Seeking Safe Harbor

f Bryan Smith doesn't look like a soldier, it's because he's serving in an unconventional war. The front line that the journeyman Customs inspector serves on is the Howland Hook Marine Terminal on the northern shore of Staten Island, New York. While it doesn't look much like a battlefield, if Smith turns his gaze north across Newark Bay on a clear day, he can see the Manhattan skyline and picture where the World Trade Center's twin towers stood before terrorists armed with box-cutters and conviction brought them down. But on a rain-soaked Friday morning in February, Smith isn't thinking about the Manhattan skyline. He's thinking about bananas.

Howland Hook is the Grand Central Station of banana commerce on the East Coast. Smith's mission is to make sure the thousands of loose bananas newly arrived on a ship from Ecuador aren't harboring any contraband-drugs, of course, but also chemical weapons, explosives, nuclear materials or anything else a terrorist might want to import. While longshoremen transfer the bananas from the ship to a warehouse on the pier, dozens of tractor trailers wait nearby to pick up the bananas and distribute them to regional grocers.

Smith has only a few hours to inspect the ship and its contents, check the manifest for discrepancies and determine whether everything is in order. "Obviously we can't search the whole ship," he says, glancing towards an adjacent pier, where a container ship from Turkey has just docked and is awaiting inspection. Time is money in the business of global commerce and nobody wants to spend any more of it than necessary at Howland Hook, a sprawling, 187-acre tract in the shadow of the Goethals Bridge, connecting Staten Island to Interstate 95 and the New Jersey Turnpike. The ship's captain is eager to finish unloading the bananas and move on with the rest of his cargo to Antwerp, Belgium. The truckers are eager to get the bananas to the grocers who want to get the perishable fruit on the shelves as soon as possible. And American consumers will certainly expect to find bananas in stores when they do their grocery shopping. Only Smith or one of his colleagues would want to slow the bananas down-and only if they had reason to suspect there might be a problem with the shipment.

The tension between facilitating trade, the lifeblood of a strong economy, and inspecting cargo is not new. But as trade has exploded in recent years, fueling unprecedented growth in the American economy, so too has the ability and motivation of terrorists to inflict damage on the United States, both economic and physical. At the same time, the ability of federal agencies like Customs to counter the growing threat has been severely limited. Stagnant budgets and staffing levels, antiquated technology and the fact that different agencies in the trade arena are organized for different priorities have created dangerous vulnerabilities.

To Coast Guard Cmdr. Stephen Flynn, this is the "soft underbelly of globalization." Flynn, who will retire from the Coast Guard this spring, is a senior fellow at the Council on Foreign Relations, where he has been directing a multi-year project on border security. For terrorists, he says, commercial shipping offers lucrative targets. "The United States has no credible way to reliably detect and intercept illegal and dangerous people and goods that infiltrate our maritime and surface transportation networks," he says. "The tools and protocols for conducting inspections, collecting and mining data, and sharing information have simply not kept pace with the size, speed and complexity of the international networks that transport people and goods."

Monumental Challenge

Merchandise can be legally shipped to or from more than 300 seaports in the United States. But until Congress passed the Port and Maritime Security Act in late December, there were no federal security standards for seaports. Because responsibility for ports falls to the states, their management varies widely, and often is shared by federal, state and local authorities and private companies, which are generally responsible for terminal operations.

Security at ports also varies considerably. The federal government's Interagency Commission on Crime and Security in U.S. Seaports reported in August 2000 that some ports did not even have perimeter fences around cargo-loading areas or methods to control access to loading docks and terminals. The Port and Maritime Security Act, prompted in large part by the commission's findings, authorizes $1 billion over six years for security improvements at ports and $3.3 billion in loan guarantees for local port authorities to finance upgrades. It also requires all ports to develop comprehensive security plans.

The roles of federal agencies further complicate the management of ports: Customs, which is responsible for enforcing the laws that govern the entry and exit of goods and people, and the Coast Guard, which is responsible for securing the harbors, are the biggest players. But many other agencies, including the departments of Agriculture and Commerce, the Immigration and Naturalization Service, the Food and Drug Administration, the Fish and Wildlife Service, the Maritime Administration and the Federal Maritime Commission, also are involved.

Until last September, the top priority of Customs inspectors was finding drugs. There were plenty to find. They were hidden in the gas tanks of automobile engines, embedded in pallet frames, placed in shipping container doors, woven into the clothing of deck hands, and concealed in cans of spinach and boxes of frozen fruit pulp. But after Sept. 11, it was hard not to miss the potential for smuggling items far more dangerous than drugs. In October, Italian officials arrested Egyptian-born Canadian citizen Amir Farid Rizk after he was discovered hiding in a container aboard a cargo ship in Gioia Tauro, a port in southern Italy. Rizk, who was reportedly carrying a satellite phone, laptop computer and airport maps, apparently was already in the container, which was outfitted with a bed and toilet, when it was loaded at Port Said, Egypt. While Rizk's intentions weren't clear, his discovery unnerved U.S. officials and raised alarms over port security.

