Thank you Dr. John for your kind introduction and for inviting me to speak before you today.

It is great to be here in Cambridge. I am honored to be at the Volpe Center to meet with you, because the Volpe Center has a worldwide reputation for its transportation and logistics expertise. I bring greetings from President George W. Bush and from Secretary of Transportation Norman Mineta.

Today’s symposium is asking the timely and critical question: Can security concerns be incorporated into our modes of transportation without compromising mobility? The answer to this question is "yes"—and the reason I say "yes" is very simple. We have to do it. We have no other choice.

It is imperative that we integrate security into our transportation system, in every mode, and that we do it in a way that does not damage the efficiency of our economy and our ability to compete in the global market. To do this, we must start with a fundamental precept in mind.

Transportation efficiency and security are NOT mutually exclusive. They should not be addressed as separate, unrelated problems. Instead, they must be tackled as part of a coherent, multi-faceted undertaking with a single overall objective—combining national security and economic well-being.

As part of this effort, all of us here today are interested in the latest technology that will keep the United States safe and secure. The challenge to this symposium and its three panels—and to all of us after we leave here today—is to find solutions to achieving optimal capacity and mobility while also improving and increasing security. Trade and the free flow of commerce must continue to provide Americans a high standard of living and ready access to the global market.

This is not an easy task. I am pleased that we have come together today to meet this challenge, because in no transportation mode is the goal of combining security and efficiency more urgent or more massive an undertaking than in marine transportation. As you may know, 37 percent of the value and 78 percent of the volume of all our nation’s foreign trade arrives by sea and 97 percent of this waterborne trade is carried by foreign-flag vessels with foreign crews from almost every corner of the globe. More than seven million containers arrive in U.S. ports each year, and that number is growing rapidly as international trade relentlessly increases its share of the economy of the United States.

We all appreciate that the security challenge we face is immense. We simply must make seaborne trade and our ports as secure as possible—first, to reduce the possibility of waterborne trade being used as a vector for terrorists or their operations, and second, because the impact of terrorist disruption in the marine mode on our economy here at home and in the global economy is greater now than ever before.

Twenty years ago, it was hard to imagine the way the global economy works today. Then, manufacturers and retailers had warehouses full of inventory. Today, "just-in-time" assembly and delivery has replaced costly storage space – making our transportation system an even more critical link in the commercial chain.

Back then, efficiency was what you did to make a little more profit than your competitor. Now, it is the only way to survive.

And as if this premium on speed and efficiency were not enough, at the same time as we face the security challenge, our ports and intermodal connectors are facing a capacity crunch that must be addressed for our economy to remain efficient and competitive in the decades to come. For example, U.S. foreign trade and freight volumes at our ports are expected to increase by 50 percent by 2020. Yet America’s port and intermodal freight system is increasingly operating at the limits of its capacity. Furthermore, key ports around the globe are increasing their own capacity, much of it aimed at exports to the American market. In 2009, the Port of Singapore alone will have more container capacity than our entire port system has today.

Thus, our ports are being pulled two directions at the same time. And while the security needs of our ports can, and must, be addressed in ways that enhance the efficiency and productivity of the maritime system, we cannot allow them to divert funds away from investment in port infrastructure.

With all this in mind, and to strengthen the marine mode as part of our national intermodal system, Secretary Mineta has initiated a broad review of our maritime policies.

The objective of this review is a comprehensive Marine Transportation System/maritime industry initiative called SEA-21. It will fit with the reforms and initiatives that the Department of Transportation and the Bush Administration are already making in the other transportation modes.

The SEA-21 initiative we envision will complement these efforts and their emphasis on integration of all our transportation modes, such as investment in intermodal freight connections. As part of this initiative, we also are working on how to encourage improved information sharing and coordination of Federal government Marine Transportation System responsibilities.

Having said all of this, it may appear that I have wondered somewhat far afield from the focus of today’s symposium. But I have done so because from now on we must view everything we do in marine transportation as interrelated.

With that as necessary background, I would like now to focus more specifically on maritime security and how we are proceeding.

Any such discussion must begin with stressing the importance of the Maritime Transportation Security Act, signed by President Bush in November 2002. This act is one more important measure of the maritime industry’s vital importance to our economic and national security, and our commitment to addressing its needs.

