Where''s The Bucks?

Where''s The Bucks?

Copyright 2004, Traffic World, Inc.

For the present, at least, shippers will not be hit up for money to pay for increased maritime security measures, a top U.S. Homeland Security official pledged as new maritime security regulations took effect July 1.

Under Secretary for Border and Transportation Security Asa Hutchinson said the Department of Homeland Security wants to stay away from imposing additional burdens on shippers and, ultimately, consumers.

"That''s just an option that''s not on the table right now," Hutchinson said at a June 29 maritime security forum in Washington. But he quickly hedged. "It doesn''t mean it couldn''t be down the road," Hutchinson said.

His statements reflect widespread insecurity in government and industry over the cost of maritime security. Nearly three years after the September 11 terrorist attacks, exactly who will pay to protect the nation''s ports and maritime facilities, and how the bill will be divided, remains unclear.

There is a yawning gap between what one branch of the federal government says is needed for port security spending in the United States and what Congress and the president are willing to spend.

The U.S. Coast Guard estimates it will cost $7.3 billion over 10 years to implement the Maritime Transportation Security Act of 2002. That averages $730 million per year. President Bush requested $46 million for the next fiscal year for port security.

In addition, there''s ongoing debate over how much private industry should spend and what level of support government should offer ports and shipping lines.

Noting that many port facilities are privately owned, Hutchinson told the forum, sponsored by George Mason University, that private industry needs to pitch in. "It''s a partnership," Hutchinson said. "And it has to be private sector investment as well as public sector investment."

Asking the private sector to shoulder the burden is easy for government officials, but the director of the Port of Baltimore says it''s hard to accomplish.

"The East Coast is so competitive that there''s no way the ports can absorb the costs," Maryland Port Administration Executive Director Jim White said. "I look to airports and I look at all the money they''re getting. For each dollar they get, each port gets a nickel. It just doesn''t seem fair."

Competition between the transportation modes for security dollars is fierce and is not likely to subside as Congress makes an attempt to rein in spending to deal with a mounting budget deficit. "I think we''re investing in ports," Hutchinson said. "You can always make a comparison."

Altogether, the federal government released about $500 million in port security grants in 2002 and 2003, including $58 million for the Secure Container Initiative and $75 million from the Office of Domestic Preparedness to 13 critical national seaports. The federal government has spent $12.7 billion on aviation security since the September 11 attacks through the end of May, according to the Transportation Security Administration.

Hutchinson spoke as two new sets of maritime security rules took effect on July 1, affecting maritime transportation around the globe.

The United Nations'' International Maritime Organization required compliance with its International Ship and Port Facility Security Code on July 1. Separately, the Maritime Transportation Security Act also took effect the same day.

The MTSA implements the ISPS code in the United States and adds additional security requirements as well. It provides for a National Maritime Transportation Security Plan, an interagency initiative to protect America''s ports. It also calls for the creation of area maritime security committees.

The IMO rules require ports, ships and shipping companies to designate security officers and to file security plans. To meet the standards, ports have added surveillance cameras and systems to check identification of people entering their facilities. In the United States, about 360 ports, 9,500 vessels, 3,200 facilities, and 40 off-shore oil or natural gas rigs are directly affected by the rules.

Ships and ports have had 18 months to meet the new standards. But that doesn''t mean they have all done so. As of the first week of July, the IMO said 58.6 percent of ships and 53.4 percent of ports worldwide met the ISPS code. U.S. ports, ships and facilities all met the deadline, according to the DHS.

On July 1, the U.S. Coast Guard began inspecting incoming foreign-flag ships to ensure they were compliant with the new ISPS rules. Fears that the inspections would cause widespread delays at ports and intermodal facilities proved as unfounded as concerns about the great Y2K computer crash. In the first five days of July, the Coast Guard denied entry to only 19 ships and detained 30 vessels.

"Things have been running smoothly with very little disruption to trade and travel," said Admiral Thomas H. Collins, commandant of the Coast Guard.

Speakers at the forum, sponsored by GMU''s Critical Infrastructure Protection Program, said the new rules are bringing much needed attention to port and maritime security. A former Coast Guard officer who now directs George Mason University''s Critical Infrastructure Protection Program described port security in the past as "a part-time, back water mission." That has changed for the better, John McCarthy said at the forum. "It''s no secret that [ports] are vulnerable to both physical and cyber attacks," McCarthy said.

Now they hope that public attention will translate to public funding.

Heritage Foundation homeland security research fellow James Carafano said the money needs to be targeted to where it is most needed. "Where are you getting the most security for the dollar you''re going to spend?" he asked. "If we''re going to ramp up spending in the maritime domain, we need to first target the Coast Guard," he said.