<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:84230.wais]
IMPROVING SECURITY AND FACILITATING COMMERCE AT THE NATION'S PORTS OF
ENTRY: SEAPORTS OF LOS ANGELES AND LONG BEACH, CA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CRIMINAL JUSTICE,
DRUG POLICY AND HUMAN RESOURCES
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 1, 2002
__________
Serial No. 107-143
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
84-230 PDF
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Jr., Tennessee BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on Criminal Justice, Drug Policy and Human Resources
MARK E. SOUDER, Indiana, Chairman
BENJAMIN A. GILMAN, New York ELIJAH E. CUMMINGS, Maryland
ILEANA ROS-LEHTINEN, Florida ROD R. BLAGOJEVICH, Illinois
JOHN L. MICA, Florida, BERNARD SANDERS, Vermont
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JIM TURNER, Texas
DOUG OSE, California THOMAS H. ALLEN, Maine
JO ANN DAVIS, Virginia JANICE D. SCHAKOWKY, Illinois
DAVE WELDON, Florida
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Christopher Donesa, Staff Director and Chief Counsel
Nick Coleman, Professional Staff Member and Counsel
Conn Carroll, Clerk
C O N T E N T S
----------
Page
Hearing held on February 1, 2002................................. 1
Statement of:
Holmes, Captain John, Operational Commander, U.S. Coast
Guard, and Captain of the Ports of Los Angeles and Long
Beach; Audrey Adams, Director of Field Operations, South
Pacific Customs Management Center; and Thomas Schiltgen,
Director, Los Angeles District Office, Immigration and
Naturalization Service..................................... 8
Steinke, Richard D., executive director, the Port of Long
Beach; Larry Keller, executive director, the Port of Los
Angeles; and Guy Fox, chairman of the board, Global
Transportation Service..................................... 45
Winter, Jay, executive director, Steamship Association of
Southern California; Dennis Heck, corporate import
compliance and purchasing manager, Yamaha Corp. of America;
Captain Bill Wright, senior vice president for safety and
the environment, Royal Caribbean and Celebrity Cruise
Lines; and Moises Cisneros, legislative manager, Los
Angeles Chamber of Commerce................................ 74
Letters, statements, etc., submitted for the record by:
Adams, Audrey, Director of Field Operations, South Pacific
Customs Management Center, prepared statement of........... 19
Fox, Guy, chairman of the board, Global Transportation
Service, prepared statement of............................. 61
Heck, Dennis, corporate import compliance and purchasing
manager, Yamaha Corp. of America, prepared statement of.... 84
Holmes, Captain John, Operational Commander, U.S. Coast
Guard, and Captain of the Ports of Los Angeles and Long
Beach, prepared statement of............................... 12
Keller, Larry, executive director, the Port of Los Angeles,
prepared statement of...................................... 52
Schiltgen, Thomas, Director, Los Angeles District Office,
Immigration and Naturalization Service, prepared statement
of......................................................... 25
Souder, Hon. Mark E., a Representative in Congress from the
State of Indiana, prepared statement of.................... 4
Steinke, Richard D., executive director, the Port of Long
Beach, prepared statement of............................... 48
Winter, Jay, executive director, Steamship Association of
Southern California, prepared statement of................. 78
Wright, Captain Bill, senior vice president for safety and
the environment, Royal Caribbean and Celebrity Cruise
Lines, prepared statement of............................... 89
IMPROVING SECURITY AND FACILITATING COMMERCE AT THE NATION'S PORTS OF
ENTRY: SEAPORTS OF LOS ANGELES AND LONG BEACH, CA
----------
FRIDAY, FEBRUARY 1, 2002
House of Representatives,
Subcommittee on Criminal Justice, Drug Policy and
Human Resources,
Committee on Government Reform,
Long Beach, CA.
The subcommittee met, pursuant to notice, at 12:10 p.m., at
Port of Long Beach, Port Administration Building, 6th Floor,
925 Harbor Plaza, Long Beach, CA, Hon. Mark E. Souder (chairman
of the subcommittee) presiding.
Present: Representative Souder.
Also present: Representative Millender-Donald.
Staff present: Christopher Donesa, staff director and chief
counsel; Nick Coleman, professional staff member and counsel;
and Conn Carroll, clerk.
Mr. Souder. Good afternoon. Thank you all for coming. Today
our subcommittee will explore the status of the Long Beach and
Los Angeles seaport border. Even before the terrorist attacks
on September 11, 2001, this subcommittee was considering ways
to improve both the security of our Nation's borders and the
efficient flow of international commerce, travel and tourism.
Continuing problems with illegal immigration and smuggling
of drugs and other contraband over the Southern and Northern
borders and into our seaports and the threat of terrorism have
prompted calls to hire more Federal law enforcement officers
and to expand the physical and technological infrastructure
needed to allow those officers to work effectively.
The attacks of September 11th and the heightened scrutiny
of the last 4 months emphasized the urgency in dealing with the
terrorist threat as well as the problems of narcotics
interdiction and illegal immigration. Following the attacks,
the Nation as a whole came together to quickly develop and
implement added security measures at our land, air and sea
borders.
The teamwork and cooperation required and displayed among
the many Federal, State and local entities throughout America
was and still is truly remarkable.
All morning long I have seen seaport activities from the
water, the land and by air. I thank everyone who has been
involved for working so hard these past 4 months to keep these
ports secure and efficient.
Our Nation's seaport borders today are more secure than 10
September of last year, but the job is nowhere near done. We
cannot let our guard down on vital border issues such as drugs
and terrorism. We must continue to improve. We must continue to
work together to work smarter and better.
Our ports and borders must remain secure and prosperous in
the years to come. Our prosperity clearly depends upon our
ability to accommodate the global trade that is predicted to
double or triple in the next 20 years. So government also needs
to be attentive to minimize the disruptions and delays caused
by Federal inspections and other requirements. There is no
doubt that there have been costs associated with heightening
our Nation's security at our borders.
Delays at some border crossings and a reduction in
commercial and commuter traffic from the increased security
measures put in place after September 11th have raised concerns
about the effect of these policies on trade, tourism and
travel.
A slowing of the flow of people, cargo and vessels is a
major concern at our seaports. Congress has been considering
numerous proposals to deal with these problems, and our
subcommittee is open to exploring all of them. However, finding
and implementing solutions is much more difficult than simply
identifying problems. For example, the House of Representatives
and the Senate last year passed anti-terrorist legislation
that, among other measures, authorizes the tripling of the
number of Border Patrol agents, INS inspectors and Customs
inspectors along the Northern border.
President Bush just proposed much needed comprehensive
increases in our support to the Coast Guard. It is unclear how
quickly any of these agencies can meet these added
requirements. Moreover, it is unclear what the impact of the
new emphasis on anti-terrorism will be on personnel decisions
at each of those agencies.
In the rush to protect our Nation's border from terrorists,
we must not hamper our ability to protect our citizens from
other dangers, as well as we must not slow down the lifeblood
of our Nation's economic well being, that of international
trade and commerce.
This hearing is part of a series of field hearings which
this subcommittee is holding at border crossings and ports of
entry throughout the United States. At each location, this
subcommittee is defining the problems facing the Federal
agencies, local lawmakers and community and business leaders
with respect to border policy.
We will focus on what new resources are needed for the
Federal Government most effectively to administer the border
crossing and port of entry as well as what new policies could
be pursued to ease the burdens placed on commerce, travel and
tourism. We will last explore how the new emphasis on
preventing terrorism may affect the ability of these agencies
to carry out their other vital mission. These issues are all
very important and extremely urgent, and I look forward to
hearing from our witnesses today about ways to address them.
We have invited representatives of the agencies primarily
responsible for protecting our borders and seaports in this
region; namely, the U.S. Coast Guard, the U.S. Customs Service,
the Immigration and Naturalization Service, to testify here
today. The subcommittee is vitally interested in ensuring the
effective functioning of those agencies, and we will continue
to work with them and their employees to ensure continued
security and effective administration of our Nation's borders
and seaports.
We welcome Captain John Holmes of the U.S. Coast Guard, who
serves as the Operational Commander of this area, and Captain
of the Ports, Los Angeles and Long Beach; Ms. Audrey Adams,
Director of Field Operations for the South Pacific Customs
Management Center; and Mr. Thomas Schiltgen, Director of the
Los Angeles District Office, Immigration and Naturalization
Service.
A big part of developing and implementing any seaport
security plan involves the respective port authorities. No two
seaports are alike. As such, input from the local port
component and port personnel is important to evaluating changes
to seaport border security policies.
Today, our second panel is the individuals that manage day-
to-day port operations. We welcome Mr. Richard Steinke,
executive director of the Port of Long Beach, and Mr. Larry
Keller, executive director of the Port of Los Angeles.
When examining seaport border policies, we must of course
also seek the input of representatives of the local community
whose livelihood is directly affected by changes to seaport
security procedures. Our third panel is made up of
representatives and port users. We welcome Mr. Jay Winter,
Executive Director of the Steamship Association of Southern
California; Mr. Guy Fox, chairman of the board of Global
Transportation Services; Mr. Dennis Heck, corporate import
compliance and purchasing manager for Yamaha Corp., Captain
Bill Wright, senior vice president for safety And Environment,
Royal Caribbean and Celebrity Cruise Lines; and Moises
Cisneros, legislative manager of the Los Angeles Chamber of
Commerce.
We thank everyone for taking time this afternoon to join us
for this important discussion. Congresswoman Millender-McDonald
is on her way here. Maybe after the first panel we will have
her recognized for her opening statement if she wants to do
that.
[The prepared statement of Hon. Mark E. Souder follows:]
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Mr. Souder. Before proceeding, I would like to take care of
a couple of procedural matters: First, ask unanimous consent
that all Members have 5 legislative days to submit written
statements and questions for the hearing record; that any
answers to written questions provided by the witnesses also be
included in the record. Without objection, so ordered.
Second, I ask unanimous consent that all exhibits,
documents and other materials referred to by Members and
witnesses may be included in the hearing record, and that all
Members be permitted to revise and extend their remarks.
Without objection, it is so ordered.
And, finally, I ask unanimous consent that all Members
present be able to participate in the hearing.
Now, this is an oversight committee of Congress and we
always ask that our witnesses be sworn in. So would the
witnesses on the first panel please rise. Raise your right
hands, I will administer the oath.
[Witnesses sworn.]
Mr. Souder. Let the record show that the witnesses have
answered in the affirmative. Each of you will now be recognized
for your opening statements. We ask you to summarize your
testimony in approximately 5 minutes, because we have lots of
witnesses. And you can insert any--the full statement, any
other additional materials you have.
It is my privilege to first recognize Captain Holmes. We
thank you for the courtesy of hosting us last night at the
wonderful Point Vicente Lighthouse and other stops on our
visit, including rousing me out of bed at 3:45 in the morning
to go out with the sea marshals.
But we appreciate your work here, as the others, and look
forward to hearing your testimony for the official record.
STATEMENTS OF CAPTAIN JOHN HOLMES, OPERATIONAL COMMANDER, U.S.
COAST GUARD, AND CAPTAIN OF THE PORTS OF LOS ANGELES AND LONG
BEACH; AUDREY ADAMS, DIRECTOR OF FIELD OPERATIONS, SOUTH
PACIFIC CUSTOMS MANAGEMENT CENTER; AND THOMAS SCHILTGEN,
DIRECTOR, LOS ANGELES DISTRICT OFFICE, IMMIGRATION AND
NATURALIZATION SERVICE
Captain Holmes. Thank you very much. Good afternoon, Mr.
Chairman. My name is John Holmes. I am the Coast Guard Captain
of the Port for the Los Angeles-Long Beach Port Complex.
It is a pleasure to appear before you today to discuss
Coast Guard border security, particularly as it applies to the
transport of people and cargo by sea into this, the country's
largest and most active international cargo hub. I have a
written statement I have submitted for the record, and I would
like to summarize it here.
What I would like to do today is provide you with a
perspective of Coast Guard security efforts in the Los Angeles-
Long Beach Port Complex. To do this I will address several
pertinent issues, including size and scope of the Port Complex,
security efforts that took place prior to the September 11th
attacks, immediate actions after the incident, current security
measures in place, and long-term initiatives underway to
address security challenges.
Simply stated, the Los Angeles-Long Beach Port Complex is
the Nation's super port. Individually, either port, Los Angeles
or Long Beach, would rank as the largest cargo port in the
United States. Cumulatively they represent the third largest
cargo port in the world, handling over 35 percent of the
Nation's containerized cargo, over one million cruise
passengers, over 500,000 vehicles, and approximately 50 percent
of the oil used in the western United States.
Over 6,000 deep-draft vessels arrive here each year. And
perhaps the most important statistic of container cargo is--
predictions indicate that container cargo will grow fourfold in
the next 20 years from a figure of approximately 9 million
TEUs, which is basically a 20-foot container, to 36 million
TEUs by the year 2020.
Prior to September 11th, the Port of Los Angeles-Long Beach
had one of the most active harbor safety committees in the
country. Upon review of a number of reports, including the DOT
report and assessment of the U.S. Marine Transportation System
and the August 2000 report of the Interagency Commission of
Crime and Security in U.S. Seaports, another committee was
formed, and that committee was the Marine Transportation System
Committee.
This committee was formed to facilitate the safe, efficient
and environmentally conscious flow of cargo in and out of the
seaport. In addition to this main committee, subcommittees were
formed, which included a Port Security Subcommittee, which was
made up of the port users and the Federal agencies which they
interact with, and a Law Enforcement Subcommittee, which was
made up strictly of the law enforcement agencies in the port
area.
I only mention this because this figures into the actions
that the Port Complex took immediately after the September 11th
tragedy. I will talk a little bit about the Coast Guard
operations before September 11th, which some people are now
referring to as the old normal, as opposed to what a lot of
people refer to now as the new normal. And under the old normal
the Coast Guard was conducting routine and--the Coast Guard and
several other agencies were conducting routine water borne
security patrols. Controls of vessels were exercised via unique
State, Federal, user fee-supported Vessel Traffic Service.
Shoreside security was ensured through facility inspections and
roving vehicle patrols. A limited number of container
inspections were being conducted by the Coast Guard, with a
particular focus on hazardous material, and a very robust Port
State-controlled Boarding Program was in place.
As you probably are aware, the Port State-controlled
Boarding Program is the program that the Coast Guard uses to
board foreign vessels that come into U.S. waters to ensure that
they meet the International Safety Standards.
In the wake of the September 11th tragedy everything
changed of course, and we started to view things in terms of
threat, and we put those threats into three basic categories.
First was the waterside threat of vessels approaching
facilities or other vessels in the port, a shoreside threat of
those vessels coming into the port, either from vehicles or
trucks, and the internal threat of the vessels coming into the
port that is represented by the crews, cargo and passengers on
board.
To mitigate the waterside threat posed by small vessels,
additional floating resources were employed, around the clock
harbor patrols were conducted and every vessel entering the
Port Complex after September 11th was provided an escort, an
armed Coast Guard escort.
To mitigate the shoreside threat to facilities, terminal
managers were directed to upgrade security, and around the
clock, multi-agency vehicle patrols were set in place. The
greatest challenge, however, posed itself in the internal
threat posed by the crews, passenger and cargo on the vessels.
In order to mitigate this threat, we had to identify every
vessel coming into port, exert positive control over its
actions using the Vessel Traffic Service, and conduct boardings
to screen the vessels, passengers and crew.
No one agency in the port, unfortunately, has the personnel
to undertake a screening operation of this nature. So on the
morning of the 11th, a multi-agency maritime enforcement
effort, consisting of Coast Guard, Immigrations, Customs, FBI,
ATF, California Highway Patrol, Los Angeles Port Police, and
the L.A.P.D. and many others were used to screen the vessels.
To give you some idea, on the 11th and 12th, this
represented about a 4 to 6-hour delay on vessels coming into
the port. After a week this was down to a delay of about 1 to 2
hours, and presently no delay exists. Currently, multi-agency
boardings are being conducted, although most are currently
using Coast Guard Reserves and/or joint U.S. Coast Guard-Los
Angeles Port Police sea marshal security teams. Vessel,
vehicle, and air patrols continue with procedures refined
daily.
Multi-agency facility surveys have been conducted in
conjunction with the Port Authority to identify and alleviate
shoreside security shortfalls. Risk management procedures are
used to identify and disburse resources. And our Harbor Safety
Committee and the MTS Committee and subcommittees have been
extremely active in developing standards and procedures to use
around the port.
In the long term, we are working with both ports to develop
a security manual. We have recently developed security
guidelines, minimal security guidelines for the terminals and
facilities, and these guidelines deal with physical security
issues, such as perimeter security, vehicle and personnel
access, and control of visiting vessels.
The next step we are working on is a--we are working with
the DOT in a credentialing subgroup to identify the possibility
of a portwide credentialing system, and we are working on the
issue--the container inspection issue with our colleagues from
Customs and other agencies.
The security of the Los Angeles-Long Beach Port Complex has
improved significantly in the months following September 11th.
I am confident that to a large extent this is due to the
phenomenal interagency cooperation that exists.
I would like to take this opportunity to acknowledge this
cooperation and thank my colleagues from the marine industry,
the ports and particularly from the other Federal, State and
local agencies for their untiring efforts.
I also believe that this crisis has been benefited
significantly from outstanding and unwavering leadership.
Certainly Admiral Loy, Transportation Secretary Mineta,
Governor Ridge and President Bush have provided superb
leadership. From a field commander's perspective, it is always
tremendously gratifying to have clear direction and unwavering
support.
