Collateral Damage?
TSA program to expedite air cargo is slow to win converts as 100% inspection deadline looms
By Eric Kulisch
Homeland Security and industry officials are issuing dire warnings that air cargo shippers, especially exporters, will face significant delays if participation doesn't quickly pick up for a voluntary security program designed to pre-clear shipments before they reach an airport.
The U.S. Transportation Security Administration launched the Certified Cargo Screening Program in late 2008 as a way to help industry meet an Aug. 1, 2010 mandate ' 180 days away as of Feb. 1 ' to screen 100 percent of air cargo on passenger planes for explosives without disrupting business. Under the law, each individual box must be screened.
Ultimate responsibility for inspecting cargo falls on airlines, which are already near effective capacity screening small shipments for narrow-body planes. CCSP is primarily designed to push screening of bulk configurations ' shrink wrapped, multipiece pallets and containers ' up the supply chain to manufacturers, retailers, logistics providers, freight forwarders and other cargo handlers.
'We anticipated that there would be thousands participating and we haven't met that mark. And we need to,' said David Heyman, assistant secretary of policy at DHS, at a Dec. 14 summit in Washington to get the word out to industry stakeholders. 'If we don't move quickly in the next couple of months, then it will be a situation where carriers won't load cargo come August.'
As of Dec. 31, more than 120 shippers have been certified to screen their own cargo. Another 410 freight forwarder and 40 independent cargo screening facilities who meet TSA criteria are approved to deconsolidate and inspect each carton by physical or technical means, according to agency figures. Most major forwarders have one or more facilities enrolled in the program.
One year ago, by comparison, TSA had certified about 154 facilities representing 141 indirect air carriers and 10 dedicated screening facilities. Three shippers had been admitted to the program. At the time, a TSA official told American Shipper that another 100 shipper applications on file would soon be completed. The numbers suggest that shipper adoption of the program has barely advanced in the past 12 months.
'We don't think enough shippers have a plan' for dealing with the August screening deadline because many believe their freight forwarders will simply take care of all the arrangements, said Douglas Brittin, TSA's air cargo manager.
'If it's unscreened, it's not going to fly. It might fly two hours later, six hours later, a day later. It depends on when the next flight is going there,' he said.
CCSP's main selling point is that shippers and forwarders who pack and seal their goods in an approved, secure environment can ensure their shipments won't be broken up and rechecked en route to or at the airport. They also avoid screening fees from service providers.
Physical screening is also allowed as a substitute for electronic trace detection and X-ray machines. Supporters like that the public-private program gives companies the flexibility to choose the screening process ' self-inspection, middleman or airline ' that suits their needs.
The TSA must audit and certify that each facility seeking to participate in the program meets established security criteria. Those include having a secure facility or designated screening area with access controls, undergoing background checks for employees, providing training on screening methods, and maintaining a securing chain of custody that verifies through documentation, package seals and other processes that no tampering occurred between time of screening and tendering to the airline.
More than 90 percent participating shippers have not had to invest in any screening technology because they are incorporating physical screening into their packing process, Brittin said.
Expected to be hardest hit by the potential cargo backlog are international shippers who tend to export their goods from 18 major airports using widebody aircraft that can carry big pallets and containers. Those busiest gateways handle 95 percent of cargo moving on large passenger aircraft in the United States. Widebody flights represent 4 percent of the total, but transport 75 percent of all domestic originating cargo.
'Airline cargo facilities are built for throughput, for speed. They're not built for taking a Unit Load Device that's already vetted and shrink wrapped, taking all that apart, spreading it all over the docks, screening it and putting it back together again,' Brittin said.
Complicating compliance is the fact that non-intrusive inspection technology has not been successfully designed for consolidated loads and Congress did not provide any grants to companies to purchase technology, except $40 million for several forwarders in a technology pilot program.
TSA officials, who are still mourning the recent death of CCSP principle developer Ed Kelly, envision an ideal world in which air carriers, freight intermediaries and shippers roughly screen equal amounts of the total cargo volume. Their top priority is to get high-volume shippers to join CCSP.
The agency has 12 specialists around the country ready to help with enrollment. 'They're like the Maytag folks because not enough people are calling right now,' Brittin said.
'We must expand participation by shippers and forwarders ' if the shipping community is to be assured of meeting the fast-approaching 100 percent deadline without experiencing supply chain disruption,' James May, president of the Air Transport Association, wrote in an open letter to shippers in September.
'If too many participants wait until next year, the TSA will unlikely be able to process all of the requests in a limited time frame, resulting in potential delays for shippers,' he said.
The length of time to get certified varies by entity, with freight forwarders usually receiving quicker approvals because they have previous experience dealing with TSA regulation, Brittin said. Shippers tend to take longer because they are unfamiliar with their new legal commitments and have to get clearance from their in-house counsel or contracts office. The fastest approval process for a shipper was a bit more than two months, he said. Other shippers have taken up to eight or nine months to get all their documentation and processes in order.
