Wall Street History
Security at the Ports
Back in 2004, I wrote two pieces for another link at
StocksandNews that pertain to the huge issue of the day, the
operation of some U.S. port terminals by a company based in
United Arab Emirates. In light of this, the following is equally
appropriate for “Wall Street History.”
Of the issues pertaining to Homeland Security, these days
securing America’s ports is as important as they come, yet we all
know that given the lack of technology and systems in place it’s
virtually impossible to prevent a serious terrorist attack.
Over $500 billion of goods are shipped in and out of the U.S.
from some 178,000 foreign businesses each year, all in 20- and
40-foot containers. On an average day 19,000 new boxes enter
U.S. ports and a system that is built for speed is still at least a
year from being able to efficiently screen each container for
The ports of Los Angeles / Long Branch and New York / New
Jersey by most estimates handle about 60% of the total cargo
traffic in any given day and an estimated 40% of American trade
in one form or another depends on containers that flow through
the former complex. But aside from these two seaports, there are
about another 350 in which goods reach the U.S.
No doubt, since 9/11 screening has been tightened for chemical /
biological weapons, explosives, missiles or components for
nuclear weapons, but as Fen Montaigne points out in an article
for the January 2004 issue of Smithsonian, weapons can easily be
shipped in small batches, on different containers, thus eluding
detection by even the most sophisticated gamma-ray machines
and radiation devices. ABC News, for example, has twice been
able to smuggle in radioactive material from Eastern Europe by
“The system is absolutely wide open, and anybody with 3,000
bucks in Asia and a little less in Europe can get a box delivered
to their lot or home and they can load it to the gills with whatever
they want, close it with a 50-cent lead seal, and it’s off to the
races,” says Stephen E. Flynn, a retired Coast Guard commander
and an expert on seaport security. “As I look at the cargo
transport system today, when I wake up each morning and see
that we haven’t had an attack, I just declare ourselves lucky. The
secretary of the treasury, the secretary of defense, the secretary
of commerce, the secretary of state, the president of the United
States should be tossing and turning at night knowing that this
system has so little security.”
In the old days, U.S. Customs inspectors merely looked for drugs
and it was well known that security was lax. But these days
Customs requires all shippers to declare the contents of each
container 24 hours before they’re loaded onto a freighter bound
for the U.S. The new computer systems then scan the manifests
for unknown importers, manufacturers or shippers that have
never delivered here before.
The big debate internally is whether or not the current
technology could detect a small nuclear bomb. Thus far, the
administration has spent about $350 million on upgrading
security, but the U.S. Coast Guard estimates it needs over $1
billion more just in 2004 alone.
When one looks at the overall situation, any kind of significant
attack on a port would cripple the economy.
“What I’m almost certain of, from talking with people at senior
levels of government, is that if we have a major event involving
one of our ports and a container, we will stand down the system,”
says Flynn, now a senior fellow for national security at the
Council on Foreign Relations. “We will shut it off until we sort
it out. Now, how is the president, when he stands in front of the
American people after a very visible and deadly act, going to
reassure them that these other containers can roll across our
borders and into our ports without worrying about them?”
And as reporter Montaigne adds, another big problem is simply
motivation. Picture, day after day after day, the security guards
and customs agents find nothing. Of course that’s a job well
done, but many are now concerned how our Customs personnel
can possibly stay on de facto “orange alert,” 365 days a year. It’s
only human nature that after a while you lose your edge or you
become susceptible to corruption.
Last spring [Ed. 5/04] I ventured to the Far East including
Singapore. I told you in my “Week in Review” columns of a boat
trip out into the Strait of Malacca to get a better idea of the
tanker traffic passing through this critical waterway and I also
took a cable car over the Port of Singapore.
The port is by various accounts the world’s largest in terms of
tonnage and normally it’s ranked #2 behind Hong Kong in
container traffic. [Los Angeles – Long Beach is usually #3 in
When I was over there I saved a piece from a business
newspaper, the Shipping Times, which had a schedule of the
various destinations out of Singapore. Picture there are usually
about 1,000 ships in port at any one time, representing 200
shipping lines and more than 600 ports in over 120 countries.