In conclusion, the Coast Guard has taken a leadership role
in coordinating the homeland security strategy, and I know you
can see from your interaction with them today the men and women
of the Coast Guard are committed to the protection of our
Nation, its citizens and the marine transportation system.
I want to thank you for your interest in enhancing homeland
security and for holding this hearing. I certainly appreciate
the opportunity to testify before you today. I will be happy to
answer any questions you may have.
Thank you.
[The prepared statement of Captain Holmes follows:]
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Mr. Souder. Thank you very much.
Ms. Adams.
Ms. Adams. Thank you. Chairman Souder, thank you so much
for your invitation to testify and for providing me the chance
to appear before you today. I would like to discuss the efforts
of the U.S. Customs Service to address the terrorism threat and
the challenges that exist at our Nation's airports and
seaports. The specific challenges I will address today are
those that U.S. Customs has encountered at the Los Angeles-Long
Beach Seaport as well as at the Los Angeles International
Airport.
The issues we face at the seaport and airport here in Los
Angeles are representative of those encountered at other major
international air and seaports throughout the country.
As Captain Holmes has stated, the Los Angeles-Long Beach
Seaport complex is the largest seaport in the United States. We
process an average of 7,400 arriving containers each and every
day. Los Angeles International Airport is the second busiest
international airport in the country, processing on average of
23,000 arriving international passengers and cargo valued at
$110 million every day.
As a major participant in the protection of our Nation's
borders, Customs has taken a lead role in efforts to deny entry
to potential terrorists and the implements of terrorism into
the United States from locations throughout the world. Our
areas of highest risk are these cargos and passengers arriving
from or departing to high risk countries, and those which might
conceal explosives, nuclear materials and weapons of mass
destruction.
The Customs Service enforces over 400 laws and regulations
for more than 40 Federal agencies. While fully enforcing our
Nation's laws at this time of highest alert, the Customs
Service also fully recognizes the impact of our enforcement and
regulatory actions on international trade, which is so vital to
our Nation's economy.
International trade must continue to flow through our
Nation's ports of entry. Expansion efforts which were underway
prior to September 11th continue at our air and seaports and
the demand for Customs resources is at an all time high.
To use the Los Angeles-Long Beach seaport as an example,
cargo valued at approximately $188 million arrives each and
every day. Much of the arriving cargo is destined for the
shelves of mass merchandisers throughout our country. Fully
assembled automobiles and auto parts destined for further
manufacturing in U.S.-based assembly lines pass through our
port as do large quantities of wearing apparel, foodstuffs,
electronics, bulk chemical and steel.
In our global economy, corporations large and small rely
heavily on imported merchandise to ensure the vitality and
competitiveness of their organizations. Our security and anti-
terrorism efforts must take into account the need to ensure the
smooth flow of legitimate trade and travel. Addressing the
terrorist threat and security vulnerabilities as well as
narcotics and currency smuggling requires a coordinated multi-
agency and multi-national approach.
The Customs Service continues to buildupon an established
cooperative relationship with the Intelligence Community, the
other Federal, State and local agencies, as well as our
partners in the International Trade Committee.
Using a collaborative approach, we are employing targeting
and risk management technologies to select people, vessels,
aircraft and cargo for increased inspection. The Customs
Service was addressing security and anti-terrorism well before
the attacks of September 11th. We now know that the Los Angeles
International Airport was the ultimate target of the Algerian
terrorist, Ahmed Ressam, who was arrested in December 1999 by
Customs inspectors at Port Angeles, Washington.
In response to the terrorist attacks of September 11th, the
U.S. Customs Service immediately implemented a level one alert
for all personnel and ports of entry. This is our highest state
of alert, calling for sustained intensive anti-terrorist
operations. We remain at level one alert today. In order to
meet the demands of maintaining this highest state of alert, we
have deployed significant numbers of local Customs employees to
other locations around the country, including the Northern
border.
These officers were immediately deployed following
September 11th to ensure that there is adequate staffing
available along the Northern border. In addition, we have a
number of our officers detailed to various national programs to
ensure a sound and cohesive national response to the threat of
terrorism.
Never has the demand for Customs resources been so great.
To help us respond to the needs of the international trade
community for expeditious release of their time sensitive
cargo, we are relying heavily on nonintrusive technology, such
as the full container gamma and x-ray devices, pallet x-rays
and radiation detection pagers.
We also rely heavily on accurate and timely advance
information from the international trade community and both our
air and sea carriers. This advance information coupled with
available technology helps us screen cargo and passengers and
enables us to use the principles of risk management when
determining the best investment of our scarce resources.
The vast volume of trade and traffic through our Nation's
air and seaports as well as our land borders has put immense
pressure on our ability to enforce the Nation's laws, while
facilitating international trade even before September 11th.
After September 11th, our challenge has risen to a new
level. Although we have taken many steps to address these
challenges, such as our recently announced Customs-Trade
Partnership Against Terrorism, we still face many challenges.
We continue to work and develop and deploy nonintrusive
inspection technology to detect weapons of mass destruction and
the implements of terrorism.
We continue to look for the best ways to recruit, train,
and retain our Customs officers. We continue to enhance our
industry partnership programs to enable the trade,
transportation and business communities to assist us in the
overall security strategy envisioned by the U.S. Customs
Service.
I want to thank you, Mr. Chairman, for this opportunity to
testify. The U.S. Customs Service continues to make every
effort possible working with our fellow inspection agencies,
with the administration, with congressional leaders, and the
international trade and transportation community to address the
concerns of the American people.
I would be happy to answer any questions you may have.
[The prepared statement of Ms. Adams follows:]
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Mr. Souder. Thank you very much.
Mr. Schiltgen.
Mr. Schiltgen. Mr. Chairman, thank you for inviting me here
today to address you on behalf of U.S. Immigration and
Naturalization Service. I am pleased to appear before you today
with two of our sister agencies in order to discuss port
security issues.
The United States has a strong history of immigration that
we should be proud of. Our immigration process contains a
degree of openness that is aligned with the freedoms this
country has to offer. But in order to retain those freedoms we
must be vigilant in our effort to enforce the immigration laws
and secure our borders.
INS has incredibly dedicated officers and support personnel
facilitating immigration and commerce to the United States,
while at the same time enforcing our immigration laws. We
remain committed to our responsibilities, And a significant
part of those responsibilities is to work collaboratively with
Federal, State, and local law enforcement to secure areas of
our borders like the seaport here in Los Angeles-Long Beach.
Given the extensive nature of our operations, it is not
surprising that the Los Angeles District is the largest INS
district, with nearly 1,700 government employees, and over 500
contract employees assigned to the various facilities
throughout our jurisdiction.
I know that you are familiar with the INS responsibilities,
and today I want to focus on issues relating to the seaport
here. The Los Angeles District seaport operations distinguishes
itself from our seaport operations by the number of both
commercial and passenger vessels that pass through the ports
here.
They are tasked with the job of inspecting over 300,000
crew members and 500,000 passengers every year. The average
daily arrival of 15 commercial vessels at the combined ports,
results in over 5,400 vessels arriving per year.
These vessels operate out of 46 different terminals at the
port. In addition to inspecting container vessels, inspectors
clear approximately five passenger vessels weekly, and each of
those vessels brings an average of 2,500 passengers and 800
crew members.
Now, key to our efforts to secure our borders is the
development, analysis and sharing of intelligence. Even before
the tragedy of September 11th, INS seaport inspectors and the
Customs Intelligence Collection and Analysis Team shared
intelligence information. And thanks to this joint effort, INS
officials continued to gather significant information regarding
Chinese smuggling organizations which transport migrants to the
United States from Asia. This has led to several successful
prosecutions. And we have expanded our efforts to include the
investigation of leads that may involve possible terrorist
activity.
We have successfully coordinated efforts between our own
inspections and investigations programs, and will remain
dedicated to working with other law enforcement agencies in
developing intelligence related to smuggling operations,
including smuggling in containers.
Now, since the terrorist attacks on September 11th, the INS
has operated under a threat level one security alert. This is
the highest level security alert in which ports of entry
operate. In response, we have established a 24-hour command
element staffed to increase our responsiveness to law
enforcement efforts against terrorism. Operations at threat
level one involve a more intense inspection, as well as closer
scrutiny of individuals and their documentation.
Additionally, we have moved INS personnel and resources
from our LAX operation to the seaports here. And vessels that
are considered high risk are boarded by multi-agency teams,
which include INS inspectors and the Coast Guard. And the Coast
Guard provides INS with crew lists to run queries on all
persons arriving on vessels prior to our boarding those
vessels. And INS has also tightened documentary requirements
for entry into the United States by crew members of cargo
vessels.
Now, clearly INS's responsibility is focused on the
inspection of aliens and prevention of unauthorized entrants to
the United States. However, we must continue to work closely
with Federal, State and local agencies, particularly U.S.
Customs and the Coast Guard, in order to foster and improve
security and communications through multi-agency task forces.
Currently, the INS is participating in the Los Angeles
Mayor's Task Force for Security and Safety. This group consists
of port officials as well as both civilian and Federal
agencies, which face the challenge of ensuring that the
waterfronts of both ports are provided with increased security.
Topics currently being reviewed are the issuance of ID
cards to those seeking access to port facilities, issues of
potential security risks on utilization of existing security
personnel, and inspection of empty containers. INS also attends
a quarterly interagency regional meeting to aid in the
prevention of human cargo smuggling and a quarterly law
enforcement manager's meeting which is hosted by the Long Beach
Police Department.
In conclusion, the INS and the Los Angeles District are
committed to securing our ports of entry against those who wish
them harm, while facilitating legitimate commerce and travel. I
want to commend the men and women of this INS district for
their outstanding commitment to the INS mission in the face of
increasing demands and finite resources.
Thank you, Mr. Chairman, for allowing me to give testimony
regarding the Los Angeles District Office. And as my panel
members said, I am happy to take questions that you may have.
Thank you.
[The prepared statement of Mr. Schiltgen follows:]
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Mr. Souder. Thank you very much, each of you, for your
testimony. And let me first start with Captain Holmes. One of
the things I wanted to--I am not sure I completely understood
your distinction. Could you explain how, waterside, shoreside
and internal? And I understood the internal, you said was the
greatest threat, crews, items on the ships.
What would be some examples on--when you say waterside, if
something attacking, for example a cruise ship or a tanker,
that would be a waterside threat, something coming up and
hitting it while it is docked, that would be seaside?
Captain Holmes. Anything that could be affected by a
vessel, whether it be getting in front of a vessel or coming up
alongside of a vessel, that would be what we consider a
waterborne threat. Then a shoreside threat would be a truck or
large vehicle who does not normally access the terminal, coming
on the terminal with perhaps something on it or in it that you
don't want to have at the terminal.
Mr. Souder. Your feeling is that programs like this, the
Sea Marshals, are going to be potentially more fruitful. Then
this morning we saw one of the cutters out going across the
front of the harbor, because one of the fundamental questions
is it is fine to do all of this on September 11th, but what is
going to happen when the boating season starts and there is
much more pressure on your resources?
Captain Holmes. We are also very fortunate here during the
boating season to have a number of other resources to deal with
small boat search and rescue. We have both the--Long Beach and
Los Angeles have fire departments which do search and rescue,
the bay watch people, and most of the counties around here have
search and rescue. So the boating season here is pretty well a
year round season as opposed to other places. So we depend a
lot on some of our partners in the search and rescue part of
the partnership here to conduct search and rescue operations.
But, basically as--I would indicate that when you came in
this morning, you had a cutter that was alongside the cruise
ship as well. And that is part of the--that is the cutter that
would, of course, deal with any kind of waterborne threat. Once
the cruise ship tied up to the pier, I am not sure you notice
it, they are provided 24-hour a day on the water boat
protection by either a Coast Guard small boat or a Port Police
boat.
Mr. Souder. We put--as the President just said the other
day--a lot of new dollars in for the Coast Guard. But what you
see, it is not just here, in Puget Sound where they have a
number of the naval bases and in Detroit where they have lots
of--whether it is nuclear power plants north of Detroit, you
are increasingly seeing vessels parked.
Come on up. Happy to have you here. I am going to wait
until Ms. McDonald comes up. Great to be in your hometown. One
of the concerns as we--we were neighbors 'till I moved over to
the other building and spent many times walking back and forth
across the floor and talking about different challenges,
including here in Los Angeles. We were hoping to be able to--
when I chaired the Empowerment Subcommittee, we had lots of
discussion about urban revitalization and a number of other
issues.
Ms. Millender-McDonald. You left me.
Mr. Souder. Yes. I wound up chairman of this subcommittee
and moved to a different office.
Because as we increase the resources, one of our--but one
of our concerns is that this is what I was trying to sort
through. Are you going to have additional pressures as the year
goes on, as we see these different boats parked, that
previously the Coast Guard was already kind of tightened for
their resources. Now, how much of your resources have been
devoted, switched over to security from what was search and
rescue and other types of operations? Do you know?
Captain Holmes. Search and rescue operations are still the
top priority for the Coast Guard. What has had to happen,
honestly, since the 11th is resources which do other things,
work with our fishing--local fishing fleet, law enforcement
patrols, those initially were curtailed to almost zero. And
then as we have been able to get some Reserves on board, use a
little bit better risk management procedures, work with other
agencies and covering some of those patrols, we have been able
to increase the patrols to a certain state.
But we certainly are not back to where we were before the
11th, by no stretch of the imagination, and I don't think we
will be there until we get some more resources. I think the
figure was given that prior to the 11th we spent about 1
percent of our budget on homeland security, and right now we
are spending about 50 percent of our budget on homeland
security. I think the Commandant is hoping to move that down to
a more realistic figure, about 25 percent.
But as you can imagine, that still represents a 25 percent
additional increase in responsibilities that we are going to
have to deal with.
Mr. Souder. Are your most critical needs here personnel,
and what equipment needs are your most critical?
Captain Holmes. At this port, we--at the present time, we
are fairly sustainable. But what we can't deal with is any kind
of a surge operation. And in the homeland security arena, as
you know, there is any number of surges that will occur as time
goes on. Not too long ago we had some threats or perceived
threats against the bridges in California, and we had to surge
operations to add additional coverage for those threats.
So what will happen is those surges now are basically borne
on the backs of our people and our equipment, and what you end
up doing is of course running the people more hours than they
should and the equipment more hours than they should. So our
needs are really across the board. We would need both more
people and more equipment to do the job.
Mr. Souder. I met a number of reserve officers in addition
to people talking about overtime. Are you nearly--can you
sustain that, or are you going to have to make some adjustments
in those areas?
Captain Holmes. We have 70 Reserve officers on board. And I
believe about half of them are Sea Marshals, and we could not
do the mission we are doing without the reserve officers. Any
base--my baseline now really I consider it the people I have
plus the 70 reserve officers that are currently on board. That
is my new baseline.
Mr. Souder. Ms. Adams, one of the things I want to make
sure, Congressman Clay Shaw of Florida, who is a friend of
mine, has legislation, along with Senator Graham of Florida and
Senator Hollings of South Carolina, on a--it has been moving
through the Senate, it is a homeland defense--it is port
security legislation.
And so in addition to our committee working on the border
reports that we are doing, as pieces of these legislation move
through we wanted to look at unique needs that we might want to
be able to build into this type of law. And some of my
questions may relate to that, some may be more general that we
are trying to follow through in each hearing.
As you can see, I was asking personnel questions as well as
needs questions. But I have an--so a couple of kind of basic
questions. First, it is clear, and I am sure we are going to
hear in the later panels, that this port is expanding
exponentially. Is Customs--do you have a plan that increases
you at 40 percent to meet the cargo increases?
Ms. Adams. Unfortunately, I don't think we are that far
along. We do know that we have gotten some increased personnel.
As you know, our budget has been relatively stagnant in recent
years. We are adding about--I think it is 640 additional
personnel this year, and that number may be wrong. And I
probably have it written down somewhere. But I apologize for
not having that nationwide at the tip of my fingers. But we can
get back to you on that.
There has been exponential growth in both the sea and the
air environment as well as along the land borders in recent
years, and Customs has had to work smarter. We employ the
principles of risk management. We try to focus our activities
on those shipments, those people of specific interest. Clearly
in response to the events of September 11th we would like to
increase those efforts. We are relying very heavily on various
types of nonintrusive technology that we continue to work with.
And every time you get a new piece of equipment it is a
little bit more sophisticated. We learn more about the
different capabilities. So to answer your question, our
staffing needs have not diminished, shall we say. There are
clear staffing needs. There is lots of demands on the Customs
resources. But there is not a manager within the Customs
Service or anywhere else who would tell you that they don't
need more, want more, couldn't do better with more. But we are
just trying to work smarter.
Mr. Souder. Most places aren't looking at 40 percent
increases in the demands. Now, yes, more efficient, and looking
at how to become more efficient. One thing that I found a
little disturbing earlier this morning was that if you--we went
through the new x-ray machines, different variations. But if
something is found and they need to do followup, my
understanding, to take it apart it has to be transported 15
miles.
Ms. Adams. That's correct. We have two container exam sites
located at very--two different locations in proximity to the
seaport. But the demand for warehouse space is very, very
great. We have a whole system where we establish these
container exam stations. They are--people bid for this
opportunity. The location is certainly one of the factors that
we evaluate. And essentially it is the best combination of
factors: Who can provide the best turnaround time, how long,
how many cargo doors do they have? There is an infinite number
of factors.
But to answer your question, that is correct. We do have to
take our cargo and the containers to remote locations.
