Aff strategy Sheet

We conclude that the cost-benefit analysis of port security can safely discount the secondary economic costs that might be caused by a port disruption. Benefits calculations should concentrate mostly on the lives and property that are directly at risk. Mitigating efforts would include plans to reduce the potential economic disturbance in the event of a port attack, including a risk-assessment program to separate safe from dangerous cargo, a way to prioritize imports in order of economic importance in the event of restricted capacity, and resources to create temporary port facilities or to rapidly expand other, existing facilities.

When IO models cannot do the job, economists look toward similar episodes in the past to provide information about the potential consequences of some change in the economy. We believe that historical episodes more appropriately capture the patterns of adjustment that a flexible economy with adaptive businesses and workers will make in response to disruptions. We do not have any examples of a terrorist strike on U.S. ports, but there are some historical incidents of work stoppages at ports that interrupted maritime trade in a fashion that seems similar to the disruption that a terrorist attack could potentially cause. The last major labor-related port closure occurred in 2002, when West Coast ports were shut for 10 days. This event was unusual for recent times, but earlier in the country’s history there were substantial maritime work stoppages—particularly in the sixties as ports began to introduce labor-saving technologies, especially containerization. There was a 35-day strike in late 1962 and early 1963, a 33-day closure in early 1965, and a 40-day strike in 1969. The largest work stoppage occurred in 1971, when the ports were closed on and off for more than four months, although the data show the actual effect on trade to be less than 90 days. Figure 2.5 shows how these events had a noticeable effect on trade flows into and out of the country.

In previous research, we explored the effects of simultaneous radiological bomb attacks on the twin ports of Los Angeles and Long Beach. These could be either brought in by container or planted very close to the port perimeter, assuming that the terrorists have access to suitable radioactive material within the United States. The extent of the disruption would depend on the size of the bombs. In our previous research, we assumed an explosion of two small radiological dispersal devices (RDDs), each containing five pounds of high explosive, more or less simultaneously at the two ports. We estimated blast damage to be modest, with deaths and serious injuries occurring only within a range of about 15 meters and with very limited damage to physical infrastructure. The evacuation zone would include all areas with exposure of greater than 1 REM (roentgen equivalent man), probably within a range of five to 10 square kilometers, depending on weather conditions such as wind speed, wind direction, and precipitation. In a subsequent study, we are attempting to measure “plume effects” in terms of household disruption, business losses, and decline in real estate values. The numbers are very speculative, but our best estimate is a $4 billion loss in output and a decline of nearly 42,600 person-years of employment. Such an attack would require the closure of both ports for health rather than security reasons. The early phase of radiation exposure lasts about four days, according to Environmental Protection Agency (EPA) guidelines; the time frame for intermediate and later phases is variable and subjective and can be measured in weeks, months, and even years. When the ports might reopen would be a policy rather than a technical decision. In the previous RDD scenario, we estimated that the closure of the Los Angeles and Long Beach ports for 15 to 120 days (for the latter case we combined the radiological bomb attacks with conventional bombs blowing up three key access bridges and overpasses) could cost the U.S. economy up to $34 billion—or more than 212,000 person-years of employment. Tables 3.1a and 3.1b show aggregate results and county level detail. The model also provides economic results in much greater spatial detail, to the level of census tracts or traffic analysis zones if required.

Both governments and shipping lines have long been concerned with the security of the global container supply chain. Prior to 2001, security efforts focused on reducing cargo theft, stowaways, and smuggling. Incidences such as the Achille Laura hijacking in 1985, the Tamil Tigers merchant shipping attacks in the 1990s, and continuing smuggling demonstrated that the marine segment of the global container supply chain is vulnerable to terrorist attacks. Prior to 2001, U.S. Customs physically inspected somewhere between 2 percent and 4 percent of the several million containers shipped to the U.S. each year. Foreign crews manned the majority of vessels making American port calls. Organized crime had long used shipping containers to smuggle narcotics and contraband throughout the world. Terrorists could use shipping containers or vessels to smuggle personnel or weapons (nuclear, biological, and conventional) into the U.S. They could also use merchant ships, such as liquefied natural gas tankers, as weapons against port cities or critical maritime infrastructure. A major U.S. portsecurity war game conducted in 2002 found that government and industry respondents suspended container supply chain operations in response to several hypothetical container supply chain terrorist events (Gerencser et al. 2003). Terrorists, if successful in these types of attacks, could claim a major victory as their efforts would not only harm the U.S. but also disrupt the global economy.1