The tragic events that day both shattered dearly held beliefs concerning our sense of invulnerability from outside attack,  and challenged policymakers and representatives of private industry about how best to meet the changing threats posed by stateless terrorism.

Perhaps the biggest implosion in the old regime of faulty and potentially fatal assumptions—those shopworn ideas that left Americans anxious and afraid—affected the U.S. maritime sector.

In a space of less than three hours, a particular and dearly held set of post-Cold War illusions was dashed—that the vast expanses of water to the East and West, and the long-standing friendly relations with the two countries bordering us to the North and South, would isolate the United States from terrorist threats, much like they had kept the country from harm’s way in the early part of our history.

For the seaport and maritime community the paradigm shift in security was dramatic—for several reasons. It became clear that communities that had only the thinnest experience with security issues beyond pilferage and narcotics smuggling, had suddenly been thrust onto the front lines in the war on terror—one in which the use of weapons of mass destruction was both a lurid nightmare and a dreaded possibility.

As many other analysts have noted, the very fact of American involvement in the global economy should have had us thinking better, more strategically, and more in the long term. It was only after 9/11 however, that, our country suddenly awoke to the fact that the very veins transporting the life blood of our prosperity might also harbor those who wish us harm.

Unfortunately, many people, including some in Washington, still do not understand either the importance of our ports to the economy, or their vulnerability to terrorist attack.

Compare for a moment the priority given to aviation security with that given to ports.  Some of that is understandable—after all, the 9/11 terrorists used airplanes and the flying public equates homeland security with, among other things, the ability to safely board and deplane an aircraft.

At the same time, it is hard to get policymakers to look at what we already know about the potential impact of an attack, or a threat of attack, on seaports—witness the $15 billion price tag of the 2002 West Coast port lockout—and to act. 

It almost seems that we will have to have some kind of incident at a port, God forbid, before we focus on homeland security as an economic issue—as surely it is in the case of our seaports.

Many of you in this room understand this already, but let me review for a moment the importance our maritime transportation system has for our economic prosperity—in addition to its critical strategic military value.

• More than 95 percent of overseas trade—some two billion tons and $800 billion in domestic and international freight annually—enters through U.S. seaports
• An estimated nine million sea containers enter the country through our seaports each year
• Some 3.3 billion barrels of oil are shipped by sea annually
• Some six million cruise ship passengers travel every year from American ports
• Approximately 180 million passengers use ferry systems annually in the United States

In addition, it is important to remember that domestic and international maritime trade is expected to double in the next 20 years, and increasingly America’s waterways are being looked at as possible alternative thoroughfares in a country where many regions’ highways are jammed with truck traffic.

But, even though America’s publicly-operated seaports and their related industries contribute an estimated 27 percent of American GDP—one forth of our wealth and our future prosperity—the fact is that even before 9/11 the ports received very little financial support from Washington.

This was due to a variety of reasons, but an important one was that they operated both independently and very competitively with each other.

And subsequently, the ports were often not represented at the table as major players, even when decisions about them were being made in Washington.  

Perhaps not surprisingly, in the aftermath of the attacks on the World Trade Center and the Pentagon, measures to fortify aviation security measures were funded at a level twenty times that of the funds dedicated to port security. 

This despite warnings from the CIA and many other sources that if Osama bin Laden’s shadowy minions were going to attack us with weapons of mass destruction, those would likely enter the U.S. would come by sea.

Yet, even today, aviation security spending still far outstrips what is being talked about in official circles for the ports. To a lot of observers, the disparity just doesn’t make sense.

It’s hard to quarrel with the conclusion reached last August by the official 9/11 Commission inquiry when it said, “over 90 percent of the nation’s $5.3 billion annual investment in the (Transportation Security Administration) goes to aviation—to fight the last war.

“The current efforts do not yet reflect a forward-looking strategic plan systematically analyzing assets, risks, costs and benefits,” it added.

What we have had up to this point is an Administration approach which has largely invested funding in port and maritime security in programs run by existing government agencies, such as the Coast Guard.  And anyone familiar with the Coast Guard’s professionalism might say that, on one level at least, that approach makes a lot of sense.

However, as Council on Foreign Relations maritime expert Steve Flynn, a former Coast Guard commander himself, has pointed out, a decade or more of neglect before 9/11 had left the Coast Guard—in Flynn’s words--“barely able to complete their pre-9/11 non-security missions, never mind their new security mandates.”

In other words, as Flynn noted, even as the Administration moves to replace the Coast Guard’s antiquated fleet of cutters and aircraft, and to upgrade its outdated shore-based communications system, it is playing catch-up along a broad and ever-expanding front of responsibilities.

The Coast Guard itself conservatively estimates that the ports will need some $7.4 billion over the next decade to comply with mandated and necessary security improvements. Other estimates go as high as $16 billion.   That’s over and above what is being spent to upgrade the Coast Guard to carry out its traditional roles and missions, as well as for homeland security.

Yet, if current federal funding trends continue, the ports are going to continue to receive only cents of federal money to each dollar’s worth of new responsibilities. The Gordian knot for improving security, both at home and abroad, continues to be questions of funding.

