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Wall Street History
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02/24/2006
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.”
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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 deadly weapons.
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 this method.
“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 such rankings.]
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.
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Wall Street History returns next week.
Brian Trumbore
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