US Has ‘Overreliance’ on China-Built Cranes, Homeland Security Official Says
U.S. ports currently are leaning too heavily on foreign-owned equipment, particularly on cranes manufactured in China, a Homeland Security trade official told a Congressional subcommittee Thursday.
According to Christa Brzozowski, acting assistant secretary for trade and economic security at the Department of Homeland Security, the federal agency sees an “overreliance” on the China-built cranes.
More from Sourcing Journal
US-China Trade Tensions Linger on Sidelines of WTO Conference
Union Wins Big: Supreme Court Declines Charleston Port Labor Dispute Case
“This is not an anomaly,” Brzozowski said. “We see this as a concerted effort where the People’s Republic of China (PRC) has proven and stated its intent to be the leading manufacturer in not only cranes like this, but other types of maritime equipment.”
In the nearly two-hour hearing, Brzozowski reflected the wider concerns of the Biden administration, which has warned that U.S. maritime ports are vulnerable to disruption via a cyberattack or espionage from foreign actors. The administration is allocating $20 billion in a wider push to bolster port security initiatives over the next five years.
Along with the investment, President Biden recently signed an executive order which directs the U.S. Coast Guard to mandate certain digital security requirements for China-built cranes deployed at strategic ports. Additionally, the Coast Guard will now have the authority to control the movement of vessels that present a known or suspected cyber threat to U.S. maritime infrastructure, and be able to inspect those vessels and facilities that pose a threat to cybersecurity.
“What the E.O., really does is allow a captain of the port—if it’s determined that there is a threat or there has been some disruption because of a cyber-intrusion—to take action to secure a crane or secure a terminal until such time that the operator, maybe with our assistance, or at least with our validation, takes action to secure that particular node of the system,” said Rear Admiral Jay Vann, commander of the U.S. Coast Guard Cyber Command, at the hearing.
The more than 200 ship-to-shore cranes are the focal point of concern for the administration, with 80 percent of cranes at U.S. ports manufactured by a Chinese state-owned company Shanghai Zhenhua Heavy Industries Co. (ZPMC).
As part of the effort to mitigate the risks of cybersecurity and port disruption, the Biden administration assigned Paceco, a U.S.-based subsidiary of Japanese crane and shipping equipment manufacturer Mitsui, to build new cranes for the ports. This is a 30-year first for port-laden cranes, which have been manufactured overseas in that time frame.
Despite the concerns, some parties ponder the question of how real the threat is. The American Association of Port Authorities (AAPA), a trade association representing U.S. ports, has said in the past there is no evidence of any Chinese intervention, or security breaches as the result of any cranes at U.S. ports.
When asked if any specific vulnerabilities had been verified in current cranes in use, Brzozowski said, “not to my knowledge.”
“As we are taking a closer look at this issue, it’s because of the potential for such a risk, and the known exploitation by the PRC of critical infrastructure, even domestic critical infrastructure sectors,” said Brzozowski.
But one of the major U.S. port directors, Gene Seroka out of the Port of Los Angeles shared similar concerns to those in Congress and the Biden administration.
“The bottom line is that today’s high-tech cranes can collect data and that is why this executive order is so important,” Seroka told CNBC in a recent interview. He noted that 2023 saw the highest number of cyberattacks at the port recorded in a single year, stopping nearly 75 percent of roughly 1 billion intrusion attempts, or 63 million cyberattack attempts each month.
America’s 361 seaports are a backbone to the country’s flow of goods—and ultimately the wider economy. More than 99 percent of the cargo coming to the U.S. from overseas enters through these ports, which indirectly support 31 million jobs and generate $5.4 trillion in economic value per year—more than a quarter of nation’s economy.
The heavy push for port security is one of multiple areas where the Biden administration has sought to improve national supply chain operations. Months after being elected, President Biden established a Supply Chain Disruptions Task Force to address congestion at U.S. ports, before debuting the Freight Logistics Optimization Works (FLOW) information sharing initiative in 2022.
Fast forward to last November, and the White House launched its own Council on Supply Chain Resilience to expand FLOW and bolster supply chain monitoring and strategy.
The administration’s national security concerns regarding China aren’t exclusive to the ports. On Thursday, President Biden ordered the Commerce Department to open an investigation into foreign-made software in cars, citing Chinese technology as a potential national security risk.