Evaluation Findings (continued from Part 4)

CONSOLIDATED BENEFITS AND COSTS

The findings of the security, safety, and efficiency benefit assessments and the industry deployment-benefit-cost analyses were stand-alone analyses examining the economic feasibility of the technologies within each context. To understand the overall economic impacts, the results of the three assessments are consolidated to demonstrate the distribution of benefits among public and private stakeholders. In this analysis, efficiency benefits are allocated to the private sector motor carriers. Security and safety benefits are allocated to society. The benefits and costs represent all trucks equipped (those currently equipped and those not).

The resulting analysis showed positive benefit-cost ratios in all three categories, from a low in the LTL environment of 1.4:1 to a high of 96.9:1 in the Truckload Explosives area. Table 7 presents the percentage of benefits realized by the private sector for each load type. Figures 2 through 5 illustrate the distributions relative to deployment costs. The low percentages attributable to the private sector in the cases of Bulk Chemical and Truckload Explosives are attributable to the fact that the potential magnitude of a terrorist event using these materials is so high; the benefits due to vulnerability reduction are extremely high relative to benefits of improved efficiency.

Table 7. Percentage of Benefits Realized by the Private Sector

Figure 2. Deployment Costs and Benefits by Stakeholder Type for Bulk Fuel Loads (For 3 Years - In Millions of Dollars)

Figure 3. Deployment Costs and Benefits by Stakeholder Type for LTL High-Hazard Loads (For 3 Years - In Millions of Dollars)

Figure 4. Deployment Costs and Benefits by Stakeholder Type for Bulk Chemical Loads (For 3 Years - In Millions of Dollars)

Figure 5. Deployment Costs and Benefits by Stakeholder Type for Truckload Explosives Loads (For 3 Years - In Millions of Dollars)

POLICY OPTIONS FOR CONSIDERATION

The described levels of benefits are assumed to be only achievable through full deployment of the technology solutions. As described by the test participants, the Expert and Delphi Panelists, along with well-documented technology deployment issues of the motor carrier industry, several issues/concerns need to be carefully addressed before levels even approaching full deployment could be reached. The issues presenting the most significant barriers to full deployment of potentially beneficial technology systems include: technology cost, technical performance/efficacy, potential liability issues and data privacy issues.

There are several possible strategies that could be employed singularly or in combination to stimulate industry deployment of technologies that show promise for reducing vulnerabilities in truck-based HAZMAT shipping.

For nearly all motor carriers, return on investment is the lead factor in the decision to adopt technology systems. As found in this FOT, aside from Wireless Communications and asset tracking, many of the technologies tested do not demonstrate a tangible improvement in motor carriers' bottom line, but show promise for reducing vulnerabilities in truck-based HAZMAT shipping, and therefore, rendering potentially significant societal benefits. In establishing policy, the Government needs to weigh these potential societal benefits against the possibility of negatively impacting the trucking industry's ability to move freight efficiently.

Multiple solutions may be required to realize societal benefits in a fair, consistent, and cost-effective manner. What may be appropriate for one type of operation may result in economic harm to another type of operation. Therefore, if base security requirements are clearly defined and mandated, the focus needs to be on measurable performance results and provide the trucking industry flexibility in how the mandated standard may be attained.

Governmental strategies that may be employed to encourage deployment include:

• Support research and development for adopting commercially available and emerging technologies that show promise for enhancing security through continued field testing.

• Create financial incentives to encourage research and development and technology purchases, grants, or facilitating cooperative purchasing arrangements.

• Enact legislative and procedural action to address data privacy issues.

• Promote technology acceptance through focused outreach and public relations efforts.

• Craft regulation/rulemaking requiring the adoption of solutions to address HAZMAT trucking vulnerabilities. These should be performance-based requirements that provide motor carriers flexibility in how they meet the requirements.