It seeks to strengthen security at the nation's seaports by requiring comprehensive security plans for U.S. ports and by mandating improved identification and screening of seaport personnel. DOT and the Department of Homeland Security (DHS) have created a partnership for the critical mission of implementing the provisions of this act.

As a result of this act, for example, MARAD and DHS shared a leadership role in the creation of the organization now known as the "Container Working Group" (CWG). This group was charged with the task of assessing and improving the security of container shipping and the recommendations, which resulted from their assessment, were provided to the Department of Homeland Security.

In addition to the creation of the CWG, further examples of meshing the primary mission of DOT with homeland security goals can be seen in the development of the Transportation Security Administration (TSA), the Container Security Initiative (CSI), and the Customs-Trade Partnership Against Terrorism (C-TPAT).

DOT (through MARAD) and DHS are also working together on other security-related measures. These include the issuance and use of Transportation Security Cards for personnel whose responsibilities require them to access secure spaces aboard ships . . . the establishment of a permanent program of grants to facilitate the enhancement of maritime security . . . and providing an enhanced system for foreign seafarer identification. Additionally, we are working to establish a program to make international intermodal transportation systems more secure, namely by improving methods of cargo screening, tracking, physical security, and compliance monitoring—and implementing requirements that shipment data must be provided electronically to U.S. Customs prior to arrival or departure of cargo.

The cargo security system we favor must be a dynamic, real-time system that sends and receives shipment information as it happens. Improving the efficiency of shipment communication will simultaneously yield greatly improved security.

DOT, and DHS have also worked together closely to fund security initiatives designed to address vital security needs. Congress has appropriated $92.3 million for competitive grants to critical national seaports to finance the cost of enhancing facility and operational security. This is known as the Port Security Grant Program.

We are also exploring the use of technology to help provide security while meeting economic efficiency. For example, we have been working on installing the Automatic Identification Systems aboard large ships to increase the ability to separate law-abiding vessels from suspect ones. We have designed and implemented security measures with the private sector. And we have been working to create a flexible response system that government, responders, and industry will all use to increase security in response to emerging threats.

Under the Port Security Program, money has been awarded to applicants who have the ability to explore the application of technologies such as those I mentioned earlier—electronic seals, vessel tracking, and electronic notification of vessel arrivals.

In dealing with the challenge of security in maritime trade, we strongly believe that cargo security solutions must be global; in other words, our trading partners must be part of an integrated security regime. We cannot have one cargo security system for the United States and another for Canada; we cannot have one for Central and South America, another for the European Union, and another for the Asia-Pacific region. There must be one unified, global cargo security system. Otherwise, there will only be more complexity, which will in turn create higher costs and more delays without increasing security. Putting in place a common, global system is in itself a significant and vital foundation for achieving our overall objective. That is why DOT and MARAD are helping to negotiate global solutions that will go a long way towards this objective of balancing efficiency and security.

In this regard, we believe that continuing to design, develop and implement vertical, "in-house" systems can no longer be considered acceptable. Accordingly, we are encouraging the development of a horizontal software platform able to integrate existing single-purpose systems. The airline industry has demonstrated that it can be done. Seven horizontal systems currently service the airline industry – among them Amadeus and Sabre, Gallileo and Worldspan. Service is instant, universal and reliable.

Our goal is an efficient, secure system of shipping, shelf to shelf. It must be a unified, global system that is consistently implemented in all countries.

In closing, I want to thank you for the work you are doing and for participating in this symposium sponsored by the Volpe Center. I cannot overemphasize the importance of what we all must do to create a secure and efficient marine transportation system. The terrorist attacks of September 11 and the global threat of terrorism clearly necessitated major changes in the way we conduct economic activity, transportation, and international trade. The fact that we are gathered here today at this symposium is in itself proof of this change. And the fact that we are working together to develop practical ways to meld security and efficiency is more than the simple academic exercise. It is critical to the future military and economic security of our nation. On behalf of MARAD, and the Bush Administration, I want—again—to thank you for the important work you are doing and for the privilege you have given me for the opportunity to meet with you today.

Thank you.

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