Tom Carper Leads Senate Finance Committee Hearing On Trade Enforcement At U.S. Ports

4 months ago

The Senate Finance Committee holds a hearing entitled, "Examining Trade Enforcement and Entry of Merchandise at U.S. Ports."

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Transcript

00:00:00 to call this hearing to order,

00:00:03 the hearing before the Senate Finance Subcommittee

00:00:06 on International Trade, Customs, and Global Competitiveness.

00:00:10 I want to especially thank my friend,

00:00:12 our colleague Senator Cornyn and his team

00:00:15 for the work that they've done with majority staff

00:00:19 to help us prepare for and plan for this hearing.

00:00:22 I thank everyone who's here in attendance.

00:00:24 I know you have a lot going on,

00:00:26 but we're delighted that you're able to work this in.

00:00:29 We look forward to a number of things.

00:00:31 I actually look forward to hearing the expertise

00:00:34 that our witnesses have to offer,

00:00:36 and we very much want to thank you

00:00:38 for your service to our country,

00:00:40 but also for joining us here today to testify.

00:00:43 I want to thank our chairman, Ron Weiner.

00:00:45 I want to thank Mike Crapo, our ranking member,

00:00:50 and the Finance Committee staff for your policy expertise

00:00:54 and for allowing us to barbar

00:00:56 in this beautiful committee hearing room

00:00:59 for the next couple of hours.

00:01:01 Today's hearing provides us with an important opportunity

00:01:05 to examine U.S. customs and border protection policies

00:01:08 and procedures for goods entering the United States,

00:01:13 and this hearing also provides us with a forum

00:01:15 to discuss the ways in which the policies laid out

00:01:19 by Congress can work to improve port operations

00:01:23 while enhancing our supply chains.

00:01:26 Trade, as we all know, is an essential part of our economy.

00:01:30 I'm told that last year in 2023, the United States,

00:01:34 get this, the United States exported

00:01:36 over $3 trillion in goods and service,

00:01:40 $3 trillion last year, around the globe

00:01:43 while importing nearly $4 trillion worth of goods

00:01:47 in the same year, and thanks to this exchange

00:01:52 of products and services that come

00:01:54 to the more than 300, 300 points of entry

00:01:58 across the U.S. land, air, and sea,

00:02:01 our daily lives are enhanced by access to goods

00:02:04 from not just across the border in other states,

00:02:08 but all around the world.

00:02:10 Effective trade facilitation is a little bit like a puzzle.

00:02:13 Strong port operations and resilient supply chains

00:02:17 must fit together seamlessly

00:02:18 to bring goods to the United States.

00:02:21 And when it comes to port operations,

00:02:23 most Americans may not realize

00:02:25 that there are literally thousands of employees

00:02:27 who work every day to ensure that our ports are safe

00:02:31 and that they're secure.

00:02:33 It takes considerable coordination by the U.S. Customs

00:02:36 and Border Protection Inspectors,

00:02:39 as well as specialized workers and longshoremen,

00:02:43 like one of our witnesses here today,

00:02:46 in order to hold our international trading partners

00:02:48 accountable to the rules of the road.

00:02:52 For example, when goods come through the Port of Wilmington,

00:02:54 not far from my home, it is the folks who I just mentioned

00:02:59 who are doing the due diligence to make sure

00:03:01 that a shipping container does not contain counterfeit

00:03:05 products.

00:03:06 Some of these rules of the road are set by the Congress

00:03:09 through laws like the Bipartisan Trade Facilitation

00:03:12 and Trade Enforcement Act,

00:03:14 and by the bipartisan,

00:03:16 rigor forced labor prevention act,

00:03:20 both of which are designed to ensure

00:03:23 that our trading partners are paying their fair share

00:03:26 of duties on the goods that are coming

00:03:28 into the United States.

00:03:31 And it's our port workers,

00:03:33 like those at the Port of Houston,

00:03:35 some of your folks,

00:03:37 that thoroughly inspect the goods that arrive in the U.S.

00:03:40 for illegal contraband like fentanyl,

00:03:44 or clothing made with forced labor,

00:03:46 before approving them to move on to their next destination.

00:03:50 Ultimately, all of these responsibilities

00:03:52 shared by port employees work hand in hand

00:03:56 to enhance our economy and our national security.

00:04:00 We also have to ensure that the other piece of the puzzle,

00:04:02 and that would be our supply chains,

00:04:05 are sufficiently strong to face the pressures

00:04:08 that life throws at us.

00:04:10 For example, during COVID-19 pandemic,

00:04:13 supply chain resiliency was tested

00:04:15 like maybe like never before.

00:04:18 Pandemic exposed many unprecedented challenges,

00:04:21 like bottlenecks and delays for medical products

00:04:24 that still affect us even to today.

00:04:27 And with the tragic collapse of the Francis Scott Key Bridge

00:04:31 nearly two months ago,

00:04:32 as my colleague Ben Cardin knows,

00:04:35 our supply chains had to quickly adapt

00:04:37 to a single but vital port of entry not operating at all.

00:04:42 Thankfully, we were able to divert

00:04:48 key imports like automobiles, like sugar,

00:04:52 farm equipment from Baltimore to nearby seaports.

00:04:56 But the accident put a magnifying glass

00:04:59 on the questions about preparedness of our nation's ports,

00:05:04 and by extension, our nation's supply chain

00:05:06 for emergency situations like this one.

00:05:09 As my colleagues, I'll say this for our witnesses,

00:05:13 my colleagues know I like to quote Albert Einstein.

00:05:17 Einstein said any number of things that are memorable,

00:05:20 but the one that I use probably every day

00:05:22 is in adversity lies opportunity.

00:05:26 I think he really nailed it.

00:05:27 In adversity lies opportunities.

00:05:29 That was true when he said it first, it's true here today.

00:05:32 Despite recent adversity today,

00:05:33 we have an opportunity to learn

00:05:35 from our witnesses' firsthand accounts

00:05:38 of what's working and what's not working

00:05:40 when it comes to implementing trade laws

00:05:43 like the ones I've mentioned just a minute ago,

00:05:46 in port operations.

00:05:48 We also have an opportunity today's hearing

00:05:50 to better understand how we can and should invest

00:05:52 in the long-term resiliency and security

00:05:54 of our supply chains.

00:05:56 In doing so, we can prevent future product shortages,

00:06:00 shore up the ability to access life-saving products,

00:06:04 and reduce the impact of unpredictable situations

00:06:07 on American families.

00:06:09 There's an old African proverb that goes something like this,

00:06:13 if you wanna go fast, go alone,

00:06:14 if you wanna go far, go together.

00:06:17 And throughout this hearing,

00:06:18 I urge our colleagues in this committee

00:06:19 to join Senator Cornyn and me and our staffs

00:06:24 in thinking about how we can go further and faster together.

00:06:29 It's a shared responsibility of Congress, of port workers,

00:06:32 the Office of U.S. Trade Representative,

00:06:34 and global trade governing partners to work together

00:06:38 to protect the people that we serve

00:06:39 while implementing the safety and security of global trade.

00:06:44 So once more, I wanna thank our colleagues,

00:06:46 especially wanna thank our ranking member

00:06:49 and the members of our staffs

00:06:50 who've been working and preparing for this hearing

00:06:52 for not just days or weeks,

00:06:54 but actually months as it turns out.

00:06:57 And we appreciate the witnesses appearing before us.

00:07:00 And with that, I'm gonna turn it over

00:07:02 to our ranking member, Senator Cornyn,

00:07:03 for any comments he would like to make.

00:07:05 Thank you, thank you, John.

00:07:06 - Thank you, Mr. Chairman.

00:07:08 I know how enthusiastic you are about today's hearing

00:07:11 and the subject matter we're gonna discuss

00:07:13 because you called me on Saturday

00:07:16 to encourage more of our members to attend the hearing.

00:07:20 But as usually happens here in the Senate,

00:07:23 most of our members have multiple overlapping commitments.

00:07:27 So, but that doesn't detract at all

00:07:30 from the importance of this and the bipartisan support

00:07:33 that this topic enjoys.

00:07:37 We know that trade is critical

00:07:38 to promoting our economic security

00:07:41 and it's important to improving the lives of our citizens.

00:07:46 30 efforts of our ports.

00:07:52 US Customs and Border Protection has the thankless job

00:07:58 of facilitating legitimate trade and travel

00:08:06 while enforcing our trade and immigration laws.

00:08:12 In recent years, the surge in illegal immigration

00:08:17 along the southern border has led to the temporary shutdown

00:08:24 of passenger and rail crossings

00:08:30 because they've simply been overwhelmed.

00:08:37 Such delays caused by the ongoing border crisis

00:08:42 have resulted in a significant cost

00:08:48 to both businesses and consumers.

00:09:01 In addition to hindering legitimate trade and travel,

00:09:04 these challenges also make it hard to keep unlawful imports

00:09:09 such as products made with forced labor,

00:09:11 counterfeits, drugs like fentanyl

00:09:14 from entering the United States.

00:09:16 That's why I introduced the Catch Fentanyl Act

00:09:19 which requires CBP to analyze and test new technologies

00:09:24 at land ports of entry to determine which ones

00:09:27 are the most effective, efficient, and affordable.

00:09:30 But this is obviously only one piece of a broader challenge

00:09:34 that is needed and changes that are needed

00:09:37 to keep up with the changing global trade environment.

00:09:40 Our ports of entry are understaffed,

00:09:43 yet the workload continues to grow.

00:09:46 We owe a great deal to the men and women

00:09:48 who serve in our ports of entry day in and day out.

00:09:51 Last year, CBP processed more than $5 trillion

00:09:56 in combined imports and exports

00:09:58 and nearly 37 million imported cargo containers

00:10:02 at US ports of entry.

00:10:05 While this continued growth is an overall positive

00:10:07 for our economy, we have simply not staffed

00:10:10 and equipped to deal with the volume.

00:10:15 Evolving supply chains, which you mentioned,

00:10:17 new players entering the marketplace

00:10:19 and the growing volume of commerce across our borders

00:10:23 all present unique challenges for CBP

00:10:26 and its industry partners.

00:10:28 I'm eager to hear from today's witnesses

00:10:30 about the best ways they recommend

00:10:32 for us to meet those challenges.

00:10:34 We also need to find new ways to increase efficiencies

00:10:38 at our ports of entry.

00:10:39 Trusted trader programs, for example,

00:10:42 are one way to accomplish this goal

00:10:44 as they allow CBP officers to focus

00:10:46 on higher risk goods and travelers.

00:10:50 We should work to enhance and expand these programs

00:10:52 where it makes sense.

00:10:54 And I introduced legislation with Chairman Carper

00:10:58 to do just that.

00:11:00 The CTPAT Pilot Program Act of 2023

00:11:03 requires DHS to create a pilot program

00:11:07 to assess the value of allowing third party

00:11:10 logistics providers to participate in the program.

00:11:14 There are many other opportunities to strengthen US trade

00:11:16 by implementing much needed changes at America's ports.

00:11:20 And I look forward to today's hearing,

00:11:23 particularly from these witnesses,

00:11:25 to figure out how we might ease the burden

00:11:27 on legitimate trade and travel

00:11:29 while increasing compliance and enforcing our trade laws.

00:11:33 Thank you very much.

00:11:35 - Senator Cornyn, thank you so much.

00:11:36 And thanks to you again and your staff

00:11:39 for helping us prepare for this.

00:11:41 And several thanks to other members of the committee

00:11:45 who are here and those who aren't.

00:11:47 We are just in the middle of a vote on the Senate floor,

00:11:50 and I'm sure we'll be joined by others

00:11:52 as they meet their responsibilities

00:11:54 and looking forward to their participation.

00:11:58 I'm going to introduce our first witness, Mr. John Pickle.

00:12:03 And John Pickle is the Senior Director

00:12:08 of International Supply Chain Policy

00:12:12 at the National Foreign Trade Council.

00:12:15 In his role, Mr. Pickle promotes efficient

00:12:17 and resilient supply chains by advancing policies

00:12:22 to prevent illicit trade while implementing

00:12:26 customs best practices in upholding human and labor rights.

00:12:31 Previously, Mr. Pickle served as the Principal Director

00:12:35 of the Trade and Economic Competitiveness

00:12:37 in the Department of Homeland Security.

00:12:40 Prior to that, he served in several different roles

00:12:43 in the U.S. Customs and Border Protection

00:12:45 for I believe over a decade, is that right?

00:12:47 Over a decade, all right.

00:12:49 Mr. Pickle, welcome, and the floor is yours.

00:12:51 Thanks, please proceed.

00:12:53 - Thank you, Mr. Chairman.

00:12:55 Good afternoon, Chairman Carper,

00:13:04 Ranking Member Cornyn, and members of the subcommittee.

00:13:07 Thank you for the opportunity to discuss

00:13:08 trade enforcement and entry of merchandise at U.S. ports.

00:13:12 As you all know, the importation and export of cargo

00:13:15 at 327 air, land, and maritime ports nationwide

00:13:19 enables our national and economic security

00:13:21 to provide a more equitable supply of inputs

00:13:24 for domestic manufacturers and increases

00:13:27 the purchasing power of U.S. consumers.

00:13:29 While all ports are different, each relies

00:13:31 on various government and private entities

00:13:33 performing their role to continue the flow of supply chains.

00:13:37 Importantly, U.S. Customs and Border Protection

00:13:40 is the primary federal agency charged

00:13:42 with enforcing U.S. trade laws

00:13:44 and facilitating the flow of legitimate cargo.

00:13:47 Last fiscal year, CBP processed over $5 trillion

00:13:50 in U.S. imports, including U.S. imports,

00:13:53 including U.S. imports, including U.S. imports,

00:13:55 including U.S. imports, including U.S. imports,

00:13:57 enforcing over 500 U.S. laws.

00:14:00 enforcing over 500 U.S. laws.

00:14:02 Before ships, planes, and trucks arrive at ports,

00:14:05 CBP receives information from various parties

00:14:08 in the supply chain to evaluate risk.

00:14:10 Most importers and shipments comply with U.S. laws,

00:14:13 resulting in about 80% of inbound shipments being released

00:14:16 before they physically arrive.

00:14:18 CBP also has a wide range of options

00:14:21 for the adoption of technology,

00:14:22 like artificial intelligence,

00:14:24 that can objectively validate data

00:14:25 that drives risk assessment.

00:14:27 Data informs CBP processes and should be collected

00:14:30 from the right party at the right time

00:14:32 in the entry process.