Mr. Souder. So if the little radiation thing, which is a
great invention, goes off, and somewhere in this huge container
there is something possibly nuclear, you have got to take it
through 15 miles of city and can't take it apart. I mean, that
is an extreme case. But it argues the illogic of not having
something in the port, both for port security and the people
around here do not want to see if these things are in
containers, and that there isn't a lot of space. Obviously if
there was urgency, you would clear out.
But the truth is, is that when a device goes off, you don't
know the level of urgency, and it is even dangerous enough if
it is heroin or cocaine or if there were other questionable
things inside that possibly--who knows what kind of weapons
cache. You don't necessarily want those going through cities.
That was a rather extraordinary challenge that has to be
addressed here. I think the Federal Government is spending a
lot of dollars in this harbor area and dredging and getting it
ready, and one way or another, that is just too much
separation.
In one of the border crossing up in New York, in the
Montreal to New York corridor, there was a concern that when we
first spot something in the truck, they have to go around the
corner. And when they corner it, we can't quite see them on the
machine. Here they are going 15 miles.
It is a totally different type of challenge than I have
seen at most other places, and I think that is a concern.
One other small thing I just wanted to say for the record,
because I hope we can follow this up, too. That is that one of
the new pieces of equipment for scanning was using a direct
connection, and the new machines may need to be looked at. We
are working through this kind of thing, because the computer
really needs to be built into the equipment, and that was
clearly expressed as something that we need to look at.
Hopefully that is the type of thing when we look at the
homeland security. Are there any other specifics that you would
like to raise at this point in addition to the general points
you have that might relate to your challenges here at Long
Beach and Los Angeles?
Ms. Adams. I concur with your concerns over the container
exam site delays and the distances. There is no question that
we would like to have container exam facilities at the docks,
ideally at the premises of every carrier where all of this
cargo is off-loaded. As you saw this morning, however, space is
very limited. Space is very expensive.
Up to this point, we have been somewhat unsuccessful in
trying to locate permanent Customs facilities with some of our
x-ray devices on the terminal property. There is I am sure a
variety of reasons for that, not the least of which would
obviously be their space limitations and the need for the
waterfront space to be occupied by the container traffic that
essentially generates the revenue. So, we would like to have
those kinds of facilities much, much closer.
The remote container exam site was a compromise that we
went to a number of years ago, perhaps in the late 1980's, when
it became very clear that we needed to look at more cargo as
the threats were increasing, and we had no place on the docks
to do it, and we therefore moved to the idea of the remote
site. Again, it is not ideal. It is the best we can do right
now.
I would like to clarify a couple of things. If there is an
exceptionally high risk shipment in terms of anything that
would be radioactive or give any indication that it was
dangerous, we would immediately take all of the necessary steps
working with our partners at the Coast Guard, the Environmental
Protection Agency, the military perhaps, whoever we needed to
call to ensure that cargo, once it was identified as a danger,
was not allowed to go unattended.
When the radiation pagers go off, they do show the degree
and the intensity of the hit. So ideally when most of them go
off, they are relatively low.
Mr. Souder. Can I clarify something you said there? You
said you wouldn't leave it unattended. Does that mean you would
escort it the 15 miles or that you would take it apart at the
spot?
Ms. Adams. I think it would obviously depend on--we would
obviously be talking to the carrier trying to get more accurate
manifest information, trying to find out who the importer was,
find out what it was. Is there a reasonable explanation for why
there is this indication on the radiation pager, just as we
would if there was any other sort of alarming anomaly. If, for
example, the threat would be perceived to be there was
narcotics built into a false wall or the nose of the container
or something like that, we would escort it to our exam site or
another suitable location as close as possible where we could
actually take the container apart, completely de-van it, take
all of the boxes out and do whatever we needed to do.
The whole concept of the radioactive material and the
nuclear material, it is very frightening, and we have worked
closely with the other agencies to have plans in place should
something like that occur. But, no, I don't envision if there
was any concept of any sort of a threat or a danger that it
would ever be dragged to the exam site.
Mr. Souder. Thank you. Ms. Millender-McDonald.
Ms. Millender-McDonald. Thank you, and good afternoon to
all of you. And I would like to welcome my good friend and
colleague from Washington, Mark Souder, in this morning to
examine the port here in Long Beach. And given with the Port of
Los Angeles makes up--both make up the largest port system in
the United States, and the third largest in the world. And so
these are extremely important ports, not only to the region
here, but to the country and indeed the world.
You have some of the most important and very impressive
people who are before us here. I have had the opportunity to
meet with them on several occasions given September 11th, and
know the plight and the arduous task that they have given not
only September 11th, but just the mere fact of seaports and the
problems that it employs.
I am happy to see Captain Holmes here and Ms. Adams, two of
the persons whom I have spoken with on several occasions. I am
concerned about--let me first say, this make the 90th year
celebration for the Port of Long Beach. And so we will be
certainly doing things in grand fashion come the exact moment
in time.
I do see Larry Keller out in the audience, who is the fine
Executive Director to the Port of Los Angeles, as well. But,
Mark, what we have here is a system that carries over 35
percent of our interstate cargo from the Ports of Los Angeles
and Long Beach across this Nation. And certainly after we
finished the dredging and the improvements that we wanted to
have done here, it will then become even a larger percentage.
Let me digress for a second to not only welcome you to Long
Beach, the city that I share with our friend Dana Rohrabacher,
but I am sure Dana in his absence welcomes you here, too.
So as we listened to Ms. Adams and this urgent need for us
to revisit this whole notion of the examination of the
containers 15 miles away, I would like to perhaps entertain at
another time this conversation. And perhaps when Larry comes
up, he might have some of the same issues that we have.
But indeed I think the Federal Government has to weigh in
on this as well because of the importance of these ports to not
only this region but also to the country, and indeed the world.
We have talked about the ships that are coming into these
seaports, both Long Beach and Los Angeles, most of whom are not
American ships, as we know. And so we need to look at clearing
the manifests on ships that are coming into our ports as we do
now for the manifests now that we are going to clear on the--
with the international flights that are coming in.
And so I am happy to have you here today. This is simply a
revisionists of what I have been told, and I have come to know
about the ports of both Long Beach and Los Angeles.
And I welcome you and I working together, to make sure that
we continue to have the strength of these ports for the
American people, not only in this region but throughout the
country. So thank you for being here this morning, and I will
continue to listen, because what they are saying is what I have
heard before. And I just want to reiterate the importance of
your being here so that you can help me as I return back to
Washington to tout the critical need for port security funds.
As Captain Holmes said, they have had to divert a lot of
their resources to take care of what happened on September
11th. They can't continue to utilize 50 percent of their budget
to do that. And so we must have the many pieces of legislation
that is now coming forward, in the full House, full
Transportation Committee. We need to look at that and garner
the support of those who are not on the Transportation
Committee, but who are in key positions to help us move this
legislation, to give them the funding that they so badly need
to secure our seaports.
Thank you.
Mr. Souder. Thank you.
Ms. Millender-McDonald. I have a statement for the record,
and I would like to submit that.
Mr. Souder. Without objection, we will submit your full
statement for the record, and any other materials that you want
to put in.
I wanted to ask a couple of questions of Mr. Schiltgen, and
I neglected to ask Ms. Adams this question too, because you
said directly in your testimony that you had--let me ask you
the question first.
Approximately how many of your people were diverted post-
September 11th? And are most of them back at this point?
Ms. Adams. We immediately deployed 14 officers from--7 from
the Los Angeles-Long Beach seaport and 7 from the Los Angeles
International Airport to support the Northern border. We have
maintained that commitment to this day.
Mr. Souder. So you are down 14 basically?
Ms. Adams. As far as the Northern border is concerned, yes.
Mr. Souder. You didn't move any to any other part of the
United States, like to New York or Boston?
Ms. Adams. Not necessarily in their capacity as Customs
officers involved in the inspection of people or merchandise.
We do have several officers working at our national office. We
have established a new Office of Border Security. We have two
officers there that are participating in a national targeting
program. There has been several other ongoing groups that have
been put together, task forces to look at ways that we can
identify our highest threat work, highest risk work, and
somehow figure out a way to take care of the rest of it on sort
of maintenance mode.
There is a lot of risk management initiatives going on.
There is a lot of looking at ways to measure compliance using a
statistically valid random sample. Again, as I mentioned
earlier, we are really trying to work smarter.
Mr. Souder. So you are saying you weren't overstaffed, you
are trying to work more efficiently, but a lot of that is at
maintenance level, which is not sustainable long term?
Ms. Adams. I think that is correct. Certainly we have used
a lot of overtime. We have our officers working very, very
hard, very long hours, and I worry very much about that. It is
not sustainable. I don't care who the officer is or how good.
In hour 15 of your 16-hour shift your senses aren't as sharp in
they were in hour 1 or hour 4.
Mr. Souder. This is a tough question we have to look at. We
are looking at a deficit this year. We have tremendous needs in
Social Security with more people aging, more people are out of
work. That is going to put more demands on our Medicaid and
welfare systems and support systems, unemployment insurance. So
we have all kinds of pressures on the budget. We are not trying
to look at it.
But I have explained to Mr. Ziglar, to Asa Hutchison, Mr.
Bonner to Admiral Lloyd and others, that when you divert
resources and then say you are able to sustain it, it doesn't
make a big compelling case to Congress about the need for those
resources. Now, the fact is you are also under tremendous
pressure not to make a lot of requests to us and to work within
the establishment. I understand that. But that is what we are
trying to hear on the balance. And, yes, we need to all work
smarter. We have had to do that in the social service support
systems. We have had to do that in many parts of government,
and all of us have a little bit of leanness.
On the other hand, in talking to people in the field, you
can see that they are working overtime, there are pressures on
the system, the Reservists, we are seeing it in the military as
well.
In INS, had you had people transferred to the Northern
border from this region as well?
Mr. Schiltgen. Since September 11th we have only had two
inspectors from our LAX operation that have been temporarily on
detail to the Northern border. But what we have done is
transferred an additional 10 from LAX temporarily to the
seaport operation here. Very significantly understaffed here.
And as we picked up part of our operation post-September 11th,
I think the fortunate thing that we have going for us, as you
may know, the user fee account placed for the first time a fee
on passenger ships, on cruise ships, which will provide
additional dollars to our agency.
And that in combination with the fiscal year 2002 budget,
we are seeing additional inspections resources coming into our
agency. I don't know at this time how many of those will be
coming to Los Angeles or the seaport. Certainly there is a
focus after September 11th on the Northern border, an
understanding that we have vulnerabilities or we have certain
concerns about areas of illegal entry into the United States
that haven't necessarily been the focus of previously.
But to some extent there is a bit of hope for us for
additional resources in the near future.
Mr. Souder. Have you lost any staff to Sky Marshals, to
other services? Have you been able to maintain fully staffed
and fill the potential new slots?
Mr. Schiltgen. Yes. We have been able to keep 100 percent
of our inspectional staff here in Los Angeles. We have had a
very aggressive hiring program over the last couple of years. I
think unlike other agencies we have been growing. Our budget
has been increasing and we have had a very aggressive hiring
situation going on.
We have lost a few folks to the Sky Marshals, not to the
number that the Border Patrol has. I know that they have lost a
lot of people or are in the process of losing people, but we
have lost only one or two.
Mr. Souder. In the check--in the background checks like the
people on the cruise of the--the ships, and so on, let me ask
you two questions related to that. One is, are there any
particular things that we should be looking at in Congress as
far as information, and do you have any stumbling blocks on
information sharing?
And the second--well, let me ask that one first. Clearly
things have improved nationwide since September 11th. Where are
your greatest difficulties?
Mr. Schiltgen. I think the thing of maybe greatest concern
is to make sure that we get the advanced passenger lists on all
incoming vessels. We are to the point now where we have for a
few years now received that on many of the incoming air flights
into the United States. We are getting from the Coast Guard
copies of lists of individuals, and we are doing our data base
checks prior to the individuals coming in. I don't believe at
this time, however, that under at least INS regulations that
advance--or Customs--that advance passenger information is
required for ships. I think that is going to be critical as
we----
Mr. Souder. That counts crew when you are saying passenger?
Mr. Schiltgen. Yes.
Mr. Souder. It was clear when we boarded this morning that
down in the engine room that none of the people spoke English
and none of them spoke Spanish. Do you have programs for
language diversity and the challenges, whether it is Sea
Marshals, INS? One of the things that we have seen in Los
Angeles is a huge melting pot of multiple Asian languages. How
are you going to handle this long term, in addition to the
whole question of the Middle Eastern languages?
Mr. Schiltgen. Well, first of all, we provide Spanish
training to all of the immigration officers, and we have since
I can remember. We recruit both for our inspection personnel
and our special agents, investigatory personnel, from
individuals who speak a wide variety of languages. However, as
you know, there is no way one or two inspectors are going to go
on any ship and have language capabilities. We utilize the
resources on each of those vessels for translation when we need
to, and I have to say that I think that we have got very astute
officers who at whatever point in the process make
determinations of the validity of information, the fairness of
the translations that are going on on the ships and interviews
with the crew. And if, in fact, we have concerns, an officer
has concerns, then we have the opportunity to bring in our own
translators.
Mr. Souder. If I could ask each of the panelists, and if
you want to add anything else, I will yield to Ms. Millender-
McDonald, if you want to add anything else that I missed in the
questioning. But I focused on this language question, in
particular with Middle Eastern languages, as we look at the
terrorist questions. But here you are dealing with all sorts.
Because it came up on the Quebec border that we didn't have
anyone who was certified to speak French, we focus so much on
Spanish, legitimately because of the south border.
But one of the gentlemen told me something very
interesting, and I wonder whether more of each people in your
agencies would respond if we made this adjustment. He was born
in Quebec, spoke French as his first language, English as his
second, but couldn't pass the State Department test because
what they expect you to do is have a formal--be willing--you
know, it is a different standard than you would need to have to
talk to somebody in an engine room.
Yet, to get the bonus pay, what a number of people have
told me is to get those grade level pay increases by taking the
language courses, it requires so much intense study, immersion,
that it is just not worth the time diversion when you have a
family. Have you heard of and do you think people would respond
if at certain times, like now, on Middle Eastern languages, we
had kind of somewhere in between colloquial here of basic
words, such as anthrax, you know, point of origin, where are
you from, there is some of that type of thing? But some kind of
range between there and being able to be Deputy Ambassador to
Saudi Arabia.
Mr. Schiltgen. I guess I will start out. I think there is
certainly a need for additional language assistance for the
INS, and I would think for all of the agencies.
We have on our--either by contract or on staff,
interpreters, language specialists that we hire at a lower
graded position, that is their job.
Certainly individuals as we go through and we are
addressing the issues of terrorism, issues of smuggling,
putting together criminal cases, we need to have interpreters
that we can trust. Our interpreters go through background
investigations just like INS employees.
I think with regard to the language training for the
officers, certainly any training is beneficial. But I would
have to think that either native or proficiency in a language
is really critical when you are talking about some of the
issues that we get into. And having a working language or
working capability like maybe I do in French and Thai,
sometimes it gets me in more trouble than it aids.
So clearly we have a significant need.
Mr. Souder. Comment from the Captain or Ms. Adams?
Ms. Adams. I think there is no question that language
capability is very, very important, and it would again be a
perfect world if we had officers that were multilingual, that
spoke a variety of languages. Customs does have a program where
we pay a bonus to employees, and I believe it is 10 percent,
but I am not sure, who have a level of proficiency in a
particular foreign language, and who use it more than 10
percent of the time in their work environment, and that has to
be certified.
Your discussion is the first I have ever heard about the
testing being too difficult and that people don't----
Mr. Souder. I heard it from Customs agents in the field at
a couple of borders.
Ms. Adams. It is the first time I have ever heard of it. I
have certainly spent a lot of my career on the Southern border,
a lot here, and I have never heard that. I do know that the
demand for Farsi and some of the different dialects in the
Asian languages has been very, very pronounced as in terms of
we see announcements coming out on a regular basis. Do we have
anybody who speaks this particular dialect or speaks Mandarin
Chinese or whatever language they need. And it is--frequently
we do those canvasses on a national level.
But I wanted to pick up on something that Mr. Schiltgen
just said. We work very, very hard to ensure that we have a
diverse work force. By having a diverse work force, they do
bring those basic language skills, if not the ability to
communicate perfectly in writing or have the best grammar, at
least they have some skills that enable them to survive in
their communities. So I just--I happen to have a chart that
talks about the work force diversity of our South Pacific
Customs Management Center area, which includes the Los Angeles-
Long Beach seaport as well as the Los Angeles International
Airport. Essentially 19 percent of our employees are of
Hispanic origin, and another 14 percent of Asian and Pacific
Islander. We try very, very hard to ensure that we have the
demographics of our organization resemble the demographics of
the community at large, and that has served us well.
Similarly to the experience that INS has, though, we rely
very heavily on interpreters perhaps from the airlines, from
the steamship companies, if we have to get someone from the
State Department or from a consulate perhaps. We don't stop
because we can't speak the language. Unfortunately, that person
or that cargo would have to be delayed until we could get the
appropriate information.
Ms. Millender-McDonald. Ms. Adams, what percentage of
Latinos do you have in the U.S. Customs?
Ms. Adams. I don't have Customs-wide figures. I am sure
that our people----
Ms. Millender-McDonald. You just mentioned a percentage of
Latinos, I think.
Ms. Adams. Here in our area, it would be Los Angeles
Seaport and Los Angeles International Airport, 19 percent of
our work force is Hispanic.
Ms. Millender-McDonald. And of that 19 percent, do they
come fully skilled for the work to be done given the
multilanguage expertise that they have?
