Homeland Security Watch

News and analysis of critical issues in homeland security

January 14, 2006

A new funding model for security at California ports

Filed under: Port and Maritime Security — by Christian Beckner on January 14, 2006

Stories in the Long Beach Press-Telegram and Information Week reported this past week on a new initiative by the Ports of Los Angeles and Long Beach to equip trucks that enter the ports with RFID tags as a means to quickly verify and clear their identity upon arriving at the entrance to the ports. From the Information Week story:

PierPASS will distribute 10,000 radio frequency identification (RFID) tags provided by WhereNet Corp. to trucking companies through eModal, a database company that tracks trucking companies and drivers. The trucking companies will install the RFID tags in the trucks. Drivers will use the tag to enter and exit the terminal gates, similar to the FasTrak and the E-ZPass devices used for automated toll collection in California. The RFID tag is expected to enable quick and secure check-in.

Marine terminals are required by the Department of Homeland Security and Coast Guard to provide security by ensuring that only those authorized enter the ports. The terminals, working through PierPASS, are launching the TruckTag program as part of their proactive approach to meeting these requirements.

The most interesting dimension of this story to me isn’t the technology application itself, but the manner in which the two ports have organized their initiatives to fund these types of investments. In 2004, partially in response to legislative pressures at the state level, the ports created a not-for-profit agency, PierPASS, whose mandate is to “address multi-terminal issues such as congestion, security and air quality.” PierPASS started a congestion relief initiative, OffPeak, in 2005 to increase port throughput by extending operational hours and creating financial incentives for companies to use the port at off-peak hours. And this latest initiative, TruckTag, is its first foray into security-related activities.

PierPASS earns the revenue to fund its activities from user fees assessed on cargo shippers: for OffPeak, $20 per TEU for shippers who use the port during peak hours, which pays for the cost of off-peak operations. PierPass estimates that the TruckTag program will cost $1.2 million in its first year, but it is giving away the first 10,000 truck RFID tags for the program. The Information Week article suggests that this program is the result of government mandates, but it’s quite possible that this a worthwhile investment to the ports irrespective of these mandates, given the potential benefits in terms of congestion relief and lower risk premiums.

The creation of a non-profit third-party is an innovative way to overcome some of the key challenges that have held back security-related investments in areas like port and cargo security. By aligning the costs and benefits of security together in a single, neutral entity, it becomes a lot easier to move investments forward, rather than being caught in a chicken-and-egg game among multiple public and private stakeholders. This model is definitely worth a closer look in terms of its applicability to other federal, regional, and private sector security initiatives.

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