shipped in oceangoing vessels are of particular concern because they 

can be filled overseas at many different locations and are transported 

through complex logistics networks before reaching U.S. ports. In 

addition, transporting a shipping container from its international point of 

origin to its final destination involves many different participants and 

many points of transfer. The container, or material in it, can be affected 

not only by the manufacturer or supplier of the material being shipped, but 

also by carriers who are responsible for getting the material to a port, as 

well as by personnel who load containers onto the ships. Others who 

interact with the cargo or have access to the records of the goods being 

shipped include exporters who make arrangements for shipping and 

loading, freight consolidators who package disparate cargo into 

containers, and forwarders who manage and process the information 

about what is being loaded onto the ship. Figure 1 illustrates many of the 

key participants and points of transfer involved from the time that a 

container is loaded for shipping to its arrival at the destination port and 

ultimately the importer. 

Page 11 GAO-10-12 Supply Chain Security
 

Figure 1: Overview of Key Participants Involved in Shipping Containers in the International Supply Chain 

Source: GAO, DHS. 

EXPORT SIDE

Exporter

Freight consolidator

Inland carrier (e.g., truck, rail)

Terminal operator

Freight forwarder

IMPORT SIDE

Customs broker

Customs inspectors

Terminal operator

Inland carrier (e.g., truck, rail)

Importer

Containerized goods ready 

for shipment

Shipment aboard ocean carrier Arrival at receiving port

Several studies of maritime security conducted by federal, academic, 

nonprofit, and business organizations have concluded that the movement 

of oceangoing cargo in containers is vulnerable to some form of terrorist 

action. Every time responsibility for cargo in containers changes hands 

along the supply chain there is the potential for a security breach. As a 

result, vulnerabilities exist that terrorists could take advantage of by, for 

example, placing a WMD into a container for shipment to the United States 

or elsewhere. U.S. government officials believe that the likelihood of 

terrorists smuggling WMD into the United States in cargo containers is 

relatively low. While there have been no known incidents of containers 

being used to transport WMD, criminals have exploited containers for 

other illegal purposes, such as smuggling weapons, people, and illicit 

substances. 

The U.S. Government Is 

Engaged in Efforts to 

Secure Containers in the 

International Supply Chain 

In the federal government, CBP is responsible for overseeing oceangoing 

container security and reducing the vulnerabilities associated with the 

supply chain. While CBP officials at domestic ports continue efforts to 

identify and examine imports arriving in containers that may pose a risk 

for terrorism, CBP’s post-9/11 strategy also involves focusing security 

Page 12 GAO-10-12 Supply Chain Security
 

efforts beyond U.S. borders to target and examine cargo that may pose a 

risk for terrorism before it enters U.S. ports. CBP’s strategy is based on a 

layered approach of related initiatives that attempt to focus limited 

resources on potentially risky cargo shipped in containers bound for the 

United States while allowing other containers carrying cargo to proceed 

without unduly disrupting commerce. CBP’s layered strategy to address 

container security is complimented by DOE’s efforts to prevent the 

proliferation of nuclear materials. DOE has led U.S. efforts to detect 

radioactive material in cargo containers originating at foreign ports. A 

brief description of CBP and DOE initiatives is provided in table 1. 

Table 1: Description of DHS and DOE Cargo Security Initiatives 

Initiative and year 

introduced 

Department 

currently 

responsible Description 

Automated Targeting 

System (ATS), 1999 

DHS CBP uses ATS—a mathematical model that uses weighted rules to assign a risk 

score to arriving cargo shipments based on shipping information—to help identify 

and prevent potential terrorists and terrorist weapons from entering the United 

States. ATS is a computerized decision support tool used by CBP to review 

documentation, including cargo manifest informationa

 submitted by the ocean 

carriers on all arriving shipments, and entry data (more detailed information about 

the cargo) submitted by brokers, to develop risk scores that help identify containers 

for additional examination. 

24-hour Rule, 2002 DHS CBP generally requires ocean carriers to electronically transmit cargo manifests to 

CBP’s Automated Manifest System 24 hours before the U.S.-bound cargo is loaded 

onto a vessel at a foreign port. Carriers and importers are to provide information to 

CBP that is used to strengthen how ATS assigns risk scores. The cargo manifest 

information is submitted by ocean carriers on all arriving cargo shipments. 

Container Security Initiative 

(CSI), 2002 

DHS CBP places staff at participating foreign ports to work with host country customs 

officials to target and examine high-risk container cargo for weapons of mass 

destruction before they are shipped to the United States. CBP officials identify the 

containers that may pose a risk for terrorism and request that their foreign 

counterparts examine the contents of the containers. 

Customs-Trade Partnership 

Against Terrorism (C-TPAT), 

2001 

DHS CBP develops voluntary partnerships with members of the international trade 

community comprised of importers; customs brokers; forwarders; air, sea, and land 

carriers; and contract logistics providers. Private companies agree to improve the 

security of their supply chains in return for various benefits, such as a reduced 

likelihood that their containers will be examined. 

Megaports Initiative, 2003 DOE DOE installs radiation detection equipment at key foreign ports, enabling foreign 

government personnel to use radiation detection equipment to screen shipping 

containers entering and leaving these ports, regardless of the containers’ 

destination, for nuclear and other radioactive material that could be used against the 

United States and its allies. As of June 2009, the Megaports Initiative was fully 

operational at 23 foreign ports and in various stages of implementation at 21others. 

Page 13 GAO-10-12 Supply Chain Security
 

Initiative and year 

introduced 

Department 

currently 

responsible Description 

Standards to Secure and 

Facilitate Global Trade 

(SAFE) Framework of 

Standards, 2005 

DHS CBP, along with international partners developed the WCO Framework of 

Standards to Secure and Facilitate Global Trade (commonly referred to as the 

SAFE Framework), the core concepts of which are based on components in CBP’s 

CSI and C-TPAT programs. In June 2005, the 173-member customs administrations 

of the World Customs Organization adopted the SAFE Framework and as of June 

2009, 157 member countries, including the United States, had signed letters of 

intent for implementing the SAFE Framework. 

Secure Freight Initiative 

(SFI), 2006 

DHS, DOE CBP and DOE program at selected ports to scan 100 percent of U.S.-bound 

container cargo for nuclear and radiological materials overseas using integrated 

examination systems that couple non-intrusive inspection (NII) and radiation 

detection equipment. 

Domestic Port Radiation 

Detection Scanning, 2007 

DHS CBP program to scan 100 percent of containers arriving in the United States with 

radiation detection equipment prior to leaving a domestic port. As of April 2009, 

CBP had 409 radiation portal monitors deployed at domestic ports, through which 

approximately 98 percent of all arriving containers passed through. 

Mutual Recognition 

Arrangements, 2007, 2008, 

2009 

DHS CBP bilateral program to develop mutual recognition of Authorized Economic 

Operator (AEO) programs.b

 This occurs when customs administrations agree to 

recognize the members of their respective programs. As of June 2009, CBP has 

signed mutual recognition arrangements with New Zealand, Canada, Jordan, and 

Japan. Furthermore, the United States is in discussions with the European Union 

regarding the possibility of entering into a nonbinding mutual recognition 

arrangement. 

Importer Security Filing and 

Additional Carrier 

Requirements (also known 

as 10+2), 2009 

DHS CBP regulation that requires importers and vessel carriers to provide additional data 

elements for improved identification of containers that may pose a risk for terrorism. 

The importer is responsible for supplying CBP with 10 shipping data elements 24 

hours prior to lading while the vessel carrier is required to provide 2 data elements 

in addition to those previously required. 

Source: GAO summary of information obtained from DHS, DOE, and WCO. 

a

Cargo manifests are prepared by the ocean carrier and are composed of bills of lading for each 

shipment of cargo loaded on a vessel to describe the contents of the shipment. 

b

Authorized Economic Operators are those companies that participate in a country’s customs-tobusiness partnership programs and may include, for example, manufacturers, importers, and 

exporters. Incentives for businesses participating in AEO programs are defined and offered by the 

individual member states. 

CBP Has Taken Steps to 

Promote Customs Security 

Standards Internationally 

CBP has taken a lead role in working with foreign customs administrations 

on approaches to standardize supply chain security worldwide. In 2004, 

CBP, along with 11 other member customs administrations of the WCO, 

formed the High Level Strategic Group to develop international standards 

for customs security practices. The group developed the WCO Framework 

of Standards to Secure and Facilitate Global Trade (commonly referred to 

as the SAFE Framework), the core concepts of which are based on 

components in CBP’s CSI and C-TPAT programs. For example, just as in 

the CSI program, the SAFE Framework states that members should use a 

risk-management system to target and identify cargo that may pose a risk 

for terrorism. Similar to C-TPAT, the SAFE Framework incorporates the 

Page 14 GAO-10-12 Supply Chain Security
 

concept of the Authorized Economic Operator (AEO) and provides 

technical guidance for customs administrations to develop an AEO 

program that offers incentives to companies that comply with 

predetermined minimum supply chain security standards. According to 

data from the WCO, as of July 2009, about 70 countries, including the 27 

members states of the European Union, have implemented or have begun 

developing AEO programs. In the United States, C-TPAT is the designated 

AEO program and businesses participating in the program are Authorized 

Economic Operators. In June 2005, the 173-member customs 

administrations of the WCO adopted the SAFE Framework. Further, as of 

June 2009, 157 WCO members, including the United States, had signed 

letters of intent to implement the SAFE Framework (see fig. 2). 

Page 15 GAO-10-12 Supply Chain Security
 

Figure 2: World Map Indicating the 157 WCO Customs Administrations That Have Signed Letters of Intent to Implement the 

WCO SAFE Framework 

Pacific ocean

Atlantic ocean

Pacific ocean

Far East, South and Southeast 

Asia, Australia and the Pacific

Indian ocean

Europe

Africa, Middle East

Source: GAO (map art), Map Resources (map), WCO (data).

WCO member countries that intend to implement the SAFE Framework

Argentina

Bahamas

Bermuda

Bolivia

Brazil

Canada

Chile

Colombia

Costa Rica

Cuba

Dominican 

Republic

Ecuador

El Salvador

Guatemala

Haiti

Honduras

Jamaica

Mexico

Netherlands

Antilles

Nicaragua

Panama

Paraguay

Peru

Saint Lucia

Trinidad and 

Tobago

United States

Uruguay 

Angola

Bahrain

Benin

Botswana

Burkina Faso

Burundi

Cameroon

Cape Verde

Central African

 Republic

Chad

Comoros

Congo

 (Republic of the)

Côte d'Ivoire

Democratic 

Republic 

 of the Congo

Egypt

Ethiopia

Gabon

Gambia

Ghana

Guinea

Iraq

Jordan

Kenya

Kuwait

Lebanon

Lesotho

Liberia

Libyan Arab

 Jamahiriya

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Oman

Qatar

Rwanda

Saudi Arabia

Senegal

Sierra Leone

South Africa

Afghanistan

Australia

Bhutan

Cambodia

China

Fiji

Hong Kong, China

India

Indonesia

Iran (Islamic Republic 

of)

Japan

Korea (Republic of)

Japan

Korea (Republic of)

Lao People's

 Democratic 

Republic

Macau, China

Malaysia

Maldives

Mongolia

Myanmar

Nepal

New Zealand

Pakistan

Papua New 

Guinea

Philippines

Singapore

Sri Lanka

Thailand

Vietnam

Sudan

Syrian Arab

 Republic

Swaziland

Tanzania

Togo

Tunisia

Uganda

United Arab

 Emirates

Yemen

Zambia

Zimbabwe

Albania

Armenia

Azerbaijan

Belarus

Croatia

Georgia

Iceland

Israel

Kazakhstan

Kyrgyzstan

Moldova

Montenegro

Norway

Russian Federation

Serbia

Tajikistan

The Former Yugoslav

 Republic of Macedonia

Turkey

Ukraine

Uzbekistan

European Union –

 27 Member States

South, North and Central

America, and the Carribean 

Note: Countries’ names and geographic regions have been defined by WCO. 