Since September, Coast Guard and Customs employees have put in enormous amounts of overtime to boost security at ports. Coast Guard personnel are boarding ships farther from shore, inspecting their manifests and escorting them into harbors. Customs purchased more container X-ray systems for the busiest ports, and equipped nearly half its inspectors with radiation detectors that will alert them to the presence of nuclear materials.

But the sheer volume of trade makes it impossible to physically inspect every shipment. Just 7,200 Customs inspectors nationwide have the monumental job of screening nearly 11 million trucks, 5 million cargo containers, 2 million rail cars, 800,000 commercial aircraft and hundreds of thousands of private aircraft, vessels, vehicles and passengers that enter the country every year through airports, seaports and land border crossing stations. And the volume of trade is expected to double by 2020. The inspectors also are responsible for finding illegal exports, such as stolen automobiles, weapons, dual-use technology that could be used to develop missiles or nuclear warheads, or large amounts of cash, which are likely to be proceeds from drug trafficking.

At the Port of New York and New Jersey, the largest port on the East Coast, the picture is overwhelming. The port, which operates around the clock, handled almost 19 million tons of general cargo in 2000, according to trade statistics compiled by the Port Authority of New York and New Jersey, the port's governing body. There are 350 Customs inspectors assigned to the port, which covers six shipping terminals, including Howland Hook; a cruise ship terminal; five airports; a rail terminus in Carney, N.J., that serves as a hub for rail service throughout the country; and an international mail facility in Secaucus, N.J. Just 64 inspectors assigned to the contraband enforcement team are responsible for inspecting incoming commercial cargo. (The other inspectors are busy screening passengers at airports, reviewing outbound cargo shipments, and enforcing the more than 600 laws and 500 trade agreements that govern commerce between other countries and the United States.)

"Could I use more people? Most certainly," says John Ruane, deputy chief of the contraband enforcement team. But his overworked team may soon be doing even more work. The team has relied for years on help from National Guard troops, whose support was funded under a federal counter-narcotics program. In early February, however, funding for the program was in jeopardy, and Customs officials were uncertain about whether they would continue to receive the Guard's support.

Ruane could also use more and better technology for detecting illegal contraband in cargo. The team has two stationary X-ray machines capable of examining an entire 40-foot shipping container in a matter of seconds, and a third mobile X-ray machine on loan from the Port of Charleston. After the attacks last September, they were able to borrow an additional mobile X-ray machine from the National Guard, but that has since been moved to the Port of Buffalo. Other tools of the trade are more conventional. In the back of a panel truck Customs acquired after a drug seizure, senior inspector Raymond Pardo shows off some of them: a fiber-optic scope, a hydraulic jack, a wet and dry vacuum, torches, a magnesium arc cutter, chainsaws, drills, an electronic stethoscope, and the assorted tools carried by any well-equipped handyman.

But the most important tool any inspector can have is a sharp eye, Pardo says. "You have to look at the fine details. The smugglers never get it quite right." For example, handprints at the top of container door that are too high up to be the result of normal activity are probably a good indication that somebody has tampered with the door.

In its fiscal 2003 budget, the White House requested funding for another 800 Customs inspectors nationwide and more high-tech tools for inspectors, but it is not clear how many, if any, of these resources will end up at seaports like New York and New Jersey.

Targeting Inspections

Various studies have shown that Customs inspectors are only able to physically examine about 2 percent of shipping containers. Customs officials say that figure is misleading, however, since they are not just randomly inspecting goods. Both shippers and importers must give Customs advance notice of shipment information. The shippers supply manifests, usually electronically, listing their cargo and where it was taken aboard. Importers or customs brokers supply detailed information about the goods they're expecting. That information is then reconciled, and matched against previous shipping patterns, so inspectors can spot potential problems in advance.

Out of 400,000 importers in the United States, about 7,400 control, by value, 82 percent of imported merchandise. "We've been doing compliance examinations for more than a decade," says Kathleen Haage-Gaynor, area director for Customs' Newark/New York office. "We know those companies' trade patterns. We know who they deal with, and we know when there's an anomaly. We want to focus on this other 18 percent that we don't know a lot about.

"The real question you have to ask the inspectors every day is: 'Have you examined the containers that you've identified as having the highest risk for bringing in contraband?' Whether that's 2 percent, 4 percent or 10 percent is not the issue. The issue is whether or not we've examined the highest-risk containers. If the answer is yes, then we've done our mission," she says. "The danger in this 2 percent mantra is that someone then says OK, you've got to examine 10 percent of the cargo. Then you may wind up doing exams just for the sake of exams to reach the 10 percent number."

