9/11 left lasting impact on commerce

Chris Semonelli’s job got tougher over the past decade.
His business, Coated Technical Solutions in Newport, imports textiles and coated membranes that are used in everything from inflatable rafts to flexible storage tanks. And these days, he’s spending more and planning more to cope with the new regulations that followed Sept. 11, 2001.
“The cost of doing business has gone up,” the company president said. “And it takes longer. That’s because of the additional inspections that are now required. If you’re bringing a shipment into the country, you have to notify U.S. Customs five days in advance, and sometimes those people aren’t as responsive as you might want them to be. And there are random inspections as well. That can hold things up a day or two.”
Semonelli’s not the only businessperson who’s had to work harder. In the years since Sept. 11, companies in Rhode Island (and across the country) have had to adapt to a slew of new regulations and requirements. The rules mean more costs and more planning, but they’ve also put many people more at ease. The business community, by most accounts, sees the need for vigilance.
“I understand why everything is being done, and I think it’s a great system,” Semonelli said of regulations he now faces. “I travel around the country and see what’s going on in different areas, and I’m amazed at what we’ve developed.”
Laurie White, president of the Greater Providence Chamber of Commerce, agreed that “people are more aware. There’s a stronger sense of community and responsibility. They also realize that institutions can come back from a devastating event.”
Certainly those companies dealing in international markets have learned to cope with more robust bureaucracies. Companies have put a new priority on protecting data as well. But the biggest impact of the catastrophe has been the ebb in business travel. Within weeks of the attacks, the federal government mandated security checkpoints at every airport boarding terminal, and the lines and frustrating waits that followed have been with us ever since.
Roger Dow, president and CEO of the U.S. Travel Association, acknowledged the trend in a recent conference call with journalists, and offered some sobering statistics. The total volume of business travel in the USA declined 21 percent between 2000 and 2010, he said. The numbers rose nearly 4 percent in 2010, and growth is expected through 2014, but at a much slower rate than in the past.
“Today travel is avoided if at all possible,” said White. “They’re doing video conferencing and teleconferencing. Even training takes place online now. Business has always been built around relationships, but it’s also true that time is money.” Those who do go mobile often head to Providence Station on Gaspee Street to catch an Amtrak line. The Acela Express – the nation’s only high-speed rail service – and the Northeast Regional both connect Providence with the Northeast Corridor from Boston to Washington, D.C., making rail an ideal alternative for business travel. “We consider Amtrak to be the hassle-free travel option,” said Cliff Cole, a spokesman for Amtrak Northeast. “The check-in line is very small. It’s an easy on-off experience.”
The numbers back that boast. Amtrak statistics show the terrorist attacks sparked a decade-long surge in train travel that waned only briefly at the height of the Great Recession. Nearly 800,000 passengers climbed in or out of trains in Rhode Island in 2010. This year overall Northeast ridership numbers are up 6 percent over last year.
Still, Rhode Islanders know the boarding terminal at T.F. Green Airport in Warwick long has been viewed as one of the country’s most convenient. But even that facility became a place to avoid in the first years after the disaster.
“Before 9/11 it was very easy to go through our airport,” said Patti Goldstein, vice president of public affairs and air-service marketing. “You could arrive at the terminal 10 minutes before your flight, and it was no problem. After 9/11, we saw lines that snaked outside the building.”
Since then the airport has taken steps to tame those tie-ups, as Goldstein is quick to point out. “We’ve attempted to address those customer-service issues with technology changes and infrastructure changes, and there have been real improvements.”
As part of that plan, construction crews rebuilt much of the terminal’s interior, proceeding at baby-step speed so as not to interrupt the constant flow of travelers. They expanded the second floor by moving a stairway and an escalator. New ramps were built to lead arriving passengers to the exit. And the cumbersome explosive-detection machines have also been moved out of the lobby and into a separate room.
