On The Waterfront

Since 9/11, Washington has spent billions of dollars on airport security. But the bigger terrorist threat may be at U.S. seaports.

No one knows for sure if terrorists have managed to get their hands on weapons of mass destruction. But if they wanted to smuggle one into the United States, the best way to do it would be by sea, inside a shipping container.

Six million of them arrive in the United States every year, and as 60 Minutes first reported shortly after the attacks on New York and Washington, only a tiny fraction of them are ever inspected.

Correspondent Steve Kroft reports from the waterfront.

But at any given moment, hundreds-of-millions of them are being shuttled around the globe, on top of ships, trains and 18-wheelers, and piled up by the thousands at ports, depots, and huge outdoor warehouses.

Almost everything we buy, sell, eat, drink, or wear is carried in these metal boxes. They are essential to American commerce and international trade.

Stephen Flynn, a former Coast Guard Commander and senior fellow at the Council on Foreign Relations, has spent the last two and a half years studying the security, or lack of it, at U.S. seaports. And he says shipping containers are the weak link.

"We have about six million of them that arrived in the United States last year," says Flynn. "And really, nobody can say with any confidence what's in them."

Flynn says the information provided by shippers is often vague and unreliable. It's not unusual for the contents of a container to be labeled "freight all kinds." And with 16,000 containers coming into U.S. ports every day, fewer than 2 percent of them are opened up and inspected by U.S. Customs.

"It is physically impossible to check every container without essentially stopping global commerce," says Flynn.

"The fact of the matter is criminals have been operating in seaports a long time. The bad guys know how open the system is. The good guys don't seem to have a real command on it here because we haven't paid as much attention to this problem as we need to."

To see the problem first hand, 60 Minutes flew over one of the busiest container ports in the United States - Charleston, S.C., which handles 800,000 containers a year, from all over the world.

Flynn calls them "the soft underbelly of globalization," and says there is no credible way to detect and intercept dangerous cargo coming into the United States.

"It's an incredibly efficient system, but it's also a system that poses opportunity for bad people to do bad things," says Flynn.

His biggest fear is that terrorists will use a shipping container to smuggle in a weapon of mass destruction. And since many big cities were literally built around their ports, they present an attractive target.

But it's not just port cities that are at risk. In most cases, those shipping containers are quickly loaded onto trains and trucks and dispatched inland to practically every town in America.

Flynn says it wouldn't be difficult for a terrorist to track a container with a global positioning system and detonate a weapon hidden inside. In fact, a terrorist could even use a shipping container to smuggle himself into the country.

The stowaway was a trained airplane mechanic, and he was carrying a laptop computer, a satellite phone, fake credit cards and an airport security pass. The incident is still under investigation.

And that's not all. The Commandant of the U.S. Coast Guard, Admiral James Loy, told us there's evidence that terrorists linked to Osama bin Laden are directly involved in the shipping business.

"We are pretty certain that there's some traceability to Al Qaeda. And believe me, we are very, very interested in those vessels," says Loy.

The U.S. believes one of those ships delivered the explosives used in the embassy bombings in Africa. The vessels are believed to be operating in and around the Arabian Sea, where the U.S. Navy and the Marines have been boarding freighters and opening up containers looking for terrorists, including bin Laden.

Robert Bonner was named commmissioner of Customs shortly after Sept. 11. He says even one terrorist incident involving shipping containers could shut down global trade. Customs' top priority, he says, used to be drugs. Now it's counter-terrorism.

"The system is vulnerable. There's just no question about it. When I say 'the system,' I mean the movement and the potential for concealing a terrorist weapon inside a cargo container. Clearly, this is vulnerable," says Bonner.

What kind of an impact would it have on the world if a bomb were to go off in one of these containers?

"It would be devastating," says Bonner. "If that should happen, the system will stop. It's like commercial aviation after Sept. 11. The system will stop. We're not going to allow another container to offload in the United States if something like that happens."

Kevin McCabe is chief inspector for U.S. Customs at the largest container port on the East Coast - the combined port of New York and Newark. He says they were put on their highest level of alert Sept. 11 and they're still on it.

While McCabe acknowledged that Customs only opens and inspects 2 percent of the cargo coming into the U.S., he says the figure is misleading. The 2 percent that is physically searched is the most suspicious, something that has raised a red flag - the shipper, the country of origin, the cargo itself, or a specific piece of intelligence.

Besides the containers that are opened, many more are run through a giant X-ray machined called "Vacis" which can see through the steel walls of containers and outline any differences in density within the shipment - which Customs calls an "anomaly."

The U.S. Customs Service gets a lot of information in advance as to what's in the containers. But it's merely paperwork. So how do they try to determine what shipments pose a potential threat?

"I have a fair degree of confidence that we're pretty good at determining those containers that might pose a risk that a terrorist or a terrorist weapon might be smuggled," says Bonner.

Customs hasn't gotten a lot of help from Washington. In the last 10 years, the number of containers coming into this country has more than doubled, while the number of inspectors has remained virtually the same.

It's the same story at the Coast Guard, which is down to its lowest manpower levels since 1964, and whose vessels are so old that a Presidential Commission called them "technically obsolete." Both agencies have also been hampered by outdated computer systems that still aren't hooked up to FBI and CIA databases.

"Seaports, believe it or not, are the only part of an international boundary that the federal government invests no money in terms of security, to provide," says Flynn.

"We do this at airports. We do it at land border crossings. But we don't do it at seaports. In some ports, it's just a rent-a-cop who may be paid minimum wage who's basically checking who comes in and out. Most ports, the best you get is a chain link fence with maybe some barbed wire."

A piece of legislation now before Congress would change that and a lot more. The Seaport Security Act would mandate background checks and comprehensive security plans - and give authorities the power to turn away any ship that doesn't give detailed and timely information on crew and cargo.
U.S. Customs would also like to assign agents in places like Rotterdam and Singapore to inspect shipments before they leave for the United States. It already has reached an agreement with Canada.

The Coast Guard wants ships to have transponders, like commercial aircraft, so their movements and exact positions are known at all times. But Flynn wants to go even further, by tagging and tracking every container as it moves from ship to ship around the globe.

Flynn says the technology to tag and track shipments is already being used by companies like Fed Ex and U.P.S. to protect their customers' inventories from theft.

So he wants to know why if the private sector can do it, why can't the government?

"I think it's imminently doable. Particularly in light of the costs that are associated with it if the terrorists do in fact target the system," says Flynn. "That cost is shutting down global commerce. Now that's a heavy price tag."