Security is a state of mind

Security is a state of mind. When the general shipping public looks at air cargo and its intrinsic vulnerabilities they see a dynamic system that moves freight efficiently throughout the world. Little or no consideration is ever given to any threat to commerce through theft of goods, shipping contraband and especially not terrorism. What the security professional sees is quite different. With air cargo’s vulnerability to a disaster being but moments away, any informed evaluation of the threat to world commerce through the use of air cargo is a given. The simple truth is that the commercial supply chain is far from safe and no where near secure, yet in all of this controlled chaos, the system performs efficiently. How air cargo functions within the world supply chain given these threats is the basis of this article. This article was written by Erik Hoffer in 2007 for Aviation Security Management, a 3 volume set of articles on air cargo issues. The entire book can be purchased at www.greenwood.com/psi/book_details.aspx?sku=C34652 Andrew Thomas Publisher. Publication date 10/30/08



The elements of supply chain and logistical security in the air freight business touch issues such as the secure packaging, handling, storage, transfer, chain of custody and delivery of goods, basic transportation from shipper to client and all aspects of logistics needed to achieve operational efficiency as well as speed and safety. Supply chain security is a dynamic concept covering containment and control over unattended goods regardless of modality of transport as well as packaging. Since choices of boxes or containers are made by shippers, the choices of bundling of freight made by carriers and the lack of possible interaction unilaterally, air cargo remains innocuous and unidentifiable by design. Typically the smaller and generic package size and bundling technique associated with air cargo intensifies the risks to any single unit within that enclosure. Unlike containerized sea freight, which is typically palletized or floor loaded to the maximum cube of the enclosure, locked and sealed and nested aboard a ship; air cargo containers are unlocked, packed randomly and easily accessible before, during and after transport. The speed with which goods are transported, combined with the inherent risks of damage, theft, tampering, spoilage or the surreptitious introduction of contraband into a box, makes air cargo that much harder to monitor or secure. The possible introduction of a weapon, piggybacked into air cargo, is a far greater concern than in over the road goods as there is little time to interdict individual boxes when shipped with thousands of similar packages. The risk of loss or concealed damage is also intensified by the inability to monitor units until received at destination for sorting. Overall, the chances of discovery of stolen goods or tainted freight or the interdiction and remediation of a terrorist planted weapon in air cargo is a challenge. This problem is compounded because of the sheer volume of generic packages, the speed of movement and the lack of inspection before, during or after transport.

“Speed” is the operative word in defining air cargo risk, because the slower the speed of delivery the more apt you are to discover problems before they become disasters. The slower the freight moves, the more hands and eyes are on the cargo and cargo at rest is always cargo at risk! Combined with reasonable package scrutiny on the part of carriers and handlers, and the possible introduction of intelligence into the air cargo security equation, the greater the greater chances of averting an incident involving air cargo. Recently there has been a far greater effort put forth by executive order to examine cargo on commercial aircraft, but that task is both ambitious and surely doomed for failure.
This type of band aid approach to a tremendous problem again demonstrates the ‘for show only’ approach to cargo security common to our government since before 911.

For the years before 911 and now for years after, cargo security has remained the stepchild of ‘supply chain best practices’. Air cargo is the biggest offender. Although the Known Shipper programs and greater passenger and baggage observation and inspection have been getting better, general air cargo, especially courier cargo and general consolidated air freight have little to no scrutiny coming into the United States or even boarding a plane from some countries. Cargo shipped from this country abroad do get some further observation and inspection, but moving tainted, illegal or hazmat cargo still remains easy for those with the know how to bypass the system. There are approximately 50 million cargo shipments started daily which deal with generic courier packs to boxes of every shape and size. Air cargo can be tendered as freight at an air counter, be shipped with a passenger or simply be dropped in an express box anywhere thereby making policy and scrutiny of parcels almost impossible without opening each and every one every time!

When dealing with effective remedy to supply chain security issues in any logistical environment, you must first have an idea of your adversary. In order to effectively plan for a threat, that threat must be defined and in order to effectively implement change (especially ion security) the process must be universally adopted and maintained. Unlike security for a home, an office or even a vehicle, that is fairly stable and predictable, supply chain security has a number of interdependent dimensions that render most general protective systems ineffective. Besides having freight constantly moving, the protection available at one location may be non-existent at another. Since air cargo rarely hits stop or choke points, implementation of interdiction and inspection techniques must be germane to each handing facility equally. In air cargo, the original carrier though to be hauling the freight may change numerous times for many reasons, all of which are unknown (and unnecessary to be known) by the shipper. Even during the final line haul from the airport by truck, the recipient or shipper may have no knowledge who is bring his freight to him nor what it looks like or how to inspect it before accepting it in good order. Therefore because of the lack of any cargo containment and handling integrity assurances, any logistical defensive strategy to securing your unique supply chain is fruitless.