Since 1984, Customs has used what's called the Automated Commercial System to process import entry and manifest data, calculate duties, find discrepancies, and identify shipments that federal agencies need to examine. Violation histories are compiled and tracked, and data about shippers, importers, consignees and commodities are maintained to identify the people and goods most likely to incur violations. In addition, Customs inspectors do random sampling so low-risk shipments are periodically examined to ensure compliance. But the 18-year-old system wasn't designed to handle the amount of data resulting from the explosion in commerce in recent years and its reliability has been widely criticized. When the network crashes, as it does periodically, importers and inspectors must resort to fax machines and phone calls. In the early 1990, Customs began planning for ACS' replacement, but that system, known as the Automated Commercial Environment, has been plagued by schedule and funding problems since its inception.

The seven inspectors who analyze the ACS data to target shipments for inspection at the terminals in Newark and New York develop regional expertise, says supervisor Robert G. Campanaro. They notice when an importer starts importing something new, and they look into it. They also know when shipments don't make sense, like fresh apples arriving from Chile in October-the apple harvest in Chile coincides with spring in the United States.

The cargo inspectors on the pier have a similar kind of expertise. They've seen so many containers of tile from Brazil they're pretty good at recognizing one that's been tampered with. If a 40,000-pound container of coffee arrives, they'll check it out-a typical shipment weighs 60,000 pounds. And they know from experience that the density of a plantain appears exactly the same as that of cocaine molded and painted to look like a plantain when both are put through an X-ray.

But the targeting system, even when it's working well, has loopholes. For instance, not every ship provides manifest data electronically before entering a port. Likewise, not all manifest data is very useful, even when it arrives in advance. When shipments are not large enough to fill an entire shipping container, freight consolidators will combine several shipments to fill one container, in which case the contents are typically described as "assorted."

In addition, half the cargo that is unloaded in U.S. ports, bound for U.S. markets, is transferred to another port before it is declared an official import. Importers are not obligated to provide detailed information about the shipment until after it reaches its destination port. For example, containers unloaded in Tacoma, Wash., may be trucked to Cincinnati before they are officially entered as imports. While those containers are traveling across the country, Customs may have little idea what's in them.

It's a situation that alarms Flynn. He describes a plausible scenario in which terrorists might purchase a ceramics company in Pakistan that has a track record of doing legitimate business with an American importer in New York. In one of the shipments, the terrorists load a chemical weapon, rigging the container so that it detonates when it is opened, or perhaps fitting the container with a global positioning system transponder so it can be detonated remotely. The container is shipped through Singapore to Long Beach, Calif., before being sent on to Newark by rail. Because the importer has a history of trade compliance, the container is unlikely to be targeted for inspection, either in Los Angeles or Newark. At every point in its journey across the country, it is a potential weapon.

Securing Containers

There are more than 500,000 companies worldwide in the business of packing and loading shipping containers, Flynn says. There are no standards for how the containers are loaded or who loads them, leaving the door open for terrorists to infiltrate the supply chain. Only by going to ports of origin, working with international trade organizations and foreign seaports, can the country hope to improve security.

Even if goods could be secured at ports of origin, though, the vulnerability of cargo to tampering in transit is enormous. The U.N.-chartered International Maritime Organization catalogued 382 reported incidents of piracy and armed robbery against ships in 2001. On Dec. 6, armed robbers boarded the Mercosul Uruguay, a container ship sailing under the flag of the Netherlands, off the coast of Ecuador. They broke into six containers before they were discovered by the crew and escaped. The day before, in the South China Sea, pirates attacked the tanker Yaulie Island and stole its entire load of diesel oil. The captain and crew were never found. The International Maritime Organization, alarmed by an increase in piracy in recent years, began tracking such reports in July 1995. To date, they have reported more than 2,500 incidents.

In January, citing some of Flynn's recommendations, Customs Commissioner Robert Bonner proposed a new security initiative aimed at securing containers. Under the initiative, the United States would work with the top 10 international ports to set standards for pre-screening containers at their port of origin. Shippers who agree to participate would get expedited processing when their goods reach U.S. ports. By sharing technology and intelligence, security could be enhanced not just for the United States, but for other nations as well.

Bonner is also promoting the development of electronic, tamper-resistant seals equipped with GPS transponders that would alert Customs or the importer if anyone breaks into a container.

Improving security through better technology is only part of the challenge, says Raymond Mintz, who served as director of applied technology at Customs before retiring in 1999. "If things are quiet, how long will the resources and enthusiasm remain? How long are other countries going to put resources into this? I'm very enthusiastic about technology and what it can do for security here. But there are other factors. If the next act of terrorism is not at a seaport or doesn't involve a container, will the momentum be sustainable?"