Ms. Adams. Oh, no. This is just the demographics of our
work force. If they bring the language expertise to the job, so
much the better, and they are compensated for it if they work
10 percent of their time at work in that language.
Ms. Millender-McDonald. But do you utilize some of that 19
percent to train for any security measures that you might need?
Ms. Adams. Not specifically. It wouldn't be limited to
those 19 percent that are of Hispanic origin. We may have
outstanding Spanish speakers or French speakers or people with
other language skills that are Anglo or have other backgrounds.
My point in raising the diversity issue is it is just one way
that we are able to help ourselves in terms of for----
Ms. Millender-McDonald. Well, it is good business too, of
course.
Ms. Adams. It helps us interact effectively with the people
that we interact with in the committee.
Ms. Millender-McDonald. That's correct. I hope I pronounced
your name correctly, sir, Mr. Schiltgen.
Sir, given that when I was here right after the September
11th, I was gathering information and data on the type of cargo
that comes into this seaport and both seaports, Long Beach and
Los Angeles, and I was told that there is a lot of human cargo
that comes in here. What percentage of illegal immigrants comes
through the seaports? Can you give me that?
Mr. Schiltgen. Well, I really cannot give you any real hard
and fast information on that, partially because to some extent
we don't know. Over the last 2 years, we have, I believe, had
18--I believe it is 18 containers where we have found--here in
this area where we have found that were used for human
smuggling.
And each of those is--I am sure you very well know--are
just horrific conditions inside of those containers after
people have been on very long voyages. But, again, given the
volume of the containers coming in here, I don't know that we
have got a good indication of really what the volume is.
Ms. Millender-McDonald. Is that something that we should be
looking at? And perhaps if not, why not?
Mr. Schiltgen. Well, it is something that we look at on a
daily basis. We have got a portion of our seaport unit here
that is focused on gathering intelligence and targeting
containers for human smuggling. And, again, I think where we
need to continue on with this is the interagency coordination
and the development and the analysis of intelligence to try to
determine which of those millions and millions of containers
are coming in potentially carry human cargo.
And, again the stakes are different with regard to human
cargo. And I think it is something that we need to be very
sensitive to.
Ms. Millender-McDonald. I must say, and I would like to get
with you, to perhaps see how we can best--I serve too on the
Homeland Security Task Force, and we need to see how we can
best integrate all of this intelligence so that you can be
better equipped, if you will, to try to get those persons who
are smuggling others and those who are coming in in those
containers to get them and arrest them.
We also need to look at what nationalities they are,
because I am told that they are coming from far away, and to be
able to sustain themselves inside of a container is a question
in and of itself.
Mr. Schiltgen. It is a remarkable process. If one should
see the containers and the kind of the aftermath when
individuals arrive here, somewhat primitive, somewhat
sophisticated methods to keep the people alive through the very
long process: The air ventilation, the water and the food
systems that they have, batteries in the containers to run fans
to circulate air, the waste material. You know, you can hardly
stand close to one of those containers because of the stench
after we find individuals in those containers.
Just a horrific means by which, you know, the smuggling
organizations, and the majority of the individuals that we see
coming in here are Chinese, but just horrific conditions that
those criminal organizations are benefiting by human cargo.
Ms. Millender-McDonald. Absolutely. My question again to
you, sir, is does the INS use your INSPASS card system at the
port here, and if not, why not?
Mr. Schiltgen. We don't use it here at the port. To the
best of my knowledge, we do have one at LAX at the airport, and
we use it quite extensively. I haven't heard of a use at the
seaport of the INSPASS process. I don't know that I can answer
why.
Ms. Millender-McDonald. Would it not be at this heightened
security environment that we find ourselves in, would this not
be an appropriate time to revisit that?
Mr. Schiltgen. It may. I am thinking back at the
implementation of INSPASS, and the fact that it was directed
toward frequent business--primarily business travelers,
frequent travelers into the United States. I would have to give
some thought as to the frequency of which individuals return to
the United States through the seaport here. I know that we have
crews that come back on a regular basis, but I don't know that
the volume of individuals traveling would be sufficient to
warrant the use of INSPASS here. It may be, but it is certainly
something that we can look at.
Ms. Millender-McDonald. Captain Holmes, during your time--
both you and Ms. Adams can answer this. Given the heightened
security awareness that you are now and we are all in, and even
the pronouncements of the Secretary of Defense Rumsfeld on
yesterday saying that we must continue to keep this, and
actually California is a very high target State, what is the
impact when you have a diversion of your attention taken from
your regular duties to perform duties at the border or
whatever? Are we prepared to intercept any terrorist attempts
given the position that I have now demonstrated that you might
be in?
You might be doing something--your diversion, as you said
to me once when I spoke with you, that sometimes you have to
take--you have go up to the Northern border to try to protect
that region given the heightened security that we are now
trying to seek in the ports.
While you are one way or the other, do we have enough
personnel in the event that interception of a terrorist right
in the middle of the ports here? Do we have enough personnel to
combat that?
Captain Holmes. Yes, I would say that we do. What would
suffer, as I said earlier, would be the other mission areas. I
mean, we would--if we had to protect several areas at once,
which we are doing right now, what happens is those resources
are solely functioning as homeland security resources, and they
don't do law enforcement patrols and some of the other things
that we do.
Ms. Millender-McDonald. Drug trafficking and those types of
things, you will not be able to do some of that because you are
having to go to try to protect the terrorists?
Captain Holmes. That has been the case since the 11th. Our
mission areas have shifted, and homeland security went from a
No. 5 on the scale to No. 2, right behind search and rescue. So
we have never been in a situation where we don't respond to oil
spills or chemical spills, but there are a lot of other
missions that the Coast Guard does, which is working with the
fisherman, working with the State Fish and Game, anti-drug
patrols down in the San Diego area, which we have had to
curtail to put the resources up here in L.A. Harbor, Port
Hueneme, which we also cover, and then we also cover near Morro
Bay as well, the El Diablo area.
Ms. Millender-McDonald. This is why in the committee I kept
stressing the need for personnel enhancement and increased
personnel at these ports, because of the diversion that
especially you have had to do and the U.S. Customs, and yet we
are so threatened right here that we need more personnel.
Ms. Adams, did you want to comment on that?
Ms. Adams. Certainly. We know that in our recent allocation
of personnel for fiscal year 2002, a large number of those
allocated officers will go to the Northern border. And we are
hoping that when they complete their training at Federal Law
Enforcement Training Center in Glynco, Georgia, and go through
their on-the-job training that we will be able to return our 14
officers back to our area.
The second highest area of priority, though, in terms of
additional staffing, we understand, after the Northern border
we understand will be the Nation's seaports.
And we are certainly looking forward to having the
availability of additional personnel.
Ms. Millender-McDonald. Thank you.
Mr. Souder. Well, I want to thank each of you for
participating in our hearing. If you could also convey again
our thanks to your personnel that basically have been working
overtime and at high stress levels, I personally do not think,
nor does our leadership or our President think this is going to
end shortly. They have been coming at us about every 6 months
for 5 years on bases overseas. They have now had success on our
domestic soil and are likely to continue to do so. And we have
to become smarter and better and stay ahead rather than behind.
We thank you for your work and thank your people for their
work, and thank you for testifying today.
Ms. Millender-McDonald. I would like to add to that, too.
Thank you all for what you are doing to make this region and
seaports more secure with your limited resources. Thanks.
Mr. Souder. If the second panel could now come forward. Mr.
Richard Steinke, Mr. Larry Keller, and Mr. Guy Fox.
If you could remain standing, I will do the oath.
[Witnesses sworn.]
Mr. Souder. Let the record show that the witnesses have
each answered in the affirmative.
Mr. Steinke, you are recognized for 5 minutes.
STATEMENTS OF RICHARD D. STEINKE, EXECUTIVE DIRECTOR, THE PORT
OF LONG BEACH; LARRY KELLER, EXECUTIVE DIRECTOR, THE PORT OF
LOS ANGELES; AND GUY FOX, CHAIRMAN OF THE BOARD, GLOBAL
TRANSPORTATION SERVICE
Mr. Steinke. Mr. Chairman, Member Millender-McDonald, thank
you for this opportunity to address you on port security, one
of the most important issues of the day.
Security has always been a paramount concern to the Port of
Long Beach. Prior to the events of September 11, 2001, our
focus was primarily crime prevention with an emphasis on cargo
theft. Following the tragic terrorist attacks on the World
Trade Center and the Pentagon, the focus of our efforts to
protect the port and facilitate commerce and travel has been
broadened to include prevention and response to acts of
terrorism.
Long before the events of September 11th we realized the
need for maintaining the highest levels of security possible in
the port. To that end the Port of Long Beach has proactively
developed a port security plan to create and maintain a level
of security that might serve as a model for the maritime
industry.
Over the last decade, the Port of Long Beach created a Port
Crime and Security Committee, made up of industry stakeholders,
terminal operators, Federal, State and local law enforcement
agency representatives, terminal security officials. And we
meet on an ongoing basis to discuss issues related to crime,
safety and security.
These meetings shape the infrastructure and open lines of
communications among industry and law enforcement responsible
for the safety of the people who work in the ports and the
security of the cargo that moves through it.
Since September 11th, we have been operating at a
heightened security level, as has been mentioned before by
other people who have testified. We have increased the number
of committees and task forces to address the greater needs and
the new charge for greater protection of our port.
Greater security is not limited simply to the movement of
cargo through the port. Every capital project that we undertake
now has a new element built into it. Our plans for a new bridge
or a pier, widening of a channel, erecting a crane all must now
include considerations for security enhancements.
We have recently completed a detailed security assessment
of our waterfront facilities with the Long Beach Police
Department and the U.S. Coast Guard and expect that the
assessment will suggest further improvements and upgrades.
Those refinements will require funding not heretofore
anticipated.
Basically what I am saying is that the new demands for
security will require new sources of funds. Funding
considerations also should be given to supplement the manpower
needs of the participating Federal and local law enforcement
agencies. We especially would like to emphasize our support for
increased funding for the U.S. Coast Guard and the Customs
Service.
Approximately 35 percent of all waterborne cargo that comes
into the United States comes through this port complex. So the
workload of these two agencies is many times above the level
expected of them in other ports throughout the country, once
again an expense to be reviewed in reconsidering the status of
our efforts to prevent and suppress acts of terrorism against
shipping and to improve maritime security.
It is my honor to serve as chairman of the American
Association of Port Authorities this year, and we are on record
in full support of greater security at all ports. Because each
port has unique characteristics, however, control for security
should be determined and maintained by the captain of the
individual ports.
The Association is aware of the funding challenges of any
new legislation, but stresses that grant funds need to be
adequate to allow for mandated security enhancements. According
to the Report on Crime and Security in U.S. Seaports, the
estimated cost of security for a model port, of which I would
think the Port of Los Angeles and Long Beach are, ranges
anywhere between 10 million to 38 million per port. That would
include physical security, cargo-crew security, military
mobilization, and contraband detection.
Military load-out capabilities in port is a key to our
national security, and must be kept in the forefront in any
security decision. There are a number of other initiatives that
could be examined in a review of seaport security issues as
they relate to international maritime traffic into and out of
the Port of Long Beach. Automatic identification systems that
provide a ship's identity, position, course and speed; seafarer
identification and background check; port of origin container
examinations, a means of ship alerting may be items that reach
beyond the scope of this committee.
I would be remiss if I did not make special note of the
exemplary job done by the Coast Guard and U.S. Customs
following the tragic events of September 11th. They deserve
recognition for taking the lead in exerting positive control
over the port at a time when confidence and assurance were
needed. The Coast Guard and Customs continue to play an
instrumental role in our efforts to keep our people and the
Port of Long Beach safe.
In closing, I thank you, Mr. Chairman, and all of the
members of the subcommittee for your interest and concern in
seaport security issues and for choosing the Port of Long Beach
to hold this hearing. Thank you.
[The prepared statement of Mr. Steinke follows:]
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Mr. Souder. Thank you very much.
Mr. Keller.
Mr. Keller. Thank you, Mr. Chairman, Congresswoman
Millender-McDonald, ladies and gentlemen.
Thank you for the opportunity to discuss the Port of Los
Angeles and the subject of seaport security, as it relates to
international maritime trafficking into and out of the San
Pedro Bay ports of entry. This hearing's goal is extremely
important to improve security, facilitate commerce and travel
between the United States and other foreign countries of
paramount importance to our port.
The Port of Los Angeles is a remarkable story. In 1984,
after the main channel was deepened, the Port of Los Angeles
was ranked 8th in the Nation. With the help and cooperation and
partnership of our customers, the Port of Los Angeles today in
an environmentally responsible way handles more than 5 million
containers in a year while creating hundreds of thousands of
jobs.
Last year's total of more than 5 million TEUs marked a
national record. This growth has been particularly important
because the rest of the Nation and the State of California
experienced a dramatic economic downturn several times during
that developing period.
We are in the midst of an incredible construction activity
as we prepare for the challenges and opportunities of the
future. The Alameda Corridor will open in April; the first
phase of an almost 500-acre terminal for America Sealand. As
has been said before, 35 percent of the U.S. ocean commerce is
moved through the two ports.
However, the events of September 11, 2001 have shifted our
focus from efficiency to security, while at the same time
continuing in the throughput, which is important to our
Nation's economy. Led by the Coast Guard and our Port Police
force, our response was immediate as we teamed with various law
enforcement agencies, as well as the INS, U.S. Customs and
other Federal agencies to safeguard cargo, people, and
property.
Our national crisis has mandated security precautions and
permanent changes in how we do our business. This is a new day
with enhanced security standards for our maritime community. We
have experienced only slight delays caused by understandable
security measures, but commerce has continued unabated. As Dick
said, we can't thank our Federal agencies, particularly the
Coast Guard, INS and U.S. Customs enough for their assistance
in making this thing happen.
Since September 11th, the Port of Los Angeles has had in
place 12-hour shifts for our Port Police with two patrol
vessels on duty at any given time, increased fixed port
security at the cruise passenger terminal, the addition of two
explosives trained canine dogs, increased liaison with the
Federal, State and local law enforcement officials, regular
dive inspections of the passenger terminal and other sensitive
areas of the port, establishment of the Joint Port Police, U.S.
Coast Guard, Sea Marshal Program to board incoming and outgoing
vessels, increased inspections of truck traffic, placement of
security barriers around the perimeter of our Harbor
Administration Building, with increased security offered to the
port offices and support to various legislative, industrial and
neighborhood communities on port security matters.
I have provided you with an assessment of the costs related
to additional Port Police, operations and equipment. The city
of Los Angeles Major James Hahn has taken the lead in
establishing a Port Security Task Force to look at the San
Pedro Bay Port and evaluate new challenges and opportunities
for providing much more secure ports. In our open society the
challenge is to provide security yet effectively facilitate
commerce and travel.
Our future security needs call for increased cooperation
and support from Federal, State and local governmental bodies
and agencies. Mayor Hahn's Port Security Task Force is looking
into how we can more closely monitor who and what enters our
country through its seaports. Securing our borders and our
seaports is vital to the protection of the United States.
Some other areas of port security we would like to put in
place include a portwide identification system to control
access and positively identify users of the port, increased
Port Police personnel and equipment to adequately deploy and
maintain increased operation security and policing functions,
development of systems and legislation to support the sharing
of the passenger information, development of data bases and
legislation to support acquisition and analysis of information
about persons and products arriving by sea, development of
improved public relations programs to communicate credible
terrorist threat information to the public and to dispel
unsubstantiated rumors, development of new technologies to
adequately inspect more shipping containers, funding for
improved audio and video surveillance and monitoring systems,
creation of a secure Internet Web site for law enforcement
agencies to act as a terrorism warning clearing house, and
establishing a data base and central repository for
intelligence that is currently being collected by several
separate Federal and State agencies.
Because of all of those factors and the new vulnerability,
it is imperative that we must concentrate on maintaining and
enhancing security awareness of our maritime environment. We
also strive to encourage a more open information sharing base
among local, State and Federal law enforcement agencies in
order to be better prepared, to fight the new terrorism.
Thank you very much.
[The prepared statement of Mr. Keller follows:]
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Mr. Souder. Thank you.
Mr. Fox.
Mr. Fox. Thank you, Mr. Souder and Representative McDonald,
ladies and gentlemen. I am honored to have been invited to
testify here at your investigative hearing concerning the
seaport border issues as it relates to maritime logistics that
is being held at the Port of Long Beach on behalf of the
international business community in southern California.
Global Transportation Services, Inc. and Global Container
is a company that is involved in international transportation,
both by sea freight and air freight. We are also licensed
customshouse brokers as well as licensed international
freightholders. We act on behalf of commercial companies to
move cargo from door to door to and from any point in the
world.
Security has always been an issue in the movement of
international freight due to pilferage, and lately due to
stowaways of human beings in containers. Our company has always
taken a firm stand on the security of all cargo for our
customers.
However, we fully understand that under today's
circumstances this is not business as usual. It is virtually
impossible to inspect each and every container that moves in
international trade. If that would happen, international
commerce would face severe injury with delays in the supply
chain.
Global handles shipments from door to door, including
placing containers at the vendor's door in China for loading,
picking up the container, processing the export documentation,
loading on the vessel, and shipping to the United States where
we perform the Customs clearance and the delivery to the
customer's door.
In doing this, we have agent partnerships throughout Asia
with individuals and firms that we have known and have had
experience with over the past several years. These are
reputable firms that are fully licensed and committed to the
highest quality performance and ethical practices.
