DHS Needs to Do More to Spur Supply Chain Resiliency

By Matthew Harwood

Maritime security stakeholders and homeland security experts briefed Congress this week on public and private efforts to make the nation's supply chain more resilient to man-made or natural catastrophes, such as Hurricane Katrina.

The hearing was the second in a series on the country's ability to recover from a catastrophic event. Wednesday's hearing was before the House’s Subcommittee on Border, Maritime, and Global Counterterrorism.

Robert W. Kelly, a senior advisor at the Reform Institute, criticized the government for prioritizing prevention over resiliency.

"We can no more prevent a determined terrorist from achieving an isolated victory than we can prevent a hurricane or earthquake," he said. "What we can control, however, is how we prepare for catastrophic events and how we react when the sad eventuality occurs."

DHS must become the "nation's cheerleader," reminding businesses that they need to build resilience into their supply chains, especially when they depend on "just-in-time" deliveries, Kelly argued.

He said the 2002 West Coast dock strike illustrated the need for robust business continuity plans. In just ten days, the U.S. economy lost $15 billion, while some firms took months to recover from the economic damage the strike inflicted on them.

"The strike was a planned, anticipated, and peaceful event," Kelly said. "One can only imagine the economic consequences of an unexpected incident that causes all U.S. ports to shut down for a period of time."

Government representatives spoke about how their agencies have adopted new emergency response procedures such as the National Incident Management System and other initiatives to spur interagency coordination as well as efforts to communicate and coordinate with private stakeholders.

Learning from the Hurricane Katrina disaster, the Coast Guard teamed up with Customs and Border Protection, both part of DHS, to create joint protocols to ensure speedy recovery of the maritime transportation system to limit trade dislocations.

The protocols established a communications link with industry stakeholders, according to Rear Admiral James Watson of the U.S. Coast Guard, to help reduce any economic losses.

"Following an event causing national impact," he said, "the Coast Guard and [CBP] will coordinate closely with these stakeholder groups to communicate [maritime transportation system] status and critical restrictions as well as ascertain industry's intentions with regard to potential cargo diversions."

CBP has also developed and tested the Unified Business Resumption Messaging, a Web-based mechanism to communicate with the trade industry.

"This message capability," said the agency's Todd Owen, "is a direct result of exercises with the trade community to understand the information needed to make informed business decisions in a post-event environment."

Paul J. Zimmerman, director of operations for the Board of Commissioners of the Port of New Orleans, applauded  the initiatives based on lessons learned from Hurricane Katrina. However, he called on the federal government to drop its 25 percent matching requirement on 2006 and 2007 Port Security Grants for New Orleans.

"This required match, along with corresponding operational and maintenance costs," he said, "present significant financial hardships and could result in projects not being undertaken."

Besides battling nature's wrath, he said, the ports of the lower Mississippi River—which account for almost 25 percent of U.S. waterborne commerce—remain good targets for a U.S.S. Cole-type terrorist attack. Despite this, Zimmerman said, the Coast Guard in the Port of New Orleans is "severely hamstrung" and does not "have enough assets on the water to provide an appropriate level of deterrence, interdiction, surveillance, and presence on the Mississippi River."

The Reform Institute’s Kelly advised DHS to embrace resilience as its mission, because it could provide the agency "with the overarching vision that it has lacked since its inception.”


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