MARGARET WARNER: The Dubai controversy has focused attention on a much- broader question: How secure are America's seaports and the global cargo system that delivers foreign goods to them? More than one billion tons of cargo enter the U.S. by ship every year, primarily through 50 major U.S. ports. The bulk of it comes in large containers that are handled by several companies along the way. In a report card issued in December 2005, members of the 9/11 commission gave a grade of D to one crucial aspect of port security: cargo screening.
For more, we turn to Stephen Flynn, a retired Coast Guard commander and an expert on transportation, border and infrastructure security. A senior fellow at the Council on Foreign Relations, he's also author of the 2004 book "America the Vulnerable." And Robert Bonner, who headed the U.S. Customs Service from 2001 to 2003 and the renamed U.S. Customs and Border Protection Service from 2003 to 2005; he now practices law with the firm of Gibson, Dunn & Crutcher in Los Angeles. Welcome to you both.
Stephen Flynn, when we spoke last week about what terminal operators do in the context of port security, you said, look, the much bigger question is overall port security and the whole cargo system. So, how safe is the entire global cargo system that brings all these goods to American ports?
STEPHEN FLYNN: Well, it's an incredibly efficient system. And it's a very reliable system. And it's very low cost to use it. It's allowed us to essentially connect with global markets around the world and make these huge oceans to the east and west of us largely irrelevant in economic terms but the drivers of the industry were efficiency, reliability and low cost.
And prior to 9/11, security was viewed as raising costs, undermining efficiency, and undermining reliability, so what we've had to do since 9/11 is largely try to retrofit some security in a system that didn't pay much attention to it prior to then.
MARGARET WARNER: And how well has it been retrofitted in your view?
STEPHEN FLYNN: Well, Commissioner Bonner, who is with us here today, is -- really should be applauded by the American people for treating this issue with some urgency and putting together a framework that is I think very well conceived. The problem is that the administration overall simply didn't provide him with the resources -- his agency, with the resources. And the national security imperative about getting this right was, I think and is still poorly understood within the traditional national security community.
It was left to customs and Coast Guard with relatively limited amount of resources to try to patch together the system we have today, which basically tries to do a number of things. It first says the private sector used to basically play a cat-and-mouse game with Coast Guard and customs. They tried to get in efficiently, and if they did something wrong we'd have to catch them. What Commissioner Bonner did right after 9/11 was reach out to them and said, look, you have to be a part of the solution.
But the challenge here by inviting them in is we have to make sure we can verify that they're living up to what they're doing. And the fact is that customs has only under 100 inspectors to try to examine the currently 5800 members of this initiative of -- that they participate in to work with customs. And they've only been able to process -- they've only been able to review about a third of them to date. And so it's a real challenge because people in the industry know that if they're not checked, then other players aren't playing by the rules. It's a problem.
MARGARET WARNER: OK. Let me go to Commissioner Bonner.
Commissioner Bonner after 9/11 -- and I gather you came on the job the day before 9/11. First of all, explain for our viewers very briefly how this global supply chain works and at what point you tried to plug some of the gaps.
ROBERT BONNER: Well, one of the things that we had to do right after 9/11 and certainly the Bush administration did was to do and has done a lot. Let's understand that. We've done a lot to improve the security of our seaports and what's moving in terms of cargo from abroad to our seaports.
And essentially, we've implemented a cargo security strategy, a very effective cargo security strategy that's based upon five interlocking initiatives. One of those is the Container Security Initiative. And that's where we target and we inspect or host nations overseas at foreign seaports inspect high-risk cargo that, before it even is loaded on board vessels moving to the U.S. -- and we're in 42 of the largest seaports of the world. The second thing we did after 9/11 --
MARGARET WARNER: Let me just interrupt to explain to our viewers. So basically the paperwork is sent to a place outside of Washington, correct, about what's in these containers, and you all or somebody identifies which ones are at risk, and then they're screened in this manner?
ROBERT BONNER: That would be part of the five-part -- the five interlocking initiatives. The second one was to implement for the first time by regulation a requirement that we, the U.S. Customs and Border Protection, receive information on every single container that's moving to the United States before -- not just before it arrives but 24 hours before it leaves the foreign seaport.
The third thing we do is to run that information through an automated targeting system, which uses strategic intelligence and a huge amount of trade data and information that U.S. Customs and Border Protection has to identify those relatively small group of cargo containers that may pose a potential threat or a terrorist threat.
And then the fourth thing we've done is to use detection technology overseas at these foreign CSI ports across the world, 42 of the largest ports in the world but also on arrival in the United States. And that's using large-scale x-ray scanning equipment plus sophisticated radiation detection equipment to determine whether there is any potential issue.
