TSA Targets Cargo

Government, industry meet to assess the agency's Air Cargo Strategic Plan

NEW ORLEANS -- In January, representatives from airports, various industries, and the Transportation Security Administration met here for the 2005 Air Cargo Symposium, sponsored by the Airports Council International-North America. The focus of this year's event: TSA's recently released Notice of Proposed Rulemaking (NPRM), issued this past November. In sum, reactions to the NPRM have been fairly favorable, although ACI-NA and others have concerns, particularly with the
estimated cost impacts on airports and aviation.

The Airports Council International-North America, in its official comments to TSA, calls the NPRM "vague" and requests that the agency perform a more thorough evaluation on the rule's potential impact on aviation stakeholders.

According to TSA, the proposed rulemaking would require the adoption of security measures throughout the air cargo supply chain, and would impose significant barriers to terrorists seeking to use the air cargo transportation system for malicious purposes.

To secure the air cargo supply chain, TSA is developing and implementing a layered security system that uses a combination of information- and technology-based solutions, says the agency. Initiatives include:

-Creating a new mandatory security regime for domestic and foreign air carriers in all-cargo operations using aircraft with a maximum certificated takeoff weight of more than 100,309 pounds.

-Creating requirements for foreign air carriers in all-cargo operations with aircraft having a maximum certificated takeoff weight of more than 12,500 pounds but no more than 100,309 pounds.

-Creating Security Threat Assessments on individuals with unescorted access to cargo.

-Enhancing existing requirements for indirect air carriers (freight forwarders).

-Codifying and further strengthening the Known Shipper program.

Meanwhile, in its official comments to the NPRM, ACI-NA told TSA that the association "does not believe that the financial impacts of this regulation accurately reflect the impacts on airports. We request that the TSA conduct a more thorough evaluation of the impacts on the aviation stakeholders. It is ACI-NA's position that neither airports nor carriers should be obligated to procure equipment nor staff to support these regulations, rather the TSA should have the responsibility for providing the necessary resources to facilitate these transportation requirements.

Economic Impact: A Difference of Opinion
According to TSA projections, the economic impact on the aviation industry brought on by the proposed regulations would be an estimated cost of some $873.3 million over ten years. Key components analyzed to come up with that figure include:

-extending the Security Identifica-tion Display Area (SIDA) to all cargo areas on an airport, along with expanded background checks;

-belly cargo screening activities;

-security procedures related to all-cargo aircraft operators; and

-freighter screening.

Among those who question the ultimate economic impact is Boeing, which conducted its own analysis. According to Bob Peterson, associate technical fellow with Boeing's Air Transportation Industry Infrastructure Research, Aviation Security division, the actual impact of the NPRM on industry will be some $1.735 billion for the same ten-year period -- or about two times as much.

Peterson explains that the intent of the Boeing study was to achieve a common understanding of the cost of the new regulations -- "extent, cost, and consequential impacts." He points out that conducting such a study was a challenging undertaking simply because accurate composite data on the air cargo industry in the United States is "very sparse."

Regarding the significant difference in cost projections from TSA and Boeing, Peterson comments, "I'm not finding fault. It's a different position from which to look at the costs and economic impact."

Perhaps Peterson's greatest caution to industry is that the air cargo industry and aviation in general can be expected to absorb the costs of the new regulations. Most of TSA's $5.2 billion budget is already being spent on passenger screening, and he doesn't see Congress offering significant increases to TSA's annual budget anytime soon.

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