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"I have had personnel working within the FAA's Y2K project state flatly that there is no way the FAA will get its new air traffic control mainframes installed, on line, and functioning in time."
- Bruce Webster

Since the economy is very interdependent, transportation relies on the availability of electric power , banking and telecommunications sytems which will also be suffering y2k failures. Without power everything begins shuting down after a few days. But if the trucks and trains stop and coal can no longer be delivered, electrical power will eventually go.

Air travel is a critical to our economy and for world trade. The FAA (Federal Aviation Administration) has been repeatedly identified as being not year 2000 compliant by the GAO (General Accounting Office) , and will not make it. If the FAA is unable to route all air traffic because its computers are not functioning, it would have to use manual methods. However, it doesn't even have a contingency plan . The FAA, which sent out a press release last September saying " we are 99% compliant" was a complete lie. As of March, 1999 they have only completed 31% of their computers. They are now claiming 100% compliance. This may be yet another in a long string of lies spewed forth by this agency.

Data released to the OMB indicates only 40% of its computers will be fuctioning in year 2000. This would mean a drastic reduction in air traffic throughout 2000, resulting in the bankruptcy of most airline companies , bankrupting the tourism industry, Fed-Ex and the like. Of course, this assumes that people still have money to pay for air travel after the economy/ financial system collapses. The manager of the US Department of Transport's Y2K program, Bonnie Fisher , said time had run out for the government to fix its 7800+ systems.

United Airlines, the nation's largest carrier, has 11, 000 non-compliant programs. The Atlanta airport will not complete remediation for 2000. Even the brand new Denver airport is not year-2000 compliant .

Here is text from the Senate Y2K Committee Report on Transportation: Aviation Industry

Significant items learned from the survey include:

62% of the respondents reported that they had not completed their Y2K assessment process. This is disturbing given the short time remaining until December 31, 1999. By comparison, the Office of Management and Budget directed all Federal agencies to complete their assessments by June 1997.

Six of the eight who answered a question on mission critical systems reported that 70% or more of their systems are mission critical.

100% of the respondents reported that their contingency plans are incomplete. Even more disturbing, over half reported that they were not even working on contingency plans at this time.

94% reported their total expected Y2K expenditures. The total projected cumulative costs at this time are over $650 million.

50% of the respondents reported they anticipated being involved in litigation due to the Y2K problem.

94% report they will finish their Y2K preparations on time. The Committee staff feels this is overly optimistic given that most of them have not yet completed the process of fully assessing the scope of their Y2K problem.

Other studies have concluded that medium and small enterprises are not as advanced in their Y2K preparedness as their larger counter-parts. Hence, since this study focused on large transportation firms, the results presented here probably represent the best-prepared portion of the industry. The survey raises many concerns about aviation given the disproportionately poor response rate to the survey of both airports and airlines. Given the concern that already exists about the readiness of the Air Traffic Control system, this will add to the general unease about air travel. The Committee staff finds the case for the Y2K flight readiness of commercial jetliners convincing. Planes will not literally "drop out of the sky" on January 1, 2000. But, if the ground-based information systems supporting overall air travel are not Y2K compliant, the system will be severely limited in its overall capacity, leading to lost revenue for the airlines, lost productivity in the economy and significant public dissatisfaction with the air transportation system.

The transportation firms surveyed did not become aware of Y2K problems until 1995 or later. Almost all have reported establishing a formal Y2K office and/or project within their company.

Companies are making the best progress on their mainframe and client-server applications and are furthest behind on the embedded chip assessment and remediation aspects of the problem.

Costs varied widely across survey responses. In an attempt to explain this disparity, the committee found a marked lack of uniform accounting for Y2K expenditures. A little more than half the surveyed parties were worried about becoming party to litigation brought by Y2K failures or upsets. Still more had concerns about the potential for business partners to fail to deliver expected products or services. Others felt that they could plan for these contingencies. . . .

