Economic Jihad – Al Qaeda Declares War on the Air Cargo Supply Chain

. . . is 100% Screening the Best Defense?

Walt Beadling; Cargo Security Alliance, Cayuga Partners LLC
Jack Muckstadt; Cornell University, Cayuga Partners LLC

Al Qaeda in the Arabian Peninsula has declared economic war against the US and is attacking it through the global air cargo supply chain.  In an article published in the November issue of its on-line jihadist magazine “Inspire”, AQAP promises more small-scale attacks like the recent attempts to bomb two U.S.-bound cargo planes, which it likens to bleeding its enemy to “death by a thousand cuts”.  Why not?  It’s cheap, effective and safe . . . for the terrorists . . . and it hits every one of us in a very sensitive place: our wallets.

Following the thwarted 29 October, 2010 plot in which two Chicago-bound packages containing explosives were shipped from Yemen on passenger and all-cargo planes, the Yemeni-based Al-Qaeda group announced “Operation Hemorrhage”, a new strategy that exploits the inherent vulnerabilities of the air cargo supply chain while increasing the frequency of its attacks, thereby raising the cost of securing the homeland against terrorism.  AQAP’s head of foreign operations writes: “You [the West] either spend billions of dollars to inspect each and every package in the world or you do nothing and we keep trying again.”

Predictably, Congress has fallen into the trap by quickly introducing legislation calling for 100% screening of freight transported on all-cargo aircraft within 3 years.  The U.S has already invested millions in the Certified Cargo Screening Program (CCSP), intended to secure cargo carried on U.S. passenger aircraft which took full effect in August, 2010.  Extending the 100% screening mandate to all-cargo aircraft, which carry approximately 85% of the freight coming in and out of the U.S. by air, ups the ante considerably.

In its Interim Final Rule on Air Cargo Screening, DHS/TSA estimated the cost to carriers of screening all cargo on passenger planes, including delays, to be nearly $1 billion per year.  Using the same logic, extending this requirement to all-cargo aircraft would result in a total annual cost of $6 billion.  These numbers are borne out by carriers who are now charging “security fees” for processing unscreened cargo in the range of $0.08 to $0.12 per pound.

In the same document, DHS/TSA forecast that the CCSP, which distributes the screening process across the supply chain, will reduce these costs dramatically, to approximately $0.03 per pound, and significantly reduce delays and bottlenecks at airports.  Using the DHS/TSA estimates, extending a CCSP-like 100% screening approach to all-cargo aircraft will impose a cost burden of $1.5 billion a year on the U.S. supply chain, still a very big number.  In its cold calculus, DHS/TSA goes on to project the break-even for the CCSP based on averted attacks that reduce the cost in lives and property lost.

Aside from the projected costs of increased security measures, the effects of disruption to the high-velocity air cargo supply chain by terrorist acts can be profound.  Manufacturers, businesses and individuals around the world count on air freight to grease the skids of commerce with just-in-time delivery of high-value goods, parcels and packages.  We estimate the economic impact on the air cargo supply chain of a single day of delay to be well over $2 billion in inventory and holding costs alone.

The supply chain repercussions on a case-by-case basis are impossible to quantify.  The effect that an all-out blitz, launched simultaneously from different points around the world would have on our interconnected global economy is difficult to comprehend, much less calculate.  It would freeze parts of the air cargo supply chain for days, possibly weeks.  Shippers would find other modes of transportation, extending lead times and raising inventory levels system-wide.  The effects of an air cargo supply chain under siege could be long-lasting.

According to the AQAP website, the ink-cartridge plot took three months and six operatives to plan and carry out, and only cost $4,200 in materials; when it comes to “Return on Investment”; this model is hard to top.

A number of questions must now be answered, and quickly, starting with this one: is it even possible to screen and secure 100% of all air freight?  What will it ultimately cost, who will pay for it, how will it impact the air cargo industry, and most importantly, when all is said and done, will it really make us safer?

100% screening is a blunt instrument where precision-guided smart weapons and deflector shields are needed.  Those knowledgeable of the air cargo security problem, including DHS, law enforcement, authorities of foreign governments, air cargo industry security experts and trade organizations don’t see the screening of all air cargo as a feasible – or necessary – approach.  According to Homeland Security Secretary Janet Napolitano, a global 100% screening mandate is “an easy thing to say, but it’s probably not the best way to go . . . cargo is infinitely more complicated and comes in infinitely more shapes and sizes” than passengers, she said.

This dichotomy of views sets up a debate which will soon play out in the halls of Congress and the media; hopefully, experience and wisdom will prevail.

Let’s examine some of the salient facts surrounding the failed attacks.  (1) According to knowledgeable sources, the cargo containing the bombs, cleverly concealed in computer printer cartridges, was screened by both Explosive Trace Detection (ETD) and canines, but went undetected.  Experts agree that X-Ray techniques would most likely not have revealed the bombs either.  (2) The plot was foiled by intelligence – human intelligence, that is – good ‘ol fashioned espionage.  According to TSA Chief John Pistole in testimony before the U.S. Senate, the bombs concealed in cargo packages from Yemen would not have been found without an intelligence tip-off from someone in the Saudi Arabian government.  (3) The availability of tracking numbers from the informant ultimately allowed authorities to locate and neutralize the bombs before any harm was done.

Screening alone is obviously not the answer.  TSA admits that, despite its best efforts to encourage development of screening technology, there are many types of cargo that can only be screened by physical search, a task best and most cost-effectively performed by shippers themselves, who must then depend on a secure chain of custody from their loading dock to airside; this is the supply chain approach embodied in the CCSP.  It’s likely that this will always be the case for many types of commodities.  Further, although distributed screening makes the most economic sense, DHS cannot compel other nations and law enforcement agencies to adopt its procedures.

Cargo screening must be seen as the last line of defense in a risk-targeted, multi-layered global security system that relies on intelligence, collaboration and information sharing.

The imminent danger is the one-off, unknown customer dropping off packages; these individuals must be deterred from introducing WMD’s into the system in the first place, at the point of attack.  The technology to do this is inexpensive and readily available for deployment into high risk areas.  Data on inbound shipments can be shared and evaluated in advance to identify and intercept high-risk packages and subject them to scrutiny; high risk cargos can be pulled aside for screening in detail.  Investments in human intelligence will reap greater dividends than technology in the near term.

Longer term, governments of the major trading nations and the worldwide air cargo and law enforcement communities must come together to agree on security standards and protocols to establish and maintain a secure air cargo chain of custody; its in everyone’s best interest to do so.  DHS is already moving quickly to revise its inbound air freight processing procedures and work with foreign governments and air carriers to screen high risk import cargos.

Ultimately, global terrorism can only be stopped by ripping it out by the root.  This will take time, treasure and the civilized world working as one; in the meantime all are at risk.  We must accept the unfortunate fact that losses can, and very likely will occur; we’ve been lucky so far.   The events of late October, 2010 exposed serious vulnerabilities to terrorist attacks on the global air cargo supply chain; Al Qaeda’s bold declaration is a call to arms.  Practical, cost-effective solutions are available today to mitigate the risks; common sense, flexibility, collaboration and a sense of urgency are needed to apply them.  The time to act is clearly NOW.