While CBP has developed cooperative relationships with foreign 

governments to enhance the security of U.S.-bound cargo containers 

before they are placed on a vessel, several factors at foreign ports that 

Page 16 GAO-10-12 Supply Chain Security
 

impact the security of cargo are beyond CBP’s control. For example, while 

CBP has developed specific standards for the inspection equipment used 

to scan cargo containers at domestic ports, CBP has potentially limited 

assurance that this inspection equipment is capable of detecting and 

identifying potential WMD at foreign ports. Additionally, while CBP can 

issue a “do not load” order so that a specific cargo container would not be 

allowed on a U.S.-bound vessel, it has no authority to compel host 

governments to participate in security programs or to scan cargo 

containers that it has determined may pose some risk. For example, when 

CBP determines that cargo in a particular container at a CSI or SFI port 

poses some risk, it must request that the host government’s customs 

service conduct a physical examination of the container since CBP has no 

authority to do so itself. Similarly, unlike domestic ports, CBP cannot 

compel private sector entities operating at foreign ports to participate in 

security initiatives. For example, at one port, for a period of approximately 

2 months, the terminal operator ceased to provide CBP information on 

which containers leaving the port were bound for the United States. As a 

result, CBP had greater difficulty determining which containers were U.S.-

bound and, therefore, should be scanned with imaging equipment. Under 

these circumstances, CBP would still have the option of preventing the 

cargo containers from being loaded onto U.S. bound vessels, or flagging 

the containers for further inspection once they arrive in the United States. 

Equipment Used to 

Conduct Examinations of 

Cargo Containers 

There are generally two types of cargo container examinations—scanning 

equipment and physical searches—used as part of the SFI and CSI 

programs. There are two basic types of scanning equipment currently used 

to examine cargo containers that do not require the container to be 

opened: (1) radiation detection equipment, including radiation portal 

monitors, and (2) non-intrusive imaging equipment (NII), which may use 

X-rays or gamma rays. Radiation detection equipment, such as radiation 

portal monitors (RPM) and radiation isotope identification devices (RIID) 

detect the presence of radioactive material that may be in a container. 

RIIDs and certain types of RPMs can identify the type of material emitting 

the radiation and whether the material poses a threat or is a naturally 

Page 17 GAO-10-12 Supply Chain Security
 

occurring radioactive material, such as that found in certain ceramic tiles.17

We observed at domestic and foreign ports that if radioactive emissions 

were detected from a cargo container, customs officials used a handheld 

RIID to determine whether the radiation being emitted posed a threat. The 

second type of equipment, referred to as NII, uses X-rays or gamma rays to 

scan a container and create images of the container’s contents without 

opening it. Examples of a RPM, handheld RIID, and NII are depicted in 

figure 3. 

Figure 3: Examples of Scanning Equipment Used at SFI Ports 

Source: GAO.

Radiation portal monitor (RPM) Handheld radiation isotope identification 

device (RIID)

Non-intrusive imaging (NII) scanner

CBP officials, along with host government officials, review the images 

produced with the NII to detect anomalies or shielding that could indicate 

the presence of WMD. The 100 percent scanning provision of the 9/11 Act 

requires containers to be scanned with both radiation detection and NII 

equipment; doing so may identify WMD material that is successfully 

shielded from detection by RPM. The average time at which a container is 

 

17 DHS, through its Domestic Nuclear Detection Office (DNDO), is currently sponsoring 

testing of the Advanced Spectroscopic Portal (ASP) monitors, which are designed to both 

detect and identify the specific type of source material. We have previously identified 

deficiencies associated with testing the ASP. For additional details see Combating Nuclear 

Smuggling: DHS Improved Testing of Advanced Radiation Detection Portal Monitors, but 

Preliminary Results Show Limits of New technology, GAO-09-655 (Washington, D.C.: May 

21, 2009). 

Page 18 GAO-10-12 Supply Chain Security
 

processed through the scanning system is 3 to 5 minutes. If the use of the 

RIID is necessary, the average time increases another 5 to 10 minutes. 

Secure Freight Initiative 

(SFI) 

In response to the SAFE Port Act requirement to implement a pilot 

program to determine the feasibility of scanning 100 percent of U.S.-bound 

containers with both RPM and NII equipment, CBP, the State Department, 

and DOE jointly announced the formation of SFI in December 2006 as an 

effort to build upon existing container security measures by enhancing the 

U.S. government’s ability to ensure containers are scanned for nuclear and 

radiological material overseas and better assess the risk of inbound 

containers. In essence, SFI builds upon the CSI and Megaports programs 

by combining each program’s scanning technology equipment. To 

accomplish this, CBP met with terminal operators to identify foreign ports 

for inclusion in the pilot program to scan 100 percent of U.S.-bound 

containers. Based on discussions with terminal operators and subsequent 

discussions with host government officials, three ports were selected to 

implement the SAFE Port Act pilot program: Qasim, Pakistan; Puerto 

Cortes, Honduras; and Southampton, United Kingdom. According to CBP 

officials, while initiating the SFI program at these ports satisfied the SAFE 

Port Act requirement to implement the program at three ports,18 CBP also 

selected the ports of Hong Kong; Busan, South Korea; and Salalah, Oman 

to more fully demonstrate the capability of the integrated scanning system 

at larger, more complex ports with higher percentages of transshipment 

container cargo—cargo containers from one port that are taken off a 

vessel at another port to be placed on another vessel bound for the United 

States. For example, port officials told us that at the Ports of Hong Kong, 

Singapore, and Salalah, transshipment cargo constitutes about 50 percent, 

87 percent, and 99 percent of U.S.-bound containers, respectively. CBP 

officials also stated that with the passage of the 9/11 Act, the focus of the 

SFI program shifted from determining the feasibility of 100 percent 

scanning to becoming the first phase of CBP’s phased-in approach to 

implementing the 100 percent scanning requirement. 

 

18 The act required CBP to identify three distinct ports through which containers pass or 

are transshipped to the United States with unique features and differing levels of trade 

volume. 6 U.S.C. § 981(a). 

Page 19 GAO-10-12 Supply Chain Security
 

While CBP and DOE have made progress in integrating new technologies 

as part of the SFI program, progress in implementing and expanding the 

scanning of U.S.-bound cargo containers at participating ports has been 

limited. Some ports that initially agreed to participate in the SFI program 

did so for a limited time, or on a limited basis. Logistical, technological, 

and other problems at participating ports, as well as concerns regarding 

the safety of the NII equipment used for the SFI program, have prevented 

any of the participating ports from achieving 100 percent scanning, as 

ultimately required by the 9/11 Act, leaving the feasibility and efficacy of 

100 percent scanning largely unproven. Moreover, attempts to implement 

100 percent scanning at these foreign ports have confirmed challenges 

previously identified by CBP and GAO.19

CBP’s Progress with 

SFI Implementation 

and Operation to Date 

Has Been Limited, 

Leaving the 

Feasibility of 100 

Percent Scanning 

Largely Unproven 

CBP and DOE Have Made 

Progress in Integrating and 

Modifying Scanning 

Equipment 

CBP has been successful in integrating outputs from the various types of 

scanning equipment used to scan cargo containers at foreign ports 

participating in the SFI program. CBP and DOE were able to integrate the 

outputs from RPM and NII equipment with the Automated Targeting 

System (ATS) so a CBP officer can review all the data and information 

associated with a container on a single screen.20 CBP officers can also 

access scanning information remotely and do not need to be present at an 

SFI port to analyze the RPM results and NII images of containers. For 

example, at the National Targeting Center-Cargo (NTCC), we observed 

that outputs from RPM and NII equipment located at Port Qasim in 

Pakistan were accessible to CBP officers located in the United States.21

These officers could observe the scanning equipment outputs in 

combination with information from ATS to make determinations as to 

whether to request that the cargo container being scanned be more closely 

examined by host government personnel. CBP officers could also observe 

scans of cargo containers being conducted at the port in real time via 

 

19 GAO, Supply Chain Security: Challenges to Scanning 100 Percent of U.S.-Bound Cargo 

Containers, GAO-08-533T (Washington, D.C.: June 12, 2008). 

20 ATS is a computerized decision support tool to review electronic documentation, 

including electronic manifest information submitted by ocean carriers to help identify 

shipments requiring additional scrutiny. 

21 According to CBP, the National Targeting Center (NTC) was established in response to 

the need for proactive targeting aimed at preventing acts of terror and to seize, deter, and 

disrupt terrorists and implements of terror. NTC originally combined both passenger and 

cargo targeting in one facility. It was later divided into the NTC-C and the National 

Targeting Center-Passenger. For purposes of this report, we use NTC-C in our references 

since its mission is to support CBP cargo-targeting operations. 

Page 20 GAO-10-12 Supply Chain Security
 

cameras that can be operated remotely from the United States. Examples 

of scanning outputs and equipment used at an SFI port are shown in 

figure 4. 

Figure 4: Example of Scanning Outputs and Equipment at SFI Ports 

CBP officer reviewing outputs from SFI scanning equipment in ATS, Port of 

Southampton, United Kingdom

Radiation detection equipment known as Mobile Radiation Detection Identification 

System (MRDIS), Port of Salalah, Oman

Source: GAO.

This integration of technologies has also allowed CBP to transfer targeting 

efforts involving the Port of Southampton, United Kingdom, to domestic 

ports. Currently, CBP officers in Newark, Baltimore, Savannah, and other 

domestic port locations have been trained to incorporate the scanned data 

from the Port of Southampton into their targeting methodology and 

coordinate secondary examinations with the SFI team at the port. 

Similarly, at Puerto Cortes in Honduras, we observed that scan data from 

imaging and RPM equipment were available for review by CBP and 

Honduran Customs officials almost instantly after the images were 

generated by the inspection equipment. Honduran Customs officials stated 

that, in addition to CBP’s interest in detecting WMD, having this 

information available greatly assisted in their efforts to detect and identify 

contraband, such as narcotics, being shipped in cargo containers through 

the port. 

Ports participating in the SFI program have also been able to serve as a 

testing ground for new inspection technologies. For example, at the Port 

Page 21 GAO-10-12 Supply Chain Security
 

of Salalah in Oman, we observed the testing of mobile platforms to carry 

large format radiation detection equipment, known as Mobile Radiation 

Detection Identification Systems (MRDIS) that Pacific Northwest National 

Laboratory, in conjunction with DOE, has developed (see fig. 4). The 

MRDIS units were built to more effectively capture transshipment cargo 

(cargo taken off of one vessel to be placed on a U.S.-bound vessel) as it is 

being unloaded from a vessel without creating congestion. However, the 

effectiveness of the MRDIS, and its impact on the flow of containers, has 

not been fully tested because the SFI program is not yet operational at the 

Port of Oman. 

Foreign Port Participation 

in the SFI Program Has 

Been Limited 

CBP reached arrangements with foreign governments to implement the 

SFI program at seven foreign ports. As of June 2009, SFI operations have 

been conducted at five ports, but in some cases for a limited time or on a 

limited basis. In addition, one port has withdrawn and another has yet to 

begin scanning operations. 

As shown in table 2, the SFI program has operated continuously since 

October 2007 at Port Qasim, Pakistan; Puerto Cortes, Honduras; and the 

Port of Southampton, United Kingdom and the majority of U.S.-bound 

cargo containers from these ports have been scanned. Host government 

officials at Puerto Cortes have expressed a desire to continue with the SFI 

program and have allocated personnel to support program operations. At 

the Port of Southampton, the host government has allowed SFI operations 

to continue, but withdrew customs personnel originally allocated to 

support program operations after the 6-month arrangement it had with 

CBP to participate in the SFI program came to an end. Customs officials in 

the United Kingdom stated that the costs associated with assigning 

personnel to assist CBP with SFI program operations were preventing 

these officials from fulfilling their domestic responsibilities, such as 

detecting drugs. As a result, the SFI program at the Port of Southampton is 

now solely supported by CBP officers working directly with the terminal 

operator. 

Page 22 GAO-10-12 Supply Chain Security
 

Table 2: Information on Ports Initially Agreeing to Participate in the SFI Program 

SFI port Date of SFI operations 

Qasim, Pakistan October 12, 2007 to present 

Puerto Cortes, Honduras October 12, 2007 to present 

Southampton, United Kingdom October 12, 2007 to presenta

Hong Kong January 11, 2008 to April 30, 2009 

Busan, South Korea March 18, 2009 to present 

Salalah, Oman Program postponed with no planned initiation date 

Singaporeb CBP and the Government of Singapore mutually 

agreed the Port of Singapore would not participate in 

SFI prior to operations beginning 

Source: GAO analysis of data provided by CBP. 

a

Although SFI operations at the Port of Southampton are ongoing, the SFI program is operated solely 

by CBP officials. United Kingdom customs withdrew its participation from the program in April 2008, 

after the 6-month arrangement it had to participate came to an end. 

b

While CBP and the Government of Singapore initially signed a declaration of principles in December 

2007 to establish the Port of Singapore’s participation in the SFI program, this decision was later 

mutually rescinded. 

