Will TWIC disrupt trade?

Will TWIC disrupt trade?

For anyone whose business depends on the smooth flow of cargo through U.S. ports, the acronym TWIC is likely to cause a shudder. The post-9/11 federal plan to restrict access to seaports and, ultimately, other transport facilities to approved workers has been synonymous with potential catastrophe for the logistics system. Is this concern justified? Let's take a look.

There is no question that 2007 will be an important year for the Transportation Worker Identification Credential. The program has been on the back burner at the Department of Homeland Security since 2002 when the concept was first codified into law, but is now on a fast track thanks to new and aggressive deadlines contained in the SAFE Ports Act signed by President Bush on Oct. 13.

The deadlines related to the TWIC and other initiatives reflect Congress's growing frustration with the pace of progress in maritime security; the DHS would be right to be concerned about the political consequences of missing deadlines with Democrats in control of Congress.

The TWIC needs to be viewed as two parallel and interrelated, but really quite distinct, initiatives, both of which have the potential to negatively impact commerce. Events earlier this year set this dual process into motion. This summer, believing that a proposed system of contact TWIC card-reader machines at terminal gates would grind commerce to a halt, industry raised a storm of protest, and the government to its credit listened. As a result, the process of reviewing TWIC applications and issuing cards to port workers has been separated from the process of creating a system of biometric card readers at terminal gates and other port entrances.

There are thus two scenarios that raise the prospect of disruption. One is the possibility that large numbers of port workers, particularly nondocumented immigrant drivers, will fail to qualify for the TWIC and thus be effectively removed from the work force. The other is the potential that the card-reader system deployed for admitting truckers through terminal gates won't work, creating miles-long backups. Let's look at each in turn.

The credentialing process for port workers is rapidly gearing up. Any day now, the DHS will announce the contractor that will process TWIC applications for port workers at the 10 highest-priority ports. The cards must be in use at those ports by July 1, 2007, and at 40 additional ports by Jan. 1, 2008. There are 750,000 workers at U.S. container, automobile, petroleum and inland ports, including an estimated 110,000 truckers.

The big question is how many of those workers will fail to qualify for the TWIC? The main concern is truckers, the independent owner-operators who shuttle containers between marine terminals and nearby distribution centers and railheads. You have to be legally authorized to work in the U.S. to receive the TWIC, and it's assumed that many Hispanic drivers, especially in Los Angeles-Long Beach, are undocumented.

How serious is the threat? It's unclear. A recent Wall Street Journal story estimated that 20 to 50 percent of the port trucker work force nationwide is undocumented, but the truth is that reliable figures do not exist. "I don't think anyone truly knows how many truckers are not U.S. citizens or here lawfully," said Charles Carroll, president of the National Association of Waterfront Employers.

It's assumed there will be an impact, "but that doesn't mean trade stops," said Chris Koch, president of the World Shipping Council. "All it means is that you would have fewer drivers, and if you use laws of supply and demand, drivers' compensation would go up and new people would enter the business. But you could have some short-term dislocations."

With regard to the card readers, the core issue is getting the technology right so that the objective of creating secure access to ports can be achieved without trade disruption. Terminals earlier this year argued correctly that contactless readers are the only type that would work in the industrial environment of marine terminals. In agreeing to put implementation of the reader system on a separate track, the DHS acknowledged that existing technology is not ready.

The SAFE Port Act requires the DHS to establish biometric access verification pilots at five ports by April and have the system up and running within two years after the pilot begins. The DHS has wisely reached out to industry groups such as the National Association of Waterfront Employers for input.

More to come for sure.

Peter Tirschwell is vice president and editorial director of Commonwealth Business Media's Magazine Division. He can be contacted at (973) 848-7158, or at ptirschwell@joc.com.