Editor's Note

On August 1, 2007, H.R. 1, Implementing the Recommendations of the 9/11 Commission Act of 2007, was presented to President Bush to sign into law. When the Democrats took control of Congress earlier this year, this comprehensive security legislation was their very first order of business, as indicated by the bill number. And for the air cargo handling community, this bill was a golden opportunity to address one of the chief concerns since the September 11, terrorist attacks — payment for cargo screening services.

As many are aware, aviation ground service providers, under contract with commercial airlines, handle a majority of the air cargo carried aboard passenger aircraft in the United States. Since the 9/11 attacks, continuously evolving security requirements have led to large increases in ground service operating costs, particularly in the cargo handling sector, with disproportionately small compensation adjustments from the airlines they service.

Airline services companies are regulated indirectly through security directives (SD) issued by the Transportation Security Administration (TSA) to commercial airlines. In establishing contracts for ground-based services, airlines pass down security requirements, which must be adhered to by the service provider. Airlines typically charge a security fee to cover a host of services provided including the secure handling of cargo. However, airlines rarely pass the revenue from this additional fee on to the ground service provider, instead opting to abide by the existing contract with the service provider.

Airlines are also compensated in part by the federal government for the costs incurred by increased security requirements. While the TSA directly compensates the airlines for the security requirements, airlines usually do not pass these funds on to the service providers, instead opting again to keep the current contract in place. As a result, ground service providers in recent years have been tasked with a much greater workload as a result of new security directives, with little additional funding to accomplish this goal.

Since the 9/11 attacks, the definition of security in the aviation industry has changed dramatically. Prior to 9/11, “security” for most ground service providers meant protection against theft of cargo. However, the 9/11 attacks brought terrorism concerns to the forefront, with ground service providers now responsible for increased screening of cargo for explosives, including weapons of mass destruction (WMD). Despite the increased workload and higher levels of risk assumed by ground service providers, the contracts for service between the airlines and the ground-based companies have changed little, if at all.

This is why NATA and its Airline Services Council (NATA ASC) became involved with the legislative process for the 9/11 bill, to address industry’s concern of providing cargo screening services without fair compensation. Starting in January after an “all-hands” meeting of the world’s major cargo handlers, NATA ASC members and NATA staff worked closely with Capitol Hill to provide solutions to this mounting concern.

NATA ASC members and NATA staff advocated to Congress that it must alter the current funding system for air cargo security screening to ensure that the airlines, the shippers or the federal government directly compensates the companies performing the actual screening. Failure to do so would continue the trend of inadequate compensation for the necessary security services provided, which could drive cost cutting measures that could adversely affect aviation security.

Our message also was clear in stating that the current system of funding for air cargo screening leaves many ground service providers without guarantees they will be reimbursed for the increased costs incurred as a result of any additional screening requirements.

As a result of these efforts, Congress included the following report language within the final bill:
“The Conference believes the TSA should consider establishing a system whereby aviation ground service providers that perform cargo security screening services for passenger aircraft, are compensated for costs incurred as a result of increased cargo security requirements.”
NATA staff has already met with TSA officials on the implementation of this system. It is our hope that within the next year a payment process will be established where ground service providers will be compensated for performing air cargo screening services.

The message delivered to Congress by NATA ASC members and NATA staff during their efforts on Capitol Hill, is cargo handling companies have consistently acted as responsible corporate citizens when aviation security is at stake. Reasonable and fair compensation for the security services provided by these companies will result in continuously improving levels of security. And it is clear that Congress heard the message loud and clear!

— Eric Byer,
NATA vice president,
government and industry affairs