Hearing

PANEL I:

Opening remarks, as prepared, of the Transportation and Infrastructure Committee’s Coast Guard and Maritime Transportation Subcommittee Chairman Daniel Webster (R-FL) and the Homeland Security Committee’s Transportation and Maritime Security Subcommittee Chairman  Carlos Gimenez (R-FL):

Coast Guard and Maritime Transportation Subcommittee Chairman Daniel Webster

Before we begin, I want to mention the recent tragedy at the Port of Baltimore. First and foremost, our thoughts are with the victims and their families. We greatly appreciate the work of the Coast Guard and other first responders in their heroic response efforts. And as work gets underway to reopen the channel, rebuild the bridge, and carry out an investigation, the Transportation and Infrastructure Committee will closely monitor developments and work with the families and stakeholders impacted.  

Turning to the agenda at hand, we meet today at PortMiami to examine port safety, security, and infrastructure investment. I appreciate Mayor Cava, the Port’s Director and Chief Executive Officer Hydi Webb, and the rest of the team at PortMiami for hosting us. And thank you to all the witnesses for joining us today.

Cargo activity at United States ports is critical to our nation’s commerce, and accounts for 26 percent of our nation’s GDP, generating nearly $5.4 trillion in total economic activity, and supporting 31 million direct and indirect jobs. To protect this crucial economic engine, we need to make the necessary investments and ensure our ports can effectively confront physical and cyber-threats.

The Maritime Transportation Security Act was passed in the wake of 9/11 and was originally envisioned to guard primarily against physical threats. However, as technology and automation become more ingrained in port operations, the risk of cyber-attacks grows. For example, we know from public reporting that one of America’s largest ports, the Port of Los Angeles, faces approximately 40 million cyber-attacks per month. 

At the same time, we must also confront the reality that China’s influence in the maritime domain is growing, and if left unchecked threatens to throw up major impediments to the maritime transportation sector. Major port equipment, such as terminal cranes, are purchased from China, and could present serious vulnerabilities to the supply chain.  LOGINK, a logistics management system developed by China, provides shipment tracking and other logistical services, while collecting significant amounts of data that could be used for malign purposes or to gain unfair economic advantage. I am pleased our subcommittees were able to work together to include language in last year’s NDAA that provides critical protections against LOGINK.

In the wake of the global supply chain crisis that caused significant disruptions to commerce, it’s critical that our ports, and just as importantly, the intermodal connections that connect our ports to inland cargo destinations have learned from the experiences during the pandemic and are working to increase the resiliency of the supply chain. I look forward to hearing from our witnesses on how Port Infrastructure Development Grant funding is improving the efficient movement of goods through ports. And I look forward to learning how operators within the supply chain are mitigating the risk of another supply chain crisis and making the maritime transportation system more resilient to future disruptions. 

Transportation and Maritime Security Subcommittee Chairman Carlos Gimenez

On behalf of my constituents in the 28th District of Florida, I would like to welcome my colleagues and our distinguished witnesses to Miami. Today, our guests will further learn what I have long known: that Miami is a unique, robust city that has much to offer to both its residents and its visitors. Our venue, PortMiami, is one of the busiest passenger and cargo ports in the United States. I am excited to use this hearing to further examine the integral role it plays in our city and more broadly our country. 

First, I would like to offer my sincere condolences to the families of the individuals that passed away or were negatively impacted by the tragic collapse of the Francis Scott Key Bridge in Baltimore, Maryland last week and express my gratitude to the men and women of the United States Coast Guard and other federal, state, and local authorities who are responding to the incident. 

While we are not aware of any malicious actors responsible for the incident, the severity of the collapse of the bridge underscores the importance of what we are discussing today.

Before I was elected to Congress, I served for 25 years as a fire fighter with the City of Miami Fire Department. I then had the privilege of serving as the Mayor of Miami-Dade County and City Manager for the City of Miami. It was during my time as Mayor of Miami Dade that I saw the critical impact that the PortMiami and maritime-born trade has on Miami and the state of Florida.

Our port here is not only a hub of commerce – it is a gateway to the world. Major disruptions to the port’s operations – like what we are witnessing in Baltimore – would severely harm the local economy and hinder the region’s connectivity to the rest of the United States and beyond. It was for that reason I worked hard during my tenure as Mayor of Miami Dade, and will continue to do so in my current capacity, to ensure PortMiami has what it needs to operate safely, effectively, and securely.

In my current role as Chairman of the House Homeland Security Committee’s Transportation and Maritime Security Subcommittee, I am continuously concerned by the security threats facing maritime ports across the country.

I am especially worried by the security vulnerabilities that exist with port equipment that is manufactured or installed in the People’s Republic of China. The ship-to-shore cranes towering over our docks — while instrumental to our port operations — are a focal point of that concern. Most of the U.S. port ship-to-shore cranes – nearly 80 percent – are made by ZPMC, a Chinese state-owned enterprise under the direct control of the Chinese Communist Party. This near-monopoly allows for ZPMC to compromise U.S.-bound cranes that could cause malfunction or facilitate cyber espionage at U.S. ports. This situation not only presents cybersecurity threats but also supply chain vulnerabilities that could be exploited by those who wish to inflict damage on our nation that could have lasting impacts. 

Unfortunately, Communist China’s influence in the supply chain extends beyond state-owned enterprises like ZPMC. Third-party companies often create the internal operational components for these ship-to-shore cranes.

These components include programmable logic controllers which control many ship-to-shore crane systems, as well as crane drives and motors. In almost all cases, ZPMC requires that these companies ship their components to the PRC where they can be installed by ZPMC engineers or technicians.

As my subcommittee has discussed in previous hearings, the proliferation of port equipment and operational technology manufactured or installed by engineers in the PRC introduces significant supply chain vulnerabilities into our Maritime Transportation System.

As a country, we must acknowledge and assess these risks, threats, and vulnerabilities and decide how to effectively respond.

In February, the Biden administration signed an executive order providing the U.S. Coast Guard with new authorities to respond to potential malicious actors targeting our maritime sector—and particularly those from the PRC. While I commend the administration on this initial action, I believe we need to continue examining this crucial topic and ensure that our ports are protected from security threats.

To do so, I have brought together a group of members from the China Select Committee and the Committee on Homeland Security, to investigate some of the vulnerabilities associated with PRC-manufactured port cranes and the consequences of having a supply chain that is overly reliant upon equipment sourced from our greatest geopolitical competitor. 

Additionally, I have introduced legislative solutions – such as my Port Crane Security and Inspection Act – to ensure the U.S. Coast Guard and other federal agencies responsible for safeguarding maritime ports have the tools and authorities necessary to deter hostile actors from operating against our ports.

I am glad to be participating in today’s hearing which will allow us to continue to address this critical topic and deliver a strong message to our adversaries interested in meddling in our ports.