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100 Percent Container Scanning for US-Bound Cargo Remains Elusive

By March 13, 2014No Comments

Original article from Journal of Commerce, February 27, 2014, by Mark Szakonyi, senior editor

WASHINGTON — The U.S. Department Homeland of Security has until July to meet a federal mandate requiring all U.S.-bound containers to be scanned at nearly 750 foreign ports.

DHS isn’t going to make it. Instead, Congress will likely grant the agency an extension like it did in 2012, when it gave DHS two more years to meet the mandate called for through the SAFE Port Act, according to sources familiar with the issue. Even though DHS has previously said the mandate is “neither the most efficient nor cost-effective approach to securing our global supply chain,” the mandate isn’t likely to go away. That’s despite major industry groups, including the World Shipping Council and the National Retail Federation, arguing that the mandate would increase the cost of shipping but deliver little to no benefit.

“I would hope Congress would repeal the mandate and finally realize it’s unattainable,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

But there is still a group in Congress — led by Sen. Edward Markey, D-Mass., and Rep. Jerry Nadler, D-N.Y. — that isn’t satisfied with roughly 5 percent of import containers being scanned and won’t give up on the mandate called for in 2007. Besides, it’s easier for Congress to kick the can down the road via an extension rather than open itself up to criticism that it’s lax on port security.

The larger question is whether the 100 percent container scanning mandate can be achieved in the long term. Decision Sciences is betting it can. DHS is evaluating whether the company’s systems that monitor naturally found high-energy particles to detect nuclear materials and contraband would be effective to meet the mandate, said Stanton Sloane, CEO and president of the Chantilly, Va.-based company. DHS is expected to complete its review of the technology by the end of the year.

Sloane said the company could provide the equipment necessary to scan imports at the 742 foreign ports that handle U.S.-bound containers for about $700 million. That’s far less than the $17 billion former DHS Secretary Janet Napolitano told Congress the mandate would cost to meet. It’s unclear how new DHS Secretary Jeh Johnson views the feasibility of meeting the mandate, because the department didn’t respond to JOC questions.

The Decision Sciences technology, developed at the Los Alamos National Laboratory, allows containers to be scanned within 30 to 40 seconds, compared to the minutes it takes to X-ray containers, Sloane said. The systems can be built as mobile units and to the size required, while X-ray units are more stationary and the radiation they emit can make dockworkers uneasy, he said. Hutchison Port Holdings’ uses a Decision Sciences scanner at its Freeport, Bahamas, transshipment terminal.

“We can put this out for zero cost to the taxpayer. All you have to do is create a public-private partnership that lets people deploy this and collect the fee,” said Sloane, adding that public-private partnerships are just one way the technology could be paid for.

The scanning systems also could be a revenue generator for foreign governments because customs agencies will gain forfeit and seizure fees through the scanning processes. Sloane acknowledged that shipper and carrier groups would push back against a fee for container scanning.

“But if you want security, you have to pay for it,” he said. “The cost would be pretty nominal.”

Meeting the mandate faces other challenges than just squeezing funding out of a cash-strapped Congress, which has never appropriated money for implementation — only dollars for testing, World Shipping Council President and CEO Chris Koch said. The U.S. must convince other foreign governments to operate the scanning systems and have confidence that international customs officials are up to the task.

Congress “wouldn’t let Dubai Ports World come in, but they’re going to be OK with foreign customs scanning containers?” said Koch, referring to how Congress successfully scared the United Arab Emirates-based company from pursuing plans to operate in six U.S. ports.

China and the European Union already have signaled their opposition to complying with the mandate, Gold said. In a staff working paper, European Commission member Algirdas Semeta said implementing 100 percent scanning at EU ports would be costly and raise transportation costs. To meet the mandate, the EU would have to spend $588 million on infrastructure and more than $274 million annually on operations. As a result, the cost of transporting good to the U.S. would rise by about 10 percent, potentially causing a trade barrier, according to the report.

“More importantly, such burdens to port authorities, companies and ultimately consumers would be for no proven security benefit,” Semeta said in the 2010 report.

Laura Hains, a security consultant, suspects DHS will claim that the mandate has been achieved by getting loose with the definition of “high-risk” cargo. Under the SAFE Port Act, DHS must achieve 100 percent cargo screening and 100 percent scanning of high-risk cargo, said Hains, who worked as a Customs and Border Protection agent for 17 years. By pointing to its multi-layered screening approach — involving manifests having to be sent to CBP 24 hours before arriving and placing agents at some foreign ports — DHS might argue that all “high-risk” cargo is already being scanned, she said.

Hains is less concerned with DHS wiggling out of the mandate’s 100 percent scanning intention, which she sees as “logistically impossible,” and more worried that screening isn’t up to snuff. CBP agents don’t receive the same level of cargo processing education as they once did, with immigration training taking precedence, she said. As screening has become more automated, agents are less skilled in finding warning signs in manifests, and Hains said the lack of training can be dangerous.

“How many of these manifests are going to say, ’10,000 widgets and a dirty bomb’?” she said. “We give trust easily because of what was written on a manifest.”

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