In any product move or where a threat against specific cargo (such as pharmaceuticals or electronics) is high, you will need to know why someone wants to either steal it or taint it. Their motivation is in so far as ideology, determination, reward for success and skill will help you and your carrier to plan a suitable defense in the form of process controls or indicative packaging. In any adversarial analysis, knowledge of the persons ability to effectively get the quarry, his ability to access it throughout the transportation and storage phase of shipping, knowledge of the location and timing of the goods, the thief’s motivation and level of reward for success as well as his timeframe are all components that help to choose remedy. Additionally these facts or suppositions tend to help define how effective intelligence will be in reducing risk and or deterring the act itself by process with or without additional security technology. With air cargo’s speed as an additional adversary, the chances of deterring an act of terror (or theft) that is already in progress, is limited at best. Proactive planning for cargo security in any modality requires packaging consistency, carrier inspection processes and strict shipping and receiving practices.

The risks to people associated with tainted air cargo are somewhat greater than with other modalities since air cargo is predominately shipped with or near people, rather than simply as freight; and through airports rather than sea ports. Air cargo on freighters always lands at facilities where people are present where sea freight is far more isolated from human contact until it hits the highways. Terrorist threats to ports are of course of equal concern and exhibit an equal or greater economic impact. Regardless of the terrorist event, the commercial supply chain can take months to recover and the costs in commercial and economic losses are staggering. With any disruption in supply chain activities from a simple theft to a major breach, the costs of loss far exceed and proactive remedial action possibly required by the carriers, shippers or airside facilities.

Scrutiny of air cargo on both ends has seen some positive evolutionary changes but effectively not much has improved since pre 911 days. Physical cargo inspections are rare and one is more apt to have issues with classification falsification and tariff violations than with illegal drugs, contraband or weaponry. The implementation of inspection technology in the form of x-ray scanners, sniffers and intel scrutiny, can only address cargo in that particular airport, hence technological advances are not the answer unless they are universally deployed. Technology is still suspect when it relates to chemistry, micro electronics or other innocuous items that could be used as weapons and still seamlessly pass through any airport inspection station. Procedural standards of care such as the Known Shipper program have begun to take big bites out of the need for physical inspection, but they too bring about major issues. Physical inspection is as good as the operator, machinery and volume of items inspected from a particular shipment. Whether you know your client or not, his employees and operating practices make the introduction of a weapon or the theft of goods equally as possible in Known Shippers or unknown shippers.

Nothing short of 100% screening both physical (visual) and mechanical can prevent problems. Such an approach is not only impossible given the nature of the market, but impractical based on the sheer volume vs. time for such an inspection to take place. Proposed government projects such as the use of RFID proved ridiculous as no standards were set nor was there any way to achieve any viable nexus between RFID and cargo security. More about these programs later. There have been technology and process testing models dating back to 2002, some created by Battelle and others by various contracted facilities such as Lockheed Martin, to demonstrate the usefulness of certain inspection machines and security procedures to discover weapons and drugs introduced into cargo. Regardless of the results of any of these test programs, the TSA has chosen no universal process and they have given no viable plan to the industry to help focus us on a best practices model.

There are issues associated with the collection and interpretation of electronic data used to protect the supply chain that have been negatively received by industry. Since intelligence data was to be collected for National security review, industry was asked to make it available. No one bothered to make it secure and evaluation by the intelligence community made it open to the public. Macy’s doesn’t tell Gimbals’, we used to say in New York, hence many competing firms choose not to have their data available. If such data were intercepted by ‘competitors’ it could be used against the contributing firm to derive marketing operation, define new markets, identify inventory levels or product volumes, or allow business intelligence and proprietary supply chain data to be viewed by unauthorized people. Data in this format can also be used by a terrorist to find patterns, products and volumes in order to use these logistic details to hide weapons or people under the radar screen of evaluators. Visibility of other data that industry feels is of a proprietary nature has put a damper on this form of intelligence gathering to the point where the data provided is almost worthless.

Diversity of cargo, generic packaging techniques, bundling on air pallets and in C containers contribute to the chaos involved with choosing a fixed inspection point or process. In many airports throughout the world, in-bond staged cargo means no more than unattended boxes out on the tar awaiting loading into aircraft. Very rarely is this staged cargo caged or securely controlled while awaiting loading. In many airports around the world, access to these staging areas is easy and therefore regardless of the security inspection program used when cargo is tendered, the possible introduction of a weapon or the removal of freight is high when it is unattended. The random nature of cargo in terms of size complicates any inspection processes. The lack of dedicated manpower funded by the airlines themselves at every station all but precludes 100% inspection of over the counter freight. The courier business is notorious for a complete lack of controls. Items picked up in drop boxes or given directly to couriers can seamlessly slip through into both commercial aircraft and freighters with little to no hands on inspection. The air cargo industry and all commercial freight relies predominately on faith to avoid catastrophic situations. A bomb can be delivered in any size parcel, containing a biologic or explosive, sufficient to disrupt the world wide commercial supply chain indefinitely. Air cargo could be terminated from certain points after an event but the negative affect on world wide commerce will be felt for years.

