Defense Transportation Journal - December 2002

Publisher .. LTG Ken Wykle, USA (Ret.)

Editor Kent N. Gourdin

Managing Editor ........... Susan Leigh susan@ndtahq.com

Contributing Editor .Denny Edwards

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Publishing Office .NDTA 50 South Pickett Street, Suite 220, Alexandria, VA 22304-7296 (703) 751-5011 • fax: (703) 823-8761

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Defense Transportation Journal (ISSN 0011-7625) is published bimonthly by the National Defense Transportation Association, a non-profit research and educational organization; NDTA, SO South Pickett Street, Suite 220, Alexandria, VA 22304-7296, (703) 751-5011. Copyright by NDTA. Periodicals postage paid at Alexandria, VA, and at additional mailing offices.

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Greetings to all! For those who were not in Greensboro, the Forum was personally and professionally enriching.

I am pleased to share the following summary of Ms. Lori Jones, A-35 Central Region Representative, regarding our A-35 Forum activities.

"I want to highlight a few key activities from the 56th Annual Forum that local chapters may be able to implement.

This year the NDTA leadership invited A-35ers to many of the traditional executive-level sessions. It was an awesome experience to have Mr. Jeff Crowe, CEO of Landstar and NDTA Chairman of the Board; Mr. Ron Drucker; LTG Honor; LTG Wykle; General Kross; Mr. Earl Boyanton, Assistant Deputy Under Secretary of Defense (Transportation Policy); General Handy, CINC, USTRANSCOM; Mr. Fred Smith, CEO of FedEx; and other senior leaders exchange ideas with us.

We had a wonderful mentor breakfast with LTG Honor and other senior industry, government and military leaders. The breakfast was an excellent venue to exchange information on the future of transportation and logistics career fields, as well as to share ideas on leadership attributes. The military and civilian leaders were very receptive to continuing these activities at the local level. Hopefully, chapters can facilitate a local exchange between our A-35 members and senior industry, government and military leaders.

At our A-35 national meeting, we discussed activities such as sponsoring an auction. The Washington, DC Chapter's auction raised over $15,000 for their scholarship fund. While the DC Chapter's auction was a major evening event, perhaps other chapters can consider starting small by requesting donations of one or two items to auction at their monthly meetings.

We also discussed requesting agendas and topics from chapter representatives to further enhance the A-35 experience within NDTA.

Finally, we discussed whether local chapters can sponsor an A-35 representative so that more A-35ers can attend next year's Forum in Kansas City. Some chapters are already doing this, and we applauded their initiative."

Thanks, Lori, for the excellent summary. In closing, continued special thanks for all NDTA supporters of the national, regional and local A-35 programs. Please continue your mentorship programs similar to those at the Forum.

Happy Holidays!

Anita McMiller Vice President, A-35

EDITORIAL REVIEW BOARD AND EDITORIAL OBJECTIVES

Dr. James M. Daley, Dean, Helzberg School of Management, Rockhurst University, Kansas City, MO

William J. Dewitt, Teaching Professor, R.H. Smith School of Business, Univ. of Maryland

Dr. Kent N. Gourdin, Director, Global Logistics and Transportation Program, College of Charleston

COL Norbert D. Grabowski, USA (Ret.)

Maj Gen John E. Griffith, USAF (Ret. ), Transportation Logistics Consultant

Richard H. Hinchcliff, Consultant

Brig Gen Malcolm P. Hooker, USAF (Ret.), Member, Board of Directors, NDTA

Dr. Joseph G. Mattingly Jr., R.H. Smith School of Business, Univ. of Maryland

Whitefield W. Mayes, Chief Engineer, Transportation Engineering Agency, MIMC

Prof. Gary S. Misch, U.S. Naval War College (Ret.)

Lt. Col. Anne T. Peck, USAF (Ret.), Senior Analyst, Stanley Associates, Inc.

Dr. Richard F. Poist Jr., Professor, Transportation and Logistics, Iowa State University

MG Harold I. Small, USA (Ret.), Consultant

COL Joseph A. Torsani, Jr. USA (Ret.), Vice President, Marketing Consolidated Safety Services Inc.

Dr. David Vellenga, Director, Carl A. Gerstacker Liberal Arts Institute for Professional Management, Professor of Economics and Management, Albion College

Dr. Clinton H. Whitehurst Jr., Senior Fellow, Strom Thurmond Institute of Government and Public Affairs, Clemson University

Editorial Objectives

The editorial objectives of the Defense Transportation Journal are to advance knowledge and science in defense transportation, the partnership between the commercial transportation industry and the government transporter. DTJ stimulates thought and effort in the areas of defense transportation and logistics by providing readers with:

• News and information about defense transportation issues;

• New theories or techniques;

• Information on research programs;

• Creative views and syntheses of new concepts;

• Articles in subject areas that have significant current impact on thought and practice in defense transportation;

• Reports on NDTA Chapters.

Editorial Policy

The Defense Transportation Journal is designed as a forum for current research, opinion, and identific;ition of trends in defense transportation. The opinions expressed are those of the authors and not necessarily of the Editors, the Editorial Review Board, or the NDTA.

Editorial Content

For correspondence including feature manuscripts and books for review, write:

Dr. Kent N. Gourdin Editor

Defense Transportation foumal Director of the Global Logistics & Transportation Program College of Charleston Charleston, SC (843) 953-5327 - Voice Mail (843) 953-5697 - Fax gourdink@email.cofc.edu

Government, Corporate, NDTA and Chapter News, Almanac Input, Mini-features, and all other departments

Send all news, photos, etc. to: Susan Leigh Managing Editor NDTA

50 South Pickett Street, Suite 220 Alexandria, VA 22304-7296

Phone: (703) 751-5011

Fax: (703) 823-8761

Email: susan@ndtahq.com

The 2002 Forum

Dr. Kent N. Gourdin Director, Global Logistics and Transportation Program College of Charleston

For those of you that couldn't make the Annual Forum in Greensboro this year, we missed you. If you've never been to a Forum, you really should try and attend next year's in Kansas City. I hadn't been to one in pretty close to ten years, and I had forgotten how enjoyable they can be on several levels.

First, they offer an incredible opportunity to examine and discuss current topics that are impacting the Defense Transportation System (DTS). As you will read elsewhere in this issue , the overriding theme this year was Security, both for cargo and passengers. Keynote speakers provided us with a "big-picture" overview, while the various panel discussions provided the opportunity to delve into the operational issues faced by military and civilian components of the DTS as they strive to accomplish their respective missions in today's sensitive environment. Now that I am out of the military transportation mainstream, and have been for a while, I find it especially gratifying to be able to keep in touch with the latest developments in the area. There is simply no better way to stay involved in defense transportation than the NDTA Forum. Second, the camaraderie is incredible. I have been retired from the Air Force now for going on 15 years, yet that sense of "belonging" to a unique family is still there. I had a chance to renew contact with people that I hadn't seen for, in some instances, decades. I ran into several that I had as students when I was on the faculty at the Air Force Institute of Technology They were First Lieutenants and junior Captains then; now they're Lieutenant Colonels and Colonels in key leadership positions in Air Force Transportation. I also had the chance to renew friendships with a couple of old buddies from my Rhein-Main days back in the late 1970s. We worked 14-hour days , pushed a

lot of pallets, griped about it and generally had a pretty good time. Needless to say, that whole experience has probably gotten better as the years have passed. Again, there is no other place but the Forum where these sorts of contacts can be renewed. Finally, the Forum is simply a lot of fun The evening events provide ample opportunity for socializing and relaxation, and the Exhibit Hall is definitely the place to catch the latest offerings from all sorts of different vendors. And, needless to say, my young daughter appreciated the array of goodies I brought home courtesy of these same fine folks The duck race scholarship event is a real tradition that is not to be missed. Emotions run high as the ducks churn towards the finish line and Jeff Crowe's commentary keeps things at a fever pitch until all the winners are announced. What a great time!

Perhaps the highlight of this year's Forum was that it was General Honor's last as the President of NDTA. The outpouring of appreciation, support, and affection for General Honor was truly inspiring and permeated the entire event. His impact on NDTA cannot be overstated. Under his stewardship, the organization has grown stronger and become a significant influence in the transportation arena. He has touched many lives, both on a personal level and through his long involvement with NDTA. Whether it was at a general session, during one of the tracks, or even at the A-35 breakfast, attendees stood to offer unsolicited thanks for, and testimonies to, General Honor's generosity and concern for his people, be they subordinates or NDTA members. His presence in a leadership role will be sorely missed, but we look forward to his continued active involvement in NDTA. Thank you, General Honor, for everything you have done.

See you in Kansas City! DTJ

s get , you can count on the United States. And the United States can count on Landstar.

We are a leading transporter of protective services, ammunition and explosives; one of the largest specialized carriers in America; a developer of systems and networks that act quickly, quietly and efficiently. From deployment to decommission, we move the machines that keep the enemy from the gate. We work to make a difference. We always have. We always will.

LTG Ken Wykle, USA (Ret.) President

Greetings! As I start my tenure as President of NDTA, I want to thank each of you for your support of our Association. I am privileged to be the 26th president of this historic association-founded in 1944 as the Army Transportation Association. For those of you who may not know me, I retired from the Army in 1995. My last duty assignment was Deputy Commander US Transportation Command, Scott AFB, IL. Subsequently, I was Vice President for Defense Transportation, Science Applications International Corporation; Administrator, Federal Highway Administration, US Department of Transportation; and Senior Vice President, Public Sector, Savi Technology.

I have been "running hard" these first two months; meeting with the leaders within the Association; attending committee meetings; getting briefings from the staff; and learning about internal association operations. I will use the President's comer to communicate one-to-one with each of you. Always feel free to communicate directly with me.

As during previous years, our members both individual and corporate continued their superb support and participation in this year's Forum. This month's issue of the DTJ provides highlights from the Forum, a Forum photo documentary, an NDTA membership survey, industry-related articles, and selected feature articles for your review.

The strength of our organization comes from the members - individual and corporate. Over the course of the coming months and years, I will be asking for your continued support, advice, and assistance. Included in this issue of the DTJ is a survey designed to gain your opinions on how we are doing and suggestions for strengthening the Association. Please complete the enclosed survey and return it to NDTA Headquarters by 15 January, 2003.

Representing the entire Association, I express our thanks to LTG Honor for his great work and leadership of NDTA for the last 13 years During his tenure he energized the Association, established a strong membership base, developed the committee structure, and implemented excellent financial management processes. Our challenge is to sustain this superb work and continue to strengthen and grow the Association. Everyone joins me in wishing him the best as he begins his next chapter in life's journey. Thank you LTG Honor!

As we look to the future, all programs and activities will be reviewed in order to make adjustments and build on what has already been accomplished. The topics for review include:

• The annual Forum and other events such as programs and their format, expositions, etc.

• The committees and their contributions to government and industry.

• The content, format, and utility of the Defense Transportation Journal.

• Exploring opportunities to expand communications electronically, both internally and externally.

• The Association staff structure and individual responsibilities.

To accomplish this review, we are seeking input from each member. This column is a call for your ideas and suggestions. Additionally, I have started a program to meet personally with each committee chair and executive agent, established an industry/government group to provide advice and assistance, and these topics will be the focus of the December Board of Directors Meeting

The results from this review will provide the basis for developing a Strategic Plan. The intent is to review and update the plan annually. The plan will provide the focus and direction for our Association. The plan is expected to be structured as follows:

• VISION - A short, concise statement of where we want the Association to go or be in 10-plus years.

• MISSION - A short, concise statement of what we are working to achieve. What we want to accomplish. Our reason for being.

• VALUES - Three to five specific words with a definition/explanation that best characterizes the moral, ethical and functional beliefs and ideals of the Association.

• GOALS - Four to five statements of what we want to accomplish in the near term. Subordinate to the goals are specific objectives or tasks to be achieved. I believe the goals should be developed around meeting the needs/desires of our current members; then working to strengthen and grow the Association; actions or activities to provide members the opportunity for professional development and to help reach their business goals; and a goal that focuses on our employees.

Once developed, the Strategic Plan will be published and available to all members. Overall, we are seeking a balanced, focused organization responsive to its members. Again, we are seeking your thoughts, ideas, and comments. You may communicate by mail: 50 South Pickett Street, Suite 220, Alexandria, VA 22304-7296; or email: ken@ndtahq.com; or telephone: (703) 751-5011. Please identify yourself when you communicate with me, so that I may contact you for clarification, ask additional questions, or provide feedback.

My intent is to use this column space to keep the membership informed on topics of interest to NDTA; to provide the status of various actions and programs, and to ask for your feedback on issues. NDTA is a strong organization committed to ensuring a robust Defense Transportation System in support of our Nation's security. Thank you for your confidence in the Association and the daily contributions each of you make to ensure our success. DTJ

In harm's way is a phrase that calls to mind the windswept decks of a World War II Navy destroyer going into battle in the North Atlantic. It's a tragically romantic scene, filled with patriotic fervor and a sense of marching off to fight the evil enemy. In a single year, however, that all changed.

In port, in the peace time of October 2000, USS Cole was placed in harm's way in Yemen. Less than a year later, the frontlines of war were redefined as "anywhere," and everyday citizens were placed in harm's way when terrorists attacked the World Trade Center and the Pentagon, with a third target unknown.

Now, for the Navy and the maritime industry, security and force protection have taken on a new sense of urgency. The Navy's Military Sealift Command, with global operations involving more than 110 ships on a daily basis, is taking the challenge seriously.

MSC is basically a non-combatant fleet much like the commercial cargo vessels of the US maritime industry. Yes, small

arms are carried, but there are no weapon systems aboard MSC ships. So, what is MSC doing for force protection? How can noncombatant crews be prepared for the new global war on terrorism and its seemingly random acts of malice?

In addressing force protection and anti-terrorism, MSC began by defining the problem - an ongoing process that will continue as issues are raised and solutions are found. The security concerns faced by MSC fall into four broad categories: the ship, the crew, the cargo and the port.

SHIP APPEARANCE

In the war on terrorism, we have been told that anything labeled "American" is a potential target. The distinctive markings of MSC's ships place them in this category, a prime reason that force protection has become paramount.

Forty-six of MSC's daily average of 110 active ships have gray hulls. They fly the US flag. They wear the distinctive blue and yellow MSC smokestack stripes. They look military in nature.

above: a white-hulled, Special Mission ship that often operates singly in a remote part of the world. insets: commercial, forward-looking infrared devices that, working in conjunction with radar systems, can allow visual imaging of approaching objects if they emit a heat signature

MSC also operates 29 white-hulled ships that wear the MSC stack stripes and fly the US flag.

Twenty-four additional ships are long-term chartered vessels that fly the US flag. Most also wear the MSC blue and yellow stack stripes.

The remainder of MSC's active ships are commercial voyage- or time-charters for specific missions to places not serviced by regularly scheduled commercial shipping lines. Most fly the US flag. All appear in published shipping schedules that provide information on cargo, shipping dates and customers.

