BEFORE THE
COMMITTEE ON GOVERNMENTAL AFFAIRS
UNITED STATES SENATE

CONCERNING

CARGO CONTAINER SECURITY

MARCH 20, 2003

Chairman Collins, Senator Lieberman and distinguished members of the Committee, I am the United States Attorney for the District of Vermont. It is a privilege and an honor to be asked to testify before this Committee concerning cargo container security and an interagency, intermodal and international initiative for cargo container security called Operation Safe Commerce – Northeast (OSC - NE). This group, which I will describe in more detail, is the original Operation Safe Commerce.

Since the early 1980's and the advent of Law Enforcement Coordinating Committees (LECC’s), sponsored by the Department of Justice and the U.S. Attorneys Offices, there has been an expansive, cross-border effort in the Northeastern United States and Eastern Canada for members of law enforcement on both sides of our northern border, and at all levels – local, state, provincial and federal – to come together regularly to share working intelligence information and to discuss and address issues of common interest. Building on pre-existing relationships, this loose-knit group now comes together for regular meetings of between 60 and 80 officers, agents, and prosecutors. It has been observed that there is no other place in the world where inter-agency and international cooperative law enforcement is better implemented.

Against this backdrop and out of this culture of cooperation, OSC was born in August 2001, a month before the events of September 11, 2001. Of obvious significance to those agencies working in this area have been organized criminal efforts in close proximity to the border, many of which involve smuggling of humans and contraband, including drugs and stolen property. At that time, U.S. Coast Guard Commander Stephen Flynn met with the cross-border LECC intelligence group to present his views on the need to secure and monitor the world’s cargo container supply chains more effectively. The group was aware from our work together that historically drug shipments came into the Port of Montreal by cargo container and that stolen vehicles had left the port by the same method. We also knew that there was theft of goods from container shipments while in and around the port. All this indicated clearly that the containers were easily accessible and able to be breached on a regular basis. Members of the LECC group offered ourselves as a test bed for a project on cargo container and supply chain security, seeking to study and test point-of-origin to point-of-delivery security, in-transit transparency and accountability, and concomitant data query capability.

Thus, OSC - NE first manifested itself as a loose-knit working group that evolved from a cross-border intelligence sharing group comprised of law enforcement representatives principally from northern New England, northern New York, Quebec and eastern Ontario. The original aim was to guard the cargo container supply chains against the insertion of materials not listed on the container manifest (smuggling) and the extraction of materials from the container as it was in transit (theft).

The events of 9/11 gave an immediate and unparalleled urgency to the work that we were undertaking. We recognized that terrorists could use the global cargo container delivery system to attack the United States in a number of significant ways. First, because the security of the system had not been a high priority, containers were in large part throughout their routes of travel easily accessible to the insertion of explosive devices, including weapons of mass destruction (WMD). Once inserted, such weapons could be detonated at any point along the route, most likely in a port or at some other intermodal transshipment point. Second, even if a WMD were not used, terrorists could wreak havoc with the cargo container transportation system itself by a combination of a smaller device and disinformation that a larger, more powerful device was already in the system. Because the system does not yet have a built-in ability for security review, this could likely cause the United States and the rest of the world community to shut down the entire system while we hunted for the problem container – with potentially catastrophic consequences. Third, in the traditional smuggling context, component parts of WMD’s could be inserted into and extracted from cargo containers and then assembled outside the intermodal delivery system. Fourth, we know that traditional smuggling of contraband, whether drugs, cigarettes, knock-off products, or other goods, may be used to support terrorist activities. Such smuggling is accommodated by a container delivery system that is easily breached.

Moreover, we know that groups which have engaged in smuggling operations in the past have been well organized and have sub-operations that enable injection or removal of items into or from cargo containers in ways to defeat previous efforts at inspection. Although we in our group cannot quantify the likelihood that such would occur, intuitively it is logical to assume that organizations that engage in smuggling operations, and that make use of cargo containers, may buy them, knowingly or otherwise, to smuggle into this continent either weapons or component parts.

