By Adina Solomon
Air Cargo World July 27, 2013
Look up how many air cargo thefts happen per year worldwide. You won’t find the answer. You will find news stories such as the 3,600 iPad minis that were taken from JFK International Airport in November 2012, or the cargo that was stolen and thrown over the perimeter wall at an Indian airport in April 2012. Cargo security professionals interviewed say air cargo is the most secure mode of transportation, in terms of theft, because of the difficulty of stealing cargo midair.
But airfreight isn’t always in the air.
Trucks often take cargo to the airport. That cargo may sit around before or after a flight, sometimes unattended. That’s where air cargo is most vulnerable to theft. “Our industry, transporting high value goods as we do, is a potential target,” Oliver Evans, chairman of The International Air Cargo Association, says.
‘A system that actually works’
Cargo travels through many hands: airlines, ground handlers, trucking companies. That’s why it must have a chain of custody, Walt Beadling, managing partner at logistics security company Cargo Security Alliance, says. “What that means is at any point in time, you know who has a particular piece of cargo, whatever it may,” Beadling says. “You may not know where it is, but you know who has responsibility for it. And at each point where the cargo’s transferred, there’s a handoff, a formal handoff, where custody is transferred from one entity to another.”
Erik Hoffer, vice president of CSA, says someone must design a logistical plan in order to create that chain of custody and have as few handoffs as possible. “There’s always going to be that one point where nobody’s watching the store,” he says. “Without having the ability to have a chain of custody throughout the different modalities, you’re not going to get anywhere. You’re just going to have a problem always.”
Most air cargo theft happens during these points of consolidation, JJ Coughlin, chairman at Southwest Transportation Security Council, says. Coughlin published a book called Cargo Crime: Security and Theft Prevention in 2012. “When it’s in the plane flying is the safest it gets,” he says. “When it’s being handled at those points of consolidation is when it’s as risky as it gets.” He says in order to fight theft, document each point of handling. “If you take care of the small things, the process and the procedure, and you do things correctly as far as the freight handling, it makes your security issues a whole lot easier to resolve,” Coughlin says.
Hoffer says without a plan to create a chain of custody, the carrier or trucking company doesn’t know that a box contains valuable cargo, and they may not protect it in the appropriate way. “The further into the supply chain you get with the less people have knowledge of what to look for and what to do, the whole system continues to break down further and further,” Hoffer says.
That’s why the owner of the cargo needs a game plan. “If he can establish how to do it and it can be implemented by the receiving carrier, then by the receiving airline, then by the delivering carrier,” Hoffer says, “now you have a system that actually works.”
It is also imperative to screen anyone who handles cargo. Coughlin estimates that 85 percent of the theft that happens during consolidation is internal. Evans, who is chief cargo officer at Swiss International Airlines, says companies should screen warehouse and office staff and anyone else involved in the supply chain. Employers typically check police background, he says. Evans also stresses the importance of screening staff as they enter and leave the premises.
People can secure the supply chain by choosing business partners with care. Charles Forsaith, Providence, R.I.-based director of supply chain security at Purdue Pharma Technologies, ensures the security of one of the company’s principle products, a sought-after opioid pain medication. The ingredients for the medication mostly come from Tanzania, Spain and Turkey. In order to bring the raw materials into the U.S., the company uses airfreight almost exclusively. Forsaith, also chairman of the Pharmaceutical Cargo Security Coalition, says Purdue, along with many in the pharmaceuticals industry, complies with U.S. Customs law by vetting all business partners.
Forsaith interrogates people Purdue does business with at least once a year and also visits businesses physically. He says the best approach to preventing cargo theft is a layered one. “That layered approach doesn’t put all your chips on one square. Much like U.S. Customs requires, it says you need to know who it is you’re doing business with. You need to know what airline it is that’s going to fly your product. You need to know exactly how your product is being packaged or stored,” he says. “You have to physically go out and meet with these people, check those facilities, pay attention to the security that’s involved in the warehousing or loading of that aircraft and how it’s unloaded on the other end.”
Keep on trucking
Chain of custody, points of handoff and consolidation, layered approach – all these phrases point to the fact that air cargo goes through many people and entities before it reaches its destination. Trucking companies are usually involved. If you want to talk about air cargo theft and security, you need to talk about truck security. “Even if you handle your cargo as air cargo, the majority is still transported at the end of the leg or the beginning by truck,” Thorsten Neumann, Germany-based chairman of the Europe, Middle East, Asia region for the Transported Asset Protection Association, says. “This is clearly the weakest link within an end-to-end supply chain solution.” TAPA provides a forum for its more than 300 member companies to converse about cargo security.
Beadling says knowing where to route trucks helps deter air cargo theft. Neumann says logistics companies’ low margins present one of the biggest security hurdles. “Many companies still do believe that security is purely a cost factor,” he says, “but if you take really a look and calculate your investment on security and compare that with nonsecured trucks or non-secured routings, you will see that your returns in investment are tremendous.”
Cargo at rest
The saying goes that cargo at rest is cargo at risk. Hoffer says thieves are less likely to snatch high-value cargo than general cargo because logistical hubs keep jewelry, cash and documents in cages. People take the general cargo that sits unattended, he says. He points to the iPad mini theft at JFK as an example of unattended cargo. “If the cargo is at some intermediate point for any length of time, when it’s sitting, it’s vulnerable,” Beadling says.
Coughlin says air cargo is at the greatest risk for theft when it sits on the tarmac. This presents a problem in Africa, Neumann says, where in some areas, the process flow is not controlled or even structured. He says high-value products can sometimes be stalled for days on the tarmac because of a lack of infrastructure. It all comes back to having a wellplanned supply chain for air cargo. “Having an efficient and secure supply chain, those things go hand in hand because if it’s always moving, then the chance that something’s going to go wrong with it are minimized,” he says.
‘Beyond the loss of dollars’
Theft also presents another dilemma. If someone can get access to the cargo in order to steal it, that person can also put unwanted objects in the freight. Coughlin tells of an incident where a cargo airline employee worked with drug smugglers to place pallets of marijuana into the airline’s system. The employee moved 15 or 20 of those pallets using a customer’s account. “If you don’t control the freight handling, whether it’s theft or smuggling, it can easily happen,” Coughlin says.
But it can go further than drug smuggling, as the Yemen bomb plot in 2010 showed. “I think it’s a real problem,” Hoffer says. “If that happened before, it can certainly happen again, and there has to be something in place where cargo in general terms has some mandate to be able to have an inspectable template for it so cargo that is moving through the supply chain can be looked at by every inspector.”
Beadling says since the Yemen incident, the scrutiny of air cargo security has improved, but Hoffer says more improvements must be made. “My fear is really not as much the theft, but it really is on the other end when you have terrorists out there who find a way to get into cargo,” Hoffer says. “Now you’re talking about a serious problem way beyond the loss of dollars and cargo.”
Securing the chain
In order to prevent airfreight theft, Beadling talks about supply chain design, physical security and information sharing, such as knowing where the cargo is in real time and the identity of people handling the cargo. Evans says the connected nature of the supply chain, with each company collaborating with another, makes it necessary for everyone to screen staff and choose partners carefully.