00:14:34 Data requirements should be developed

00:14:35 in partnership with industry to address well-defined needs

00:14:38 without slowing supply chains

00:14:40 or increasing transaction costs.

00:14:42 Modernizing CBP authorities, processes, and systems

00:14:46 in a comprehensive way should balance

00:14:48 to enable resilient supply chains.

00:14:51 Recent supply chain challenges have shown

00:14:52 that ports are where we focus attention

00:14:56 during system failures.

00:14:58 Improved efficiencies can be found

00:14:59 in embracing trade facilitation principles.

00:15:02 A third-way report found that improving trade facilitation

00:15:05 would save the U.S. economy $88 billion in export costs

00:15:10 and create about one million jobs

00:15:12 across every state in the country.

00:15:14 My written statement goes into more detail,

00:15:16 but here are a few facilitation opportunities.

00:15:19 Trusted trader programs are mutually beneficial

00:15:21 to government and industry,

00:15:23 but the cost of partnership is high for participants.

00:15:27 Partnership benefits should be evaluated

00:15:29 on an ongoing basis in consultation with businesses.

00:15:32 Further, CBP should consider innovative ways

00:15:35 to create new trusted trader programs

00:15:37 that reflect current supply chain and business practices.

00:15:40 Duty-free treatment of low-value shipments, or de minimis,

00:15:44 facilitates supply chains while still subjecting shipments

00:15:47 to enforcement of U.S. laws.

00:15:50 All de minimis shipments are required

00:15:52 to have the data that CBP uses for enforcement,

00:15:55 and 80% of de minimis shipments include even more data

00:15:59 through ongoing pilot programs.

00:16:01 Congress stated the economic benefits of de minimis

00:16:04 when raising the threshold in 2016.

00:16:06 In fact, American exports benefit

00:16:08 from de minimis policies in 89 countries

00:16:11 where they would otherwise face

00:16:12 significantly higher tariffs than products coming to the U.S.

00:16:16 Those standards could roll back

00:16:18 if the U.S. signals lack of commitment in this area.

00:16:21 Restricting de minimis domestically would bog CBP down

00:16:24 in collecting minimal revenue at a loss

00:16:27 rather than targeting, detaining, inspecting,

00:16:29 and seizing actual noncompliant shipments.

00:16:32 Entry requirements across the U.S. government

00:16:35 should be entirely digital

00:16:36 and not require duplicative filing or data.

00:16:39 Current systems for data intake

00:16:41 and sharing need to be updated

00:16:43 to maximize digital payments

00:16:44 and adopt downtime procedures

00:16:46 that do not revert to paper entry forms.

00:16:49 Agility in this area requires a governance structure

00:16:52 that creates clear decision-making authority

00:16:54 to resolve inconsistencies and duplication across agencies,

00:16:58 dedicated resourcing, and an ongoing mandate

00:17:01 to continually smooth the path of imports and exports.

00:17:04 Responsible members of industry

00:17:06 remain committed to working with CBP

00:17:08 and other government agencies

00:17:09 to create clear compliance standards,

00:17:11 address supply chain vulnerabilities, and address risks

00:17:14 like forced labor and intellectual property theft

00:17:16 at the source.

00:17:18 Mitigating the root causes of these risks

00:17:20 rather than solely through border enforcement

00:17:22 is more effective in preventing violations

00:17:24 from actually occurring

00:17:26 and remove stress from the port environment.

00:17:28 Supply chains are long, frequently complicated,

00:17:31 and subject to external stress.

00:17:33 The NFTC and our members look forward

00:17:34 to working with this committee and others

00:17:36 to reinvigorate public-private partnership

00:17:39 that can result in meaningful systems updates

00:17:41 that reduce pressure on the flow of goods through our ports.

00:17:44 Thank you, and I look forward to your questions.

00:17:47 - Mr. Pickle, thank you very much for opening statement,

00:17:49 for getting it started.

00:17:50 And our second witness is James H. Paler, Jr.,

00:17:55 Assistant General Organizer

00:17:57 of the International Longshoremen's Association.

00:18:01 The International Longshoremen's Association

00:18:03 is the labor union that represents longshore workers

00:18:07 on the East Coast of the United States.

00:18:10 Now, over the last five decades, Mr. Paler,

00:18:13 a second-generation longshoreman,

00:18:15 is that right, second generation?

00:18:17 Third, third generation,

00:18:19 has established an impressive career.

00:18:21 For much of this time,

00:18:23 he has assumed leadership positions within his union,

00:18:27 shaping its direction

00:18:28 and championing the rights of its members.

00:18:31 Mr. Paler, welcome, you have the floor.

00:18:33 - Good afternoon, Chairman Carper,

00:18:38 and Ranking Member Coon,

00:18:40 and distinguished members of the subcommittee.

00:18:43 Thank you for the opportunity to appear

00:18:45 to discuss trade and commerce of our nation's ports.

00:18:48 That ends my prepared statement.

00:18:51 I was a longshoreman starting in 1973,

00:18:54 and as you pointed out, I followed my father,

00:18:56 who followed his father onto the waterfront.

00:18:59 In 1973, I worked in the hold of a vessel,

00:19:01 loading and unloading.

00:19:03 The longshore industry consists of three classifications,

00:19:07 all longshoremen, which are the loading,

00:19:09 unloading of vessels and barges,

00:19:11 the facilitating of receiving and delivery of cargo,

00:19:15 which we refer to as clerks and checkers,

00:19:17 and then the maintenance division

00:19:20 of the International Longshoremen's Association,

00:19:22 which does a multitude of job functions

00:19:25 while on the terminal.

00:19:26 When I became a ship's carpenter,

00:19:29 I was assigned a responsibility of working directly

00:19:32 with customs back in 1973 and into 1974.

00:19:37 That job at that time actually was working side by side

00:19:41 with the customs inspector who would identify the cargo,

00:19:45 and we would travel with the inspector

00:19:46 in different locations of the terminal,

00:19:48 and then open the cases or packaging for any,

00:19:53 from apples to zebras is what I always say.

00:19:57 They've all been on the waterfront.

00:20:01 They would do what was said earlier

00:20:02 in your opening statements,

00:20:03 where they would check the origin of the cargo

00:20:06 and make sure that the US trade laws

00:20:09 were in compliance with that cargo,

00:20:12 and they would also be checking for actually insects

00:20:16 and in a lot of cases, drugs.

00:20:18 When we found situations that were suspicious,

00:20:24 many times we would leave the customs inspectors

00:20:26 to perform the rest of their inspection,

00:20:28 and then when they were complete,

00:20:30 we would come back into the location

00:20:32 and re-secure all the packaging

00:20:36 onto the cargos that were being inspected.

00:20:40 We would then turn in a billing process

00:20:43 that included the bill of lading for the cargo,

00:20:46 the type of cargo, and the type of inspection

00:20:49 that we would provide,

00:20:50 and then Steve, our terminal operator,

00:20:53 would bill the shipper for that cargo.

00:20:56 That changed.

00:20:59 Okay, once containerization came into play,

00:21:02 it changed the whole inspection process,

00:21:04 where each location or terminal

00:21:06 had to designate a portion of the port facility

00:21:10 to accommodate the movement of the containers

00:21:13 that would be brought to a docking facility,

00:21:15 where the customs inspector

00:21:17 then would identify the container

00:21:19 and instruct us to open the container,

00:21:21 which was cutting a safety security seal,

00:21:24 and then open the container,

00:21:25 and then the customs inspector would also determine

00:21:28 how much of inspection had to be done

00:21:30 out of that existing container.

00:21:32 That went on for days at a time,

00:21:35 and is still part of the process today.

00:21:37 Once we unpackage the product,

00:21:39 they do the investigation,

00:21:41 and then we would repackage it

00:21:43 and put it back into the same container

00:21:45 and add a new security seal to it

00:21:47 that was recorded for delivery.

00:21:49 The other part of the inspections

00:21:52 that were done at the terminal back then

00:21:55 were actually inspection on imported meat,

00:21:58 where thousands of loose boxes would come in to the port.

00:22:03 There would be meat inspection rooms

00:22:05 with the MID division,

00:22:06 or Meat Inspection Division of the USDA,

00:22:10 and we would open the meat boxes,

00:22:12 actually cut two slabs,

00:22:14 two-inch slabs out of the frozen meat,

00:22:17 and put them into a thawing tank,

00:22:19 which would then be deposited onto a tray for inspection.

00:22:24 That was a pretty normal process.

00:22:26 Okay, then another event came, September 11th,

00:22:30 and everything changed again.

00:22:32 And what we realized in September 11th,

00:22:34 that as stated earlier,

00:22:36 Customs did not have enough inspectors

00:22:38 to staff all the different locations,

00:22:40 especially with the higher level of scrutiny

00:22:43 that was being performed at each terminal.

00:22:46 They came up with the term

00:22:47 of centralized examination station.

00:22:51 Instead of manning all the port facilities,

00:22:56 had the facilities send the containers

00:22:58 to the central examination station.

00:23:01 The impact was we lost many jobs as a result of that,

00:23:04 and the people who were replacing our jobs

00:23:06 at the remote area were working for a lot less

00:23:09 than the family sustaining wages that we got.

00:23:11 That was the economics.

00:23:12 Most important piece was we were taking the containers

00:23:15 off the terminal and driving those containers

00:23:19 through our neighborhoods, up onto our highways,

00:23:21 sometimes through our sporting event facilities,

00:23:25 crossing rivers and bridges to go to this remote area.

00:23:28 So the higher level of risk was transferred

00:23:31 from the port out into our communities.

00:23:33 We were concerned about it.

00:23:35 We're still concerned about that being an issue.

00:23:37 We have a very good relationship

00:23:38 with Customs inspectors,

00:23:41 and we expect to continue with that.

00:23:44 And we look forward to enforcing

00:23:46 whatever the policy rules that have been enforced,

00:23:49 which we're not part of,

00:23:51 but my recommendation would be

00:23:53 that when there is a policy change,

00:23:56 that the ports themselves also educate the port workers

00:24:01 to make sure that they're working in conjunction

00:24:03 with the Customs inspectors as we move forward.

00:24:06 The other thing that I would recommend,

00:24:08 consistent enforcement of the port is an economic issue

00:24:12 that also becomes an issue of safety

00:24:14 when those who have the system in mind

00:24:16 are looking to breach whatever securities we do have.

00:24:19 If it's not being done consistently in port,

00:24:22 they would find it out.

00:24:24 So I appreciate the opportunity,

00:24:27 and we'd be glad to answer any questions.

00:24:30 - Thank you.

00:24:31 You just gave us the shortest prepared statement.

00:24:34 - What's that?

00:24:34 - I think you've delivered the shortest prepared statement

00:24:37 that we've had before this committee in quite a while,

00:24:41 but a very fulsome, off-the-cuff statement

00:24:44 that we very much appreciate.

00:24:46 We thank you for sharing that with us,

00:24:49 and look forward to having a chance

00:24:51 to ask you some questions.

00:24:53 Our next witness, our final witness,

00:24:56 is Mr. John Drake, Vice President, right?

00:25:01 Vice President.

00:25:02 It's a job I always wanted, but never landed,

00:25:06 for Transportation, Infrastructure, and Supply Chain Policy

00:25:10 at the U.S. Chamber of Commerce.

00:25:13 In his role, Mr. Drake represents the business community

00:25:17 on transportation, infrastructure,

00:25:19 and supply chain issues.

00:25:22 He's also, I'm told, a Commercial Customs

00:25:25 Operations Advisory Committee member.

00:25:28 Is that true?

00:25:29 - Yes, sir.

00:25:30 - All right.

00:25:31 Advising the U.S. Customs and Border Protection on trade.

00:25:34 Previously, Mr. Drake was a senior appointee

00:25:38 at the Department of Transportation,

00:25:40 and worked on Capitol Hill for over 10 years.

00:25:43 In what capacity?

00:25:44 - Two of no.

00:25:47 I was a professional staff for Senate Commerce Committee,

00:25:50 and then also professional staff

00:25:51 for the House Transportation Committee.

00:25:52 - All right, thank you.

00:25:54 All right, with that having been said,

00:25:56 welcome aboard, and you have the floor.

00:25:58 Thanks for joining us.

00:25:59 - Well, thank you, Senator.

00:26:00 And Chairman Carper, Ranking Member Cornyn,

00:26:04 Senator Cortez-Masto, and Senator Grassley,

00:26:06 and members of the subcommittee,

00:26:08 as the Chairman said, my name is John Drake,

00:26:10 and I want to thank you for the opportunity

00:26:12 to testify today at today's hearing

00:26:14 on U.S. Trade Enforcement and Entry of Merchandise

00:26:16 on behalf of the United States Chamber of Commerce.

00:26:19 Look, international trade is critical

00:26:21 to our nation's economy and way of life.

00:26:24 Ports are fundamental to this trade,

00:26:25 including the 328 international land, air,

00:26:28 and sea ports throughout the United States

00:26:30 that have a U.S. Customs and Border Protection presence.

00:26:33 The operations of these ports and moving goods efficiently

00:26:37 is of significant importance to the business community.

00:26:40 Delays, congestion, and ineffective operations

00:26:43 add cost to businesses and consumers,

00:26:45 ultimately making goods more expensive

00:26:47 and our economy less competitive.

00:26:49 It does not feel that long ago

00:26:52 when we were in the depths of the COVID pandemic,

00:26:54 and many Americans were facing delays

00:26:55 in everything from toilet paper

00:26:57 to products that required semiconductor chips,

00:27:00 and pictures of long lines of ocean vessels

00:27:02 waiting to enter the ports of LA and Long Beach

00:27:04 dominated the news.

00:27:06 We've come a long way since those days,

00:27:09 but we have not returned to normal

00:27:12 in any sense of the word.

00:27:14 Instead, today, we are in a new normal

00:27:17 of significant and seemingly daily supply chain challenges.

00:27:21 To start, I think many things

00:27:23 that are really sort of top of mind

00:27:24 for a lot of policymakers,

00:27:25 the shipping diversions caused by the Red Sea crisis,

00:27:28 the war in Ukraine,

00:27:29 the collapse of the Francis Scott Key Bridge in Baltimore.

00:27:33 We also face labor challenges.

00:27:35 For one, we have a shortage of truck drivers,

00:27:37 rail workers, longshoremen, pilots, mechanics,

00:27:41 and other necessary supply chain and logistics workers.