Among ports that participated in the SFI program, the largest port in terms 

of container volume shipped to the United States, the Port of Hong Kong, 

participated in the program for about 16 months—scanning containers at 

one of the nine terminals on a voluntary basis. The program ended as 

scheduled in April 2009 and was not renewed at the mutual decision of the 

Hong Kong government and DHS. Discussing their decision not to extend 

SFI, Hong Kong port officials observed that CBP-provided statistics 

showed no trade facilitation benefits for containers passing through SFI 

scanning and noted CBP’s efforts to focus container scanning at those 

ports where there was greater risk. They also stated that they saw no 

benefit to participation in the program in terms of their own port security 

and expressed concerns that equipment and infrastructure costs, as well 

as costs to port efficiency, would make full implementation of the SFI 

program at all of its terminals unfeasible. 

Similarly, according to CBP officials, the government of South Korea 

agreed to allow the Port of Busan to participate in the SFI program for 6 

months at one terminal at the port. CBP officials stated that the South 

Korean government has agreed to extend the program for another 6 

months, but no permanent arrangement has been reached. 

In addition, two ports that had initially agreed to participate in the 

program have since withdrawn or postponed their operations. DHS and 

Page 23 GAO-10-12 Supply Chain Security
 

the government of Singapore mutually agreed to suspend the SFI program 

at the Port of Singapore before the program began scanning operations, 

noting concerns about the potential adverse impact on port efficiencies 

due to the large volume and complexity of operations at the port. In this 

instance, both DHS and Singapore agreed that the benefits of initiating the 

program with existing technology were outweighed by the potential 

impact the operations could have on trade flow through the port. Also, 

according to CBP officials, Port Salalah in Oman had initially agreed to 

participate in the SFI program for 6 months. However, according to U.S.-

government officials, implementation of the SFI program at Port Salalah 

has been postponed due to port management concerns regarding the 

scope, time line, and criteria for success for the program. The officials said 

that U.S. government personnel are working with Omani Customs to find a 

path forward, but no firm plans or time line yet exist for initiating SFI 

operations at the Port of Salalah. 

Government officials we spoke with in Asia and Europe generally stated 

that they viewed the implementation and operation of the SFI program to 

be a pilot—with a definite start and end date—to determine the feasibility 

and usefulness of further implementation. As such, they stated that they 

do not view the SFI program as being permanent. 

Scanning Rates at Larger 

SFI Ports Have Been Far 

Short of 100 Percent 

While CBP has been able to scan a majority of U.S.-bound cargo 

containers from three comparatively low-volume ports participating in the 

SFI program, at two higher volume ports—which constitute approximately 

17 percent of containers arriving in the United States—it has been able to 

scan no more than 5 percent of U.S.-bound cargo containers, on average, 

most of which were scanned after they were determined to be high risk by 

CBP officers as part of the CSI program, according to CBP officials.22 As 

shown in table 3, at Port Qasim, Puerto Cortes, and the Port of 

Southampton—which together account for 2.4 percent of U.S.-bound 

cargo containers with little or no transshipment cargo containers—CBP 

has been able to scan, on average, 54 percent to 86 percent of the U.S.-

bound cargo containers. In contrast, at the Ports of Hong Kong and 

Busan—which together account for 16.6 percent of U.S.-bound cargo 

containers and have larger percentages of transshipped cargo—CBP has 

 

22 Under the CSI program, CBP personnel work with host country customs officials to 

identify high-risk cargo before it is loaded on a U.S.-bound vessel. CBP officials then 

request that their foreign counterparts examine the contents of the container. 

Page 24 GAO-10-12 Supply Chain Security
 

been able to scan, on average, 3 to 5 percent of the U.S.-bound cargo 

containers. CBP officials stated that while scanning percentages are low, 

operations at these ports have been limited to a single terminal or to an 

area within a single terminal. They added that these larger ports would 

only agree to participate in the program if SFI operations were limited in 

scope, and the agency has worked with host governments to expand 

operations. However, as of yet, CBP has not made arrangements to expand 

operations at these ports. 

Table 3: Data on Containers Scanned and Container Volume at SFI Ports 

Average percentage of U.S.-

bound containers scanned 

during SFI program 

SFI port RPMa NII 

Number of U.S.-bound 

containers exported from 

SFI ports, fiscal year 2008

Rank of SFI ports in 

terms of volume of 

containers exported to 

the U.S., fiscal year 2008 

Percentage of all cargo 

containers that arrived 

in U.S. from SFI ports, 

fiscal year 2008 

Qasimb85 86 29,191 61st 0.3

Puerto Cortesb 76 78 188,438 21st 1.9

Southamptonb54 56 20,687 63rd 0.2

Hong Kongc3 3 894,080 3rd 9.2

Busand5 5 720,582 4th 7.4

Salalah Not yet operational 55,053 37th 0.6

Source: GAO analysis of data provided by CBP. 

a

The radiation detection equipment used to scan containers are referred to as radiation portal 

monitors (RPM). 

b

Scanning percentages at Port Qasim, Puerto Cortes, and the Port of Southampton reflect operations 

conducted from November 2007 through May 2009. 

c

Scanning percentages at the Port of Hong Kong reflect operations conducted from February 2008 

through April 2009. 

d

Scanning percentages at the Port of Busan reflect operations conducted from April 2009 through 

May 2009. 

Page 25 GAO-10-12 Supply Chain Security
 

To date, attempts to implement 100 percent scanning at foreign ports have 

confirmed challenges, some of which we and CBP have previously 

reported.23 For example, challenges associated with the perceived safety of 

the NII scanning equipment, scanning cargo containers arriving at a port 

by rail, or scanning transshipment cargo containers, among other things, 

have prevented CBP from achieving 100 percent scanning at participating 

ports.24 Specifically: 

• Safety Concerns: Port officials at five of the seven ports that initially 

agreed to participate in the SFI program expressed concerns regarding 

the safety of drivers and port operators who work near NII scanning 

equipment, which generates radiation in order to generate an image of 

a container’s contents. CBP provided information or conducted town 

hall meetings on the safety of the equipment to officials and workers at 

participating ports. However, to address these concerns and allow for 

the equipment to be used, port officials required that passage through 

the NII equipment at the ports of Hong Kong and Busan be voluntary, 

thus limiting efforts to test the feasibility of using the NII equipment, as 

well as the SFI program’s overall effectiveness. 

The Feasibility of 100 

Percent Scanning Remains 

Largely Unproven as 

Efforts to Implement and 

Operate the SFI Program 

at Participating Ports Have 

Confirmed Previously 

Identified Challenges 

• Logistics: Logistics issues and costs associated with moving cargo 

containers to scanning areas at the Port of Southampton resulted in 

the cessation of scans of cargo containers arriving by rail. Initially, 

CBP and the terminal operator agreed that the terminal operator 

would absorb the costs to place cargo containers arriving by rail onto 

trucks so that those containers could pass through SFI scanning 

systems, at a cost of approximately $60 per container, but this 

arrangement ended in April 2008. 

• Transshipment: Transshipment cargo containers—those taken off of 

one vessel to be placed on a U.S.-bound vessel—present significant 

challenges to scanning because of logistical difficulties associated with 

 

23 GAO-08-533T. In this testimony we cited the following potential challenges to conducting 

100 percent scanning: workforce planning, host nation examination practices, measuring 

performance, resource responsibilities, logistics, technology and infrastructure, use and 

ownership of data, consistency with risk management, and reciprocity and trade concerns. 

24 Some examples of these challenges cannot be included in this report due to the security 

sensitive nature of the information. Rather, we have included examples from public 

documents. 

Page 26 GAO-10-12 Supply Chain Security
 

transporting these containers.25 Transshipment cargo containers are 

only available for scanning for a comparatively short period of time 

and may be difficult to access. For example, UK customs officials 

stated that it was not possible to route transshipment containers that 

arrived by sea through the SFI equipment. As a consequence, the 

scanning of transshipment containers was delayed at the Port of 

Southampton, United Kingdom. Further, in April 2009, the Acting 

Commissioner of CBP testified that there is no proven technology that 

can scan these containers. 

• Equipment Breakdowns: Scanning and communication equipment 

breakdowns have occurred at several ports. For example, two of the 

three seaports fully participating in the SFI pilot program experienced 

weather-related mechanical breakdowns of scanning equipment. 

Specifically, at the Port of Southampton, a piece of radiation scanning 

equipment failed because of rainy conditions and had to be replaced, 

resulting in 2 weeks of diminished scanning capabilities. Additionally, 

Port Qasim in Pakistan has experienced difficulties with scanning 

equipment because of the extreme heat. Because of the range of 

climates at the more than 600 foreign ports that ship cargo to the 

United States, these types of technological challenges could be 

experienced elsewhere. 

Additionally, while cargo containers may be scanned at SFI ports, the 

images obtained through these scans may not always be sufficiently clear 

to determine the potential presence of WMD. For example, we observed 

that some trucks carrying cargo containers at the Port of Hong Kong 

passed through imaging equipment too quickly to obtain a clear enough 

image to verify the contents of the container. This problem is not isolated 

to scans that were taken at the Port of Hong Kong, as CBP officials at the 

Port of Long Beach also showed us images taken at other SFI ports that 

were not clear enough to read because the driver drove through the NII 

equipment too quickly. The CBP officials also showed us an image in 

which one-third of the container was not captured. The CBP officials 

further explained that if the container was determined to pose a risk for 

terrorism by CBP through targeting activities, it would need to be 

 

25 According to DOE, while scanning transshipment containers remains a significant 

challenge, DOE has modified current radiation detection technologies to scan a high 

percentage of transshipped containers at some foreign ports. For example, in Freeport, 

Bahamas, DOE mounted radiation detection panels on straddle carriers to scan 

transshipped containers while stacked in the container yard. 

Page 27 GAO-10-12 Supply Chain Security
 

examined again with imaging equipment upon arrival in the United States 

because of the inadequacy of the image scan at the SFI port. 

CBP plans to implement SFI at select ports it believes would help mitigate 

the greatest risk. CBP officials maintain that this strategy, combined with a 

plan to gather additional cargo container information, would enhance 

container security. However, DHS and CBP acknowledge that not all 

foreign ports will be in a position to scan 100 percent of U.S.-bound cargo 

containers by July 2012. While CBP has expressed concerns about the 

feasibility of scanning 100 percent of U.S.-bound cargo containers, it has 

not conducted a feasibility analysis of expanding 100 percent scanning to 

nonpilot ports, as required by the SAFE Port Act. Also, because of 

concerns about the feasibility of the scanning requirement, DHS plans to 

issue a blanket extension for all ports pursuant to the extension provisions 

of the 9/11 Act. 

CBP Plans to Improve 

Container Security 

Through Two 

Initiatives, but These 

Plans Will Not 

Achieve 100 Percent 

Scanning and Will 

Require a Process to 

Grant Extensions to 

Noncompliant Ports 

DHS Plans to Improve 

Container Security by 

Expanding SFI to Strategic 

Corridors and Gathering 

Additional Data for 

Assessing Risks 

In April 2009, the Secretary of DHS endorsed the strategic trade corridor 

strategy as the path forward for implementing the SFI program. The 

Secretary was presented with three options ranging from implementing 

SFI at 70 ports that account for shipping over 90 percent of U.S.-bound 

containers to seeking repeal of the 100 percent scanning requirement. The 

strategic trade corridor strategy selected by the Secretary focuses cargo 

container scanning efforts on a limited number of ports where CBP has 

determined SFI will help mitigate the greatest risk of potential WMD from 

entering the United States.26 CBP determined which ports were strategic 

by working with DOE to develop a joint analysis of the potential risk of 

DHS Plans to Improve Security 

by Expanding SFI to Strategic 

Trade Corridors 

 

26 According to CBP officials, the agency’s plan is to scan those containers arriving by truck 

at strategic ports, until the technology is available to scan transshipment containers 

without disrupting the flow of trade. 

Page 28 GAO-10-12 Supply Chain Security
 

cargo containers from all foreign seaports that ship directly and indirectly 

to the United States. This analysis focused on issues such as known 

smuggling routes, volume of container traffic, proximity to special nuclear 

material sources, and known presence of terrorist cells operating in the 

country and according to CBP, had been validated by the intelligence 

community. DHS has endorsed the strategic trade corridor concept, 

recognizing DHS will fund the majority of costs if not all, but has not yet 

finalized decisions regarding the specific number of strategic ports to be 

included or developed a time frame for implementation. However, it is 

unclear whether DHS intends for the strategic trade corridor strategy to be 

implemented in lieu of the 100 percent scanning requirement or whether it 

is an initial step towards full implementation at all ports. While DHS is still 

developing specific details, CBP is working on expanding the SFI program 

to strategic ports. 