In addition, MSC has access to 93 ships maintained in reduced operating status. Twenty are MSC-owned ships. The other 73 are maintained by the US Department of Transportation's Maritime Administration. They become MSC assets when activated. All 93 ships are gray hulls that fly the US flag.

SAFETY IN NUMBERS

Generally speaking there is safety in numbers. When MSC's Naval Fleet Auxiliary Force ships are providing combat logistics support - fuel, parts, food, ammunition and mail - to the Navy's carrier battle groups and amphibious ready groups, protection responsibilities are assumed by the groups. But MSC ships often transit to and from the groups on a different schedule, without that protection.

The same holds true for the white-hulled Special Mission ships that usually operate singly in the far-flung comers of the world. They provide platforms for a variety of missions generated by MSC's Navy customers and other federal agencies and operations. Missions range from oceanographic survey and undersea surveillance to ballistic missile tracking/telemetry and undersea cable laying/repair. Some Special Mission ships are also used for counter-drug missions in the Caribbean and easterri Pacific under the auspices of a federal task force. Until now, the occasional pirate had been their primary security concern.

MSC's Prepositioning Program ships carry equipment, supplies and fuel for the US Army, Marine Corps, Air Force, Navy and Defense Logistics Agency. They are maintained in three strategic locations near the world's hot spots. While they are usually in large groups, they do travel back and forth periodically for cargo refurbishment without escort.

SECURITY MEASURES

When it comes to security measures, MSC relies on a variety of passive systems. Some involve relatively simple technologies easily obtained in the marketplace. For instance, hull perimeter lighting, basic to all ships, is being enhanced on MSC ships to provide better coverage and brighter lights that will make it more difficult for intruders to approach unseen. At the same time, an intrusion detection system is being installed that places alarms on every entry hatch and at other strategic points throughout the ship. Those strategic points are covered as well by closed-circuit video cameras that offer real-time visual inspection when the intrusion detection system alarms. Video snap-shots can be taken of any unauthorized activities or unauthorized entry.

On the high-technology side, MSC is looking at enhancing ship radar systems by integrating infrared cameras. While underway, this integration will be an aid to navigation, allowing a clearer picture of what's ahead. In port or at anchor, the combined system will be used to create an exclusion zone around the ship with an automatic detection mode. When entities approach within a preset range, an alarm would sound, calling attention to any potential visitors. The infrared cameras, working in conjunction with the

radar systems, will allow visual imaging of approaching objects if they emit a heat signature.

One other area of improvement is communication capabilities. Satellites began offering advantages over simple radio communications years ago. With the advent of e-mail and Internet connectivity, the capability of transferring larger amounts of data faster is increasing, allowing secure communications and greater access to intelligence information and advisories on potential terrorist activities. A better informed crew is a safer crew.

MSC is installing a bandwidth efficient satellite transport (BEST) system that increases the capabilities of the International Maritime Satellite system for shipboard users. The package increases data transmission and reception capabilities, allows increased on-line time and gives MSC the discretion to allocate bandwidth usage aboard individual ships and across the fleet based on need. Thirty-five ships have the BEST system installed. Twenty more will be installed by the end of fiscal year 2003. The focus is on Naval Fleet Auxiliary Force, Prepositioning Program and Special Mission Program ships.

In the war on terrorism, we have been told that anything labeled '1\.merican" is a potential target. The distinctive markings of MSC's ships place them in this catego~ a prime reason that force protection has become paramount.

SYSTEM INTEGRATION

In the early 1990's, MSC began using closed-circuit video camera aboard undersea surveillance ships. In the late 90's, infrared cameras were considered for use aboard prepositioning ships. Funding for the cameras came in fiscal year 2000 and the cameras were tested aboard several ships with positive results.

Now, MSC is involved in integrating the various systems to create a ship security module, a package that includes all the intrusion detection and identification capabilities that have been tested singly over the years. Ideally, all systems would be tied to an integrated control point where the ship's master could observe radar, infrared and video images; monitor intrusion and container alarms; and control hull perimeter lighting, camera angles and so forth. Duplicate control stations would be installed on the bridge and quarter deck, with a backup station in the master's stateroom. These stations would provide the crew with centralized access to shipboard security operations and the means to better defend their ship against unauthorized boarding.

CREWISSUES

MSC ships are crewed by civilian mariners. The crews are relatively small compared to those found on Navy combat ships. Since they're small, most of their working time is already consumed by normal shipboard duties. Force protection and antiterrorism duties are performed as additional duties.

Generally speaking there is safety in numbers. When MSC's Naval Fleet Auxiliary Force ships are providing combat logistics support- fuel, parts, food, ammunition and

mail-ta the Navy's carrier battle groups and amphibious ready groups, protection resp onsibilities are assumed by the groups. But MSC ships often transit to and from the groups on a different schedule, without that protection.

MSC does have a distinct advantage in that more than 3,500 of its mariners are federal employees General screening is part of the in-processing procedure for these mariners. The same is true for the small Navy departments that serve aboard the supply ships in the Naval Fleet Auxiliary Force.

For the 2,000 commercial mariners who sail for MSC through the ship operating companies and unions aboard long-term chartered ships and government-owned/contractor-operated ships, the screening is primarily a function of the contractor. Their screening processes are among the myriad things taken into consideration during the contracting process.

Voyage charters and time charters in the Sealift Program offer a unique challenge . By law, MSC must give preference to US-flagged ships in the commercial market to meet transportation needs. Those ships must meet certain standards to retain their US-flag status. Beyond that, MSC uses all available resources to determine potential security threats to mission operations. Possible help may be on the way in the form of new legislation from the 107th Congress.

At this writing, bill number HR3983, Maritime Transportation Antiterrorism Act of 2002, had been reported in the US House of Representatives. A similar bill in the US Senate, S1214, contained some differences and a conference committee had been requested to come to agreement on the separate bills. In part, HR3983 would require all commercial vessels arriving in the United States from a foreign port to provide, in advance, a passenger and crew manifest with names, citizenship, passport number and visa or resident alien card number, as applicable.

CARGO SECURITY

With cargo, MSC, again, has a distinct advantage in that most of the cargo carried is loaded by US Department of Defense employees. Container contents are generally known, and manifests are trustworthy.

To be on the safe side, however, MSC loads containers in sealed holds whenever possible to preclude illegal entry while underway or in port. In addition, containers are stowed with their entry doors against bulkheads or against the entry doors of adjacent containers A higher-technology approach, borrowed from commercial industry, will place electronic seals on high-value containers carried on deck or in exposed positions. When the seal is broken , a centrallymonitored alarm system indicates which container, by location, has been tampered with. MSC is constantly looking for any cost-effective measure that could reduce the risk of cargo tampering or theft.

PDRT ISSUES

In port, any ship is more vulnerable than when at sea.

Already small crews have reduced watches or are busy supervising loading and unloading. Security can sometimes be problematic in foreign ports. In addition to the combination radar/infrared camera system mentioned earlier, MSC is looking at the use of military security forces. Small, mobile, platoon-size forces could be temporarily stationed aboard ships transiting or making port in dangerous areas. The security forces could be used for both onboard watch security and pier security. They could provide entry control and a visible sign that the ship is not an easy target. This is a variation of the contract security patrols employed by the commercial industry.

FUTURE ACTIONS

The partnership between MSC and the maritime industry is a strong one. Perhaps the lessons already learned by MSC and those that will be learned might benefit the industry as the world deals with global terrorism. The reverse is certainly true in that MSC patterns many of its processes on the experiences of the maritime industry.

In the future, both government and commercial entities need to share ideas and technologies that lead to safer, more secure maritime operations. Awareness of the risks , especially since September 11 , 2002, is the first step. Participation in the forums throughout the industry and the government on anti-terrorism and force protection is paramount. Each organization involved in the shipment of goods must be involved , because no one can afford to be "just the bus driver" any more. There ' s too much at stake when the world depends on ocean transportation. DTJ

above: The MSC Special Mission Ship Indomitable

Knowledge is a good thing . That's why FedEx lnSightsM is so good for your business. Web-based and easy-to-use, FedEx lnSight puts you inside your shipping network. Now you're proactively tracking domestic and international inbound, outbound and third-party shipments . Better yet, the contents of your package can be revealed to you in mid-shipmene Plus, you receive shipping updates by e-mail or fax. Obviously, you can see the wisdom in that. Need to know what's coming, what's going, and what's inside? Don't worry. There's a FedEx for that~M

We've been navigating the oceans for over a hundred years. But we're equally at home on the world wide web. Vtsit us at www.matson.com and you'll have 24/7 access to sailing schedules, shipment tracking, pricing, and billing information. You can also get all the information you want-the old-fashioned way- by calling our Customer Support Center at (800) 4-MATSON.

FORUM KEYNOTE SPEAKERS

Commencement Keynote Speakers

Frederick W Smith - Chairman and CEO, Federal Express

General john W Handy, USAF - Commander in Chief, USTRANSCOM

Luncheon Keynote Speaker

Admiral James M. Loy, USCG, (Ret.), Acting Under Secretary of Transportation Security

Frederick W Smith

"Cargo Transportation Security in the A~ermath of 9/ I I"

GGlobalization is not just a buzzword to the military. It's the reality of having to deploy equipment and supplies to the ends of the earth on a regular basis.

Some 20 thousand ocean containers arrive daily in US ports. Another 25 to 35 thousand truckloads each day pour in from Canada and Mexico. From the skies, about 15 thousand containers and pallets and hundreds of thousands of small, individual shipments arrive at US airports in both passenger and all-cargo planes each day. Similar scenarios, with different statistics, occur daily in Europe, Asia, Latin America and the Middle East-creating a worldwide trading system of about 10 trillion dollars per year, about one-fourth of which affects the US. What keeps all these planes flying, trucks rolling and ships sailing? The answer is found in four macro-economic trends that drive global commerce, whether you manufacture car parts in Tokyo or sell high-fashion garments in New York.

ood afternoon. NDTA members and guests, LTG Honor, LTG Wykle, General Handy and Chairman Crowe, it is an honor and pleasure for me to participate in your conference today. As a former Marine and Vietnam veteran, I appreciate the challenges our military and their industry partners face today and have always faced in providing warfighter support. I also appreciate the chance to speak to you today since last year's NDTA conference was not held due to 9-11. However, as tragic as the events of that day were, what emerged was a nation committed to homeland security and recommitted to the American way of life and commerce.

So we are gathered today to consider the global changes, challenges and solutions in a post 9/11 world. The changes and challenges dramatically affect not only the businesses of FedEx Corporation, but all US trade and logistics as well.

Decisions made about cargo security will have farreaching influence on our economy and standard of living, so we must ensure that the right decisions are made. Before discussing that, however, I am sure this audience will have no trouble imagining with me the busy hum of trade on a typical day in the United States.

The first trend is the increase in high-tech and highvalue-added goods as a percentage of total economic output. These types of goods can be roughly defined as any product with a relatively high value-to-weight ratio or a high value-added content. As Alan Greenspan often notes, the weight of the United States' economic output has barely changed in the past half-century while its value has increased fivefold. For example, international air cargo accounts for only about 2 percent of the tonnage moved, but over 40 percent of the total value-even more when petroleum and agriculture products and surface NAFTA trades are factored out. The DLA/FedEx Premium Service Program, begun in 1994, is a great example of moving high-volume goods through the supply chain.

Our warehouse in Memphis maintains an inventory of high-value goods that support such projects as the Tomahawk Missile program with critical electronic components for military readiness and deployment These high-tech goods are delivered in the continental US within 24 hours and outside the continental US in 48 hours.

The second macro-trend is globalization . With global sourcing and selling, companies can streamline their supply chains and open new market s, and they have . In 1970, about a dime per dollar of US GDP was related in international trade Now it's 25 cents per dollar and growing.

Globalization is not just a buzzword to the military. It's the reality of having to deploy equipment and supplies to the ends of the earth on a regular basis, including readiness to deploy to two theaters simultaneously.

In future conflicts, global sourcing of combat commodities such as food, fuel and construction materials could become a reality. FedEx has the most far-reaching global network, in terms of both physical and technological infrastructure, so we are quite proud of our partnership with the military that allows you to better serve the warfighter.

So, in general, the air cargo/air express industry has become the leading facilitator of trans-continental trade in the high-tech, high-value-added sectors. Why? Because people all over the world need things fast. That brings me to the third trend-fast-cycle logistics.

As the economy has become increasingly global, it has also become more fast-paced. Organizations such as the US military cannot wait weeks to source hightech, high-obsolescence items such as weapons and parts. So companies of all sizes depend on the delivery of just-in-time inventory to help them compete faster and more efficiently. For our military, compressing the supply chain improves readiness.

An example of fast-cycle logistics is the CRAP program, which we have participated in since 1984. One hundred percent of our wide-body aircraft fleet-111 MD-lls and DC-lOs-is available for CRAP participation. The last activation of our fleet was Desert Storm, in which we flew 633 missions, the most of any carrier. The CRAP program is a critical factor in the security of our nation and the success of our military mission. That's why I think it's appropriate for the AMC to require CRAP participation of anyone entering into a military transportation contract.

Adding to the need for fast-cycle is the fourth trend-the growth of e-commerce via the Internet. In the old, industrial economy, a warehouse was used to manage inventory at rest. In the new, information-rich, networked economy, companies such as FedEx can help customers such as DLA manage inventory in motion.

The visibility of goods in motion is enabled by electronic commerce, which has been fueled by the growth of the World Wide Web. The genesis of e-commerce began during the Berlin airlift, when the military needed to move airplanes from one part of Germany to another so fast that people literally couldn't speak quickly and accurately enough to make sure that no mishaps resulted from transposition errors or miscommunication. And so electronic data interchange or EDI was born. Over the next 45 to 50 years, it was adopted by many major companies all over the world. The technology that began in those early years has now evolved into the Internet, which is so important in our daily lives that some people can hardly imagine a day without "going online. 11 Now, for the better part of three decades, FedEx has been a technology leader. Our Web site, fedex.com, averages 4 million hits per month. Our automated transactions, including those on our Web site, generate more than 2 million shipments a day or about two-thirds of our domestic express volume. In fact, FedEx interfaces with multiple military shipping systems such as DSS

Four Macro-Economic Trends:

• Increase in high-tech and high-valued goods as a percentage of total economic output.

• Globalization.

• Fast-Cycle Logistics.

• Growth of e-commerce via the Internet.

that produce both the FedEx shipping label and the military shipping label. In addition, we provide logistics data to the DoD's Global Transportation Network several times a day. On a corporate level, we invest over $1 billion annually on the most sophisticated information technology and the best IT people we can find. It's this combination of networks-the physical, information and people networks-that enable FedEx to connect our customers with the global marketplace.