Global receives a purchase order from our customers. This
information is sent electronically to our agents for arranging
shipment. They will call the factory; that is, the shipper, to
coordinate the movement. If this is an unknown factory and has
not had any shipping experience, they will visit this factory
to make sure that everything is in order and to make sure that
they are a legitimate supplier for commercial goods. If
everything checks out, then shipping will be arranged.
When a container is placed at the factory for loading, the
loading is supervised by the management of the factory. As the
container is loaded, the container is sealed with a specific
container seal with a unique number on that seal. The number of
the seal is placed on the bill of lading that is used in the
movement of the container. Our partners are always on the
lookout for any anomalies that may exist. If and when those
anomalies do occur, the authorities would be notified
immediately to check them out.
You also have to understand that our partners are
knowledgeable people and thoroughly understand the process, and
anything out of the ordinary would be readily identified.
Anything that does not look right is investigated.
Global also has the other scenario of consolidating
containers, which is freight that is less than a container load
from various suppliers to various consignees in the United
States. We again deal with known suppliers, and I have to
emphasize that, known suppliers, factories and known consignees
in the United States.
Less than container loads are picked up from the factory
and transported by truck to a container freight station where
the goods are received and checked in. If the goods are from a
factory that is not known, then our partners will visit the
factory to make sure that they are a legitimate supplier. They
again will look for any anomalies and report such anomalies to
the authorities for investigation. They do not take any
chances.
The LCL cargo is then loaded into a consolidated container
where a load plan of cargo is made. Each LCL cargo is given a
sub-bill of lading number and is manifested on a cargo manifest
that will go forward with a master bill of lading and the
export documentation to the Global office in the United States.
When those documents are received, they are immediately
processed the same day, and our people also look for any
anomalies. The documents are broken down by LCL shipment and
each consignee is notified of the arrival of these goods, and a
copy of the shipping manifest is given to U.S. Customs for
their review. Manifests will have the name of the consignee, a
full description of the cargo, weight, size, name of the
shipper, and port of origin. We do this as a matter of course.
There are some consolidators that do not follow this
practice, and it is usually the Asian-based consolidators who
do not understand our laws and regulations, yet we license them
to do business in the United States and we do not have the same
privilege in their country.
In cases such as these, security can be compromised as they
will take freight from any shipper to any consignee in the
United States. I only bring this up as it is not a level
playing field for consolidators that are an American-based
firm.
When the goods arrive in the United States, the
consolidated container is moved to a CFS, which is the
container freight station, and the CFS is a Customs-bonded
warehouse. So the goods are under Customs custody until they
have been cleared for delivery to the consignee. This is
another opportunity to look for anomalies. Due to the security
steps we have taken, we have not run into any anomalies, but we
are ever vigilant for such anomalies if they exist. If any are
discovered or if there is implicit feeling about any shipment,
we would immediately notify the authorities.
If the proper procedures are followed, this will minimize
the possibility of any breaches in security. Nothing is
perfect, and a certain amount of risk has to be taken in order
to move cargo to keep trade goods flowing. Due to Customs
procedures, Global is able to pre-file Customs entries 5 days
prior to the arrival. All information concerning any given
shipment is given to Customs. We understand that they have the
resources of checking out the shippers, consignees and the
cargo itself.
We make sure they have all of the information in order to
process the Customs clearance. This also gives Customs a chance
to review everything and anything that has to do with any
individual shipment. Security will perhaps become tighter and
importers will still want to and need to use the just-in-time
concept. However, we will see importers while still using JIT
will also use a just-in-case concept.
Importers will start warehousing more goods to have on
hand, which will increase the cost of goods and will ultimately
be passed on to consumers. Importers refer to this as an
operational buffer.
Security in today's environment is based on the knowledge
of who you are dealing with and the faith that you have in the
factory or individuals. Reputation of ethical practice also
plays a large part and a role in this process. Due diligence on
the part of the importer in the United States is absolutely
necessary to be able to spot any inconsistencies that may
exist.
In southern California the international business community
is working together very closely. This includes all of the
international trade associations, the U.S. Coast Guard, U.S.
Customs, Immigration, the Marine Exchange, the Vessel Tracking
System, and many of us are or have been officers at the
International Trade Association and are on the cutting edge of
what is going on in our ports. We also have the opportunity to
participate in getting the word out on security measures, and I
would like to compliment Captain John Holmes of the U.S. Coast
Guard, the Marine Exchange and Vessel Tracking System, and also
Larry Keller and Dick Steinke of the Ports of Los Angeles and
Long Beach.
I hope this report will give you some insight on the
process, because I think it is very important in understanding
where security measures must take place. If you understand the
process, then we know where to focus.
But we need to make sure that security is absolute as much
as it can be. If you have any further information you require
or if there is any questions that I may answer, I will be
available to do so.
Thank you.
[The prepared statement of Mr. Fox follows:]
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Mr. Souder. Thank you, Mr. Fox. On the licensing question
that you mentioned, some of the Asian-based consolidators, is
that a license that goes through Customs, through the Commerce
Department, through Transportation? Who issues the license?
Mr. Fox. There are licenses to become a Customs broker.
There are also licenses to become an FMC, which is a Federal
Maritime Commission. And we issue these licenses to foreign
companies. They may have a U.S. citizen that is the qualifying
party. But then in many cases those individuals don't have much
of a say.
Mr. Souder. Mr. Steinke or Mr. Keller, are you familiar
with what he was raising there, and is that a--how much of a
problem is this that we may have different standards on
overseas shippers compared to American shippers?
Mr. Keller. Frankly, Mr. Chairman, this isn't an issue that
rises to our level. This is something that Mr. Fox can address.
I am not even sure that is----
Mr. Steinke. I would agree.
Mr. Souder. I wanted to say, too, Mr. Fox, I appreciated
your comment about the just-in-case concept. I think that
reflects what is happening across the board in the business
community, not just in shipping, but in trucking and airport
type of things. Businessmen are going to make an adjustment.
There are hidden costs as well as overt costs to the American
people of security.
I don't think that changes their attitude that they want
more security. But I don't think there has been quite a
realistic risk assessment, cost assessment in the public mind.
But in fact it is going on, and it is important that we get out
in front of us so that we can really do wise risk assessment,
what the real costs are. And I appreciate that concept, because
in fact there are going to be slowdowns here and there. And
that means that if your whole factory is going to shut down, or
your store is not going to have things on the shelf if it got
slowed down at a given point for whatever reason, you have to
have some sort of an emergency thing.
I have an MBA, and just-in-time inventory--I am old, that
was kind of new coming in then, the critical path method and
all of that kind of stuff. There is going to be those
adjustments, and those margins are tight. So I appreciate that.
That is the first time I ever heard a kind of public record
acknowledgment of that, but it is a very logical change that is
likely to occur. And obviously we are all trying to keep that
down as a percentage.
That, I think the next panel, I am going to focus a little
more on the manifest question, on the goods. But could Mr.
Fox--I am not sure whether the two port directors may have a
comment on this too. You heard us raise it at the beginning.
One is a people manifest for INS checking and for security,
whether it be crew or a cruise ship passengers, but there are
difficulties that I saw today, in just the few cases that I saw
of manifests with specific goods being mentioned by item to be
matched up. We require that in the trucking area. I have seen
it on multiple borders. They match up item by item. And
anything that looks like an anomaly is caught. But if the
manifest is too general, then what you have is a much longer,
much more expensive to the taxpayer, which means that we are
either paying more to process it, which means the American
taxpayer is paying for it, or it means that fewer points are
being checked, or the backlog goes up, all of which are
expenses that are borne by different parts of the public.
Do you see that as a problem in your business and the
people you work with as being able to provide detailed
manifests? I would assume that, for example, I grew up in the
furniture business. We didn't want a truck coming in that says
you got a bunch of bedroom furniture coming in. We wanted to
know how much dressers, how many chests, how many three-drawer
chests and how many five-drawer chests so we could match up--as
a kid, I helped unload the trucks. It was a family business. My
dad said learn every part. Clean the restrooms, unload the
truck, ride the service truck, do every part of it. Then we had
to check off when we got each two-drawer chest and each three-
drawer chest.
Why are we having a problem with that here?
Mr. Fox. I think it all starts at the point of origin. You
have to have complete descriptions of the cargo that you are
shipping. We make sure that we have complete descriptions on
the bills of lading. We need to have that on the manifests,
because when we are submitting those manifests to Customs, they
have to have complete descriptions. If there is anything out of
the ordinary, they are going to spot it and designate those
shipments for examination.
While there might not be anything wrong with that shipment,
if there is not a proper explanation, they are going to pull it
aside to examine it, because something isn't right there. So it
is up to our people on the other end to make sure that we have
complete descriptions.
Further, you know, when you are talking about description
of goods and having to do a lot of extra work, we receive a lot
of inbound cargo here in the Port of Los Angeles, sent inbound
to inland points. And I think if you have just more of an
editorial description on those cargos, and I think there is a
bill before Congress now to put harmonized tariff numbers
against those, that would just cause--it is really of no use.
If you have a verbal description of that, you have got a ship's
manifest, you certainly don't need to go to all of the trouble
and expense to put those harmonized tariff numbers on a Customs
inbound form.
And I think it is up to again the people that are handling
the door-to-door shipping to see--when we take responsibility,
we take responsibility from the supplier's door, including the
transportation, the Customs clearance, and delivery to the
customer's door, whether it be here or in Chicago or
Minneapolis, or what have you.
So these are just some of the things that--this is why I
say, if you understand the process of shipping and the supply
chain, then you can understand the areas to focus on as far as
security is concerned.
Ms. Millender-McDonald. Mr. Fox, this is a concern that I
have always had. When the containers are loaded at the point of
origin, that doesn't mean that you will not have others being
boarded at different intervals before it gets to this seaport;
am I correct on that or once it is boarded at the point of
origin, nothing else is disturbed, either on or off before it
gets to the Ports of Los Angeles and Long Beach?
Mr. Fox. When it is loaded at the supplier's door, then it
is trucked to the port that--it is accepted and received there
under a bill of lading number. It is on book that they know
what they are receiving. The seal is put on the container at
the factory. If any of those seals are busted or what have you,
they won't put those containers on board. So nobody else is
touching that.
Ms. Millender-McDonald. No one else is touching it, nor--
will there be any more cargo put on that ship at any other
point outside of the initial point of origin?
Mr. Fox. If it is a feeder vessel, say going from China to
Hong Kong, then it would be off-loaded there and put on a
mother ship coming to the United States.
Ms. Millender-McDonald. I suppose this is a concern that we
have as to how much security is given to those various points?
Mr. Fox. Well, that again is--the seaport security of those
particular countries, you know, like here in the United States,
when you have a shipment that is the transient, it is in bond,
so it remains within the custodial area. It is not moved. And
then when it goes on rail, it is going on the carrier's bond.
They accept full responsibility for it.
Ms. Millender-McDonald. Thank you. Well, yes, thank you,
Mr. Chairman.
Richard, you spoke of these new devices. I tell you, they
are just great.
You spoke of the fact in your statement that because of the
heightened security now, it is a possibility you might have to
do new bridges or piers, widening of a channel, erecting
cranes. Did I hear you correctly in saying that these will be
added types of--increased types of things you will have to do
to secure the region, or would these be things that you would
just ordinarily do in the improvement of the port?
Mr. Steinke. Congresswoman, my statement was that as we are
doing improvements to the infrastructure here at the Port of
Long Beach, and I am sure at the Port of Los Angeles too,
security has taken on a whole other meaning with respect to
contracting and the construction contracts that we let.
Contractors are being informed about security measures, you
know, having a better sense of what they are doing, looking for
unauthorized vehicles that might be coming to the work site,
those types of things, which was not of paramount importance in
previous years.
So we have broadened our net with respect to security
concerns, not only as far as cargo goes, but also the other
work that takes place on a day-to-day basis here in this harbor
complex.
Ms. Millender-McDonald. Given all of those scenarios that
you are talking about and the increase given the improvement as
well as the heightened security, and your having to inform the
many entities that are directly involved in that, be it the
contractors or construction folks, are you also keeping in
touch with your Chambers of Commerce in the region to let them
know, because a lot of this might spill out over a cost factor
to them, given the increase in what you will have to do to
secure the ports?
Mr. Steinke. Congresswoman, as Mr. Keller said, there is a
public relations element to the whole security issues, making
sure that the public is informed. I know that we have been
working very closely with the Long Beach Police, and they have
been working with the Chamber of Commerce so that they can
inform business members and the community in general about
measures that they may see or that may be taking place. Added
security in certain locations, as was testified earlier, there
were some concerns about the safety of bridges in California.
And that needs to be communicated to the general public and
businesses around the port as to what is taking place so that
there is not any undue concern when they see a heightened
security presence.
Ms. Millender-McDonald. Speaking of bridges, Larry, let me
first thank all of you for being here. I suppose I just wanted
to go right into the questions here. But let me thank you for
the work that you do in providing our Nation as well as the
people who work at and around this place, close to our maritime
centers, the type of, I guess, satisfaction that they have.
They really do depend upon you guys, your expertise, your
ability to move quickly at the sight of any problems. And so I
really want to personally thank all of you for the work that
you do here while some of us are back in Washington trying to
bring the bacon in to you.
But the information sharing, Larry, that has been a concern
that we have had since September 11th, that a lot of the
agencies were not integrating their intelligence whereby one
did not particularly know what the other was doing. Given the
September 11th, how much information sharing are you now
getting from the Federal agencies, you know, the CIA, FBI and
others?
Mr. Keller. We believe that as a part of the task force
there has been vast improvement. As Captain Holmes said, when
the Port Security Task Force came out about a year and a half
ago, many things were pointed out. At that time, this port
community, which is a particularly active one, a real
partnership with the ports, the shipping companies, the freight
forwarders, the security agencies began looking at those
things. And what we found is we didn't know too much.
And leading up to September 11th----
Ms. Millender-McDonald. Neither did we.
Mr. Keller. But leading up to September 11th there was a
lot of work that was done, particularly between the Coast
Guard, INS, Customs, and then with FBI and some other more
arcane Federal agencies where this information sharing began
taking place. Starting on September 11th, as a result of the
work that has been done before, all of the parties came
together. And as Captain Holmes said, the initial response was
to stop each ship and anchor it outside of the port, go on
board, check the documents, make sure that in fact the captain
and the crew were who they said that they were, and that they
were in fact in charge of this ship.
And we had those delays in the first week or so. And those
delays are something that frankly, while they made sense from a
security point of view, aren't something that we can sustain as
a trading society. We have grown prosperous over the efficiency
that we have built in, the logistics efficiency that we have
built in.
Following that, however, as this information sharing got
better and better, what then happened was that INS, Customs,
Coast Guard were feeding information back and forth. And Coast
Guard was, for instance, requiring earlier and earlier
notification calls in from the ships as to who was on board,
what the manifests were, and that information was then shared
out to the agencies and came back essentially a clearance to
allow a vessel in without anchoring, or to anchor the vessel
out far enough where it could do no harm until such time as the
individuals and the cargo manifests were checked.
So information has made this whole thing work. I am going
to guess that we can always do a better job. One of the things
that I have said, and it is a little out of my purview, but I
don't think so, is that I would like to see the Congress and
the Senate fully fund the ACE computer system, that is the
Automated Customs Environment system, which has been requested
to be replaced for about the last 5 years. And while our
Legislature and the President have put in 100 million and 200
million here and there, this is about a $1.2 billion project.
And the type of information that it affords in profiling, if
not in specific, and these were some of the things that you
were discussing with Mr. Fox, allows Customs and the other
agencies to make a decision as to whether they are dealing with
a reputable known party who has patterns of integrity or
someone who is just trying to slip something through. And those
type of enhancements frankly are--and this information sharing
that you have referred to, Congresswoman, are what allowed
Congress to move.
When we speak to our railroad brethren, they talk about
velocity. When that velocity slows and you are moving 9 million
containers as we through these two ports, someone is going to
hurt. Some factory is going to slow down. Some retail store is
going to run out of materials. And while the buffer stocks are
probably something that should be better considered, the fact
is that our standard of living and the efficiencies at which
transportation and retailing and manufacturing are done have
delivered a remarkable economy in the way we do business, and
it has given a remarkable economy to our citizens.
Ms. Millender-McDonald. You are absolutely right. This is
why it is critical for folks to recognize the importance of
those ports and how they do transport cargo and if, in fact, it
has to be held in abeyance because of some manifest and we
cannot get the goods in here and sent across the Nation, then
it is absolutely a--it will be a hinderance and a disaster in
my view.
Let my say a couple of things. I see the--I hate to see
this device. I thought we only saw it in committee in
Washington. But let me see that permanent change costs. I need
to get some assessment of that, a list of that. I think you
spoke about a cost that will now be permanent given the
heightened security that you have.
The portwide identification system and the control access
and positive identification, if you can speak on that perhaps
at the time maybe the chairman comes back in to raise
questions. But I will say that we understand that there is
going to be a cost because of the heightened security. Now
permanent things that you are going to have to put in place. I
need to know this for one of the Congress folks who represent
you down here, along with the one who really actually
represents the port; that is, Congressman Rohrabacher. We would
like to have that so we can best understand what we are going
after as we go back to fight on your behalf.
I would like to have you look at the bill that I have, and
you too, my friend, Mr. Chairman, the threat assessment bill
that I have that looks at the clear--the threat assessment of
all transportation so that we can get a better understanding of
what we need, the type of funding that is needed, and the
critical aspects of those threats. And so I have that bill
pending. I have talked with the Secretary, and I have talked
with some of the administration folks about it. And so that
will help us in really getting some idea of the costs that will
be imposed, permanent costs, given the heightened security that
we are asking for.