00:27:45 We also face disruptions stemming from contract negotiations,

00:27:48 including the UAW strike in 2023,

00:27:51 the Class I freight railroads negotiations,

00:27:54 the ILWU in the West Coast port terminals last year,

00:27:59 and the Teamsters and UPS negotiations.

00:28:01 Right now, we're also tracking the negotiations

00:28:04 that are happening between the ILA

00:28:06 and the U.S. Maritime Alliance

00:28:08 to renew labor contracts set to expire

00:28:09 at the end of this September.

00:28:11 We also face a difficult situation at our southern border.

00:28:15 Migrant surges are disruptive,

00:28:17 with CBP increasingly diverting resources

00:28:19 and performing short-term closures

00:28:22 of key commercial ports to help process migrants.

00:28:24 Make no mistake, these events are intended

00:28:28 to illustrate that businesses today

00:28:29 are managing multiple C-suite level disruptions at once,

00:28:33 that they create their own set of challenges.

00:28:36 As a CEO of a prominent shipping company recently said,

00:28:40 "We were accustomed to managing a black swan event

00:28:42 "once every couple years.

00:28:44 "Today, we deal with one every week."

00:28:46 There are silver linings, though.

00:28:49 For one, there is a greater awareness

00:28:51 and focus on the resilience and efficiency

00:28:53 of America's supply chains, including its ports of entries.

00:28:57 This is helping elevate discussions here in Washington, D.C.

00:29:01 and in other places around data

00:29:03 and the opportunities to improve the overall performance

00:29:05 of our supply chains, where any friction can lead

00:29:08 to impacts on consumer choice, price,

00:29:10 and economic development.

00:29:12 That's why we're grateful for this hearing.

00:29:15 But it's clear that we are in a very different world

00:29:16 than just a few years ago.

00:29:18 As such, we have several recommendations

00:29:20 for this committee.

00:29:22 First, we urge you to consider changes

00:29:24 to CBP statutory authorities in a holistic context.

00:29:29 Trade is interconnected.

00:29:30 There are significant concerns around threats

00:29:33 like forced labor, fentanyl and counterfeits,

00:29:35 among many other challenges.

00:29:37 And this deserves our attention.

00:29:40 But part of confronting these challenges means looking

00:29:42 at the entire universe of CBP's tools and authorities.

00:29:46 Making a change in one part of CBP's authorities

00:29:49 can result in unintended consequences

00:29:51 to other parts of our trade laws

00:29:53 that will have unintended and potentially negative

00:29:56 consequences on our businesses and consumers.

00:30:00 Second, this committee should consider

00:30:03 a comprehensive customs modernization effort

00:30:05 that balances the equally important goals

00:30:08 of enforcing US customs laws with trade facilitation,

00:30:11 which will enhance the resiliency of our supply chains

00:30:14 and also promote economic securities.

00:30:17 Important goals both.

00:30:18 That is why the chamber is helping lead a coalition

00:30:21 of businesses and trade associations

00:30:23 to help inform any update to CBP's trade authorities.

00:30:27 Finally, there are legislative opportunities

00:30:29 out there as well.

00:30:30 We urge Congress to pass Senators Peters and Cornyn's

00:30:33 Securing America's Ports of Entry Act of 2023.

00:30:36 CBP staffing, as Senator Cornyn noted,

00:30:39 has not kept pace with demand generated

00:30:41 by the tripling of goods entering the US

00:30:43 in the last 25 years.

00:30:45 While CBP will need to look at tools beyond staffing

00:30:48 to keep pace with trade demands, staffing is important.

00:30:51 And this legislation will help CBP reduce

00:30:53 the lengthy wait times, help stop the flow

00:30:56 of illicit goods, illicit drugs, and other contraband,

00:31:00 and facilitate new economic opportunities

00:31:01 throughout the US.

00:31:03 Thank you again for the opportunity to participate

00:31:05 in this hearing, and I look forward to your questions.

00:31:08 - Thanks, thanks so much for that statement,

00:31:11 and also for being with us today.

00:31:14 I'm going to yield to Senator Grassley

00:31:18 for the first questions.

00:31:18 Go ahead, Senator Grassley, again, welcome.

00:31:20 - I thank my colleagues for your courtesy

00:31:23 of letting me go ahead so I can meet

00:31:25 with the Waterloo Chamber of Commerce there in town.

00:31:28 Mr. Pickle, I want to talk about

00:31:30 the Uyghur Forced Labor Act,

00:31:33 and several lists, companies have been listed to it.

00:31:38 Most recently, Homeland Security listed 26 textile companies.

00:31:43 Do you think that this act has been effective

00:31:48 in changing companies' behavior,

00:31:50 whether it be US companies importing products from China,

00:31:55 or Chinese companies exporting to the United States?

00:31:59 - Thanks for the question, Senator.

00:32:00 I would say, from my time in government,

00:32:02 and my time in the private sector,

00:32:04 I have seen a level of attention

00:32:06 to the issue of forced labor that I did not experience

00:32:09 before the UFLPA was enacted into law.

00:32:11 Are there still issues that need to be ironed out

00:32:16 in terms of how industry and government

00:32:19 are working together to fully implement

00:32:22 every provision of the UFLPA?

00:32:24 Absolutely, I think there's a lot of work

00:32:27 that can be done in terms of understanding

00:32:29 how certain technologies can be used,

00:32:32 and how due diligence standards can be clarified,

00:32:35 to make sure that we have the best shot

00:32:36 at making sure that we're keeping

00:32:37 forced labor out of the country.

00:32:39 I do think the UFLPA, the provisions that envision

00:32:43 getting at the root causes of forced labor,

00:32:45 the diplomatic engagement, as well as using

00:32:48 our trade negotiating and trade engagements

00:32:51 to actually address those conditions,

00:32:54 is a far more sustainable approach

00:32:56 than relying almost entirely on border enforcement,

00:32:58 which should be more of a backstop

00:33:00 and less of a single point of failure.

00:33:02 Do you think it works effectively from third countries,

00:33:09 you know, transitioning from China to other countries

00:33:16 to come to the United States, is that a problem?

00:33:18 Sure, transshipment.

00:33:19 So transshipment is potentially an issue

00:33:22 in all forms of trade law compliance.

00:33:24 Forced labor is no exception to that.

00:33:25 Forced labor is challenging because, in many instances,

00:33:29 Customs and Border Protection has to evaluate

00:33:32 many tiers back in the supply chain,

00:33:34 where if they're looking at counterfeits

00:33:36 or they're looking at some other type of violation,

00:33:38 they're looking at the goods as they're presented to them,

00:33:40 as they exist right in front of them, right?

00:33:42 So it's a different dynamic.

00:33:43 They're having to go farther back in the process.

00:33:46 Transshipment is not necessarily always an illicit practice,

00:33:51 but to the extent that it's used to mask

00:33:53 where products are coming from, it can present a challenge.

00:33:57 Ultimately, CBP needs to have better visibility

00:34:01 into the risks that exist around the world,

00:34:05 something that other agencies should be contributing more to,

00:34:10 in my view, so that CBP can share that information

00:34:13 with their trusted trade partners.

00:34:15 Thank you.

00:34:16 Mr. Drake, since the enactment of the Trade Facilitation

00:34:20 and Trade Enforcement Act, there's been discussion

00:34:23 about the effective level of diminished threshold.

00:34:27 I support the passage of that act,

00:34:29 and I still consider myself a free trader.

00:34:32 However, I believe that continuous abuses

00:34:35 of this threshold must be addressed.

00:34:38 Do you think that there's a more effective level

00:34:40 of Congress could set in diminished threshold

00:34:46 in order to prevent abuses

00:34:49 such as bulk importation of counterfeits?

00:34:52 So we have found that the enter dollar level

00:34:54 has been very successful, and it has allowed CBP

00:34:57 to target its limited enforcement resources

00:35:00 to where it is best appropriate.

00:35:03 That being said, we recognize that the trade environment

00:35:07 has changed significantly over the last 25 years.

00:35:10 There are concerns out there that CBP is not collecting

00:35:15 certain types of data that would help

00:35:17 further refine its enforcement mission,

00:35:20 but we would argue that that is true

00:35:23 for not just the minimum of shipments,

00:35:25 but all up and down the trade environment.

00:35:27 So formal entry and informal entry, et cetera.

00:35:31 We have been supportive of CBP looking to expand

00:35:34 the data it's collecting from new parties

00:35:37 in the custom space, like warehouses,

00:35:39 fulfillment centers, et cetera,

00:35:41 but we think that more can be done.

00:35:43 And we do think that efforts to single out de minimis

00:35:47 are inappropriate, and I think that we would say

00:35:52 that a comprehensive review of the data

00:35:55 that CBP's collecting at all levels of trade

00:35:58 are a more appropriate focus for Congress's attention.

00:36:02 - Mr. Pickle, I'm gonna have a question

00:36:05 for writing in letter because my time is up,

00:36:09 so I'll ask you to answer that writing.

00:36:12 Thank you very much.

00:36:13 - Yes, sir.

00:36:14 - Senator Gratzky, thank you so much.

00:36:16 How long were you the chairman of this committee?

00:36:19 How many years did you serve on this committee?

00:36:24 - All but four of the 44 years I've been in the Senate.

00:36:28 - So you're sort of a newcomer, huh?

00:36:29 - That was from 1986 to 1890

00:36:33 when we didn't have enough Republicans

00:36:36 because I was way down there in the far end.

00:36:39 Never thought I'd ever get to the top.

00:36:41 - Yeah, but you did.

00:36:42 How long did you serve as chair for this committee?

00:36:44 How long?

00:36:45 - Six years in the House and 44 here,

00:36:48 I guess we add up to 50, right?

00:36:50 - That's pretty immense.

00:36:52 Good years, 50 good years, thank you.

00:36:53 Thanks so much for helping us kick this off.

00:36:56 I think we're gonna turn to Senator Cortez-Masto

00:37:01 and then maybe to Senator Cornyn if he's ready.

00:37:05 - Thank you, Mr. Chair. - Go ahead, please, welcome.

00:37:06 We're glad you're here.

00:37:07 - I understand from Senator Gratzky there's hope for me

00:37:09 'cause I'm down at the end.

00:37:11 So at some point in time, I'm assuming there's hope for me.

00:37:13 - You'll be here faster than you think.

00:37:15 (laughing)

00:37:17 And if I can make it, you can too, believe me.

00:37:20 - Thank you.

00:37:20 Thank you for this discussion, gentlemen.

00:37:22 Thank you for being here.

00:37:23 One of the things I wanna talk about

00:37:25 is the US foreign trade zones,

00:37:27 which in Nevada is happening in an important area

00:37:32 for so many of our businesses.

00:37:34 I am hearing from our businesses

00:37:37 and from our Las Vegas foreign trade zone

00:37:40 that Customs and Border Patrol struggles

00:37:43 to maintain adequate staff to respond to the needs

00:37:46 of those foreign trade zones in a timely manner.

00:37:50 And I'm curious, Mr. Pickle and Mr. Drake,

00:37:53 has this been your experience as well?

00:37:54 Are you seeing businesses having those same challenges?

00:37:57 - I would start by offering that I think this is one symptom

00:38:02 of what's been alluded to here today,

00:38:04 which is that US Customs and Border Protection

00:38:06 has had ongoing and pretty pervasive staffing shortages

00:38:11 going back to before I started working there in 2011.

00:38:15 So I think--

00:38:16 - Nationally, not just at the southern border,

00:38:18 but nationally everywhere across the country.

00:38:20 - Yes, Senator, yes.

00:38:22 And so I think compounding that challenge

00:38:24 is that there are some FTZs in the country,

00:38:26 I'm not sure about the FTZs or subzones in your state,

00:38:30 but they can exist up to 60 miles or 90 minute drive time

00:38:35 away from the ports of entry.

00:38:37 So I know that that's particularly challenging

00:38:38 for some ports that are staffed at one or two

00:38:41 or three CBP officers to be able to get out to those ports.

00:38:45 They do try to adopt additional types of oversight,

00:38:50 whether it's closed circuit videos

00:38:53 or different types of compliance programs,

00:38:56 weekly reports that are generated by the FTZs

00:38:58 that show their inventory control and so forth.

00:39:01 But in terms of the actual physical presence there,

00:39:05 I would tie that back to the nationwide staffing shortage

00:39:08 and the systemic challenges with that distance.

00:39:11 - And I appreciate that.

00:39:12 I was down a couple of months ago

00:39:14 at the Nogales port of entry in the Tucson sector,

00:39:18 and I understand that that port alone,

00:39:20 just talking with the customs agents there,

00:39:23 that work there, the men and women,

00:39:25 it handles $30 billion in trade each year,

00:39:27 just in those two ports of entry.

00:39:30 But I also know what you're saying

00:39:33 is that they are understaffed and overwhelmed,

00:39:37 not just with the immigration that's happening,

00:39:40 but the trade, the increasing trade that they see.

00:39:43 And really, that's one of the reasons

00:39:45 why I supported the Bipartisan Border Security Act,

00:39:49 the James Lankford, Kirsten Sinema,

00:39:53 Chris Murphy legislation that was put together,

00:39:56 because in that legislation,

00:39:58 based on what I was hearing firsthand at the border,

00:40:01 particularly the Tucson sector,

00:40:03 it provides additional resources

00:40:05 for US Customs and Border Protection, among other things,

00:40:09 additional resources to hire US Customs

00:40:12 and Border Security personnel,

00:40:14 and money, almost a billion dollars,

00:40:16 to expand border security and operational capacity.

00:40:19 And it's what I'm hearing in my state,

00:40:20 it's what I saw at the border.

00:40:22 And I suspect, and I may be wrong,

00:40:24 but Mr. Drake, it's my understanding

00:40:26 that the US Chamber supported this legislation

00:40:28 when it first came out.

00:40:29 I suspect it's for that reason,

00:40:30 to provide additional resources that are necessary

00:40:34 for our Customs and Border Patrol, is that correct?

00:40:37 That is correct.

00:40:38 I think we see the failure to act

00:40:42 on immigration reform as a missed opportunity.

00:40:44 I think we would say that a lot of the challenges

00:40:47 that CBP's experience at the southern border

00:40:49 are in part because the immigration laws are out of date.

00:40:52 But we do think that border security's an important area

00:40:57 where we need to focus on to fix this problem.

00:40:59 Yeah, thank you, I appreciate that.

00:41:01 One of the other things I was hearing from my businesses

00:41:05 is that there are just a lot of duplicative data requirements

00:41:11 rather than a streamlined entry or export process.

