Three weeks before new security rules go into effect for all export cargo moving by air, the Transportation Security Administration has finalized plans giving businesses the ability to opt out of screening every shipment prior to loading if their facilities have approved security controls. The air cargo industry is splintered over whether an alternative approach will provide the same protection and be fairly applied. 

The TSA said manufacturers, suppliers, warehouses, vendors, e-commerce fulfillment centers and third-party logistics providers are eligible to become a Secured Packing Facility (SPF), enabling them to tender outbound shipments to airlines without screening to meet international requirements, according to a preview notice scheduled to be published in Monday’s Federal Register

The program is designed to minimize the compliance burden associated with self-inspecting 100% of air cargo shipments, or outsourcing the task to other parties.

But critics of a flexible framework argue that without screening the cargo itself, bad actors could slip improvised explosive devices into a box or container at a temporary storage facility. Tendering cargo to airlines under different security parameters for passenger and freighter aircraft, they say, could cause confusion at the receiving end about whether freight was properly secured. 

And logistics providers, despite being eligible to participate as an SPF, see the program as a favor to large online retailers such as Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT)) by letting them out of screening, while many regulated freight agents years ago adapted to stricter regulations governing cargo on passenger airlines by incorporating physical screening into their operations. 

“While we appreciate its intended availability to the indirect air carrier community, the proposed SPF order seemingly provides no apparent security value while benefiting a select few stakeholders,” said Brandon Fried, executive director of the Airforwarders Association, in a statement provided to American Shipper.

Indirect air carriers are companies that consolidate shipments for customers and arrange for their transport on commercial air carriers. Each air forwarder must follow a TSA-approved security program, which is renewed annually.

The International Civil Aviation Organization is mandating, as of July 1, that every cross-border shipment moving on all-cargo aircraft be screened, either by X-ray, explosive trace detection, physical search or explosive sniffer dogs. The U.N. organization gave member states two compliance options, including letting entities outside the regulator’s normal jurisdiction prove their facilities provide an equivalent level of security as a substitute for screening.

The new international rules represent a significant change for the air logistics sector, which will have to apply security measures for cargo carried on freighters as it has done for more than a decade in the passenger environment. About 60% of U.S. international air cargo travels on all-cargo jets and the ratio is even greater now with international passenger aircraft mostly idle due to COVID travel limitations. 

The extra security is expected to increase shipping costs as third parties and airlines assess service fees. It could also create bottlenecks if transport providers don’t have enough trained staff, detection equipment or access to canine teams that can search entire pallets. Some containers are too large for conventional X-ray and must be separated into smaller forms. Cargo likely will also need to be dropped off earlier to ensure adequate time for security checks. 

Online retailers are especially concerned that 100% screening could make it difficult to meet increasingly demanding delivery times.

Scan-all versus risk management

All-cargo carriers and express carriers generally support a flexible, risk-based approach, arguing that it spreads out responsibility for carrying out inspections. The new regulation gives them a competitive advantage because they don’t have to deal with the cost and delays of screening.

Large companies that already have physical barriers, access controls and other security protocols in place may determine that having their warehouse security deemed equivalent to shipment screening saves money and delivery time. By requiring applicants for secure designation to first become a regulated indirect air carrier and join the agency’s standard security program, the TSA appears to acknowledge that generic security measures for loss prevention aren’t the same as ones for aviation security.

Existing freight forwarders can also apply to become an SPF.

TSA’s trust-but-verify approach bears some similarity to U.S. Customs and Border Protection’s trusted shipper program. Under the Customs-Trade Partnership Against Terrorism, vetted companies that meet or exceed minimum security practices across their supply chain are eligible for trade facilitation benefits, including reduced inspection rates for ocean containers and trucks at ports of entry. But TSA conditions go further because it doesn’t consider C-TPAT commensurate with air cargo security requirements. 

(Photo: Smiths Detection)

Airlines have primary responsibility for securing cargo, but to prevent long backlogs at constrained airline warehouses the TSA allowed certified freight forwarders, ground handlers and independent security firms to screen cargo for passenger aircraft away from the airport, before it is consolidated. Manufacturers can also qualify as Certified Cargo Screening Facilities (CCSF) if they pack each consignment in a secure portion of their warehouse. In both cases, the shipments are marked with TSA-issued tamper-evident tape and delivered through a secure chain of custody to the airline with a certificate of screening. 

The TSA says that only medical and pharmaceutical manufacturers have taken advantage of the shipper screening program so far.

The agency is amending the passenger-focused security program to allow indirect air carriers and CCSFs to also screen cargo moving on all-cargo aircraft.

Fried said the Certified Cargo Screening Program is effective and should be expanded rather than creating an uneven playing field.

“The Airforwarders Association believes that the proposed Secured Packing Facility order as another cargo-related security program different from the CCSSSP would only serve to create additional inconsistencies in the market, as entities struggle to adhere to multiple handling and administrative requirements throughout the complete supply chain. 

“Promoting and using the Certified Cargo Screening Program in the shipper community as an acceptable way to screen all-cargo aircraft shipments would avoid confusion created by the introduction and complexity of yet another security program and its specific handling requirements,” he said.

SPFs also represent a potential lost business opportunity if large shippers are excused from screening and don’t end up paying freight agents, or their security partners, to do the job. 

The SPF application must include a written plan of how the company will implement the TSA’s security criteria and satisfy certain performance-based standards. The TSA will conduct an onsite security threat assessment of the facility before granting written approval, according to the notice. 

Validation requirements include:

A designated security coordinator at the corporate level to serve as the primary point of contact.
Physical security: Access controls, secure cargo storage, perimeter security and identification of the area within the facility where cargo is secured.
Emergency plan and procedures for notifying authorities.
Chain of custody procedures to prevent unauthorized access and deter the introduction of any unauthorized explosives or other destructive substances.

Companies would have to allow follow-up inspections to ensure compliance.

SPFs will not be able to tender cargo to passenger aircraft without physical screening

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.


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