Certification can also be slowed when facilities are busy and have to space out employee training rather than doing it all at once, said Brad Elrod, director of global conveyance security and logistics risk management for Pfizer.
Last February, the TSA met an interim deadline to screen half of all cargo on passenger planes by requiring airlines to screen all cargo going on narrow-body planes, along with help from some initial CCSP participants and 14 large freight forwarders in the technology trial that installed and used scanning and explosives trace detection equipment to gather data on how well the devices work.
A little less than half of cargo measured by weight still remains unscreened today, Brittin said. That means there has not been much progress in terms of the share of cargo that is screened during the past 10 months.
'The first 50 percent was low-hanging fruit. There's a false sense of security that the next 50 percent will be easy' too, Airforwarders Association Executive Director Brandon Fried said.
The highest adoption rate among shippers has been from entities concerned about maintaining the integrity of their product, according to government and industry officials. CCSP, they say, is well suited for shippers who don't want to risk downstream handling that can contaminate or damage products, or render them unusable if opened.
A forwarder, for example, must still open an individual package to check the contents if its technology triggers an alarm, such as when benign residue from other shipments gets on a box and sets off an explosive trace detector.
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| 'Airline cargo facilities are built for throughput, for speed. They're not built for taking a Unit Load Device that's already vetted and shrink wrapped, taking all that apart, spreading it all over the docks, screening it and putting it back together again.' | |
| Douglas Brittin air cargo manager, TSA |
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'This could be another Y2K. But my hunch is from 25 years in the business, it's gonna be a real trifecta. So we're going to really need to have as many shippers as possible screening their freight to cut down on bottlenecks,' Fried said.
He attributed part of the TSA's outreach difficulties to the fact that it depends on the freight brokers to talk to shippers about CCSP because it doesn't have a large marketing budget. But smaller forwarders that don't plan to invest in screening capability often are reluctant to inform shippers about the program for fear that they'll lose customers to competitors that provide the security service, according to Fried and other industry experts. That strategy could backfire if a shipper discovers its cargo was delayed at the airport when pre-screening could have ensured quick transport, they say.
Large forwarders who have invested in explosives detection equipment haven't aggressively marketed the program either, said a TSA manager who is not authorized to publicly speak. Some realize ' at least at the operations staff level ' they are better off letting certain customers screen on their own because cargo that is difficult to inspect may not be profitable and having too many shipments to screen may reduce their efficiency. Those businesses aren't worried about giving up some screening fees because they can recoup equipment costs with their volume. The mentality sometimes conflicts with the sales side of the business that doesn't want to market a shipper option that results in lost screening fees.
'The problem for us is we can't go out and solicit (individual) shippers to join because of perceptions of favoritism, so we work down from the airports, airlines and freight forwarders and try to get the word down to the shipper levels,' the manager said.
TSA officials say they are trying to engage more shippers via trade associations and other avenues. The agency is collaborating with the Commerce Department because of its extensive contacts with all business sectors, including more than 300 industry liaisons. The TSA plans to piggyback on webinars and seminars that the International Trade Administration, a part of Commerce, regularly conducts on competitiveness issues to get the message out about 100 percent screening and the options available to shippers.
Shippers and forwarders in CCSP must communicate to make sure cargo is handled according to the customer's requirements, but TSA rules limiting the spread of so-called Sensitive Security Information make detailed discussions between forwarders and shippers more difficult, Elrod said. TSA officials say more information about how to meet CCSP standards is available by applying to the program or directly contacting the program office.
'One of my biggest fears as a shipper is that I screen it, I've spoken with my forwarder who knows not to do anything further except maintain the chain of custody and it's going to show up at an airline that is going to break it down and screen it anyway. And I've just lost the benefit of being in the program,' Elrod said.
The Airforwarders Association supports CCSP, but complains that 100 percent scanning is an unfunded mandate on the private sector. It continues to lobby Congress for grants to help forwarders purchase explosives trace detection machines, which run about $50,000, and X-ray machines, which cost $200,000 apiece. Such funding is important in a very competitive industry with low margins, Fried said. Otherwise, the high implementation costs could drive almost half of the air freight forwarding industry to spurn the program, putting additional pressure on airports and airlines to do the screening.
'We need to have money to purchase these machines so we don't have to open boxes and incur claims liability' for damaged products, he said.
Another incentive for manufacturers and distributors to move quickly is that TSA is still conducting free on-site facility assessments, but by June will move to outsource most of the reviews to approved third-party validation firms that will charge a fee for the service, Brittin said.
DHS is also offering fast-track designation under the SAFETY Act for companies that have completed CCSP certification, said Akmal Ali, an insurance examiner with the DHS Science & Technology Directorate.