CBP officials stated that the strategic trade corridor strategy, combined 

with additional information on U.S.-bound cargo containers it receives 

through the recently implemented “10+2” program, will enhance container 

security. The Importer Security Filing and Additional Carrier 

Requirements (also known as “10+2”) is a regulation issued pursuant to 

the SAFE Port Act that requires importers and vessel carriers to provide 

additional data elements for U.S.-bound cargo containers to CBP. As of 

January 2009,27 the importer is responsible for supplying CBP with 10 

shipping data elements, including shippers’ addresses and cargo 

destinations, 24 hours prior to lading. Additionally, the vessel carrier is 

required to provide 2 data elements, the vessel stow plan, which is used to 

identify the location of containers onboard a vessel, and container status 

messages, which are used to track the movement of containers through 

the supply chain. The data supplements the advanced cargo data CBP 

receives through the 24-hour rule. CBP believes the additional data 

provided through 10+2 will enhance security by improving the targeting 

process used to identify containers that may pose a risk for terrorism. 

CBP Plans to Improve Security 

by Gathering Additional Data 

through its 10+2 Program for 

Assessing Risks 

 

27 Although 10+2 went into effect in January 2009, CBP has implemented a ‘flexible 

enforcement period’ until January 2010, or later, to allow industry an opportunity to 

become familiar with and adjust to the new requirements. 

Page 29 GAO-10-12 Supply Chain Security
 

While security may be enhanced through the strategic trade corridor 

strategy and 10+2 program, these efforts will not achieve the 9/11 Act 

requirement to scan 100 percent of U.S.-bound cargo containers by July 

2012. Furthermore, DHS and CBP do not have a plan on how they will 

work with foreign ports to ensure that 100 percent of U.S.-bound cargo 

containers are scanned by July 2012 to meet the requirements set forth in 

the 9/11 Act. According to DHS and CBP officials, they have not developed 

a plan to achieve 100 percent scanning by July 2012 because challenges 

encountered thus far in implementing the SFI program indicate that 

implementation of 100 percent scanning worldwide by the 2012 deadline 

will be difficult to achieve. While both DHS and CBP question the security 

value and feasibility of achieving 100 percent scanning by 2012, they have 

yet to conduct an analysis of the feasibility of scanning all U.S.-bound 

containers to demonstrate whether the 9/11 Act requirement can be met. 

The SAFE Port Act requires an analysis of the feasibility of expanding 

scanning to other foreign ports participating in the Container Security 

Initiative. 28 Furthermore, standard practices for project management call 

for the feasibility of programs to be considered early on, which can be 

done through evaluating alternatives.29 CBP should determine whether 100 

percent scanning is feasible and if so what is the best way to achieve it, or 

if it is not feasible, what are the other alternatives. The analysis should 

consider the scope, objectives, time line, and resources needed to achieve 

100 percent scanning or the alternatives, if appropriate. Such an analysis 

would ensure that a complete assessment of feasibility is conducted and 

the results are communicated so that DHS and Congress could determine 

key challenges, ways they can be addressed, and potential courses of 

action for enhancing container security. 

While DHS and CBP Question 

Ability to Achieve 100 Percent 

Scanning, They Have Not 

Conducted a Feasibility 

Analysis 

 

28 6 U.S.C. § 981(d)(5). Neither the SAFE Port Act nor its legislative history contains an 

explicit definition of the term “feasibility” with respect to the scanning requirement. 

However, the act indicates that the pilot-related “need and feasibility analysis” should 

include some of the following factors: (1) infrastructure requirements, (2) effect on average 

processing time for containers, (3) scalability to meet current and future forecasted trade 

flows, (4) ability of system to maintain and catalog appropriate data for reference and 

analysis, (5) cost to install and maintain an integrated scanning system, (6) ability of 

administering personnel to efficiently manage and utilize the data, (7) the ability to 

safeguard commercial data generated, and (8) an assessment of the reliability of currently 

available technology to implement an integrated scanning system. 

29 The Project Management Institute, A Guide to the Project Management Body of 

Knowledge. 

Page 30 GAO-10-12 Supply Chain Security
 

DHS acknowledged it will not be able to meet the July 2012 deadline for 

full-scale implementation of the 9/11 Act’s scanning requirement and will 

need to grant extensions to those foreign ports unable to meet the 

scanning deadline in order to maintain the flow of trade and comply with 

the 9/11 Act prohibition on allowing containers that have not been scanned 

to enter the United States. To grant an extension, the 9/11Act requires DHS 

to certify that at least two of six conditions exist.30 The act also requires 

DHS to report to Congress 60 days before any extension takes effect on 

the container traffic affected by the extension, the evidence supporting the 

extension, and the measures DHS is taking to ensure that scanning can be 

implemented as early as possible at the ports covered by the extension.31

DHS has the authority to grant extensions to any number of foreign ports 

for which at least two of the six conditions exist, which could mean 

granting a blanket extension to all ports where such conditions exist or on 

a port-by-port basis. Granting extensions on a port-by-port basis could, 

according to international organizations we spoke with, potentially give a 

competitive advantage to some ports and lead to trade disruptions. They 

cited a possible example where one port that invests in scanning 

equipment would be able to meet the scanning requirement, but another 

port that does not invest in scanning equipment could not meet the 

requirement. If the latter port gets an extension, it could have a temporary 

competitive advantage over the former port because its costs of operations 

do not include the costs of investments in scanning equipment. Similarly, 

officials from Industrial Economics, Inc.—a firm contracted by CBP to 

assess the economic impact of 100 percent scanning—told us that if 

multiple ports in an area are accessible and one port does not have a 

scanning system but is temporarily exempt from the 100 percent 

requirement, it may get a competitive advantage in the region because the 

private industry would likely choose to ship containers from ports where it 

believes it will experience the fewest delays. 

DHS Plans to Grant 

Blanket Extensions to 

Ports Unable to Meet the 

2012 Deadline 

 

30 The 9/11 Act scanning requirement authorizes DHS to grant extensions for a port or ports 

if at least two of the following six conditions exist: (1) equipment to scan all U.S.-bound 

containers is not available for purchase and installation; (2) equipment to scan all U.S.-

bound containers does not have a sufficiently low false alarm rate; (3) equipment to scan 

all U.S.-bound containers cannot be purchased, deployed, or operated at a port or ports 

(including where this is due to the physical characteristics of the port); (4) equipment to 

scan all U.S.-bound containers cannot be integrated with existing systems; (5) use of the 

equipment to scan all U.S.-bound containers would significantly impact trade capacity and 

the flow of cargo; or (6) the scanning equipment does not adequately provide automatic 

notification of an anomaly in a container. 6 U.S.C. § 982(b)(4). 

31 6 U.S.C. § 982(b)(6). 

Page 31 GAO-10-12 Supply Chain Security
 

During the course of our review, DHS was developing its approach for 

granting extensions. CBP program officials told us that DHS had been 

considering granting extensions on port-by-port basis, which they stated 

would be a lengthy process. According to these officials, site surveys 

would be needed to assess each of the ports that ship containers directly 

to the United States to determine the feasibility of establishing a scanning 

system. CBP program officials estimated each site survey would take 

approximately 2 weeks to complete, plus the additional time needed to 

draft the report to Congress justifying the extension. In September 2009, 

DHS officials told us that the department had determined that port-by-port 

site visits were not required to invoke a condition to claim an extension. 

According to DHS officials, at least some of the conditions listed in the 

9/11 Act as a basis for granting extensions can be applied systemically to 

all ports rather than on a port-by-port basis. At a minimum, DHS believes 

the last two conditions—use of the equipment to scan all U.S.-bound 

containers would significantly impact trade capacity and the flow of cargo, 

and scanning equipment does not adequately provide automatic 

notification of an anomaly in a container—could apply to all foreign ports 

and, thus, may warrant the use of a blanket extension. DHS officials 

acknowledged that their current position could change if there are 

significant changes (e.g., advancements in scanning technology) before the 

July 2012 deadline. 

CBP and DOE have identified costs borne by the U.S. government for 

implementing SFI—about $100 million to date—but CBP has not 

developed a cost estimate for future U.S. program costs, or conducted a 

cost-benefit analysis that compares the costs of the scanning requirement 

with other alternatives, such as the strategic trade corridor strategy. In 

addition, CBP has not estimated costs to stakeholders, such as foreign 

governments and terminal operators; or nonfinancial costs, such as trade 

disruptions, which could be greater than operating and maintaining the 

scanning systems. 

CBP Has Not 

Identified Total 

Program Costs of SFI 

Implementation or 

Conducted a CostBenefit Analysis to 

Assist in Evaluating 

Alternatives to 

Achieving the 100 

Percent Scanning 

Requirement 

Page 32 GAO-10-12 Supply Chain Security
 

The SAFE Port Act requires CBP to report on U.S. government costs of 

deploying integrated scanning equipment at foreign ports as part of the SFI 

program, and CBP and DOE have identified costs borne by the United 

States of about $100 million for implementing and operating the SFI 

program at six participating ports through June 2009. While CBP and DOE 

have purchased cargo container scanning equipment thus far for foreign 

ports that have participated in the SFI program, it is unclear who will pay 

for additional resources—including increased staff, equipment, and 

infrastructure to continue the program—or who will be responsible for 

operating and maintaining the equipment used for the 100 percent 

scanning statutory requirement. While DHS has the authority to provide 

nonintrusive inspection and radiation detection equipment to foreign 

ports, neither the SAFE Port Act nor the 9/11 Act specifies who is to pay 

for the scanning of U.S.-bound cargo containers at foreign ports.32 While 

the Congressional Budget Office assumed that foreign ports would pay for 

installing and maintaining the systems at their ports as a means for 

continuing trade with the United States, the U.S. government has borne a 

majority of the SFI program costs to date.33 DHS officials stated that they 

anticipate that the U.S. government will continue to pay the majority of the 

costs for implementing the SFI program. Table 4 provides additional 

details on SFI costs by port and department. 

9/11 Act Does Not Specify 

Funding Responsibilities, 

but the United States Has 

Paid Most SFI Costs to 

Date 

CBP and DOE Have Funded 

Much of the Costs at SFI Ports 

 

32 See 6 U.S.C. § 983. 

33 Congressional Budget Office Cost Estimate, H.R. 1 Implementing the 9/11 Commission 

Recommendations Act of 2007 (Feb. 2007). 

Page 33 GAO-10-12 Supply Chain Security
 

Table 4: Costs Incurred by DHS and DOE to Implement and Operate SFI Program, 

through June 2009 

Dollars in thousands 

SFI port DHS DOE

Port Qasim, Pakistan $5,295 $2,315

Puerto Cortes, Honduras $1,048 $4,393

Port of Southampton, United Kingdom $4,091 $10,125

Port of Hong Kong $3,555 $1,414

Port of Busan, South Korea $3,643 $9,384

Port Salalah, Oman $5,520 $12,940

Port of Singapore $305 $2,826

Costs not attributable by port $29,860 $0

Total $53,313 $43,396

Source: Cost data provided by DHS and DOE. 

Government officials from Europe, Asia, and the Middle East that we 

spoke with have stated that the SFI program and 100 percent scanning are 

primarily for the security benefit of the United States and, as such, they 

are unwilling to pay for this security initiative. However, while the U.S. 

government has paid a majority of the costs for implementing the SFI 

program at participating ports, foreign governments have incurred 

personnel, infrastructure, and other costs to implement the program. For 

example, the Customs service in the United Kingdom dedicated 12 officers 

to work on the SFI program for 6 months, and the Hong Kong Customs 

service dedicated a team of 18 officers to work on the SFI program and 

pulled officers from other teams, as necessary, to conduct more thorough 

examinations of container cargo using equipment to determine whether 

radiation being emitted from a container is dangerous. Terminal operators 

have also incurred costs for implementing the SFI program. For example, 

one terminal operator at the Port of Hong Kong set up a control room and 

an information technology infrastructure to support the SFI program at a 

cost of approximately $260,000. Additionally, the terminal operator at the 

Port of Southampton paid approximately $60 per container to move cargo 

containers arriving by rail to the scanning facility. Further, European 

customs officials stated that to fully implement the 100 percent scanning 

requirement at large ports with complex operations would likely result in 

the need for a fundamental redesign of several ports, entailing substantial 

costs to terminal users. 

Foreign Governments and 

Terminal Operators Have Also 

Funded Costs, but Expressed 

Unwillingness to Do So Going 

Forward 

Page 34 GAO-10-12 Supply Chain Security
 

In January 2009, a consortium of four international terminal operators 

formed the Terminal Operator Security Study Group to examine the 100 

percent scanning requirement and outline potential collaborative 

approaches to expand the SFI program in partnership with the U.S. 

government.34 The group proposed, among other things, that the U.S. 

government reach out to host governments to determine the extent to 

which terminal operators could be involved in running portions of the SFI 

program in foreign countries. According to an official from the group, if 

foreign governments do not want to conduct scans of U.S.-bound 

containers, terminal operators would purchase, operate, and maintain the 

SFI equipment for scanning cargo containers entering the port on trucks. 

