By Peter A. Buxbaum, AJOT Security spending in the nation’s ports is beginning to show a return on investment, according to a Department of Homeland Security official. Douglas Doan, private sector liaison in Secretary Tom Ridge’s office, speaking at a cargo security conference in Washington on October 18, said a study undertaken at the port of New York and New Jersey showed a more than 40% decrease in crimes at Port Authority facilities, thanks to security measures implemented since September 11, 2001. Doan also said that government spending on transportation security would likely increase, but that the private sector would have to shoulder the lion’s share of security expenses. “The dominant view is that security represents a cost,” Doan said. But the New York port study means that “we’re beginning to see benefits.” Doan compared current complaints over security spending to resistance to automobile seat belts in the 1960s. “Eventually, auto makers came to realize seat belts are a great safety benefit,” Doan said. A private initiative at the land border crossing at Nogales, Mexico, on the Arizona border, is another example of the growing realization of the business benefits of private security spending, according to Doan. There, a group of produce growers invested their own funds to build a new road to be used for shipments with expedited clearance. This shows a connection, according to Doan, between security and the need to enhance port infrastructure. Although DHS is not in the road-building business, Doan noted that it is part of DHS’s mission to separate high-risk from low-risk shipments, so that the latter can be removed from the port speedily. The Nogales growers “wouldn’t have [made the investment] without an understanding of the economic return inherent in moving shipments through faster,” Doan said. “One hour in line at the border can equal one day in the supermarket. Expediting shipments does much to reduce the indirect costs of shipping.” He added that many seaports and land border crossings are cramped for capacity as the volumes of international trade increase and noted that Nafta trade has grown five fold since the treaty’s enactment. Doan predicted elevated levels of public financing for supply chain security measures, but warned they will remain “a drop in the bucket” as a proportion of total supply chain security spending. On the contrary, the government is looking to industry for answers on what makes sense and what works. “Don’t look to the government for answers,” Doan told the conference attendees. “Business knows best and has a better awareness to determine where the possibilities are.” Doan also advised shippers who implement security measures not to expect a break on cargo insurance rates anytime soon. “Some shippers are asking for reduced insurance rates based on security measures implemented in the last six to twelve months,” he said. “They need to prove the reduction in risk over a longer period of time before the rates drop. One year is not long enough for the insurance companies to evaluate the reduction in risk.” Security costs now factored into planning Expedited release of international shipments was the motivation behind security enhancements made by several shippers who made presentations at the conference. Ken Koenigsmark, C-TPAT Program Manager at Boeing Corp., noted that his company, the largest US exporter, “like most companies, had only limited pre-9/11 emphasis on supply chain security.” C-TPAT, the Customs-Trade Partnership Against Terrorism, is a public-private partnership that encourages supply chain participants to enhance security by providing incentives, such as expedited Customs clearance. Boeing applied for C-TPAT certification in January 2003, Koenigsmark related, and received that designation in March of the same year. “At that point, we moved from planning to implementation,” he said. “We established a program office, an implementation team, and an executive steering committee to oversee the process.” As a “cross-functional, e