Mr. Fox. I would like to, if I may, emphatically second
what Larry Keller had to say about the Customs, so that is it
on the record, because it is really a critical part of our new
environment.
Ms. Millender-McDonald. Thank you.
Mr. Souder. Currently intelligence and the ability to share
information is going to be the critical component, because we
can't chase everything.
I, too, want to thank the port directors for your--I mean
it is amazing to see the size and scale of what you are doing
here and the expansion with it. It is clearly important to our
trade. I was intrigued by one of statements from Mr. Steinke,
and I--just because I am not familiar enough with ports.
You said because each port has unique characteristics,
control for security should be determined and maintained by the
captain of the individual ports. As opposed to what we are
doing now?
Mr. Steinke. Mr. Chairman, I think it is important to note
that unlike airports, individual ports have multiple points of
entry. As you go through an airport, you have an individual
concourse that can be controlled at a certain point. I think
Captain Holmes and other people in the profession would agree
with me when they say that here in the Port Complex of L.A.-
Long Beach, you can probably get in landside 15 or 20 different
ways, and waterside, you know, multiple ways. We have 46
terminals that was mentioned before. And so I think the
security plan that would be endorsed and approved should be
done on a localized basis as opposed to a cookie cutter
approach that would say that Port Hueneme in Ventura County
should be looked at the same way that the Port of Long Beach-
Los Angeles should be looked at, the same way that San Diego
should be looked at.
Each has a unique need. Each has a different control point,
and the captain of the port should be working with the port
authorities on a local basis to approve a plan that fits the
right size of the individual port.
Mr. Souder. Do you and your association sense that this
isn't happening?
Mr. Steinke. No. I think it was one of the concerns
expressed by the association early on as to some pending
legislation that said there would be mandated requirements for
each and every port, and those mandated requirements may not
apply to a bulk dock that is dealing with coal or petroleum
coke or some kind of aggregate versus a container terminal that
has very specific requirements and controls on those types of
things.
So we wanted to make sure that those differences were
recognized in any legislation that was passed. I think that the
Hollings bill reflects that.
Ms. Millender-McDonald. The Hollings bill is the bill that
reflects that?
Mr. Steinke. The Senate bill was revised to reflect that.
Ms. Millender-McDonald. The companion bill is--
Representative Brown out of Florida has the companion bill to
that in the House.
Mr. Souder. You also made a reference to the AIS--I think
that is the Shaw. Since we are in the majority, it will move in
the House under a Republican name. But Ms. Brown is certainly a
key player.
The AIS system, in your statement you described some of
what that is. Is there anything else you want to add to that?
One of the things you said is it may be beyond the scope of
this committee. One of the things that frustrates this
committee is hardly anything is beyond our scope, because we
have commerce and the others. I just wanted to make sure
because some of this we are backing into areas to get at what
we are doing here. We are saying, oh, well, just like on INS,
when we go to the embassies overseas, what we are learning is a
lot of the preclearances who we are clearing at the embassies
or who we are rejecting at the embassies, garbage in, garbage
out, in the sense of background checks. And often it is
Congressmen beating on them to clear somebody, and they clear
somebody and then we have got them in our system and they are
cleared. They are not even illegal, they are legal because some
constituent called us and we said, hey, we have got someone who
is a friend of someone who lives in my district in Pakistan,
who is from Pakistan. Similar on some of the trade things, as
we move to the points of origin, not only on our close borders
but elsewhere.
Did you have anything that you wanted to add to that
comment?
Mr. Steinke. Well, Mr. Chairman, I think the AIS system, as
I understand, it is basically for cruise mariners, and I think
it is something that the Maritime Administration is working on.
I would see that would be a stepping stone toward a broader
identification system. And I know there has been some talk
about advocating a national transportation identification
system, where all transportation workers would have some kind
of a system. So the AIS is a stepping stone toward that
process.
Mr. Souder. For individuals, basically much like a
variation of this Fast Pass stuff that you have on workers.
You heard me commenting in the last panel regarding the
inability of Customs to do more detailed taking apart of--kind
of the second tier of investigation at the actual ports. That
is a subject in both of your ports. I know the arguments can go
both directions; in other words, what comes in here goes all
over the country, we all have a stake, and the money comes from
Los Angeles to Washington. In the first place it is not
Washington's money, it is money that stays here. But we are
putting a lot of Federal dollars in here as well.
And do you think this can be worked out? I mean, it is
inconceivable to me that it is 15 miles. It is even
inconceivable that it would be several miles. As I said, at
most places we are concerned about it going--vehicles going
around a corner from the site once they have been identified as
a potential risk.
What do we need to do to make this happen?
Mr. Keller. Perhaps I could answer that. We are in a new
reality. I mean, years ago each of our terminals had warehouses
onsite because we were handling non-containerized cargo. So
this would have been easy. As we have redeveloped our
facilities, those have disappeared, and you only have to look
at the old photos and the new photos to see how much that has
been the case.
But for efficiency's sake, as I think Customs has stated,
you know, they have chosen sites for their physical
characteristics to handle a mass of containers, both for
storage and for individual inspection for a variety of reasons.
It is not unreasonable to assume that there probably are
some facilities that are closer. That is not going to be on
each terminal, I don't imagine. Some terminals do have what we
call tailgate facilities where they can actually examine the
tailgate of the container. While they may not have space to
unload the whole container at that site if there were something
suspect inside it, it would give the ability to do that.
The other thing that comes to mind, just as I was listening
to the conversation is that Customs recently moved, and GSA has
put up their property for sale, which is right on Terminal
Island, and that is very, very central to both ports and could
possibly give a site, in a limited space environment, where
this might be possible.
But again, I can't help but agree with you. 15 miles is
clearly too far if you have a container threat of some kind,
particularly if there is a public health threat of any kind
involved. The last thing you would want to do is drag it
through neighborhoods.
Ms. Millender-McDonald. Given the quadrupling of containers
coming after the dredging has taken place, the spot that you
have just identified as an interim place for the container
inspection would not be adequate at all. Then is there anything
else that we would have on a larger scale for the container
ships--for the containers that we will have given the large
volume that we are expecting?
Mr. Keller. Well, we certainly have a large volume of
containers. There has to be a differentiation, Congresswoman,
between the inspection of suspect containers which probably at
this point is best done by some of the portable equipment that
Customs has acquired, the gamma ray equipment as opposed to the
solid almost bunker type equipment that works at the border,
because the trucks are streamed through, and at any given time
you can--you have power to take them through a fixed facility.
But in an identified threat, after that has been done, I am
going to guess that you are probably talking a very, very small
number of containers. Not 15 or 20, but say one container that
sets off a geiger counter or some other sniffing devices that
would show that there is a biologic or something inside that
would be threatening. In that case I think a small central
facility probably would suffice.
Ms. Millender-McDonald. We are speaking about--while there
will be quadrupling of the containers, We are speaking about a
small percent of those that really will need to be further
examined in this place?
Mr. Keller. I think so. The quadrupling or the doubling
over the next 20 years from our 9 to 20 million is going to be
occasioned by the growth in trade and manufacturing and
consumption. The bad guys only have to send one in to give us a
really bad day.
Mr. Souder. It is going to take more than an acre. I am not
arguing that site--in fact I have similar questions about that
site. But it is going to take multiple acres. Secondary is the
most critical. Secondary is where the stakes really go up. It
isn't the first part where they go through on the border where
they are scanning them, it is when they send them over to
secondary to take it apart, to send guys in. That is when all
of the danger occurs. If there is a shooting, that is where it
is going to be. If there is bribery, that is when it is going
to be. If there is an explosion, that is when it is going to
be. If there are people who are going to flee, that is when it
is going to be, because it means that we have identified them
beyond the first part, and that part of the cooperation is the
Federal Government is going to invest more, but there is going
to have to be investments by the local ports, the local city,
the local business people.
And let me--I know we need to get to the third panel, and I
want to raise this, this point which I am going to reiterate on
the third panel. They can hear it on this one, too.
One of the things my home city does is a lot of
reinsurance. We have lots of major companies there in
reinsurance. And security and terrorism have become a huge
question in the insurance industry as to whether anybody is
going to be able to afford insurance any more. One of the
things is that those who don't, who have additional
vulnerabilities, are going to either pay premium rates on
insurance or get no insurance, and that is just the bottom
line.
Most of these companies right now are opting out of any
terrorism insurance and asking the Federal Government to pick
it up. Some are looking at the risk and the cost to business,
much like what happened to doctors, when they couldn't get
catastrophic coverage, individuals, it is incredible. We have
to figure out how to do this. And the businesses that--whether
they are cruise lines or ports or whoever who become more
difficult targets are going to have a competitive edge. It
isn't just that there is a cost of security, it is going to
become a competitive edge, in your rates and insurance, in
whether people take your cruise or not your cruise, your
airlines or not your airlines, because for the business side,
you will be able to get insurance probably at a cheaper rate
and people haven't done it, and from the advertising side, for
clients who want to use you, it is a different market.
Instead of security being a liability, all of a sudden
having better secondary facilities, being able to say--it is
almost like a Good Housekeeping Seal that what is coming
through here has an advantage over other ports, and a bad
housekeeping seal if you don't have it. It is a different
commercial reality that is just kind of dawning on everybody in
the business area, and insurance is going to be one of our huge
first tests that can just bust the bank, like it is happening
in medicine, if we are not careful where you are going if you
get hit and don't have insurance.
So those are new dynamics, and I wanted to make sure I
raised that because these issues are important. Anything any of
you want to add before we conclude, or do you have any
additional?
Ms. Millender-McDonald. No. I just want to thank them and
want to continue to work with them so that we can make sure
that you have what you need for the safety of our folks and the
work that you are doing and the businesses here. Please, stick
with me, and of course Dana Rohrabacher and I will be working
together with you.
Mr. Souder. I wanted to make one final plug that is
security, but also a historic landmark. You have got some great
lift bridges. I know the Coast Guard was arguing that they are
part of their secondary emergency route, but I hope you can
preserve those. I know there is a push to be efficient, and we
are doing that all over America. But as somebody who really
appreciates historic landmark opportunities, it is a vital part
of your community if you can figure out how to make it work
commercially.
Ms. Millender-McDonald. Funding from the Federal
Government, Mr. Chairman.
Mr. Souder. You can tell which party she is from.
Can the third panel please come forward? Mr. Winter, Mr.
Heck, Captain Wright, Mr. Cisneros.
[Witnesses sworn.]
Mr. Souder. Let the record show that each of the witnesses
responded in the affirmative.
And Mr. Winter, you are first. Thank you for coming.
STATEMENTS OF JAY WINTER, EXECUTIVE DIRECTOR, STEAMSHIP
ASSOCIATION OF SOUTHERN CALIFORNIA; DENNIS HECK, CORPORATE
IMPORT COMPLIANCE AND PURCHASING MANAGER, YAMAHA CORPORATION OF
AMERICA; CAPTAIN BILL WRIGHT, SENIOR VICE PRESIDENT FOR SAFETY
AND THE ENVIRONMENT, ROYAL CARIBBEAN AND CELEBRITY CRUISE
LINES; AND MOISES CISNEROS, LEGISLATIVE MANAGER, LOS ANGELES
CHAMBER OF COMMERCE
Mr. Winter. Good afternoon. Chairman Souder, Congresswoman
Millender, it is always wonderful to have you back in the
district.
Chairman Souder, we are honored to have you spend the time
and take the time and the interest to look at our seaports,
which we feel very strongly are a very unique part of southern
California, and frankly a very important part, I think as you
are learning, of not only California as a whole, but the
Nation.
The Steamship Association is made up of the shipowners,
operators that provide deep sea ocean transport service to
southern California's ports in San Pedro Bay. Our members also
include the pier operators and stevedoring companies that
provide service in this harbor.
Primarily, the focus of our membership is the liner-
container trades that serve us here. I want to say every one of
the major container carriers that comes into Los Angeles-Long
Beach is a member of our organization. Frankly, we are rather
small. There is only about 45, and of those, the container
carriers, the major container carriers run probably 25. So the
industry, frankly, in terms of numbers isn't quite as large as
people often think.
I always like to mention, and I think I did when I spoke
with Mr. Rendon on the telephone, frequently people, when
talking about our industry, tend to confuse the vocabulary and
refer to us as shippers. We are not the shippers, we are the
ocean carriers. The shippers are our customers, the people who
tender freight and merchandise to us to transport.
Since September 11th, our members have had quite a
revelation here, and I think it is appropriate Larry Keller and
Dick Steinke certainly and Guy Fox mentioned that the role of
the Coast Guard and the Customs in particular and the other
agencies played. They stepped right up and provided the
leadership necessary, frankly, to keep our members and this
port and the community and the economy moving on a very smooth
basis.
You mentioned the delays we had right at the beginning. I
think those were worked out very quickly, and we have found
ways to operate. Because of the global nature of the ship
operating business, we have seen security all over the world.
In the United States, it is frankly somewhat new to us. In
other parts of the world we have to deal with pirates, we have
to deal with gangs that come aboard the ships and steal and
murder crew, and so forth. So we have always thought of the
United States, I think like the rest of us, as a safe haven.
Today of course these things have changed.
In our business here in Los Angeles-Long Beach, and I think
throughout the United States, and I don't want to speak for the
United States, but primarily here, what happens on the line
side of our operations I think is our primary concern.
The shipowners that have just mammoth investments today are
very responsible, conscious business people. But we come into
seaports, and particularly I think here, West Coast and
California in particular, we have always had a rather open
feeling about our ports and anybody who wanted to could
basically come in. As a result, we think it is very important,
other people have mentioned also, that there be developed a
standardized ID system for all port laborers, truck drivers,
what have you, that want access to our facilities.
Those IDs and standardized system of checking the people
should include a reasonable background check. We don't have to
go back to their childhood, and so forth, but I think we need
to have a good idea who the people are that are having access
to these vital assets that we have here in the harbor.
We think also that random drug testing should become an
important part for people who provide service in the harbor,
whether it is truck drivers--most of the truck drivers already
do. Some of our other port workers today don't. Most parts of
the transportation industry require some type of random drug
testing, and I think that would be appropriate given today's
circumstances that be included.
The trucks that pick up the containers and deliver them in
the harbor. The system that we should be working with them,
because it is a constant flow, needs to be a real-time system.
By that, we don't want to have systems where the information is
put in, it stays in there 5 years and nobody ever updates it.
You have to have a system that ties into the other law
enforcement agencies. So if, say, an outside person that's
coming into the harbor has created a felony since their
identification went into the system, they are flagged, they get
a new no-entry type of process.
Above all, we think that we have to be sure that we come up
with essentially one system that is going to work. As you know,
there has been a lot of concern, different agencies, levels of
government, everybody is pushing for it. Let's not--let's put
all of our energies into one system and make sure that we get
one that works.
Cargo security and the flow of commerce here. I think
Customs has certainly touched on it, everybody has touched on
it. It is very important with the volumes that we deal with
here to use sound risk management approaches to security.
An absolutely crucial item that Larry Keller mentioned was
updating of the computers that the Customs Service uses. As
good as they are, and I think the people that work with the
port will tell you that Customs has better information than
most people give them credit for today. But those systems are
still outmoded. The Customs folks that are here, Eileen, you
can correct me if I'm wrong, I wanted to say the system that is
still in place, the old ACS system, does not connect directly
with the ocean manifest that we are using. We provide Customs
with electronic manifest information, and that information has
to be essentially hand input to the rest of the system.
That is where the Automated Commercial Environment System
that we started to get funding is very crucial. We have to have
a system that ties it all together.
I think now on the Customs issue, I think Audrey Adams was
being kind. We are terribly understaffed here. If you look at
our manpower relative to the Port of New York, which is less
than half of our size, New York has more people than we do in
the Customs Service. I mean it is appalling. As you know, the
East Coast of course is where this country was born, and I
think a lot of manning and staffing of the government agencies
still reflect that mentality. We have never moved west where
the growth is. It is very important that Customs and probably
Coast Guard--frankly, I don't know the Coast Guard numbers
compared to those others areas, but I would guess that we are
lower.
Another item I always like to touch on, too, is TEUs, 20-
foot equivalent units. My apologies to Mr. Steinke and Mr.
Keller. They like to talk in TEUs because those are big
numbers. It is like we like to say in oil pollution, people
like to talk in gallons rather than barrels and tons because
they are a bigger numbers. When we talk TEUs, bear in mind that
approximately 75 percent of the containers that come into this
area are 40-foot containers. So if you translate it back, we
are handling really total container volume somewhere in the
neighborhood of 5\1/2\ to 6 million containers that come
through this port, import and export.
On the import side alone, it is somewhere in the
neighborhoods of 3.2 million containers. And again nobody, I
don't think we have a hard number, but a good working figure is
that 75 percent of our containers are 40-footers.
This means though when we hear people talking about
increasing the examination of containers here, that is still on
the import side over 31,000 containers someone has to look at.
There's seaports in the United States that aren't handling that
many in a year. The volumes here are significant. That is where
risk management and new technology becomes critical. We just
cannot start to do the job of looking at the risk cargo, not
the everyday cargo, not the Mattell, the Barbie dolls, not the
Nikes, the Dell computers, the Toyota components. We have got
to do a better job of identifying the people we don't know and
that pose the risk.
As you may have seen on the border down at Otay Mesa and
San Ysidro, they worked down there with the manufacturers and
the maquiladoras to develop essentially a Good Housekeeping
Seal of Approval for those manufacturers that have good
procedures in place. We think with effort, the same type of
procedures and recognition can be adopted for the overseas
cargo that comes into this area.
