Copyright 2002, Traffic World Magazine
The U.S. government has started to tackle what some in the industry believe is this country's greatest threat: a terrorist attack via the U.S. intermodal freight network. But the biggest hurdle may be trying to implement a plan that is satisfactory to shippers and carriers, as well as the government.
The National Industrial Transportation League and other industry representatives are advising the Container Working Group, a task force formed jointly by the Department of Transportation and the U.S. Customs Service, on issues that include documentation requirements, cargo manifest information, seals on containers, tendering loaded containers and cargo identification.
At its most recent meeting, according to NITL, the CWG suggested including a provision in the House maritime security bill, H.R. 3983, that would require shippers and/or carriers to provide cargo information to the government not later than 24 hours before containers destined for the U.S. are loaded on a vessel in a foreign port.
"In considering this matter, the league and other groups stressed that such a strict requirement would create substantial impediments for the efficient transfer of international freight," NITL said. "One suggestion offered would be for shippers or third parties to be enrolled in a risk management program commonly referred to as 'known shipper.' In this plan, a shipper or freight forwarder would be allowed to submit its container content information in a time frame that is less than the 24-hour requirement."
NITL said it generally was agreed in the subgroup that in forwarding container information electronically to the government, a single database that federal agencies could tap into could be used. However, "regardless of how the information is collected, the industry representatives emphasized that commercially sensitive information needs to be 'fire-walled' and protected from federal agencies (having no specific need to know) and from public disclosure."
But some claim that what has been proposed so far by the government does not go far enough - that is, it doesn't take into account domestic intermodal security. In fact, the U.S. intermodal network is dangerously susceptible to terrorist attack, according to a third-party logistics company. "The system is so wide open it's sick," said Brian Watt, director of marketing for Chicago-based Select Logistics.
Watt says that both intermodal marketing companies and the carriers are responsible. "Since the era of deregulation, companies participating in the freight market primarily have been consumed by the profit motive rather than focusing appropriate resources toward safety and professional oversight," he said. He claims that by shifting from marketing directly to the actual beneficial owners to marketing instead to third-party logistics companies, "the railroads have lost the knowledge of who is really using their systems."
Some IMCs, Watt alleges, habitually abuse the rate system by using different product commodities for a rate designed for a specific commodity. He cites as an example an IMC that books freight from Los Angeles to Chicago for Customer A under a special commodity rate of $900 and then offers the same rate to Customer B for a different product. That is against the contract rules of the railroad. "Innocently enough, that's generally used to inflate profits," Watt said. "But in a more sinister setting where you're out to do the system harm, misidentifying freight is an extremely easy thing to do on the railroads. You could put a hazmat shipment on the railroads and they'd never know it."
In a letter sent to congressional representatives, Watt outlined several ways in which the government should be auditing the U.S. intermodal freight network to better protect it against terrorism, including identifying and validating truck drivers holding commercial drivers licenses, truck company owners and their financial support.
Other steps the government should be taking to secure the intermodal industry include:
n Audit railroad police facilities and staff so that appropriate levels of terminal security can be determined and executed.
n Determine strategies and resources needed to monitor railroad rights of way for system integrity and appropriate use.
n Reduce the ability of any party to trace those shipments moving via rail by limiting availability to only the beneficial owner or the coordinating third party.
n Require shipments of questionable origin or validity to be opened, stripped and inspected before being allowed to move further via domestic intermodal container or road vehicle.
Watt claims that many of these procedures might not be necessary if railroads enforced their contracts. "The railroads' intermodal contracts give them the right to audit the IMCs, but they don't because it's too much hassle," he said.