00:41:15 Is that true as well, what you're hearing and seeing?

00:41:17 I'm just curious, Mr. Drake, start with you.

00:41:19 It is, I think, duplicative and also,

00:41:24 I think another area where the business community

00:41:26 is concerned is that oftentimes the data

00:41:29 that is being asked to be collected

00:41:30 isn't necessarily tied to a specific goal

00:41:33 in the enforcement regime.

00:41:34 So if this data that you're asking us to provide to CBP,

00:41:37 for example, is this tied to screening for fentanyl

00:41:42 or screening for counterfeits?

00:41:44 Maybe it is.

00:41:46 I think what we would argue is CBP has not always

00:41:49 been the best at articulating that clear connection

00:41:52 and how that data collection ask

00:41:55 would meet those revised goals.

00:41:57 Thank you, Mr. Pickle?

00:41:58 I would just add that, I mentioned in my statement

00:42:00 that there are 47 different federal agencies

00:42:03 that work with CBP to regulate the importation of products.

00:42:06 Each one of those agencies has their own unique

00:42:08 entry requirements and their own ways

00:42:10 of approaching their regulatory responsibilities.

00:42:14 So to the extent that information can be shared better

00:42:17 and there could be among those agencies

00:42:20 and then there could be more of a cohesive governance

00:42:24 structure around how data is collected,

00:42:26 there's an automated system that collects this data.

00:42:30 And to the extent that there were more of a

00:42:33 decision-making structure to deconflict

00:42:36 and deduplicate those data requirements,

00:42:40 that would definitely smooth the experience

00:42:42 in sort of the digital data input process.

00:42:45 Thank you, and I suspect that's why you called

00:42:47 for the codification of the Border Interagency

00:42:49 Executive Council, one of the reasons?

00:42:50 Yes.

00:42:51 Thank you, my time is up.

00:42:52 I appreciate that.

00:42:53 Thank you.

00:42:54 Thank you, Senator Cortez Masto.

00:42:57 Gentlemen, the Congress appropriated $380 million

00:43:04 in fiscal year 2024 for non-intrusive inspection equipment.

00:43:09 Additionally, for DHS's Fentanyl Initiative,

00:43:18 including $32 million for expanded lab capacity

00:43:22 under the Fentanyl Initiative,

00:43:25 that provided funding for an increase

00:43:26 in 2,000 border agents, bringing the total

00:43:30 funding level to 22,000 agents

00:43:33 and 150 new CBP officers who work at the ports of entry.

00:43:38 Now, I realize that none of that's been implemented yet,

00:43:42 but Congress has been generous, I think,

00:43:45 even by Washington, D.C. standards

00:43:48 to try to respond to the needs of being

00:43:52 shorthanded at the border.

00:43:53 Mr. Pickle, Mr. Drake, do you have any other suggestions

00:43:57 for things we need to do to meet

00:44:00 the resource problems at the border?

00:44:03 Mr. Pickle first.

00:44:05 Sure, thanks for the question, Senator.

00:44:06 I would say that, as I said, CBP has been

00:44:10 in a pervasive staffing shortage.

00:44:13 I think with respect to the trade responsibilities,

00:44:16 which obviously is one facet of a very complicated job

00:44:20 for the agency, it's very important to look

00:44:23 for creative ways to use innovation.

00:44:26 We talked a little bit about data,

00:44:28 the use of data and the way that CBP gets that

00:44:31 before cargo actually arrives at a land port,

00:44:34 an airport, a seaport, and being able to do more

00:44:37 to evaluate risk using that data,

00:44:39 using technology like artificial intelligence

00:44:42 to be able to validate that data using an objective source

00:44:47 would really help CBP be able to identify risk more readily

00:44:52 rather than sort of continuously needing

00:44:57 more and more and more officers.

00:44:59 So the adoption of AI, I think, is one example.

00:45:02 So to put in the context of NII at a land border port,

00:45:06 you know, if AI were able to compare a static image

00:45:09 of a truck coming through a port compared to the way

00:45:12 that that truck came across the port the last five times

00:45:16 to see anomalies, AI technology could do that much quicker

00:45:20 than the naked eye of a CBP officer.

00:45:23 - Just to press the issue a little bit,

00:45:27 if AI can help us detect infractions and problems

00:45:31 at the border, you're still gonna need CBP agents

00:45:33 to follow up on that, right,

00:45:34 and do the enforcement compliance actions, okay?

00:45:37 - Yes.

00:45:38 - So we're not talking about displacing the need

00:45:40 for flesh and blood human beings?

00:45:43 - No, I don't think that that process

00:45:44 will be entirely automated, but I think the idea

00:45:47 is that you're taking the CBP officers

00:45:49 and putting them in the roles that you need a person to do

00:45:54 and let the technology compare the data points across time.

00:45:59 So the CBP officer would still do the inspection,

00:46:01 they would still, you know, make sure

00:46:03 that all the other entry requirements are being met.

00:46:06 - And Mr. Drake, just to add to that question,

00:46:10 would trusted traveler programs,

00:46:14 because if you go to the border, for example,

00:46:17 they have a lot of people that basically

00:46:19 are already been inspected, not at the border,

00:46:22 but before they get to the border,

00:46:23 and then they have secure containers or other facilities

00:46:27 that obviate the need to duplicate that at the border.

00:46:31 Those are the sorts of things that you think will help?

00:46:35 - Absolutely, and I think they've been very successful

00:46:37 up till now.

00:46:38 I think if, with the legislation that you're considering,

00:46:42 as well as, you know, if Congress were to look

00:46:44 at these programs more fully, I think, you know,

00:46:46 our recommendation there is to continue to make sure

00:46:48 that the advantages that are bestowed upon participants

00:46:53 in those programs meet or exceed the administrative aspects,

00:46:58 and that there is a strong dialogue that's happening

00:47:01 between the federal government and the private sector

00:47:03 to make sure that what's being asked of the private sector

00:47:07 is understood and is discussed ahead of time.

00:47:12 - Let me come back to you again, Mr. Drake.

00:47:16 - Yes, sir.

00:47:17 - We talked a little bit, you alluded in your opening

00:47:19 statement to the disruption in legitimate trade and travel

00:47:22 as a result of the migrant surge across the border,

00:47:25 and of course, we know that so many personnel

00:47:29 have to relocate it to try to deal with processing migrants

00:47:35 and the like, but in particular, CBP suspended rail crossings

00:47:40 in Eagle Pass, Texas, multiple times, as you know,

00:47:43 during the migrant surges, so they were shifted over

00:47:47 to assist border patrol.

00:47:49 Do you happen to know what percentage of rail traffic

00:47:52 between the United States and Mexico

00:47:54 the Eagle Pass rail crossing accounts for?

00:47:56 - That's a good question, Senator.

00:48:00 So Eagle Pass is a significantly important rail crossing

00:48:04 between the US and Mexico.

00:48:05 My understanding is the most important rail crossing

00:48:10 right now, and certainly, I believe it handles

00:48:14 the majority of rail traffic between the US

00:48:16 and Mexico itself.

00:48:17 - My notes here indicate that BorderPlex Alliance

00:48:20 estimates it to be about 45%.

00:48:23 Does that sound about right?

00:48:24 - That sounds about right, yes, sir.

00:48:26 - Union Pacific Railroad estimated a daily overall impact

00:48:29 of $200 million to the US economy

00:48:33 from the closure.

00:48:34 Does that sound about right?

00:48:37 - I think it was a little bit higher.

00:48:38 You're talking about the closure that happened

00:48:39 back in December.

00:48:41 Yeah, my understanding is the number was around

00:48:43 $205 to $210 million.

00:48:44 - And Mr. Pickle, what are the economic impacts downstream

00:48:49 when you have these sort of problems at the border,

00:48:54 suspending rail crossings, for example?

00:48:56 What are the economic impacts?

00:49:00 And do these impact supply chain resilience?

00:49:03 - Yes, of course.

00:49:05 So in addition to the impacts that the rail processing

00:49:10 operations had, there were also several instances

00:49:14 where the Bridge of the Americas in El Paso

00:49:16 was shut down, the cargo facilities there.

00:49:19 And I think there's sort of a macro impact

00:49:22 in terms of encouraging the movement of manufacturing

00:49:26 facilities back to the Western Hemisphere

00:49:29 from areas like Southeast Asia,

00:49:32 and realizing that there could be potentially

00:49:35 fragile border situations that would prevent

00:49:38 those products from coming into the United States.

00:49:40 And the potential downstream economic impacts

00:49:42 that you refer to are that those products

00:49:45 are going to be further manufactured.

00:49:48 There are people who work in distribution centers.

00:49:50 There are people who stock shelves,

00:49:52 who are waiting for those products to come.

00:49:56 And of course, consumers.

00:49:58 I mean, these situations can lead to product shortages

00:50:01 for consumers, potential work stoppages

00:50:04 in extreme situations, and also rethinking of investment

00:50:09 if there seem to be persistent risks.

00:50:12 - Well, because my state, Texas, is ground zero

00:50:15 for a lot of these problems, we are perhaps more

00:50:18 acquainted with the challenges that the current crisis

00:50:23 at the border presents.

00:50:25 But Mr. Drake, I seem to remember a poster

00:50:28 by the U.S. Chamber of Commerce that talks about

00:50:33 where the jobs that are created by the binational trade

00:50:37 are distributed, and I'm sure those include

00:50:39 the state of Maryland, and the state of Nevada,

00:50:42 the state of Delaware, virtually all 50 states.

00:50:44 So there's a huge economic impact

00:50:47 across the entire country when those supply chains

00:50:51 are disrupted, or because of bottlenecks

00:50:55 associated with shortages of CBP

00:50:57 and other inspection facilities.

00:51:00 My time's up, Senator Carton.

00:51:02 - Thank you, Mr. Chairman.

00:51:05 I'm gonna talk about uncertainties and catastrophic events

00:51:10 that affect the supply chain.

00:51:11 I know, Mr. Drake, you mentioned the Port of Baltimore

00:51:14 with the Francis Scott Key Bridge that collapsed

00:51:17 when the DALI struck it.

00:51:21 Totally closing the Port of Baltimore,

00:51:23 the third busiest port in our country.

00:51:26 And I wanna start off by saying

00:51:29 there was incredible cooperation to deal with all aspects

00:51:34 of that catastrophic event, from this federal government,

00:51:38 state government, local government, private sectors,

00:51:41 all working together.

00:51:43 And today, the port is opened months earlier

00:51:47 than we thought possible.

00:51:49 There's been help to the businesses

00:51:54 whose supply chains were disrupted.

00:51:56 There's been some help for the workers,

00:51:58 as well as small businesses, et cetera.

00:52:00 So I'm gonna start off by saying

00:52:02 there was a really unified response.

00:52:05 But there are challenges here.

00:52:07 The Port of Baltimore does about $80 billion

00:52:10 of business a year.

00:52:11 We're the number one on roll-on, roll-off cargo.

00:52:16 And during the early stages,

00:52:17 when the bridge was knocked down,

00:52:19 I met with a lot of the business owners

00:52:21 and the labor people.

00:52:23 And they were puzzled because it was difficult

00:52:28 for a small business operator of a trucking company

00:52:30 to take their trucking company

00:52:32 and go to another port and get business

00:52:34 because of the protocols of the port

00:52:36 and all the politics involved there.

00:52:39 There was challenges with the workers at the port

00:52:42 as to whether they could transfer some of their work

00:52:45 to other places.

00:52:46 That was also a turf problem that we had to deal with.

00:52:50 We had shippers that needed alternative supply routes.

00:52:55 And we worked to get that done.

00:52:58 But there was some concern that it might not return

00:53:01 to the Port of Baltimore,

00:53:02 and that might be the price for alternative routes.

00:53:06 So there were trades there

00:53:07 that didn't seem to be a consistent policy.

00:53:11 And do we need to rethink

00:53:14 how we can have a more seamless national system?

00:53:17 Because unpredictable catastrophic events

00:53:20 seem to be occurring more frequently these days.

00:53:22 Do we need to have a better understanding

00:53:25 as to how we can work together in a unified way

00:53:28 to make sure we protect supply chains,

00:53:29 but also protect a community

00:53:32 that goes through an unpredictable event?

00:53:35 Drake, you look anxious to answer.

00:53:37 (laughing)

00:53:40 - So I will tell you, after the last four or five years,

00:53:42 the business community is getting exceptionally better

00:53:44 about responding to catastrophic events.

00:53:47 This is one of those situations where, as you said,

00:53:52 the response has been over the top.

00:53:55 And the fact that you had this terrible thing happen,

00:53:58 six people lost their lives.

00:53:59 And yet, local government, state government,

00:54:05 the business community, the federal government,

00:54:06 and Congress came together to solve this.

00:54:08 And as you noted, we're well ahead

00:54:10 of where I think we thought we were gonna be at this point.

00:54:13 That being said, we have a bridge

00:54:17 that we have to replace quickly.

00:54:20 Because I think the business community

00:54:23 is not gonna be able to wait forever.

00:54:26 I think we work very close

00:54:28 with the Maryland Chamber of Commerce

00:54:30 in helping its response efforts.

00:54:33 We know that people who work in Baltimore,

00:54:36 a 30-minute commute now is two hours each way,

00:54:38 or three hours each way.

00:54:40 That is not sustainable.

00:54:42 And if it's gonna take four plus years

00:54:44 to get a bridge rebuilt,

00:54:46 you wonder how long people will wait.

00:54:50 And that bridge isn't just critical

00:54:52 for people who are going to and from work,

00:54:55 but it's also critical for supply chains.

00:54:57 It does add cost.

00:55:00 - Let me just underscore that point.

00:55:01 - Yes, sir.

00:55:03 - There's, I think, 34,000 vehicles that cross that bridge.

00:55:06 There's three crossings in the Port of Baltimore

00:55:09 on the North-South Corridor.

00:55:11 Two are tunnels, one was the Francis Scott Key Bridge.

00:55:15 Many of the containers cannot go through the tunnels

00:55:18 because of the cargo that they're containing.

00:55:21 The delays are, it could be an hour delay

00:55:26 with the detours.

00:55:30 That affects costs and supply, and you're exactly right.

00:55:33 We are now experiencing tremendous traffic problems

00:55:37 because the port is open.

00:55:38 We're happy the port is open,

00:55:40 but there's gridlock now, and you're right,

00:55:42 patients will run thin.