These four trends-the increase in high-value goods, globalization, fast-cycle logistics and e-commerce-have set the rhythm of modern commerce. Despite setbacks and slowdowns, they will continue to do so in the foreseeable future. But to ensure the momentum of these trends, we must meet the challenges posed by new security requirements. Certainly, one of the terrorist's goals on 9 /11 was to attack American citizens, and the tragic loss of human life that day was a sad testament to their success. But their bigger goal was to cut the very fabric of American commerce, to stymie the infrastructure that connects our businesses to each other and the world. And in the short term, they were successful. Passenger air travel shriveled, and the economy, which had been showing signs of recovery, slumped.

However, there were some positive outcomes: a long-overdue tightening of passenger airline security, and The Aviation Security Act, which stipulated that all-cargo airlines must screen, inspect or otherwise ensure the security of goods aboard their aircraft. The challenge, of course, is to improve security in all modes of cargo transport without interrupting supply chains based upon the fast-cycle logistics so ingrained in today's environment, and to prevent security measures from becoming so time- and cost-intensive that they do not corrupt our business cycles-this would be letting the terrorists win after all. And we cannot let that happen.

What can we do then? I suggest several measures, some of which are already underway, to help us manage the need for increased security without choking the flow of trade. First, we must consolidate a variety of government functions under one banner and those functions must be able to share cross-functional databases. We applaud the proposal to integrate Customs and the INS to facilitate the international movement of people. That's a good start. We believe, longer term, however, that even more integration of information regarding the movement of goods will be required to address both security and trade facilitation needs.

Measures to Manage Need for Increased Security

• Consolidate government functions under one banner with cross-functional databases.

• Deploy security and Customs processes to sources of origin.

• Complete visibility of all shipments in-transit.

• Deal with shipments from known and unknown shippers differently.

• Maintain positive control of all commercial vehicles and containers within the US.

• Extensive employee background investigations.

Second, we must deploy much of the security and the Customs processes to the shipment's source of origin. The responsibility for security is not at the border, but at foreign points of consignment. The goal, as noted by US Customs Commissioner Robert Bonner, is to "push the cargo screening process outward, to make our border or seaport the last line of defense, not the first." Bonner suggests we do that by establishing criteria for high-risk containers, pre-screening containers for high or low-risk before they are shipped to the US, and then use technology to screen those high-risk containers.

Third, we must require complete visibility of all shipments in transit, including those in trailers and containers. At FedEx we have a system to provide our customers such visibility. It's called InSight. With it, our customers can track the status of their inbound, outbound, and third-party shipments and get status information about their shipments, anytime and anywhere, in order to better manage their supply chain. In-transit capabilities for military transportation are important, particularly in regard to surge capacity and re-deployment of supplies and parts. The Navy, for instance, often must ensure that goods-in-motion catch up with fleets-in-motion.

The fourth measure is to deal with shipments from known and unknown shippers differently. The definition for known shippers has been established by the TSA for cargo shipped on passenger airplanes. We need to apply such standards when establishing security procedures for cargo, whether by air, ground or water. Known shippers must be required to have adequate security systems in place, and these procedures must be periodically monitored by government authorities. Once established, such a system frees up transportation companies as well as Customs to scrutinize unknown shippers very closely.

The fifth measure we believe will be needed is a system that maintains positive control of all commercial vehicles and containers within the US. In other words, it won't be enough to track the shipments themselves but also the locations of the trailers or containers transporting the shipments. The techniques to do this range from simple to sophisticated. Here are some options, several of which are already in

use: dispatch records or highways checks; radio frequency devices on vehicles that electronically record movement; satellite tracking devices called transponders; or simply 24-hour cell phone contact, currently common on planes and boats, but not on trucks.

Combining known, pre-approved shippers and satellite tracking of trucks is part of a new, cooperative border-crossing program the Customs Service is piloting to boost security at its commercial cargo checkpoints while eliminating inspection bottlenecks. Companies participating in this pilot program equip their trucks with transponders that allow the trucks to be waved through checkpoints electronically in seconds, subject only to occasional spot checks by Customs. In return, the companies have agreed to implement new precautions that make them partners in government security. The companies make extensive employee background checks, limit access to loading docks and plants, and conduct a special company review of security procedures and undergo one by Customs. The program allows the US to treat these companies as known shippers whose individual truck inventories can simply be beamed electronically. A major advantage of this program is that it will allow Customs to focus more on cargo they consider high risk. FedEx will be among the first to be certified when this program is formally extended beyond the pilot stage.

The sixth and last measure is more extensive employee background investigations. Most companies conduct some form of background investigation on employees they hire, but some do none at all. Other companies consider it a cost without payback, so they go with the lowest bidder and minimum checks. What we need in the transportation industry is the ability to conduct national, criminal history checks using the resources of the FBI's National Criminal Information Center. Such checks would include every county in every state as well as the watch lists published by various Federal agencies.

Many of the precautions that I have suggested today have been standard operating procedures at FedEx. We believe that shipper profiling, random screening based on such profiling, extensive employee education and the ability to track and trace shipments to the time and place of consignment are the security practices that make sense for cargo airlines. Of course, because cargo planes do not carry passengers, all-cargo operators have greater control over those who have access to aircraft. Therefore, the security issues regarding air freighters are quite different from those needed for passenger and combination aircraft.

Going forward, the airline cargo industries must embrace the notion of greater security in our post9/11 environment. But those security needs must and can be accomplished cost-effectively through the use of technology, well-designed, focused processes, and effective cooperation and coordination between responsible government agencies and transport companies.

In conclusion, commerce around the world has been dramatically affected by the macro-trends I mentioned earlier and by heightened security requirements. Since the US Government worldwide is our single largest account, FedEx wants to ensure that the US

Military is well positioned to thrive on the macrotrends and benefit from the increased security. What's more, we know our customers-military, corporations and small business-will continue to reward those carriers that consistently find new, technology-smart methods of moving materials and managing information to add value, shorten distance and optimize time.

You have our commitment to work with you to pioneer technology and systems that will keep our military strong.

Gen John W Handy, USAF

"Post 9/ I I Operations and Security Challenges"

IWe must continue to seek out and adapt best practices in order to streamline our processes and better interact with our customers, suppliers, and partners.

don't need to tell you the feeling I am sure we all had on 9/11. And to see the tools of our trade used as weapons was almost unfathomable. But what started as the darkest of days has turned into a shining testimony to the will of our people and the strength of our transportation team. Air Mobility Command, for instance, flew 4- airlift missions moving 2,867 personnel and 445 short tons of criticallyneeded rescue and recovery supplies in the three days immediately following 9/11. Urgent air defense measures protecting America's major cities required extensive aerial refueling support to sustain both fighter and airborne early warning and control aircraft. This marked a significant overall increase in tanker OPTEMPO, ultimately requiring 453 aerial refueling missions through the end of September 2001 alone. Our support to NOBLE EAGLE continued throughout the year, providing one of the highest operational tempos within the continental United States that USTRANSCOM has experienced.

Realizing that America's response to the terrorist attacks would ultimately require worldwide deployment and sustainment of US forces, we immediately began orchestrating the modal planning necessary to facilitate the movements required. Such planning, as you know, must be a collaborative effort, and so we worked hand in hand, day by day, hour by hour with our supported commands, the "warfighters", and our partners in industry, many of whom are represented here today within our audience. This historic response to combat terrorism ultimately became what we now know as Operation ENDURING FREEDOM. ENDURING

FREEDOM efforts to date have been tremendous. The operation was, and continues to be, very complex. Not only has USTRANSCOM simultaneously supported five combatant commanders involved in worldwide operations in the War on Terrorism, but it was forced to operate in Afghanistan, one of the most austere operating areas ever experienced by modern military forces.

• Since 9/11, we've organized the transportation of 215,000 passengers and nearly 300 thousand shcirt tons of equipment and supplies by air alone, and arranged more than 12,840 missions transporting troops, supplies, and equipment to Afghanistan. This would be difficult even in peace, and in war is an absolutely herculean undertaking.

• During an average week we schedule more than 1,900 air missions, have more than 25 ships enroute and complete more than 10,000 ground shipments.

• Because Afghanistan is land locked and the transportation infrastructure so undeveloped, Operation ENDURING FREEDOM quickly became a very air intensive operation. The operation is currently the third-largest airlift mission undertaken by the US military (largest was the Berlin Airlift, second largest was DESERT SHIELD/STORM).

But it is by no means an exclusively air mobility operation, and the team effort of our transportation network has made it possible Our special operations troops had to move certain high tech equipment on the backs of pack mules. As the SECDEF has said, ingenuity is indeed transformational.

These are truly phenomenal accomplishments by our men and women in the Defense Transportation System. And I am more certain than ever that our success hinges on the close relationship between the military and our commercial partners in industry.

• The Military Traffic Management Command, working with the commercial trucking industry as well as its Reserve Component elements, has safely moved over 2,400 sensitive shipments, including critical munitions, throughout the continental US. This accomplishment, involving over 3 million mission miles while maintaining strict Intransit Visibility of cargo, ensured security of movements to a degree never envisioned prior to 9/11. What we long accepted as routine is no longer-the response to secure these shipments has been magnificent.

• Commercial shipping, both air and sea, played a major part in supporting the epic humanitarian relief airdrop missions undertaken by TRANSCOM last fall in northern and eastern Afghanistan. Chartered commercial aircraft flew 2 million Humanitarian Daily Rations (HDRs) to Europe for transload on to C-17 aircraft. Commercial sealift brought 1.3 million HDRs and 875 short tons of wheat across the Atlantic to maintain the flow of food, a monumental effort helping to ensure the relief of thousands of Afghani citizens from harsh winter conditions and bolstering coalition support throughout the country. And let me tell you, when those HDRs got in the hands of starving folks we

won hearts and minds. So know that your efforts make a difference winning the war both on the battlefield and off!

• Close coordination with our merchant mariners crewing Ready Reserve Force and prepositioned shipping assets was critical to reinforcing USAF bombing efforts in Afghanistan. A total of 968 containers of critical munitions and 650 square feet of equipment were delivered to the area of operations. The ability to move this cargo quickly via surface was key in that it made available to CENTCOM and General Franks directly an additional 179 C-5 sorties for use moving other, higher priority cargo to the area.

• The movement of significant US ground forces into Afghanistan exponentially increased sustainment requirements there. That country's landlocked location, coupled with the quantity of supplies required, exploring territory completely new to the command, we developed a limited partnership with the Russian commercial rail industry to move extensive quantities of bulk food, water and health supplies across Russia and portions of Central Asia. Such movements currently save nearly 40 additional C-17 airlift missions per month for use on more time-sensitive requirements .

• And because our operating locations put a premium on military aircraft, we shifted a huge percentage of our day-to-day lift of goods and personnel directly into the hands of our commercial partners. The shift was seamless and the response enormous. Our customers never knew the difference and that's exactly how it should be-what a marvelous team effort!

SECURITY CHALLENGES

Indeed, we are winning the war but we know it is a long one and requires vigilance, resolve, and courage On 9/11 our world changed forever and how we view the world must also change. 9/11 collectively put us on notice that nothing is as it used to be. The ante has gone up dramatically, the risks higher, the consequences more profound. Our cooperative efforts over the past year have done much to identify security concerns within our transportation infrastructure, to include a significant report on transportation security published by this organization in recent months. Militarily and commercially, we've begun to take the steps necessary to shore up security. Although we've come far, we've got a long road ahead of us It ' s a journey we must make and make together, and we cannot fail, we cannot loose sight, we cannot suffer from complacency or 9/11 will play out over and over and over again and we cannot have that happen.

I believe the initiatives outlined within the recent NDTA report on transportation security provide an outstanding framework within which to pursue exquisite transportation security. We all must answer the challenge to push these initiatives further, through our liaison with local, state, and federal agencies and within industry itself. We must move to eliminate outdated/unnecessary rules, and propose new federal standards to enhance and standardize safety and security practices for shipments from point

of origin all the way to destination. Progress along these lines will facilitate more timely movement of surface cargo within the continental US and enhance safety/security of each load while in transit.

We can further facilitate the security of cargo moving within the transportation system by establishing industry-wide mandates for security seals on all containers, to include maintaining seal data integrity throughout a shipment's chain of custody.

While these initiatives go a long way towards securing cargo while it is in the pipeline, what is also needed is a process by which transportation organizations across the spectrum can actively manage the security risks inherent in daily operations. We will achieve that goal through the establishment of a formal system for sharing intelligence information with industry on potential security hazards. This is an area of key concern for us all, and one in which we are making definite progress. We are currently nearing operational capability on a system that will share available information from intelligence and law enforcement sources with organizations involved in defense transportation operations, both military and civilian. Still in the works is the formal process to get the information to the carriers on a timely basis. Another key part of the initiative involves reviewing our existing contracts with carriers to ensure provisions are included for carriers to support key Essential Elements of Information (EEI), such as possible terrorist surveillance, or related unusual events, to a central reporting location or agency. It will indeed be a two way street, benefiting both commercial and defense sectors.

Significant progress in these areas will enhance overall security of the DTS and ensure our ability to support the warfighter around the globe, whenever and wherever this endeavor may take us.

THE WAY AHEAD

Our focus for the future is one that is undoubtedly shared by everyone in this room. We must continue to seek out and adapt best practices in order to streamline our processes and better interact with our customers, suppliers, and partners. At TRANSCOM, in particular, we seek to develop business and financial practices more in step with the commercial sector, making ourselves easier to work with. We must be flexible, responsive, and very capable. Our partnership with industry and the evolution of our process is at the leading edge of defense logistics transformation. It's important to our financial bottom line whether that's the taxpayer or the board of directors. And it's what really matters, what all of us here today are signed up to do and that is to provide exquisite support to our warfighters in the service of this great nation.

CLOSING

Let me close by thanking the Association and General Honor in particular for the opportunity to address this group of great Americans, patriots and friends. May God continue to bless each of you and may He continue to bless the United States of America.

ADM James M. Loy. USCG,

(Ret)

"TSA and Transportation Security"

TTransportation security today is better than yesterday, and will be better yet tomorrow, thanks to all of us working together to achieve our common aims.

hank you Mary Ann for that kind introduction. It's good to be among those who share our vision for an efficient and secure transportation system that supports national defense as well.

At the outset, TSA (Transportation Security Administration) faced two major challenges: creating a new federal agency and taking on the responsibility for airline passenger and baggage screening activities. Nine months later, we're standing strong and are well on our way to meeting both of those challenges.

We have assembled a talented and dedicated group of senior executives and security professionals from all transportation modes who are building and operating the TSA in Washington, DC, and across the country.

TSA has announced the appointment of 150 federal security directors responsible for overseeing security at 400 airports.

So far, we've hired more than 6,000 federal security screeners covering 122 airports. We're on track to meet the congressionally-mandated deadline of November 19, when the symbolic TSA logo of nine stars and eleven stripes will be seen in 429 airports nationwide.

The nationwide face of TSA is that of a quiet professional: a man or woman, highly trained and motivated to provide excellence in security and customer service. That doesn't mean the process will always be easy or convenient. Sometimes the best security is neither. But it will be the best, using state-of-the art technology and treating people with dignity and respect.