The SAFETY Act is a post-9/11 law that caps liability for producers, sellers and users of anti-terror technologies in the event of a successful attack.
Ali said that SAFETY program designations typically take 120 days to complete, but that DHS has averaged about 45 to 60 days processing time for Certified Cargo Screening Facilities. Faster approvals are possible because the department waived the requirement to do a technical review of detection devices in each case because the technology has already been approved. That means program staff only needs to complete an economic and insurance review of the applicant and obtain the signature of the Science & Technology undersecretary.
As of mid-December, the directorate had approved 25 companies for liability protection and had 12 more under review, Ali said.
TSA Assistant Administrator John Sammon cautioned shippers not to bet on switching shipments to all-cargo carriers to get around the airport backlogs because the all-cargo sector has shrunk capacity by one-third in the past year. All-cargo carriers, he added, tend to charge more and don't have the same schedule frequency or geographic coverage as passenger airlines.
Cherry growers in Washington last summer shipped more by freighter 'but the real problem is there isn't enough lift out there to get all the cherries exported absent these passenger planes,' said Mark Powers, president of the Northwest Horticulture Council.
Shippers are in for 'a rude awakening' if they don't sign up for CCSP, Sammon said.
Security Equivalents. TSA officials have worked closely with the pharmaceutical, fishing, perishables, funeral home and museum industries, as well as other government agencies, to identify existing security or quality control protocols that could count as screening under CCSP to prevent sensitive shipments from being contaminated or delayed.
The agency is also encouraging companies to build on their participation in the Customs-Trade Partnership Against Terrorism and the Transported Asset Protection Association to simplify participation in the trusted shipper program.
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| 'One of my biggest fears as a shipper is that I screen it, I've spoken with my forwarder who knows not to do anything further except maintain the chain of custody and it's going to show up at an airline that is going to break it down and screen it anyway. And I've just lost the benefit of being in the program.' | |
| Brad Elrod director of global conveyance security and logistics risk management, Pfizer |
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Drug manufacturers, for example, already follow stringent quality control and security procedures in their manufacturing and packaging processes to comply with Food and Drug Administration regulations and industry standards. TSA officials say they will accept that process as equivalent to verifying the content of each sub-component so that nobody has to open each packet, or pillbox, before it is put in a shipping box.
Members of the Transported Asset Protection Association, which includes many high-tech companies, similarly follow stringent cargo security guidelines that largely meet the CCSP requirements for secure facilities. The organization is also working to put together an air cargo security standard. Additional steps required for CCSP involve getting background checks for employees in secure areas, and learning screening, taping and sealing procedures.
'Our members who have been certified say they've been able to put CCSP in place relatively easily,' Elrod said in his capacity as a TAPA representative. CCSP is attainable without much additional work above the standards already required in the pharmaceutical industry, he added.
One of the challenges for the cherry industry, which exports one-third of its crop each year primarily by widebody passenger aircraft, is that thousands of temporary workers hired for the harvest season don't want to undergo any sort of background check, Powers said. Small farmers also have to consider whether it's worth hiring extra staff to implement CCSP when a packing facility may only be used six to eight weeks a year, he added.
Nonetheless, five packing facilities were certified to do cargo screening last summer.
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Program officials say that C-TPAT certification does not automatically qualify a company for acceptance in CCSP, but that they are working with Customs and Border Protection to align the programs as closely as possible. Similarly, the TSA is studying how to harmonize the security threat assessments, or background checks, of individuals for various DHS security programs, said Kim Costner Moore, acting general manager for air cargo.
C-TPAT is a voluntary program under which companies involved in international trade implement approved internal security controls, with importers potentially gaining benefits such as fewer inspections of inbound cargo. The biggest difference between the two self-monitoring programs is that C-TPAT certification is done for security practices at the corporate level, while CCSP requires security certification for each facility that wants to directly tender shipments without further inspection.
May, ATA's president, said at the briefing he would like TSA to eliminate duplicate background checks for workers that fall under separate government security programs. He and Fried also requested the agency deploy more canine teams to airline facilities during high cargo volume periods to help achieve the screen-all mandate.
Canines are the only screening method that does not require pallets to be disassembled.
The TSA has 120 canine teams dedicated for cargo. They are primarily used as another layer of defense to sniff cargo for explosives on a random basis, but occasionally can be deployed to help airlines with their screening process.
The agency is still exploring how to give private companies in CCSP the capability to use dogs too. Brittin told American Shipper that protocols must be developed that ensure private entities meet the same standards as TSA has for its own canine units.
'From a philosophical standpoint, TSA does support the concept of private canines, but it does take awhile to get that all put together,' he said.
To learn more about CCSP, go to www.tsa.gov/ccsp. The CCSP program office can be reached at [email protected].
