Tourism & Terrorism

A Difficult Journey Ahead for the Cruise Ship Industry

By DON WALSH

Dr. Don Walsh is president of the Oregon-based consulting practice International Maritime Inc. Since 1973 he has worked as a lecturer, naturalist, and staff member during nearly 100 cruises--on board 27different cruise ships operated by 15 different companies. He also has been an international consultant to foreign seaports hoping to attract cruise-ship business. A retired naval officer, he served numerous tours in submarines and in ocean-related research and development assignments.

The horrific terrorist attacks of 11 September 2001 focused new attention on U.S. maritime security. For many years U.S. ports and waterways had been under increasing pressure from such diverse criminal activities as drug smuggling, illegal immigration, and cargo pilferage. Now terrorism has been added to the mix.

Perhaps the single most serious maritime-security problem is the ubiquitous shipping container. The "boxes" introduced in the 1960s revolutionized the movement of goods throughout the world. Cargoes moved almost seamlessly from producer to consumer between modes of transportation--ship, barge, rail, and truck. Containerization became symbolic of America's free and open trade with the world.

Today, 95 percent of the U.S. international trade tonnage comes by sea, 80 percent of it in containers. Some 361 seaports serve the nation--the 50 biggest ones handle 93 percent of the nation's two-way international trade. Virtually all of this trade is carried by some 8,000 foreign-manned vessels that collectively make more than 51,000 U.S. port calls a year.

It is the very seamless nature of containerized cargo that leads to huge security concerns. Approximately seven and a half million containers enter the United States each year, but government authorities are able to physically inspect only about 2 percent of them. Inspecting all or most of them is not an economically viable answer in an era when speed is always of the essence. Any mass-inspection program could essentially shut down the efficient flow of cargo through the U.S. port system.

Comfort in a Box

However, containers already have been used by terrorists. In 1998, a vessel controlled by the al Qaeda carried the explosives into Mombassa, Kenya that later were used to bomb the U.S. embassies in Kenya and Tanzania. More recently there was the "terrorist in a box" incident--in October 2001, when a container destined for Toronto was opened by suspicious authorities during a port stop in Italy. Inside was a suspected al Qaeda member who had fitted the container with all of the necessities of daily living as well as a variety of forged documents, electronics equipment, and blueprints and floor plans of various "sensitive" facilities throughout North America. It is reasonable and prudent to assume that these were not what British authorities call "one-off" (i.e., unique) events.

The U.S. cruise-ship industry also faces formidable security problems. A robust business with an annual growth rate, prior to 9/11, of 6 to 8 percent, it contributed $17.9 billion in economic benefits to the U.S. economy in 2000. The cruise-ship fleet--more than 250 ships larger than 100 gross tons--carried nearly seven million passengers last year; six million of them were North Americans. More passenger capacity is on the way--over the next four years almost 40 new ships built at a cost of $13.5 billion will be added to the fleet.

This leisure sector of the U.S. economy was severely affected by 9/11. International air travel had shut down, disembarking passengers could not return home from ports throughout the world, and previously scheduled passengers could not get to their cruise ships. Large sums were paid out by the companies to cover refunds, adjustments, and extraordinary travel costs.

Some ships made major diversions to avoid potentially hazardous areas. One ship en route from the Mediterranean to the Indian Ocean via the Suez Canal had to turn back when war-isk insurance rates became cost-prohibitive. Terminating the cruise early, it returned to the United States without passengers. Other ships had similar, and similarly expensive, experiences. Meanwhile, almost all cruises scheduled for Mideast ports were terminated.

An Alternative to Aircraft

Because people were so reluctant to fly, the cruise companies moved quickly to offer departures from ports easily accessed by land transportation--primarily by repositioning many ships from overseas to U.S. domestic ports. The Holland America Lines, for example, offered 360 departures from 15 ports within a half-day's drive from 40 percent of American households. Thanks to these redeployments, ports that previously had little hope of being considered cruise-ship sites started getting into the business. Ports as geographically diverse as Grays Harbor (Wash.), Port Manatee, (Fla.), and Redwood City (Calif.) now compete for cruise-ship calls.

To recover from the lost sales and cancelled bookings, cruise-ship companies offered deep discounts. Some Caribbean cruises were priced between $60 and $100 a day for a seven-day trip--"cheaper than staying at home," said one satisfied customer. A beneficial side effect is that the lower-cost close-to-home cruises recruited a number of first-time passengers.

The redeployment and aggressive pricing strategies paid off handsomely in 2002, when first-quarter bookings for the major cruise-ship companies were greater than in 2001. With ships sailing with near-capacity passenger loads, the industry estimates the total number of cruise passengers for 2002 will be more than seven million, a 7.5 percent increase over 2001. However, net profits may be flat, or slightly lower than in 2001, primarily because of the deep discounts and the cost of redeploying ships. Still, this is a remarkable performance considering that, in addition to the 9/11 disruptions, the world economy was still mired in the recession that began in early 2001.

A Megadisaster Afloat?

That is the good news. The "dark side" is that cruise ships today represent increasingly attractive targets for terrorists. This does not mean that the ships themselves, or their marine environments, are particularly unsafe. But cruise ships are by definition high-visibility locales for large gatherings of people and, as a bonus, promise public exposure of the sort that concerned officials at events such as the Super Bowl and the Winter Olympics. A catastrophic "incident" on a "megasized" cruise ship carrying 2,000 to 3,000 passengers, plus a crew of up to 1,000, could equal or exceed the loss of life on 9/11.

Tomorrow's ships will be even bigger; there are now 20 cruise ships in service or on order of 100,000 gross tons or larger. In addition to the human tragedy involved, the loss of just one of these ships would be an enormous blow to the economic viability of the global cruise-ship industry. If a terrorist attack took place in U.S. waters the much more stringent security measures that would inevitably, and almost immediately, be ordered could greatly restrict the nation's vital maritime commerce for an undetermined but very long period of time thereafter.