TSA is also committed to having 100 percent explosives-detection screening of checked baggage by the December 31, 2002 deadline, also mandated by Congress. TSA will have baggage screeners and equipment deployed in more than 90 percent of the nation's airports by that time. In the remaining 10 percent, we will use other options-such as explosive sniffing dogs and portable screening equipment-to ensure the security requirements are met.

We recognize that every airport is different - different base clientele, different geography, different security needs, space, size and capabilities. Our passenger and baggage screening systems will be responsive to these differences and strategically formulated to meet future needs, while ensuring consistency in customer service.

Implementing the security system in each airport is a team effort. It involves working with the local officials and experts in the aviation community to assess the needs and work towards a common solution for improving security.

We are committed to both excellent world-class security and customer service. We're doing everything we can using a common-sense approach and borrowing and adapting the best ideas from business and industry. The goal is not just to make people feel secure, but to ensure that they are secure.

Right up front, I want you to know some of the ground rules I've instituted in our approach to our many tasks.

First of all, involving our stakeholders in everything that impacts them is my modus operandi. I have established charter working groups to revisit some old issues and address some new ones. For each charter I insist on gathering input from the issue's most appropriate stakeholders. It's the only way I do business, and I clearly have set the standard.

I believe in operating in a common-sense and riskdriven mode. We're looking at the logic in our approach to security, and we're weighing the benefits against the risks. We're also assessing the threats through our intelligence gathering, to consider how best to prepare and respond to them. Putting information pieces together not only helps determine what security steps we should take, but also what steps would serve little purpose for the amount of effort and resources expended.

I believe in measuring performance. All of TSA employees are accountable for their actions and their inactions. Doing the right thing every time is critical when your enemy only has to get it right once.

I also believe in measuring results against expectations. Did we get what we wanted from the program, the process, or the participation? For example, we're gathering baseline data where there are no federal security screeners yet, so we can compare that data against the airport security environment after federalization.

Our statistics demonstrate progress for the system as a whole. Of equal importance is identifying ways to improve the security process at the personal level by making it more efficient and less onerous for groups and individuals. I have charged TSA staff with taking aggressive steps to reduce the "hassle factor" at airports and eliminate "unnecessary rules." For example, passengers can now carry unsealed foam or paper cups through the magnetometers, rather than throwing that precious cup of coffee or giant cold drink in the trash. Also, airline employees are no longer required to ask passengers if they've been in control of their baggage and whether anyone has asked them to carry anything on a flight. TSA made that move as part of an on-going effort to balance security and convenience for air travelers. The questions are now unnecessary, as we implement improved security processes. In addition, we're supporting development of a Registered Traveler Program and are studying options for how best to implement it. Persons wishing to be Registered Travelers would submit to a detailed background check. We have concluded that such a

TSA Mission: The Transportation Security Administration protects the Nation's transportation systems to ensure freedom of movement for people and commerce.

Vision: The TSA will continuously set the standard for excellence in transportation security through its people, processes, and technologies.

Values: Excellence in public service through: Integrity, Innovation, Courtesy and Respect, Competence, Customer Focus, Dedication, Diveristy and Teamwork.

program could reduce the hassle factor for registered pass e ngers and improve the throughput rate. We've also published very clear guidance on our Website for the traveling public to use. This easily understandable yet comprehensive guidance lists prohibited items that passengers may not bring through security checkpoints and onto airliners, as well as items permitted in aircraft cabins. It contains travel tips for people with disabilities , guidelines on traveling with children, information on boarding, and general "Dos and Don'ts." We also have standardized signs at airports nationwide at the screening checkpoints to remind passengers of the prohibited items. TSA is also well down the road in implementing CAPPS II , another identity technology system , which uses large data sets to better select those travelers who should receive additional scrutiny at the security checkpoints.

Aviation security is just one of the areas of focus by TSA. What about the other modes? We've created the Office of Maritime and Land Security, headed by Admiral Dick Bennis, who the world now remembers as the commander of Coast Guard forces during the evacuation of Manhattan on September 11 , 2001. Admiral Bennis and his staff are working in a number of areas involving security in the maritime and private sector, in conjunction with the Coast Guard , other DOT agencies, Customs, and domestic and international organizations. For example, we are nearing completion of a Memorandum of Agreement with the Coast Guard to better describe our respective roles in US port and maritime security.

Several initiatives are now underway in the maritime domain that involve : instituting enhanced security measures for training and qualifying transportation security workers; developing a credentialing system for transportation workers conducting vulnerability assessments; providing grants and physical security improvements to upgrade the security infrastructure; and establish standards for transportation facility and infrastructure security, including intermodal containers and transport of hazardous materials and food.

Having spent most of my working life in the Coast Guard, I learned firsthand the value of collaboration with the maritime industry. That kind of collaboration will be a key ingredient to success as we move into other modes.

We are working on a number of initiatives in rail cargo security involving intermodal shipping container security standards; hazardous material security standards; and food and feed stock security.

One initiative is focused on the shipment of hazardous materials using a system security perspective. This approach would integrate mechanisms that identify cargo and people involved in the transport of these products, pinpoint the origins and destinations of such cargo, and provide risk and vulnerability assessments in order to accomplish the following: tighten access to facilities by monitoring deliveries of materials and people involved in the transport; share information with law enforcement agencies and local emergency officials to keep emergency contingency plans current; and implement higher standards for shippers and carriers.

We will continue to move forward with these types of efforts to ensure security across the modes. None of the efforts I've just described have been done in a vacuum. Instead, we have actively involved stakeholders, conducted studies, consulted with experts, and applied that oh-so-important ingredient-common sense. In his State of the Union Address on January 29, President Bush emphasized that our first priority must be the security of the nation. He stated three goals that support this priority, to include winning the war against terrorism, protecting our homeland, and reviving the economy.

TSA is building a robust cornerstone for our nation's transportation security . Since 9/11, we have seen a renewed sense of patriotism in America. Our actions have been in reaction to the dastardly deeds that snuffed out the lives of thousands of innocent people and affected millions more. We've mobilized our collective strength to strike back against the forces of evil to defend our country.

But as we continue to work in securing our homeland and maintaining world peace, I suggest we remind ourselves of the ultimate reason supporting our cause. President Abraham Lincoln captured the essence of our higher purpose almost 150 years ago when he said, "America is the last, best hope for the world "

More than ever, I believe that's the case. We can't do it alone, but we're destined to lead the charge. Each of us, blessed to be Americans, has the responsibility to keep the light of liberty burning bright, now and forever.

We owe it to the legacy of our ancestors, to the quality of American life, and to the future of our children and grandchildren-the generations to come. Transportation security today is better than yesterday, and will be better yet tomorrow, thanks to all of us working together to achieve our common aims.

Thank you for your interest and commitment to transportation security. You and many other patriots like you will ensure that the forces of liberty will ultimately prevail, and America will continue to be the "last , best hope for the world." We're working toward a security system for tomorrow that ' s better than today's And I assure you that our system today is better than yesterday's. DTJ

FORUM EDUCATIONAL PROGRAM

THE FOLLOWING ARE SUMMARIZED HIGHLIGHTS OF THE 2002 N DTA FORUM SESSIONS

Session A "Tronsportnt1on Frecdorn "

Vanous topics covc1·cd such as: T1-ansportation f1-ccdom: Sccunly txpectations; Rumo1- vc.,. fruth; The Tr·avcl lnclustr·y Pcr·spectivc; and I he Passcnge1· [xpETience

MOD[RATOR:

Lori Brooks, Director of Govt Sales, Si>< Continents Hotels

r1ANELIS IS:

Denny Clifford, No1·thvvest Ai1-lines, MiliL;ir·y and Cov1. Sales; Kay Anderson Hager. Cai-Ison Wagonlit Travel, Dir·ecto1· Bus111c,.s Solutions; Rocky Mobaraki, The He1~t1 Co1·p., Di1-ecto1· Govt. Sales; Mary Sarkis, Choice I lolels International, Reg101d W' l11tc1Tnedia1 y Marke ti

This Session's panel was comprised of members of the NDTA Passenger Travel Services Committee. Each representative is from a different sector of the travel industry. The goal of the session was to inform and educate on the latest challenges and issues facing the Passenger Travel industry, along with a briefing on the state of the different sectors in the industry. The following are summarized highlights from each panelist's presentation.

AIRLINE PERSPECTIVE

Denny Clifford, Northwest Airlines

The Status of the Airline Industry and Security Issues

THE STATE OF THE AIRLINE INDUSTRY

The airline industry is slowly rebounding from the impact of September 11th. The affects of this tragedy will be felt by the airlines and the transportation

industry as a whole for years. The airlines were the most adversely affected industry. Economic and operating pressures are being felt in a major way.

As a result of the impact of 9/11, security has become a primary focus and important issue facing the airlines. The organization of the Transportation Security Administration (TSA) is an example of the major steps taken in addressing security issues. The airline industry is looking forward to a strong partnership with TSA. The intensity of it all in such a compressed timeframe is crucial. Urgency is Key!

The economics are very challenging. In 2001, the industry lost $8 billion before the so-called "bailout" of $5 billion dollars from the government. The bailout was a slow infusion of cash over a period of time, which covered the 5-day shutdown after 9/11. The airline industry as a whole expects to lose $7 billion dollars. In 2003, there is no expectation of a profit.

The challenge ahead is simply a lack of cash When you don ' t make money, there is no cash available. When you don't have cash you can't invest in the future, thus impacting all plans.

The airlines have had to draw on its lines of credit, e.g., borrowing against the aircraft. As a result of this borrowing, the airlines have increased their amount of debt. The industry is not looking to ask for any more bailouts, but it is looking to be taxed less

Insurance expenses have also been increasing. Fortunately, the cost of fuel has remained the same. However, most airline-related expenses have increased.

Airlines live and die on their yield . Yield is the number of cents-per-mile on passenger travel. Yield has been down since 9/11, however, it is slowly stabilizing. Revenue is the biggest challenge on the airline industry. The load factor has been increasing (how many people on the plane) steadily.

The key factor is business travel, which has not returned to the status it was before 9/11. Businesses are cutting back their budgets for travel and using alternative means such as teleconferences. The question that still remains is - will business travel go back to the same level it was before 9/11? There has been a shift in business, and the industry is preparing for this shift to take hold in the business paradigm. As a result, there is aggressive cost cutting, i.e., layoffs, retiring aircraft, etc. - all things necessary to increase revenue.

Travel agencies are affected when the airlines do poorly. Airlines are cutting agency commissions. There is also more of a push for e-commerce than ever before. E-ticketing and web fares also help to save the airlines money. Non-refundable tickets are being issued and charges are being incurred for paper ticket requests.

These are all means in which the airlines must resort to in order to survive, rebound and stay economically afloat. There will be more industry consolidation happening. Less airline mergers will happen due to the cost - they are paid for by debt. There will be several code shares arising. Code Shares are when airlines partner together to share aircraft and route networks. US Airways and United announced the most recent code share resulting in the response of a code share between Delta, Northwest and Continental.

SECURITY

Airline economics are a direct function that is tied to security. The fear factor as a result of 9/11 is now replaced with a "hassle factor." Our way of life has changed since 9/11. Security requires us to endure more hassles.

ISA is starting to be phased in at all airports. The cost of obtaining a strong security system is very expensive. Baggage screening machines cost in the millions of dollars. The level of scrutiny in passing through security checkpoints has increased.

How do we find the delicate balance between effective security and passenger convenience? This is a major dilemma for the travel industry as a whole. Who will pay for these expenses? Both the airlines and passengers have reached their limit on what they can fund. A fleeting security perspective starts another vicious cycle of economic turmoil. If passengers don't fly, there is decreased revenue for the airlines. This, as a result, trickles down to the other aspects of the travel industry and causes them to go into the red.

REGISTERED TRAVEL PROGRAM

The Airline industry supports this volunteer program. The goal of the Registered Travel Program is to reduce the problem of passenger hassles and provide a solution. The program intially calls for an extensive background check and then an ID card is provided which will help get travelers through security checkpoints with more ease.

TRAVEL AGENCY PERSPECTIVE

Kay Anderson Hager, Carlson Wagonlit Transportation Freedom - The Security Travel Requirement to Fight Terrorism

"Those who expect to reap the blessing of freedom must bear the fatigue of supporting it."

-Thomas Jefferson Freedom requires that we make sacrifices for the greater good. In the interest of preserving freedom, we must as individuals give up a few small rights. The new security procedures are here to stay for the foreseeable future.

THE ROLE OF THE TRAVEL AGENT

The travel agent will play an important role in providing information and communication to travelers.

Agents are responsible to help prepare our clients, thus adding more value to the service we provide. The Internet has been key to information distribution and travel agents must use the Internet more and more as a means of providing added-value information to clients.

Freedom comes with a price. We can further minimize the impact of the price paid with good information and communication.

CAR RENTAL PERSPECTIVE

Rocky Morabaki, The Hertz Corporation

The State of the Car Rental Industry

SECURITY

The car rental industry is limited in terms of what it can do on security. Rental companies rely on how well the airlines do since the airlines funnel business to car rental companies. In an effort to increase security, some Hertz locations have implemented the use of cameras and have been conducting random driver's license checks.

THE STATE OF THE INDUSTRY

Profit margins are low. Some agencies are facing bankruptcy. There are 150,000 fewer cars compared to 2001. Profit has not materialized so there will need to be more depleting of inventory.

The latest industry issues are increases in Loss Damage Waivers. The agreement between Hertz and MTMC has always included Loss Damage Waivers automatically in the contract.

MTMC CAR RENTAL PROGRAM

The Hertz MTMC Car Rental Program benefits are:

• Ceiling Rates - MTMC is guaranteed a specific rate for liability coverage up to $300K.

• Free Loss Damage Waiver included in service.

• Under Industry Age Rental (18 and above).

• Leisure Discounts Worldwide.

• Upgrades.

• Last Car Availability.

• Minimum surcharge.

• Unlimited mileage.

TIPS FOR A HASSLE FREE EXPERIENCE WHEN RENTING A CAR

• Sign up for Gold Service or Frequent Traveler Programs.

• Book reservations in advance, but not more than 60 days ahead.

• Place your promotion code on free upgrades to give at the time of reservation.

• Use the pre-purchase program for fuel to alleviate additional charges if the car comes back empty.

• Take time to check the car for prior damage before leaving the lot.

• Use the Express Service if provided for returns.

HOTEL INDUSTRY PERSPECTIVE

Mary Sarkis, Choice Hotels

The State of the Hotel Industry

There are 53,500 properties in the US with about 4.1 million rooms. The hotel industry has also been affected by the aftermath of 9/11. Labor is the most expensive part of the industry and plenty layoffs resulted after 9/11. A majority of the workers are foreigners who come into the industry looking for their first jobs. The weakening economy doesn't leave many choices for them. Businesses have cut back on travel and people are more critical about what they do with their discretionary income for vacations, etc. Occupancy is in line with what is going on in the industry there has been a 3.2 percent drop. These changes in occupancy affect the client. There is more access to a greater number of options, especially for the government and military client. The government and military traveler should take advantage of the options and negotiated deals.