Transshipment cargo containers would not be included in the program, 

however, since no technical solution currently exists for scanning these 

containers. The terminal operators would also be responsible for 

adjudicating scanning equipment alarms with local government officials. 

Terminal operators would recoup their costs for purchasing, operating, 

and maintaining the equipment by charging a fee to users of the terminals. 

An official from the consortium stated that at ports where the volume of 

cargo containers is such that fees would not cover the cost of purchasing, 

operating, and maintaining the scanning equipment, the U.S. government 

would be responsible for covering the cost of SFI program operations. In 

addition, the U.S. government would be responsible for purchasing and 

operating equipment to conduct secondary inspections—more involved 

inspections of cargo containers determined to pose a risk—as well as be 

responsible for providing personnel to review scanned images of the cargo 

containers. According to the terminal operators’ representative, this model 

would lessen the financial burden on the U.S. government and allow for 

scanning equipment to be deployed to the terminals where these terminal 

operators are located in about 18 months. 

Terminal Operators Propose a 

Separate Model to Purchase, 

Operate, and Maintain 

Scanning Equipment at SFI 

Ports 

DHS has indicated that it is open to the possibility of working with 

terminal operators to receive scan data; however, CBP officials stated that 

they do not approve of the plan proposed by the Terminal Operator 

Security Study Group because terminal operators have an incentive to 

move cargo containers through their facilities quickly and there is little 

assurance that they will adequately review scanning equipment outputs. 

The officials also stated that this proposal is not consistent with CBP’s 

strategic trade corridor strategy—which aims to focus scanning efforts at 

 

34 The four member terminal operators are APM Terminals, PSA International, Hutchison 

Port Holdings, and Dubai Ports World. 

Page 35 GAO-10-12 Supply Chain Security
 

those ports where doing so would provide the greatest benefit—because it 

includes ports outside the proposed corridor. 

CBP Has Not Developed 

an Estimate of Complete 

U.S. Program Costs or 

Performed a Cost-Benefit 

Analysis that Includes 

Other Economic Costs 

While CBP has reported costs of the SFI program to date, it has not 

developed a comprehensive life-cycle cost estimate for full 

implementation of 100 percent scanning of U.S.-bound cargo containers. 

CBP reported in December 2008 that establishing a single scanning lane 

costs approximately $9.7 million for infrastructure, construction, and 

equipment and roughly 2,100 scanning lanes would be needed at foreign 

ports to fully implement the program at all ports that ship cargo to the 

United States. CBP acknowledged that this $20 billion estimate of program 

implementation costs was rough and based on the costs of implementing 

SFI thus far. CBP officials also developed rough implementation cost 

estimates for potential deployment options for SFI consistent with its 

secure trade corridor strategy. These estimates range from $500 million 

(with most SFI costs paid by the trade community or foreign governments) 

to $1.6 billion (with SFI costs at 70 ports paid by DHS). However, the 

officials acknowledged that none of these estimates were developed in a 

manner consistent with the DHS cost estimation guidelines. CBP officials 

stated that they have not developed a more comprehensive cost estimate 

because DHS has not specified a clear path forward for the program. CBP 

officials added, though, that it is difficult to estimate the cost for 

implementing SFI at a single port without conducting a thorough 

assessment of the port and obtaining the input of local government 

officials. Given the agency’s limited resources they stated that they cannot 

conduct these types of detailed assessments at all ports that ship cargo 

containers to the United States. These officials added that any estimates of 

costs for full implementation would be of limited use given the complexity 

and variability of operations at individual ports. Additionally, officials from 

Industrial Economics, Inc. concurred that cost estimating would be 

difficult because of the different factors beyond CBP’s control that would 

need to be considered, including whether the port was publicly or 

privately held, whether port operations are centralized or spread out over 

a large geographic area, the willingness of the host government to 

accommodate the scanning program, and whether and to what extent the 

port had communications and information technology infrastructure 

available. 

While U.S. program cost of implementing the SFI program at individual 

ports will likely vary based on factors beyond CBP’s control, 

commonalities exist among ports that allow for assumptions to be made 

regarding costs for program implementation. Examples of such 

Page 36 GAO-10-12 Supply Chain Security
 

commonalities include the need for inspection equipment at foreign ports 

participating in the program—which has generally been paid for by the 

U.S. government—and the need for personnel to review images produced 

by imaging equipment. DHS’s guidance on cost estimation states that 

program managers need to keep analysis of costs moving forward, even in 

periods of ambiguous, partial, or even missing information, and that this is 

best managed by making assumptions to resolve uncertainty and allow 

analysis to continue.35 Further, as we have previously reported, having a 

realistic cost estimate makes for effective resource allocation and 

increases the probability of a program’s success.36 Additionally, a cost 

estimate can serve as a basis for establishing and defending budgets and 

driving affordability analyses. A cost estimate also helps agencies 

determine whether a program is feasible and the resources needed to 

support it. While we recognize that CBP may have difficulty developing 

cost estimates because of the uncertainties and assumptions that will have 

to be made, having a more comprehensive cost estimate could provide 

CBP with valid cost information to share with Congress to allow it to make 

sound and prudent decisions regarding SFI program implementation, and 

could better position CBP and Congress to evaluate alternatives for SFI 

program configuration and implementation. 

In addition to not identifying estimates of U.S. program costs, CBP has not 

developed estimates of economic costs to other stakeholders such as costs 

that would result from lowering terminal efficiency. For example, 

Industrial Economics, Inc. concluded that 100 percent scanning will likely 

reduce port and terminal efficiency as well as increase costs. Officials 

from Industrial Economics, Inc. stated that these increased costs would be 

due to costs to accommodate scanning—additional land, labor, and 

equipment—as well as to delays caused by 100 percent scanning. These 

officials also stated that while the precise degree to which costs may 

increase is uncertain, some costs could be substantial, particularly for 

larger volume ports or ports with significant amounts of transshipment 

cargo containers as operations at these ports would need to be more 

significantly altered to accommodate 100 percent scanning. Further, 

officials from the World Bank and the WCO with whom we spoke stated 

that implementing 100 percent scanning would likely create additional 

shipping costs in certain parts of the world because of changes in trade 

 

35 Department of Homeland Security, Cost-Benefit Analysis (CBA) Guidebook. 

36 A realistic cost estimate is developed using four characteristics: well-documented, 

comprehensive, accurate, and credible. For additional information see GAO-09-3SP. 

Page 37 GAO-10-12 Supply Chain Security
 

routes that would be necessary. In particular, the officials stated that U.S.-

bound cargo containers may have to be funneled through hub ports that 

could accommodate and operate the scanning equipment before the 

containers are then shipped to the United States. They noted that these 

additional logistics costs would have a disproportionately negative 

economic impact on developing economies and countries with 

comparatively small ports. 

Furthermore, CBP has not performed a cost-benefit analysis to assess 

alternatives to achieving 100 percent scanning, such as its proposed 

strategic trade corridor strategy and, as appropriate, other alternatives for 

enhancing container security. According to CBP officials, they have not 

performed this type of analysis because it is not legally required since the 

100 percent scanning requirement was mandated and not initiated by CBP. 

Although we recognize the 100 percent scanning requirement was 

mandated by law, development of a systematic cost-benefit analysis, 

which incorporates more comprehensive cost estimates, could better 

inform CBP and Congress of the relative costs and benefits of different 

alternatives for achieving 100 percent scanning of U.S.-bound goods from 

all ports that ship directly to the United States as well as alternatives for a 

path forward to enhance container security. This type of analysis could, in 

turn, help DHS and Congress identify whether and to what extent other 

viable options exist to implementing the 100 percent scanning 

requirement. 

The Office of Management and Budget states that any cost-benefit analysis 

that serves as a basis for evaluating government programs or policies 

should identify and measure overall societal costs and benefits, not solely 

costs and benefits to the federal government.37 For example, as discussed 

later in this report, the implementation of the 100 percent scanning 

requirement could potentially create challenges to the continued operation 

of CBP’s existing layered security programs and hinder their 

implementation by reducing the willingness of foreign countries and 

industry to participate. If participation is diminished, this could constitute 

a cost (e.g., reduced implementation and effectiveness of other programs), 

which would be one element to consider in any cost-benefit analysis. As 

noted earlier, other costs beyond the federal government are those 

incurred by foreign governments, the shipping industry, and consumers. 

 

37See Circular No. A-94 Guidelines and Discount Rates for Benefit-Cost Analysis of 

Federal Programs. 

Page 38 GAO-10-12 Supply Chain Security
 

Further, OMB cites as a key element of cost-benefit analysis the 

consideration of alternative means of achieving program objectives by 

examining different program methods of provision and different degrees 

of government involvement. Additionally, DHS’s Cost-Benefit Analysis 

Guidebook states that cost-benefit analysis is designed to identify the 

superior financial solution amongst competing alternatives, and that it is a 

proven management tool to support planning and managing costs and 

risks.38 By utilizing cost-benefit analysis to compare the current 

implementation requirements of SFI with other alternatives, which might 

include its proposed strategic trade corridor strategy or CBP’s existing 

layered strategy, CBP could more fully ensure that it is efficiently 

allocating and prioritizing its limited resources, as well as those of 

individual ports, in a way that maximizes the effectiveness of its cargo 

container security efforts. This analysis could also provide information on 

other potential alternatives for achieving the 100 percent scanning 

requirement. 

The 100 percent scanning requirement is a departure from several existing 

container security programs, which creates potential challenges for CBP 

as it may hinder the programs’ continued operation. The scanning 

requirement differs from existing container security programs because it 

requires CBP to scan all containers before performing analysis to 

determine their potential risk level. Our work also indicates that the 100 

percent scanning requirement could hinder implementation of some 

existing container security programs by reducing the willingness of some 

foreign governments to work with CBP to identify and examine containers 

at their ports, and the willingness of some private companies to partner 

with CBP to improve their internal security programs. Some foreign 

governments have expressed concern that the 100 percent scanning 

requirement is being put forth solely by the United States, in contrast to 

existing container security programs that were negotiated multilaterally or 

bilaterally with willing partners. In addition, some foreign governments 

have expressed the possibility of imposing a reciprocal scanning 

requirement on the United States. 

Requirement for 100 

Percent Scanning 

Creates Potential 

Challenges for CBP 

that May Hinder the 

Continued Operation 

of Existing Container 

Security Programs 

and Raises Concerns 

with International 

Partners 

 

38 Department of Homeland Security, Cost-Benefit Analysis (CBA) Guidebook. 

Page 39 GAO-10-12 Supply Chain Security
 

The 100 Percent Scanning 

Requirement May Hinder 

the Continued Operation 

of CBP’s Existing 

Container Security 

Programs 

Our work has indicated that the 100 percent scanning requirement is a 

departure from existing container security programs built on bilateral 

partnerships with foreign governments and the private sector. This 

situation may hinder continued operation of these existing programs, 

depending on how the SFI program is expanded and how the 100 percent 

scanning requirement is implemented. 

The 100 percent scanning requirement is a departure from CBP’s use of 

ATS and the 24-hour rule to first determine risk before scanning 

containers. Through ATS and the 24-hour rule, CBP gathers advanced 

information on U.S.-bound cargo containers provided by carriers and 

importers and makes determinations as to the risk level associated with 

the cargo containers before using imaging equipment to examine 

containers’ contents. At CSI ports, when it is determined through 

advanced information that a U.S.-bound container poses some potential 

risk of WMD, CBP typically requests that the host government scan the 

container with radiation detection and NII equipment. If these scans 

indicate the potential presence of WMD, CBP requests that the host 

government conduct physical examination of the container, which could 

involve physically removing the container’s contents for inspection. If the 

host government declines a request to give the container additional 

scrutiny, CBP can issue a “do not load” order for the container—so it is 

refused entry onto the vessel—or flag the container for further inspection 

upon arrival at a domestic port. In contrast, under the 100 percent 

scanning concept required by the 9/11 Act, all U.S.-bound containers are 

required to be scanned with radiation detection and NII equipment before 

any analysis of risk. At the three operational SFI pilot ports we visited, we 

observed CBP officers reviewing scanning equipment outputs without the 

use of ATS targeting information. Information is generally not available in 

ATS at the time of scanning since containers are being scanned upon 

arrival at the foreign port before the container’s information is received by 

CBP under the 24-hour rule. Thus, depending on how SFI and the 100 

percent scanning requirement are implemented, CBP may face challenges 

in integrating the scans into its existing ATS program to identify high risk 

containers. 