Neumann says many companies believe that if they experience a security issue, it must remain confidential. But theft and security aren’t company-specific issues – they affect the entire supply chain. “Security is everyone’s responsibility,” Neumann says. “Security should not be a competition within our industry because we all face the same challenge every single day.”
Air Cargo Advance Screening Pilot
Frequently Asked Questions
Q: What are the benefits to industry of participating in Air Cargo Advance Screening (ACAS)?
A: While the benefits of ACAS participation vary between organizations, several universal advantages of joining include:
- Increasing security by leveraging Department of Homeland Security (DHS) threat and other data to employ a risk-based approach to improve air cargo security through targeted screening
- Gaining efficiencies by automating identification of high risk cargo for enhanced screening before it is consolidated and loaded on aircraft
- Establishing mitigation protocols for high-risk shipments
- Informing Transportation Security Administration (TSA) and U.S. Customs and Border Protection (CBP) decision-making by participating in efforts to establish, test, and refine the interface between government and industry communication systems for the implementation of ACAS
- Ensuring a variety of business models are considered in the development and implementation of ACAS
- Facilitating corporate preparedness for future mandatory implementation of ACAS submission requirements
- Reducing paper processes related to cargo screening requirements, thereby increasing carrier convenience
Q: Who is permitted to participate in ACAS?
A: Participation in ACAS is open to all organizations associated with the air cargo supply chain, including passenger carriers, all-cargo carriers, freight forwarders, express carriers, etc. There are no restrictions with regard to organization size, location, or commodity type.
Q: Who do I contact to join ACAS and when can I join ACAS?
A: All parties interested in joining ACAS should send their inquiries to firstname.lastname@example.org, email@example.com, and firstname.lastname@example.org. At that time, detailed information on when and how to join, including qualification requirements, will be provided.
Q: What type of data do I need to submit? How should the data be submitted?
A: Airlines and freight forwarders will exchange advance security filing data and related action messages for air cargo with CBP using new messages modeled on either existing Cargo-IMP format messages or CBP CAMIR-Air messages. While the overall form of the ACAS message will be similar to the message on which it is based, the new message formats will have slight differences in edits, timing, or new coded values as needed. The messages used for ACAS will be as follows:
Optional ACAS Message Format Based On Source
PHL FHL Cargo IMP
PRI FRI CAMIR Air
PSN FSN CAMIR Air
PER FER CAMIR Air
PWB (future use) FWB Cargo IMP
Q: Which government agencies have access to my organization’s ACAS data submissions?
A: CBP and TSA. Following a terrorist attempt in October 2010 involving explosives concealed in packages on U.S.-bound aircraft from Yemen, TSA and CBP have worked to enhance air cargo supply chain security by leveraging advance cargo screening data to jointly target passenger and all-cargo shipments inbound to the U.S.
Q: Are there plans to make ACAS a mandatory program?
A: Yes. CBP and TSA intend to issue a regulation to require advance data submission to ACAS for all international shipments either destined for or transiting through the United States. ACAS will facilitate a risk-based approach to screening.
Q: What are the costs of participating in ACAS?
A: The costs of ACAS participation vary between organizations, depending on their pre-existing infrastructures. Costs may include carrier communication requirements, such as submission and receipt of data, as well as the cost of screening protocol implementation.
Q: Are there penalties for incorrect or untimely ACAS data submission?
A: No, there are no penalties associated with ACAS at this time. Once ACAS becomes a mandatory program, penalties for incorrect or untimely data submission will likely exist.
Q: To what extent is the international community (for example, Border Action Plan, European Union, World Customs Organization) involved with ACAS, and how is the U.S. Government promoting uniformity of security programs globally?
A: A critical step to achieving a global solution to terrorism is international cooperation on data collection standards that promote a harmonized approach to international air cargo security. The United States sees ACAS as a model for the international community to effectively enhance air cargo security, and will continue to work with the World Customs Organization and the International Civil Aviation Organization as harmonization of air cargo security standards spread to all areas of the globe, further facilitating trade and enhancing security worldwide.
Q: To what extent will industry stakeholders be involved in development of ACAS as a mandatory program?
A: TSA and CBP are in on-going communication with industry stakeholders from all stages of the air cargo supply chain in an effort to enhance ACAS’ effectiveness and functionality from an industry perspective.
Q: How are ACAS submissions aligned with the submissions that industry currently provides to CBP for entry to the United States?
A: The ACAS data elements are a subset of the data required by the Trade Act of 2002: Shipper name and address, Consignee name and address, Cargo description, Piece count, and Weight.
Q: Why did the government implement ACAS and under what legal authority does it operate?
A: Following a terrorist attempt in October 2010 involving explosives concealed in U.S.-bound packages from Yemen, CBP and TSA worked to enhance air cargo supply chain security by using ACAS to target shipments inbound to the United States. ACAS participation is not required at this time; however, CBP and TSA do intend to issue regulations in the future to require submission of pre-loading data to ACAS for international inbound air cargo. CBP’s legal authority is derived from the Trade Act of 2002. TSA’s legal authority comes from Aviation Transportation Security Act.
Q: Will ACAS be required for both passenger and all-cargo carriers?
A: Yes. Upon the successful conclusion of the pilot, CBP and TSA intend to mandate both passenger and all-cargo carriers to submit data to ACAS. The ACAS test is open to all organizations associated with the air cargo supply chain, including passenger carriers, all-cargo carriers, express carriers, and freight forwarders.
Q: How will freight forwarders participate in ACAS?
A: ACAS is open to all passenger carriers, all-cargo carriers, express carriers, and freight forwarders that have the ability to transmit advance data to CBP, using one of the three options identified in the ACAS Strategic Plan. Freight forwarder engagement will be facilitated by air carriers; given that both TSA’s and CBP’s legal authority rests with the air carrier.
The Strategic Plan can be found on both CBP.gov and TSA.gov. ( Air Cargo Advance Screening (ACAS) Pilot Strategic Plan (pdf – 420 KB.) ) or ( ACAS Strategic Plan )
Q: What are the benefits of joining ACAS from a freight forwarder perspective, given that only the carrier is required to submit data?
A: While the benefits of ACAS Pilot participation vary between organizations, several universal advantages of joining include:
- Avoiding the reduced cut-off times that may result from carriers requesting earlier data submission from freight forwarders that are not ACAS Pilot participants
- Ensuring that a variety of business models, including those of freight forwarders, are considered in the development and implementation of rules related to ACAS
- Facilitating freight forwarder business operations by increasing consolidation lead-times through improved visibility into which shipments require enhanced screening
- Increasing security by leveraging Department of Homeland Security (DHS) threat and other data to employ a risk-based approach through targeted screening
- Informing TSA and CBP decision-making by participating in efforts to establish, test, and refine the interface between government and industry communication systems for the implementation of ACAS
Q: How would it work for a freight forwarder if a shipment requires enhanced screening?
A: Should a shipment require enhanced screening, email or phone notification will be provided to the freight forwarder as soon as possible, in order to afford the freight forwarder an opportunity to segregate or screen the shipment under its National Cargo Security Program (NCSP), or as an authorized representative of the carrier, as appropriate.
Q: How will the carriers know that a freight forwarder has already submitted House level ACAS data to CBP?
