Supply Chain Security

Position

RILA members are committed to partnering with federal and state agencies to enhance global supply chain security. RILA has supported congressional efforts to improve supply chain security, specifically, the Security and Accountability for Every (SAFE) Port Act. Building upon the multi-layered, risk-based approach used by the U.S. government since September 11, 2001, this legislation allows government and industry to work together to develop measures that not only improve security but also enhance the movement of legitimate commerce.

Recent Activity

DHS Secretary Janet Napolitano has stated concerns about the ability to implement the 100 percent scanning mandate at foreign seaports by 2012. As a result, consensus appears to be slowly building behind the scenes in Congress that the law is neither practical nor effective and should be modified. As such, the Senate Committees on Homeland Security and Commerce, Science, and Transportation are taking a look at tweaking the language as they draft the next SAFE Port Reauthorization legislation. RILA is continuing to reach out to members at DHS, Customs and Border Protection (CBP) and Hill staff on this important issue.

With the discovery of U.S.-bound bombs disguised as printer cartridges on a UPS plane in England and in a FedEx facility in Dubai in late 2010, there will continue to be a focus on Capitol Hill in the 112th Congress to tighten security measures on all passenger and cargo planes. The Transportation Security Administration (TSA) has already been begun screening all cargo on domestic passenger planes, as mandated by Congress. However, TSA is only screening about two-thirds of international cargo, due to struggles in securing agreements with other countries. Some Congressional members have taken an interest in mandating 100 percent scanning on all cargo planes, but others are willing to look at additional resources and methods to securing the supply chain.

On November 25, 2008, CBP released its interim final rule on the Advance Trade Data Requirements, also known as “10+2.” This rule took effect on January 26, 2009, (60 days after the publication date) and allowed for a 12-month delayed compliance period to allow industry to comply with the new requirements. The final compliance date came into effect on January 26, 2010, with CBP implementing a graduated process during the first six months, with warnings being issued to those who are non-compliant. RILA continues to monitor the program and work with CBP staff to address issues.
Effective April 2009, the Transportation Security Administration (TSA) requires Transportation Worker Identification Credential Card (TWIC) for all personnel, including truck drivers, requiring unescorted access to secure areas of ports around the country. The TWIC program was established by Congress through the Maritime Transportation Security Act (MTSA). By way of background, individuals meeting TWIC eligibility requirements are issued a tamper-resistant credential containing the worker's biometric (fingerprint template), allowing for a positive link between the card and the individual.

Enrollment and issuance of cards began at the Port of Wilmington, Delaware, October 16, 2007, and has continued through 2009 with over 1 million cards being issued nationwide. The compliance deadline for the TWIC initiative passed on
April 15, 2009. Since the April enforcement, all personnel requiring unescorted access to secure areas in facilities and vessels (regulated under the Maritime Transportation Security Act of 2002) are required to have their TWIC card.

The TWIC program has been under fire after the Government Accountability Office (GAO) reported that covert testing, requested by the Senate, allowed government investigators to infiltrate major U.S. seaports with simulated explosives by using fraudulently obtained cards. The highly critical report states that security directives under the program have not been achieved and weaknesses in the program have not properly assessed, despite nearly a decade of effort and total funding of the program reaching $420 million.

As a response to the report, committees in the Senate and House have held hearings, questioning the legitimacy of the program and the methods TSA uses to review the cost-benefit analysis. Senator John Rockefeller (D-WV), Chairman of the Senate Commerce Committee, plans to introduce a port security authorization bill addressing shortcomings in port security credentialing, including potential options in less costly port security measures.

Action Needed

RILA will continue to oppose efforts to impose arbitrary security mandates. RILA will continue to engage Congress and the Department of Homeland Security to effectively implement new supply chain security policies. Industry must also continue to educate Congress on why risk-management is the only way to meet the dual objectives of a secure and efficient supply chain. Specifically:

Supply chain security policies should focus on areas of risk.
Proven technologies should be deployed in a way to ensure that high-risk containers are inspected.

Background

Safe and secure seaports and airports are essential elements in efficient and technologically advanced supply chains that can move cargo quickly to distribution centers, stores and factories around the world. In the post-9/11 era, RILA and its members have played a critical leadership role in shaping our nation’s supply chain security policies. As some of the largest users of the global supply chain, RILA members have actively participated in and supported public-private collaboration to enhance security through efforts such as the Customs-Trade Partnership Against Terrorism (C-TPAT) and the Secure Freight Initiative.

The federal government has been very active in developing polices that strengthen supply chain security. Since 9/11, Congress has passed two major pieces of legislation: the Maritime Transportation Security Act of 2002 and the SAFE Port Act. These laws have greatly improved supply chain security and will continue to do so over time.
Since the passage of these laws, a number of regulations and initiatives have been undertaken to protect the U.S. from a terrorist attack throughout the supply chain. Programs such as C-TPAT, the Container Security Initiative (CSI), the 24 Hour Rule, Transportation Worker Identification Credential, the Radiation Portal Monitor program and the International Ship and Port Facility Security Code (ISPS) all address important aspects of supply chain security.
Supply chain security is a global issue that cannot be addressed unilaterally and without the involvement of the private sector. While enhanced domestic port security is an important part of that equation, the most effective supply chain security measures will be those that assess vulnerabilities and identify threats before products reach U.S. ports. Thus, it is important that security policy be developed in partnership with foreign trading partners through organizations such as the World Customs Organization and the International Maritime Organization and with the private sector stakeholders such as terminal operators and carriers who own supply chain assets.
Over time, technology will play a valuable role in the improvement of supply chain security and efficiency. It must, however, undergo thorough evaluation to ensure that it can be integrated effectively into the operation of the supply chain.
RILA members are already funding security-related initiatives through federal customs duties and port/terminal security fees. In addition, RILA members have made security investments through participation in C-TPAT and believe that the government should ensure that revenue from current fees is used effectively before any new fees are levied.

Congress also addressed container scanning with the passage of the Implementing the Recommendations of the 9/11 Commission Act of 2007 (9/11 bill). RILA played an active role in the development of the legislation and will continue to work with Congress and the Department of Homeland Security (DHS) as the law is implemented.

A provision in the 9/11 bill mandated that DHS require foreign seaports to scan 100 percent of U.S. containers for radiation and density by 2012. The proposal allows the Secretary of Homeland Security to grant renewable waivers for up to two-year increments if the Secretary can certify that: scanning technology is not available for purchase, the scanning technology does not have a sufficient false alarm rate, the equipment cannot be deployed because of the physical characteristics of the port, scanning systems cannot be integrated, the scanning systems will significantly affect trade or the systems do not provide automated notification of questionable or high-risk cargo for further inspection. It also requires the Secretary to consult with other appropriate federal agencies to ensure that actions taken under this section do not violate international trade obligations.

DHS submitted a report to Congress on container scanning pilot projects at three foreign seaports. The report, which is required by the SAFE Port Act, demonstrated the results of projects that occurred in Port Qasim, Pakistan; Puerto Codero, Honduras; and Southampton, United Kingdom. The report highlighted the logistical, staffing, and financial challenges associated with 100 percent scanning.

State Affairs

Contact

For more information, please contact Kelly Kolb, vice president of government affairs, at kelly.kolb@rila.org.