Automated Targeting System 

(ATS) 

Depending on how it is implemented, SFI or other efforts to achieve 100 

percent scanning may potentially replace the CSI program at foreign ports. 

CBP built the CSI program on bilateral partnerships with foreign 

governments that allow CBP to place its staff at 58 foreign ports to work 

with host country customs officials to identify and scan high-risk cargo 

before it is shipped to the United States. CSI allows for a reciprocal 

arrangement in which foreign governments may also place staff at U.S. 

Container Security Initiative 

(CSI) 

Page 40 GAO-10-12 Supply Chain Security
 

ports.39 According to CBP, the strength of the CSI program is the 

information gained from host government officials that CBP would 

otherwise not have access to. We have also previously reported instances 

where the CSI program establishes trust and collegiality, leading to 

increased information sharing, as well as more effective targeting and 

examination of high-risk cargo containers. For example, CBP officers 

noted instances in which host government customs officials would notify 

them of cargo containers they thought could be high risk so that CBP 

could take a closer look at the information available in ATS related to the 

containers. However, our work at three of the four operational pilot ports 

indicates that implementing the SFI program at foreign ports could result 

in reduced collaboration between CBP and host government customs 

officials or the end of the CSI program. For example, at the Port of 

Southampton, United Kingdom, customs officials previously worked side 

by side to share information with CBP officers as part of the CSI program 

and during the initial transition from CSI to SFI. However, United Kingdom 

customs officials no longer participate in SFI, as they withdrew their 

support for the program after the first 6 months of operation, which was 

the agreed-upon time frame for their participation. CBP officials stationed 

at the Port of Southampton stated that it has been more difficult to have 

containers they determine may pose some risk physically inspected by 

their British counterparts because of this reduced interaction caused by 

the transition from CSI to SFI. This reduced interaction and challenges in 

having U.S.-bound containers physically inspected may be because the 

port’s participation in the program was viewed by the British government 

as a pilot and would not necessarily occur when implementing SFI or 

another form of 100 percent scanning on a more permanent basis. If the 

SFI program is implemented in such a way that CBP officials are stationed 

overseas, and if host nation officials work with them to jointly research 

shipping data on containers, then this type of information sharing could 

continue under the 100 percent scanning requirement. However, foreign 

government officials from Singapore and South Korea we spoke with said 

that given the many security programs the United States has adopted, the 

United States should choose whether it wants to continue CSI or 

implement SFI, but that it cannot do both. 

The willingness of private companies to voluntarily enhance their security 

practices to join C-TPAT may be diminished if a key benefit of 

C-TPAT and AEO Programs 

 

39 Currently Japan and Canada have customs staff placed at U.S. ports to help determine 

the risk of cargo bound for their respective countries. 

Page 41 GAO-10-12 Supply Chain Security
 

membership is reduced by 100 percent scanning. Through the C-TPAT 

program, members of the trade community (e.g., importers, vessel 

carriers, and others) voluntarily enter into an agreement with CBP to 

improve their security programs in return for various trade-related 

benefits, such as reduced scrutiny of their cargo containers upon arrival in 

the United States. 40 As part of this voluntary agreement, C-TPAT 

participants share sensitive, corporate security plans with CBP and 

provide CBP with access to their facilities. This level of information 

sharing would otherwise not be available to CBP for companies that are 

not C-TPAT members. 

According to a survey conducted in 2007 by the University of Virginia, the 

most important motivation for businesses joining C-TPAT was reducing 

the time and cost of getting cargo released by CBP. 41 However, this benefit 

could be diminished by the 100 percent scanning requirement since, under 

such a requirement all cargo is to be scanned regardless of membership in 

C-TPAT. While the six C-TPAT members we interviewed generally 

expressed their intent to remain in the program, three stated that there 

would be less incentive to maintain membership, or for other companies 

to join C-TPAT if the 100 percent scanning requirement is fully 

implemented. If companies drop out of or do not join C-TPAT, it could be 

difficult for CBP to determine what, if any, security initiatives have been 

undertaken by the companies, unless other programs or methods were 

developed to do so. CBP officials have stated that they do not believe 100 

percent scanning will affect membership in the C-TPAT program, and that 

the C-TPAT program has some benefits that will continue to exist 

regardless of container scanning. For example, they note that C-TPAT 

members that transfer cargo by truck to the United States from Canada or 

Mexico will not be affected by the requirement. However, given that other 

companies who use maritime shipping may lose an incentive for joining 

C-TPAT or maintaining membership, the potential security benefit 

associated with the program could be diminished to the extent that 

C-TPAT membership does not grow or decreases. 

 

40The security guidelines for C-TPAT program members address a broad range of topics 

including personnel, physical, and procedural security; access controls; education; training 

and awareness; threat awareness; and others. Companies that apply to C-TPAT must sign 

an agreement with CBP that commits their organization to the program’s security 

guidelines. 

41 University of Virginia, Customs-Trade Partnership Against Terrorism (C-TPAT) 

Cost/Benefit Survey (August 2007). 

Page 42 GAO-10-12 Supply Chain Security
 

AEO programs—programs similar to C-TPAT run by other countries—may 

be hindered by 100 percent scanning because it may be viewed as a 

deterrent to private companies to join AEO programs. A core concept of 

the SAFE Framework is a system of mutual recognition, whereby two 

nations’ AEO programs are mutually recognized by the respective customs 

administrations. Mutual recognition of AEO programs occurs when 

customs administrations agree to recognize one another’s AEO programs 

and security features and to provide comparable benefits to members of 

the respective programs. As of June 2009, CBP had signed mutual 

recognition arrangements with New Zealand, Canada, Jordan, and Japan. 

Furthermore, the United States is discussing entering into a nonbinding 

arrangement with the European Union. According to data from the WCO, 

as of July 2009, about 70 countries had implemented or had begun 

developing their own national AEO programs. Foreign government, World 

Bank, and WCO officials we interviewed expressed concern that 

implementation of SFI or other efforts to achieve 100 percent scanning 

may hinder mutual recognition efforts because, under such a program, if 

all U.S.-bound cargo is to be scanned, there is little incentive for 

companies to join such partnerships, or governments to develop these 

partnership programs, without one of the common benefits—reduced 

scrutiny of cargo containers. 

The 100 Percent Scanning 

Requirement Is a 

Departure from 

Multilateral Partnerships, 

Raising Concerns with Key 

Trading Partners and 

Leading to Calls for 

Reciprocal Scanning 

Requirements 

CBP has traditionally worked with its international partners to enhance 

the security of the supply chain. The International Outreach and 

Coordination Strategy, one of eight supporting plans for The National 

Strategy for Maritime Security, establishes the goal of developing a 

coordinated policy for U.S. government maritime security activities with 

foreign governments, international and regional organizations, and the 

private sector. According to the strategy, the United States must forge 

cooperative partnerships and alliances with other nations, as well as with 

public and private stakeholders in the international community, to achieve 

effective maritime security. As CBP has recognized in security matters, the 

United States is not self-contained, either in its problems or in its 

solutions. The growing interdependence of countries requires policy 

makers to recognize the need to work in partnerships across international 

boundaries to achieve vital national goals. As such, CBP has taken a lead 

role in working with the WCO and foreign customs administrations to 

establish and implement international customs security standards that 

benefit all participants. For example, CBP was a principal author of the 

multilateral SAFE Framework of Standards—based on CBP’s existing 

layered security strategy—unanimously adopted by the members of the 

WCO, and CBP officials have stated that its existing layered strategy 

Page 43 GAO-10-12 Supply Chain Security
 

constitutes U.S. efforts to implement the elements of the SAFE 

Framework. 

However, the 100 percent scanning requirement is a departure from these 

existing efforts to enhance cargo container security through partnerships. 

Existing CBP efforts to enhance cargo container security, such as 

collaboration with the WCO to develop the SAFE Framework, have been 

based on a bilateral and multilateral approach meant to enhance security 

for all participants. Foreign government and international organization 

officials with whom we met have also expressed concern that the 100 

percent scanning requirement is inconsistent with multilaterally adopted 

customs security standards, may negatively impact trade, and could 

diminish container security. For example, customs and other officials from 

foreign governments, including the European Union, South Korea, Hong 

Kong, and Singapore, as well as international organizations, including the 

WCO, have expressed their belief that scanning 100 percent of U.S-bound 

containers is inconsistent with the risk-based strategy agreed to in the 

SAFE Framework because it treats all containers as having the same risk 

level before any analysis of the risks they may pose is performed.42 Foreign 

government and international organization officials we spoke with added 

that, given limited resources, 100 percent scanning could provide a lower 

level of security, as the focused attention on specific high-risk shipments is 

replaced by a blanket approach applying to all containers. 

Because the100 percent scanning requirement was initiated solely by the 

United States, government officials in Europe, Asia, and the Middle East 

with whom we met have stated that the requirement is perceived as being 

for the sole security benefit of the United States. The European Union has 

formally stated that the 100 percent scanning requirement was imposed 

unilaterally and implies extraterritoriality. In June 2008, WCO members 

unanimously endorsed a resolution expressing concern that 

implementation of 100 percent scanning would be detrimental to world 

trade and could result in unreasonable delays, port congestion, and 

international trading difficulties.43 Similarly, in May 2008, the European 

 

42 Foreign governments and international organizations we spoke with stated that they are 

generally not opposed to the use of radiation detection equipment, such as that used as 

part of the Megaports Initiative, but to the use of nonintrusive imaging equipment because 

of the likelihood that it may hinder trade and reduce security by consuming a large amount 

of scarce customs resources for little benefit. 

43 The United States abstained from the vote. 

Page 44 GAO-10-12 Supply Chain Security
 

Parliament issued a resolution calling for the United States to repeal the 

100 percent scanning requirement. Further, in June 2009, the governments 

of five developing countries submitted a position paper to the WCO 

opposing 100 percent scanning due to the disproportionate impact it will 

have on their developing economies.44

According to State Department officials with whom we met, the 100 

percent scanning requirement has negatively impacted interactions with 

other countries on various issues.45 State Department officials overseas 

have acknowledged that the 100 percent scanning requirement has already 

impacted or could have impact on future U.S. interests. For example, 

according to these officials, they have experienced difficulty making 

progress on U.S. concerns related to agricultural exports and registration 

of chemical products because they cannot discuss these issues without 

foreign governments raising their concerns with 100 percent scanning. 

Related to these international concerns, some foreign government officials 

with whom we spoke are considering requiring a reciprocal scanning 

requirement for cargo coming from the United States. Specifically, 

government officials in Honduras and the European Commission—which 

represents the 27 member states of the European Union—have indicated 

that they may consider a reciprocal container scanning requirement in 

which containers from the United States that are being shipped to these 

countries would have to be scanned. Although the European Commission 

indicated it does not think scanning will enhance security, it added it 

would be difficult not to ask for reciprocity if their member states are 

initiating cargo scanning programs for the security benefit of the United 

States. 

According to CBP and domestic port terminal officials, and our 

observations at the domestic ports we visited, scanning outbound 

containers to meet a reciprocity requirement would be challenging and 

 

44 The position paper was submitted by the governments of Ecuador, Bolivia, the 

Dominican Republic, Uruguay, and Cuba. 

45 In addition to noting concerns from international partners, the State Department also 

indicated its own concerns regarding the scanning of diplomatic shipments. According to 

the State Department, it intends to work with DHS to ensure that, consistent with section 6 

U.S.C. § 982(b)(9), implementation of the scanning requirement does not violate 

the international conventions that prohibit scanning of diplomatic pouches, as well as the 

presumption against inspection of personal baggage of diplomats, as set forth in the Vienna 

Convention on Diplomatic Relations. 

Page 45 GAO-10-12 Supply Chain Security
 

require additional resources. CBP officials noted that the difficulty 

negotiating and obtaining space from terminal operators to install 

scanning equipment for inbound containers would also apply to installing 

equipment needed to scan outbound containers should reciprocity be 

required. CBP officials also noted additional staff would be needed to 

review container images and adjudicate identified anomalies. Further, it 

would be difficult to identify the destination of outbound cargo containers, 

according to CBP and port officials. Therefore, even if a few countries 

asked that goods bound from their countries be examined, it might be 

necessary for CBP to examine all outbound goods. CBP officials stated 

scanning outbound containers could come at the expense of their ability to 

secure the United States from inbound containers that might contain 

WMD. 