General Concerns : Aviation-Specific Y2K Issues

Aviation is by far the most complex and automated transportation sector. In the words of one interviewee, "Airlines and airports along with FAA and air traffic service providers rely heavily on Y2K infested technology" and "If today were January 1, 2000, the world?s airline system would fail." . . .

Significant risks in the FAA remediation program sited by the GAO included:

Ineffective management of external data exchange analysis and remediation efforts. As of August 6, 1998 half the exchanges were still not examined for date sensitive data; of the 25% found to have date sensitive data, over 90% of those needed repairs.

Poor coordination to date on international air transportation issues.

Reliance on a telecommunications infrastructure that is not totally within its control and may not be renovated on time. Missteps in business continuity and contingency planning.

The trucking industry is at risk as well. Aside from the economic implications of an international banking crisis , which affect profitability and ability to conduct business, it requires availability of parts and fuel from countless suppliers.

There are over 400,000 trucking companies registered with department of motor vehicle agencies in the United States. Eighty percent of these employ fewer than 20 trucks within their operations. The American Trucking Association represents approximately 45,000 individual trucking companies. The trucking industry has become increasingly more reliant on information technology and electronic data interchange in the everyday conduct of business transactions. The process of just-in-time inventory management has drastically reduced reliance on long-term warehouse storage. Consequently, trucking companies have in a sense become mobile warehouses that rely on a dependable stream of up-to-date information in order to effectively service customers. The trucking industry has become highly time sensitive and uses a sophisticated level of computer software to manage its workload. The load management systems of these companies involve the transfer of electronic data between shippers, brokers, merchants and the trucking companies. This includes transmission of shipping status notices, bills of lading and payment forms. Industry automation extends to advanced on-board vehicle systems that enable a company to remotely monitor a truck?s engine performance and speed, and global positioning systems that track a truck?s location. Computer technology is also used in advanced weigh-in-motion devices, inspection systems and safety record databases.

The petroleum industry supplies fuel for planes, trains and automobiles is at risk. It too has suppliers that must meet year-2000 compliance to maintain business functions. Texaco has not even completed inventory of systems (1% of a y2k project). Mobil, according to its third quarter 10Q SEC filing had only spent half of its allocated $ 290 million, The oil companies depend on the Maritime industry to be compliant to ship oil in supertankers. Tankers have become essentially computerized with non year-2000 compliant embedded systems with no manual overides . Shipping relies on the Global Positioning System which rolls over on Aug. 22,1999 . Once the oil arrives on shore it must then be refined. Senator Thurman says 70% of our nation's oil refineries may not be able to function in 2000.

Here is text from the Senate Y2K Committee Report on Transportation: Maritime Industry

Y2K awareness within the maritime community is low to moderate. Maritime cargo shipping (containerized, bulk, tanker, etc.) is somewhat unique from other transportation modes in that each ship is virtually custom built. Thus, each must be individually inventoried and assessed for Y2K problems. Maritime shipping operational safety is at greatest risk during entry and exit from ports. To avoid increasing that risk due to possible Y2K problems, the concept of keeping ships from entering and exiting ports during the change of century is being considered by shipping operators. If Y2K prevents ports from operating for a lengthy period, there will be a high economic cost to U.S. companies. However, given that the millennium change will occur on New Year?s Eve, a short "stand down" period will have minimal economic impact.

Due to the long lifecycle of ships, major maritime shipping companies? ship inventories often include a variety of ages and automation among ships. Committee investigation into concerns about the automation of oil tankers did not yield any major Y2K-related safety or environmental issues. There is a large amount of embedded chip technology in material handling equipment at ports. However, assessments of that equipment is still incomplete and it is too early to identify significant issues. Along with revenue systems, cargo tracking, maintenance and scheduling systems are a major concern, since most use commercial, off-the-shelf (COTS) software. Finally, interviewees did not have an accurate sense of the status of international ports. However, it is widely believed that they are far behind in their Y2K efforts. While Y2K impacts on the maritime industry may potentially interrupt commerce, safety is less an issue than in some other industries. . . .