This is obviously a security nightmare these days and the United
States and Singapore, working with Indonesia and Malaysia, are
doing their best to buck up the system in the region. A large
tanker sunk in the right spot in the narrow Strait, for example,
could tie up the flow of oil for weeks, while Singapore officials
have warned of “floating bombs” crashing into critical
infrastructure such as oil refineries.
None of this is easy to pull off, mind you, and at least Singapore
is as focused as any nation in the world on the threats it faces.
It’s a good ally of the U.S.
That said I kept this shipping schedule for a reason. It’s quiz
time! [Or rather, quiz your mate.] Picture trying to track the
cargo from places like the following. [I’m leaving out more
obvious destinations, with a few exceptions. Also, I double-
checked some of these. In one or two cases I’m assuming the
cargo goes upriver or by rail from the sea when you’re dealing
with what appear to be landlocked countries.]
Abidjan (Cote D’Ivoire), Antofagasata (Chile), Apapa (Nigeria),
Balingasag / Cagay (Philippines), Bandar Abbas (Iran),
Banjarmasin (Indonesia), Batam (Indonesia I went here), Beira
(Mozambique), Bintulu (Malaysia), Buenaventura (Colombia),
Callao (Peru), Chah-Bahar (Iran), Chittagong (Bangladesh),
Cochin (India worked here in 1985), Colombo (Sri Lanka),
Concepcion Bay (Chile), Cotonou (Benin).
Da-Nang (Vietnam), Dalian (China), Daman (India), Damietta
(Egypt), Damman (Saudi Arabia), Dampier (Australia), Dar Es
Salaam (Tanzania), Douala (Cameroon), Felixstowe (U.K.), Fos-
Sur-Mer (France), Guayaquil (Ecuador), Honiara (Solomon
Islands), Inchon (South Korea), Itajai (Brazil), Jambi (Indonesia),
Jebel Ali (United Arab Emirates).
Kaohsiung (Taiwan 2nd largest city), Karachi (Pakistan),
Khorramshahr (Iran), Koh Sichang (Thailand), Kopervik
(Norway), Kota Kinabalu (Malaysia), Kuala Belait (Brunei), La
Spezia (Italy), Labuan (Malaysia), Lae (Papua New Guinea),
Laem Chabang (Thailand), Latakia (Syria), Lautoka (Fiji),
Libreville (Gabon), Lome (Togo), Luanda (Angola), Male
(Maldives), Manaus (Brazil), Manzanillo (Panama), Matadi
(Zaire), Mombasa (Kenya).
Napier (New Zealand), Nhava Sheva (India), Ningbo (China),
Nouakchott (Mauritania), Noumea (New Caledonia), Odessa
(Ukraine), Papeete (French Polynesia Tahiti), Paranagua
(Brazil), Pasir Gudang (Malaysia), Piraeus (Greece), Pointe
Noire (Congo yes, it has a port), Port Elizabeth (South Africa),
Port Harcourt (Nigeria), Port Moresby (Papua New Guinea), Port
Osim (Saudi Arabia), Pusan (South Korea).
Quinhon (Vietnam), Rio Grande (Argentina), Rotterdam
(Netherlands just put this obvious one for the heck of it),
Saipan (N. Mariana Islands famous WW II battle here toured
it in the mid-90s), Salalah (Oman), Sampit (Indonesia), Savona
(Italy), Semarang (Indonesia), Sharjah (UAE), Sokhna (Egypt),
Sriracha (Thailand), Taichung (Taiwan), Takoradi (Ghana),
Tanga (Tanzania), Tartous (Syria), Tema (Ghana), Tilbury
(U.K.), Tincan (Nigeria hope the ship isn’t), Truk
(Micronesia), Ulsan (North Korea), Valparaiso (Chile), Victoria
(Cameroon), Yangon (Myanmar i.e., Rangoon / Burma),
Yantian (China), Zeebrugge (Belgium).
If your child knows where 50% of these places are, get them to
apply ‘early admission’ as soon as possible. And can you
imagine spending weeks traveling on some of them? These
aren’t exactly luxury liners.
Note: I will comment on Dubai Ports World, specifically, in my
“Week in Review” column.
Wall Street History returns next week.