"Government readying plans to scan air cargo for bombs"

Monday, August 25, 2003

Government readying plans to scan air cargo for bombs 
By Walter Woods
The Atlanta (GA) Business Chronicle 


Two years after the Sept. 11 terrorist attacks, the government is expected
this fall to release long-awaited rules designed to keep bombs from being
stowed in the cargo holds of passenger jets, government sources said.  
 
The Transportation Security Administration probably will require Hartsfield
Atlanta International Airport and carriers such as Delta Air Lines Inc.
(NYSE: DAL) to X-ray cargo crates or unleash teams of dogs to sniff out
explosives, sources said.

Logistics experts and members of Congress, most vocally Rep. Ed Markey,
D-Mass., say cargo is a "gaping hole" in the nation's air security system.
They demand the government do more to protect the public and U.S. commerce.

But airlines, airports and others in the cargo industry fear another
security rule would cost billions to implement and slow air cargo enough to
erase its competitive advantage over trucking, experts said.

The government in the coming weeks will post a draft set of rules for cargo
and enlist comment from interested parties, sources at Hartsfield and the
TSA said. TSA could put the rules in stone next year.

Both sides are lobbying the TSA to shape the draft rules to their liking.

"There are enough people in Washington, D.C., working on this to create a
whole other industry," said Paul Page, editor of Air Cargo World, an
industry trade magazine.

More than 20 million metric tons of cargo moved through North America's
largest cargo airports last year; 732,000 tons came through Hartsfield
(making it the No. 22 cargo airport worldwide).

An estimated 22 percent of those goods were stowed in the cargo holds of
passenger jets, though most travelers are unaware it's there.

The majority of cargo is moved on air freighters, which have few people on
board, but experts suggest the loss of an air freighter to a terrorist
attack could seriously impair U.S. commerce.

Since the terrorist attacks of Sept. 11, 2001, TSA and the industry have
enforced a strict background check system called the "Known Shipper Program"
to prevent the possibility of a terrorist shipping explosives on a U.S.
airline or freighter.

But experts said the Known Shipper Program is vulnerable. "It's not a
panacea," as Air Cargo World's Page put it. And critics such as Markey
question the wisdom of electronically scanning luggage (which the government
mandated last year) but using a background-check system for cargo.

"Once passengers board the plane, they are seated on top of a cargo hold
that contains cargo that has never been screened and never been physically
inspected," Markey wrote in a June letter to Tom Ridge, secretary of the
Department of Homeland Security. "This must stop."

But Hartsfield is already struggling to fund a host of security upgrades
mandated by the federal government over the last two years, including $200
million for a system to electronically scan luggage.

The government pledged about $40 million Aug. 14 to help pay for the luggage
system, and airport officials are hoping the government will reimburse about
70 percent of the total cost of screening baggage. The rest will have to
come from the airport.

"We're really concerned about the potential for more unfunded mandates at
all points of security," said Ben DeCosta, Hartsfield's general manager, of
the coming cargo rules. "Security is a national issue, and should come from
the national budget."

With the rules yet to be released, experts shied away from estimating the
cost of putting more screening devices and dogs in U.S. airports.
(Hartsfield currently has 10 dogs trained to sniff for explosives.) But
Delta's chairman and CEO Leo Mullin told the U.S. Senate Commerce Committee
last October that post-Sept. 11 security upgrades have cost U.S. airlines $4
billion.

"Four billion dollars is a staggering amount for any industry to absorb,"
Mullin told Congress, "and, indeed, no other private sector has been asked
to finance national security costs."

In the days after Sept. 11, 2002, Congress gave the airlines $5 billion to
stay in business. Delta's share totaled $654 million. In April, the
government temporarily lifted security-related passenger fees, which saved
the industry $2.9 billion. That action saved Delta $251 million, and allowed
it to post a second-quarter profit. But the fees will return this fall.

Delta officials did not respond for comment about the pending rules. But
Mullin has been on nothing short of a crusade to lift the cost of homeland
security off the airlines. The carrier, which made $458 million from flying
cargo last year, could curtail its cargo operations if the costs skyrocket,
experts said.

City leaders at the Metro Atlanta Chamber of Commerce, meanwhile, are trying
to expand cargo operations at Hartsfield as part of their efforts to bring
the Free Trade Area of the Americas home office to Atlanta.

"If you insert a whole host of scans and labor into the system, it's
probably better to take the damn business away," said Mo Bazaraa, managing
director of global logistics at the Logistics Institute of Georgia Tech.

At the same time, more stringent rules could send more cargo onto the
highways, experts said. "Scanning all cargo could add a day [to the shipping
time], defeating the purpose of fast air shipping and the premium shippers
pay for it," said Bazaraa, a former officer with American Airlines.

Hartsfield's cargo tonnage was down 1.2 percent last year, and much of that
business went to the trucking industry. Trucking companies have taken
advantage of the perception of a hassle factor at airports, sources said.
Many domestic goods, particularly nonperishable items like computer parts,
can be trucked to and from Mexico or Canada in about 30 hours.

"Some want 100 percent scanning of cargo, and I don't want to say that would
destroy the industry, but it would be a crippling blow," Air Cargo World's
Page said. "There's no question there will be more screening. The question
is how much? And the fear is a lot of screening will slow things down and
grind the system to a halt."


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