You have mentioned the price tag. And some day it is--we
are all going to have to reckon up to it and figure out what
this is costing, And this is where good management and good
risk management is going to play a role.
I wanted to thank you for the opportunity to address you.
In addition, I would like to leave with you, if you haven't
seen by chance the World Shipping Council, which is really our
master organization for container and liner trades in the
United States, their position and their position paper that
they have used in the Senate with the Hollings bill. I will
leave copies of that here.
Thank you again.
[The prepared statement of Mr. Winter follows:]
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Mr. Souder. Thank you. We will look to at least take the
summary recommendation and put that in the record if we can.
Mr. Heck.
Mr. Heck. Yes, Representative McDonald and Mr. Souder, I
really appreciate this opportunity to address your committee
about seaport security from the perspective of a medium size
importer. Now I am maybe one of the smaller fish in the supply
chain, but I want to just give you some perspective from a
company that imports maybe 3,300 of these 40-foot containers.
My name is Dennis Heck, and I am the corporate manager for
purchasing and compliance for Yamaha Corp. My primary
responsibilities are purchasing inbound logistics, Customs
clearance and compliance for our shipments out of Asia and
Europe and Canada.
Each year, Yamaha imports approximately 3,300 of those 40-
foot containers containing our pianos, musical instruments,
components and things like that to our corporate headquarters
here in the Los Angeles area, and the parts to our factory, our
musical instrument factory in Grand Rapids, Michigan, and our
piano and speaker factory in Thomaston, Georgia. Some of these
parts also end up at an OEM musical case factory in Elkhart,
Indiana.
You can see that our shipments are not only important for
our U.S. sales efforts, but for the continuation of our
assembly lines and for the safety and employment of our valued
U.S. factory workers and support staff.
I am glad to report that since September 11th Yamaha has
not experienced any appreciable delays in clearing Customs or
in picking up and delivering these containers to our
warehouses. Part of that I feel is due to my close working
relationship with U.S. Customs.
Virtually all of Yamaha's purchases and shipments are
related party transactions from our parent company in Japan or
from Yamaha factories throughout Asia. Since the majority of
the containers for these shipments are stuffed and sealed at
our factory door, we feel reasonably comfortable as to the
security and safety of these shipments from the foreign origin
to U.S. destinations.
The few unrelated transactions that we purchase from non-
Yamaha suppliers are further controlled by requiring the use of
our U.S. Customs broker's freight forwarding divisions in the
foreign ports of departure. Since September 11th we have
implemented a procedure that, as a condition of purchase, our
purchase orders to unrelated foreign suppliers state they must
surrender their shipments and documents to our selected freight
forwarder in the foreign countries. Our U.S.-based freight
forwarder and his foreign office will then be responsible for
coordinating the export to the United States.
This process, we feel, increases the security of our
shipments and dramatically reduces the chance of introducing
unwanted problems into our supply chain.
I have several proposals that I would like to discuss.
Since September 11th there has been a flurry of activity by
many Federal agencies to address the security of our Nation. We
are concerned that, unlike Customs, most other Federal agencies
may be preparing their respective initiatives without input
from the trade and without a coordinating lead agency.
It would seem appropriate for U.S. Customs to be given this
task since they have the expertise in handling and inspecting
passengers and cargo. In addition, Customs should be given
priority funding to ensure expedited implementation of their
new ACE system to assist them in their enforcement functions
and to ensure faster clearance of imported products in the
future.
In an effort to tighten security at the ports, I am hopeful
that background checks and identification be required of all
employees in and around our air and seaports. This should at
least include crew members, dock workers and trucking
companies.
Since almost half of my 25 years in the international trade
arena was spent with U.S. Customs, I must admit that I am a bit
biased in my support of their endeavors. However, Customs
recently has linked--proposed linking commercial compliance to
supply chain security. These are two separate issues of
international trade that I feel should not be linked.
For example, the related party aspect of commercial
compliance is one issue that must be overcome by an importer to
qualify as a low-risk importer. But, on the other hand, supply
chain security in a related party shipment should be considered
a low risk importation. Consequently, I urge Customs not to
link commercial compliance and supply chain security, since I
feel it would be very difficult for more importers to qualify
as a low risk importer under these two buckets.
Thank you again for giving me this opportunity to speak
with you.
[The prepared statement of Mr. Heck follows:]
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Mr. Souder. You still have a little bit of time on your 5
minutes. Because I am not familiar with the term, could you
explain what exactly you mean by the related party? You mean,
like a parent company, a co-shipper?
Mr. Heck. Exactly. Related party transaction in Customs
lingo means that there is a relationship between the parent and
the subsidiary. That is what the transaction is.
Mr. Souder. Captain Wright.
Captain Wright. Good afternoon, Mr. Chairman, and
Representative Millender-McDonald. My name is Captain Bill
Wright. I am the Senior Vice President for Safety and
Environment for Royal Caribbean Cruises, Ltd., comprised of two
brands, Royal Caribbean International and Celebrity Cruises.
An additional responsibility of my position requires that I
continue to sail regularly as a Master on Royal Caribbean
ships.
I am pleased to appear before you today regarding security
at our Nation's seaports, particularly in the Port of Los
Angeles and Long Beach. I am here not only to testify on behalf
of my company, but also our industry, our trade association,
the International Council of Cruise Lines.
Mr. Chairman, I have written testimony that with your
permission I would like to submit for the record and summarize
in an oral statement. The International Council of Cruise Lines
is a North American industry trade association representing 16
of the largest cruise vessel operators.
Last year ICCL members carried over 7 million passenger on
over 90 ships calling at ports around the world. The majority
of those passengers were carried out of U.S. ports, and the
majority of those from the Port of Miami and Port Everglades
and Ft. Lauderdale.
Mr. Chairman, before September 11th, passenger ships
calling on U.S. ports and U.S. terminals were required to
maintain comprehensive security plans that are acceptable to
the U.S. Coast Guard.
ICCL worked closely with the Coast Guard a number of years
ago to provide a security plan template for use by our members
to assure that each of these plans contains the required
information in a similar format to ensure consistency and
thoroughness.
Because these plans and the industry's existing security
posture, this industry was able to immediately increase its
security measures to the highest level immediately after the
tragic attack on our country on September 11th.
In addition, ICCL initiated daily telephone conference
calls between cruise companies' security and operations
managers and government agencies. Participants included the
Coast Guard Atlantic Area Command, Coast Guard Pacific Area
Command, Coast Guard Headquarters, Coast Guard Marine Safety
Offices, Department of Transportation, U.S. Immigration and
Naturalization Service and other agency representatives as
needed.
Again the purpose was to harmonize actions around the
country, facilitate the ship relocations when the Port of New
York was closed to cruise ships, identify best practices for
use by everyone, to share information, control rumors, and to
standardize requirements and procedures.
Each ICCL member line has officers at my level who are at
the front line of these conference calls and who are the front
line facilitators responsible for stepping up security,
relocating ships to alternative ports and ensuring the
consistent safety and security of our passengers, not only here
but around the world.
Mr. Chairman, I have mentioned harmonization and
consistency several times now. These elements are absolutely
critical to the success of all efforts addressing terminal,
ship, passenger and cruise security.
We are currently working with the Coast Guard at several
levels to identify and implement a long-term security posture
that is not only high but also sustainable, one that is
flexible enough to meet the demands of each of the unique ports
that we visit, either as turn-around ports or as ports of call.
Because our members trade worldwide, it is important to
assure that appropriate and adequate security is provided at
each port of call in whichever country we visit. To assist in
obtaining consistency around the world, ICCL has recently sent
to all Caribbean states urging a review and a timely upgrade of
security at these ports.
We have and will continue to participate fully in the U.S.
Coast Guard initiative at the International Maritime
Organization to develop worldwide security regulations and
guidelines.
Mr. Chairman, ICCL members continue to operate at the
highest level of security. The visible measures that passengers
will see actually exceed those at airports. Not only are
passengers and hand-held items screened by x-ray and
magnetometers, all baggage, 100 percent, is screened by x-ray,
hand searches, explosive sniffing dogs or other methods.
All stores coming on board are screened and all personnel
passengers, crew and visitors are thoroughly identified and
vetted before boarding. Passenger lists with pertinent
information are provided to the Coast Guard, Customs and INS at
least 96 hours in advance of sailing for their screening.
Key side terminal and waterside security, where necessary,
is coordinated with the Coast Guard and other Federal, State,
and local authorities. At this time I would like to applaud the
support and close cooperation that our industry has received
form the three Federal agencies represented here today. The
benefits derived from our longstanding relationships with these
agencies in responding to the events of September 11th is one
of the real success stories of the last 5 months.
Mr. Chairman, a lot has been accomplished since September
11th. However, our task is by no means over. Let us assure you
that ICCL and its cruise line members will be at the forefront
of these activities, development and implementation of
technology and striving in partnership with responsible
agencies to assure that cruising remains a safe and secure
vacation option.
Thank you, Mr. Chairman. I would be pleased to answer any
questions you may have.
[The prepared statement of Captain Wright follows:]
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Mr. Souder. Thank you very much. Mr. Cisneros, you get to
bat clean-up.
Mr. Cisneros. Good afternoon, Chairman Souder,
Representative Millender-McDonald. It is a pleasure for me to
be here and speak on behalf of the Los Angeles Area Chamber of
Commerce, where I serve as the International Trade Manager. We
are the largest Chamber in the Los Angeles region, speaking for
companies who employ over 750,000 individuals.
First off, I would like to mention that we are in awe and
admiration of the diligence and hard work that we have
witnessed in the southern California international trade
community. They have strived to efficiently balance two very
important issues, which is the timely delivery of goods and the
heightened security risks.
And as some several speakers mentioned before me, one-third
of all containers entering the United States passes through the
Ports of Los Angeles-Long Beach complex. Any outgoing hub in
the transportation shake here would adversely affect local
economies throughout the United States.
We are keenly aware that international commerce has played
a dramatic role in the shaping of Los Angeles' business
landscape. In fact, one out of seven jobs in California is
directly related to international trade.
International trade affects so many different industries in
southern California that any impediment to international
commerce would have a detrimental effect on all of our
economies.
September 11th has made all of us reevaluate everything
that we do. Security and vigilance has increased. The U.S.
Coast Guard took immediate action when they improved the way
that they identified vessels, cargo, how they identified the
ports from where these vessels are coming from, and where they
are going to.
Now the Coast Guard, Customs, Immigration or the FDA board
all incoming ships before they actually reach their berth. The
idea of all crew and passenger lists aboard cruise ships are
closely scrutinized. The shipping industry has also agreed to
deliver manifest and crew information 96 hours in advance to
U.S. Coast Guard officials, and since September 11th, many
procedures like smart examinations have been implemented
rapidly and effectively, thanks to the cooperation of the
Federal agencies, the steamship industry, the Marine Exchange
and the harbor commissioners of both the Port of Los Angeles
and Long Beach.
We would like to especially acknowledge the leadership of
the Captain of the Port, John Holmes, of the U.S. Coast Guard
and Captain Mannie Ashmeyer of the Marine Exchange, their crew
and colleagues for their fine work under these new and extreme
circumstances. We are confident that they will continue to do
everything humanly possible to protect us from security risks
without plugging the flow of our economy.
However, we must understand that these increased security
risks must also be met with applied new technologies. Unless we
implement new technology solutions, we will be forced to use
manual processes and techniques that will delay shipment and
cause a negative ripple effect in our economy.
We need to purchase smart technology like the gamma
machines that use X-rays to examine the hull of vessels and
help pinpoint suspicious cargo efficiently. Currently we only
have two such machines. And at the cost of $1 million each, we
urge Congress to help offset the increased cost of securing our
Nation's busiest seaport as we use technology to protect our
home front.
We believe this is a national problem with national
solutions. Much like the government has developed rapid
response to the risks at airports, so too must it focus on sea-
based transportation. The risk that security breaches pose both
to human life, cargo security and potential environmental
consequences require that we be diligent in all three of these
areas.
The fact that we are holding these hearings today is a
reflection of your interest in this, and we welcome your
commitment to continue to work with our local community to find
sustainable solutions to these new challenges. I am available
for questions.
Mr. Souder. Thank you very much. If I could start with Mr.
Winter with just a--first a comment. Your comment was very
interesting. I'm not arguing. New York does make sure that they
get covered on their fair share. But every single State will
make the argument they are underfunded. And in fact, California
is not underfunded compared to the dollars that are coming in.
I think much of the numbers are--in some areas you are up,
and some areas you are under. I am not arguing the port
question. I think you diverted a lot of yours to water. And
different States are--everybody--one of the funny things that
we have dealt with as Republicans, as we got in the highway
bill, for example, California gets I think 89 cents on the
dollar and argued that they weren't getting their full dollar.
But that is like fourth. Everybody else was below 89. The
problem is the Federal Government takes off of everybody. That
is why some of us believe that we ought to take less in at the
Federal level and leave it at the State.
But there is no question that you made an interesting point
about historic use of resources not adjusting to contemporary
conditions; in other words, when there is movement and growth
in one area and there are certain categories where is it very
difficult. My bet is, and I wanted to ask you this question,
that it isn't the business community that is necessarily
resisting the background checks.
Mr. Winter. No, I don't think it is the business community.
The business----
Mr. Souder. So why isn't it being done? Is it because of
the unions oppose it?
Mr. Winter. Historical baggage there, should we say, and
that goes back to some of the waterfront practices during the
McCarthy era and some resistance by laborers on the West Coast
and some of the ports in general back--there were some witch
hunts and there were some concerns that they were just
unnecessary intrusions into the background of people.
Mr. Souder. Because the illustration that I was going to
use, because clearly this is a California political problem, it
makes eminent sense that--particularly as--one of the people
when I was a staffer in the Senate who drove the drug testing
for transportation, I carried the workplace bill that helped
fund small businesses, in particular, how to set up drug
testing, which also would have to include some treatment type
of proposals or it would never be held up in court, for one
thing, and equality of management and labor.
But those type of things seem very logical. I also don't
believe that either of the ports or any official organization
of any type here is prohibited from doing it. What seems to be
being asked is for the Federal Government to mandate it because
there is not the ability to execute it here at the local level.
And the corollary I wanted to make is, it is a similar
political problem in how to downsize the Port of Philadelphia
or Connecticut or New York, or places because you have the same
difficulty in the historic structure that views it as a job
threat. It is one of the difficulties of when things become
consolidated in government of the ability to move, or when
there are large institutions.
So hopefully we can gradually over time catch up some of
those balances. Maybe if there is additional security threats
we can move toward more background checks, but my bet is that
politically both of those things, while good sounding ideas,
are difficult to move ahead. And I wanted to comment on some of
the complexity and some of the numbers that you hear thrown
around.
In fact, often one State gets one thing and one State gets
another. In Indiana we lose in a lot of other categories, but
we do OK on agriculture. There are some countervailing things.
I also really appreciated your comments on risk assessment.
You know, I already heard both of us talk some about that. And
this has been an emotional reaction. But one message, in
talking with Mr. Bonner yesterday, because apparently he is
going to be giving a speech here Monday to many in the
community, and I urge each of you to take this back to the
business community, we are in a political environment that is
different than anything that we have been in in my lifetime,
arguably Pearl Harbor was but I wasn't here yet. And that is at
this point there is a zero tolerance expectation out of the
general public, which is nearly impossible to execute. And with
that zero tolerance, it requires us to think more and more in
our budget sense of risk assessment, and you all have given us
some good suggestions about how to do that.
You have had to do it in your businesses already, and we
have to do that. But you need to understand a fundamental
thing, that this is different than what you would do in the
private sector, in the public arena, because you would make a
more logical dollar risk assessment and figure there is going
to be a certain number of losses. We are in a zero tolerance
situation. If anything happens in any port in the United
States, it will be automatic almost shutdown of the commerce
because--same thing at the airports. Same thing if they hit an
amusement park.
OK. We gave you guys in government 6 months and you still
didn't protect us. And that is why there is going to be kind
of--hopefully we can be logical and then ramp up one notch post
logical.
Because this isn't logical at the grass roots level. If we
successfully kind of fend off some of these attacks for a
period of time, perhaps we can have a more realistic
discussion. But I can feel in town meetings here in January as
I went through, they believe there is the one unifying
legitimate function of government, and that is to protect them
from external and internal attack. And a clear nonparty
differentiation, nonpolitical. It has put us, when you are
trying to figure out how to do your businesses in a logical
way, your costs in a logical way, all of a sudden, as I
mentioned, last panel, insurance rates, the companies are going
to be asking you now proactively what are you doing to make
yourself less of a hard target? What are you doing? It is
changing our phenomena, at least in the short-term and probably
somewhat over the long-term.
I wanted to make some of those comments. You have given a
lot of good information, and if I could ask one more specific
thing of Mr. Heck following up my other question to you. When
you said that if these are parent or related companies, and you
said it we would be very difficult to get preclearance for
any--I forget your--you said it would be--there would be
problems in the supply--the related party to get a low risk
importation. Are you saying that most people who ship have some
affiliation somewhere with somebody who wouldn't be cooperative
or it would be considered somewhat of a risk somewhere?
Mr. Heck. No. I was trying to make the point that in
related party transactions, the supply chain security aspect of
that would noticeably be less of a risk, because in a related
party transaction your parent has gotten the container and it
is sealed and it is shipped to the subsidiary. So a lot lower
risk than dealing with an unknown shipper shipping to someone
else in this side where the U.S. import has no control.