A: CBP welcomes all data submissions directly from freight forwarders who have the ability to transmit advance data directly to CBP. CBP encourages carriers to accept the data already transmitted and vetted to CBP by the freight forwarders. Technical solutions providing an alternative way to facilitate the submission of data from the freight forwarders and carriers are being explored.
Q: How far in advance does data have to be submitted for ACAS?
A: While the government does not currently intend to establish a specific data submission timeline, timely provision of ACAS data prior to consolidation and loading the cargo on an aircraft will be required to enable risk assessment for each cargo shipment and to conduct the required screening . The sooner data are submitted to ACAS, the sooner screening or Do Not Load (DNL) determinations can be communicated to industry stakeholders, thereby minimizing the impact to operations.
Q: How does ACAS apply in countries that have an NCSP?
A: ACAS involvement is currently encouraged and will ultimately be required for air cargo supply chain participants in all countries- including those operating under an NCSP. Operating in an NCSP country does not exempt participants from ACAS requirements; the NCSP program simply allows approved air cargo supply chain participants to screen in accordance with that country’s domestic cargo screening regime.
Air Cargo Advance Screening (ACAS) Pilot Strategic Plan
(pdf – 420 KB.)
Nov 30, 2011
Author: Ben Brandt
Combating Terrorism Center at West Point
Ten years ago, al-Qa`ida utilized four U.S. commercial airliners to destroy the World Trade Center’s towers, damage the Pentagon, and kill close to 3,000 people. This attack spurred the United States to convert its counterterrorism efforts into a sustained war on terrorism, resulting in the invasion of Afghanistan and Iraq, the capture or killing of hundreds of al-Qa`ida members, and the eventual death of al-Qa`ida chief Usama bin Ladin. There has been extensive reflection in recent months regarding the implications of Bin Ladin’s death and the Arab Spring to al-Qa`ida and its affiliated groups.
Two critical issues, however, have been partially sidelined as a result. How has the terrorist threat to commercial aviation evolved since the events of 9/11? How have actions by the U.S. and other governments worked to mitigate this threat?
This article offers a thorough review of recent aviation-related terrorist plots, subsequent mitigation strategies, and current terrorist intentions and capabilities dealing with commercial aviation. It concludes by offering three steps security experts can take to reduce the terrorist threat to commercial aviation.
Aviation-Related Plots Since 9/11 and the Regulatory Response
A number of al-Qa`ida-affiliated plots sought to target commercial aviation since 9/11. A sampling of these include the “shoe bomber” plot in December 2001, an attempt to shoot down an Israeli airliner in Kenya in 2002, the liquid explosives plot against transatlantic flights in 2006, the Christmas Day plot in 2009, and the cargo bomb plots in 2010. Other prominent operations attempted or executed by Islamist extremists during this period include a 2002 plot to hijack an airliner and crash it into Changi International Airport in Singapore, the 2002 El Al ticket counter shootings at Los Angeles International Airport, the 2004 bombings of two Russian airliners, the 2007 Glasgow airport attack, a 2007 plot against Frankfurt Airport by the Sauerland cell, a 2007 attempt by extremists to target fuel lines at JFK International Airport in New York, the 2011 suicide bombing at Moscow’s Domodedovo International Airport, and the 2011 shootings of U.S. military personnel at Frankfurt International Airport.
In response to these incidents, the U.S. government and many other countries have dramatically increased aviation security measures to prevent or deter future attacks. Many of these measures are well known to the public, including: the hardening of cockpit doors; federalization of airport security screening staff and the creation of the Transportation Security Administration (TSA); deployment of federal air marshals (FAMs) and federal flight deck officers (FFDOs) aboard aircraft; implementation of new detection equipment and methods, such as advanced imaging technology (AIT), often referred to as “body scanners”; increased amounts of screening for cargo; explosive trace detection (ETD), full body “patdowns,” and behavioral detection officers (BDOs); enhanced scrutiny for visa applicants wanting to travel to the United States; and the use of watch lists to screen for terrorists to prevent them from boarding flights or from gaining employment in airports or airlines.
Certain measures—such as invasive patdowns, AIT scanning, inducing passengers to remove jackets, belts, and shoes for inspection, and requiring them to travel with minimal amounts of liquid in their possession—have drawn widespread complaints regarding their inconvenience, as well as questions about their supposed efficacy. The reactive nature of many such measures has been widely noted as well, with some security practices designed to counter highly specific attack techniques utilized in past terrorist plots. Al-Qa`ida in the Arabian Peninsula (AQAP) sarcastically commented on this tendency in its online magazine Inspire, rhetorically asking the U.S. government whether it thought the group had no other way to conceal explosives after the TSA prohibited passengers from carrying printer cartridges.
Current Threats to Aviation
Despite the strenuous efforts by governments to harden commercial aviation in the post-9/11 era, the number of plots illustrates that al-Qa`ida core, its affiliates, and numerous other Islamist extremist groups and self-radicalized individuals maintain a high level of interest in attacking aviation. Despite the organizational disruptions caused by the deaths of numerous senior al-Qa`ida leaders in 2011, and the current preoccupation of several al-Qa`ida affiliates with local conflicts, this ongoing interest in attacking aviation is unlikely to dissipate in the long-term. Furthermore, the evolving tactics utilized in these various plots lend weight to AQAP’s contention that government regulators suffer from a lack of imagination in anticipating and mitigating emergent and existing threats. As indicated by numerous accounts, including the description of the cargo plot contained in Inspire, terrorists constantly seek to analyze existing aviation security measures to probe for weaknesses and develop countermeasures. Terrorists’ ongoing efforts to study and defeat security are further exemplified by the arrest of Rajib Karim, a former information technology employee at British Airways; prior to his arrest, Karim maintained an ongoing dialogue with AQAP operative Anwar al-`Awlaqi and attempted to provide al-`Awlaqi with information on aviation security procedures.
Therefore, despite government efforts to improve aviation security, a number of critical tactical threats remain.
Rajib Karim sought to stage a terrorist attack on behalf of AQAP, seeking to become a flight attendant for British Airways to stage a suicide attack. He also attempted to recruit fellow Muslims (including a baggage handler at Heathrow Airport and an employee of airport security) to stage an attack. Coupled with the aforementioned 2007 JFK airport plot, which involved at least one airport employee, and a reported 2009 plot by Indonesian terrorist Noordin Top to target commercial aviation at Jakarta’s main airport, which included assistance from a former mechanic for Garuda Indonesia, this illustrates the primacy of the so-called “insider threat” to aviation.
Although TSA and U.S. airports currently conduct criminal and terrorist database checks on potential airport, airline, and vendor employees who are to be granted access to secure areas, there are significant vulnerabilities in this approach, which has proven notably unsuccessful at stopping members of street gangs from gaining employment and carrying out criminal activities such as narcotrafficking, baggage theft, and prostitution at airports nationwide. In 2010, an individual named Takuma Owuo-Hagood obtained employment as a baggage handler for Delta Airlines, then promptly traveled to Afghanistan where he made contact with the Taliban, reportedly providing advice on how to effectively engage U.S. troops.