00:55:44 So I very much appreciate your statement.

00:55:47 We gotta get moving on that quickly.

00:55:49 One of the reasons why our delegation,

00:55:52 bipartisan delegation, thinks it's urgent

00:55:54 that we pass the bill that allows

00:55:56 for the 100% state reimbursement,

00:55:58 which is what we do during these catastrophic events now,

00:56:02 is that we wanna start the construction phase

00:56:04 as quickly as possible.

00:56:05 And to start the construction phase,

00:56:07 that bill has to be passed for it to be 100% federal share.

00:56:11 It's not the time limit when you start,

00:56:13 which many of my colleagues think,

00:56:15 it's when you start the construction phase,

00:56:17 you have to have that law in place.

00:56:19 So, Mr. Chairman, I'm just making a plea to my colleagues.

00:56:22 We've gotta get that bill done as quickly as possible

00:56:24 so it's not the reason for the delay

00:56:27 on the work being done to replace the bridge.

00:56:29 And, Drake, I appreciate you bringing that up

00:56:32 because it does affect supply chain.

00:56:34 It's beyond just the Port of Baltimore.

00:56:37 It's an efficiency issue, there's a frustration issue,

00:56:40 and the response to date has been great.

00:56:43 It's gonna take a while to get that bridge replaced,

00:56:45 but we don't wanna see unnecessary delays.

00:56:48 So, thank you.

00:56:48 - Yeah, and, Senator, we would love to work with you

00:56:50 on that legislation.

00:56:51 - Thank you, thank you.

00:56:52 The Chairman of Environment Public Works Committee

00:56:55 came back.

00:56:56 I'll repeat it all again. - The pressure's on.

00:56:58 - It's urgent that we get the,

00:57:01 the Chamber of Commerce is agreeing with me.

00:57:04 So, we gotta get that bill passed.

00:57:05 - Repetition is good.

00:57:07 - We can't start the construction phase

00:57:09 until that bill is done,

00:57:10 and it is affecting the supply chain in our port.

00:57:13 Just wanted to make that point.

00:57:14 - Senator Cardin, thank you.

00:57:22 Thank you, thanks for being a great friend

00:57:24 and a great colleague on this committee.

00:57:26 He and I serve and serve,

00:57:28 I can sit next to each other on two different committees,

00:57:30 and he finds it hard to get away from me.

00:57:33 He lives just down the road, not far, not too far away.

00:57:36 All right, thanks, pal.

00:57:40 The, let me see, I think I have a,

00:57:45 looking for a question here.

00:57:46 I have Mr. Pickle.

00:57:48 Mr. Pickle, I might be wrong.

00:57:52 I think when Bob Dole was in the United States Senate,

00:57:58 he may have served on the Finance Committee.

00:58:01 I'm not sure of that,

00:58:01 but he may have served on the Finance Committee,

00:58:04 which would mean he'd sat right here.

00:58:06 His wife, Elizabeth Dole, was quite an accomplished person.

00:58:11 She was a Cabinet Secretary in,

00:58:13 I think, one of the Bush cabinets,

00:58:16 and she was nominated to be a Cabinet Secretary,

00:58:19 and at her, you may know this,

00:58:23 when people are nominated for a Cabinet position,

00:58:28 it's not uncommon for them to be introduced

00:58:30 at the committee, before the Committee of Jurisdiction,

00:58:34 by their home state senator,

00:58:35 or one of their home state senators,

00:58:38 and when Elizabeth Dole was nominated

00:58:39 to be a Cabinet Secretary many moons ago,

00:58:43 her home state senator showed up to introduce Elizabeth Dole

00:58:48 and I don't have the words exactly,

00:58:53 but I think he said to his colleagues that day,

00:58:58 I regret that I have but one wife to give for my country.

00:59:02 I regret that I have but one wife to give for my country.

00:59:08 I love Bob Dole, and Elizabeth, he's deceased sadly.

00:59:12 Bob Dole and I are both veterans, different wars,

00:59:15 but great sense of humor, great service.

00:59:19 I understand that you may have a spouse

00:59:23 that's not been nominated to be a Cabinet Secretary,

00:59:27 but to serve in some other capacity,

00:59:29 maybe even in the U.S. Senate where we serve,

00:59:34 and just take just a minute and explain with us,

00:59:39 this is not her confirmation hearing,

00:59:40 but what is the nature of her responsibilities in this,

00:59:43 and I'm told she's quite a gift from your family.

00:59:46 - Yes, my wife Megan is the first woman to serve

00:59:49 as the Journal Clerk of the United States Senate.

00:59:52 - Okay.

00:59:53 Say that one more time.

00:59:58 - Sure, my wife Megan is the first woman

01:00:01 to serve as the Journal Clerk of the United States Senate.

01:00:04 - Yeah, explain what that means.

01:00:06 - She sits on the Senate floor and captures

01:00:09 the official record of the Senate's proceedings.

01:00:12 - Pretty scary, huh?

01:00:13 Usually not.

01:00:16 Well, thank you for sharing your wife.

01:00:18 - Yes, my pleasure.

01:00:19 - With all of us.

01:00:21 Mr. Poehler, you're up for another question?

01:00:25 I thought you would be.

01:00:26 In your testimony, I believe you mentioned

01:00:29 the close relationship that many longshoremen have

01:00:34 with Customs and Border Protection agents

01:00:36 at ports across the country.

01:00:38 My question for you, Mr. Poehler,

01:00:41 could you just take a few minutes for us

01:00:43 and discuss differences between the work

01:00:46 that longshoremen perform and the work

01:00:49 that Customs and Border Protection agents perform at ports

01:00:54 and how both groups work together to make sure

01:00:57 that goods that move through these ports

01:01:00 are thoroughly inspected?

01:01:01 - Thank you, Mr. Chairman.

01:01:04 If I can, I would like to applaud Senator Cardin's

01:01:08 understanding of the impact of the Francis Scott Key Bridge

01:01:13 on the Port of Baltimore.

01:01:14 I think he outlined it very well.

01:01:16 But to answer your question,

01:01:18 the relationship that we've had with Customs

01:01:21 goes back even before my time starting in 1973.

01:01:24 My father performed a work of assisting Customs

01:01:28 way before I was even on the waterfront.

01:01:31 But that relationship developed into the friendship

01:01:33 and it was based on mutual respect

01:01:36 that the labor that was performed before containerization,

01:01:40 which was much more burdensome back then

01:01:44 than it is today where it's more skilled,

01:01:46 it's required to handle the containers

01:01:48 versus the old style of cargo or freight,

01:01:52 which was box-cased and loosed at the time.

01:01:56 So I think that the relationship that grew

01:02:00 was the understanding that the skill that we provided

01:02:03 to perform the labor that was needed

01:02:05 for them to have the ability to assist

01:02:07 as much cargo as possible

01:02:09 with the manning that they had available at the terminals

01:02:12 where we were working at.

01:02:14 And they were spread thin

01:02:16 where they were working at container terminals.

01:02:18 Most ports are multifaceted

01:02:20 and there are some finger piers that still remain today

01:02:24 that were used pretty frequently back in the '70s and '80s

01:02:28 that once again all changed through containerization.

01:02:31 But those relationships still exist today.

01:02:34 It's one of respect.

01:02:35 And the people who work side by side

01:02:37 with the Customs inspectors at the terminals

01:02:40 are usually return employees that are there day to day.

01:02:44 And in the casual labor industry,

01:02:46 sometimes that's not the case at all facilities.

01:02:51 But they develop those relationships

01:02:52 and have an understanding.

01:02:54 And it helps the process be expedited

01:02:57 to get as much cargo done or inspected

01:02:59 in an eight-hour period and sometimes longer

01:03:02 by virtue of each other understanding the relationship

01:03:05 and the responsibilities that both the inspectors have

01:03:08 and our people who facilitate the handling of the cargo

01:03:12 while they're inspecting.

01:03:14 - I'm gonna just follow up on that

01:03:15 and then I'm gonna ask if any of our other witnesses

01:03:18 wanna comment on what we are talking about here.

01:03:21 But Mr. Palekin, could you just discuss with us briefly

01:03:26 how staff from other partner government agencies

01:03:30 stationed at US ports like Food and Drug Administration,

01:03:35 like the Coast Guard,

01:03:37 work with longshoremen at these ports?

01:03:40 - Yes, the USDA is a perfect example,

01:03:43 which is a division of the CPP.

01:03:46 And when you have food products, like in your own port,

01:03:49 we have bananas that are the staple

01:03:51 or the anchor business of the Port of Wilmington.

01:03:54 And we have a lot of stone fruit

01:03:56 that comes from other locations in the South,

01:03:58 South America and Central America

01:04:02 and all places from around the globe.

01:04:06 So USDA plays a very intricate part

01:04:09 on making sure that that cargo is to be inspected

01:04:12 for the quality of the fruit,

01:04:15 making sure that there's no insects in there

01:04:17 that would be harmful to our environment.

01:04:19 So it's something that happens on a regular basis,

01:04:22 a daily basis, and provides a lot of overtime.

01:04:25 So it's, once again, those relations that we develop

01:04:30 with CBP inspectors are the same

01:04:32 that we develop with the USDA inspectors.

01:04:35 - All right, thank you.

01:04:36 A question, if I could, for Mr. Picoll.

01:04:39 And the COVID-19 pandemic and Russia's war in the Ukraine,

01:04:44 senseless war in the Ukraine, I would say,

01:04:49 have jumbled supply chains and disrupted the global economy

01:04:53 in many ways, unprecedented ways, I think.

01:04:56 And in your testimony, I think you mentioned

01:04:59 that in order to build stronger

01:05:01 and more resilient supply chains across all sectors,

01:05:05 across all sectors, companies must work

01:05:08 with the federal government to anticipate

01:05:10 supply chain challenges and do their fair share

01:05:14 to ensure that goods entering the United States

01:05:18 are safe for consumers.

01:05:20 My question, would you please take a few moments

01:05:24 to share with us how different industries

01:05:28 can work with the federal government,

01:05:29 can work with the federal government to share information

01:05:33 and build more resilient supply chains

01:05:36 in an effort to prevent the supply chain bottlenecks

01:05:39 and shortages that Americans have become

01:05:41 all too familiar with?

01:05:42 - Thanks for that question.

01:05:45 I think it's a very important one,

01:05:46 and one that is not entirely new

01:05:50 in the context of port operations

01:05:52 and some of the agencies that we've talked about

01:05:55 already here today, certainly with CBP.

01:05:57 Many of the best innovations from process standpoint

01:06:05 that I've seen CBP adopt

01:06:08 and some of the partner government agencies

01:06:10 come as a direct result of having not only formal

01:06:14 but informal consultations,

01:06:16 engagement with private industry.

01:06:19 Much of that is done through

01:06:20 the Commercial Operations Advisory Committee

01:06:23 that's established in statute.

01:06:24 And Mr. Drake, my fellow panelist, serves on.

01:06:27 I would say that it's important to also have conversations

01:06:31 on an ad hoc basis as well,

01:06:33 to really identify what are some of the pressing concerns

01:06:37 that industry is seeing and challenges that CBP is seeing

01:06:41 and how those issues can be resolved,

01:06:43 but also to look forward and say,

01:06:45 what's the next wave of emerging challenges

01:06:49 that we're gonna be facing?

01:06:51 Particularly because many federal agencies

01:06:55 sort of operate in a silo, right?

01:06:56 They're performing their responsibilities

01:06:59 at a port of entry or within a process.

01:07:01 So in many instances, industry can help

01:07:05 to sort of see across the supply chain

01:07:08 that may be regulated by multiple different agencies

01:07:11 and help find where there may be innovations

01:07:14 that they can borrow from other agencies as well.

01:07:16 So I would say the simple answer to your question

01:07:19 is to talk to each other,

01:07:21 is to really stay in constant communication.

01:07:24 One example I would give

01:07:25 is the Air Cargo Advanced Screening Program

01:07:28 where CBP identified challenges

01:07:31 in the air cargo environment

01:07:32 in terms of getting data in enough time

01:07:36 to be able to screen packages

01:07:37 that were coming to the US on aircraft.

01:07:40 And for lack of a better phrase,

01:07:43 industry and CBP officials kind of locked themselves

01:07:46 in a room and said, we have to figure this out.

01:07:48 And they did.

01:07:49 And they figured out a construct

01:07:51 that is the operative requirement now

01:07:54 for security filings related to air cargo.

01:07:57 So I think that constant communication

01:07:59 and collaboration is the most important component.

01:08:02 - All right, thanks for, thank you for that.

01:08:03 Anybody else want to comment on the question?

01:08:05 Anybody?

01:08:06 Gentleman, Mr. Prela, Mr. Drake, anything?

01:08:08 No, okay.

01:08:09 I have another question, Mr. Drake, for you

01:08:14 involving examining data collected and shared

01:08:17 at US ports.

01:08:20 And having access to accurate and reliable data

01:08:24 is a critical component for sound decision making

01:08:27 as you know, anticipating new challenges.

01:08:30 In your testimony, Mr. Drake, you discuss how the data

01:08:34 that Customs and Border Protection collect

01:08:37 can be used to inform, can be used to potentially

01:08:41 improve port operations, specifically at land ports.

01:08:45 Here's my question.

01:08:46 Could you please take a few minutes for us today

01:08:50 to discuss how Customs and Border Protection

01:08:53 might improve the ways in which they use

01:08:57 and share data collected at US ports,

01:09:00 as well as any recommendations that you have

01:09:03 for members of this committee to ensure

01:09:05 that data is made available?

01:09:07 - Thank you, Senator, for the question.

01:09:10 I think two recommendations, and I think this was

01:09:13 referenced earlier on in the hearing,

01:09:15 but the first is CBP does collect a significant amount

01:09:20 of data, oftentimes that data is good and helpful,

01:09:24 but they need to do a better job of sharing that data

01:09:27 with the 47 other federal agencies that have a role

01:09:31 in helping safeguard what's coming into our country.

01:09:33 Those PGAs oftentimes will not get that data,

01:09:37 and sometimes when they do get that data,

01:09:39 they're operating on it in different ways

01:09:40 or with a different set of priorities than CBP.

01:09:43 We think it's absolutely critical that Congress intervene,

01:09:49 and this is something the administration can do,

01:09:51 but we think that it would benefit

01:09:53 from congressional support, which is to set priorities

01:09:56 on making sure that NHTSA, USDA, EPA,

01:10:01 other agencies that have a role in making sure

01:10:03 that we're not getting counterfeits,

01:10:06 we're not getting invasive species

01:10:08 or other bad stuff coming in,

01:10:11 that they're doing their job as well.

