"Hidden danger: Air cargo security remains elusive in United States"

Monday, February 28, 2005

Hidden danger: Air cargo security remains elusive in United States
By Amy Bryer
The Denver (CO) Business Journal


Two years after federal officials described a "gaping loophole" in air cargo
security, little has changed in the way packages are handled by shippers who
transport goods in the cargo holds of passenger planes. 
 
Air travelers who have had tweezers and pocket knives confiscated and their
luggage X-rayed during airport security screening still sit a few feet away
from cargo holds with contents that haven't undergone anywhere close to the
same level of scrutiny. 

Packages aren't routinely X-rayed or even closely examined by security
personnel. 

Instead, the Transportation Security Admini-stration (TSA) relies on a
system that's equivalent to an industry honor code called the "known
shipper" program. It requires major shippers and freight forwarders that
ship cargo on passenger planes to verify the legitimacy of its customers. 

Privately, shippers and airline officials admit that the system has security
holes. But they say subjecting every package shipped in a passenger plane to
an X-ray inspection would paralyze the air cargo system. 

Last year, more than 100,000 tons were shipped through planes landing or
taking off from Denver International Airport. Those doing business at the
airport are reluctant to talk about any specific security procedures. 

A Government Accountability Office (GAO) investigator, testifying Feb. 15
before the U.S. Senate Committee on Commerce, Science and Transportation,
said the office is concerned about "the ability for someone to pose as a
known shipper by falsifying or counterfeiting shipping documents." 

"There are definitely holes," said retired pilot Steve Luckey, chairman of
the national security committee for the Air Line Pilots Association. "It's a
vulnerability. Everytime you put another step in the thing, the holes get
greater ... it's easier to get something into the system through the freight
forwarders." 

The TSA said it's working on a plan to strengthen its system and has
requested $55 million from the federal government in fiscal year 2005 to
develop and deploy new security technologies. 

In September, TSA signed nine contracts for a total of $24 million to be
spent on R&D to find technologies to screen cargo and mail for explosives.
TSA is looking at a pilot program in 2006. 

Money has been allocated in the past for cargo security and other R&D
projects, but TSA has had to shift the money around to cover personnel and
operating costs. According to the GAO's Feb. 15 testimony, $61 million of
TSA's $110 million R&D appropriations in 2003 went to screening passengers,
which delayed new screening technology for cargo shipped inside passenger
jets, checked baggage screening and checkpoint screening. 
 
U.S. authorities inspect only about 5 percent of the 16 million cargo
containers that arrive by land, sea and air each year in this country,
according to a report by business consultant firm EDS in Plano, Texas. 

None are inspected the same way passengers are before these containers get
loaded into the belly of passenger planes. 

Instead, the known shipper program is the primary safeguard against use of
the air cargo system by terrorists, according to government officials and
those in the industry. 

The "known shipper" concept dates to the 1970s and has been the centerpiece
of the federal air cargo program since the early 1990s, according to the
TSA. Companies shipping goods must qualify themselves with carriers to
become "known shippers." The process includes background checks with Social
Security numbers, driver's licenses, site visits and face-to-face meetings,
according to local freight forwarders. 

"We want to make sure who we're dealing with," said Scott Bulloch, export
manager with AIT Freight Systems in Aurora. 

TSA does spot checks at the freight forwarder businesses to make sure they
have the proper paperwork from shippers. But it doesn't inspect the cargo in
the warehouse. That's left up to the airlines -- if they choose -- when the
cargo is delivered to the airport. The TSA doesn't require airlines to
inspect it. 

Bulloch said the airlines he works with look at all of his containers to
verify they're coming from a known shipper. 

Frontier and United airlines, the two major carriers at DIA, declined to
comment on their specific security procedures. 

Frontier Airlines spokesman Joe Hodas said the airline is "in compliance
with regulations mandated by TSA and will continue to be compliant with any
changes."

Key elements of TSA's air cargo rule requires security clearance for anyone
in cargo areas in the airport and near the plane during loading and
unloading. TSA also requires aircraft operators accept cargo only from an
entity with "comparable" security programs or directly from the shipper. 
 
Cargo companies can be specially certified with the federal government under
what's called C-TPAT, which designates their cargo as low-risk, requiring
minimal inspection at ports. 

Freight forwarders say they also have instituted their own common-sense
rules that enhance security and prevent theft, such as making sure trucks
are locked when unattended and cameras record anyone entering the cargo
area. Many also do background checks on employees. 

Bulloch said he has notified the FBI and TSA a couple times when he's
received suspicious calls from potential customers. 

"Maybe it's undisclosed cargo, or they want to send it to a high-risk area
[like the Middle East], or they need pricing and they need it now, or they
don't want to give an address," Bulloch said. "It's common sense." 

Bulloch, a native of Scotland, was living 75 miles from Lockerbie when Pan
Am flight 103 exploded in 1988 because of a bomb in the cargo hold of the
passenger plane. After that, the United Kingdom switched to government-paid
cargo inspections that include X-rays and compression chambers to check for
explosives. 

Cambridge, Mass.-based Forrester Research said in a recent report that "the
next terrorist attack is likely to be staged through a supply chain." 

But the cargo industry said it would be far too costly and time-consuming to
X-ray every piece of cargo. As an example, the shutdown of the West Coast
ports in 2002 resulted in an estimated $2 billion loss each day. 

Bulloch has worked in cargo for 25 years and in the United States for 14. He
believes switching the United States to the same system used in the U.K.
would be costly to the airlines -- and that would be passed along to
customers. 

"In the 16 years I've been here, I've never seen an incident, so are we
going to spend $1 billion for another 16 years not to have an incident?"
said Joseph Klein, district manager with DHL Danzas Air & Ocean in Aurora. 

Jude Buemi, import export coordinator with SDV (USA) Inc., in Denver
admitted his industry has room for growth and continues to learn as it goes.

 
They close potential loopholes as they're discovered, but doesn't see the
day when every piece of cargo will be physically screened. 

"In a perfect world, every piece would be scanned, but unfortunately we
don't live in a perfect world and it would be a monumental disaster to the
industry," he said. "Short of another catastrophic event, we're a long way
away from that." 

The Intelligence Reform Act enacted Dec. 17 gives the TSA eight months to: 

   Establish an effective national air cargo inspection program and to work
with foreign countries to conduct regular inspections at facilities
transporting air cargo to the United States. 

   Create an industry database of all known air cargo shippers and require
better scrutiny of indirect air carriers and facilities. 

   Develop a training program for air cargo handlers. 

   Require strictly cargo carriers to develop approved security plans for
their facilities, operations, cargo and personnel. Plans must include
background checks for employees and contractors with security
responsibilities. 


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