The magnitude of this vulnerability is compounded because most airport employees working in secure areas do not undergo security screening prior to entering their workspace due to practical constraints. Additional measures, such as random screening and security probes, are unable to effectively mitigate this threat. The insider threat becomes markedly worse at non-Western airports in regions such as West Africa or South Asia, where local authorities’ ability to effectively screen prospective airport employees is frequently negligible due to incomplete or poorly structured terrorist and criminal intelligence databases.
Threats from Ranged Weapons
MANPADS, or man-portable air defense systems, have been described as a growing threat to commercial aviation following the outbreak of Libya’s civil war in early 2011 and subsequent news reports claiming that al-Qa`ida in the Islamic Maghreb (AQIM) has obtained surface-to-air missiles. Some reports suggest that missiles stolen from Libyan arsenals have spread as far as Niger, the Gaza Strip, and the Sinai Peninsula. In addition to AQIM, al-Shabab has been known to possess advanced MANPADS, allegedly provided by Eritrea. Given that AQAP maintains ties to al-Shabab and has reportedly taken over multiple military depots in Yemen following the outbreak of civil unrest there, it is not implausible to assume that AQAP could acquire additional MANPADS. There are also reports that the Taliban acquired MANPADS from Iran, making it conceivable that elements of the group sympathetic to al-Qa`ida’s aims could provide al-Qa`ida with MANPADS for a future attack.
Although MANPADS are unable to target aircraft at cruising altitudes, commercial aircraft would become vulnerable for several miles while ascending and descending, particularly due to their lack of countermeasure systems.
In addition to the MANPAD threat, a significant variety of ranged weapons could be used to target commercial aircraft, particularly when taxiing prior to takeoff or after landing. Rocket-propelled grenades (RPGs), for example, are inaccurate at extended ranges; however, they have been used to shoot down rotary wing aircraft in combat zones, and have been used in at least one plot against El Al aircraft. The Irish Republican Army (IRA) used homemade mortars to attack Heathrow Airport in the 1990s, while heavy anti-material sniper rifles such as the Barrett M82 fire .50 caliber rounds to a range of more than one mile and have been previously used by non-state actors, such as the IRA and the Los Zetas drug cartel.
Evolving Threats from Explosive Devices
Terrorist groups, particularly AQAP, have continuously refined their ability to conceal improvised explosive devices (IEDs) from security screening equipment, as shown by the 2009 Christmas Day plot, where a would-be suicide bomber concealed explosives in his underwear, and the 2010 cargo bomb plot, where bombmakers hid explosives in printer cartridges.
Following the 2009 plot in particular, TSA, foreign regulatory agencies, and some airlines sought to increase safeguards against passenger- or cargo-borne IEDs by the deployment of AIT and ETD equipment. IEDs, however, are likely to remain a significant threat to commercial aviation due to limitations in current screening technology. AIT can be defeated by concealing IEDs internally, either by the frequently discussed stratagem of surgically implanting devices in a would-be suicide bomber or by the simpler route of secreting the device within a body cavity. Alternately, IEDs concealed within complex electronic devices are likely to defeat all but the most thorough visual inspection, as illustrated by explosives experts’ initial failure to detect the devices used in the 2010 cargo plot. AQAP has shown itself to be particularly adept at concealing IEDs within electronic devices such as printers and radios, which it will likely continue to use in the future.
ETDs and explosives detection dogs, meanwhile, can be defeated by numerous countermeasures. For example, many (though not all) ETD devices detect only two popular explosive compounds. ETD equipment is also not designed to detect the components of improvised incendiary devices (IIDs), making the use of these correspondingly attractive to terrorists. Lastly, IEDs can be sealed and cleaned to degrade the ability of ETD equipment to detect explosive vapors or particles.
Nor is behavioral profiling likely to provide the solution to passenger-borne IEDs and IIDs. Umar Farouk Abdulmutallab underwent two interviews by security staff prior to staging his attack on Northwest Airlines Flight 253 in 2009. Similarly, a GAO report examining the TSA’s use of BDOs noted that the scientific community is divided as to whether behavioral detection of terrorists is viable.
Threats Against Airline Facilities and Airports
One aspect of aviation security that is not frequently addressed is the potential for terrorists to strike other aspects of aviation infrastructure beyond aircraft. Commercial airlines are highly reliant upon information technology systems to handle critical functions such as reservations and crew check-in, a fact not lost upon Rajib Karim when he suggested in correspondence with Anwar al-`Awlaqi that he could erase data from British Airways’ servers, thus disabling the airline’s website. Such an approach would mesh closely with al-Qa`ida core’s and AQAP’s stated aims of waging economic jihad against the West. The operational control centers operated by air carriers are another significant point of vulnerability, which conduct the airlines’ flight control, meteorology, and emergency management functions. Despite their criticality to flight operations, these control centers are rarely heavily guarded, meaning that a team of attackers equipped with inside knowledge could temporarily shut down the global operations of a major air carrier, particularly if backup facilities were to be targeted as well.
Another threat to commercial aviation is the increasing number of plots and attacks targeting airports themselves rather than aircraft. There have been two significant attacks staged at international airports thus far in 2011 in Frankfurt and Moscow. Attacks against airports have been planned or executed using a variety of tactics, such as firearms, car bombs, suicide bombers, and hijacked aircraft. The targets have included airport facilities such as fuel lines, arrival halls, and curbside drop-off points. Terrorists could also breach perimeter fencing and assault aircraft on runways, taxiing areas, and at gates. This tactic was used during the 2001 Bandaranaike airport attack in Sri Lanka, when a team of Black Tigers used rocket-propelled grenades and antitank weapons to destroy half of Sri Lankan Airlines’ fleet of aircraft. More recently, Afghan authorities announced the discovery of arms caches belonging to the Haqqani network near Kabul Airport and claimed that the group had planned to use the caches to stage an assault on the airport. The actions of activist groups—such as Plane Stupid, which has breached perimeter fencing at UK airports so that activists could handcuff themselves to aircraft in a protest against the airline industry’s carbon emissions—demonstrate the viability of such an attack in the West as well.
The trend toward attacking airports rather than aircraft has likely been driven by a number of factors, particularly increased checkpoint screening measures and terrorists’ growing emphasis on decentralized, small-scale attacks on targets of opportunity. Firearms will likely prove to be a key component of future attacks, given their relative ease of use compared to explosives, as well as their wide availability in the United States and many other countries. This trend was exemplified by the 2011 Frankfurt attack, which was conducted by Arid Uka, an employee at the airport’s postal facility, who shot and killed two U.S. soldiers at a bus at the terminal. Although deployment of plainclothes security personnel and quick reaction teams can help ameliorate the impact of attacks on airports, their ease of execution and the impossibility of eliminating all airport queues (be they for drop-off, check-in, security screening, baggage claim, or car rentals) make this tactic a persistent threat.
