DHS nears procurement for Secure Freight data mining pilot
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The U.S. Department of Homeland Security is very close to issuing a solicitation to test the controversial concept of a global information warehouse designed to enhance security screening of international cargo shipments, Secretary Michael Chertoff said Thursday.
Other DHS officials suggested a request for quotation seeking private sector operators for the data mining project could be issued within weeks.
The Global Trade Exchange is the brainchild of Deputy Secretary Michael Jackson, who has proposed an information clearinghouse that would collect non-regulated, raw commercial transaction data exchanged between importers and their overseas suppliers beyond what is submitted to the government through advance manifests, customs entries or a proposed filing better identifying the manufacturer and consignee.
Businesses engaged in international trade are very nervous about sharing confidential information with commercial third parties with whom they do not have contractual relationships.
Chertoff provided few details about the project, part of the department’s Secure Freight Initiative, but did say data sharing with the clearinghouse would initially start on a voluntary basis. Department officials explained there could be multiple data warehouses, not necessarily one big repository.
“I’m interested in hearing about this concept of an information clearinghouse that would collect data on shipments, on purchases, on purchasers, which we could then use to further refine our intelligence-based targeting” of suspicious containers for automated or physical inspection, Chertoff told the Commercial Operations Advisory Committee.
“We use information as a substitute for the brute force of 100 percent physical inspection, because the more information we have on a container, the less likely it is for us to have to waste a physical inspection, and that way, of course, we can reduce cost and delays,” he said.
Despite the comments, details about the program are still hazy and members of the trade community remain deeply skeptical about a program that involves sharing commercially sensitive data.
Some COAC members asked Chertoff to brief the committee on how the Global Freight Exchange would work and allow it to offer recommendations for shaping the system before moving forward with the request for quotation.
“If you’re going out for an RFQ that appears you are going out for bid for something you’ve already designed, but you haven’t talked to the trade who has to populate it,” said Christopher Koch, president of the World Shipping Council and a COAC member, in an interview afterwards.
A pending appropriation bill in Congress includes a $15 million request from DHS for the pilot project.
Chertoff’s presence marked the first time a DHS secretary has attended a quarterly meeting of the industry sounding board and drew an overflow audience, as well as camera crews from NBC News and other media outlets.
The secretary also said he expected to begin implementing the 10+2 proposal mandating importers and carriers file extra shipment data prior to vessel loading by the end of the year. The rule will be phased in over a 12-month period to help importers adjust to the new requirement before penalties and shipment denials go into full effect, officials have said.
U.S. Customs and Border Protection has been rushing since November to produce a regulation for advance data about the origin and destination of international cargo to improve its analytical capability to pre-screen shipments for security inspections overseas or upon arrival at a U.S. port. The security filing was mandated by Congress in last year’s SAFE Port Act.
Chertoff said the department is reviewing the notice of proposed rulemaking prepared by CBP and will soon send it to the Office of Management and Budget (OMB) for clearance.
Chertoff’s schedule is ambitious. CBP officials had hoped to publish the notice by June and a final rule by fall. OMB frequently takes 90 days or more to clear a rule, especially ones that could have significant economic impact. Then the rule must be go through a 30-day comment period and be re-reviewed before being finalized.
Importers have raised confidentiality and cost concerns about the proposal, namely that they may have to pay an extra fee to an intermediary to file the extra data on their behalf, and that the information is shared with a non-regulated party, like a freight forwarder.
The race is on to convince Congress that DHS’s risk-management strategy for supply chain security works to forestall going forward with the recent mandate for scanning 100 percent of ocean containers at foreign ports within five years, and having early and accurate information that can bolster the computerized screening system is key to that effort, Chertoff told the group.
“Those of you who have seen the 100 percent overseas scanning requirements well understand that a simple argument like 100 percent physical inspection can have a lot of traction. And if we’re not prompt and reasonably energetic in coming up with an alternative model for how to do this, we may well find the model being dictated by people who have a very simple view of what ought to be done, which is open everything up,” he said.
One of the technologies used for overseas and domestic scanning are radiation portal monitors, which can survey whole containers for radiation, but are notorious for registering alarms for kitty litter, ceramic tile, bananas and other materials that contain natural amounts of radiation. The machines are normally set up at truck exit gates or other choke points to collect readings as containers move through or out of a marine terminal.
Chertoff’s department has come under recent fire from congressional auditors for trying to push through advanced spectroscopic machines that are unable to distinguish between benign and dangerous radiation material, as promised. The secretary was originally scheduled to sign off on going to full production earlier this summer.
Chertoff, who made it clear he doesn’t put much stock in the Government Accountability Office’s opinion, said he will now gather an independent panel of experts to advise him on whether to certify the new technology.
“If Congress is going to mandate that I certify, I’m going to look to scientists and experts that I trust to give me the background I need to do that certification,” he said.
Chertoff also promised to get trade input before finalizing standards for a container security device designed to detect in-transit tampering. CBP is developing the requirements so that importers who participate in the Customs-Trade Partnership Against Terrorism can use the devices if they choose and further reduce their chances of inspection. He did not indicate whether that input would be sought through public comment, through COAC or other means.
The secretary also reiterated DHS’s interest in developing plans to protect against the threat of small boat attacks in the marine environment. Small boats pose a danger because they can be used to smuggle weapons, including nuclear devices, or terrorists into the country, and can be used as a waterborne improved explosive device to attack a vessel or infrastructure.