Davis: No, I don’t think so. In several different instances they’ve found things in the middle of a skid that weren’t detected simply because they were in the middle of a skid that didn’t get broken down to be screened. Our message is, if we get this legislation passed it’s going to put everything on a more even playing field to detect what’s out there and make sure not only the passenger safety is addressed but the safety of the cargo planes as well. The collateral damage to that would be significant.
ab: What’s your analysis of Rep. Markey’s proposed legislation?
Davis: It does put everyone on a more level playing field. It won’t allow an in-road of any kind to undermine the safety of the supply chain. The bad point is, the timetable of 12 to 18 months for 50 percent as proposed will be a struggle to implement, just simply because the technology, while it’s available, is not readily approved by the government agencies at this point. I know TSA and Homeland Security are looking actively at a lot of new technology, but it just hasn’t been approved yet. The technology is available; and the ingenuity to develop new technology is out there too.
ab: Do we have any idea where the money is going to come from to fund this latest initiative?
Davis: I didn’t see anything in the proposal. I believe it’s being proposed on the same level as the original security legislation for what’s happening with passenger aircraft. It’s an unfunded mandate. What’s happened is that it has been private money and/or it gets passed on to the consumer because now it has to be security screened.
On the passenger side, most airlines are charging by the kilo for it — you have a screening fee as well as a security fee. Companies like ours that are independent charge a security fee to screen it; it’s our bread and butter. But then it’s accepted at the airlines because it’s pre-screened when presented to them. Somewhere along the line it gets pushed back to the customer.
ab: What is the liability exposure for a company like ComSec?
Davis: It runs fairly high; you have to carry a lot of insurance and you have to qualify for terrorist act insurance. That seems to be the biggest deterrent to people being involved in the program, actually, is the liability. It’s a program that is still in development, much like C-TPAT was for so many years. Training is not at peak level yet.
ab: Did you find that insurance coverage was readily available for this type of high-risk operation?
Davis: It took me months to find coverage, partly because it’s a whole new industry. There’s no insurance industry coding — we don’t fall into any currently coded insurance sector. We had to find an underwriter who was willing or underwrite to support a new industry segment.
If you’re coming in as an independent it’s been a bit of challenge. I’m sure the airlines have their own way of addressing insurance. On the indirect air carriers side, because their core competency is warehousing and transportation, there is coverage on that side because the cargo screening piece to them becomes an additional piece. It’s a value-added service. For the independents or those willing to specialize in just security screening, which is where I think it is going to have to go, that then becomes our bread and butter but it also becomes our focal point. That’s all we do. At some point I think it will come down to the shippers and industrial development manufacturers will take responsibility for how it’s packaged and what goes into it and how it’s screened. If they can interrupt the supply chain, it’s such an important part of our commerce. We are so much a nation of just-in-time supply.
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