The value of air cargo industry hovers about $60 billion. One supply chain incident adversely effecting world commerce through a terrorist strike using air cargo as a vehicle can dwarf that amount in just a few days.

Carriers are constantly struggling with increasing fuel costs, salaries, personnel, equipment maintenance, regulatory barriers and stiff competition, so who can wonder why they balk about taking on the expensive function of cargo security. Notwithstanding their obvious self interest in security, brand and equipment protection and the potential loss of life which can be caused through a terrorist strike, air carriers still feel burdened by the lack of specific direction given to them by the TSA. The nebulous nature of government regulation regarding an approved definitive course of action to secure unattended air cargo is so illusive that carriers remain on the fence in terms of taking any action at all. Whether it is their job alone to screen cargo is also in question. Physical inspection vs. cursory screening was recently mentioned in an article by Bruce Butterworth, published through a think tank. Do we really want to bring commerce to its knees by opening and inspecting all cargo or do we find some mid-ground between intelligence and inspection. Our government is moving far too slowly in helping industry to choose a world wide course of action whereby the security process would be both predictable and consistent throughout the world and done in such a manner as not to be overly prejudicial to more advanced airports and more lax with others.

By definition both the Known Shipper Program and conventional cargo screening implies an administrative overview of a shipper, cargo and recipient, and tries to detect anomalies based on historic norms. This method is done completely in the back office and rarely if ever has “hands on” any box. The obvious flaw in this thinking is that even if the shipper is known, and the cargo and recipient are both innocuous, the box may still contain a bomb. In my personal experience with the package delivery business, even if a box was to be leaking powder or fumes, or if the box had battery cables hanging from it and it was poorly packed or labeled, it probably would still manage to arrive at a distribution hub, here in the USA and possibly even delivered to a client! Given that any unsecured and unchecked cargo can be transshipped numerous times to elude this form of intel detection, and once at an airport, it can be shipped over the road to further confuse the process, administrative scrutiny falls short of a true protection platform. The goal of economic terrorism is to deploy a weapon of mass destruction, or mass effect, here in the commercial US supply chain, such that it creates fear, disruption and costly remediation sufficient to stop commerce at some level. Providing protection against an ideological focus such as this is impossible.

The technique of tainting lots of cargo at one time is a reasonable terrorist approach given the speed with which air cargo moves. Inspection is the only way this can be stopped. Total physical inspection is considered unreasonable and cost prohibitive in our current world, yet without it, counteracting such a strike is unlikely. A terrorist attack using air cargo as the vehicle is and remains a critical risk to commerce.

Passenger protection, aka what is visible to the public as a confidence builder, is surely the focus of the TSA. In that they can control inspection and have written rules and criteria for passenger scrutiny, they have allocated $5 Billion in dedicated assets and infra structure to bolster this feel good façade, yet they have spent only $55 million on like and kind protection technology for cargo. In many cases this ‘uninspected’ cargo rides on the same aircraft along side passenger baggage and below passengers!

The TSA is well meaning but inept unequipped to mandate, choose or fund changes to the security process for cargo across the board. There is no reasonable system that can detect every form of contraband nor is there any way to guaranty 100% success in any security endeavor, however without challenging industry to step up, nor creating more stringent criteria for insuring the secure shipping of air cargo, little will be done to improve our current condition. Congress needs to empower those qualified to make such decision to act and mandate compliance. Industry has to understand that the speed of commerce is directly proportionate to the risks associated with a terrorist strike. Somewhere between 100% physical inspection and administrative scrutiny lies an acceptable and effective mix. Security is not a perfect science.

One plan which was briefly mentioned was the known shipper program, instituted shortly after 911 to curtail the random introduction of a bomb into the cargo of large volume shippers. The program uses information provided by the shipper himself to his forwarder or directly to the carrier to establish himself as a secure shipper and whose cargo is beyond reproach. This program is empirically reasonable assuming that every terrorist, thief or smuggler is always honest and forthcoming! It allows the shipper (even if it is a front operation, so long as they pay their bills) to demonstrate through the submission of a form the fact that he is a good guy and deserves a pass through the rigors of ‘air cargo security screening and inspection’! In these cases the shipper becomes the inspector, the wolf in the hen house technique. As the sea freights’ ‘CTPAT’ (Custom Trade Partnership Against Terrorism) program dictates, all signators to the document will have full background screening for their employees, secure yards and stuffing facilities and appropriate tamper evident security packaging and sealing. There is no such mandate for air cargo and even if there were it could not be universally enforced. C-TPAT is a voluntary program that again offers the Doctor Feel Good approach to security rather than a true effort to secure the world’s supply chain.

