Threats to Port Security Call for Integrated Public/Private Action

WASHINGTON, DC, December 4, 2002 — In a strategic simulation of a terror attack designed to thoroughly assess America's vulnerability through its ports, a group of business and government leaders found that such an attack could potentially cripple global trade and have a devastating impact on the nation's economy. The group focused on ways to improve detection before a weapon gets to a U.S. port, as well as help businesses to build resiliency into their operations.

The two-day Port Security Wargame, sponsored by Booz Allen Hamilton and The Conference Board, took place October 2-3, 2002, in Washington, DC, with 85 leaders from a range of government and industry organizations, who have a critical stake in port security.

In the wargame scenario, a radioactive dirty bomb slipped through port security and was discovered when it fell off a truck at the Port of Los Angeles. A second, identical dirty bomb was unpacked from a shipping container in Minneapolis, having arrived by truck via Canada. The same day, three men, one on the FBI watch list for suspected terrorists, were arrested by Georgia Port Authority Police Force on suspicion of attempted cargo theft.

Wargame participants — from a range of government agencies, port authorities, consumer goods manufacturers, insurers, technology providers, and carriers — grappled with ways to balance security while maintaining an open and efficient flow of goods through U.S. supply chains. Key lessons learned included the following:

• Public and private partnerships are essential. Local concerns quickly bubble up to become national and international crises. A decision to close a port completely quickly creates issues for businesses and, ultimately, consumers. Therefore, cooperation between government and industry organizations, at both the local and national level, is critical. "The government needs to involve industry in designing their 'port security solution' so that it does not destroy businesses," noted one wargame participant.



• Port security starts at the point of origin. A risk assessment of an individual container needs to be made before it gets to U.S. shores. The options are limited once a container has landed. Port security must be expanded to involve every link in the chain of delivering goods to market, from origin (manufacturing) through the entire transportation system: sea, land, rail, and air.



• Security must be embedded, not "bolted on." Every sector with a stake in port security — government agencies, port authorities, manufacturers, shippers, trade associations — needs to rethink its respective activities behind the act of moving international goods into the U.S., and build in security to everyday processes. For businesses, this also means rethinking their supply and logistics chains, looking at changing capacity, increasing routing alternatives, and assessing their mix of domestic and offshore production, so that they have options in the event of a disruption.



• No single solution will secure the system. Solutions that address only one facet of port operations, such as increasing the number of containers inspected, will fall short. Securing global logistics is a complex, system-wide endeavor.



• Federal leadership needs to be unified. "We need to overcome organizational inertia and conflicting agendas," said one wargame participant. A single government focal point must be created to effectively deter and detect terrorist events, and to oversee response, communications and ensure economic recovery.
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The actions of participants had dramatic consequences:

• Decisions made by the teams led to shutting down every port in the United States for eight days;



• The backlog of container deliveries caused by the closure would require 92 days to be resolved;



• There would be a forecasted resulting loss of $58 billion in revenue to the U.S. economy.

"The game revealed that port security is everyone's concern, and everyone's responsibility," said Booz Allen Hamilton Vice President Mark Gerencser. "The key to securing our ports is to maintain security throughout the whole supply chain, from the factory to the end user. The ports serve as a checkpoint, but they cannot provide a foolproof security screen. And we have seen that disruptions caused by security breaches can create enormous economic consequences."

"For example, we discovered that it is easy to close a port in the event of a crisis, but it is extraordinarily difficult to deal with the consequences of closing," Gerencser noted. "Even when working 24/7, port personnel are not prepared to deal with the backlog, leading to ripple effects throughout the economic system. And businesses need to think through 'just-in-case' scenarios and plan accordingly, in terms of managing their supply chains."

About The Wargame

Seven stakeholder teams — representing carriers, border operations, federal policymakers, supply chain (commercial businesses), Port of Los Angeles, Port of Savannah, and a control group — responded to the crisis, making decisions and managing the consequences. Each team consisted of organizations that came from that sector, although there was some mixing of composition (e.g., a government official participating in the supply chain group) in order to foster greater understanding of each stakeholder's perspective. The wargame was in "free play" style, meaning that there were no pre-determined outcomes to the actions of the participants.

Among business participants were AIG, Chiquita, Maersk, Motorola, P&O Nedlloyd, and Sara Lee Branded Apparel. Government participants included senior policymakers from the Department of Defense, Department of Transportation, Transportation Security Administration, U.S. Customs Service, Office of Homeland Security, and the Port Authorities of New York & New Jersey and Georgia.

"Wargaming is a powerful process for thinking about the future, which challenges conventional wisdom and allows participants to break with known truths and past assumptions," said Booz Allen's Gerencser. "The goal of the Port Security Wargame was to proactively mobilize government and businesses representing every link in the process of moving cargo through U.S. ports to explore innovative ideas and practical solutions to improve our nation's preparedness and response to the unthinkable," he added.

Booz Allen is a leader in developing wargames for both public and private sector clients. The firm's brand of wargaming is unique in the business world, matched only by Department of Defense wargaming in its power and scope. Booz Allen wargames are designed to capture the impact of qualitative and quantitative forces on complex problems in changing industries.

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