01:10:13 I think the second recommendation we would have,

01:10:16 and this is that CBP, we believe,

01:10:20 could do a better job of sharing the data it's collecting

01:10:23 with the private industry.

01:10:24 The private industry is always gonna be the front line

01:10:29 of every sort of trade problem that we see,

01:10:32 and they wanna make sure that they're making

01:10:35 the best decisions possible.

01:10:37 A really good area for that is if CBP provided

01:10:42 more specific information to the business community

01:10:44 to help the business community understand

01:10:47 if they're doing business with the right folks

01:10:50 or if they should be shifting to a different supplier,

01:10:53 a different carrier, et cetera.

01:10:54 - All right, let me follow up that question

01:10:57 with another word.

01:10:58 Would you also, for us, just please discuss the role

01:11:02 of the private sector in ensuring that Customs

01:11:06 and Border Protection has accurate data

01:11:08 about the goods that are moving through our ports

01:11:11 and how these relationships might be further strengthened?

01:11:15 - Yeah, so CBP success is always gonna be based

01:11:20 on the data it's collecting,

01:11:22 and oftentimes that data is the first part

01:11:26 of the shipment that happens, right?

01:11:27 If the good is at the port and CBP doesn't have any data

01:11:31 on that good, they're gonna have a very difficult time

01:11:34 evaluating what that product is

01:11:36 and if it needs to be intervened or not.

01:11:38 We would say that it's absolutely critical

01:11:45 that the data that the private sector is providing

01:11:52 excuse me, let me take a step back.

01:11:55 We would say that CBP is in all cases collecting the data

01:11:59 on all parties it needs to be collecting today.

01:12:02 So the huge explosion of e-commerce in this nation, right?

01:12:05 You have a variety of new players who are in the trade space

01:12:09 who weren't there 15, 20 years ago.

01:12:11 - For example?

01:12:12 - For example, warehouses, fulfillment centers,

01:12:15 e-commerce platforms.

01:12:18 Those players aren't the traditional express carriers

01:12:23 who have been operating under CBP authority for decades.

01:12:27 They are not necessarily in all cases providing data to CBP

01:12:32 and we would argue that in a lot of cases they should be.

01:12:36 It's gonna help CBP's enforcement mission,

01:12:40 but it also is gonna level the playing field.

01:12:43 - Okay, thank you.

01:12:44 Mr. Poehler, are you up for another question?

01:12:48 Okay.

01:12:48 As we all know and a friend, Ben Cardin was just here

01:12:53 and I'm sure he covered this, but I'm gonna revisit it

01:12:56 and if I'm covering some ground

01:12:59 that's already been covered, I apologize.

01:13:01 As we all know, a March 26th tragedy struck

01:13:06 as the Francis Scott Key Bridge in Baltimore collapsed

01:13:11 after being hit by a malfunctioning cargo ship.

01:13:14 Six individuals tragically lost their lives.

01:13:18 As a result, the Port of Baltimore had to initially stop

01:13:22 all cargo ships from moving in and out of the port

01:13:24 in order to clear the debris

01:13:27 and carefully remove parts of the collapsed bridge.

01:13:31 Port of Baltimore is an economic powerhouse.

01:13:33 We think our port in Delaware is a powerhouse,

01:13:37 but a real powerhouse and we're good,

01:13:40 but Port of Baltimore is even more so.

01:13:44 But Port of Baltimore employs thousands of people

01:13:49 from the region, including some from Delaware

01:13:52 and Pennsylvania as well as Maryland.

01:13:54 And its initial closure and now gradual reopening

01:13:58 have had ripple effects across sectors.

01:14:02 A question for you, Mr. Poehler,

01:14:05 could you please discuss with us how the initial closure

01:14:10 and gradual reopening of the Port of Baltimore

01:14:13 has impacted members of the International

01:14:16 Longshoremen's Association, them and their families?

01:14:19 - Yes, thank you, Mr. Chairman.

01:14:21 It's a very important question and I think it's one

01:14:24 that can't be answered at this point completely.

01:14:29 And that's because the assessment is still growing

01:14:32 and trying to be understood.

01:14:34 But the accident that caused the shutting down

01:14:38 of the terminal had a direct effect on 1,800 members

01:14:42 of International Longshoremen's Association.

01:14:45 There's a few different locals in Baltimore.

01:14:49 The majority of those people have been out of work

01:14:51 completely and even with the support of unemployment

01:14:55 that mitigates some of their losses,

01:14:57 when you have people that are working pretty regularly,

01:15:00 as you point out, that the level of containers

01:15:03 and row-row product that goes through the port

01:15:06 generates not just a lot of man hours for our members,

01:15:10 but also for people who are not union members

01:15:13 or maybe members of other unions, truck drivers.

01:15:16 And that filters down to the mom and pop stores

01:15:19 that are right outside port complexes,

01:15:21 to the local banks that are being impacted.

01:15:23 But when you have 1,800 people that are now out of work

01:15:26 and not collecting their income,

01:15:28 the wages are only a part of the impact

01:15:31 when you lose two months of your income.

01:15:34 It's how do you pay your mortgage,

01:15:35 how do you pay your car payment,

01:15:37 and how do you make things feasible

01:15:42 when you're looking at the debt that you're accumulating?

01:15:46 The other thing that has to be taken in consideration

01:15:48 in our industry, that making eligibility

01:15:51 for your medical benefits is based on a yearly situation.

01:15:56 It's all hours accumulated for a year of service

01:16:00 for next year's coverage.

01:16:02 So we don't even know what the impact

01:16:03 of that's gonna be at this point, but it's serious.

01:16:06 When your members lose health benefits,

01:16:09 hopefully there's a system in place

01:16:11 that could help mitigate that also.

01:16:14 But once again, still it hasn't been identified.

01:16:17 I think the important piece that was said just a minute ago,

01:16:20 which is a little deeper thinking,

01:16:23 which is now that they've lost significant cargo,

01:16:27 container cargo and railroad,

01:16:29 the good news is for the supply chain,

01:16:32 they've moved to adjacent ports,

01:16:34 which could have been the port of Wilmington, Delaware,

01:16:37 the port of Norfolk, Virginia,

01:16:40 and as far south as Savannah,

01:16:43 and as far north as New York.

01:16:45 What will be the mystery that nobody has an answer for

01:16:51 is how much of that cargo will return.

01:16:56 If they can only process a certain amount of vessel

01:17:00 and cargoes based on it being open but restricted,

01:17:03 that could cause problems that are more long-term

01:17:07 if carriers or shippers decide

01:17:10 that they would have to go to a different port.

01:17:12 Then you have the situation where one port's pain

01:17:17 is another port's gain,

01:17:20 where port authorities are always highly competitive

01:17:22 against one another,

01:17:24 so the opportunity to take advantage of one's pain

01:17:27 to provide cheaper rates possibly to the shippers

01:17:31 or to the carriers in order to attract cargo

01:17:34 that has not been able to be serviced

01:17:36 in the port of Baltimore is another unknown

01:17:39 that I don't think we have a full understanding

01:17:41 of what the impact could be.

01:17:43 And once again, the fact that it is an accident

01:17:47 upsets the supply chain to the highest level

01:17:50 when it goes back to the whole purpose

01:17:51 behind custom inspections.

01:17:53 Now that people see what could be done by an accident,

01:17:57 what would happen in any competing port

01:18:00 or a sane port if it was done intentionally

01:18:02 by some type of terroristic action?

01:18:05 - Okay, I think you've in part answered the question,

01:18:09 next question I'm gonna ask,

01:18:10 but I'm gonna ask it anyway,

01:18:11 and you just think about it,

01:18:13 and any response you have,

01:18:15 go ahead and let us have that,

01:18:16 and we'll pick on somebody else.

01:18:19 But could you also please discuss with us

01:18:23 how port workers had to shift their operations

01:18:27 and how shipping companies adapted

01:18:30 to this emergency situation in Baltimore?

01:18:32 - Yes, well, we speak for labor and labor, okay?

01:18:36 The good news, having the unity

01:18:38 of the International Oceans Association

01:18:40 who works in all the same competitive ports,

01:18:43 there was the unity that we shared

01:18:45 where ports of Norfolk, for example,

01:18:47 Philadelphia, Delaware, had all offered

01:18:51 the unemployed people from the port of Baltimore

01:18:53 to come to their ports and help them

01:18:56 provide the service to the cargo

01:18:58 that left Baltimore to go to those other respective ports.

01:19:01 So it was good.

01:19:02 Unfortunately, the logistics of travel

01:19:05 made it impossible in some cases.

01:19:09 The other one is that there are contracts in place

01:19:12 in other locations where the contract

01:19:15 and the benefits especially are proprietary

01:19:18 to the employees that work in those respective ports,

01:19:21 so by traveling, even if it was practical,

01:19:25 the credit that would be needed

01:19:27 for your cumulative hours for benefits

01:19:32 was something that we found impossible,

01:19:35 and then there was some employers

01:19:37 who were really willing to work out

01:19:40 and help the industry and help the US economy,

01:19:45 and there was others who wanted to take advantage

01:19:47 of the fact that that cargo had to go somewhere.

01:19:50 So you had both the good and the bad

01:19:52 that comes along with an issue like that.

01:19:55 I like to believe that the unity that we shared

01:19:58 was a full example of solidarity,

01:20:02 and I do believe that the majority of employers

01:20:05 who could have offered help

01:20:07 did it with all good intentions

01:20:09 and not what I said,

01:20:10 taking advantage of the opportunity

01:20:14 to become the new competitor for the port of Baltimore.

01:20:17 - All right, thank you.

01:20:18 Thank you for those responses.

01:20:20 The next question,

01:20:23 it's gonna be a question for all three of you.

01:20:25 We'll start with Mr. Drake and then over to Mr. Pickle,

01:20:28 and then back to Mr. Paylor.

01:20:32 Mr. Drake, the question is,

01:20:33 concerns preparedness for future emergencies at US ports.

01:20:39 I'd like to think, we'd like to think

01:20:41 there'll never be an emergency

01:20:43 or something's dire even worse

01:20:44 than what's been experienced in Baltimore,

01:20:47 but we all know that that's not probably realistic.

01:20:53 So my question is, as I mentioned in my opening statement,

01:20:57 the collapse of the Francis Scott Key bridge

01:21:00 raised questions about the preparedness

01:21:02 of our nation's ports and by extension,

01:21:04 our nation's supply chains for future emergency situations.

01:21:09 My question, Mr. Drake, for you first,

01:21:13 how can the federal government,

01:21:17 how can the federal government better ensure

01:21:19 that all US ports are better prepared

01:21:23 to address future emergency situations

01:21:26 similar to that which we have witnessed in Baltimore?

01:21:29 Thank you for the question.

01:21:32 So it's helpful that everyone,

01:21:37 you, the Congress, the business community,

01:21:41 are thinking about these issues

01:21:43 much more regularly than they were before.

01:21:46 That's certainly helpful.

01:21:48 You know, I would argue that if we were to experience

01:21:52 a repeat of the West Coast port crisis that we had in 2020,

01:21:56 we would likely be in the exact same situation

01:21:58 we were back then.

01:22:00 Not a whole lot has changed at the level

01:22:02 to prevent the pileup that, for lack of a better term,

01:22:07 that we saw back in 2020 from repeating itself.

01:22:11 That being said, it's critical that the conversations

01:22:16 between the private sector,

01:22:18 those who are working the ports,

01:22:20 everyone from the workers to the carriers,

01:22:24 to the shippers, to the local governments

01:22:28 are saying in close contact.

01:22:31 The federal government is helping to inform

01:22:32 those discussions as well.

01:22:34 There is a new program at the Department of Transportation

01:22:37 called the FLOW effort.

01:22:39 This is a public-private partnership

01:22:41 where the private industry will share data with the DOT,

01:22:44 and DOT will aggregate that data

01:22:46 and share it back with the private sector.

01:22:49 Where this was exceptionally helpful

01:22:52 is in the immediate aftermath of the collapse

01:22:54 of the Francis Scott Key Bridge.

01:22:55 DOT was able to provide in real time

01:22:59 and help the private community understand

01:23:01 where they should go next to begin the diversification

01:23:05 away from the Port of Baltimore

01:23:07 and identify other ports that could handle that traffic.

01:23:10 We need more efforts like that

01:23:14 to prepare us for the next emergency.

01:23:18 - All right, thank you.

01:23:19 Same question, if I could.

01:23:21 - So I think-- - Please.

01:23:26 - I'm sorry, sir. - Go ahead.

01:23:27 - I think we have to acknowledge

01:23:30 sort of a core kind of limiting factor that exists

01:23:34 in how the federal government responds

01:23:36 to port vulnerabilities

01:23:39 and supply chain conditions in general, right?

01:23:41 Ports are not owned by the federal government,

01:23:44 supply chains are not owned by the federal government,

01:23:46 but obviously they can have influence

01:23:48 on how those resources are used, right?

01:23:52 So I think with that sort of understanding,

01:23:56 looking at how the federal government

01:23:57 can continue to be a convener of sorts,

01:24:02 this was a great sort of silver lining

01:24:04 that came out of the West Coast port congestion dynamic

01:24:09 that John just referenced,

01:24:11 where you had industry

01:24:14 and all different government agencies

01:24:16 getting on these pretty prolific Zoom calls

01:24:19 where there were 200 screens of individuals

01:24:22 who were talking about how to address different conditions

01:24:25 that were contributing to port congestion

01:24:27 and having the ability to have agility

01:24:31 within each of those areas of responsibility

01:24:33 across the different agencies,

01:24:35 as well as the many different private actors

01:24:38 who perform their responsibilities

01:24:40 within the port boundaries.

01:24:42 I think from a federal government standpoint,

01:24:44 the key word here is agility.

01:24:48 The ability for federal agencies

01:24:50 who operate within port boundaries

01:24:53 to be able to shift their resources

01:24:58 and if cargo is relocating to an adjacent port,

01:25:02 being able to move personnel there

01:25:04 to absorb the additional capacity that's being taken on,

01:25:08 or additional volume, I should say,

01:25:10 as well as how to create a resumption plan.

01:25:15 So we've talked a lot about CBP,

01:25:17 but other DHS agencies that have responsibilities

01:25:22 within the port boundaries,

01:25:24 the Transportation Security Administration,

01:25:27 they oversee the transportation program for truck drivers

01:25:31 to be able to maneuver around ports.