Session A summarized by Susan Leigh, NDTA Public Affairs.

Session B

"Air Tronsportotion Securi ly"

MODERATOR:

Mr. Patrick V. Murphy, Jr., Pa1-tner, Gerchick-Mur·phy Associates

PANELISTS:

The Honorable Read Van de Water, Asst. Sec. fo1- Aviation & Int' I Affairs, US DOT; LtGen Mac Armstrong, USAF (Ret.), Senior VP Ope,·ations & Safety, Air Transport Assoc. of America; Mr. James W. Hlavacek Exec. VP & COO, American Trans Air

Air Transportation Security encompasses all aspects of the aviation industry. The airline industry has struggled to overcome the effects of 9/11 for the past year. Many industry observers believed that a~er a period of 6 to 12 months the industry would fully recover. However, traffic has leveled off, revenue and profits are down. Aviation security, the hassle factor, delays and dollars are all a concern. The following are brief summaries of what each Panelist presented.

LtGen Mac Armstrong

Economic Impact on Aviation

We are in a crisis! The state of the industry is

"survival." All airlines in the US are operating in a "Survival Mode." All carriers are pushing to stay afloat. Most of the industry is already operating in the red.

AIRLINE ECONOMIC SITUATION

The total impact of the civil aviation industry in the US is a full 9 percent of the gross domestic product. That is $900 billion a year - eleven million jobs. We are in the worst economic situation ever!

The loss is about $ 7 billion. In the first half of this year, passenger airlines have already lost over $4 billion. Since deregulation, these losses taken together will mean approximately $0 net to the airline industry.

Going back to a regulated industry is not the answer. The net profit margin for the airline industry is less than one half of 1 percent. That's compared to the average of all industries in this country of about 6 percent.

Some of the airlines have debt amounting to at or over 100 percent of their capital. This is a result of retained losses that they can't get rid of and the problems with the stock market.

The hope for profitability return in 2003 is long gone. Losses are projected at $3-$4 billion. Every loss, fee, tax or passenger that chooses to travel by other means, all adds to the unsustainable debt burden of today, where companies owe more than they are worth and borrow more than they can afford to stay afloat.

In 2002, industry revenue was off by at least 22 percent from the previous year.

The airline industry drives a huge sector of the overall economy. All players must contribute to helping to resolve this huge problem and bring back economic balance. It is a serious threat to the economy's health and the needs of the nation.

The market drivers of today's dire situation are increases in taxes, rising insurance costs, security costs and revenue losses from well-intentioned government decisions.

Attention must be drawn to the consequences of the decisions made in effort to rectify this dilemma. The excessive taxation on the industry is a large portion of the problem.

The cutbacks made in the industry will contribute to the stagnation of the job market. The result is lost jobs and economic decline.

The "hassle factor" must be decreased to encourage travel and win back the business traveler segment, which has dramatically fallen since 9/11.

Jim Hlavacek

The Vitality of the Airlines and the CRAF Program

Shutting down the U.S. airway system, while significant in and of itself, was only the first of many negative events seen in the airline industry - lost revenue, industry-wide layoffs, bankruptcies, and the failure of several carriers, to name a few. As a result, there was a push for Congressional action. All of these events affected a principal component of the DTS - the Civil Reserve Air Fleet (CRAP).

-Capt Jason L. Masciulli, USAF, DTJ, August 2002.

Our security system is transitioning from general aviation security to a federal screening system. The principle threat to aviation security is a terrorist attack using an airplane as a vehicle of destruction.

The task that TSA has been asked to fulfill is huge with a tight timeline. The new TSA system will need more than 60,000 employees. Congress has capped this to 45,000 until TSA can effectively justify their costs

The nation's economic prosperity is the cornerstone of our nations defense strategy. Without it, we risk corporate failures, widespread unemployment, national deficits, restricted government spending and weaker defense. That in turn impacts our underlying defense strategy of promoting democracy abroad. The dismal economic effect on the airlines affects national security because of the risk in reduction to the CRAF fleet size.

The CRAF program is vital because of the help it provides in transporting troops all over the world.

The OSD has initiated a study of CRAF under the leadership of Mr. Earl Boyanton and the institute of defense analysis. Similar studies have been made periodically, but this new approach is likely to produce a landmark report.

The Hon. Read Van de Water

DOT - The Sta te of TSA

DOT is working very hard to fulfill a mandate that was passed down from the US Congress last November, the sustaining of the TSA. The agency will eventually service 429 commercial airports in the United States. Each airport is set up very differently and the task of implementing a strong, consistent, and effective security system is a huge one.

There is no flexibility in meeting the end-ofDecember timeline. We have been working to stand up an agency in a year's time. These are the issues that TSA is currently working :

• Securing airplane cockpit doors.

• Guns in the cockpit.

• Deputizing state and local law enforcement officers to fulfill duties at the security checkpoints and not requiring that federal officers be present.

• 300 feet parking rule.

• Hass}e factor.

• The "Stupid Rules" review - getting rid of ineffective rules already in place.

We invite members of NDTA to join in providing suggestions to Admiral Loy. No matter how burdensome it is, the terrorist threat is still there - "we have to be right every time, a terrorist only has to get it right once!"

The agency started with 13 employees and is now up to 32,000 federal screeners that have been hired, 149 officials that are in charge of security at airports covering over 300 airports, and a full headquarters staff.

We ask for your help and suggestions, the continued support is appreciated.

Session B summarized by Susan Leigh, NDTA Public Affairs

Session C ''Maritime Security"

MODERATOR:

VADM David L. Brewer, Ill, USN Commandc1; MSC. Depar-tmcnt of the Navy

PAN! LISTS:

Capt. William G. Schubert , Administrator; MARA[) US DOT: Mr. Raymond P. Ebeling, 1ir-esidcnt and ChairTnan. Ameriecm Roll on Roll off Ca1T1ei-s, LLC; Mr. John Reinhart , Cl11ef Executive Officer; Ma e1-sk Line, Lt d.; Mr. Michael Sacco , r:-esidcnt, Seafarers ln tema ti onc1 I U n ,0 11; Ms. Bethann Rooney , Manage, Pon Secunty, T he Port Authonty of New Yor-k & New Jer-scy

"12 days into my job, September 11th occurred ... the impact of this tragedy clearly affected the maritime industry," stated VADM David Brewer, USN. "You don't miss your water till your well runs dry. 11 The Maritime Security Session focuses on how different organizations must network to work towards a solution to our current maritime security issues.

Capt. William G. Schubert

DOT Pe rspecti ve for Maritime Security

Ports are the backbone of our economy. Port operations account for more than 95 percent of our nation's economy. Security of the ports is critical to our national defense and securing of the industry. We must all work towards the security and efficiency of cargo transportation domestically. Secretary Mineta has put $92.3 million towards the protection of our ports. The terrorist attacks have resulted in a renewed focus on our transportation security system.

We are aggressively meeting our challenges on several fronts. Port security dollars totaling $ 78 million are needed to fund enhanced security and operations. Congress provided the funding to TSA, which is responsible for security of all the modes.

The unique aspects of this grant program was the creation of a web-based tracking system allowing applicants to submit their applications electronically. All actions can be monitored via the web.

Following the terrorist attacks, the Coast Guard enhanced security in the nation ' s waters by tracking high interest vessels and requiring key information on

people to make sure they did not pose a threat to the nation's security. The Coast Guard has increased its presence amongst bridges, port facilities and critical infrastructures adjacent to waterways. When necessary the Coast Guard is escorting vessels containing high-risk cargo, etc., and those traveling through security sensitive areas.

Recommendations have been made to secure cargo containers as they move through the intermodal transportation system. The DOT's Intelligence Transportation System Joint Program Office recently augmented the group's efforts by successfully completing it's effort to test new electronic seals -a new technology that enables regulatory agencies to determine if a container has been tampered with. President Bush's 2003 budget includes key funding for new port security initiatives including port vulnerability assessments, US Coast Guard Maritime Safety and security teams. Additionally, the administration is working to enact maritime security legislation that will provide long-term tools for security planning and international coordination. We are anticipating a second round of port security grants to take place in the near future. With respect to future funding, congressional conferences are meeting to resolve differences between the senate version S12-14, Port and Maritime Security Act of 2001 and HR3983, Maritime Transportation Antiterrorist Act of 2002. Both bills will provide port security grant provisions in general terms. S12-14 will provide a 5-year funding mechanism for $390 million; HR3983, a 3 year grant program totaling $225 million. This needs to be worked out in the conference committees which is currently underway. Another important measure involves the security training at the Global Maritime and Transportation School at the US Merchant Marine Academy. This is also contained in at least the Senate version of the legislation to use that facility for port training.

RECENT SUCCESSES INCLUDE:

• GMAT trained 19 New York City Police department personnel and 31 members of the Florida Department of Law Enforcement who attended the marine terminal and seaport security course at GMAT, this was very successful.

• Law enforcement types are going out to get training in seaport security to perform in a marine environment. This course will add another check into our security efforts.

• Working on developing standards and regulations to determine who is coming in and out of ports.

• The Nationwide Transportation ID Card is another program that :will institute standards and regulations. MARAD shares a lead role with the military in ensuring port security and protection in this critical infrastructure during mobilization.

represented in the transportation sector. We must protect our facilities and cargo. The measures that have been taken by all the agencies are commendable to put together a system of systems that we will need to secure our industry.

Physical security is a challenging task; ports were not traditionally built to protect against a terrorist attack. The size, the complexity and their openness present issues. The ports in the US are estimating a minimum cost of $2 billion. The implementation of this is on hold because they don't yet know what the requirements will be.

The true cost to secure our ports is yet unknown. We do know the recurring costs of operations and maintenance are expected to double and even triple our security budgets.

Containers are an attractive target because they can bring global commerce to a grinding halt. 95 percent of goods are transported in the maritime industry. All delivery devices need to be secured.

We cannot eliminate the threat, but we need to take steps to reduce it. For example, we can identify cargo from the point of origin and track it all the way to its destination. Disruptions in cargo lead to disruptions in global commerce.

The port security bills need to be passed and put in motion. Minimum guidelines and standards need to be implemented at various port locations.

John Reinhart

Ho w Do We Design an Effecti ve Maritime Security Program?

7.8 million containers of cargo were handled in 2001. Just in cargo alone there is $1.3 billion in revenue moving through the ports of our country each and every day. 800 ocean liners are calling on this country. There are 22,000 port calls to the US each year - this generates over 1 million American jobs, equivalent to $32 billion in wages for Americans. Our economy has been hurt by enough issues not to have the security of cargo transportation added to it. The scope of the problem is quite enormous so we have to enhance the security of our country. We have maintained the economic effectiveness that international trade has supplied our country .

The Customs-Trade Partnership Against Terrorism (C-TPAT) is a joint government-business initiative. The program encourages shippers to secure their supply chain and offers compliant shippers expedited cargo into the United States. For C-TPAT to be effective it must encompass the entire movement of cargo from point-of-stage to point-of-delivery. We have to actively promote C-TPAT by ongoing administrative efforts with customers, shippers, educating the sales force, educating logisticians working through the entire supply chain.

Bethann Rooney Port Secu rity

A new and urgent focus worldwide is maritime security. 11 percent of the gross domestic product is

Maersk is working with C-TPAT. This strategy has to be unified amongst all the agencies involved. Maersk was the first carrier to enroll in 2002. Maersk educates their customers daily and emphasizes the importance of CTPAT with shippers they work with.

Maersk has put global security officers in place within the organization and regional security officers in each of the regions. They are a strong supporter of the program and will enforce full compliance with those they work with. Some of the actions Maersk has taken to strenghten port security are:

• Perform vessel and terminal security analyses.

• Reviews of the security in place in the current supply chain.

• Appointed security officers on each vessel and each port.

• We have looked at potential bomb threats.

• Vessel search checklists are in place.

• Effort to inspect all empty inbound containers coming in the US.

• Training drills for security.

• Automated manifest systems.

• Maintain active lists on all personnel.

• Place port liaison reps in each port.

• Implement Security systems for the vessel.

• Maintain high-security seals for all containers

• Refine our documentation procedures.

• Expanded dangerous cargo handling procedures.

• Make sure vessels have current visa and ID procedures

Ray Ebeling Ideas for Consideration

The west coast disruption is costing $1 billion a day. The industry is so vital to our economy Most manufacturing and distribution channels are dependent on just-in-time logistics. Shutting down ports is not a viable option We must seek protections that won't dramatically impact our economy.

3 PRINCIPLE PROPOSITIONS TO ADVANCE

• Maritime Security is an international issue requiring an international solution.

• All elements of maritime security must be seen and secured as an integrated supply chain, e.g., a typical transaction can have at least a dozen parties involved.

• All security enhancements underway have a cost to be dealt with .

The Container Security Initiative is good . It is intended to identify high-risk containers at the point of origin, instead of destination. So far, C-TPAT has no specific requirements - it's all volunteer based. It needs standardization (IMO standards should be out in December).

The Port and Maritime Security Act (Hollings Bill) doesn't address our integrated maritime transportation security system - it views each port as an entity. This needs to be integrated. Port security is equivalent to national security - taxpayer involvement and funding is necessary. The bottom line is we're making progress, but need to deal with the money issue. Who will pay for all this?

Mike Sacco

Concern s, Impro vements, Solutions

Maritime labor has security concerns, but they have taken steps and have come up with possible solutions. We need a means of solid verification.

CONCERNS

• How can we verify the identification of foreign mariners arriving in US ports?

- Need equal treatment of foreign crews here and US crews overseas.

- Whatever we do, we can expect reciprocity by foreign governments.

• IMO will adopt new regulations on anti-terrorism.

- No enforcement capabilities or authorization means in place.

• Use of tankers and roll-on roll-off carriers with vehicles as weapons.

- Vulnerable on the Mississippi and Great Lakes, too.

• Biggest obstacle is run-away flag shipping.

STEPS TAKEN

• New crew training at Piney Point.

- Anti-terrorist Level I for past 3 years at MSC request (VADM Holder).

- Small arms training courses.

- Other unions have followed suit.

• Flag of convenience shipping.

- Need total visibility of ownership - who is responsible?

POSSIBLE SOLUTIONS

• Dramatically increase number of US-flagged vessels.

• Work toward more accurate crew lists/rosters

• Use smart card technology for maritime worker IDs.

• Develop an international hiring hall with standardized background checks.

• Be consistent in enforcement of current and future rules/regulations.

• Provide for immediate and total transparency of ownership of vessels with flags of convenience.

Session C summarized by Susan Leigh, NDTA Public Affairs; Frank Randall, MSC Public Affairs; and William Tall ey, MSC Public Affairs.

