By Stas Margaronis, AJOTThe Air Cargo Security Alliance (ACSA), representing small and medium-size freight forwarders says that new air cargo screening regulations adversely impact the industry and cost as much as $600 million annually. ACSA supports passage of the Air Cargo Security Act of 2010, which calls on the federal government to fund and establish air cargo screening facilities at major airports around the country so as to avoid placing an unfair burden on forwarders. Without such facilities, ACSA says it is not possible “to screen all of the cargo currently shipped on passenger planes in a timely and cost-effective manner – meaning that thousands of tons of air cargo are now subject to being grounded on a daily basis.” ACSA supports the efforts of Representative Ed Markey (D-MA), Representative Loretta Sanchez (D-CA) and Representative Walter Jones (R-NC) “for supporting all of the small and mid-size companies in the air cargo industry and introducing the HR 6275, Air Cargo Security Act of 2010.” The Alliance says the legislation “ will establish federal air cargo screening centers at all Category X (smaller airports) and Category I airports (main airports) that will work in conjunction with the Certified Cargo Screening and Narrow-body Screening programs already in place in order to ensure that all freight forwarders and shippers can load their cargo at any airport in the country.” However, Brandon Fried, executive director of the Washington, DC-based Airforwarders Association says such an approach would be a “disaster”: “The proposal for requiring TSA to inspect air freight is totally inappropriate and would cause major delays at major airports at peak periods. The proposed inspection process would cause delays when trucks are delivering cargoes and create back ups and delays. It would be a disaster….The way to go is pre-screening.” Fried explained that most air cargo is pre-screened eliminating delays by airlines or other third parties doing the screening: “In the United States our success owes a lot to the fact that 60% of cargo is pre-screened under a program called the Certified Cargo Screening Program. This places the burden on big companies like Apple and Dell to do the screening of their products and ensure that they are kept in secure facilities. It is true that bigger companies with deeper pockets are more likely to avail themselves of this service, but smaller companies can go to third party screeners As a result only 40% of air freight shipped in the United States is done by the airlines and third party screening businesses.” Michael Lewellyn, compliance officer at SOS Global Express, based in New Berne North Carolina, says the present screening system run by U.S. airlines is not a fair system and is causing losses to customers. He says Fried is right about screening services being available in large markets, but not in smaller market. The airlines offer the cheapest services for forwarders, but they do not provide a level playing field in terms of service and this is causing losses to smaller forwarders: “In large metro areas, such as New York, Chicago, Los Angeles third party screening is available, but not at smaller airports and markets…The airlines are the cheapest way to get screening, but they control what they want to screen so you are left to their discretion.” Legislation proposed by Congressman Markey would create a fairer system: “If we don’t have a change in the way we do cargo screening in the United States the result could be that the 4,000 freight forwarders today become 400 air freight forwarders tomorrow. Then air freight prices will go up and screening may become a new revenue stream for the airlines. Right now screening costs vary from 5 cents per 100 pounds of cargo to over 10 cents per 100 pounds. Lewellyn says the current screening system has several competitive impacts:
  1. Airlines give preference to favored customers: “If an airline has a big customer it can give it preference over