FINDINGS AND CONCLUSIONS

This complex HAZMAT Safety and Security Technology Field Operational Test was conducted in the pursuit of improving Homeland Security vis-à-vis protection of truck-based hazardous materials shipments. With over 800,000 HAZMAT shipments per day, many involve materials that could be used for terrorist attacks with the staggering potential consequences in terms of deaths, injuries, property damage, and business disruption. The possibility of even one shipment used by terrorists for an attack underscores the immediacy of implementing countermeasures rapidly. With resources in limited supply and many counter-terrorism fronts to contend with, meeting the "clear and present danger" to HAZMAT trucking requires implementing solutions that are currently available, reduce risk, and that provide tangible and quickly realized benefits to stakeholders proportional to their level of investment.

This evaluation examined the technical and financial performance of several promising technologies for increasing the security of HAZMAT shipments to determine what levels of operational efficiency and security benefits can be attained through deployment. To date, no studies were uncovered that have attempted the analysis conducted here, particularly relating to security benefits. This groundbreaking effort called upon the input and guidance of many nationally recognized experts in HAZMAT shipping, security and counter-terrorism, and risk analysis and management, to assess the capabilities of the technology systems tested in the National Hazardous Materials Safety and Security Technology Field Operational Test.

Based on the evaluation of the test technologies, the findings include:

• Technology performance overall for the technologies was good, with most technologies performing well under operational conditions with the exception of Biometric Login, Electronic Seals (E-seals). These two technologies were deemed as requiring additional product development to be fully adapted for and accepted in the HAZMAT trucking environment.

• The Wireless Communication system with GPS tracking provided a positive return on investment for all four of the test scenarios, and also provided the base for vulnerability reduction, with the additional technologies providing incremental gains.

• The tested technologies showed the capability to significantly reduce the vulnerability of hazardous materials transportation, with the greatest reductions for the attack profile: theft.

• In all cases except for the LTL scenario, preventing only one terrorist attack by using the tested technologies over a 3-year period would lead to a tremendous societal cost savings well beyond the break even point for benefits and costs.

• The combined benefit-cost analysis showed positive benefit-cost ratios in all categories, from a low in the LTL environment of 1.4:1 to a high of 96.9:1 in the Truckload Explosives operations.

• In considering the distribution of overall benefits between private-sector motor carriers and society as a whole, it was found that motor carriers would realize 60 to 72 percent; 81 to 92 percent; 5 to 13 percent; and 1 to 3 percent of benefits for Bulk Fuel, LTL High-Hazard, Bulk Chemicals, and Truckload Explosives operations, respectively.

In conclusion, several key points are proffered: The threat of terrorism is a reality. Organizations such as Al Qaeda will exploit nearly any weakness in Western society to inflict physical and psychological harm upon persons and the destruction of property and critical infrastructure. Given the ubiquitous, mobile, and potentially harmful impacts of truck-based HAZMAT shipments, attempts to procure and use these loads as weapons could be considered just a matter of time until they occur. This FOT was designed to test the ability of commercially available technology systems to reduce vulnerabilities in HAZMAT shipping while providing sufficient returns on investment to motor carriers to encourage deployment.

As demonstrated, these technologies promise to enhance not only security, but also operational efficiencies and potentially, safety. It should be noted that technology alone is not the complete answer to HAZMAT trucking security. At best, the technologies are estimated to reduce vulnerability and hence, potential terrorist consequences by approximately 36 percent. Technology, along with sound security practices and supported by ongoing public and private outreach, training, and security programs, are needed to meet a constantly present threat. Additionally, the technology-enabled reductions in HAZMAT shipping vulnerabilities and potential deterrence effects may never be validated empirically, as one may never truly know the degree to which terrorist intent has been thwarted.

While the technologies do show promise for enhancing safety, security, and efficiency, market forces may be slow in moving the HAZMAT trucking industry towards full deployment and realization of benefits. Government intervention may be required to facilitate the deployment process.

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