The purpose of Phase I of OSC - NE was to begin identifying where injection and removal points occurred in a simple cargo container supply chain and to begin testing some possible technologies to detect intrusions and to track the container for anomalies. Coming together to start the process of addressing the potential devastating impact on world commerce described by Commander Flynn were representatives from the northeastern United States of the following agencies: U.S. Customs Service, U.S. Coast Guard, U.S. Immigration and Naturalization Service, U.S. Attorney’s Office, U.S. Marshals Service, the state economic communities, particularly those of New Hampshire, and through the state economic development arm, members of the private sector. Members of the working group began having serious discussions with representatives of agencies in Washington, particularly within the Department of Transportation. In conjunction with this effort, the Volpe National Transportation Systems Center of Cambridge, Massachusetts ("Volpe"), prepared a white paper proposing to study a simple cargo container supply chain. The Technical Support Working Group agreed to fund the Volpe Center’s initial effort, and the loose-knit affiliation that had come together to promote this project took on a more structured existence. The United States Attorneys for the Districts of New Hampshire and Vermont together appointed a joint law enforcement coordinating committee subcommittee to be tri-chaired by each of them and the Governor of New Hampshire. The rural and economic development arm of New Hampshire provided the necessary and critical linkage to the private sector.

Operation Safe Commerce, as conceived a year ago, had a single mission:

"Operation Safe Commerce represents a comprehensive coalition of federal agencies, state governments and private sector businesses committed to the concept of enhancing border and international transportation security without impeding free trade and international commerce. Operation Safe Commerce gathers and provides information and assists in collaborative efforts to develop new models for international freight monitoring and transportation that maintains open borders and facilitates commerce while improving security."

As the working group reminded itself on a regular basis, this group worked together "on a spit and a handshake" basis; agency egos were "checked at the door." The limited strategic goal we sought to achieve was simple:

"Operation Safe Commerce will provide a demonstration model for the international container shipping system that maintains open borders and facilitates commerce while improving security practices by using point-of-origin security, in transit tracking and monitoring and data query capability designed to validate and facilitate the movement of containerized cargo."

The New Hampshire/Vermont Joint Law Enforcement Coordinating Subcommittee for Operation Safe Commerce has maintained as its mission engaging in strategic planning on behalf of, and providing general and specialized advice to, personnel charged with responsibility for effecting OSC strategic goals by drawing on the collaborative efforts and the expertise and input of the agencies and entities represented by its membership.

Announced in March 2002, the OSC - NE working group’s initial goals were:

1. To establish and facilitate a mechanism for identifying and securing on-going support and funding for Operation Safe Commerce.

2. To develop and implement a mechanism for expert and agency-specific input into the ongoing work of the demonstration project OSC - NE.

3. To promote international trade security concepts through Operation Safe Commerce to be viable within 18 months and encompassing federal, state and international agencies coupled with representatives from the private sector to assist with future demonstration projects of Operation Safe Commerce as may be needed.

The group came together by telephone conference and face-to-face, first, to assist Volpe in refining the parameters of the proposed demonstration project, second, to push the project along and oversee it as it was undertaken, and third, to review and analyze the Volpe reports and assist in the preparation of the final report, which I understand has been released by Volpe for restricted distribution.

Throughout the process, our aim was to look at a prototype and to support and guide a process that would begin gathering data which could then be used to promulgate regulations and set new standards for secure international transportation of cargo containers.

Phase One of the project was accomplished in two parts, both of them involving cargo containers used to ship automobile light bulbs from the Osram-Sylvania plant in Nove Zamke, Slovakia, via the Port of Hamburg, to the Port of Montreal, across the U.S.-Canadian border at Highgate Springs, Vermont, and on to the Osram-Sylvania plant in Hillsboro, New Hampshire. First, the Volpe Team studied the actual supply chain for a cargo container, seeking to understand and report the way in which the cargo container was handled and the various potential problems for intrusion that could occur along the route. Second, Volpe put instrumentation and monitoring devices on another container to determine whether it could be tracked and monitored effectively with commercially-available technology.

The technology they used is described in more detail in the report. It involved Global Positioning Satellite (GPS) technology, tracking and multi-node downloads, with transmission of data from those nodes to a central point at Volpe’s headquarters. There were also installed a serious of sensors which detected light changes inside the container and detected possible intrusions through magnetic sensors, similar to a home security system, and through an electronic seal on the exterior door of the container. The intrusion data monitored by the interior sensors and the GPS tracking data were downloaded to nodes at the outset of the container’s trip, at the port entryways in Hamburg, Germany, at the Port of Montreal, at the border port of entry at Highgate Springs, Vermont and at the receiving company premises in Hillsboro, New Hampshire. By and large the equipment worked well and provided information at each of the nodes that was subsequently transmitted to Volpe. There was some problem getting the data transmitted from the entryways at the Port of Hamburg, because there was two choices for entry, truck and rail, and getting them both set up in time became a problem. (Note that this was not a flaw in the equipment but a problem in the timing of the shipment and the delayed arrival of the node equipment as Volpe personnel were seeking to set up the download nodes.) Also, because the container was in the hold of the ship as it traversed the Atlantic Ocean, the GPS capabilities were nullified. A download of information at the Port of Montreal, however, indicated that the container had not been tampered with while on board ship.

