403-2

1. Transportation & Cargo Security
Threats and Solution

3. KEEPING THE GLOBAL SUPPLY CHAIN
MOVING

4. INTRODUCTION
The trucking, mass transit, and oil pipeline industries are facing daunting challenges
regarding the implementation of appropriate security measures. They have unique
needs and unique issues. Trucking is the back-bone of the nation’s short and long haul
delivery mechanism; mass transit operators carry millions of passengers’ everyday and
the oil operators have thousands of miles of pipeline to protect.

5. IMPORTANCE OF THE TRUCKING COMPONENT
Trucking represents a huge portion of U.S. freight revenue. The
industry is composed of private carriers, regulated carriers,
exempt services, and independent truckers. They have relatively
low fixed costs but the cost of fuel has skyrocketed and the profit
margin for the industry is very small, leaving little room for costly
security expenditure.
History and Development

6. FACILITIES/INFRASTRUCTURE
Local governments maintain the vast numbers of roads in
the system. State highways, including the interstate
system, fall within the purview of State authority. The
federal government actually administers only a small
percentage of the roads (federal parks and reservations).
The federal government does however place controls on
the system via the distribution of funds. Bridges and
tunnels present very distinct security problems.

7. The industry is regulated by the Motor Carrier
Act , which in the early 1980s attempted to
open up the industry to more firms. The rising
volume of freight moved by motor carriers
and its linking function with rail, sea, and air
make it important to both the economy and
the national defense.
REGULATION/DEREGULATION

8. EMERGENCY FUNDING
Heightened rules regarding carrying hazardous
materials have been initiated but any additional
security measures have progressed very slowly.
Efforts to complete background checks on drivers
have also moved at a leisurely pace due to cost
considerations.

9. In May 2006, the American Trucking Associations unveiled a new
Security Council. The group’s security focus had previously been
housed within its Safety & Loss Prevention Management Council but,
given the growing and intense focus on security, ATA determined it
was appropriate to establish a separate entity dedicated solely to
trucking security issues and operations. Congress has set in motion an
overhaul of the nation's truck driver licensing system and new
restrictions on non-U.S. truckers. Legislation ordering the U.S. DOT to
verify the citizenship status of all 11 million commercial driver's
license holders was approved late September 2006
Update:

10. TRUCKS
BRING IT!

11. IMPORTANCE OF THE MASS TRANSIT COMPONENT
Mass transit generally refers to municipal or regional public shared transportation,
such as buses, streetcars, ferries, and subways open to the public on a no-reserved
basis. Mass transit vehicles carry a far higher passenger load per unit of weight and
volume than do private vehicles. They also offer fuel savings, not only because of the
relative reduction in weight transported, but also because they are large enough to
carry more efficient engines. By the late 1890s, mass transit had become
indispensable to the life of large American cities but efforts to upgrade mass transit
systems have experienced mixed results.
History and Development

12. FACILITIES/INFRASTRUCTURE
The congestion and pollution caused by automobiles and trucks
created a renewed interest in mass transit in the 1970s. Privately
owned transit systems do exist but publicly owned systems
possess over 90% of the transit vehicles. By the end of 1979,
there were 463 publicly owned transit systems with operating
revenues of over $2 billion.

13. REGULATION/DEREGULATION
The Federal-Aid Highway Act in 1973 increased
levels of support to mass transit and for the first
time, Federal Highway Trust Fund money was usable
toward mass transit construction and maintenance.
The Act actually authorized $19.9 billion over a
three-year period and later the National Mass
Transportation Assistance Act of 1974 directly
authorized the use of federal subsidies for mass
transit systems.

14. The overall costs of adequately protecting a
mass transit system are astronomical and the
public will have to support Congress in efforts
to finance the needed enhancements. The
government plans on re-examining the
Transportation Equity Act for the 21st
Century
(TEA-21)
EMERGENCY FUNDING

15. EMERGENCY FUNDING CONTINUED
in order to authorize more funding for security
improvements. In August 2002, $15 million in federal
grants was appropriated to the TSA for commercial bus
security. The funds are expected to be dispersed in the
form of security grants to operators to assist in the
development of security programs and training.