Mr. Souder. It would be almost like a regional Wal-Mart
store compared to the parent Wal-Mart, maybe a little more
independence, depending on the company.
Well, I yield to you, Ms. Millender-McDonald, for
questions. Then we will get closing.
Ms. Millender-McDonald. Thank you so much, Mr. Chairman.
Please, Mr. Winter, don't delay those Barbie dolls, for
heaven's sake.
Mr. Winter. That goes back to the related transactions.
Ms. Millender-McDonald. My grandchildren will be a little
floored.
The first thing that I suppose--I am trying to get to the
notes that I wrote here. You spoke of sound risk management
approach. And I suppose you said that so that we would not have
the propensity to try to examine every cargo, but those that
are potential threats. Or may I ask you to expound on what you
mean by sound risk management approach?
Mr. Winter. I think you interpreted exactly what I meant.
But I think sometimes today there is--you will see in the media
and the press concerns that Customs is only looking at 1 or 2
percent of all of the containers that come in.
Ms. Millender-McDonald. That is what is reflected back in
Washington.
Mr. Winter. Exactly, yes, and I think Customs officials
will say that the 1 or 2 percent that they are looking at, they
are looking at for a very good reason.
Now, maybe they can go up a little higher, but then it
becomes redundant. You start looking at the Barbie dolls and
the Toyotas, and the things that--those are manufacturers and
business people who have spent millions of dollars developing
the integrity of their brand names and so forth. They are not
going to allow bad things to happen, and I think the example we
used like down in the maquiladoras when Senator Feinstein had
some concerns, and they developed some programs there that--
where they went to these major manufacturers. They surveyed,
you know, their shipping systems and watched the logistics
chain from the plant to the border, and they saw that those
were good sound practices that they were putting in, and there
is no need then for the examination.
Ms. Millender-McDonald. Irrespective of a new heightened
awareness that we have now with the security, you still think
that what they have is sound enough where we will not need to
go through all of them?
Mr. Winter. We just can't look at--the numbers are just too
large.
Ms. Millender-McDonald. Indeed, you are right that we
cannot slow up commerce either, because people are waiting for
whatever it is on the other side of this.
Mr. Winter. You combine that with practicality. And I think
one of the points that Dennis is trying to make, when you have
Yamaha shipping to Yamaha, that is probably a poor use of
resources to open up every Yamaha container and start looking
at it.
Ms. Millender-McDonald. Very well put and duly noted.
Background checks. I will say to the chairman, we have
grappled over this given the fact that there are some persons,
unions who are concerned about background checks, not
necessarily to have background checks, but to not use that
adversely against them if in fact--if there was an arrest, this
arrest was not a criminal one. And so this is what the whole
notion is of the background checks and the concerns.
Mr. Winter. I think you have some ideas. The word is
reasonableness. That is exactly that. Our industry has kind of
come to a quasi-understanding that you don't have to go back to
a person's childhood, or if they had a juvenile or something
arrested for smoking marijuana, say you can't have a job. Today
they have a family they are raising, they are responsible
citizens. That person's background is going to get cleared.
Ms. Millender-McDonald. Absolutely. That is the sentiments
of those whom I have spoken with.
Mr. Souder. What I wonder is, clearly people change, and so
one way to deal with this is the period of time, depending on
when it is. But other transportation workers do in fact have
drug and alcohol background checks. That is part of it.
Ms. Millender-McDonald. By no means are we on the
Transportation Committee stating not to have background checks,
but we have got to have some reasonable provisions that we
impose. I think that is what it is.
Mr. Winter, the general feeling among shippers regarding
the 96-hour notification requiring the Coast Guard to come
aboard the ship, do you have any feelings on that whatsoever?
Mr. Winter. I think it is--on the whole, most of the
information our industry today provides both Customs and Coast
Guard is electronic, and it is--other than a few unusual
exceptions where the distance say from a foreign port to the
U.S. port is very short, less than 96 hours, it is--then it
gets difficult of course.
But I think your ocean transits across the Pacific, for
instance, providing that type of information I don't think has
been a major challenge. They have it. They are used to
providing it. It is just a matter of maybe sending it a few
days earlier. I wouldn't be surprised if the vast majority of
the companies were already sending it that early.
You have to watch in that 96 hours as the ships get faster.
What used to be a 15-day trip from Japan to the West Coast is
now a 9 and sometimes 8-day trip.
Ms. Millender-McDonald. Again, duly noted. I want Mr.
Chairman to know as he returns back and certainly speaks on our
behalf, that he does recognize--he recognizes that the growth
here is in California. And therefore California needs more
resources given that growth and given the request that is
imposed here on these two ports to move cargo is just enormous.
And so we have got to make sure that you recognize the
necessity of California calling upon this Congress for more
financial resources, Mr. Chairman.
Thank you so much.
Now, Mr. Royal Caribbean. You spoke of your security plan,
and indeed it seems like you really do have something rather
ironclad. But given the heightened security, would you be
opposed to having either sea marshals, and what would be your
public reaction to that, or undercover law enforcement on these
cruise lines? And did you have any fewer people going aboard
the cruise lines after September 11th?
Captain Wright. Well, I will answer the last question
first. You are speaking in terms of guests? The industry has
been dramatically impacted. Our business I think was affected
very much in the same way that the airline industry was
affected, and partially the relationship is because of all of
our guests or majority are coming through the airlines to us.
But the good side of that story is it seems to be
recovering nicely. We are not where we would have been had
September 11th not occurred, but we are on our way.
In terms of the sea marshals, we are very appreciative for
the Coast Guard's efforts and their concerns in trying to
provide that type of security.
I would question, looking at the current loads that are on
Coast Guard resources, the need to necessarily direct those sea
marshals toward cruise vessels. Our crews we feel that we
have--given the background checks that are in place, all of our
crew members are in possession of U.S. visas issued prior to
becoming crew members or boarding our ships.
The controlled environment of a cruise ship, the access
control that we have on and off the vessel. All of our vessels,
for example, crew members and passengers alike have access
cards that have electronically embedded photographs, facial
photographs of the crew members and the guests, which are
checked every time the crew member or guest leaves or boards
the ship.
So there is a whole slew of efforts that are going into
maintaining a highly structured security organization on board
the ship.
So, again, I am stating this based on the known and limited
resources that the Coast Guard is working with, that perhaps
there are other merchant traders that don't have similar types
of controls over their crews, that effort might be more
appropriate.
Ms. Millender-McDonald. And last, Mr. Chamber of Commerce.
I have not--Mr. Cisneros, thank you for being here.
What impact has September 11th had on tourism and travel?
And what impact has it had on our local businesses?
Mr. Cisneros. It has been pretty devastating. The southern
California area travel and tourism industry, hotels, the
convention bureaus, the trade conferences, some other--the L.A.
Convention Center and others areas have suffered dramatically.
I know for a fact that the hotels all over the Los Angeles area
have declined at one point down to 60 percent. And those
numbers, although they are getting better, it is still--it
hasn't changed back to where it was at all.
And so we have been very concerned. There is a lot of
people being laid off. And trying to get back into a work force
is a concern for the Department of Commerce.
Ms. Millender-McDonald. I have a resolution that is going
in, as I return back, asking people to revisit your State and
all of the great things that are in your State and do the due
diligence of going to hotels, staying over the weekend, and
doing some things that we think that we Californians can do to
help us during this time of getting back on our feet, if you
will, in terms of tourism. And then we are inviting folks to
come in and not be concerned about the air travel or the bus
travel or rail, whatever it is coming into California, or to
any other State. This is not just endemic to California, it is
talking about to revisit your own State, meaning your
respective State.
I was late coming in because I had the great opportunity to
be with a company in my district that has done breakthrough
through providing a type of container now that will be in the
hull of the aircraft, that will circumvent any explosive
devices that would be in luggage to dismantle the plane. This
is just great breakthrough. They will be coming to Washington
next week, and hopefully you will come and meet with them, as I
will be inviting Members of Congress to come.
But this is what we are trying to do to get that type of
satisfaction and the fear taken from that flying passenger as
well as the ship passenger, to try to see what we can do in
terms of technology. So that is a new breakthrough that is
coming in. It will be for aircraft. And certainly the amount of
passenger travel and tourism that we have had has come from
aircraft as opposed to sea, in my opinion. I might be wrong,
sir.
But, nevertheless, we are trying our desperate best to get
people back on planes, on ships. Mr. Royal Caribbean, my
husband wants to take a cruise, and so I am going to see
whether we can do this to help you out.
But let me again thank this chairman for his sensitivity. I
have known him to be this way. He goes outside of his State to
come in to see just what can be done to help us. While he is
not a Californian, he is a committed Congressperson for trying
to find the answer. So thank you for being here today.
Mr. Souder. Thank you. I have to make sure those Yamaha
parts gets to Elkhart, which is in my district, and for my
son's keyboard.
I wanted to ask two more brief things, one on the cruise
lines, on your background checks. Would you agree that an INS
background check has access to information that you in the
private sector do not have in a background check, and that
really the Federal Government would not want to share?
Captain Wright. I would assume so, yes. I would almost want
to say I would hope so.
Mr. Souder. Because one of the--the reason is right now in
this heightened security times, while I tend to kind of
superficially agree that you are not a prime target, in
actuality you have--I will just say this--what I saw this
morning was a higher degree of security, and probably better
clearance than at any airport. What we are striving for is to
get to that level in an airport. With the one exception that we
are trying to do at the airports as well, and quite frankly as
a conservative Republican I have some concern that the
information we are collecting on people could actually leak out
and really isn't the business of the general public and needs
to be kept in the Federal realm.
In the area of background checks, because a lot of it is
basically--I mean, the fundamental problem we are trying to
deal with in the United States right now, there isn't any other
way to say it, with latent cells. And what in the world is a
latent cell? In other words, we are not just chasing--in the
19, 2 of those guys on September 11th had done something
before. But others were interconnected. This isn't the type of
information that all can find out in your background checks,
only the Federal Government will have it.
That is why at least for a period of time it actually gives
your cruise people additional support that we are running those
lists of your crew members and others with those background
checks, because you wouldn't have it. It is not a lack of,
well, in fact, your willingness to work with ports. Is it
unfortunate that you got caught up in your weakness in our
airlines system, because from what I can see here, you are way
ahead. With the sea marshals you are double that. By having
people watching, probably unnecessarily because you already had
security on board as you come into a port, you are able to do
the background checks. If they can't penetrate that, they are
basically going to look for a softer target.
But that is one thing that I wanted to point out, because
of your ability to do a background check is different than the
government's ability to do a background check.
Captain Wright. We are fortunate that the government is
doing it though. I think the way that it is being processed now
is that all that is happening, if there should be a hit, that
the government is simply indicating that is an individual that
they would like to look more closely at. The reasons for that
are not communicated.
Mr. Souder. And then the other thing is I think that the 1
to 2 percent figure is more of a national figure from what I
can tell. And believe me, just learning a little about ports is
almost worse in some cases than learning nothing, because
whether it is counted one container or two containers, and how
to convert the 31,000 that they are going through or trying to
move up to 40,000 into the units looks to me more like a third
of a percent that is being checked. But what the bad guys need
to know is they never know which parts are likely to get the
highest risk. We are moving that up. The question is how to
move that up from that even to the 1 to 2 percent level or
higher. I am one who believes that--I don't know whether it is
1 percent, 2 percent. It is certainly higher than probably
where it is at in Los Angeles and Long Beach.
You have so much stuff going through here that you have to
have a higher load than 31,000 even to get it up to the
national average. But how to do that is really the question
with the system, with the new radiation devices, with the
equipment that people can drive through faster. We can probably
look at a higher percent with more accuracy without
compromising a lot of that if we do a logical ramp-up. Because
our supposition in the government is--and I have been working
on the terrorism issue for about 5 years in this oversight
committee and around the world, and Larry Johnson and others
have been in front of our committee both in closed session and
open session for years looking at that--is they are going to
increasingly get more sophisticated, but we are, too.
And that now that we have new tools to be able to identify,
it isn't necessarily a win-lose situation here if we work it,
because what I call the kind of the--everything seems to a baby
boomer like another repeat of Vietnam, where we are always not
quite doing enough to get over the hump. In this case we may be
slightly ahead of the curve if we stay at it and work together,
with hopefully the least impact on commerce.
Do any of you want to make a final statement before we
adjourn?
Mr. Heck. I would like to make one comment about this 2
percent figure. It is really important to understand that
importers transmit data to Customs on virtually every line on
every invoice that we ship through Customs, and that along with
the manufacturer ID number of the factory, the IRS number of
the importer, the country of origin of the product of every
line on every invoice, that is all transmitted to Customs. That
data, with the help of business analysts at Customs and their
computer, that is why this ACE system is so important to make
it even more efficient. That is where they come up with this 2
percent.
So people may think that this 2 percent, they just throw
darts at a board and they pick 2 percent and the other 98
percent go through. That is really not true.
Mr. Souder. Our political problem is that system didn't
work on September 11th, that we thought we did a better job of
identifying risk factors, and what we found is that we didn't
know them. They were moving back and forth across our border,
some of them three and four times. We have been up meeting in
Ottawa to try to address their questions. This has gotten
beyond where we had an ability to identify the risk, And this
is not unusual in international trade.
The biggest narcotics--well, one of the biggest narcotics
busts in Detroit were narcotics inside a load of worms. In the
reporting, what looked like was going through looked like
worms, not narcotics. In Vermont--that was the kind of the worm
story. And the other one in Vermont, there they are looking for
cheese, because that is important to their people. In other
places they are looking for fish. This isn't just terrorists,
but the fact is that--and then the last point is because all of
the information is coming in doesn't mean that the Federal
Government--that this is typically coming from the business
side, this is typically what you think anyway, but that all of
information coming in doesn't mean that we actually have the
ability to sort it.
When we are looking at those college kids who came in and--
illegally sometimes, and we don't know what university they are
going to, yet the university sent it in to the INS, it doesn't
get looked at because we haven't had the ability to have enough
agents to go through it to track it. So the universities say,
well, I don't know about all this paperwork, and some of the
business goes well, so what if I kind of don't make it real
clear on this manifest, because who knows whether they are
going to check it anyway. And we have kind of bred that system,
which all now is kind of getting a little tightened up, and we
have to figure out how to tighten that up without putting you
out of business.
I think your fundamental point is correct. Probably we have
a lot of this paperwork already in the system. By managing it
better, by doing what the private sector does, this is a
government that at the Social Security System we have regional
computers that couldn't talk to each other and we had a company
stealing us blind in four regions and we didn't know it. That
was a government that still reenlists servicemen who have
been--I mean, I remember working on this a number of years ago.
We reenlisted rapists who were busted in one zone, and then
they reenlisted in another branch of the military because we
weren't sharing family information.
It is expensive to get everything up to speed. We are
working on terrorism. We are behind the business sector. But we
are trying to catch up. We have a mandate from the American
people: Stop the terrorists. We are trying to do it because
they also want a good job and a good paying job. If we don't
have international trade, we aren't going to have that either.
And your message is today help us sort that through.
You were also very specific in a number of things that are
just very helpful too, and helping me understand, and as I say,
it comes out in the committee print and the report, too.
Anything else you want to add?
Captain Wright. On behalf of the ICCL, I would like to say
that we fully support the need for the nationwide ID, and to
what degree that requires background checks or what type of
background checks that can be done, that can be discussed, but
that we have a consistent way of identifying port workers is of
critical importance.
An investigation was done not so many years ago in Miami,
the Port of Miami. I cannot quote you the exact statistics of
that investigation, but it showed a shockingly high percentage
of port workers who were actually convicted. That raised great
concern.
Mr. Souder. It is scary.
Captain Wright. These workers are at times being given
access to all areas of our vessels due to loading.
Ms. Millender-McDonald. Mr. Chairman, the one thing that I
would like to ask Mr. Winter and Mr. Heck to do for me is to
give me some type of a white paper, if you will, on those
percentages that we talked about, because those of us who are
on the Homeland Security tend to think, and I, until I have
heard from some of you over the times I have been here, that
the 1 percent is just atrocious in terms of investigating.
But, when you speak of it in the realm that you have today,
and others have in recent meetings I have had, it is
efficiency, and efficiency is what is going to help us to
identify a small percentage as opposed to those of us who
thought it should be a 10 percent, 15 percent. You always think
in large numbers, but not necessarily does that always cash in
to efficiency and also security protection.
Mr. Winter. If is it any comfort, I was speaking to the
Century Plaza this week and they were sold out. So they were
very optimistic. They wouldn't renegotiate some rates for May.
Mr. Souder. One of things you can tell politicians too, and
we complain about the 1 or 2 percent, that we often make
decisions based on a national sample of 600 people. Good target
sampling is a principle in marketing research. The only
question here is, are we getting the right mix? That is what we
are struggling with right now, because we have had our
confidence shattered.
Mr. Winter. Mr. Chairman, you touched on, and I tried to in
my comments, the role that using the technology and new
technology that is going to enable these percentages to be
increased. Because I think what people have been looking for in
the past is usually--people that lie about the value of their
merchandise or drugs and things like that, and we are looking
at a new world of what we are looking for, too. And I think in
every industry where it has been challenged, we have been able
to find the technology, whether it is better gamma rays, faster
and so forth, that we can increase the percentage of the
freight that we are looking at without being intrusive in the
stream of commerce. I think that is absolutely critical.
Mr. Souder. Thank you very much for coming. I thank
everyone for being patient, and those who came here today to
listen. And with that, our hearing stands adjourned.
[Whereupon, at 3:25 p.m., the subcommittee was adjourned.]
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