Major cruise-ship terminals such as those in Miami and Ft. Lauderdale handle millions of passengers a year--primarily for the Caribbean trade. Several ships routinely arrive on the same day and leave port just a few hours later. In only six to eight hours the ship is "turned around"--offloading passengers and embarking new ones while being resupplied and refueled. While this is being done all embarking passengers and their baggage also have to be screened and inspected. Meanwhile, on the dock, shipping containers and trucks filled with provisions are being unloaded. To complete the picture--and add to the confusion and complexity of an already difficult-to-control situation--numerous small craft are almost always milling about in the vicinity of the cruise ships. Each of these activities is a possible "vector" for a terrorist incident.

The Coast Guard, port authorities, and the cruise-ship industry are working hard to assess and counter the many potential threats to the ships and passengers. In compliance with the U.S. Passenger Vessel Safety Act of 1993, each major cruise ship now has a safety/security officer assigned, along with an established, working security plan. The cruise-ship companies also have established corporate staff positions for shipboard safety and security, and many have hired outside security companies to advise them on a continuing basis.

A Tightening of Security

On the shore side, the Coast Guard and the nation's port authorities are now carrying out extensive and systematic threat assessments in all major U.S. seaports. The goal is to find any weaknesses that exist in the port system and fix them. Congress has provided $93.5 million to help the ports carry out the assessments and install additional security systems.

When all goes according to plan and all security personnel are carrying out their assigned duties, passengers are now checked at least seven times before boarding their ships; a 100 percent inspection of hand-carried items and checked baggage also is required. Containers and trucks that service the ships are carefully monitored and physically inspected.

On the sea side, the Coast Guard has established mandatory "standoff distances" to keep casual small craft at least 100 yards away from cruise ships. In some ports, divers are used to "sweep the piers" before a cruise ship comes alongside. Dog teams also are being used to check for explosives in boxes and baggage and around the dock area.

Such scrutiny does not end when the ships are underway. To ensure safe passage through U.S. ports the Coast Guard now routinely escorts all major "vessels of interest." This is not a small matter--over 8,000 foreign ships call at U.S. ports every year. All foreign-flag vessels over 300 gross tons are required to provide the Coast Guard with detailed information on their crew and cargo at least 96 hours in advance of arrival.

In addition to its maritime escort service, the Coast Guard has implemented a new "Sea Marshals" program that puts armed personnel on inbound ships to monitor their entry into port.

On the Legislative Front

Congress also is taking action through new legislation that in future years will provide significantly increased resources for port and maritime security. In addition, Congress has approved record increases in Coast Guard funding to finance the dramatic increase in the service's maritime-security responsibilities.

But the problems facing the industry are not entirely or exclusively domestic ones. Because cruise ships take passengers to and between foreign ports worldwide, there are even greater concerns about port security overseas. The U.S. government has been working with the International Maritime Organization (IMO) to implement mandatory international port-security programs. The London-based IMO will be the site of a major maritime-security conference in December 2002. There already is general agreement among the organization's member states that prompt, and numerous, remedial actions to eliminate or at least ameliorate the burgeoning "port-security problem" are urgently needed.

There also is the possibility of terrorist threats being carried out at sea in international waters perhaps hundreds of miles from the nearest port. This threat is not speculation; it is established fact. In 1985, terrorists seized the cruise ship Achille Lauro and killed one passenger, an American. Years earlier a group of Portuguese dissidents took over a passenger/cruise ship in Brazilian waters. In both situations the terrorists came aboard as passengers.

Another threat is maritime piracy, which is still common in many areas of the world--and could be used as a cover for terrorists to take control of ships bound for major international seaports. The al Qaeda network is believed to own, operate, and control an estimated two dozen or so medium-sized cargo ships, so already has a cadre of seamen who could man pirated ships.

Personnel reliability poses another question. The crews of most cruise ships serving North American ports are foreigners. This makes background checks and identity verification extremely difficult. Many major cruise-ship companies have Indonesian and Philippine citizens on their deck and engineering staffs. To date, all evidence suggests that the vast majority of them are loyal, skilled, and hardworking people. However, both countries have faced difficult internal problems with extremist Islamic elements for many years, and these problems have erupted into lethal violence several times in the post-9/11 era.

Serious Concerns Remain

How difficult would it be for dedicated terrorists to "submerge" themselves in the crew of a cruise ship? Probably not too difficult. An IMO Marine Safety Committee study on fraudulent documentation found more than 12,500 cases of bogus documentation over the past five years. Most violations occurred in Southeast Asia. Forged seamen's papers are a serious international safety matter, therefore, and provide an ideal cover for terrorists.

New U.S. maritime-security legislation will require all U.S. transportation workers to carry standardized national ID cards that include name, signature, and photo of the holder as well as an embedded chip containing various "biometrics" information--e.g. fingerprint, DNA, retina scan, etc.--and the current licensing qualifications of the holder. It seems certain that similar cards will be required in the near future for all crewmembers of foreign-flag ships entering U.S. ports.

To help ensure the reliability of seagoing personnel, two agencies, the IMO and the U.N.'s International Labor Organization, are developing their own identity systems for seamen--which ideally will be similar to the U.S. card. This will be difficult to achieve, though, because in some nations religious, cultural, and/or bureaucratic obstacles limit the type and amount of information an ID card can show.

Clearly, the threats are many. But the cruise-ship industry has shown that it can quickly adapt to significant and sudden changes. Working in close cooperation with domestic and foreign agencies, the companies are striving to make cruises once again not only the most enjoyable but also the safest vacation experience possible. *