CSI’s evolution

U.S. container security program moves forward, relies more on technology and outsourcing.
   
   After lengthy preparations, the Port of Aqaba in Jordan has joined U.S. Customs’ Container Security Initiative, becoming the 58th participating port in the program.
   The move comes as CSI transitions into a hybrid operational model and some politicians continue to push for inspecting 100 percent of all containers headed to U.S. ports.
   Under the program, Customs and Border Protection officers are stationed at overseas ports to help their foreign counterparts flag a container of concern and request that it be examined with non-intrusive x-ray machines and radiation detection devices.
   At its core, CSI extends the border by pushing some inspections over the horizon rather than doing them upon arrival, which could pose a danger in the case of a weapon of mass destruction. On average, about 27,600 import containers arrive at U.S. seaports every day. In 2013, ports handled 18 million TEUs of cargo, according to research firm Datamyne. About 5 percent of all containers are inspected with drive-by imaging equipment and the vast majority of that activity occurs at the port of entry. Selection for exams is mostly triggered by data mining shipping information and intelligence to identify suspicious shipments within a box, although some random selection of containers also is built into the system.
   A fraction-of-1 percent of containers are inspected overseas through CSI. In fiscal year 2013, according to the Department of Homeland Security’s fiscal year 2015 budget request to Congress, CSI teams reviewed more than 11.2 million bills of lading which were filed with carrier manifests prior to vessel loading and conducted 104,000 exams of high-risk cargo in cooperation with host country counterparts. The actual number of containers scanned could be more or less because bills of lading can contain multiple shipments in one container or a single shipment in multiple containers. About 94 percent of examination requests are granted by foreign governments, meaning that in 6 percent of cases further scrutiny is denied, according to CBP’s website.
   CBP first began negotiations with the government of Jordan about joining CSI in 2009. Since the signing of a declaration of principles in mid-2011 CBP has worked with Jordan Customs on logistics for installing necessary equipment, established information-sharing and response protocols, and otherwise coordinated security activity, CSI Director Dan Stajcar told American Shipper.
   In fiscal year 2013, CBP analyzed 6,500 bills of lading from Jordan and expects that number to increase due to expansion of the port, according to his office.
   The Port of Aqaba arrangement is similar to ones CBP has in Karachi, Pakistan; Israel; Melbourne, Australia; and Auckland, New Zealand. 
   Pakistan is considered such a high-threat area for potential terrorist tampering of containers that Port Qasim is the only port in the world where every U.S.-bound container is inspected prior to loading. Last year, more than 44,700 containers were scanned there, according to DHS figures. CBP calls the program there the Secure Freight Initiative (SFI), which actually began as a pilot program at six ports to test the concept of scanning all inbound containers prior to vessel loading. The rest of the pilot has been dismantled after proving too difficult to replicate. The program is made possible by low volumes from Qasim to the United States, limiting logistical challenges, and strong support from a Pakistani government interested in maintaining trade with the largest consumer market in the world. The region is considered so dangerous for U.S. personnel that the process is done remotely. The agency has an arrangement with Pakistan Customs for all ocean boxes to get routed through x-ray imaging machines and radiation portal monitors. The images and radiation reads are uploaded in real-time to a secure website for CBP analysts to look at. Pakistani authorities will open and inspect any containers that appear to have contraband and CBP can supervise the process by video.
   Aqaba will utilize near real-time remote imaging of the container examination process. If the National Targeting Center (NTC) requests an exam based on its targeting, the images and radiation data will be transmitted back to determine if there is any need for a physical exam. CBP officers can watch a live video feed to monitor the inspection process, including any referral for a physical inspection. Stajcar said CBP has foreign-service nationals—Jordanian citizens vetted and hired by the embassy to work on the agency’s behalf— instead of CBP officers in Aqaba. The contractors run the x-ray equipment along with Jordanian Customs.
   Customs has foreign-service nationals in Pakistan too that act as liaisons with Pakistan Customs, help run the detection equipment and make sure trucks efficiently circulate through the security checkpoint, he said.
   Ports in New Zealand and Australia, as well as Haifa and Ashdod in Israel, have never been staffed by CBP officers.
   CSI, which operates on a $60 million budget, has matured into a more sophisticated cargo security program since its inception a dozen years ago, aided by better technology, increased levels of cooperation with other governments and an established overseas infrastructure.
  In recent years, CBP has been able to rebalance the program by reducing the number of overseas personnel. Initially, officers were placed on site to help with targeting and build relationships, but much analysis of import security filings and manifests is now centralized at the NTC. The NTC can also review scan images and resolve radiation alarms at ports where CBP does not have a presence. 
   Since 2010, CBP has scaled back from about 165 overseas personnel to 86.
   Despite the cost reductions from operating in a remote environment, there is still great value to having people stationed at overseas ports where they can share information and best practices with foreign customs administrations, as well as provide training on risk-based targeting and anomaly detection with large-scale non-intrusive inspection technology, which further secures the global supply chain, Stajcar said.
   CBP eventually hopes to station officers in Aqaba, but opted not to because of State Department concerns about security in the Middle East, he said.
   CSI capacity-building efforts have allowed foreign customs administrations to develop risk-based targeting systems and provide training and guidance on anomaly identification using large-scale NII technology. 
   CSI actually saves Customs money because the cost of domestically performing more than 100,000 additional exams would be about $234 million, with much of the money going to pay additional personnel, according to the DHS budget document. U.S. cargo exams can cost as much as $2,500 to $3,000 per exam compared to $1,000 in some Asian ports—and the charges sometimes aren’t even passed on to the shipper. It’s often cheaper to conduct the exam in a foreign port even with the extra costs incurred from having officers stationed at foreign ports.
   The DHS budget request said the agency will look to expand CSI targeting beyond the traditional weapons of mass destruction/effect to include trade violations and other trans-national criminal activity, which will depend on host country willingness to change the terms of their agreement.
   CSI has already facilitated the interdiction of narcotics, precursor chemicals, dual-use technology, stolen vehicles, weapons and ammunition, and counterfeit products, according to DHS testimony to the Senate on June 4. 
   Last September, the Government Accountability Office issued a report stating CBP had not re-evaluated its selection of CSI ports since 2005. It recommended the agency periodically assess the potential threat from foreign ports shipping containers to the United States and adjust CSI locations as necessary. DHS has agreed to develop a process for conducting such risk assessments by December. 