U.S. Customs and Border protection came out with the C-TPAT program some years ago as a means by which to ask industry to participate in securing the world of sea freight through the use of best practices. Since they had no real experienced personnel for sealing security nor any original ideas, they asked the International Standard Organization to use their seal criteria. Our of this fiasco, the ISO developed a set of recommended, not required, best practices and products to secure seal freight. Among these tainted recommendations was the infamous ‘bolt seal’ recommendation. This was later (after 4 years of misinformation) withdrawn in August of ’06 but it still exemplifies the worst our government has to offer in recommending appropriate remedy to supply chain threats. In the air cargo industry, no such recommendation was proposed because there is not one bundling technique as there is in containerized sea freight. There are no doors to close nor locks to apply when it comes to air cargo. Because of their inability to tackle the problem, they have effectively left remedial recommendations to chance

The only viable defensive strategy for air cargo security has to mimic sea and domestic truck protocols for integrity checks. Surely as soon as air cargo kicks up the bar so too will the threat rise among other modalities. Commerce cannot be inhibited by such a technique nor can the resources be in place for 100% inspection. What we need to have is a plan that creates risk for the would be perpetrator such that the deterrent value of any remedial or proactive countermeasures meets the threat head on thereby reducing (not eliminating) risk through such a plan. Defensive strength against terrorism and collaterally theft, can be achieved by establishing security packaging standards for all air freight, the use and deployment of inspection technology world wide and the creation of choke point inspections and process controls at each airport before and after screening. The randomization of security processes at world wide air facilities such as 100% opening and inspection vs. 40% or maintenance of a 24 hour rule for all air freight shipments complicates terrorist plans which rely on operational consistency and complacency as their best cover.

The fact that security plans require buy-in from the air carriers, governments and shippers is the fly in the ointment. Everyone wants positive change and no one wants to disrupt commerce or affect their bottom line. Not many air cargo companies are willing to fund remedy nor mandate the processes required to increase protection levels. Governments typically baulk about security expense while shippers never want to accept the inherent delays such inspections will surely cause. The carriers will always get their revenue regardless of timing of delivery of goods and therefore seem to be the course of least resistance. If Governments can contribute inspection technology in the form of machinery, a defined security plan and recommendations and funding for inspection personnel; while carriers and airport operators implement these systems; and if shippers can adjust their delivery schedules for the potential delays while revising their JIT inventory process, we can be well on our way to risk reduction in air cargo.

Our government has inherently failed miserably to produce and implement a viable cargo security plan in any modality. Shortly after 911 the C-TPAT concept was adopted by Congress and touted as the end all for cargo protection. It proved to be a tremendous proposal but failed to have tangible benefits to shippers or carriers and remains, after 5 years, a concept with 200,000+ people dedicated to its enhancement, but a process that has done little to reduce risk. The nebulous nature of is tenets, the lack of benefits and penalties to those not involved makes the legislation worth little more than the paper it is printed on. The CSI (Container Security Initiative) attempted to engage ports to provide control and inspections to cargo under the guidance and funding of CBP (Customs and Border Protection) however the issue there is the container has already been dispatched to a port somewhere in the world and then inspected randomly. Since in actual practice, less than ½ of one percent of sea containers actually get inspected (even less get opened) we cannot reliably insure our security anywhere based on this process. The issue we face with legislated guidelines is that without a full scale mandate, these systems fall flat on their face.

The United States has porous borders. We base security on blind trust because that is our societal norm. Based on our system we cannot integrate barriers to commerce without completely disrupting logistics as we know it. Logistics is the backbone of commerce and integrating walls and barriers to that system cannot come without significant push-back from all quarters of our system. Unfortunately terrorism gets press for as long as practical and fades from public view when sufficient time has elapsed to spin out its’ media value.

The costs of loss to our economy and GNP through a terrorist strike can be catastrophic but proactive spending to reduce this known risk is non existent unless mandated. Take cargo theft for instance from air, truck or sea freight, combine its effects with smuggling, money laundering and other conditions of loss and you get numbers approaching $55 Billion. This type of information rarely hits the news media. The project costs to our government to deploy a viable technology based air cargo inspection plan would be $3.6 Billion. What could be a better use of funds? In addition to dealing with technology, mandated process controls to shippers and carriers needs to implemented. These controls would entail a 24 hour reporting system, significant data on the cargo, shipper and recipient as well as to establish cargo holds on random shipments for inspection purposes. The time impact from pre-notification in air cargo, like what is being done currently in sea freight, gives authorities time to filter intelligence into the security equation to help identify anomalies before these goods enter the supply chain.

The competitive nature of companies will help define this systems effectiveness. Everyone wants JIT cargo and inventory yet few will accept these internal changes. Air cargo still basically travels unencumbered with paperwork. E-Shipping is the standard and e-data is kept to a minimum by design. The more data needed the more cost. By maintaining the requirements for minimal data collection but enhancing the inspection process, shippers and carriers could reasonable enjoy some of the benefits they have now while decreasing risks. The added inspection process simply involves time, the component of air cargo which is least available! Bridging this gap can only be accomplished by creating efficiencies through packaging and loading consistencies and the ability to recognize packaging anomalies easily.