Session D "Swfoce Security"

MODERATOR:

Gary Hartter

P1-esident, Landstar Carner Grnup

PANELISTS:

Mr. Daryl Deel, CEO. R&R Truckillg; Mr. George Rodriguez, Dit-ecto1- of Security, TSA; Mr Charles E. Dettman, Exec. VP, Safety & Opc1-atiolls, Assoc. of Americall Railroads; Mr. William Lucas, Deputy to the Commander. MTMC

The following is an article entitled "Innovation, Anomaly Review Necessary for Surface Transportation Security", that elucidates key points made during Session D of the 2002 NDTA Forum.

TSA Executive

George Rodiguez has a favorite story about his days as a trucking-line security manager.

Freight was disappearing off of the shipping docks of the carrier's terminals. Security specialists went to work reviewing video surveillance videos. They were in for a surprise. The missing freight was disappearing into what appeared to be one of the firm's own trucks. On closer review, however, the truck turned out to be an absolute counterfeit decoy.

"They had leased the truck and put on our decals," said Rodriguez, Director of Security for the new Transportation Security Administration.

Rodriguez used the story as an example in explaining the challenges of the new agency to members of the NDTA.

"The problem with law enforcement is the entire focus is to investigate something after it happened," said Rodriguez , whose career spans 30 years of law enforcement and security work "When I went to work (for private industry) I found a very proactive attitude of prevention."

Rodriguez told association members that the proactive stance is one of the attitudes he is stressing at his new job. The task is daunting. "Nine million tractor trailers run the streets of the United Stated every day," said Rodriguez. "Think of that!"

A more secure transportation environment is going to be achieved by innovation. "Things are constantly changing. We need an infrastructure that can accommodate change. And, we do not want to put all the burden on one segment of the industry such as the carriers or the shippers. It is the responsibility of all.

There is a tremendous amount of information available within the transportation community."

The solution will lie in part on a review of anomalies within the transportation system.

After the September 11, 2001, terrorist attacks, Rodriguez said he sent a message to his firm's terminal managers to be on the lookout for several anomalies, including false addresses and loading dock pickups The result was the identification of 20 suspicious packages - 17 of the packages proved to contain illegal narcotics. The trucking firm promptly turned the information and packages over to law enforcement officials. "We have to establish a system that reminds us of anomalies," said Rodriguez. "The final thing is the infrastructure that handles changes also accommodates new automation.

Some basic security features provide multi-faceted results. As an example, video surveillance cameras reduce external thefts and cut internal losses as well. "They provide a magnificent deterrence system," said Rodriguez.

Challenges in the future include a standardization of loading seals. Electronic seals cost $10 each while paper or tape seals costs a few cents each. "We have to make a decision. We have to keep security up but we also have to make a decision that all modes can accept as a good standard."

The transportation worker security cards are coming. "This is doable. There is a collateral cost. It will not occur overnight." The cards alone are not the solution, he said. "You have to have a person or system to check it."

MTMC Munitions Shipments

The Military Traffic Management Command has taken a number of steps to reduce the vulnerabilities of its arms, ammunitions and explosives shipments. On average, the command has 42,000 such shipments a year - mostly by truck.

11 One of our goals has been to reduce exposure on the highways," said William Lucas. Shipment times of munitions have been greatly reduced. "We had a baseline of 89 hours per average (munitions) shipment time in April 2001," said Lucas. "We've cut it in half."

Army Reservists, who have been assisting MTMC operations in the shipments, are a part of that solution. The soldiers help orchestrate shipment schedules to reduce the time and distance of munitions movements.

Additional surveillance is provided by MTMC's Intelligent Road/Rail Server. The Web-based system provides instant access to numerous existing highway, traffic and weather databases. The server also provides in-transit visit visibility for the munitions shipments.

In addition, MTMC is requiring all munitions drivers to have secret clearances. "I'd like to say we have a national identification card check," said Lucas. "If we had, we'd probably default to them."

Currently 80 percent of munitions drivers have the clearances. "It's a constant challenge," said Lucas.

American Railroads

The railroad industry has put a heavy emphasis on the security of its shipments, said Charles Dettman. 11 After 9-11, the chief executive officers (of American railroads) got together to look at vulnerabilities. We didn't know what we were up against."

While many risks were known, he said, the massive movement of chlorine by railroad cars had not been fully appreciated. The extremely caustic chemical is used extensively in water treatment plants and the pharmaceutical industry. Chlorine is "critical to the livelihood of and health of this country," said Dettman.

A key part of the railroad's solution to movements of such cargoes is their routing and monitoring over critical transportation nodes such as strategic bridges and tunnels.

Munitions shipments have also received additional scrutiny "We have worked well (with the military), and we will continue to work well, 11 said Dettman. The military has provided railroads with secure phones and e-mail. "We (American railroads) have created the Railroad Alert Network. It is 24-7."

"We are far more secure today than yesterday."

Session D article by John Randt, MTMC Public Affairs.

Session E ''Tronsportotion Security Issues 111 the Post9 I I I Environrnen/"

MOrlERATOR:

Mr. Ronald W. Drucker lmr-r1cd iate Past C h airman, NIJ TA

F)AN FLISTS:

Mr. Patrick V. Murphy, Jr., Pa ,-tne1; Gc,-chick - Mu ,-phy Ass o ciates; Ms. Lori L. Brooks, l<ey Acco unt Di1 -c·cto 1 -Covernmenl, Six Continent Hotels ; RADM David L. Brewer Ill, USN , Cor-nmande1; MSC, Depzwtnwnt of the Navy; Mr. Gary Hartter , P,-csid e nt, I <1 n dsta r C atTie r Gm up

The Wrap-up session included all of the 2002 Forum Session moderators who identified over-arching issues from the 56th annual NDTA Forum. At the top of the list were:

NDTA FORUM ISSUES

• Need to determine a means of securing all nodes of transportation.

• Need for a National Transportation Worker Card.

• Necessity to find a means to fund the security enhancements necessary to protect the US transportation System.

All of these issues will be high on the US Government's and US Military's agendas in the months and years to come. The truth is prevalent and speaks to all of us - as the NOT A banner reads, "Transportation Protects The Nation." DTJ

Session E summarized by Frank Randall, MSC Public Affairs and William Talley, MSC Public Affairs.

NDTA FORUMS - PAST AND FUTURE

pt e

r N e vv s

Honshu Chapter

Several chapter members attended the NDTA Forum in Greensboro. Captain Chris Trotter, Chapter 2d VP, accepted the Chapter of the Year and Membership Drive awards on behalf of the Chapter.

In August, Captain Trotter spearheaded the Chapter's blood drive. The successful effort yielded nearly 60 units of blood.

The Chapter recently held its quarterly meeting at Yokota Air Base. Over 20 members attended with the highlight of the meeting being a tour of the C-17 Globemaster III.

Nearly 100 chapter members and other golfers from the military and civilian communities participated in the Fall golf tournament at the Tama Hills Golf Course. The tournament raised over $1,500 for the scholarship fund. Special thanks goes out our corporate sponsors and Master Sergeant Mike Hoffman, for doing all of the "grunt work" to get the tournament going.

Norfolk-Tidewater Chapter

The Norfolk-Tidewater Chapter recently elected new officers: President, Susan Hubbard; 1st Vice President, Renee Rice; 2nd Vice President, Art Hughes; 3rd Vice President, Donald Norman; Treasurer, LtCol David Shepherd, USAF; and Secretary, Robin Smithling.

Our May 16th Golf Tournament was a huge success, thanks to board member Don Norman, and his great organizational ability. Many thanks for his hard work and to volunteers Renee Rice, Carl Olderich, Dick Dietz, Tom Lilley , Lynn Nelson, and Susan Hubbard for their efforts. Proceeds from the golf tournament benefited the local chapter of the American Red Cross.

In September, the Chapter awarded Midshipman 4/C Arron James Garrod , USN, a $500 scholarship towards his education expenses at the US Merchant Marine Academy, Kings Point.

San Francisco Bay Area Chapter

The October 2002 Emergency Preparedness meeting was held at Spenger's in Berkeley, California. Our

featured speakers, Gary Larson of the American Red Cross and Captain Rich Garcia of the California Highway Patrol (CHP ), prov i ded a wealth of information concerning the Red Cross and the CHP safety initiatives.

The November 16th Day at the Races was held at Golden Gate Fields in Albany, California. Our Holiday Party was held on December 7th at the Jimmy Doolittle Air & Space Museum at Travis Air Force Base. Our annual Crab Feed will be held on January 10th at the San Ramon Community Center and is being chaired by chapter member Bill Scott.

The Chapter would like to recognize Staff Sargent Donald Serre of Travis Air Force Base, for his excellence in recruiting and signing in seven new members in less than three months .

Washington DC Chapter

The weather was like Indian summer as over a hundred members and guests of NDTA met at the Officer's Club for the monthly Washington, DC Chapter luncheon . The Washington DC Chapter sponsored a luncheon and tour of the 89th Airlift Wing, Andrews Air force Base. Members enjoyed a pleasant buffet lunch while meeting with the crew and the Commander of the 89th Operations Group, 89th Airlift Wing.

LTG Kenneth Wykle addressed the audience on the future of NDTA. He began by thanking the membership and its supporters for all their efforts and contributions to date. "My challenge is to maintain and continue to strengthen the Association. 11 LTG

Wykle revealed his ideas and plans for NDTA. LTG Wykle is currently meeting with a selection of individuals to gather feedback and ideas on determining NDTA's direction for the next 10 years. One of his first goals is to develop a Strategic Plan for the association. Key components of the NDTA Strategic plan will include a mission statement, vision statement, and clearly defined values and goals. "The strength of the organization comes from the membership, " said LTG Wykle, "My thoughts are that we need goals that center around the members ... members are the core of this association."

The Chapter announced upcoming events to include the kickoff of the Mentor Protege Program. This program will start with 15 applicants, and the Chapter is looking for volunteer mentors. The Chapter is also looking for help to keep its website running strong. A proposal to hold a Tennis Tournament fundraiser at Andrews AFB was presented to the members Colonel Mark Ramsey, USAF , Commander, 89th Operations Group, gave the audience an overview of the 89th Airlift Wing. The general goal of the 89th Airlift Wing is to provide safe, comfortable and reliable travel for our nation's leaders. Customers of the 89th Wing include the President, First Lady, foreign dignitaries, and members of Congress. The fleet is made up of C-32A, C-40B, and C-9C to name a few.

The members and guests were escorted to the airstrip to visit some of the planes and helicopters. Members were able to walk through the planes and speak with crew members. DTJ

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~YELLOW J

Govern ment

N 'ews

MSC

(i)

VADM David L. Brewer III, USN, became the US Navy's newest three-star admiral wh en he was promoted October 23, 2002, by Chief of Naval Operations Admiral Vern Clark, USN, at ceremonies on the historic Washington Navy Yard in Washington, DC. VADM Brewer is the commander of the Navy's Military Sealift Command, the command responsible for the Navy's 120 noncombatant ships operating worldwide. VADM Brewer becomes one of only 32 officers that hold the Navy's second highest rank.

As commander, VADM Brewer has led the MSC support of the war against terrorism. MSC has been at the forefront of the US response, delivering a variety of services and supplies to US and allied forces around the world.

MSC's Naval Fleet Auxiliary Force ships are replenishing Navy ships at sea with fuel, food, ammunition, spare parts and other supplies, enabling the ships and aircraft to operate at sea for extended periods without returning to port.

MSC's Special Mission ships are conducting routine undersea surveillance and oceanographic missions while sister ships assist counter drug operations and monitor missile launches.

Prepositioning and sealift ships are standing ready to move enormous quantities of US combat equipment to any theater of operation if called.

More than 95 percent of all equipment and supplies for a war or contingency operation move by sea on

and NDTA

ships controlled by VADM Brewer's command.

VADM Brewer began his Navy career as a member of the first graduating class of the Naval Reserve Officers Training Corps at a historically African-American university, Prairie View A&M University, in Prairie View, Texas.

VADM Brewer came to MSC from Pensacola, FL, where he was the vice chief of Naval Education and Training. His initial tour as an admiral was as the commander of US Naval Forces Marianas/Commander in Chief, US Pacific Command Representative Guam/Commonwealth of the Northern Marianas Islands/Federated States of Micronesia/Republic of Palau. That tour was followed by duty as Commander, Amphibious Group Three, in San Diego, CA, where he was promoted to Rear Admiral (Upper Half). He has served in a variety of afloat and shore positions throughout his 32-year Navy career.

MTMC

An Army general with extensive service in the XVIII Airborne Corps has assumed command ofMTMC.

MG Ann E Dunwoody assumed the duties of commanding general of this major US Army command at a formal ceremony October 17, at Fort Myer, VA. Dunwood y replaces MG Kenneth L. Privratsk y, MTMC commanding general since July 1999.

"Today I am honored to be part of this team," said Dunwoody, promising full support to the military's warfighters. "One of the reasons I'm proud to be here is because MTMC supports the warfighter every day," said Dunwoody, who spent 10 of the last 14 years of her military service in the Army's key ready-reaction force of the XVIII Airborne Corps.

Dunwoody assumes control of an Army headquarters responsible for the global, end-to-end surface movement of the Department of Defense's equipment and materials. The command has a worldwide Operations Center at Ft Eustis, VA, and 24 port terminal units around the globe. MTMC soldiers and civilians at the ports, trained to work as members of deployment support teams, are capable of working at any port in the world.

The change of command ceremony was hosted by Gen. John W Handy, Commander-in-Chief, USTRANSCOM, Scott Air Force Base, Ill. Handy thanked Privratsky for his energetic leadership in developing efficiencies in transportation processes and costs. "He developed innovative solutions involving shipments to Afghanistan," said Handy, describing rail routings across Europe, Russia and South West Asia countries .

Dunwoody, in her most recent assignment, was commanding general of the 1st Corps Support Command (Airborne), Fort Bragg, NC. In that position, her unit provided support to Army units deployed in Afghanistan.

Dunwoody received a direct commission as a second lieutenant after graduating from the State University of New York at Cortland in 1975 She has graduate degrees in national resource strategy and logistics management. Her past assignments include tours of duty with the 82nd Airborne Division, Fort Bragg, NC; 10th Mountain Division (Light Infantry), Fort Drum, NY ; and the Defense Logistics Agency, Fort Belvoir, VA.

Defense Transportation Journal

During Operation Desert Storm, Dunwoody was deployed to Saudi Arabia as the division parachute officer of the 82nd Airborne Division.

Privratsky praised the soldiers and civilians of the 2,300-member command for their resilience amid organizational change and MTMC's challenging global mission. "I am especially proud to have ended my career in the Military Traffic Management Command, 11 said Privratsky. "I have never worked with a work force that took on so much, so fast and kept such great morale, 11 he said. "I am proud to have been your leader."

MG Dunwoody assumes command during a critical period in American history in which the nation is engaged in a war on terrorism, heavily engaged in Afghanistan, and prepares for possible intervention in Iraq. MTMC's role

in providing end-to-end surface transportation solutions as part of Defense Distribution efforts will be key.