Required Steps to Improve Aviation Security
Given the breadth and complexity of threats to commercial aviation, those who criticize the TSA and other aviation security regulatory agencies for reactive policies and overly narrow focus appear to have substantial grounding. Three particularly serious charges can be levied against the TSA: it overemphasizes defending against specific attack vectors (such as hijackings or passenger-borne IEDs) at the expense of others (such as insider threats or attacks on airports); it overemphasizes securing U.S. airports while failing to acknowledge the significantly greater threat posed to flights arriving or departing from foreign airports; and it has failed to be transparent with the American people that certain threats are either extremely difficult or beyond the TSA’s ability to control. Furthermore, the adoption of cumbersome aviation security measures in the wake of failed attacks entails a financial burden on both governments and the airline industry, which has not gone unnoticed by jihadist propagandists and strategists. While the U.S. government has spent some $56 billion on aviation security measures since 9/11, AQAP prominently noted that its 2010 cargo plot cost a total of $4,900.
With this in mind, there are several measures that could be undertaken to improve U.S. aviation security. First, policymakers must recognize the timely collection and exploitation of intelligence will always be the most effective means of interdicting terrorist threats to aviation, whether by disrupting terrorist leadership in safe havens, breaking up nascent plots, or preventing would-be terrorists from boarding aircraft. The successful exploitation of intelligence gathered from the Bin Ladin raid in May 2011 has likely done far more to defend commercial aviation from al-Qa`ida than the use of advanced imaging equipment and patdowns.
Second, the TSA and other aviation security regulators must increase their liaison with the airline industry regarding the development of risk mitigation strategies, as airlines are far more aware of the vulnerabilities inherent to commercial aviation, as well as the practical constraints on proposed security measures.
Third, rather than increasing spending on screening equipment and employees deployed in the United States, the TSA and other regulators should instead provide financial support for airlines attempting to improve security for their overseas operations. This could include subsidizing background checks on airlines’ international employees and vendors, paying for armed guards at ticket counters, helping upgrade security for airlines’ computer networks and control centers, and paying for the deployment of ETD screening equipment. Aviation security regulators should also work to improve the quality of threat information shared with airlines, which is frequently dated, irrelevant, or inaccurate.
Most importantly, the TSA and policymakers must publicly acknowledge that it is impossible to successfully protect every aspect of commercial aviation at all times. Intelligence gaps will occur, watch lists will not always be updated, scanners will fail to detect concealed items, and employees will become corrupt or radicalized. As politically painful as such an admission may be, it is essential to scale back bloated security measures that add significant expense and inconvenience to commercial aviation without materially reducing risk. The TSA’s leadership has begun to take small steps in this direction, such as a current pilot program designed to prescreen travelers to facilitate expedited screening, but more must be done to ensure that commercial aviation remains both secure and commercially viable.
Ben Brandt is a director at Lime, a political risk consultancy based in the United Arab Emirates. Prior to joining Lime, he worked as a threat analyst for a major U.S. airline, as well as at the New Jersey Office of Homeland Security and Preparedness. Mr. Brandt holds an MA in Security Studies from Georgetown University.
 “BA Worker to Stand Trial on Terror Charges,” CNN, March 26, 2010.
 Vikram Dodd, “British Airways Worker Rajib Karim Convicted of Terrorist Plot,” Guardian, February 28, 2011.
 “Terror Suspect Top Said Planning Attack on Airline – Indonesian Police Chief,” BBC, September 1, 2009.
 For example, it is difficult to conduct effective background screening on immigrants who have migrated to the United States from countries with poor records systems.
 Alissa Rubin, “Tangled Tale of American Found in Afghanistan,” New York Times, October 11, 2010.
 See, for example, “Qaeda Offshoot Acquires Libyan Missiles: EU,” Agence France-Presse, September 6, 2011.
 “Report of the Monitoring Group on Somalia,” UN Monitoring Group on Somalia, July 18, 2007.
 Fawaz al-Haidari, “Blast at Qaeda-Looted Yemen Ammo Plant Kills 75,” Agence France-Presse, March 28, 2011.
 Declan Walsh, “Afghanistan War Logs: US Covered Up Fatal Taliban Missile Strike on Chinook,” Guardian, July 25, 2010; “Afghanistan War Logs: Anti-Aircraft Missiles Clandestinely Transported from Iran into Afghanistan – US Report,” Guardian, July 25, 2010.
 Richard Cummings, “Special Feature: The 1981 Bombing of RFE/RL,” Radio Free Europe/Radio Liberty, February 9, 1996. Some news reports claim that Islamic militants planned to target an El Al flight with rocket propelled grenades in Switzerland in 2005 as well.
 Scott Kraft, “New IRA ‘Spectaculars’ Seen Stalling Peace,” Los Angeles Times, March 19, 1994; Samuel Logan, “Los Zetas: Evolution of a Criminal Organization,” ISN Security Watch, March 11, 2009.
 “Failure to Find Airport Bomb ‘a Weakness,’ Expert Says,” BBC, November 1, 2010.
 For details, see Brian Jackson, Peter Chalk et al., Breaching the Fortress Wall (Santa Monica, CA: RAND Corporation, 2007).
 “Aviation Security: Efforts to Validate TSA’s Passenger Screening Behavior Detection Program Underway,” U.S. Government Accountability Office, May 2010.
 Alistair MacDonald, “U.K. Prosecutors Tie BA Employee to Awlaki,” Wall Street Journal, February 2, 2011.
 The Black Tigers were a specially selected and trained group of suicide operatives deployed by the Liberation Tigers of Tamil Eelam during their insurgent campaign in Sri Lanka.
 Celia W. Dugger, “Rebel Attack on Airport Shocks Leaders of Sri Lanka,” New York Times, July 25, 2001.
 Matt Dupee, “NDS Smashes Haqqani Network Plots in Kabul,” The Long War Journal, July 31, 2011.
 See, for example, Helen Carter, “Plane Stupid Demo at Manchester Airport Increased Emissions, Court Hears,” Guardian, February 21, 2011.
 See, for example, Bruce Riedel, “AQAP’s ‘Great Expectations’ for the Future,” CTC Sentinel 4:8 (2011). For details on the $56 billion, see Ashley Halsey III, “GOP Report: TSA Hasn’t Improved Aviation Security,” Washington Post, November 16, 2011.
The Journal of International Security Affairs
Fall/Winter – Number 21
Any evaluation of the first decade of the global War on Terror (or whatever phrase du jour is currently used to describe the conflict) cannot avoid an unmistakable triumph: America hasn’t suffered another catastrophic act of terrorism since September 11, 2001. Nevertheless, the U.S.’s success in defending itself against the tactic of terrorism has not been complemented by a deep understanding of its enemies’ strategy, and consequently its systems of offense and defense have not been structured for victory.
The lack of attention the U.S. has paid to al-Qaeda’s strategy so far is remarkable. To comprehend the shallowness of its understanding, one need look no further than the documents that frame official U.S. thinking about terrorism. For example, the National Military Strategic Plan for the War on Terrorism (NMSP-WOT)—the most comprehensive military plan for the fight against al-Qaeda and its affiliates—outlines America’s ends, ways, and means in the conflict, but doesn’t perform the same analysis for al-Qaeda. This is striking, because understanding an enemy’s ends, ways, and means is fundamental to military strategy.
Likewise, neither the White House’s National Strategy for Combating Terrorism nor the 9/11 Commission Report performs an ends, ways, and means analysis of the jihadi group. These vital documents typically discuss al-Qaeda’s goal of re-establishing the caliphate and its tactic of terrorism, with an unresolved disconnect between this goal and the group’s tactics. It appears that planners assumed that al-Qaeda did not think strategically, an unwarranted assumption.