Air freight moves in predetermined cubes with rigid weight and volume constraints. By placing cargo into a consistent format would not only speed technology inspection and reduce load times, but so too would this format improve operational efficiency and throughput, it would create an increased revenue platform for freighters and commercial aircraft alike. By requiring bulk shippers to pack in a predetermined ‘brick’ with the use of tamper evident shrink films, security tapes or other visibly inspectable components, we would move closer to assuring packaging integrity. By the use of airport choke point inspection for bulk cargo, rather than independent air line inspection, the costs of full inspection could be spread out to an acceptable level. Much like seaport screening, one point serving many, establishes consistent monitorable controls and thereby adds positive layers to the process at a lower cost while maintaining efficiency. If shippers were brought into this equation through reduced tariffs or other financial incentives for those that comply, they may be more apt to have an incentive to comply. For non bulk shippers, desk screening would be seamless as their expectation could easily be established to accept this additional processing. For the domestic and some foreign courier businesses, simple break bulk inspections are currently be done, which rarely if ever hold up cargo. The inspection process could be radically reduced by having these reasonable controls in place.

The author had written such a comprehensive plan for the TSA in 2005 who promptly tabled it and continues to fund non defined remedy which includes locks, building controls and more personnel to ‘define’ the problems. There is a significant amount of proposed legislation which remains unaddressed. The disconnect between the need to act on passing legislation and actually implementing it is political. No one wants to be the bearer of change. The lack of such legislation precludes the air carriers and industry in general from purchasing appropriate (approved) technology nor implementing process controls to help reduce risk…. Hence we stay in our stagnant state of complacency. Isn’t government great!

When President Bush created the Department of Homeland Security (DHS) in 2002, his noble concept was to create a central hub for the implementation of remedy to a terrorist risk through our borders, commerce system and the world wide logistics. Through a central review of intelligence with our best and brightest tacticians, and with the ability to act unilaterally, he felt that such an agency would be the cornerstone of risk reduction. Instead of this concept we have over 350,000 people in a newly formed self contained bureaucracy that is so mired in their own layers, that action is the furthest thing from the truth. We have spent more money in defining the problems than solving them. We have dressed up thousands of untrained part time TSA inspectors in nice uniforms and armed them with state of the art screening for passengers and bags, but failed to consider the total picture of air security. Again security is a perception which seems to satisfy the traveling public but surely this facade will catch up with us very soon. The blame of course of a strike will revert to the airlines and their brand rather than the lack of ability of the TSA, DHS et al. to provide guidance and effective solutions.

Soon after the TSA was rolling, the Patriot Act was implemented giving law enforcement and our legal system both tools and remedy to those would world attempt to hurt the USA. This plan to disrupt a terrorist plot is a sound strategy as it accomplished the creation of useful data which could help determine shipping and cargo anomalies and thereby identify suspect shippers. The CSI also has been helpful in data creation. Both of these programs help identify smuggling, theft, contraband and drug importation as well as money laundering, conspiracies, trade fraud and terrorism. The issues however are empirical and rarely physical, hence while they are helpful and necessary they fail to address the hands on need of cargo for inspection. Other legislations in this regard include The Port and Maritime Security Act of 2001 and the Maritime Transportation Antiterrorism Act of 2002. The G-8 summits have always had cargo security on their agenda and participants have consistently expressed interest but little action has ever taken place. Operation Safe Commerce (OSC) was to be a public and private partnership dedicated to securing the worlds supply chain, but it has also failed to mandate a solution and has fallen short of being effective.

Intelligence aside, (and I really mean that) the TSA and industry partnership has attempted to address security through the use of space age technology which includes RFID. The TSA has spent multi-millions of dollars on studies of RFID as a security platform when they know full well that the technology is orientated toward data collection and transmission and not physical security. RFID provide no useful tools to secure parcels or bulk freight….plain and simple. All of these highly funded RFID studies have failed for the same basic reasons having to do with the physical limitations of the technology and the fact that the technology is inappropriate for this purpose. Studies unto themselves create great press and therefore the hope of the ‘coming’ of security without work. Again the doctor feel-good approach has kept the money flowing to favored Government vendors and has allowed there to be more studies than actual remedy. Senators have funded hundreds of shallow ill based studies based on their lack of knowledge in these areas. The TSA has helped proliferate this unsuccessful concept for the past 3 years as more studies yields bigger budgets, more people, more organization and therefore less need to implement remedy. That’s job security for you, plan plan, plan and never ever implement change. Minimizing effort to achieve greater security success can only be achieved through the use of deterrent and barrier packaging, pre board inspections and the collaboration of industry and carriers. There are currently 300- 400 cargo security agents of the TSA focused on the threats and vulnerabilities to cargo, that is 1% or less of their workforce. According to a report from the Center for American Progress, “The TSA allows the 1.5 million Known Shippers, 4000 freight forwarders with over (10,000 individual branches and millions of personnel) and 300+ commercial air carriers that form the air cargo supply chain, to largely police themselves.” Scary.