16. The U.S. Department of Homeland Security (DHS)
announced in October 2006 a
$150,000 grant to C-TRAN in Vancouver, Wash. to improve
intercity bus security. This award is part of $136 million in
grants to cities across the nation to protect transit
systems.
Update:

17. CAN’T
GET
THERE
(CHEAPLY)
FROM
HERE

18. IMPORTANCE OF THE PIPELINE COMPONENT
The concept of pipelines falls under the category of a specialized means of
transportation. They have been in use in the U.S. since the Civil War and have been
characterized as those that carry petroleum, natural and synthetic gas, and those
used to transfer chemicals, coal, wood, and milk. Water is specifically not included in
the list. The cost structure for pipelines is similar to that for the railroads: both are
high fixed cost ventures. The high fixed cost characteristic of oil and gas lines limits
the number of competitors willing to build the infrastructure.
History and Development

19. FACILITIES/INFRASTRUCTURE
Total pipeline mileage is approximately 430,000 miles in
which about one third-carry liquid, and the remainder moves
natural gas. Texas contains the most mileage even though all
contiguous lower 48 states have some segment of the overall
system.

20. FACILITIES/INFRASTRUCTURE CONTINUED
The U.S. liquid pipeline industry is large,
diverse, and vital to the economy.
Comprised of approximately 200,000 miles
of pipes in all of the 50 States, during
2001, liquid pipelines carried more than 40
million barrels per day, or 4 trillion barrel-
miles, of crude oil and refined products.

21. REGULATION/DEREGULATION
The history of pipeline regulation reflects
a mixed and inconsistent approach. In
spite of Standard Oil’s obvious monopoly
and the courts recognizing the lack of
competition, from 1906 to 1914 the major
pipeline companies generally evaded
regulation. This evasion continued
throughout the 1920s and 1930s.

22. REGULATION/DEREGULATION CONTINUED
The Hepburn Act of 1906 gave the
Interstate Commerce Commission
jurisdiction over the interstate
transportation of oil and other
commodities by pipeline. The Act stated
that pipelines were common carriers by
definition. Therefore, they could be
required to carry oil at reasonable rates
for any shipper.

23. In response, the Bush Administration passed
the Pipeline Infrastructure Protection to
Enhance Security and Safety Act (HR 3609) on
December 17, 2002. One of the biggest
challenges to verify the security of the
pipeline system is conducting patrols along
the 200,000 miles of line.
EMERGENCY FUNDING

24. EMERGENCY FUNDING CONTINUED
During the weeks following the attacks of
September 11, 2001, the FAA placed stringent
limits on certain general aviation activities that
hampered pipeline operators’ ability to patrol
portions of the pipeline by air.

25. Industry and government agencies generally assert that efforts to
promote U.S. pipeline security are on the right track. Nonetheless,
TSA’s current funding for pipeline security will provide only limited
capability for inspections and enforcement of any future regulations.
The President’s FY2005 budget request does not include a line item for
TSA’s pipeline activities; they will be funded from the agency’s general
operational budget.
Update:

26. ENERGY
PRODUCTION
AT
THUMS
ISLAND
IN
LONG
BEACH,
CA

27. CONCLUSION
The government has taken positive steps to move from improving
not only the aviation component to the maritime and border
crossing aspects of transportation security. More efforts in mass
transit, railroads, and oil pipeline security are sure to follow and
are certainly warranted. Close cooperation between individual
stakeholders and the government will be essential for any
meaningful changes to be made. Private ownership of these assets
necessitates a complementary effort between government
regulation and the desire to make for corporate profit.
Thank you for giving me the tools to
make this presentation better. DCW