Given the situation, foreign governments and the trade industry are 

awaiting information on how CBP plans to implement 100 percent 

scanning. Although the scanning requirement is a U.S. law, officials from 

the European Commission stated that they are aware that DHS and CBP 

have stated that implementing the law by July 2012 is likely not feasible, 

which has created a sense of uncertainty regarding future implementation 

of the scanning requirement. DHS acknowledged this concern, noting that 

without a clear path forward for SFI, partnerships with foreign 

governments would be put at risk. Although the Secretary of DHS 

consequently endorsed the strategic trade corridor strategy as the path 

forward, the department has not specified whether implementation of 100 

percent scanning at strategic corridors would constitute the entirety of 

CBP’s efforts to implement 100 percent scanning or was an initial phase of 

a broader effort to implement 100 percent scanning. 

Foreign terminal operators have also expressed concerns regarding the 

lack of a clear path forward for the SFI program. During our discussion 

with the Federation of European Private Port Operators, the terminal 

operator representatives noted the July 2012 deadline was quickly 

approaching, but there was a lack of information as to how the 

requirement would be achieved. The terminal operator representatives 

added that decisions needed to be made regarding who is required to pay 

for and operate the scanning equipment, among other things. The officials 

noted that they did not want to purchase scanning equipment without 

standards being established because they did not want to bear this 

expense and later learn that the scanning equipment they purchased is not 

considered sufficient. 

Page 46 GAO-10-12 Supply Chain Security
 

Challenges in scanning U.S.-bound cargo containers at participating ports 

to date, as well as challenges in getting additional ports to participate, 

have raised questions about the feasibility of scanning 100 percent of U.S.-

bound cargo containers. While CBP officials have stated that they may not 

be able to overcome these challenges based on the experiences of the SFI 

program to date, the agency has not conducted an analysis of the 

feasibility of implementing 100 percent scanning. Such an analysis could 

assist both the agency and Congress by providing important information 

regarding CBP’s ability to fully implement the 100 percent scanning 

requirement and determining a path forward to enhance container 

security. 

As CBP attempts to expand the SFI program, it will need more 

comprehensive cost estimates. Such cost estimates could provide CBP 

with valid cost information to share with Congress to allow it to make 

sound and prudent decisions regarding SFI program implementation. CBP 

and Congress could also benefit from a cost-benefit analysis (that includes 

costs to international maritime stakeholders) to evaluate the relative costs 

and benefits of various alternatives for implementing the 100 percent 

scanning requirement, to include its strategic trade corridor strategy. Such 

an analysis could help to guide CBP and Congress in attempting to 

implement the 100 percent scanning requirement, as well as assessing 

other alternatives short of 100 percent scanning for enhancing container 

security. 

DHS and CBP officials have acknowledged that they will likely not be able 

to achieve 100 percent scanning of U.S.-bound cargo containers by 2012, 

and expressed concerns over the feasibility, costs, and security benefits 

associated with the requirement. However, without conducting feasibility 

and cost-benefit analyses, DHS and CBP will not be able to fully evaluate 

various alternatives for implementing the 100 percent scanning 

requirement or other alternatives that enhance cargo container security in 

a cost-efficient manner. 

To better position DHS to implement the cargo container scanning 

provisions of the SAFE Port and 9/11 Acts, improve container security 

programs, and better inform Congress, we recommend that the Secretary 

of Homeland Security, working with the CBP Commissioner, in 

consultation with the Secretaries of Energy and State as appropriate, take 

the following actions: 

Conclusions 

Recommendations for 

Executive Action 

Page 47 GAO-10-12 Supply Chain Security
 

• conduct a feasibility analysis of implementing the 100 percent scanning 

requirement of all U.S.-bound cargo containers in light of the 

challenges faced at the initial SFI ports; 

• develop more comprehensive cost estimates for achieving the 

requirement to scan 100 percent of U.S.-bound cargo containers, 

consistent with best practices for implementing, operating, and 

maintaining U.S. government programs; 

• conduct a cost-benefit analysis (to include all significant economic 

costs) of different alternatives for achieving the 100 percent scanning 

requirement, to include as appropriate, other alternatives short of 

achieving 100 percent scanning, to enhance container security, and to 

address the impact that 100 percent scanning may have on other 

container security programs; and 

• provide the results of the feasibility analysis, U.S. program cost 

estimates, and cost-benefit analysis outlined above to Congress, along 

with various cost-effective alternatives to implementing the 100 percent 

scanning requirement, as appropriate. 

We provided a copy of this report to the State Department, the Department 

of Energy (DOE), and the Department of Homeland Security (DHS) for 

comment. The State Department did not provide written comments to 

include in the report, but provided technical comments that have been 

incorporated into the report, where appropriate. DOE provided comments 

on October 19, 2009, that cite the need to distinguish between challenges 

regarding the use of radiation versus nonintrusive image scanning 

equipment. We have modified the report to include this distinction. DOE 

made no comments on the recommendations since they were directed 

towards DHS and CBP. A copy of DOE’s comments are reprinted in 

appendix II. DHS and CBP provided technical comments that have been 

incorporated into the report, where appropriate. 

Agency Comments 

and Our Evaluation 

DHS also provided written comments—that incorporated comments from 

CBP—on October 19, 2009. A copy of DHS’s comments are reprinted in 

appendix III. In commenting on a draft of this report, DHS noted that it 

concurred with three recommendations and concurred in part with one. It 

also commented that CBP views these recommendations as having been 

largely achieved through its publication of previous reports to Congress. 

We disagree with this for the reasons discussed in the paragraphs below. 

Page 48 GAO-10-12 Supply Chain Security
 

Regarding our first recommendation to conduct a feasibility analysis for 

implementing the 100 percent scanning requirement for all U.S.-bound 

cargo containers, DHS noted that CBP concurred with our 

recommendation. The agency further stated that the recommendation had 

been achieved in its June 2008 report to Congress, “Report to Congress on 

Integrated Scanning Systems Pilot (Security and Accountability for 

Every Port Act of 2006), Section 231,” where it discussed challenges to 

implementing the requirement at participating seaports. Specifically, CBP 

noted that its report concluded that the 100 percent scanning of U.S.-

bound maritime container is possible on a limited scale in locations with 

an array of accommodating and supportive conditions, such as host nation 

cooperation, low cargo volumes, low transshipment rates and technology 

and infrastructure costs covered primarily by the U.S. government. It also 

noted that its report determined that these conditions would not likely 

exist at all ports shipping to the United States. During our review, we 

analyzed the June 2008 report and while it discusses these and other 

challenges that exist at participating ports, we do not believe that it 

constitutes a feasibility analysis of the 100 percent scanning requirement, 

as required by the SAFE Port Act. In particular, as we have noted in this 

report, the SAFE Port Act requires certain specific elements to be included 

when evaluating the feasibility of expanding 100 percent scanning to other 

ports, including an analysis of the infrastructure requirements to 

implement 100 percent scanning and an analysis of requirements, 

including costs, to install and maintain an integrated scanning system at 

ports participating in the Container Security Initiative. These analyses 

were not included in the 2008 report and CBP has acknowledged that they 

have not been conducted. 

Regarding our second recommendation to develop more comprehensive 

cost estimates for achieving the requirement to scan 100 percent of U.S.-

bound cargo containers, consistent with best practices, DHS commented 

that CBP concurred with the recommendation and had already achieved it 

through issuance of its June 2008 report to Congress. In particular, CBP 

stated that it believes that it is incumbent upon the agency to develop 

realistic cost estimates for the overall operational elements associated 

with implementing legislative mandates, such as the 100 percent scanning 

requirement. However, as acknowledged by CBP, the cost estimates 

generated by CBP to date were not developed in a manner that is 

consistent with cost estimation guidelines. For example, estimates 

developed by CBP to date cover implementation of the program as it 

currently exists, but do not examine costs over the life of the program, 

which is a best practice identified by GAO and accepted by DHS. As a 

result, total costs for the life of the SFI program could be significantly 

Page 49 GAO-10-12 Supply Chain Security
 

greater than CBP’s current cost estimates. As we have noted in this 

report, having more comprehensive cost estimates could provide CBP 

with valid cost information to share with Congress to allow it to make 

sound and prudent decisions regarding SFI program design and 

implementation. 

Regarding our third recommendation to conduct a cost-benefit analysis (to 

include all significant economic costs) of different alternatives for 

achieving the 100 percent scanning requirement, to include as appropriate, 

other alternatives short of achieving 100 percent scanning, DHS 

commented that CBP concurred in part with our recommendation. In its 

response CBP acknowledged that a cost-benefit analysis would be helpful 

to frame the discussion and better inform Congress; however, it noted that 

such a comprehensive study would place significant burdens on its limited 

resources. Given the potential costs to the United States, foreign 

governments and trade industry of implementing 100 percent scanning, we 

believe a cost-benefit analysis is warranted to evaluate other alternatives. 

CBP added that neither the SAFE Port Act nor the 9/11 Act require CBP to 

conduct such an analysis and suggests that the Congressional Budget 

Office is the most appropriate entity to conduct such an analysis. While 

CBO does prepare cost estimates for pending legislation, as we mention in 

this report, CBO has evaluated the 9/11 Act and assumed that foreign 

governments would pay for implementing scanning systems at their port, 

which has generally not been the case thus far. We believe that, given its 

daily interaction with foreign customs services and its direct knowledge of 

port operations, CBP is in a better position to conduct any cost-benefit 

analysis and bring results to Congress for consideration. Further, as noted 

in this report, DHS cites cost-benefit analysis as a proven management tool 

to support planning and manage costs. We believe that the challenges 

faced in implementing the program thus far, and the potential costs of 

implementing and operating the 100 percent scanning requirement—

particularly non-financial costs such as reductions in the effectiveness of 

existing container security programs like CSI and C-TPAT—emphasize the 

importance of such an analysis. This analysis could assist both the agency 

and Congress in understanding CBP’s ability to implement the 100 percent 

scanning requirement as well provide Congress more complete 

understanding of the scanning requirement’s advantages and 

disadvantages. Congress could then use this information in its role 

providing oversight over the program or in considering alternatives for 

enhancing cargo container security in a cost-efficient manner. 

Finally, regarding our fourth recommendation to provide results of the 

feasibility analysis, U.S. program costs estimates, and cost-benefit analysis 

Page 50 GAO-10-12 Supply Chain Security
 

to Congress, along with various cost-effective alternatives to implementing 

the 100 percent scanning requirement, DHS commented that CBP 

concurred with our recommendation, had already achieved it, and outlined 

its intent to continue to explore the full range of costs associated with 

scanning efforts at foreign ports. Specifically, CBP stated that in June 

2008, it submitted to Congress the findings of the feasibility study required 

under Section 231 of the SAFE Port Act. It added that this report and the 

number of subsequent reports provided at 6-month intervals detailed CBP 

and DOE expenditures under SFI, including the cost of scanning 

equipment, as well as personnel expenditures for each potential scanning 

site. While these reports have contained useful information, as mentioned 

previously, our view is that they do not contain comprehensive analyses of 

the feasibility or costs of the 100 percent scanning requirement or evaluate 

potential program alternatives to determine which may be most feasible 

and cost effective. We believe that feasibility and cost-benefit analyses are 

critical to help ensure that DHS and CBP have the necessary information 

to assist the Congress as it considers options for implementing the 100 

percent scanning requirement or other alternatives to enhancing cargo 

container security. This information should include more definitive 

information on the feasibility of the scanning requirement—to include the 

factors discussed in the SAFE Port Act such as infrastructure 

requirements, impact on processing times, ability to meet forecasted 

container volume, costs, and personnel needs—across different alternative 

implementation scenarios. 

As arranged by your offices we plan no further distribution until 30 days 

after the date of this report. At that time, we will send copies of this report 

to the Secretaries of Energy, Homeland Security, and State; and other 

interested parties. In addition, the report will be available on GAO’s Web 

site at http://www.gao.gov. 

Page 51 GAO-10-12 Supply Chain Security
 

If you or your staff have any questions about this report, please contact me 

at (202) 512-9610 or at caldwells@gao.gov. Key contributors to this report 

are listed in appendix IV. This report will also be available at no charge on 

Stephen L. Caldwell 

the GAO Web site at http://www.gao.gov. 