Air cargo risk can be viewed in many ways, however remedial action must be categorized in such a manner as to direct resources to the most critical areas first. By defining individual risks air carriers and their clients can leverage their choices of whose job it is to do which task and therefore collectively participate in reducing such risk. Areas such as security tapes and seals would automatically become the shippers responsible to apply while the carriers responsibility may be to visually inspect the boxes at each hub and prior to boarding. Courier box and envelope shipments should have an indigenous numbers and tamper evident seals and markings (tied to the bill of lading) so that replacement packaging with a similar box is harder to do. Carriers may elect to physically pack, inspect and seal counter tendered goods from certain shippers against theft and the introduction of piggybacked contraband. In this scenario the carrier would control the packaging components and security systems and bear the costs associated with this level of protection based, typically, on the volume and value of the shipper and his goods. Shippers would be charged for this just like the security add-on’s charged by the airports to passenger tickets. By offering a participatory plan whose outcome is mutually beneficial, carrier and shipper or carrier and government can cooperatively work to provide the unique component of security that they do best and at the least cost.

SPECIFIC RISKS AND THREATS:

THEFT: Cargo theft is alive and well in air shipping as well as in most other modalities. It is conservatively estimated at that air cargo theft is an annual world wide problem approaching $25 Billion, most of which occurs at unprotected airside facilities, distribution and sort hubs and at points before, during and after arrival. Luxury goods such as sun glasses, jewelry, electronics, watches, CD’s, software, designer clothes and pharmaceuticals are among the long list of targeted goods. Many of these items, like any air cargo are most vulnerable when left unattended in in-bond areas or unprotected airside warehouses. Theft can be easy fort those with access and almost impossible to detect due to the sheer volume and chaos associated with cargo sorting and staging. Theft can be both a total or partial removal of the contents thereby making detection even harder to notice. Small volume pilferage mounts up quickly when dealing with controlled substances, jewelry or electronics. Claims of this nature plague the shippers and the insurance industry tremendously but many never get filed simply because of the cost and affect of future business based on the negative press one receives when identifying that his goods were stolen and are now free astray in the market. This is especially true in ingestibles such as pharmaceuticals. Boxes can be surreptitious entered, items removed and resealed with little or no scrutiny because packaging is typically generic or has no viable or reliable means to detect entry and reclosure. Items can also be tampered with in the same manner. Tampering is usually undetectable until delivered, where many physical thefts are discovered at sort facilities. No mater how hard air carriers and air couriers try, this form of loss continues to escalate. There is little to no reliable data on the dollar volume of cargo theft on an international basis because no one wants to air their ‘dirty laundry’. Insurance data is also quite fuzzy since most transportation losses, where employee infidelity is the proven cause, is not an insurable event. The Carmack amendment covers many transportation losses by the ‘pound’ rather than by value, making financial recovery through insurance impossible for most high value goods. Issues such as a companies reluctance to share critical loss or embarrassing data, further complicates the ability to actually assess the magnitude of air cargo theft losses. Many carriers still deny the problem since the problem is not specifically defined. Government statistics and industry available loss data fail to show the magnitude of the problem so little focus is placed on remedy by them. With the advent of government mandated counter terrorist activities, shoring up airport facilities, theft control was positively impacted but as a collateral rather than a primary focus. Theft control for air carriers has always been the stepchild of operational efficiency. Since they have little to no control of packaging, type of goods or daily volume, carriers must rely on the use of best security practices to effectuate theft avoidance rather than develop a focused approach to the problem.

Many air carriers sell cargo insurance as a profit center since actuarially this is a tremendous profit center. They sell the concept of protection at a shipper acceptable level and work the numbers and trends to bolster income. Insurance is also a state of mind! Most air carriers have security departments but many have these services under human resources rather than operations, since security requires operational inefficient protocols which are taboo in the air industry.

A lesser known theft condition is the compromise of intellectual data placed in courier boxes or envelopes and subsequently opened and read prior to getting to the recipient. This condition is prevalent in the courier business as generic courier packaging lends itself to this form of surreptitious penetration. Since most courier packaging is unmarked, unnumbered, generic by design and having no indigenous features, inspection for opening or replacement is impossible. Although noting physical is stolen, the data compromised can be significant. Data such as mergers, stock trades, contracts, litigation, medical and financial records and other sensitive information can easily be read in the field, copied and transmitted in minutes. This form of theft can do a considerable amount of harm yet it has never been acknowledged by carriers nor remedied although easy remedial action and technology exists for shippers. Items such as uniquely number packages would shut down the problem as would tamper evident tapes and seals and or technology to identify the packages as originals.

Law enforcement views cargo theft as the lowest priority possible. Cargo theft has few defined laws and consequently not many viable task forces are available to investigate crime or prevent it. Most cargo criminals are recidivists and most serve no time in jail if actually apprehended. Laws covering cargo theft or theft resulting in endangering human life now include the statutes contained in the Patriot Act which opens new avenues of prosecution and new resources to deter these conditions especially in air cargo incidents. There has been a good deal of positive fallout from 911 relating to the bolstering of air side security. The TSA has initiated requirements for any service industry relating to aircraft be located on a secured site with appropriate fences, locks, cameras, sign-in processes as well as background checks for employees. Planes overnighting outside the United States require self adhesive door seals. They have mandated more stringent requirements for vehicles moving freely on to airports from food suppliers, refuse companies as well as truckers, brokers and forwarders.

