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  - September 18, 2007 -  

Global Logistics: Thinking the Unthinkable – The Economic and Supply Chain Impact of a “Dirty Bomb” at Ports of Los Angeles and Long Beach


New Report from Terrorism Risk Center says Threat is High; if the Worst Happens, Would Your Supply Chain be Able to Respond?



SCDigest Editorial Staff

SCDigest Says:
If your company brings in all its import goods through these ports, and has all its import warehousing positioned there, how quickly and effectively could you re-wire your supply chain – and at what cost? - in the event of an attack.

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The News – It’s the event no one wants to consider, but an attack on a major U.S. port is one of the most likely and serious terrorist threats faced by the U.S. The potential use of a radiological dispersal device, or so-called “dirty bomb,” is especially worrisome, according to a recent study presented by the Center for Risk and Economic Analysis of Terrorism Events at the University of Southern California.  Ports are attractive targets because they are vulnerable, and due to the perceived potential for economic damage and loss of human life. For supply chain professionals, however, there is another aspect – the potential for an unimaginable supply chain disruption.

The Impact – The Center for Risk and Economic Analysis of Terrorism Events analyzed possible terrorist attack scenarios on the ports of Los Angeles and Long Beach, CA.  The good news is that the impact of a dirty bomb detonation in a major United States port would likely result in few deaths.  The bad news – there would be severe economic and psychological consequences resulting in losses of hundreds of billions of dollars, and the incident would create a critical missing link in the worldwide supply chain as the terrorized port is closed.

With an increased focus on Risk Mitigation by supply chain and corporate executives, contemplating this devastating scenario is difficult – but necessary. Under just the medium level dirty bomb attack, the report speculates the ports could be closed for at least a year – and maybe much longer. If your company brings in all its import goods through these ports, and has all its import warehousing positioned there, how quickly and effectively could you re-wire your supply chain – and at what cost?

The report also says the ports should invest now in a number of countermeasures, including radiation sensing technology.

The Story – A study by the Center of Risk and Economic Analysis of Terrorism Events identifies major United States’ ports as attractive targets for terrorists.  Major ports, such as Long Beach and Los Angeles are typically accessible by land, air, and sea, and are difficult to secure.  They also meet one of the goals a terrorist sets for a successful attack - maximum economic damage.  With ports typically utilizing several forms of transportation, including roads, railways, and ships, the closure of a port due to a dirty bomb attack for even a few days could have a severe impact on the supply chain of hundreds or even thousands of companies. 

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How real is the dirty bomb threat?  It is very real, according to the study.  Radioactive materials are easy to obtain.  The International Atomic Energy Agency reports that nearly every country has devices with the radioactive materials needed to build a dirty bomb.  Once the materials are in terrorist hands, a dirty bomb can be built by anyone who knows how to build a conventional bomb. 

Consequences from a dirty bomb attack fall into three categories.  First are the immediate fatalities and injuries that occur from the blast and radiation exposure.  Second is the airborne dispersal of the radioactive material and the immediate and long-term effects it has on the exposed population.  Lastly is the economic impact the shutting down of a major port would have on our nation, and, from a supply chain point of view, the dent it would put in the movement of goods from one point to another. 

The study estimated the length of time a port may be inoperative following a dirty bomb attack into short (15 days), medium (120 days), and long term (one year) closures.  The closure of a port following a dirty bomb attack would likely occur due to:

  • Dock workers concerned about returning to work.
  • Shippers fearful of delivering goods to the harbor.
  • The time it takes to decontaminate the site. 

Any of the above reasons for a major port closure would have a tremendous impact on a company’s supply chain.  Without dock workers, who will unload the goods?  Will the product be safe at a port that has already been terrorized?  How long will it take for the EPA to deem the port decontaminated?   

Scenarios estimating the economic impact of a port closure in either Long Beach or Los Angeles, CA calculate that a short-term shut down would result in a loss of approximately $300 million.  A medium closure time could result in a significant loss of approximately $63 billion, and a long-term closure up to $252 billion.

The port closure periods and economic losses, of course, are just predictions. The report makes clear no one really knows how long a dirty bomb would close a major port – conceivably, it could be for many years.

As devastating as such an attack would be on U.S. and world economic activity, some companies will be hurt far worse than others. Those that have their entire inbound supply chains tied to Long Beach and related import warehouses, and which do not have clear, executable contingency plans, may find supply chain recovery extremely difficult and expensive.

The report does support investment in a number of “countermeasures” at the ports than can help reduce the risk of a dirty bomb attack.

For example, the report notes that “our analysis clearly supports ongoing programs to install radiation detection technology around the harbor. In addition, the analysis raises concerns regarding the security risks associated with cargo material as it is offloaded from ships but not yet transported through the portals, incoming containers from the U.S. mainland (by truck, small boat, or air), and harbor perimeter control.”

Is it worth the effort to do contingency plans against the unthinkable – a dirty bomb at a major U.S. port such as LA/Long Beach? Are there many supply chains at serious risk from such a terrorism incident? Let us know your thoughts through the Feedback Button below. 

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