Director, Homeland Security and Justice Issues 

Page 52 GAO-10-12 Supply Chain Security
 

List of Requesters 

The Honorable John D. Rockefeller IV 

Chairman 

Committee on Commerce, Science, and Transportation 

United States Senate 

The Honorable Joe Lieberman 

Chairman 

The Honorable Susan Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Bennie G. Thompson 

Chairman 

Committee on Homeland Security 

House of Representatives 

The Honorable John Dingell 

Chairman Emeritus 

Committee on Energy and Commerce 

House of Representatives 

The Honorable George V. Voinovich 

United States Senate 

Page 53 GAO-10-12 Supply Chain Security
Appendix 1: Objectives, Scope, and 

Methodology 

Page 54 GAO-10-12 

Appendix I: Objectives, Scope, and 

Methodology 

Our objectives were to identify (1) what progress U.S. Customs and 

Border Protection (CBP) has made toward implementing 100 percent 

scanning at the initial ports participating in the Secure Freight Initiative 

(SFI) program; (2) what planning efforts CBP has made to address the 

requirement to scan all U.S.-bound cargo containers by July 2012; (3) the 

estimated costs to date of the SFI program, and to what extent future 

implementation costs have been estimated; and (4) what challenges, if any, 

CBP faces in integrating the 100 percent scanning requirement with its 

existing container security programs. 

To determine the progress CBP has made in implementing the requirement 

to scan 100 percent scanning of U.S.-bound cargo containers, we 

conducted site visits at six of the seven foreign ports that have been 

involved in SFI, and spoke with foreign government, U.S. customs, and 

terminal operator officials during these visits. While the results of these 

site visits and interviews cannot be generalized across all ports that ship 

cargo containers to the United States, by observing operations at six of the 

seven ports involved with the SFI program to date—Busan, South Korea; 

Puerto Cortes, Honduras; Salalah, Oman; Southampton, United Kingdom; 

Hong Kong; and Singapore—we gained a critical understanding of the 

factors and challenges associated with implementing SFI at these ports. 

Due to ongoing security concerns, we did not conduct a site visit at Port 

Qasim, Pakistan. Instead, we observed CBP’s remote operation of the SFI 

program in Qasim from the National Targeting Center-Cargo in Virginia. To 

assess CBP’s progress implementing SFI at individual ports, we compared 

data on the number of containers scanned to the total volume of U.S.-

bound containers at each SFI port, to the requirement set forth in the 9/11 

Act. CBP was unable to provide container scan data based on container 

arrival mode (e.g., truck, rail, and transshipment) due to system 

limitations. After reviewing possible limitations of all the data sources, we 

determined that the data provided were sufficiently reliable for the 

purposes for which we have used them in this report. 

To identify the planning efforts CBP has undertaken to achieve the 

requirement to scan 100 percent of U.S.-bound cargo containers, we 

reviewed relevant documents, including the SFI program management 

plan, the coordinating strategy and operations plan, and the concept of 

operations/standard operating procedures documents for the SFI ports 

visited. We supplemented our document reviews and analyses with 

interviews of CBP officials in the SFI program office to determine future 

plans for expansion of 100 percent scanning through the strategic trade 

corridor strategy. Furthermore, we discussed the extent to which the 

Department of Homeland Security (DHS) and CBP have developed 

 Supply Chain Security 
Appendix 1: Objectives, Scope, and 

Methodology 

criteria, and a methodology and time line for granting extensions to ports 

that cannot meet the 2012 deadline for scanning U.S.-bound containers. 

We compared CBP’s planning efforts to best practices in A Guide to the 

Project Management Body of Knowledge. 

To examine the estimated costs of implementing 100 percent scanning of 

U.S.-bound cargo containers at foreign ports, we interviewed CBP and 

Department of Energy (DOE) officials, international organization 

personnel, foreign government officials, and terminal operators to obtain 

their views as to the types of costs associated with implementing 100 

percent scanning. To determine the costs to the U.S. government of 

implementing, operating, and maintaining the SFI program, we reviewed 

documentation on CBP’s and DOE’s expenditures to date. After reviewing 

possible limitations of the cost data provided, we determined that the data 

provided were sufficiently reliable for the purposes for which we have 

used them in this report. We compared CBP’s methods for developing cost 

estimates to further implement 100 percent scanning with the best 

practices outlined in the GAO Cost Estimating and Assessment Guide. 

We examined DHS’s Cost-Benefit Analysis Guidebook, as well as Office of 

Management and Budget (OMB) Circular No. A-11 Preparation, 

Submission, and Execution of the Budget, OMB Circular No. A-94 

Guidelines and Discount Rates for Benefit-Cost Analysis of Federal 

Programs, and OMB Circular A-4 Regulatory Analysis to identify the need 

for, and elements of a comprehensive cost-benefit analysis. To understand 

the costs to entities other than the U.S. government, we spoke with 

terminal operators and officials from foreign governments participating in 

the SFI program. We also interviewed the World Customs Organization 

(WCO) and the World Bank to further understand other costs that may 

result from 100 percent scanning, such as changes in trade flow and 

impacts on developing economies. We reviewed economic studies 

conducted on the issue, including those conducted by the University of Le 

Havre and Industrial Economics, Inc. Furthermore, we discussed with 

officials from foreign governments, representatives of the European 

Commission, and terminal operators, including the Federation of 

European Private Port Operators, their willingness to share the costs of 

container scanning with the United States at SFI ports. 

To determine any challenges CBP faces in integrating 100 percent 

scanning with existing container security programs, we assessed the 

potential impact of scanning on the core elements of CBP’s current 

security programs, DOE’s Megaports Initiative, and the security strategy 

advocated by the WCO through the SAFE Framework. As appropriate, we 

also relied on our extensive body of work on container security conducted 

Page 55 GAO-10-12 Supply Chain Security
Appendix 1: Objectives, Scope, and 

Methodology 

over the last several years (see list of Related GAO Products at the end of 

this report). To determine the impact of scanning on the use of the 

Automated Targeting System in conjunction with the 24-hour rule, we 

interviewed CBP officers working at the ports of Baltimore, Maryland and 

Los Angeles/Long Beach, California—domestic ports with access to SFI 

data—to discuss how the availability of SFI data affects adjudication of 

high-risk containers. We observed how domestic CBP officers access and 

review SFI scan data. To determine the impact of scanning on the 

Container Security Initiative (CSI), we interviewed foreign government 

officials at ports participating in both CSI and SFI on how the programs 

operate simultaneously, and the resulting impact on collaboration between 

U.S. and host government customs officials. We interviewed CBP’s 

Customs-Trade Partnership Against Terrorism (C-TPAT) office and six 

members of C-TPAT to determine what impact 100 percent scanning may 

have on the benefits of membership and how this will affect participation 

in C-TPAT. Our interviews with these trade industry representatives were 

based on a nonprobability sample, so while their views are not 

generalizable to the entire maritime trade industry, they provide 

knowledgeable insight into the relationship between the SFI and C-TPAT 

programs. We spoke with DOE officials responsible for implementing the 

Megaports Initiative to understand the impact of 100 percent scanning on 

efforts to expand the Megaports Initiative. We interviewed representatives 

of the WCO, International Maritime Organization, International Chamber 

of Shipping, European Commission, and foreign government officials to 

obtain their views on the consistency of 100 percent scanning with 

multilateral and bilateral efforts to promote supply chain security. With 

these entities, we discussed how scanning may affect core principles of 

the SAFE Framework, including the establishment of customs-to-business 

partnerships and mutual recognition between countries of these 

partnerships. While we obtained the perspective of all foreign 

governments participating in the SFI program that intend to implement the 

SAFE Framework, with the exception of Pakistan, these views are not 

necessarily representative of all foreign governments intending to 

implement the SAFE Framework. We interviewed State Department 

officials in Washington D.C.; at the U.S. Mission to the European Union; 

and the U.S. Embassy in Seoul, to discuss how the 100 percent 

requirement affects the ability of the State Department to defend U.S. 

interests. With foreign government officials and representatives of the 

European Commission we discussed their intensions to require a 

reciprocal 100 percent container scanning requirement of the United 

States. We also discussed the impact of reciprocity on domestic ports with 

CBP officials at the Ports of Baltimore, Houston, and Los Angeles/Long 

Beach; as well as the Houston and Miami Port Authorities. 

Page 56 GAO-10-12 Supply Chain Security
Appendix 1: Objectives, Scope, and 

Methodology 

We conducted this performance audit from August 2008 through October 

2009 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Page 57 GAO-10-12 Supply Chain Security
Appendix II: Comments from the Department 

of Energy 

Page 58 GAO-10-12 

Appendix II: Comments from the Department 

of Energy 

 Supply Chain Security 
Appendix II: Comments from the Department 

of Energy 

Page 59 GAO-10-12 Supply Chain Security
Appendix III: Comments from the Department Appendix III: Comments from the of Homeland Security 

Department of Homeland Security 

Page 60 GAO-10-12 Supply Chain Security 
Appendix III: Comments from the Department 

of Homeland Security 

Page 61 GAO-10-12 Supply Chain Security
Appendix III: Comments from the Department 

of Homeland Security 

Page 62 GAO-10-12 Supply Chain Security
Appendix IV: 

A

GAO Contact and Staff 

cknowledgments 

Page 63 GAO-10-12 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

Stephen L. Caldwell, (202) 512-9610 or caldwells@gao.gov GAO Contact 

In addition to the contact named above, Christopher Conrad, Assistant 

Director, and Robert Rivas, Analyst-in-Charge, managed this review. Lisa 

Canini and Julia Coulter made significant contributions to the work. 

Chuck Bausell, Richard Hung, Stanley J. Kostyla, and Timothy M. Persons 

assisted with design, methodology, and data analysis. Frances Cook, 

Geoffrey Hamilton, and Jan Montgomery provided legal support. Katherine 

Davis and Sally Williamson provided assistance in report preparation. 

Avrum Ashery and Pille Anvelt helped develop the report’s graphics. 

Acknowledgments 

 Supply Chain Security 
Related GAO Products Related GAO Products 

Combating Nuclear Smuggling: DHS Improved Testing of Advanced 

Radiation Detection Portal Monitors, but Preliminary Results Show 

Limits of New Technology. GAO-09-655. Washington, D.C.: May 21, 2009. 

Combating Nuclear Smuggling: DHS’s Phase 3 Test Report on Advanced 

Portal Monitors Does Not Fully Disclose the Limitations of the Test 

Results. GAO-08-979. Washington, D.C.: September 20, 2008. 

Supply Chain Security: CBP Works with International Entities to 

Promote Global Customs Security Standards and Initiatives, but 

Challenges Remain. GAO-08-538. Washington, D.C.: August 15, 2008 

Supply Chain Security: Challenges to Scanning 100 Percent of U.S.-

Bound Cargo Containers. GAO-08-533T. Washington, D.C.: June 12, 2008. 

Supply Chain Security: Examinations of High-Risk Cargo at Foreign 

Seaports Have Increased, but Improved Data Collection and Performance 

Measures Are Needed. GAO-08-187. Washington, D.C.: January 25, 2008. 

Maritime Security: The SAFE Port Act: Status and Implementation One 

Year Later. GAO-08-126T. Washington, D.C.: October 30, 2007. 

Maritime Security: One Year Later: A Progress Report on the SAFE Port 

Act. GAO-08-171T. Washington, D.C.: October 16, 2007. 

Maritime Security: The SAFE Port Act and Efforts to Secure Our 

Nation’s Seaports. GAO-08-86T. Washington, D.C.: October 4, 2007. 

Combating Nuclear Smuggling: Additional Actions Needed to Ensure 

Adequate Testing of Next Generation Radiation Detection Equipment. 

GAO-07-1247T. Washington, D.C.: September 18, 2007. 

Maritime Security: Observations on Selected Aspects of the SAFE Port 

Act. GAO-07-754T. Washington, D.C.: April 26, 2007. 

Customs Revenue: Customs and Border Protection Needs to Improve 

Workforce Planning and Accountability. GAO-07-529. Washington, D.C.: 

April 12, 2007. 

Cargo Container Inspections: Preliminary Observations on the Status of 

Efforts to Improve the Automated Targeting System. GAO-06-591T. 

Washington, D.C.: March 30, 2006. 

Page 64 GAO-10-12 Supply Chain Security
Related GAO Products 

Combating Nuclear Smuggling: Efforts to Deploy Radiation Detection 

Equipment in the United States and in Other Countries. GAO-05-840T. 

Washington, D.C.: June 21, 2005. 

Container Security: A Flexible Staffing Model and Minimum Equipment 

Requirements Would Improve Overseas Targeting and Inspection 

Efforts. GAO-05-557. Washington, D.C.: April 26, 2005. 

Homeland Security: Key Cargo Security Programs Can Be Improved. 

GAO-05-466T. Washington, D.C.: May 26, 2005. 

Maritime Security: Enhancements Made, but Implementation and 

Sustainability Remain Key Challenges. GAO-05-448T. Washington, D.C.: 

May 17, 2005. 

(440737) Page 65 GAO-10-12 Supply Chain Security
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