NDTA

•NDTA President Ken Wykle met with MG Ann E. Dunwoody, the new commander of MTMC, on October 25, 2002. The occasion took place during Wykle's presentation of a plaque to Sgt. Gregory Kaskey, 2002 MTMC NCO of the Year. lllt is an

cont'd page 38

right: LTG Ken Wykle, President of NDTA, talks with MG Ann E. Dunwoody Also, LTG Wykle presents a plaque to Sgt. Gregory Kaskey, MTMC 2002 NCO of the Year.

MTM C MOVES FORWARD TO REVAMP DE FENSE MOVES

The Military Traffic Management Command is moving ahead to substantially change the way the nation's service members move.

MTMC has presented to the US Transportation Command a comprehensive plan that will significantly revamp defense moves beginning October 1, 2004. The plan was briefed September 16 to a general officers' steering committee and September 18 to the semi-annual personal property Military/Industry Symposium.

Currently, the Department of Defense spends over $1.7 billion annually on personal property moves managed by MTMC. With the inclusion of commercial-based services, its quality and quality-of-life additions, the new program is estimated to increase direct costs by an additional 13 percent However, planned efficiencies in the new program will reduce both storage and claims costs.

11 At last," said Col. Silvia Anderson, Deputy Chief of Staff for Passenger & Personal Property, "We're moving forward. Our 'Families First' plan incorporates years of pilot test efforts and moving experience. We greatly appreciate the support of the industry associations and the military services in developing this plan."

What has developed is the basis of a program that ensures that members and their family can look forward to a quality move by a quality transportation provider. The most significant change for the members is their empowerment to determine who is a quality carrier. The traffic distribution method is based 70 percent on customer satisfaction and 30 percent on cost, which squarely places the

KEY PLAN FEATURES FOR

focus on the needs of Service members first. Service members will be evaluating the transportation services they receive. With the member's new initiative goes the responsibility to be helpful in the customer survey each member will be asked to complete to evaluate the transportation providers. Surveys will be completed via the Internet and by telephone and only require a few minutes to complete.

The Department of Defense generates an average of 612,000 personal property moves a year. The existing program, now 30-years old, has generated many customer quality control complaints and is fraught with inefficiency.

The new program, said Col. Anderson, offers positive features for all participants and sectors of the program. "The military members should expect a higher quality move because we are ensuring only quality transportation providers will receive Department of Defense business," said Anderson. "In the new program, service member customer surveys will help determine the selection of our future moving partners. We will do this via the telephone and Web-based customer surveys."

Through better member-mover communications, the program will foster a reduction in temporary storage by increasing the number of door-to-door deliveries, said Anderson. "A program feature called Spread Dates provides windows for both pickup and delivery versus a guaranteed, or rigid, delivery date. This will enable both members and transportation providers more flexibility to ensure the direct delivery when housing has not been arranged in advance."

THE TRANSPORTATION PROVIDERS

The win-win basis of the plan includes positive attributes for industry. Transportation providers of personal property moves will find the new program - while demanding higher qualitative performance - provides industry partners with greater operational flexibility.

The process of a military move will be modernized with a reduction in government unique forms/processes. Best-value awards, long a hallmark among MTMC's

transportation awards, will expand to personal property. Now, the lowest price is not necessarily the determining factor in a transportation award.

A second feature borrowed from regular MTMC freight movements will be the required use of PowerTrack automated payment software. For a small fee, transportation providers will receive payments for their moves in a span of a few days.

There is an added benefit to reducing moves that requires temporary storage, said Dinah Locklear, Chief, Personal Property Re-engineering Division. "The greatest benefit of this is a reduction in damage caused by multiple handling of the same personal property shipment."

In fact, correcting the frustrations surrounding loss and damage claims in the current program was the loudest refrain heard from members in earlier surveys. The new program envisions a streamlined claims process (much of it Webbased), direct settlement with the transportation provider and full-value replacement up to a maximum of $50,000.

Another program feature, the Web counseling module, will expand information about the moving process to military customers.

The business focus of the plan is on the commercial firms who move the personal property. Transportation providers must demonstrate their financial viability, have experience and maintain required performance bonds and cargo/liability insurance.

In return for high standards, commercial firms will be paid at a more competitive level. The MTMC program calls for adopting discounts off the commercial tariff which provides the rate base used by the moving industry.

We have developed the basis of a program that ensures members and their family can look forward to a quality move by a quality transportation provider.

The new program was developed in a rapid series of MTMC-moving industry meetings beginning June 19. Many sessions were hosted by Logistics Management Institute of McLean, VA. Representatives from a trio of trade associations participated in the meetings, including: the American Moving & Storage Association, Household Good Freight Forwarders of America, Inc., and Military Mobility Coalition.

The seven-week, fast-track effort was centered on the work of five smaller business-process working groups. These groups focused on rates, payments, claims, quality control and information systems. All the work of the groups was focused on re-engineered processes based on the guidance from a recent US Transportation Command report that reviewed MTMC's Personal Property Program and a quartet of pilot programs designed to improve it. The report cited the need for improvements in acquisition process, information systems technology, and liability/claims process. "The whole idea was to leverage the lessons learned and best practices," said Anderson, "We used this knowledge and leveraged our program development." DTJ

KEY PLAN FEATURES FOR THE MILITARY SERVICES

The military services will find, wh i le they are paying additional direct costs, that the revamped personal property moving program will provide quali ty-of-life factors for service members, which in tum will provide a greater return on investment.

Ultimately, the program will provide for a more pe rformance-oriented military-speed readiness of newly -arrived personnel. The nation's service member s will not be distracted from their duties with protracted moving details A more professional move, with less Joss or damage, will be a significant quality-of-life factor for service member families.

Information flow (much of it Web-based) to servic e member families will empower them during the moving process. While costing more, many factors in the new program, such as more door-todoor moves which reduce temporary storage costs and damage claims, will be a hedge on the program 's higher direct costs .

In the new program, the military DoD will find themselves with a greater management perspective New program automation will come from commercial , off-the-shelf software The enhanced software will provide greater complete information and visibility oversight on the performance of personal property moves.

KEY PLAN FEATURES FOR MILITARY SERVICE MEMBERS

The new MTMC personal property program is a imed s pecifically at provid i ng quality moves for the m ilitary service member.

Movers will be requi red to have toll-free number s to assist direct communicat ion between the se rvi ce member and the transpo r tation provider. Members wi l l now provide in- t ransit contact information to the mover. More communication is expected to encourage an increase in the number of direct deliveries and door-to-door moves. This will provide a more seamless move for the service member and, at the same time, be more economical. Door-to-door delivery will help reduce temporary storage costs and will also minimize handling, which reduces opportunities for lost or damaged property.

The new program will require movers to offer a higher liability that provides for full replacement value of lost or damaged goods. Currently, service members only receive a discounted value for loss. In place of the current bureaucratic system, the revised program will be simplified and involve claims settled between the mover and customer.

Of additional assistance to the customer will be moving information and counseling available on the Web via any personal computer.

cont'd from page 35

honor to present this award," said Wykle, to Koskey. "You have the heartfelt support of our entire worldwide organization for your achievement."

Koskey is assigned to the 838th Transportation Battalion, Rotterdam, the Netherlands. The Pennsylvania native credits studying on weekends and off-duty time for his success. "The competition was very tough and winning was not easy," said Koskey, who

has several job titles in the battalion including Training NCO and Customs Clearance NCO.

"I was just glad to see all of my hard work and studying pay off It took lots of study time but it was worth it - not only for me, but for my family as well. I am very proud to serve my nation and I think joining the Army was one of the best decisions I ever made," said Koskey.

Koskey said he felt drawn to an Army enlistment. His first duty assign-

ment was as an assistant squad leader in the 7th Transportation's Group's 11th Transportation Battalion, Fort Story, VA.

Command Sgt. Maj. James Morgan praised Koskey's selection. "Sergeant Koskey is a true asset to the organization and is one of the pillars I can rely on. Becoming the MTMC NCO of the year is a well-deserved recognition for this soldier." Koskey and his wife, Magda, have two daughters, Paola and Estefany.

NDTA Member Revolutionizes Aerial Port Cargo Velocity

At Travis Air Force Base, California, one NDTA member revolutionized the way cargo coming through the Port is processed , increasing velocity and productivity in Travis' cargo-processing section of the Port more than 200 percent . As part of a senior project for his Industrial Technology degree , Staff Sgt. Donald Serre developed the MICI - pronounced "Mickey" - for Mobile In-Check Integrated system.

Serre and his team, including MSgt Rich Seslar and SSgt Geoffrey Schurman, pioneered the MICI , which is a completely mobile cargo processing system on wheels. Aerial Port workers can accomplish 100 percent of the cargo processing function without an umbilical cord.

The MICI is a wireless system with all the necessary tools to process cargo on the spot, including a label printer, a battery-run computer and a bar code scanner.

Travis' Port cargo check-in personnel on average walk around 8,000 mil e s a year , going back and forth between the cargo needing to be

processed and the computer system where data is input.

Serre is supervisor of the Port's computer operations section. Schurman is the Port's primary security manager with a strong background in cargo movement. Paired up, these two performed a series of motion and time studies. These studies focused on outlined steps, or motions, workers did to process and piece cargo, and how long it took to accomplish each step.

Serre and Schurman discovered there was a considerable amount of time spent walking back and forth to process cargo into the fixed-station computer system. "There is a dollar cost associated with all that walking, including a certain amount of lost productivity caused b y fatigue," Serre said.

Travis' Port, th e largest Port in the United States, processes over 66,000 tons of cargo year. T he MICI was designed to bring the "processing to the work" instead of the "work to the processing." "It also eliminated the excess walking between locations," Schurman added.

The rough preliminary cost savings annually to the Air Force by using the MICI to process cargo is estimated at $128,592. "The entire concept of the MICI was to streamline the cargo processing component of the Port It is designed to make cargo processing easier, more efficient and completely mobile. It's a reliable, easy-to-use, low maintenance system developed to work out some of the inefficiencies of the previous process," said Serre.

The users love it, said Chief Master Sgt. John Buchanan, 60th APS superintendent "We have only one MICI built right now , but we've been able to secure funding for five more for other sections of the Port," he said . Buchanan also mentioned other aerial ports have already been calling Travis' Port to see how they can acquire this system.

"I love the MICI," said Senior Airman Maricella Estrada, a Travis cargo-processing technician. "It definitely beats having to write things down and then transcribe it. Everything that I need is right here in front of me, making the job much easier with less room for error and more flexibility We get cargo processed much faster as well."

The 450-pound system is in a continuous state of improvement, Serre said. Master Sgt. Rich Seslar, who is an NDTA member and the superintendent of computer operations at the Port, was instrumental in securing the wireless system and continues to work with Serre and Schurman on the development of future MICI ' s.

CMSgt Buchanan said in closing, "Rapid response is part of the global mobility mission. With innovation like the MICI, the Travis Aerial Port is setting the standard for the Air Force and other services for the future of cargo movement." DTJ

left: Staff Sgt. Donald Serre standing next to one of the prototype MIC/units.

Corp orate News

ABF

ABF Freight System Inc. has recently announced the release of Shipment Director'm, an online application that helps customers streamline document preparation and freight tendering across multiple shipments. This new tool is the latest addition to ABF's exclusive logistics planning suite, a collection of online tools that allows customers to examine distribution patterns and facilitate supply chain optimization .

Unique to the transportation industry, the Shipment Director simplifies the steps involved in document preparation and carrier pickup notification for multiple shipments. Customers maintain an online database of pending shipments that may be processed in batch via a single interface. With a few clicks of the mouse, ready shipments are selected, bills of lading and shipping labels are generated, and ABF is notified instantly of the shipment details and desired pickup dates. If multiple shipments are to be picked up together, a single manifest may also be created and used in lieu of multiple bills of lading. In addition, Shipment Director incorporates many timesaving functions already available on abf.com, such as retrieval of previous bills of lading and pickup requests as well as the ability to create templates for common shipments.

"In our daily communications with customers, we are frequently told of the positive impact that ABF's online tools have on the management of their freight operations," commented Art Lynch, ABF vice president of sales. "Customers are empowered by the productivity benefits of abf com with registered users representing over 70 percent of ABF's shipment volume, and site usage continues to show strong growth." Empowering customers is the motivation behind the ABF Web site. For instance, the initial concept for Shipment Director was based on the requirements of a single shipper. "ABF's customer-focused philosophy

coupled with the flexible nature of the Internet is the key ingredient in abf com ' s success," added Michael Newcity, ABF manager of ecommerce

~ DEING

Boeing

George Muellner, VP-GM IDS Air Force Systems and Mary Foerster, VP Communications Boeing IDS, are pleased to announce that Rick Fuller will lead Air Force Systems Communications, as director, effective immediately.

Prior to joining Boeing, Rick served in the USAF, r e tiring with the rank of colonel. He served in key public affairs positions including chief of media relations for the Supreme Headquarters Allied Powers Europe (NATO); director of public affairs for the Military Airlift Command; and commander of the Armed Forces Radio and Television Service broadcast center. He served in a variety of positions in the Pentagon for seven years

At Boeing, Rick has held senior communications positions with the C-17 program (when it won the Baldrig e national quality award); in the Washington, DC office; and with A&M in St. Louis. Rick will be returning to California in his new position.

C CENDANT

Cendant

AmeriHost Inn guests now can direct one dollar of their room rates to benefit volunteer firefighters, thanks to a three-year alliance between the hotel chain and the National Volunteer Fire Council.

To qualify for the program, hotel stays must be booked through www.amerihostinn.com, or by calling 1-800-434-5800 and specifying code 24102.

"Volunteer firefighters, who comprise nearly 73 percent of the firefighters in the United States, are often the first line of defense in emergencies, yet are unsung heroes of public safety," said Keith J. Pierce, AmeriHost Inn brand president & chief executive officer. "We are honored to work with the National Volunteer Fire Council to improve the safety, training and recruitment of volunteer firefighters."

"America's volunteer fire and emergency services will benefit from the partnership between the National Volunteer Fire Council and the ArneriHost Inn brand," said council Chairman Philip C. Stittleburg. "With this additional funding, we can continue to provide a voice for the volunteer emergency services."

CSX:

CSX

The Logistics , Transportation and Supply Chain Management Society (L TSCM Society) and the Graduate Logistics and Supply Chain Manag e ment Organi z ation (GLASCO) of the Robert H. Smith School of Business, University of Maryland, have named CSX Corporation president Michael J. Ward as their "Person of the Year."

Ward, who was elected president of the company in July 2002, has spent his entire 25-year business career with the company. He has been credited with leading an impressive turnaround at CSX Transportation, Inc. (CSXT), CSX's railroad unit, after he took charge of operations in early 2000. Ward served as president of CSXT from December 2000 until his new appointment at CSX Corporation last summer.

A native of Baltimore, the 52-yearold Ward received his bachelor's degree from the University of Maryland in 1972 and his MBA from Harvard Business School in 1976. He began his CSX career as a research analyst for Chessie System in Baltimore in 1977.