An interesting academic article published in International Security a few months before the 9/11 attacks provides a good way to conceptualize the fight against al-Qaeda. Written by Ivan Arreguín-Toft, “How the Weak Win Wars” began with an extended look at the famed “rumble in the jungle” boxing match between Muhammad Ali and George Foreman in Kinshasa, Zaire, in 1974. Foreman, “the strongest, hardest hitting boxer of his generation,” was heavily favored—but was defeated by Ali’s “rope-a-dope” strategy, which turned Foreman’s strength against him.
“Ali appeared to cower against the ropes,” Arreguín-Toft recounted. “Foreman, now confident of victory, pounded him again and again, while Ali whispered hoarse taunts… Foreman lost his temper, and his punches became a furious blur. To spectators, unaware that the elastic ring ropes were absorbing much of the force of Foreman’s blows, it looked as if Ali would surely fall.” Yet because the ropes absorbed the blows, Foreman’s attacks only succeeded in tiring him, and Ali pulled off an upset by knocking out his exhausted opponent in the eighth round.
This is how a relatively small and weak actor, like al-Qaeda, can beat a strong actor like the U.S.: by turning its strength against it. While al-Qaeda hasn’t fully replicated Muhammad Ali’s successful strategy, it has managed to put the U.S. in a position where many of its offensive and defensive measures do in fact serve to make America more vulnerable by exhausting it.
An examination of the evolution of al-Qaeda’s strategy for undermining the U.S. economy is instructive. (A key facet of al-Qaeda’s anti-American warfare has always been economic.) Its initial phase linked terrorist attacks directly to economic harm. A prime example is the September 11th attacks, in which a major economic target (the World Trade Center) was destroyed. It’s clear that 9/11 was intended to create a serious economic setback for the U.S. In an interview conducted by Al Jazeera’s Taysir Allouni in October 2001, Bin Laden spoke at length about the extent of the economic damage the attacks inflicted: this economic harm was in fact the first accomplishment to which he pointed.
A second identifiable phase in this strategy can be called the “bleed-until-bankruptcy” plan. Bin Laden first used this phrase in October 2004, when he made clear that al-Qaeda sought to embroil the U.S. and its allies in draining wars in the Muslim world, such as those in Iraq and Afghanistan. Another step in this strategy targeted the oil supply: Bin Laden exhorted his followers to attack oil targets, and new al-Qaeda head Ayman al-Zawahiri has similarly advocated for this. Jihadis have responded by attacking oil targets in countries that include Saudi Arabia and Iraq.
But after the collapse of the U.S. economy in September 2008, jihadi warfare entered a new period that can be called its “strategy of a thousand cuts” phase. An overarching reason for this shift is that America now appears mortal. According to Inspire, the English-language online magazine of al-Qaeda in the Arabian Peninsula (AQAP), the gist of this strategy has been to perpetrate “smaller, but more frequent” attacks.
The cover of the November 2010 issue of Inspire features a photo of a UPS plane and the headline “$4,200.” That pithy headline provides deep insight into the direction that al-Qaeda’s strategy has taken, referring to the disparity between the cost of executing terrorist attacks and the cost to Western countries of defending themselves. “$4,200” refers to what it cost AQAP to execute a cartridge-bomb plot in October 2010, in which PETN-based bombs were placed on FedEx and UPS planes. Even though no planes were brought down, the plot will cost Western countries far more than it cost al-Qaeda, as these countries attempt to prevent terrorists from successfully destroying planes in the future through similar measures.
In Inspire, radical Yemeni-American preacher Anwar al-Awlaki explains that AQAP settled on attacking cargo planes because the jihadis’ foes would be faced with a dilemma once AQAP placed bombs on these planes. “You either spend billions of dollars to inspect each and every package in the world,” he wrote, “or you do nothing and we keep trying again.” Awlaki further explained, “The air freight is a multi-billion dollar industry. FedEx alone flies a fleet of 600 aircraft and ships an average of four million packages per day. It is a huge worldwide industry. For the trade between North America and Europe, air cargo is indispensable and to be able to force the West to install stringent security measures sufficient enough to stop our explosive devices would add a heavy economic burden to an already faltering economy.”
Inspire also explains that large-scale attacks, such as those of 9/11, are in its view no longer required to defeat the United States. “To bring down America we do not need to strike big,” it claims. “In such an environment of security phobia that is sweeping America, it is more feasible to stage smaller attacks that involve less players and less time to launch and thus we may circumvent the security barriers America worked so hard to erect.” (Al-Qaeda, however, has not abandoned catastrophic attacks entirely: its attempt to execute multiple Mumbai-style urban warfare attacks in Europe in late 2010 shows that these efforts continue.) The Foreman-Ali analogy is apt: al-Qaeda thinks it is turning the U.S.’s strength against it, envisioning the elevated security spending exhausting America and making it more vulnerable.
The fundamental problem with the U.S.’s system of homeland defense is that it has been structured in an expensive manner from top to bottom. One striking example is the U.S.’s hesitance to embrace a system of terrorist profiling (most notably in airports), which produces inefficiencies. As Sheldon Jacobson, a University of Illinois at Urbana-Champaign computer science professor who has studied aviation security since 1996, has noted: “Spending billions of dollars on screening the wrong people uses up finite resources. If we keep focusing on stopping terrorist tactics rather than stopping the terrorists themselves, the aviation security system will never reach an acceptable level of security.”
The problem is that if we simply slash our national security spending without making our system of defending against the terrorist threat more efficient and effective, we’ll end up less safe. Thus, a critical challenge the U.S. now faces is improving the efficacy of the system, even as it reduces its expenditures in an effort to escape from al-Qaeda’s rope-a-dope.
Daveed Gartenstein-Ross is the vice president of research at the Foundation for Defense of Democracies, where he directs the Center for Terrorism Research. He is currently a Ph.D. candidate in world politics at the Catholic University of America.
Interview: Barry Brandman, Danbee Investigations
The underlying message in this current interview with Brandman is clear: In a high-risk world, companies must be proactive when in comes to supply chain security; to be otherwise, invites a host of serious and potentially devastating consequences.
Supply Chain Managment Review Editorial Director Francis J. Quinn conducted the interview.
By Barchi Peleg-Gillai, Gauri Bhat and Lesley Sept
Sponsored by the Manufacturing Institute and IBM Corporation
Companies traditionally find it challenging to justify security-related investments because they focus largely on the direct expenses and not on the collateral benefits (e.g., supply chain efficiency, improved customer satisfaction, improved inventory management, etc.) that may be realized. Limited research has been completed regarding the creation of collateral benefits from security investments. To fill this gap, the institute and Stanford University have conducted a study to confirm and quantify the magnitude of collateral benefits received by a select group of companies that are considered “innovators” in supply chain security in their industries such as chemicals, consumer goods, food, information technology, automotive parts and logistics service providers.
Although the results of this study should not be considered as representative of the industry average, the findings clearly indicate that significant business value accrues from supply chain security investments. The innovative companies participating in this study received the expected security benefits from their investments (e.g., reduced risk, less theft and pilferage, etc.), but also quantified numerous collateral benefits they received, such as:
- Higher supply chain visibility;
- Improved supply chain efficiency;
- Better customer satisfaction;
- Improved inventory management;
- Reduced cycle time and shipping time; and
- Cost reduction following the above-mentioned collateral benefits
. . . 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.