DAMAGE: Most cargo suitable for air shipping is highly valuable, critical by design, and or in some way sensitive or delicate. From body parts in coolers to newly calibrated devices, air cargo can be most anything. Blood, pharmaceuticals and foods that need constant refrigeration are vulnerable to damage through delays, electronics such as plasma TV’s are frequently damaged through rough handling where smaller items are frequently crushed or exposed to conditions that adversely affect their operation. Unlike palletized cargo moving in sea containers, air cargo is randomly packed for shipping at the time of loading. Cargo can be flung into C containers, loaded on air pallets and covered with 5000 pounds of non-descript cargo. Little to no priority is given to bulk air freight in so far as commodity classification or stacking priorities which is a condition that causes most damage.

Because of the speed with which air cargo navigates the supply chain, if damage is not discovered at a sort facility it is rarely if ever found until opened by the recipient. Air claims involving concealed damage or loss resulting from packaging deficiencies are hard to prove as shippers are frequently unable to document packaging specifics and therefore many claims are denied. Outside insurance on air cargo is harder to secure than truck or rail cargo and it is considerably more expensive and issue specific. Most air carriers offer the purchase of cargo insurance as an added profit center to their line haul. The Carmack amendment created bench mark valuations for lost or damaged goods which have little use in truly assessing the true cost of a loss. Values of $.25 per pound remain as active benchmarks for uninsured freight claims. Little can be done to improve or bolster packaging without a considerable increase in shipping expense as all air cargo is based on a cube/weight ratio. Light and bulky freight is equally as expensive as heavier goods and therefore offers little incentive to shippers to beef up packaging standards.

Damage claims in air freight out paces theft by a ratio of approximately 3:1 where damage in truck and rail is easily 10:1.

PIGGYBACKING; The introduction of contraband into legitimate cargo is a condition that has existed for many years, but not recognized as a problem until 911. Threat awareness brought this condition out into the open but agencies such as DEA and CBP have been dealing with it for 30+ years. Drugs and other contraband have moved freely in the world supply chain regularly inserted into cargo of every description. Interdiction technology ranging from x-ray and sniffer screening, which is recent, to dogs and hands on visual and physical inspection has only been recently adopted. More effort has been put into these areas in the last 10 years than has any theft controls. The collateral positive effect of this type of scrutiny has begin to yield a more viable means to discover weapons and drugs than any other tool. Passenger inspection personnel supplied by TSA have done little to enhance these areas as most are unskilled, poorly trained and unable to effectively deter smuggling since most of it is done in cargo which is outside their scope. The checking accompanied baggage and freight from passengers is only now being performed regularly. As a side bar, only 5 percent of the 2.8 million tons of air cargo carried on to commercial aircraft is screened for explosives and other dangerous devices, according to the Center for American Progress. That would mean that negligible to no screening is done to the almost 1 million tons of freight passing through passenger terminals. Illegal food, animal and agricultural cargo can also the basis of the deployment of a weapon of mass effect or mass destruction by air. Biologics and related chemicals are next to impossible to detect in the sea of small packages on an aircraft or in passenger baggage or freight. The fact that animals can be an effective terrorist tool makes all cargo suspect and no cargo inherently safe.

SMUGGLING: Can be defined as the introduction of contraband cargo into the United States that is either misclassified to avoid tariffs’ and duties or are illegal or banned goods or people. Smuggling can be dangerous cargo, ethical drugs, controlled substances, animals or any type of innocuous cargo that is deemed an exception by our government as acceptable for importation. A creative terrorist can easily introduce a weapon, explosive or biologic inside cargo, nested as a piggyback to some approved shipment or inside a person or animal. Discovery of this form of smuggling is extremely difficult if not all but impossible. Intelligence typically is the key to discovery of this form of threat, where conventional physical inspection techniques are ineffective. This type of nesting is extremely common in drug or currency smuggling, where smaller bags are nested in larger cargo. This same method is used to extract goods. Reverse smuggling can move weapons, currency or stolen goods out of the country. Regardless of the size of the cargo, misclassification is an easy and reliable ploy to beat the system.

Passenger accompanied air cargo is a major profit center for the airline industry. It accounts for approximately 15% of their overall revenue with no additional expenditures required. To require more physical security in this one area of revenue would not only decrease profits but would add residual operational costs, slowdowns and dedicated personnel to administer. The balance between each revenue generating component in the air industry affects their willingness to fund and implement enhancements so unless mandated, there is no incentive to go overboard on shoring up this vulnerability.