As a result, there are now eight lines, all wider and longer than before. Special rooms have been added to ensure privacy for those who require more thorough screening. A new terrazzo floor delineates the waiting area. And to enhance security, the airport has also installed newer and better surveillance cameras. “The system gets a lot of criticism,” said Kevin Dillon, executive director of R.I. Airport Corporation, the agency that runs T.F. Green. “You’re always hearing stories about a 90-year-old woman or a 5-year-old being screened. But I think for the most part the Transportation Security Administration is doing a pretty good job. They not only provide a high level of security, but they do so in the most customer-friendly manner possible.”
While business travel has waned, the security routines established after 9/11 have caused no lasting decline in long-distance vacations. That’s good news for one of Rhode Island’s most successful companies, the Pawtucket-based, global-travel agency Collette Vacations. “When it happened, it had a profound impact that lasted well into 2002,” recalled John Galvin, the company’s chief financial officer. “But people have been resilient. If they’re going to travel, they’re going to travel. We’ve grown as a business over that time.”
These days there’s also more vigilance when it comes to moving goods. Companies now face more paperwork and regulations, even when moving freight across the borders of the nation’s NAFTA partners.
“Canada used to be an interchangeable border. It was easier to get a product through there than anywhere else,” said Ray Fogarty, director of the Chafee Center for International Business at Bryant University. “Now there’s a back-up, and your shipment might sit at the border for a day or two. The checkpoint in Detroit is one of the worst – it’s stifling.”
According to Fogarty, trade has suffered as a result. “Regulatory features have inhibited business,” he said. “Transportation costs have increased because trucks just sit there waiting for inspection.” Still, Ocean State companies have increased the number of countries they export to to 210, from 140 back in 2001.
Fogarty also notes that new regulations – coupled with scanning and other high-tech advances – have made shipping more secure. “People are more aware about the coming and going of their goods,” he said. “Everything is now tracked through GPS technology or supply-chain management. You know where something is from the time it leaves the dock until it reaches the destination. Those tighter controls mean you don’t lose packages as often.”
The events of 2001 did nothing to slow the revival of Providence’s seaport. In 2000, cargo volume had surpassed 750,000 tons. Today it exceeds 3.1 million tons annually, making Providence the second-busiest seaport in New England after Boston. That growth spurt can be attributed partly to the purchase of two harbor cranes to expand cargo handling. But beefed-up security also has made the 105-acre facility more attractive. A perimeter fence went up around the site, and ProvPort hired armed contract security. Last year the agency added cameras and a chemical-detection sensor system, funded by a $593,000 U.S. Department of Homeland Security grant. The Smiths Centurion II system, developed by Smiths Detection, is designed to detect and identify various chemical-warfare agents and toxic industrial chemicals. “Like many port facilities, after 9/11 we were faced with the task of having to immediately comply with some new federal regulations on security,” said Stephen Curtis, chief security officer at ProvPort. “For the first two years, we focused on developing infrastructure. Thankfully, there were some federal grants to help.”
The biggest change at the port, according to Curtis, has been the cooperation of various public-safety agencies in protecting the facility. “We work with Providence police and fire, the state police, the state emergency management agency, the Coast Guard, U.S. Customs and a lot of other federal agencies,” he said. “People realize that if a security incident were to happen here, it could ripple through the state’s economy, so we get a lot of assistance.”
Another lesson from Sept. 11 is that companies must take steps to keep their data, their facilities, and their employees out of harm’s way. Many Rhode Island businesses already have addressed that issue, according to Lori Adamo, president of the Cranston consulting firm Code Red Business Continuity Services.
“They understand that whether it’s a terrible tragedy or a burst pipe, they have to have a response plan in place,” she said. “Companies need backup data and some off-site facilities to keep critical operations going, even if that’s just a plan for having people work from home. And people need to know how to retrieve backup data quickly.”
But some important issues still don’t receive enough attention. Many companies, according to Adamo, ignore the need for fire drills, as if such exercises are for school kids only. “Every company should have a thorough evacuation plan, one with rally points so people know where to go,” she said. “They should designate employees as fire wardens, people who can give directions and count heads. It’s something every business should be doing, but most aren’t. Management has to provide for the safety of employees.” •

No posts to display