01:25:33 The Coast Guard, they handle port security.

01:25:35 They have port security plans that are in place

01:25:39 that should take into account

01:25:41 how ports resume their operations.

01:25:43 So I think they can be that sort of cohesive nature

01:25:46 between all of these disparate organizations

01:25:50 that operate within a port

01:25:52 and link back to the broader supply chains.

01:25:55 But I think coming at it from a perspective that,

01:25:58 as I say earlier, they don't own the infrastructure

01:26:02 or the supply chain itself.

01:26:04 - All right, thank you.

01:26:05 Mr. Poehler, same question, let me just repeat it.

01:26:06 How can the federal government better ensure

01:26:08 that all US ports are prepared?

01:26:11 - I understand the question, Mr. Chairman,

01:26:13 and I should yield to the two gentlemen who are more qualified,

01:26:15 but I would like to give you a labor perspective on it.

01:26:18 - We never yield to our colleagues,

01:26:19 even when they're more qualified.

01:26:21 - But anyway, I have three thoughts on it.

01:26:25 One is consistent enforcement,

01:26:26 which may not be practical

01:26:28 with so many ports and so many different facilities

01:26:30 and customs having their own procedural ways

01:26:33 of doing things a little bit different

01:26:34 state to state, port to port.

01:26:36 But one of the things that I learned just in the last week,

01:26:39 looking at a few things based on the questions

01:26:41 that Olivia was running by me,

01:26:44 and I just did a very unprofessional question

01:26:48 and answer for a number of different ports.

01:26:50 And one of them is very simple

01:26:52 but very significant layer of security,

01:26:54 and that's called a seal that goes on to the container

01:26:58 from the port that where it originated

01:27:00 or from the manufacturer,

01:27:01 that could have been China, Singapore, or anywhere else.

01:27:05 That container then goes to the port

01:27:08 that's gonna be loading it onto a vessel.

01:27:10 And all the paperwork should have that security seal,

01:27:15 which is usually a very large number identification on it.

01:27:20 That container goes onto the vessel,

01:27:22 and then when it comes to the United States,

01:27:24 that should be looked at as one of the first layers

01:27:26 of security to make sure that container

01:27:28 was not opened on route and therefore tampered with.

01:27:32 And that's where I see one of the inconsistencies

01:27:35 of something that looks small but that's significant.

01:27:37 That should be done when there's a change of custody

01:27:40 of the container, when it's being shipped to a port

01:27:43 in the United States, and then again,

01:27:45 when it's being shipped out of the terminal

01:27:48 and put it onto our public roads.

01:27:50 The other thing that I think that's necessary,

01:27:52 and I think Mr. Drake alluded to that,

01:27:55 that the private operators are sometimes

01:27:58 your first line of defense, and I agree with that.

01:28:00 But really the first line of defense

01:28:02 is the people who board that vessel every day

01:28:04 and are familiar with the things

01:28:06 that we're talking about right now and concerned.

01:28:08 Those are the same people that from our industry,

01:28:11 when there was a global disruption on the supply chain,

01:28:15 President Daggett instructed our people

01:28:18 that this is what we do under all circumstances.

01:28:20 We've done it during wars,

01:28:22 and now we're dealing with the world pandemic.

01:28:24 We show up and we go to work.

01:28:26 So what I think should be done is that

01:28:28 there should be orientation for all port facilities,

01:28:31 for all workers, to make sure they clearly understand

01:28:34 the importance of what's being done

01:28:36 with the people who work side by side with CBP,

01:28:39 but with CBP themselves.

01:28:41 So it's not looked at as a secondary or ancillary work,

01:28:44 but it's a primary function for homeland security purposes

01:28:48 and for the safety of the people that work at the port.

01:28:51 And I think that the way of funding something like that

01:28:55 that's so different is my understanding

01:28:57 that the harbor maintenance tax has accumulated

01:29:01 and it has a fund sitting there,

01:29:03 but not a lot of draw on it,

01:29:04 and I think that would be a way of funding that.

01:29:07 The third thing that I would suggest

01:29:09 is that when you're looking at the applications

01:29:11 that are being made, whether it's TIFA or PIDP

01:29:16 or the TIGER grants that are used for port modifications,

01:29:20 that I think when those applications are being made

01:29:23 to modify an existing port

01:29:25 or for the purpose of funding the development of a new port,

01:29:29 it should be required and a prerequisite

01:29:31 that a inspection facility is part of

01:29:35 and developed into that facility

01:29:37 before receiving any public monies

01:29:39 because it's something that has to be controlled

01:29:43 at our ports and not taken out onto our public streets.

01:29:46 - Okay, thank you.

01:29:47 I got at least one or maybe one or two more questions

01:29:52 if you're all up to that.

01:29:55 Again, thanks for joining us today.

01:29:57 But with respect to Customs Trade Partnership

01:30:01 against terrorism compliance,

01:30:05 this would be a question I think probably for you,

01:30:08 Mr. Pickle, and maybe for Mr. Drake.

01:30:11 The Customs Trade Partnership against terrorism,

01:30:15 that's, we're big on acronyms around here, I'm not,

01:30:19 but there is an acronym

01:30:21 for Customs Trade Partnership against terrorism,

01:30:23 and it's CTPAT.

01:30:26 And program is, it's a program that's a public,

01:30:29 as you know, public-private sector partnership

01:30:32 and represents one layer of Customs and Border Protection's

01:30:37 multi-layered cargo enforcement strategy.

01:30:41 This program gets, asks, rather,

01:30:45 this program asks trading partners

01:30:47 to implement stricter security procedures

01:30:51 throughout their supply chains,

01:30:53 and in return, their goods or cargo are screened

01:30:56 more quickly.

01:30:58 Last year, for the second time,

01:31:00 CTPAT, CPAC, Pilot Program Act,

01:31:05 which Senator Corden and I introduced,

01:31:08 passed by unanimous consent in the Senate,

01:31:11 which means nobody voted against it.

01:31:13 And we're pleased, very pleased with that.

01:31:17 The legislation would create a pilot program

01:31:20 to strengthen CTPAT, CPAC,

01:31:24 and aims to reduce cargo congestion at ports of entry

01:31:29 while strengthening our national security.

01:31:32 I believe that's a win-win situation.

01:31:34 Question for Mr. Pickle and for Mr. Drake.

01:31:39 Could each of you please describe for us

01:31:43 how our international trading partners and companies

01:31:47 in the private sector might benefit

01:31:49 from the Customs Trade Partnership

01:31:52 Against Terrorism program?

01:31:55 Please, go ahead.

01:31:56 - Thank you, sir.

01:31:57 I would say for importers who are bringing products

01:32:02 to the United States, there's really two fronts

01:32:04 that they potentially benefit from participation in CTPAT.

01:32:09 The first, as you noted,

01:32:10 they receive fewer customs inspections

01:32:15 because they are vetted partners.

01:32:16 When they are selected for inspection,

01:32:18 they are given front of the line privileges, as we say.

01:32:23 They're inspected first.

01:32:25 I will note that the CTPAT program

01:32:29 is required to review benefits

01:32:32 that are provided to its members on a regular basis

01:32:35 and consult with industry when adjusting those benefits.

01:32:40 So that's a very important process to go through as well.

01:32:44 As far as, CTPAT is part of a global construct

01:32:49 called the Authorized Economic Operator concept.

01:32:52 And so other countries have reciprocal programs.

01:32:56 And CBP actually will review those programs

01:33:00 of other countries as well

01:33:01 and provide reciprocal treatment

01:33:04 to members of 18 other countries' AEO programs.

01:33:08 So there really is a global impact

01:33:10 when we talk about lessening some of the stress

01:33:13 for those parties who have taken on additional responsibility

01:33:16 to vet on the security side in particular.

01:33:19 The CTPAT sort of brings into scope

01:33:22 both trade compliance principles

01:33:24 as well as security compliance principles.

01:33:26 When you get into the international context,

01:33:28 the mutual recognition arrangements,

01:33:30 not agreements, arrangements,

01:33:31 there's an important distinction there.

01:33:34 But they're focused more on the security side of things.

01:33:37 So there is definitely a safety emphasis there.

01:33:41 - All right, thank you.

01:33:42 Mr. Drake, same question.

01:33:43 - I think Mr. Pickle answered it very well

01:33:49 and I would align myself entirely with his remarks.

01:33:52 - Okay.

01:33:54 Sometimes, first of all, you've done an admirable job.

01:34:02 On an important, sometimes not easily described issue

01:34:06 and you've done it more than justice to it.

01:34:11 I think I want to say to our staff,

01:34:15 Senator Cornyn's staff and on the minority

01:34:18 and our staff on the majority,

01:34:20 I want to thank you very much for choosing you

01:34:24 out of all the thousands of witnesses

01:34:27 we could have brought forward.

01:34:29 You rose to the top.

01:34:31 We're grateful for that.

01:34:33 I have a question I'd like to ask

01:34:39 when we have a panel with diverse points of view

01:34:46 and complimentary but different kinds of backgrounds.

01:34:51 And one of the questions I'd like to ask,

01:34:53 I'm always looking for consensus.

01:34:56 I know when people watch the news,

01:34:57 they follow the news, they think all we do

01:34:59 is fight down here, we hate each other.

01:35:01 And we do not only fight, we actually work together.

01:35:04 And for the most part, we have pretty decent relationships.

01:35:08 But I've said a million times in this room,

01:35:13 bipartisan solutions are lasting solutions.

01:35:17 I'm always looking for how do we find consensus

01:35:19 on difficult issues.

01:35:22 So let me just ask for each of you,

01:35:23 and we'll start, Mr. Drake, with you

01:35:25 and Mr. Paler and then Mr. Pickle.

01:35:27 My question would be where is there consensus

01:35:32 amongst the three of you?

01:35:34 Where do you think there is consensus

01:35:35 in what you've said and heard

01:35:38 that you would leave and say,

01:35:40 of all that we've heard you've given to us,

01:35:44 these are areas where there's a real consensus.

01:35:47 And it's important that you not ignore that consensus

01:35:51 but actually grab it, seize the day.

01:35:54 And so I'm gonna ask Mr. Drake,

01:35:56 where are some areas where you think there is a consensus

01:35:59 that we shouldn't look that gift horse in the mouth?

01:36:02 - You know, in the trades, when we're talking ports,

01:36:08 venture in particular, if that's, you know.

01:36:11 First and foremost, I think we all agree

01:36:15 that ports are absolutely fundamental

01:36:18 to our economic competitiveness,

01:36:21 but also our communities, to the people who work there

01:36:24 and the businesses that support them.

01:36:26 And I think there is broad consensus

01:36:29 that we are absolutely aligned,

01:36:31 that we don't wanna do anything

01:36:32 that would undermine the strength of our ports

01:36:34 or the people who work there.

01:36:36 I also wanna make sure that we are looking

01:36:38 at their long-term success.

01:36:40 So I think if we can start there

01:36:42 and recognizing that there are always gonna be

01:36:45 principal differences or principal disagreements

01:36:47 between my organization and Mr. Paler's organization

01:36:51 and Mr. Pickle's organization,

01:36:53 I still believe that that fundamental recognition

01:36:56 and agreement can help guide a whole variety of,

01:37:01 you know, consensus and bipartisan agreements

01:37:03 on a whole variety of things,

01:37:04 regardless of what we're talking about,

01:37:05 immigration reform, port security, and the like.

01:37:10 - All right, thank you for that.

01:37:12 Mr. Paler, areas of consensus, please.

01:37:16 - Yes, Mr. Chairman, I agree that I think the consensus

01:37:19 is that everybody has the same goal

01:37:23 of protecting the interests of the United States

01:37:25 and the people that we all represent.

01:37:27 As a survivor of September 11th,

01:37:30 I shared this just the other day,

01:37:33 that if somebody asked me on September 10th,

01:37:35 did I ever think that what happened

01:37:37 on September 11th would have happened,

01:37:40 I would have said on September 10th,

01:37:42 no way that that would ever happen, and it did.

01:37:46 And I feel the same way about the ports now,

01:37:48 having that experience,

01:37:50 that the ports are secure for the most part.

01:37:55 I think inconsistency creates some problems.

01:37:58 Sometimes bureaucracy interferes with consistency,

01:38:02 but I think that from the longshoreman,

01:38:05 who's actually the one up here,

01:38:07 working with a customs inspector

01:38:09 who's trained to perform the policies

01:38:10 that you create up here,

01:38:14 with the different governmental agencies

01:38:17 and independent agencies,

01:38:20 I think that the goal is the same.

01:38:24 So how do you streamline what we've learned

01:38:27 through mistakes, and how do we get the people

01:38:30 to be consistent with the bottom line,

01:38:35 what is the right procedures?

01:38:37 And they will change from time to time.

01:38:39 But I think as long as there's the willingness

01:38:41 of groups that are sitting at this table,

01:38:44 and the bipartisan support that you require

01:38:46 to get policies done,

01:38:48 I think that we're on the right path.

01:38:51 We don't criticize customs and border inspectors

01:38:56 at this point, we know that they're all hard working

01:38:59 women and men and women,

01:39:01 and we're glad to work alongside of them.

01:39:04 But I think education for all levels,

01:39:06 from the private sector to the public sector,

01:39:10 which is your port authorities,

01:39:11 and including labor, whether it's union

01:39:14 or in other cases, other unions,

01:39:17 I think they all have the same understanding

01:39:20 of how our ports work.

01:39:22 - Good, thank you.

01:39:23 Mr. Bickle, what are a couple of areas of consensus

01:39:26 that you would lift up for the consideration

01:39:30 of our members of this committee and their staffs?

01:39:34 A lot of people are watching this by television,

01:39:36 watching it remotely.

01:39:38 But what are some areas that you would lift up for us?

01:39:42 - Well, let me just note that it's difficult

01:39:44 to be the third person answering

01:39:45 when two fantastic answers preceded me.

01:39:49 I would say that--

01:39:50 - We say when that happens,

01:39:52 we have a way of saying that I'd like to

01:39:55 take the words of my colleague and embrace them,

01:40:01 which there's ways that we can do that, you can too.

01:40:03 - Absolutely.

01:40:04 So I think I would highlight,

01:40:07 I would agree with what my co-panelists have said.

