COVID-19 exposing funding shortfalls at U.S. ports

The current port security regime in the United States does not provide safety levels needed to protect the nation’s ports — and the supply chains that rely on them — against the spread of coronavirus, according to a global security expert.

Testifying at a U.S. House Transportation and Infrastructure hearing on Capitol Hill on Tuesday, Stephen Flynn, director of the Global Resilience Institute at Northeastern University, said chronic underfunding of the U.S. Coast Guard is the underlying factor for the security risk.

“We spend more money protecting the Port of San Diego than all the other commercial West Coast Ports combined, including Los Angeles-Long Beach, Oakland and Seattle-Tacoma,” as a result of the Coast Guard’s responsibility to protect the military presence in San Diego, Flynn said.

“We’re trading off investments in our own security, and the capacity of the Coast Guard to be out in front of something like the coronavirus — you’re robbing Peter to pay Paul. The need [for a larger Coast Guard budget], which is well recognized operationally, is not being recognized through resources.”

The annual budget for the Coast Guard, which is funded as part of the Department of Homeland Security, is about $11 billion, or 1.5% of the $750 billion allocated for the rest of the U.S. military under the Department of Defense. Flynn said the Coast Guard’s funding should be doubled over the next decade.

“That’s minuscule when compared to the amount of resources we’ve been willing to invest in our national security capabilities; we just haven’t been putting the Coast Guard in that mix,” he said.

Asked during the hearing whether the Coast Guard has the resources to deal with COVID-19, Daniel Abel, the Coast Guard’s deputy commandant for operations, testified that “it’s a challenge” with regard to the cruise industry. “On any given day we’re tracking 3,000 targets. Looking at just cruise lines alone, for the next 10 days we’re talking 76 vessels, around 270,000 passengers and crews.”

On the cargo side, “we have not seen substantial risk,” Abel said. “Those ships come in and we restrict the crew to whatever it takes on the pier to turn the ship around. Get the cargo loaded, get back to sea, and they’re happy with that because that’s how they make money. We have not seen a huge threat from cargo.”

Abel pointed to a Coast Guard safety bulletin issued in late January that required ship crews working on commercial ships that had been in China within the past 14 days to remain on board. “If anyone’s sick, we need to be notified, we’ll handle that. But if no one is symptomatic, that ship comes in, and they stay with the vessel.”

The coronavirus, meanwhile, is expected to have “a longer and larger impact” on imports flowing into major U.S. container ports than previously believed due to factory shutdowns and travel restrictions in China that continue to affect production, according to the National Retail Federation (NRF). “There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold on March 9.

“As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”

The Port of Los Angeles, the nation’s largest container port, reported on March 10 a 22.9% decrease in container volumes in February compared with the same month last year.

The American Association of Port Authorities announced earlier this month that first quarter cargo volumes at U.S. ports could drop 20% or more from 2019 levels because of supply chain disruptions caused by the coronavirus.