The Biden administration has announced it will invest $20 billion over the next 5 years to upgrade cybersecurity measures at US ports. Much of the investment will go to replacing Chinese-made cranes which may be a potential threat to national security. The Port of Los Angeles has been investing in cyber resilience since 2019.
Port of Los Angeles Executive Director Gene Seroka joins Yahoo Finance to discuss the initiatives that the Port of LA has been working on, the Biden administration’s planned investment, and enhancements for cybersecurity at ports going forward.
When asked why so many Chinese cranes already existed in US Ports, Seroka answers: "We've shipped manufacturing overseas the past 45 to 50 years. Cranes, chassis wheels that move our containers around as well as those container boxes. We don't make that or any of those products in the United States. Part of the efforts of people like Secretary Gina Raimondo at Commerce and others is to try to reshore near-shore some of the manufacturing so we can tighten up the supply chains and help American companies grow. "
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JOSH: Cybersecurity at US ports has been in the spotlight this week. The Biden administration announcing it will invest $20 billion to upgrade equipment, warning current Chinese made cranes could be a threat to national security. The port of Los Angeles has been investing in ways to prevent cyber attacks since 2019. And the executive director Gene Seroka joins us now. Gene, thank you for being here.
GENE SEROKA: Good to see you, Josh.
JOSH: So, Gene, let's get right to this news. So the Biden administration, it's going to invest billions here, right, replace these Chinese made cranes at our ports. What is this, Gene, going to mean for the Port of Los Angeles?
GENE SEROKA: Well, it goes a little deeper than that as well. Looking at what the Port of Los Angeles has done in partnership with the Department of Homeland Security, about 10 years ago we put in the nation's first cybersecurity operation center. Just last year it stopped 750 million cyber intrusion attempts, and that wasn't enough for us. With IBM, we co-created one of the world's first cyber resilience centers that brought in our private sector partners. And to date, a little over 15 months in, we've stopped six intrusion attempts to private sector interests of which they were unaware. Now the focus begins on trying to get some of this equipment manufactured in the United States, so we can take a little more control over national security as it relates to the supply chain.
JULIE: OK, so I want to linger on this a little bit, because those are big numbers, and surprising numbers that we're seeing all of these attempted incursions. Are they coming from the hardware? Are they coming in some cases from cranes that are made elsewhere. What do we know about where they originate?
GENE SEROKA: I won't speak for the National Security experts, but safe to say about 50% of the cranes at the Port of Los Angeles are manufactured in China. They're taking up data, analyzing it, and using it for what we just don't know at this point in time. But the federal government under President Biden's direction doesn't want to take chances in this area.
JULIE: But that seems sort of speculative, doesn't it? I mean, you know, you're running this port. You talked about all those incursions. Like, if you don't know where they're coming from and who's doing them, it's hard to stop them instead of just sort of guessing at where they might be coming from.
GENE SEROKA: Not necessarily true.
JULIE: OK.
GENE SEROKA: If we go downstairs on the second floor into that Cybersecurity Center, we can see the IP addresses, the nation states involved, and the flow of those intrusion attempts no matter whether they're coming to Los Angeles or points beyond. So we've got a pretty good idea with respect to our information where that is happening, and the federal government has a deeper look as well.
JOSH: Gene, I'm curious, though, because China has posed a national security risk for some time. China is an adversary. So I'm curious why in the first place were there Chinese made cranes at our ports? Was it cost? Was it just there wasn't domestic manufacturers?
GENE SEROKA: Well, Josh, like much everything else we've shipped manufacturing overseas the past 45 to 50 years, cranes, chassis wheels that move our containers around, as well as those container boxes. We don't make that or any of those products in the United States. And part of the efforts of people like Secretary Gina Raimondo at Commerce and others is to try to reshore nearshore some of this manufacturing work so we can tighten up the supply chains and help American companies grow.
JULIE: I mean, this is a huge endeavor, just like the reshoring the chip industry for example. Going to take time, going to take money, going to take labor. I mean, when are we going to start to see US made equipment in US ports?
GENE SEROKA: Yeah, you're right, Julie. It's not going to be a flip of a switch. But I think we've got subsidiaries and a couple of companies were named in the press release from Washington the other night, and we'll see more and more start getting interested. Just like the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, the idea here is the federal government is putting in multi, multi-billion dollars worth of investment, giving confidence to the private sector to come and invest behind that.