The test runs informed our OSC - NE working group that there is a basis for continuing to explore both container tracking and container intrusion. Our group, however, always saw itself as a vehicle for providing data to regulatory bodies within the United States, and through them to entities throughout the world, which could be used for setting standards to ensure greater safety from intrusion in the handling and transportation of cargo containers. Indeed, in proposed Phase Two, OSC - NE is partnering with Lawrence Livermore National Laboratory to test additional intrusion detection devices within the container and monitoring and detection equipment to be used in moving cargo containers at the ports. How soon more comprehensive technical solutions to container tracking and intrusion will be developed depends, of course, on additional study and monitoring of more complex supply chains for additional vulnerabilities that may be addressed by technology.

An important lesson learned from the Phase One supply chain analysis and monitored test run is that a comprehensive answer cannot be provided by technology alone. The security systems, or lack thereof, and the cargo container handling arrangements of companies participating in the supply chain sometimes create additional vulnerabilities. For example, on the loaded container there was an absence of seals and use of un-secured seals that were easy to duplicate for short periods of the container’s trip. Also, the container involved was held up at a border crossing in Europe for an extended number of hours. The waiting truck traffic at that point was drawn up along side a tent city where drivers were exposed to temptations of ways in which to bide their time while waiting to cross through the port of entry, potentially leaving the container that they were hauling easily subject to tampering. The former problem can be handled by an initiative such as Customs - Trade Partnership Against Terrorism (C-TPAT), which would set standards for companies originating and transporting cargo containers if they wanted to receive a "safe commerce" designation. The latter problem, it appears, would more likely need to be addressed by world customs organizations and possibly bi-lateral or multi-lateral agreements.
Other lessons learned include the fact that it took little if any credentialing for the engineers setting up the electronic nodes to have access to secure areas of international ports – identifying another potential vulnerability. Also, the cargo container, which had on the exterior of its entry door visible additional wires and antennae and which was accompanied by no special documentation indicating that it was an experimental test run, cleared at least five international borders and two shipping ports without once being opened for examination.

Conclusions

To date, the OSC - NE project is the only one of its kind that has provided a study of an existing supply chain and certain technical tests. We understand that additional projects are in the process of being proposed for funding by Transportation Security Administration grant monies that were part of the 2002 budget. These projects are open to the three largest United States load centers: Los Angeles/Long Beach, Seattle/Tacoma and New York/New Jersey. Additional testing of actual supply chains and technical modalities may also be warranted. The data from all of these sources should be used to detect and analyze vulnerabilities not yet identified and to articulate best practices, standards and regulations for the handling of cargo containers that will decrease their vulnerability and ensure that they can move expeditiously through the cargo container transportation system.

The Operation Safe Commerce initiatives are complementary to, and intended to build upon, the CSI (Container Security Initiative) and C-TPAT programs that are now in place. Almost invariably, however, extending the analysis and effectuation of security for cargo containers from point of origin to point of destination will go beyond dealing with the participants who are enrolled in C-TPAT and CSI. Container handling standards and technological solutions must ultimately affect manufacturers, shippers, freight haulers, terminal operations, shipping lines, warehouse operators, and the like as well as government regulatory agencies.

As modeled by the membership of the OSC - NE working group, ongoing examinations of supply chains for vulnerabilities, testing of the technological proposed solutions and ultimately promulgation of proposed standards and regulations will be a function of the cooperative work of multiple agencies. True security in the system will come from a combination of enhanced security practices, technological solutions, appropriately shared intelligence information and the experienced intuition of agents and officers on the line responsible for seeing that the system remains both secure and operational. The multiple agencies that are part of the OCS - NE working group exemplify the kind of coalition that has proven effective to produce test results, exemplifying a multi-agency and public/private partnership. Since the completion of Phase One, the working group has reached out to involve more directly the U.S. Attorney’s offices from Western and Northern New York along the border to Maine and down to Massachusetts and has engaged our law enforcement partners in the Eastern Canadian provinces, as well. Meaningful standards will evolve from the data derived from additional test runs that examine vulnerabilities, on-going efforts that improve inspection and handling security, and technological solutions. To accommodate fully the philosophy and mission of the Operation Safe Commerce initiatives, the solutions will need to evolve from inter-agency cooperation, address intermodal transportation issues, including truck, rail and shipping, and be international in scope.

Madam Chair, that concludes my prepared remarks. I thank you and the other Members of the Committee for the opportunity to appear before you today. I look forward to answering your questions.