Air cargo security is an uphill no-win battle between what is industry practical and what is mandated theory. Numerous congressional attempts have been made at mandating 100% inspection through legislation. The cost of 100% cargo screening on commercial passenger aircraft would be in the billions of dollars. Funding such an inspection mandate would be a challenge. It has been proposed that there be a fee charged for security, much like the airport security fee for passengers. With millions of air shipments daily, new funds would collect quickly. The issue is who administers these funds? What guidelines would be needed to purchase technology and of course, what technology would be purchased. Since there are really no answers to these questions, no one can begin this course of action.

According to the International Air Transport Association there will be a 26% increase in Asian air freight in the next few years resulting in a tremendous bottleneck if even a few percent increase in inspection is required. The issue with world wide air cargo inspections is also based on a countries ability to fund such inspection and if the current air side facilities can handle this in a secure manner. The EU certainly has a range of both excellent and suspect air facilities. Third world countries rarely if ever can provide minimal standards of care and inspection to air freight.

The Asian market is surely the greatest revenue generator in the air cargo industry. The growth rate of goods shipped by air from China and the Pacific rim is staggering with no end to that growth in sight. Every air freight carrier and every commercial passenger airline is embroiled in getting market share. The more encumbered air cargo becomes by inspection requirements the slower air cargo becomes. There is a delicate balance between what a shipper is willing to pay to move goods and what trigger he would have to alter his supply chain. Speed is value proposition for air freight however with the complex interconnection between modalities which exists today, switching from purely air to a sea/air or sea/land combination is tenuous. Price is always an issue but with the fluctuations in fuel costs and the possible implementation of security processes airlines are sensitive to the balance of freight rates with the possible new expenditures in mind. The higher cost of inspection combined with the possible security operational slow downs, could cost shippers more than they are willing to spend. The new developments in sea freight and dedicated sea lanes combined with the faster speed of sea cargo is a concern to the air industry. At what point do shippers bail out because of costs vs. speed considerations?

In spite what can be seen as slower transit times, the globalization of our supply chain is fixed and there are basically no choices for some shippers and commodities other than air regardless of the increases in cost, paperwork, time and reduced schedules. Commodities such as consumer electronics, high end apparel and foot ware are some of the time and market sensitive products that mandate carriage by air; so despite the pitfalls and increased costs, these items will continue to move by air. The higher costs of transit however will soon make its way to the market. Since the air cargo industries’ infrastructure just cannot support the increased security requirements of a changing world, shippers will soon be seeing sur-charges on air freight and even higher premiums on smaller shipments. Since many Asian routes are growing faster than predicted these ship points will soon become choke points in order to accommodate security procedures and some shippers may be forced to change modality to get goods to market. Direct sailings from many Asian ports to the United States can reduce sea times significantly hence the declining delivery gap between air cargo and sea/land services will make financial sense to many/ The trend in choosing modality is the fine line between costs and time and is no longer clear cut.


The greater the need for compliance with laws to inspect and protect air cargo, the less air cargo will be effective in accomplishing it mission of speed. Choke point inspections at international airports could require air freight to be tendered 24-48 hours in advance of loading and combined with further inspection upon arrival air cargo could be set back 3-5 days. Specialized cargo such as blood, body parts, perishables and time sensitive items would therefore be charged a hefty premium to ‘move to the head of the line’. Traditional freight would need to be marked in such a manner as to insure the integrity of the pre and post inspections. Such indicative sealing technology would have to be placed on these items post inspection, which would enable all handlers to continue the inspection process visually throughout the system. Since air cargo can be in any form or package, tamper indicative tape sealing would be the only viable method to introduce this feature and mark items as inspected while protecting them en-route. Inspection with no in-bond controls or containment is worthless based on a sophisticated threat. If smaller airports fail to meet inspection criteria will they be precluded from shipping goods here? If we plan on this type of mandate the exclusionary result could be devastating to some smaller countries or smaller airports.


Legislation means different things to different countries. Laws created here have no binding effect elsewhere. Security systems such as background screening for transportation workers (TWIC cards) is an excellent way to know who is handing your cargo however it does not apply elsewhere. C-TPAT, best practices asks that over seas cargo container stuffers (packers) be vetted to insure compliance with anti-terrorist security procedures. This is a great concept that is all but impossible to guaranty. The Known Shipper program requires a complete background be done on volume air shippers in help speed their cargo through the system but fails to account for the thousands of consolidators who become the middlemen in these logistical moves. Here again, a great concept but easily corrupted by anyone able to infiltrate these companies and use their good name as a screen for covert activities. E-manifests have been proposed as a security tool but because these documents can say anything and are written by the shipper, their use as a security component is suspect at best.

Overall the air cargo industry provides a reliable and cost effective way to speed goods to market from world wide points. The industry recognizes it’s role in commerce and like any business views profitable operation as their main strategy. The fine line between our governments ability to alter the actions of private enterprise for the greater good is a gray and uncharted path. Given the changing world in which we live and threats we face to our way of life by terrorists, we must find a way to mandate changes to industry processes and thereby effectively protect our borders. Vulnerability is the new paradigm for long term business planning in any business, but especially in logistics. It need not take another 911 to motivate our law makers to act in this regard.