PowerPoint presentation of Webinar delivered on 15 June 2010 (wih narrative)
Thank you for attending today’s Webinar on the topic of cargo security. I’m Walt Beadling, President of the Cargo Security Alliance and Managing Partner of Cayuga Partners LLC, here today with Jim Barrett, President of Road Scholar Transport, a leader in High Security, High Velocity, Full Truck Load and Less Than Load transportation services, and a member of the CSA.
Our topic today is cargo security, including techniques, technologies and best practices to protect your employees, products, customer relationships and your company’s reputation.
Today’s presentation and discussion is a “Lunch and Learn”, scheduled for 30 minutes. We’ll begin with a brief overview of the Cargo Security Alliance, a review of current threats to cargo security, the regulatory environment, and related trends. Jim will take us through strategies and best practices for risk mitigation, including a discussion of the importance of collaboration, speed and visibility to supply chain security, combined with multi-layered security protocols that establish, maintain and prove a secure Chain of Custody. We’ll have time for your questions at the end of the presentation.
Securing the Air Cargo Supply Chain,
Expediting the Flow of Commerce:
a Collaborative Approach
John A. Muckstadt
Cayuga Partners LLC
Sean E. Conlin
Deloitte Consulting LLP
Walter H. Beadling
Cargo Security Alliance
Cayuga Partners LLC
1. Executive Summary
The Congressional mandate for 100% screening of air cargo carried on passenger aircraft originating in the U.S. takes full effect in August, 2010. This event has the potential to seriously disrupt the air cargo supply chain with severe economic consequences. Timely, effective implementation of the TSA’s Certified Cargo Screening Program (CCSP) promises a solution, but only if shippers, industry associations and the air cargo industry work together to take quick action. Successful deployment of the CCSP depends upon adherence to, and the rapid adoption of, the “5 Principles of Secure Supply Chain Design and Operation”, described herein.
2. Background: the Congressional mandate for screening air cargo
The paradigm of passenger air cargo security was set to shift on August 3, 2007 when the 9/11 Act was signed. In addition to mandating security enhancements across the government, this law “requires the Secretary of Homeland Security to establish a system to enable industry to screen 100 percent of cargo transported on passenger aircraft at a level of security commensurate with the level of security of passenger checked baggage within three years.” To date, the impact of the 9/11 Act has minimally affected the air cargo industry as it reached the 50% screening milestone in February 2009. However, the full challenges of implementing the law will be felt as the 100% screening requirement approaches in August 2010. As the Transportation Security Administration (TSA) presses toward providing a flexible solution for industry, it does not anticipate any adjustment, extension, or elimination of the Congressional mandate.
Given that cargo must be screened on a level commensurate to passenger baggage, the requirement of “piece level screening” is necessary to achieving the 100% mandate. This poses complex challenges to the current supply chain, as cargo arrives at an airport in large containers, pallets built up from smaller pieces of cargo from a variety of sources, and loose cargo that is often mixed together. “Piece level screening” will require each piece within those larger configurations to be deconstructed, individually screened and reconstructed, significantly increasing handling and processing time and costs.
Initially, a Federally managed screening service, similar to that used for passengers and baggage, was considered to accomplish this task. This would consist of government employees performing the screening on millions of pieces of cargo. Given the nuanced details of the air cargo supply chain, this solution had many drawbacks. TSA employees performing piece-level screening of cargo would mean that a government worker would be inspecting and possibly opening each box, with little regard for the integrity of packaging, nor the special handling requirements of some goods, and little, if any, consideration given to the need for quick throughput. Additionally, screening cargo at the piece level at the airport would result in bottlenecks and delays. Alternatively, screening could be performed by the air carriers at airports. Although air carriers have screening capabilities, most facilities do not have the necessary operational scalability from a technology and logistics perspective. Even if on-airport facilities could adjust their operations, the bottleneck and delay issues would still exist. To eliminate these problems and achieve the required service levels, the costs would be prohibitive
3. TSA’s Solution: a “supply chain” approach
To the air cargo shipping industry, the 100% screening mandate increases complexity. Recognizing this, the TSA adopted a flexible “supply chain” approach that considers both security requirements and unique industry needs in the design of practical, workable screening systems. To enable this, the Certified Cargo Screening Program (CCSP) was established. The CCSP is a voluntary, facility-based, program in which shipping and freight forwarding actors can become certified to screen cargo. The process to become certified involves implementing facility security standards, vetting necessary employees who will have access to screened cargo, training employees to perform security and screening roles, and implementing the processes and technology needed to screen cargo. Once certified, CCSP locations, know as Certified Cargo Screening Facilities (CCSF), can tender screened cargo through the air cargo supply chain, directly to air carriers, with no need for it to be screened at the airport. Properly implemented, the CCSP promises to maintain supply chain velocity and the overall flow of commerce without loss from theft, terrorism or other threats.
The CCSP program is open to three primary participants in the air cargo supply chain:
- Manufacturers (OEM) and shippers from all industries that move enough cargo by of air can join the program and screen their goods as they are being packaged, thereby avoiding the need for specialized screening equipment and having others open and tamper with their goods.
- Freight forwarding companies and Independent Air Carriers (IAC) can participate in the program to provide screening and maintain secure custody of cargo on behalf of their shipping customers.
- Independent Cargo Screening Facilities (ICSF), a new business model that specializes in screening cargo destined for passenger aircraft on behalf of air carriers and indirect air carriers.
A simplified schematic view of the CCSP supply chain depicting product flow options and the chain of custody can be found in Appendix II (1).
TSA has recognized that there is not a “one size fits all” screening solution in the air cargo shipping environment. CCSP, unlike the on-airport, Federal or air carrier screening approaches, builds flexibility into the screening process in many ways. First, it provides the option for shippers to screen their products themselves; it also allows different types of commodities to be screened with processes and procedures that meet their specific and unique needs. Secondly, CCSP allows for a variety of screening methods and technologies to be used – including physical search – which many of the shipper participants can readily build into their existing packaging and shipping processes.
In securing the air cargo supply chain, screening alone is not enough. TSA’s supply chain approach is layered with other countermeasures against air cargo threats, such as vetting shipping companies and employees, facility security controls, chain of custody methods, and secondary screening. It is especially critical to establish and maintain a secure chain of custody that ensures cargo is not subject to tampering and compromise as it passes along the supply chain after it has been screened.
In summary, TSA has taken an approach that allows industry to participate in securing the air cargo supply chain in a manner that minimizes costs and best suits their needs. By varying the nodes in which screening can take place there are many more options available to air cargo supply chain participants that provide for special circumstances and give more control over their products and logistics costs.
4. Challenges of Managing and Securing the Air Cargo Supply Chain
The air cargo supply chain is, by definition, a high velocity supply chain. For shippers that move their products by air, lead times are critical and speed is of the essence; they are willing to pay significant premiums for it over other modes of transportation.