The LTSCM Society provides networking and career development opportunities for Smith School undergraduates; while GLASCO provides networking and placement opportunities for the school's MBA,

MS and PhD students. Each year, the groups present the Person of the Year Award to an individual who has made outstanding contributions to the logistics, transportation and supply chain management industry. Previous winners include Don Schneider, president of Schneider National Inc.; Herb Johnson, past president of the Council of Logistics Management; and Edward Emmett, president of the National Industrial Transportation League.

MAERSK SEALAND

Maersk Sealand

Maersk Line, Limited (MLL) recently asked the US Maritime Administration to confirm its eligibility as a Maritime Security Program (MSP) contractor under existing law so the company can more effectively and efficiently operate additional vessels under MSP.

This action would increase from 4 to 19 the number of vessels currently under contract to the Maritime Administration. Under its operating contracts with Maersk Line, Limited, US Ship Management, Inc. (USSM) has agreed to transfer direct operation of the vessels in question to Maersk should MLL elect to become

the MSP contractor Those contracts were reviewed and approved by the Maritime Administration in 1999.

Under the new arrangement, the vessels will continue to be owned by the same "Section 2" US citizens that own them today, thus ensuring Defense Department control and access to assets needed to respond to national emergencies. The vessels will remain US-flagged supporting US global trade and national security , and will be crewed by the same American seafarers that man those vessels today.

Currently, Maersk Line, Limited maintains a separate "operating" company, USSM, to provide limited vessel management services for these 15 vessels. Maersk Line, Limited, however, currently provides the same types of management services for more than 30 vessels, including many operated for the Department of Defense. Consolidating its vessel management services under Maersk Line, Limited, will allow those services to be performed more efficiently and effectively than under the present arrangement.

In addition to its vessel management services, Maersk Line, Limited also provides the Defense Department immediate access to its global network of intermodal assets including terminals, cranes, logistical platforms, computerized management systems, containers and chassis. The proposed arrangement would more closely integrate management of the 15 MSP ves-

Providing Mission Critical Solutions

sels with this global system, further strengthening the MSP for military purposes and enhancing the US-flag presence in international shipping.

1111 IPDRI' AUIIIOIIIIY ®J ~m [R!b!J

Port Authority of New York and New Jersey

A unique Port Authority Website has been a hit with the shipping community using the Port of New York and New Jersey, and will be continued after a year's trial, Port Commerce Director Richard M. Larrabee announced today

Information on the sitewww.firstnynj.com - is collected from various sources to provide ocean carriers, exporters, importers, foreign freight forwarders, customs brokers, terminal operators and rail and truck providers with "one-stop shopping" for data they need to make decisions about cargo pickup and delivery In addition, updates on security-related issues, as well as port operations bulletins, are posted daily on the FIRST home page.

FIRST currently provides cargo information from the Global, Howland Hook and Port Newark Container Terminals, vessel arrival and departure information, and access to the Sea Link database of trucking companies who do business in the Port of New York and New Jersey. The system is being upgraded to include an online berth application process, a link with the Sandy Hook Pilots database for receipt of vessel arrival and departure information, highway traffic information, camera views of port roads, and realtime container and chassis tracking information. OTJ

DTJ INDEX OF ADVERTISERS

This month's column takes a lighter look at what appeared in our journal during and immediately following WWII. As it was on the battlefield, as well as in the Journal, humor was a staple of military life. When it first appeared in July 1945, the Army Transportation Journal was a monthly magazine, yet it still took seven full-time staff members to write, illustrate, print and mail the issues to the members. Compare that to the effidency we enjoy today where only one NDTA staffer an a part-time basis, and two production associates put the Journal together, print it and distribute it to nearly 8,000 members worldwide, six times a year.

Tie early issues of the Anny Transportation ournal, and later the Defense Transportation Journal in the mid 1940's, were difficult and time-consuming to publish. Photographs one saw in other magazines of the day were pretty much limited to mass circulation titles like Time, Life, and Saturday Evening Post. Few small journals like ours could afford the services of a staff photographer.

What they did have on staff back in those days was an illustrator. His job was to hand draw charts, diagrams and illustrations to complement the feature articles. You may even be surprised to know that ATA had a cartoonist on staff for a short while, whose job it was to draw transportation-related cartoons. In fact, we were one of the first professional journals to use the cartoon as an educational device.

Look at some of the illustrations from early issues and note how they were designed to inform and educate. We've also included some magazine covers that were penned by much more famous cartoonists and artists of the day. And finally, note the "troop-humor" cartoon, always popular with the troops, especially in wartime, when morale was at its lowest. OTJ

above right and below: Famous Firsts in History, from Sep/Oct '54 and Jan/Feb '54 Army Transportation Journal. covers I tor: April 1945 and August 1945. below right: troop humor, May 1946

..7/2.e FIRS T rwo-wAV' RADIO C ONVER~ATION J..IELD Bl TWEEN A IZ. /2 BRRKEMIU.J INA CABOOSE OF MOVING FREIGHT TRIUN tlNO ENGIN~ER. IN THE CAB 0/:A LO MOTIVE w.qs DEr,'JONSTRRTED JUNE 15./927 THE fESTWAS ON OY GENERAL. ELECTRIC SCHENECTADY, N. Y ...7/u ~NGIN£ -,\/

~~jU\TH

Flt.!ST COMMANDER.-JN-CHIEF REVOLVrlONARyARMY,

/:lli!ST PR.ESJDENT-1789-1797. FIRST GENERIH- TO Bt!COME PlfASIDENr OF TH£ U.S.

!=/~ST OF 20 P~ESIDENTS Wl-/0 SER.VED IN THE AR.MY.

Fll?ST ~No ONLY PRE'SIDENT To HAVE .q STRrE NAMED IA/ HIS HONOR..

FIR.ST 1'ND ONLY PRESIDENT WHO

NEVER, LIVED IN THC WHITE HOVSE., @ 1954- BY CRRMACK-MAJOR (//SIIR)

"But

honey - where did you get the idea that all Americans live in skyscrapers?"

COL Denny Edwards, USA (Ret.)

Honor Roll of Sustaining Members and Regional Patrons

All of these firms support the purposes and objectives of NDTA.

Sustaining Members

AAR Mobility Systems

ABF Freight System, Inc.

AirNet Express

Air Transport Assn of America

Alamo Rent A Car

All-State Express, Inc.

American Airlines

American Automar

American Express Government Services

American Maritime Congress

American Maritime Officers

American Ocean Enterprises, Inc.

American Road Line

American Roll-on Roll-off Carriers

American Shipbuilding Assn.

American Trans Air

American Trucking Association

Anteon Corp.

American President Lines, Ltd.

ARINC,lnc.

Associated Global Systems

AT&T

Atlas Van Lines, Inc.

Baggett Transportation Co.

BAX Global

Best Western Hotels Worldwide Boeing Co., 1he

Booz Allen & Hamilton

Boyle Transportation, Inc.

Bristol Associates

Carlson Hotels Worldwide

Carlson Wagonlit Travel

Cendant Corp.

Central Delivery Service of Washington, Inc.

Choice Hotels International

Computer Sciences Corp.

Consolidated Freightways Corp.

Consolidated Safety Services, Inc.

CorTrans Logistics, UC

CRST International, Inc.

Crowley Maritime Corp.

CSI/Crown

CSX Transportation

Dallas & Mavis Specialized Carriers

DanzasAEI

Delta Air Lines, Inc.

DHLAirways

Dimensions International, Inc.

Dollar Rent A Car

DynCorp

Regional Patrons

Acme Truck Lines, Inc.

Advantage Rent-A-Car

American Management Systems, Inc.

American Moving & Storage Assn.

American Ship Mgmt , LLC

Arven Freight Forwarding, Inc.

Avis Rent A Car

Baymont Inns and Suites/ Woodfield Suites

Bell Additives, Inc.

B.F Saul Company

Bid4 Assets

BTC Management Systems, Inc.

Candlewood Suites

Concurrent Technologies Corp.

CSI Aviation Services

CSX Lines

Dyn Marine and ~istics Services Dynamics Research Corp.

Eagle Global Logistics LLC

EDS

Eurapcar

Evergreen lnt'I Airlines, Inc.

EWA Information and Infrastructure Technologies, Inc.

FedEx Custom Critical, Inc.

FedEx Services

First American Bulk Carrier Corp. FMC Corporation

FRAPORT AG

GE Aircraft Engines

General Dynamics/American Overseas Marine

Global Maritime and Transportation School

i2 Technologies

IBM

Information Technology Solutions

lntermarine, Inc.

International Longshoremen' s Association, AFL-CIO

Intl. Organization of Masters, Mates and Pilots

Kansas City Southern Railway Keystone Shipping Compony

Landstar System, Inc.

Li~ Maritime Corporation

Lockheed Martin Aeronautical Systems

Lockheed Martin Mission Systems

Logistics Management Institute Lykes Lines Ltd., LLC

Maersk Sealand Manugistics Group

Matson Navigation Co.

Mayflower Transit

MEBA, District No. 1 - PCD

Menlo Worldwide, Emery Gov't Sales

Mercer Transportation Co.

Notional Air Cargo

National Air Carrier Assn.

North American Airlines, Inc.

Notional Van Lines

Northrop Grumman IT Northwest Airlines, Inc.

Daedalic Industries, Inc.

DHL Japon, Inc.

FlightTime.com

Gelco Government Network

Great American Lines

Greensboro Area C&VB

Green Valley Transportation Corp.

Hawthorn Suites-Alexandria

Hertz Corp.

Holiday Inn Harrisburg West

Holiday Inn National Airport

Hyatt Hotels & Resorts

Innovative logistics Techniques, Inc.

Interstate Worldwide Relocation

la Quinta Inns, Inc.

Labelmaster Software

labor Management Maritime Committee, Inc.

OAG Worldwide OokscaP.8

Ocean Shipholdings, Inc.

Old Dominion Freight Line, Inc.

Omni Air International

OSG Ship Management, Inc.

Overnite Transportation Co.

P&O Nedlloyd Ltd.

Pilot Air Freight

Polar Air Cargo

Port Authority of N.Y. & NJ., The Port of Beaumont

Port of Oakland

Powersource Transportation, Inc.

Pratt and Whitney, a United Technologies Co.

QUALCOMM

Roadway Express, Inc.

R&R Trucking

Sandia National Laboratories

SatoTravel

Savi Technolcw

Schneider Notional, Inc.

Sea Conlainers America, Inc

Sealed Air Corp.

Sea Stor Line, LLC

Seafarers lnt'I Union cl NA AGUWD

Six Continents Hotels

Southwest Airlines

SRA International Corp.

Stanley Associates, Inc.

Stevedoring Services cJ America

Teco Ocean Shipping

Totem Ocean Trailer Express, Inc. Transportation Institute

TRI-STATE Expedited Service, Inc.

TRW Systems Integration Group

TSMT

TTX.Company

Union Pacific Railroad

United Airlines

United Parcel Service

United Van Lines; Inc .

US Airways

U.S. Ship Management, Inc.

U.S. Xpress Enterprises, Inc.

Waterman Steamship Corp. (Central Gulf Lines) World Airways, Inc.

logistics Management Resources, Inc.

LXE, Inc.

MacSema, Inc.

MaerskK.K.

MCRFederal

MegaSys, Inc.

Military Living Publications

Modem Technologies Corp

Morten Beyer &Agnew

National Car Rental

NCI Information Systems, Inc .

Oakwood Corporate Housing

Omega World Travel

Panther II Transportation, Inc.

Port of Corpus Christi Authority

Port of Galveston

Port of Lake Charles

Prererred Systems Solutions, Inc.

Quality Support, Inc.

Radian, Inc.

SAIC

Sea Box, Inc.

SuperClubs

SI International

Thrifty Car Rental

Trailer Bridge, Inc.

Trailway Transportalion System

TRANSCAR, GmbH

Travel-Supplements, Menuco Corp.

US Bank PowerTrack

Venture Transport, Inc., an ASCO Co.

Virginian Suites, The

American Roll-on Roll-off Carriers, LLC

APL Limited

Bristol Associates

CSX Transportation DanzasAEI

Menlo Worldwide (Emery Forwarding)

Evergreen International Airlines, Inc.

International Longshoremen's Association AFL-CIO

Landstar System, Inc.

Lockheed Martin Mission Systems

Maersk Sealand

National Air Cargo, Inc.

TRW Systems Integration Group

The above-named corporations are a distinctive group of Sustaining Member Patrons who, through a special annual contribution, have dedicated themselves to supporting an expansion of NDTA programs to benefit our members and defense transportation preparedness.

Bookshelf Ideas

Combat Fleets of the World 2002-2003, by A. D . Baker III, published by the Naval Institute Press . List price $195 Hardbound (ISBNl55750-242-0); $159.95 on CD (ISBN 1-55750-207-2).

This book has been published biennially for a quarter of a century, and is internationally acknowledged as the leading one-volume reference to the world naval and paranaval forces. Comprehensive, authoritative, and affordable, it provides accurate and timely data about the composition of the afloat, coastal defense, and aviation arms of more than 180

Dr. Kent N. Gourdin

countries and territories, including coast guards and other armed maritime government services Compiled from information contributed by more than one hundred correspondents around the world, this new volume provides full descriptions of principal naval aircraft, weapons systems, and sensors, as well as ships and craft ranging in size from giant carriers to tugs and police launches. It also offers useful material on personnel strengths, organization, and bases. More than 4 ,500 photographs and drawings illustrate the text.

This volume is very impressive. The amount of information it con-

tains is truly astounding and includes dimensions, crew compliments, motive power manufacturers, range fuel, endurance, etc., for every single listing. Each country is repres e nted, with their respective naval fleets detailed in copious detail, even if that fleet is comprised of one patrol boat. For nations like the United States, which is detailed over 158 pages, the huge and varied nature of these assets is awe-inspiring. Combat Fleets of the World 2002-2003 is a must-have for anyone with an interest in sea power. In terms of the information provided, the book is an incredible value. DTJ

EMPLOYMENT CORNER - SUPPLY CHAIN LOGISTICS MANAGER

JOB REFERRAL NO. 0208 Proactive, versatile, results-oriented logistics professional with extensive management and leadership skills. Over 20 years of logistics experience, including: coordination , development and execution of strategic and operational plans; contract management; resource management; supply chain management; global distribution tracking and management; evaluation and consulting experience with corporation staff. Outstanding interpersonal and communications skills to include public speaking and presentation. Seeking management position where my knowledge, skills, abilities, and education will provide added value to company operations. (For more listings, visit www.ndtahq.com)

It starts with building the world's most capable airlifter. Next, comes a partnership between customer, manufacturer and suppliers that continually spurs innovation while it lowers costs. Add to that a commitment to quality and efficiency worthy are measured.] of the Baldrige Award, the Collier Trophy and countless other accolades and it's clear what makes the C-17 Globemaster Ill one of a kind. It's miles ahead of anything else by any measure.