100% Isn’t Dead. CSI is one of the layers of supply chain security created by Customs as part of its risk-based approach to combatting terrorist smuggling. Those layers are intended as a smarter alternative to inspecting every container with technology.
   DHS Secretary Jeh Johnson in May formally notified Congress that his department will exercise its right to extend for another two years the deadline to scan all inbound ocean containers for nuclear weapons or other terror-related contraband at foreign ports, and business groups are now rising up to kill the mandate altogether.
   The decision coincides with efforts by some lawmakers to revive a law that was left for dead because most lawmakers, realizing their vote was an overreaction, haven’t pressed DHS to meet the timetable for x-raying the contents of U.S.-bound containers.
   On June 2, 70 trade associations from a cross-section of industries wrote Johnson and key congressional leaders requesting the controversial law be scrapped because there is no realistic way to implement it and it distracts from effective risk-based security programs. Trade and security experts, as well as foreign governments, have strongly argued the law would cause a logistics nightmare and raise the cost of international shipping to unacceptable levels. Many ports are not configured to reroute traffic through a secure area, especially for transshipment cargo. Another concern is that other countries could retaliate by imposing similar requirements on exports from U.S. ports.
   “The statutory provision calling for 100-percent container scanning has always been, and remains, impractical and does not actually improve security. If implemented, this provision would have a significantly negative impact on global commerce and cause significant conflict with the governments of our foreign trading partners, many of which have stated their opposition to the requirement previously,” the letter, drafted by the U.S. Chamber of Commerce, World Shipping Council and National Retail Federation, stated.
   The 9/11 Recommendations Act in 2007, which required x-ray imaging and radiation sensing of all sea boxes, included authority for the homeland security secretary to waive the deadline under certain conditions, such as whether necessary technology is commercially available.
   The industry coalition said it agreed with Johnson’s decision to postpone implementing the law, but recommended he pursue its repeal.
   “We fully support your waiver; however, instead of going through this exercise every two years, we urge you and the administration to recommend to the Congress that the statutory 100-percent container scanning requirement be repealed. That would be the most appropriate way to address this flawed provision and allow the department, industry and our trading partners to focus on real solutions to address any security gaps that remain in the global supply chain,” the letter said.
   DHS, going back to the Bush administration, strongly resisted the scan-all law when it was introduced and worked hard after the fact to educate lawmakers about the logistical, financial, jurisdictional, diplomatic, economic and technological challenges involved in implementing such a program at hundreds of overseas ports where the United States lacks legal power. SFI reinforced the department’s position on the implementation hurdles. DHS estimated it would cost $16.8 billion just to deploy high-tech inspection equipment and associated technology at foreign ports.
   Many lawmakers in recent years have remained quiet about following through on their votes and instead publicly supported continuation of the department’s risk-based, layered approach for screening advance data and intelligence to selectively target shipments for inspection. That is the approach favored by transportation service providers and importers. Congress acknowledged in a report accompanying the DHS fiscal year 2010 appropriations law that “it has become increasingly clear that, at least for now, a 100-percent scanning goal is not feasible, and even if it were, would come at an unacceptably high cost monetarily and in the displacement of other efforts.”
   Current supply chain security programs include the Importer Security Filing (advance cargo and origin data), the advance manifest rule for carriers, CSI, the Customs-Trade Partnership Against Terrorism (trusted shipper program), and drive-through radiation portal monitors for all containers upon exiting a U.S. port.
   But congressional ambivalence towards the inspection law is not universal and Johnson has come under some pressure to figure out how to make the measure work.
   The DHS fiscal year 2014 appropriation includes language instructing the department to re-evaluate various options for 100-percent scanning and during Johnson’s confirmation hearing in the Senate late last year he was asked about the inspection policy.
   In late May, Johnson testified before a House committee where Rep. Jerald Nadler, D-N.Y., asked what the department is doing to advance container scanning and whether he would commit to implement the law. Nadler said Congress gave DHS five years to comply and allowed for extensions because it understood the challenges involved.
   Johnson said the law “is a very large unfunded mandate,” but that he is exploring a plan to address Congress’ intent. He did not promise to scan all import boxes, saying the plan would include “raising the percentage of cargo that is scanned, to move in the right direction on this, and demonstrate we’re making our best efforts at trying to comply.”
   Johnson also said DHS planned to engage other countries to discuss the possibility of expanding CSI to more ports.
   The industry letter raised several problems with the comprehensive inspection requirement. The law, for example, does not define whether images of scanned containers must just be taken and stored or whether personnel resources would need to be devoted to analyzing each image before loading on a vessel. The industry coalition questioned whether CBP has the capacity to process the data or whether the private sector is supposed to carry out the function.

This article was published in the July 2014 issue of American Shipper.