In December, Asa Hutchinson, DHS undersecretary of border and transportation security, broke new ground in the debate about whether the U.S. government or private industry should absorb the more than $7 billion ($5.4 billion for marine facilities alone) in costs for necessary port improvements in the next decade.

Hutchinson suggested that private companies with port facilities perhaps ought to be paying more of the costs for the security of those facilities; currently a number of these receive federal grants to cover costs. Port experts note that in the latest round of grants that provided $49 million for port security, less than 55 percent went to public port authorities, the entities that actually operate the nation’s commercial ports. 

“Now some people might question, should we be giving grants to Exxon-Mobil and major chemical plants for their building of fences and surveillance cameras to enhance the security of their facilities, or should that be a private sector responsibility?”  Hutchinson said.

The government, Hutchinson added, can provide leadership, incentives and seed money for pilot projects, but the expense for carrying out security upgrades, he said, “has to be a burden that is shared by the private sector as well.”

I think it is time to think anew about the funding issue.  Let’s look at different ways to attack a problem that affects us all—no matter whether you live in Los Angeles or LaCrosse, Wisconsin. Let’s look at what the risks are and let’s figure out how to mitigate those risks.

Last year, the ports asked Congress and the Administration for $400 million to help them meet their annual needs.  My efforts on Capitol Hill got $150 million. 

There are 55 ports in this country that are considered by Washington to be “strategic” ports.  That means that, if that money was dedicated to them and to no others, they would still be getting less than $3 million a piece. 

If, as Henry IV of France once said, “Paris was worth a Mass,” then surely protecting our seaports is worth what it takes to do it right.

For example, the Port of New Orleans alone needs $64 million in security upgrades. To date, it has gotten just $8 million.  An application by the port for money to build four security gates at its main entrances yielded funds for just four half gates, none of which were able to do that which a completed gate would.  It’s time to finish those gates.

It is clear that we need to look beyond the world of grants and whether the ports can squeeze an additional $350 million out of Congress this year, and look to a comprehensive strategy for port security that includes funds for operating costs.

The ports, it needs to be remembered, were built for open access in a secure society.  Today that world exists no longer—and we all have to adjust to that, and to share the bill.

Why, for example, should the ports and residents of local communities that surround them be responsible for freighting the bill to secure a supply chain from which everyone—in Dubuque and Denver as well as New York City and Long Beach, California—benefits?

It is, I think, a reasonable proposition that the federal government step in and cover ports’ capital security costs—it does at the airports.  Why should the seaports be any different?

Unfortunately, the port grant program doesn’t cover O&M, personnel and training costs.  So even those ports lucky enough to win a grant are  placed in the position akin to winning a car, but not having the driver’s license nor the gasoline needed to operate it.

Even worse, a lot of the ports have to pay the capital costs of the Maritime Transportation Safety Act of 2002, which went into effect last July 1.  The combined effects of those burdens may surely act as a disincentive on ports to adding more sophisticated technology to keep pace with the threats.

Rather than looking at aggregate figures for port security, I think we are going to have to start examining the value of seeking earmarks for different programs, such as the Transportation Worker Identification Credential (TWIC), and looking a multi-year funding so that the ports have the ability to plan and to prioritize according to their own business and security needs. 

A lot of people don’t know it, but a Title 7, Chapter 26 of the U.S. Code authorizes 30 percent of the gross receipts from Customs duties to “encourage the exportation of agricultural commodities and products.”

Now, doesn’t it make sense that if Customs duties, most of which are generated by America’s seaports, can be used to promote agricultural exports, another percentage of those fees might be used to protect those ports will they ship the bounty of our farms abroad?

It was because these security and legislative ships are still passing in the night that the Port Security Council was created as the legislative and public affairs coalition through which leading sectors of the U.S. maritime industry and their international partners address security, funding and other issues.

Four of the most important players in the maritime industry—the American Association of Port Authorities, the Chamber of Shipping of America, the International Council of Cruise Lines, and the Waterfront Coalition—are founding members of the council, which also works with “Council Partners”— suppliers, users, associations and government entities.

Because the council represents those public and private interests which, taken as a whole, serve as the gatekeepers of America’s entire supply chain, its main goal is to forge public-private partnerships that can increase security funding and awareness, and to address terrorist threats to the nation’s seaports and maritime transportation system.

Since its creation in May of last year, the council has been in the forefront of efforts to disseminate news about the importance of America’s ports to the nation’s economy. It has also sought to bring port stakeholders into official decision-making processes about homeland security policies and priorities—including spending.

The council seeks to hammer home the message that America’s seaports and their freshwater cousins the inland river ports  must receive sufficient federal dollars necessary to do the job before another, avoidable terrorist tragedy occurs.

As the council seeks to educate and advocate to Congress and the Executive Branch, it is also undertaking a coordinated media and grassroots’ campaign in support of those efforts, as well as preparing white papers on key issues of concern to policymakers.

We know that within America’s budget that there is enough money to support the means to protect our economy and the future of our children--by protecting our seaports and inland waterways.  And we are going to find it.

Jay Grant, Director of Port Security Council of America