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Terminal Operators and Their Role in U.S. Port and Maritime Security

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Publication Date: April 2006

Publisher(s): Library of Congress. Congressional Research Service

Series: RL33383

Topic: Transportation (Maritime industry and transport)

Abstract:

The failed attempt by Dubai Ports World (DP World) to operate marine terminals at some U.S. ports raises the issue of whether foreign marine terminal operators pose a threat to U.S. homeland security. Notwithstanding the proposed sale of U.S. terminal operations by DP World to a U.S. entity, the underlying issue remains because many U.S. marine terminals are operated by foreign-based companies and a similar transaction could occur in the future, given the global nature of the shipping industry.

Evaluating the potential security ramifications of foreign-based terminal operators requires first understanding how ports work and who is in charge of their security. Most major U.S. ports are publicly owned by a "port authority," which is a public organization associated with a city, county, regional, or state government. A port typically contains many terminals that are each designed to handle different types of cargo. Some port authorities operate all or some of their marine terminals, but most ports lease their facilities to several different terminal operating companies. All of the cargo handling that takes place on a marine terminal is performed by members of a longshoremen's union.

The Coast Guard is in charge of the security of port facilities and vessels, and Customs and Border Protection (CBP) is in charge of the security of cargo. Coast Guard regulations and CBP security guidelines require terminal operators to provide basic security infrastructure, such as fences, gates, and surveillance cameras, and follow certain security practices when handling cargo. The Transportation Security Administration (TSA) is developing a credentialing process for screening port workers. However, port security involves much more than the measures put in place within the immediate vicinity of a U.S. port complex. Not finding a terrorist-placed weapon until after it reaches a U.S. port could be too late to prevent a potentially catastrophic event. Thus, securing the cargo and ships in transit to U.S. ports is critical and consequently the bulk of federal security activity takes place before cargo is unloaded at U.S. ports. Key layers of security are CBP's scrutiny of U.S.-bound cargo at the overseas port of loading and the Coast Guard's scrutiny of ships before they enter U.S. harbors.

The necessity of pushing the border out to counter the terrorist threat requires the cooperation of shippers, carriers, ports, and border agencies in the country of origin to take security precautions with U.S.-bound cargo. Global terminal operators like DP World may handle U.S. cargo at the overseas loading port, even if they do not handle it at a U.S. port. Thus, a key issue for policymakers is deciding under what conditions the United States should trust foreign cargo-handling entities and whether they should be treated as partners in securing U.S. supply lines. The DP World controversy refueled debate about whether the nation is doing enough, with sufficient urgency, to secure U.S. ports. In its oversight role, Congress is assessing the effectiveness of Coast Guard and CBP maritime security initiatives and faces pressing questions about the overall security of ports and maritime commerce. This report will not be updated.