When shipments of auto parts were held at the Canadian border for two days after the Sept. 11 attacks, Detroit shuddered. In the end, the halt in cargo shipments at the nation's borders and ports proved a brief hiccup.
But it was a vivid reminder of just how dependent the economy has become on the efficient transportation of goods and parts that arrive just in time for assembly.
These days, for example, a personal computer is a veritable global smorgasbord of chips, disks and other gear, so the international supply line provides the industry's lifeblood.
"The interdependence risk is so much greater in today's global economy," said Warren Starr, a principal at Booz Allen Hamilton.
To date, the focus of the Transportation Security Administration, which Congress created last November, has understandably been on passenger-airline security. But cargo is next -- by air, ship and rail -- and both the House and Senate are preparing legislation to improve the monitoring and surveillance of those shipments.
The security risks from cargo, experts say, are real and worrying. In Senate testimony earlier this year, Rob Quartel, a former federal maritime commissioner, said that each of the truck-size containers, which arrive in the US at the rate of 2,000 an hour, should "be treated as a potential weapon of mass destruction." They can be used to carry everything from bombs to terrorists.
Yet tougher security measures carry economic risks. Robert Delaney, vice president of Cass Information Systems, a logistics company in Bridgeton, Mo., warned that greatly increasing the number of containers that are opened and inspected by hand, as some have proposed, could "bring commerce to its knees."
The productivity and cost-saving gains of the current system -- fueled by deregulation, technology and just-in-time inventory for manufacturing -- have been striking. Since 1980, inventory costs as a percentage of economic activity have declined to 14 percent, from 25 percent.
Instead of increasing physical inspections, some government officials and industry executives advocate a concept they call "pushing the border back." The term means a closer, more refined tracking of cargo before it arrives at a port of entry. The way to do that, they say, is to improve the collection and sorting of the information generated from shippers, owners, freight forwarders and others involved in cargo shipments.
Such an effort would require that a government agency -- the Transportation Security Administration and the Customs Service are the leading candidates -- have a consolidated database. It would also require cooperation by the government and transportation companies.
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