And the last thing is what Steve talked about, and that was partnering with the private sector in what's called the Customs-Trade Partnership Against Terrorism in which the private sector takes certain steps to secure its supply chain literally all the way back to foreign manufacturers' loading docks. And, in exchange, they receive benefits of expedited processing upon arrival in the U.S. That's called C-TPAT. There are over 6,000 or so companies most of the major U.S. importers that are participating in C-TPAT. It's the largest and I believe the most successful customs -- I mean government-private sector partnership to arise from 9/11.
MARGARET WARNER: OK. Let me just get back to Mr. Flynn for a minute.
Mr. Flynn, OK, where on the supply chain from the manufacturer who puts -- first sends his goods to the U.S. to be sold to the point it arrives in the U.S., where are the greatest vulnerabilities along that supply chain today?
STEPHEN FLYNN: Oh, I think what we widely know is really between the factory-- and there are millions of factories, of course, around the world who are trying to ship materials to one jurisdiction or another-- and we in this country outsource a lot of what we put in your manufacturing process, and our retailers are very dependent, of course, on what comes from overseas.
So we're basically looking at the point from when it leaves a factory it often goes on a truck, not very well paid truck driver in a rickety road system often to get it to a seaport, and maybe in-between there it may have to get it to a railhead or a bigger truck company.
And there are a number of weigh points along the way before it gets to the oversea seaport where there's potential for mischief within that container. That everybody I think has acknowledged in the area is the toughest nut to crack. When we have -- at a seaport we get very big companies who are very interested in efficiency but what happens between the factory and the actual load port has been -- is a difficult nut to crack. And that would be the area of biggest vulnerability.
MARGARET WARNER: And how easy is it to break into one of these containers and put something in? I assume that's the nightmare scenario -- that some kind of weapon of mass destruction or components would be smuggled into the U.S. How easy is it to break into a container and do something like that undetected?
STEPHEN FLYNN: Well, there is no international standard on a seal per se. There's no requirement that all containers be sealed. There's an agreement that they should be sealed for commercial bases. The common tool is a 50-cent lead seal. They have increasingly moved to mechanical seals. And some of the companies that move higher risk cargo like electronics or designer jeans or these kinds of things will add a little bit more.
But the cargo theft industry has been a huge one in this area. You can pop the hinges off of doors. These are really thin sides. You could poke holes through the sides if you had enough time with a container, and so you could do it in such a way to as not even to disturb the seal.
And my nightmare scenario is really not -- is that the trusted shippers who are working hard to try to do things at the factory and maybe working with transportation providers at the port who are name brand companies -- it's those companies who get targeted by terrorists because they only have to get it right once.
And they break into the container. Because we view it as low risk, it basically moves right through the system, which is why we need I think a more effective check at the load ports -- like in Hong Kong right now a company Hutchinson Port Holdings has put in place as a pilot program inside before the trucks get into the terminal examining every container with a gamma image and every container with a radiation signature and capturing a picture of the top, sides and bottoms and putting in a database.
What's valuable about that is we have, therefore, a record of every container before it arrives into the terminal, which would give us a real validation point that low risk is low risk. And if we saw something we couldn't determine with a sort of quick screen, it could be referred to secondary inspections that have been set up with the host country.
MARGARET WARNER: OK. And --
STEPHEN FLYNN: So we could go a long ways further. It's an issue of resources and real commitment to take the steps that have been made and really give them some teeth.
MARGARET WARNER: And let me get back to Mr. Bonner.
Mr. Bonner, it's often noted that the U.S. has spent something like $18 billion on securing airports since 9/11 but only about 600 and some million dollars on seaports. What would it cost to do what you think it really is required to make the seaports as safe as, say, our airports?
ROBERT BONNER: Well, first of all, I'm not sure that figure is correct. I mean, I know that our funding alone for Customs and Border Protection was several hundred millions of dollars a year for each year so I think we're well over a billion dollars in terms of funding just for the initiatives that I've described. That doesn't get into the funds that the Coast Guard -
MARGARET WARNER: But how about --
ROBERT BONNER: -- has received to oversee physical security of the ports.
So, look, this is a work in progress. There's more to be done, but I think if you look at what's been done here in terms of a cargo security strategy that helps make our seaports safer and America more secure, it's really quite impressive what we've done already. Now it's not done.
One of the things that I think we need to do and I think Steve was alluding to it -- was in addition to -- well, the nightmare scenario is something concealed in a container. Well, the thing to do is to identify containers that are potential risk for terrorist -- concealment of a terrorist weapon and make sure that we are running them through an X-ray screening and a radiation screen.
And, by the way, we have a system in place where we identify the highest -- the high-risk containers, those that are potentially risky for the terrorist threat. And we do just that more and more now at the overseas at the foreign seaport before these containers even arrive in the United States.
But one other thing we need to do is we need to implement what I've called the smart box. And that is to have some sort of a device in a container that tells us whether it's been tampered with at any point along its journey. And I think we're very close to being able to implement something like that.
MARGARET WARNER: All right. Robert Bonner and Stephen Flynn, thank you both.
ROBERT BONNER: You bet.