The December 1998 U.N. meeting of Y2K leaders from over 100 countries identified ports and maritime shipping operations around the world as an area of great concern. There is very little known about the Y2K readiness of this sector, which greatly influences the global economy. In the U.S., over 95% of imports and exports go through U.S. ports. To raise the visibility of the seriousness of this issue world-wide, the International Maritime Organization, a U.N. affiliate, will host a major conference and workshop on this topic in London during March 1999. . . .

Here is text from the Senate Y2K Committee Report on Transportation: Trucking Industry

The survey was sent to over 8,000 gas and oil companies. Only 638 or less than 10% responded. Although the response was disappointing, it did represent 45% of oil and gas production, 78% of refining capacity, 70% of crude and product pipeline deliveries, and 43% of U.S. service stations.

The survey asked companies to indicate the stage their companies were in for business systems and for embedded systems.

This required companies to summarize information at too high a level to be meaningful. In reality, a company may have hundreds or even thousands of business and embedded systems each at a different stage of remediation. Nevertheless, the survey results are still alarming. The survey indicates that 45% of companies who responded consider themselves to be in the assessment phase or earlier for business systems, and 60% for embedded systems.

The Committee can only conclude that, despite claims to the contrary, many companies in the gas and oil industry will not complete Y2K remediation efforts in time. This conclusion is based on the fact that only companies with the most robust programs typically respond to Y2K surveys. Y2K consultants estimate that remediation and testing are the most difficult phases, often consuming up to 40 to 70% of the entire Y2K effort.

Survey respondents all contend that they will be Y2K ready in time-76% by June 1999 and the remaining 24% by December 1999. However, based on the progress to date, and the experience regarding the amount of time and resources it takes to complete the remaining phases, this contention may be unrealistic. The Committee recommends that the companies who are lagging this far behind, i.e., are still in the assessment phase or earlier, devote significant resources to contingency planning because they will not have sufficient time to repair and test all of their mission critical systems in the limited time remaining.

One of the biggest areas of concern for the Committee is the Y2K status of countries from which the U.S. imports oil. Nearly 50% of the oil used in the U.S. comes from foreign sources. Yet, as depicted in figure 8, many of the countries are significantly behind the U.S., and thus, have a high risk of failure. Indeed, 3 of the top 5 countries from which the U.S. imports oil are, according to the Gartner Group, 12 to 18 months behind the U.S. in their Y2K remediation efforts. This means that oil production and transportation may be at risk in these countries. Any disruption to oil imports could significantly impact oil availability and, thus, prices in the U.S. The oil industry and the federal government need to monitor this situation closely. . . .

Concerns

Y2K remediation in the gas and oil sector began too late and is progressing too slowly. The thousands of miles of pipeline that must be checked and repaired and the proliferation of embedded chips and processors throughout the industry?s production, transportation, and distribution systems make failure of at least some mission-critical systems possible. The industry needs to step up its efforts and focus on developing contingency plans.

The dependence of the gas and oil industry on other sectors-electric power and telecommunications-dictates better coordination with these sectors.

Railroads transport the bulk of our commodities including chemicals, wheat, corn, coal and manufactured goods. Manual rail switching capabilities have been replaced (tossed in the trash) by computerized means that are run in (non-compliant) mainframe operated distribution centers. While it is technically possible to switch manually, it would require a full stop at every terminal, which would severly disrupt operations The industry relies on suppliers that could shut down operations. If trains are halted and cannot ship food for the cities, it will rot in the fields, resulting in famine. If coal cannot be delivered to electricity generation plants, the power grid could be affected. If the power goes down, so does our ability to fly, drive, drill and refine for oil and coal and virtually everything else.

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July 18,1998