Forwarders note concerns with 100% air cargo scanning
Representatives from two of the country's largest freight forwarder associations told lawmakers Tuesday that their members support the Transportation Security Administration's efforts to meet a mandate for 100 percent inspection of cargo placed in the bellies of passenger planes, but warned many small forwarders may be forced to leave the market.
To participate directly in the TSA's Certified Cargo Screening Program, forwarders — legally referred to by federal aviation security regulators as Indirect Air Carriers (IACs) — must invest in scanning equipment that's substantially more robust than that used to scan passenger baggage.
'Forwarders participating in CCSP must purchase technology for which the cost may range from $150,000 to $500,000 per facility — a price tag that cannot be met by most small and medium-size forwarders,' said Brandon Fried, executive director of the Airforwarders Association, in testimony before the House Homeland Security Committee's subcommittee on transportation security and infrastructure protection.
'As a result, they will face delays at the airport for cargo screening, causing them to miss flights and lose revenues,' he added. 'This lost revenue, in the current economic environment with high fuel surcharges and razor-thin profit margins, could force forwarders out of business.'
There are more than 4,000 registered IACs involved in the air cargo industry, most considered small to medium-size enterprises.
TSA had invited a number of large forwarders to participate in a pilot program that's expected to significantly help the government meet its mandate of 50 percent scanning of all cargo loaded on passenger planes by February 2009, with the remainder to be met by August 2010.
The forwarder representatives noted to the House subcommittee that the TSA has underwritten the pilot, including the scanning equipment.
'Small companies, all of whom have been excluded from the pilot, will receive no such benefit,' said Cindy Allen of Argents Air Express in Romulus, Mich., and chairman of the National Customs Brokers and Forwarders Association of America's Security Task Force. 'Their sole option is to join the queue at the airport and await their turn for examination.
'This not only reduces their ability to put cargo on aircraft expeditiously but adds one more cost to each shipment for both the IAC and their customers — the small and medium-sized exporters who are at the heart of our economy,' she said. 'This creates a huge competitive disadvantage in an industry where two of the key differentiators of service between companies are time-in-transit and cost.'
Both the Airforwarders Association and NCBFAA called on Congress to authorize and appropriate funding in fiscal 2010 to help offset the cost for small to mid-sized firms to self-examine cargo within the TSA's Certified Cargo Screening Program.
The forwarder groups eagerly await the TSA's demonstration of the newly proposed independent screening facility pilot program or 'carwash,' where third parties will have an off-site, standalone facility dedicated to screening cargo for a fee. 'We believe this is another tool that will alleviate bottlenecks at the airport,' Fried said.
For more information about the regulation and impact of air freight forwarders, read the June American Shipper, pages 64-72. ' Chris Gillis