01:40:10 I think one thing I would observe is that

01:40:14 the element of partnership that exists at ports

01:40:16 and the mutual respect for the importance of roles

01:40:19 that so many different actors play

01:40:22 really undercuts, or underpins, I should say,

01:40:26 the importance of the port environment.

01:40:30 But also just as consumers, as parents,

01:40:33 as existing in society, I mean,

01:40:37 we've all known what it's like to go to a local store

01:40:40 and it's difficult to find a particular product

01:40:44 that you need if your child is sick, for example.

01:40:48 And how we can use the power of international trade

01:40:52 and secure supply chains, resilient supply chains,

01:40:56 not only to create employment opportunities

01:40:58 and share the ability to supply ourselves

01:41:03 and the rest of the world with things that we all need,

01:41:07 but also to access those critical supplies.

01:41:09 So for example, I think the Medical Supply Chain

01:41:13 Resilience Act is something I was hoping to highlight

01:41:15 with Senator Tillis, but I know you and he

01:41:17 co-sponsored that legislation.

01:41:20 Perfect example of ways to engage with our trading partners

01:41:22 to make sure that we have access to medical supplies

01:41:25 with our most trusted allies.

01:41:28 I think that's a great example,

01:41:29 but looking for ways to expand those partnerships

01:41:31 to overcome the vulnerabilities

01:41:33 that quite frankly aren't going anywhere.

01:41:35 I think I also heard here today that we don't think

01:41:37 that there's going to be a return

01:41:41 to pre-pandemic normalcy, right?

01:41:44 So really embracing opportunities where they exist

01:41:46 and capitalizing on those systemic strengths

01:41:49 within the global international trade system.

01:41:51 - All right, thanks for that.

01:41:53 I think maybe one other question

01:41:59 I'd like to ask each of you.

01:42:01 And it's if you were sitting, where I'm sitting,

01:42:05 and you had the opportunity to figure out

01:42:09 maybe a question that you should have been asked,

01:42:12 you weren't asked.

01:42:13 What might be a question that you would like

01:42:15 to have seen asked of this panel?

01:42:17 And if you wanted to answer that question,

01:42:19 you could do that as well.

01:42:21 What do you think maybe we could have asked,

01:42:22 should have asked, and have not asked?

01:42:24 Go ahead, and then Mr. Drake,

01:42:25 you want to take a shot at that?

01:42:27 There's no right or wrong answers.

01:42:31 It's not pass/fail.

01:42:33 - You know, there's been a lot of, I think,

01:42:35 good questions and discussion, I think,

01:42:36 during the course of this hearing.

01:42:38 You know, this is a really challenging environment

01:42:44 right now, right, when you look at the supply chain

01:42:46 issues before us.

01:42:48 You know, and I think from my vantage point,

01:42:52 the most important thing is just to know

01:42:54 that you all are continuing to show up and ask questions.

01:42:57 So I don't know if I necessarily have a specific question

01:43:00 that I'd say that this committee should be asking of us.

01:43:04 I think instead what I would encourage,

01:43:06 or what I would urge, is that the committee

01:43:08 continue doing these types of discussions,

01:43:10 these types of hearings, to hear about these issues.

01:43:14 Because I don't think, you know,

01:43:15 the challenge we discussed today about

01:43:17 the growth of e-commerce, the growing trade volumes

01:43:20 that are expected to be coming through our ports,

01:43:22 they're not going away.

01:43:23 And sitting and doing nothing, you know,

01:43:25 is just simply not a solution.

01:43:27 And I think, you know, at some point,

01:43:29 Congress is gonna have to come forth

01:43:31 and take a hard look at these authorities and these laws,

01:43:34 and see if there's a willingness and an interest

01:43:37 to update them for today's trade environment.

01:43:41 - Thank you, sir.

01:43:43 Mr. Paylor, please, same question.

01:43:45 Maybe another question you think maybe could be asked,

01:43:49 should be asked, but it hasn't been.

01:43:51 - I don't know if I can frame it that way,

01:43:53 'cause I think having this experience has been great,

01:43:57 and the questions that have been asked

01:43:58 are right on to some of the concerns I had coming in here.

01:44:02 I think that what I would offer is that,

01:44:07 I was in Sydney, Canada, and a member of Parliament

01:44:11 asked me why did I come from the United States

01:44:13 to promote port development,

01:44:17 where they were gonna put a container facility

01:44:19 in Sydney, Canada.

01:44:21 And I explained to them, I said,

01:44:22 that you have the public sector that provides

01:44:24 the true asset, which is the land on your harbors.

01:44:28 Then you have the private investment, okay,

01:44:31 or investor that gets involved and puts the money up

01:44:34 for the capital improvement themselves.

01:44:37 Why would you not want to include labor,

01:44:39 who I was representing at the time,

01:44:41 into that discussion in order to make sure

01:44:45 that people are gonna be working

01:44:47 and protecting your investment,

01:44:48 protecting your asset from being involved.

01:44:51 So I would just say that labor does not belong up there

01:44:55 unless it's elected through our constitution.

01:45:00 But I do believe that having labor involved

01:45:03 from the longshore industry would be a total asset

01:45:08 on a regular ongoing basis when enforcing consistency

01:45:13 place to place.

01:45:14 All right, thank you.

01:45:16 Anyone else?

01:45:19 Please.

01:45:21 I would just add, I think something that we've talked

01:45:24 about in our own ways throughout this exchange today

01:45:28 is how can we use existing resources,

01:45:33 existing authorities, existing sort of latent specialization

01:45:38 to address the challenges that we see today,

01:45:40 as well as to be able to see what challenges

01:45:44 may be five, 10, 15 steps down the road.

01:45:48 I think that this is a difficult area to do that

01:45:51 because jurisdiction both within Congress

01:45:55 as well as across federal agencies are a bit dispersed

01:45:58 when we talk about supply chains.

01:46:00 Certainly not when we talk about customs authorities

01:46:04 and other areas.

01:46:06 But I think really honing in on what the specific elements

01:46:10 of that kind of combine to really promote

01:46:15 supply chain resilience would benefit from being mapped out.

01:46:21 With other agencies and not limited to customs

01:46:25 and treasury and so forth.

01:46:26 - Good, thank you.

01:46:28 Before we close, I spent a lot of years

01:46:35 in the life in the Navy.

01:46:37 I was a Naval flight officer, last Vietnam veteran here

01:46:39 serving in the US Senate.

01:46:41 And a lot of time in airplanes.

01:46:43 We have a big base, a big Air Force base in Dover

01:46:48 that most Americans heard of.

01:46:51 In some cases, very tragic.

01:46:52 Because we have, which is the last,

01:46:55 if you're a resting place for fallen heroes

01:46:59 that are brought to Dover before they're reunited

01:47:02 with their families.

01:47:03 But we also have a huge C-5 aircraft and C-17s.

01:47:08 And we are, I described it the other day

01:47:12 at an event at the Dover Air Force Base.

01:47:14 The Dover Air Force Base is the air bridge,

01:47:16 a big part of the air bridge between our country

01:47:18 and the Ukraine.

01:47:19 And playing an extraordinarily valuable role

01:47:22 in that capacity.

01:47:25 I came out of the Navy and I ended up moving to Delaware

01:47:31 and got myself an MBA and went to work

01:47:35 in what was the Division of Economic Development.

01:47:38 And for only about six months.

01:47:40 And the Democrats didn't have anybody run

01:47:44 for state treasurer.

01:47:45 Nobody wanted to run.

01:47:46 We had the worst credit rating in the country.

01:47:48 We were tied for dead last with Puerto Rico.

01:47:51 And they were embarrassed to be in our company.

01:47:54 But nobody wanted to run.

01:47:55 I said, I'll raise my hand.

01:47:57 I'd been in Delaware for like, not even a year or more.

01:48:01 And so they let me run.

01:48:02 But I have never forgotten what I learned in the six months

01:48:07 that I worked in the Delaware Division

01:48:09 of Economic Development.

01:48:11 And one of the things that I have taken with me

01:48:14 all these years is government doesn't create jobs.

01:48:17 Sometimes we as politicians act,

01:48:20 we feel like we could create jobs.

01:48:23 I was told recently that when I was governor for eight years

01:48:26 more jobs were created in those eight years

01:48:28 than any eight year period in the history

01:48:30 of the state of Delaware.

01:48:32 And I always say, I didn't create one of them.

01:48:34 What I sought to do as governor of our state

01:48:37 was to help create a nurturing environment.

01:48:40 A nurturing environment for job creation

01:48:44 and job preservation.

01:48:45 What does that include?

01:48:46 Access to capital for folks who want to start a business

01:48:49 or grow a business includes workforce.

01:48:53 And when I visit employers up and down the state of Delaware

01:48:57 I do that every week.

01:48:59 I ask three questions.

01:49:00 How are you doing?

01:49:01 How are we doing, our congressional delegation,

01:49:03 the federal government, state government,

01:49:04 how are we doing?

01:49:05 What can we do to help?

01:49:06 I hear from almost everybody.

01:49:08 A workforce, we need people to come to work.

01:49:10 People who are trainable, who'll come

01:49:11 and do a day's work for a day's pay.

01:49:14 In terms of what's important in job creation,

01:49:20 access to energy.

01:49:22 And as we go further into the future,

01:49:24 access to energy that's clean energy

01:49:26 that'll help us not only provide our energy needs

01:49:28 but also help us successfully combat the climate crisis

01:49:32 that's real and before us every day.

01:49:37 Intellectual property.

01:49:40 Intellectual property, Delaware, we have more companies

01:49:42 incorporated in Delaware than I think

01:49:45 any state in the country.

01:49:46 And one of the reasons why they do that

01:49:49 has something to do with protection

01:49:50 of intellectual property.

01:49:51 It's important to them as you might imagine.

01:49:54 And another issue is transportation.

01:49:59 The ability to get goods and services

01:50:02 where they need to go when they need to go

01:50:04 in a cost efficient way.

01:50:08 For some people, those issues are not all that interesting.

01:50:13 But if we care about jobs for our children,

01:50:16 our grandchildren, we better be interested in them.

01:50:19 And we also better be interested in our ports.

01:50:23 When I was privileged to serve as governor of Delaware,

01:50:26 a fellow came to, it was my deputy chief of staff,

01:50:28 his name's John Carney, he's now the governor of Delaware.

01:50:31 He was my deputy chief of staff and he came to me one day

01:50:34 and he said, "The state of Delaware should buy

01:50:37 "the port of Wilmington."

01:50:39 I said, "Really?"

01:50:40 And he said, "It's owned by the city of Wilmington.

01:50:42 "The city doesn't have any money to invest in the port.

01:50:45 "The city could use revenues and if we were to buy

01:50:47 "the port of Wilmington, the city would have revenues

01:50:50 "they need, the state was awash in time and money.

01:50:53 "And we could use some of the state's money

01:50:55 "to take a kind of tired, dilapidated part

01:51:00 "and actually make it shine."

01:51:01 And that's what we did.

01:51:03 And that's what we have continued to do.

01:51:07 It turns out a lot of people think,

01:51:09 oh, it's not that important who we sell to,

01:51:13 some are in our stuff that we produce

01:51:15 in this country around the world, others are vice versa.

01:51:18 Actually, it's hugely important.

01:51:20 Most of, we like to think the markets in the US

01:51:23 are vast and they are, but most of the markets

01:51:26 that we sell to are outside of our nation

01:51:31 and a lot of them go by ships.

01:51:33 I said earlier, I spent a lot of my life in airplanes

01:51:36 and it's important what we do with airplanes

01:51:37 like Dover Air Force Base, but it's what we do

01:51:40 in ships, in a lot of way, that at the end of the day

01:51:43 is really the 800 pound gorilla in all of this.

01:51:47 And as I think you've given us some good ideas

01:51:55 that I think we'll follow up on,

01:51:56 given us some good ideas we can work on together

01:51:59 with our colleagues.

01:52:01 I like to say everything I do, I know I can do better.

01:52:06 And I think we can always do a better job

01:52:07 with respect to the way we're sending and selling

01:52:10 and shipping our goods, our services

01:52:13 to other countries around the world

01:52:15 and receiving theirs in return.

01:52:19 And with that, I want to, in closing,

01:52:22 I want to just express my thanks to Senator Cornyn

01:52:25 and to his staff.

01:52:27 And I want to express my thanks to the majority staff

01:52:32 for working together in an almost seamless way

01:52:36 and trying to bring us all together

01:52:39 for what I think has been an informative hearing

01:52:42 on the entry of merchandise into our U.S. ports.

01:52:46 We thank you as well for joining us today

01:52:52 and for discussing the importance of trade enforcement

01:52:55 and trade facilitation at U.S. ports across our country.

01:53:01 For our senators who wish to submit questions

01:53:05 for the records, we call those QFRs,

01:53:08 questions for the record.

01:53:10 Those questions are due from our members

01:53:12 in seven days, a week from today.

01:53:16 And we're gonna ask our witnesses to respond

01:53:20 to those in 24 hours.

01:53:23 Just kidding.

01:53:25 We're gonna ask you to respond in 45 days.

01:53:29 Can you guys a long time?

01:53:31 45 days to respond to the questions for the record

01:53:35 that you might receive from all of us.

01:53:39 And one of my favorite parts of hearings,

01:53:41 I chair the Committee on Environment and Public Works.

01:53:44 We help write the bipartisan infrastructure bill.

01:53:47 Just about to report out a major water resource

01:53:51 development act election tomorrow.

01:53:53 We record all kinds of issues, recycling, you name it.

01:53:55 We get into all kinds of stuff.

01:53:58 And occasionally at the end of those hearings,

01:54:02 I will want to make a unanimous consent request.

01:54:05 And you ask unanimous consent,

01:54:07 you wanna get something done or into the record.

01:54:09 And if there's none, none of my colleagues

01:54:12 are still in a room, if they've left

01:54:14 and gone to other hearings,

01:54:15 and they're on the floor voting and stuff,

01:54:18 I love asking unanimous consent to do stuff.

01:54:21 When nobody's in a room,

01:54:22 'cause there's nobody there to object.

01:54:24 So if there's no objection,

01:54:27 we're going to adjourn.

01:54:30 And as you leave, go with our thanks

01:54:32 and hope you'll give us a chance to follow up

01:54:34 with you and explore some of what's been discussed today.

01:54:36 Thank you very much.

01:54:37 And with that, this hearing is adjourned.

01:54:39 Thank you.

01:54:40 [BLANK_AUDIO]

Tom Carper Leads Senate Finance Committee Hearing On Trade Enforcement At U.S. Ports

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