WASHINGTON — Port security is a key issue in the presidential campaign, but there is something Republicans and Democrats agree on: There’s not enough money in federal coffers to pay for the billions of dollars needed to keep imported cargo or entire port facilities from being terrorist targets.
Lawmakers have grappled with how to pay for increased port security since the terrorist attacks of Sept. 11, 2001, but so far have sidestepped the issue of how importers, exporters, ocean carriers, freight forwarders and others in the international commerce supply chain might also shoulder the cost.
Port users, particularly importers, are now clamoring for Congress to reach a funding solution, and say they aren’t averse to paying their share to prevent terrorist sabotage at ports or weaponry from being smuggled in the 7 million cargo containers arriving in the U.S. each year.
“Maybe it could be an across-the-board fee, as long as the money is then earmarked for security use,” said Frank Kelly, vice president of trade compliance and government affairs at Liz Claiborne Inc.
Port security funding also has gained renewed urgency since release last month of the 9/11 Commission report, which stressed the need to improve all U.S. anti-terrorism security, including at ports.
“The current efforts do not yet reflect a forward-looking strategic plan, systematically analyzing assets, risks, costs and benefits,” the commission said.
Despite this warning, a long-term decision about who will pay and how much is expected to be delayed until next year. Lawmakers have little time left on their agenda this year, expecting to adjourn by October after one more month of deliberations in September.
It’s also an election year during which lawmakers are keen on not angering any constituency. Levying any cargo surcharge might be viewed as a tax, and choices made about where to fund anti-terrorism efforts could be criticized.
“A lot of these terrorism issues are going to be played to see if they are potential campaign issues,” said Julia Hughes, vice president of international trade with the U.S. Association of Importers of Textiles & Apparel. “I would expect a continuation of the current port policies until after the election.”
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At the same time, ports next year and beyond are facing new Congressional security mandates, such as using container X-ray machines and creating computerized security systems, and don’t yet have the money to implement all the changes.
On deck for Congressional consideration next month is the 2005 budget for the Department of Homeland Security. U.S. ports have asked that $400 million in DHS funds to be dedicated to port security, but the House has only voted for $125 million and the Senate is weighing a $150 million allocation.
However, Sen. Ernest Hollings (D., S.C.) is expected to offer an amendment to the DHS bill asking that $500 million a year be set aside for ports. The money would come from the roughly $20 billion a year now collected in import tariffs, almost half of which comes from apparel and textile shipments. But retailers and other importers are resisting this idea because they don’t want to be the only port users to shoulder the cost.
In the past three years, the Bush administration’s port plans have mainly focused on keeping terrorist weaponry from being smuggled onto U.S.-bound containers. U.S. Customs officers have been stationed at 16 foreign ports and seven more are soon to be manned. Together, those 23 ports — from Hong Kong to Halifax — account for more than two-thirds of all U.S. import trade by volume.
Working with local authorities, terrorist intelligence experts and cargo manifests, inspectors decide whether to X-ray or open containers for inspection. The administration also has put security demands on importers and ocean carriers in areas such as loading cargo and providing detailed shipping manifests 24 hours before embarkation.
For his part, Democratic presidential candidate Massachusetts Sen. John Kerry finds fault with Bush’s port security and has expressed alarm that only 5 percent of the containers arriving in the U.S. are inspected. Kerry hasn’t advocated more hand inspections of containers — a step that trade officials claim would cause massive backups and disrupt the U.S. economy — but has called for more technology at ports, such as container X-ray machines, improved cargo data and port intelligence sharing.
The X-ray machines are costly and the techniques for using them to inspect the standard 20-foot-long and 40-foot-long containers are still evolving. A new $4.5 million machine called the Eagle, which can scan 90 percent of a container’s contents in two minutes, is being tested this month in Georgia’s Port of Savannah.
For apparel industry importers, the quandary is finding the right balance between developing security methods that work efficiently, without incurring too much extra cost and time in the import process.
“We need to resolve the funding issue,” said Erik Autor, vice president and international trade counsel with the National Retail Federation, whose department and specialty store members depend on imports entering the U.S. without a hitch.
Autor said retailers are pressing for port security costs to be shared among all parties in the supply chain. He said the government should avoid creating a special “container tax.”
“Port security is for the benefit of the nation’s security as a whole,” the NRF executive said. “Funding can be worked out in commercial contracts between port authorities…terminals and carriers” and importers, he said. “Quite frankly, by negotiating these in the contract, that will allow greater flexibility in finding the actual price for security.”
Updating the nation’s 55 largest ports and paying for the security improvements is expected to remain an issue for some time.
“There’s just not enough money,” said trade consultant Robin Lanier, who is executive director of the Waterfront Coalition, representing retailers, importers, exporters, transportation companies and others in the supply chain.
The U.S.’ largest commercial ports form an aging system. Officials have estimated it will cost from $7 billion to $10 billion over the next 10 years to make them more secure.
Jay Grant, a lobbyist with the American Association of Port Authorities said when considering the lack of funding in the face of the threat posed by inadequate port security, “the whole picture gets scarier and scarier.”