Characteristics of cargo that has a “need for speed” include: high value items for which security is imperative and transportation costs relatively small, exports with short lead times, “Just-in-Time” manufacturing components, critical replacement parts, perishables, shipments with unique timing requirements and circumstances (e.g. human remains, life saving material), and goods that simply need regular, reliable arrival times over long distances. Industry segments that ship high volumes of goods by passenger aircraft are often specific to regions of the country. For example, complex, expensive machined parts for oil drilling are frequently shipped from Houston; fresh fish from the Northwestern US. Also, global high tech industries such as pharmaceuticals, computer parts, printers, semi-conductors, and other electronics often depend on air shipments to move large volumes of product by both freight and passenger aircraft.
For some products, the use of slower, less predictable modes of transport can be offset by carrying more inventories held in different nodes of the supply chain to compensate for longer lead times. The trade off is the cost of carrying this inventory, and the potential impact on customer service levels. Trucking is typically the most viable alternative to shipping by air. Depending on the distances involved, express trucking services can compete on speed of delivery and cost. Obviously this is not an option when longer distances or transcontinental shipping is required.
To maintain competitiveness, it is imperative that the air cargo industry find solutions to minimize the added costs and processing time required by complying with the 9/11 Act mandate for 100% screening.
Uncertainty: challenge and opportunity
The enemy of speed and security in the supply chain is uncertainty. Demand uncertainty is so substantial in most supply chain environments that if it is not adequately addressed, it can severely degrade anticipated performance in terms of unit cost, speed, quality, and responsiveness.
Close collaboration with supply chain partners can minimize the impact of uncertainty by better anticipating demand and identifying security exposures, and planning mitigation strategies accordingly. Collaborative relationships that focus on reducing the uncertainty in operating environments by employing improved information systems and business processes will result in more efficient, secure supply chain performance. However, these collaborative arrangements by themselves cannot compensate for fundamentally flawed and operationally ineffective manufacturing, distribution and logistics environments. Well conceived and designed systems, security procedures and protocols are required.
Those CCSP participants including air cargo shippers, freight forwarders and air carriers who manage uncertainty best will gain competitive advantage; those who do not participate, or fail to manage uncertainty well, are at greater risk for failure and vulnerability to security threats.
High velocity supply chains and high security supply chains have much in common; it can be argued that you cannot have one without the other. Both depend on visibility to minimize uncertainty – the ability to know where things are, when, and where they are going next. High velocity supply chains are based upon repeatable, consistent processes to eliminate uncertainty through end-to-end efficiency and speed. Fortuitously, secure chains of custody are based upon repeatable, consistent processes to eliminate uncertainty through end-to-end traceability and uniquely identifiable, readily detectable and verifiable cargo integrity.
The Applicable “Laws of Supply Chain Physics” (1)
The 1st Law of Supply Chain Physics is “Local Optimization = Global Disharmony”. Supply chain partners acting independently and in their own self-interest will destabilize and slow down the air cargo supply chain system, increasing overall costs and vulnerability to security threats. Lack of standards and clumsy, inconsistent hand-offs among supply chain partners exposes the supply chain to a multitude of threats. Global coordination and collaboration are required to expedite the flow of commerce and maintain supply chain integrity.
The 2nd Law of Supply Chain Physics is Little’s Law, (L = λ W): “The average amount of inventory in a system is equal to the product of the demand rate and the average time a unit is in the system”. The penalty for lack of speed is higher inventories and lower customer service levels; the costs of this are quantifiable and vary from case to case. Most CCSP cost estimates focus on facilities, operations and screening technology. The hidden cost of screening air cargo without an efficient, collaborative supply chain is far greater. Impeding the flow of commerce will lead to inventory build ups and reductions in customer service that will have serious, far-reaching economic consequences.
According to Professor David Menachof of the Cass Business School, City University, London: “Using 2010 estimates of the value of air cargo shipments, an average one day delay for half of all shipments will result in an industry-wide inventory carrying cost of $537million for just US domestic shipments. If international air cargo shipments are included [not yet subject to a deadline], this cost to the supply chain increases to $1billion.
Much of the reason for these costs is the need for the supply chain to absorb the extra inventory needed to maintain on-time delivery . . . Note that these costs will occur even if freight is shifted from air to road transport which might end up being faster than the “delayed air shipment” but slower than the original air shipment transit time.” (2)
As noted above, supply chain performance and security are closely linked; hence, we propose the Supply Chain Security Corollary to Little’s Law: “The longer inventory is held in the system, the more vulnerable it is to tampering, contamination, terrorism and theft”. Said another way, the faster inventory moves through the system, the lower is the exposure to, and costs from, tampering, theft and security risks.
The 5th Law of Supply Chain Physics is “Collaboration and efficient supply chain design reduce uncertainty, increase velocity (and security), and improve operational and financial performance”. The active participation of shippers, industry associations and the air cargo community, working closely with the TSA and international regulatory bodies to develop effective standards, protocols, procedures and technologies, is prerequisite to securing the global supply chain. Further, given inefficiencies in the current air cargo system, advanced system design and optimization techniques, together with closer coordination at local, regional, national and international levels, can effectively negate the impact of enhanced security measures and expedite the flow of commerce.
5. The Five Principles of Secure Supply Design and Operation
The Essential Foundation: Integrated Systems
Efficient air cargo supply chains require five interconnected systems: engineering (system design), marketing (customer facing), cargo handling and processing, inbound / outbound logistics, and financial management. Compliance with the CCSP introduces another critical component to this mix: the need for cargo screening and a secure chain of custody. Shippers and the air cargo Industry are justifiably concerned that the introduction of this “extra step” to the supply chain management process has the potential to slow the system down, impeding the flow of commerce with damaging financial effects.
Opportunities for improved supply chain speed and efficiency tend to be at the boundaries of these systems. The greatest advantages will come from focusing on (1) integrating the five systems intra-organizationally, (2) integrating the supply chain processes with collaborating supply chain partners, and (3) implementing an integrated, systemic approach to supply chain security and employing best practices throughout the system. But integration alone will not achieve unimpeded supply chain flow; management must learn to deal explicitly with the impact of uncertainty on the supply chain decisions they make. While sharing data is essential, simply passing data will not be sufficient to substantially reduce the impact of uncertainty; predictable, verifiable, repeatable processes, close collaboration with supply chain trading partners and the effective use of advanced information technology and tools are the keys to achieving and sustaining a secure, high velocity air cargo supply chain.
Application of the “Five Principles of Secure Supply Chain Design and Operation” (3) can mitigate the impact of enhanced security procedures and increase the flow of commerce. Secure, high velocity supply chains share several key attributes. We have identified five guiding principles that provide the essential foundation for securing the air cargo supply chain while expediting the flow of commerce. Each principle is explained below, with illustrations of its applications.
Principle # 1: Know the Customer
Principle # 1- Concept
Without a clear understanding and definition of customer requirements, a secure, high-velocity air cargo supply chain cannot be established and sustained. To gain that understanding requires constant research and collaboration with supply chain partners, the construction of an information infrastructure to capture transaction data, and the storage and analysis of these data from a strategic, tactical and operational perspective.
Further, the needs of the customer must be understood within the context of the supply chain system within which it operates, the products it ships and the threats to which they are vulnerable that can vary considerably from location to location and time to time. All of these requirements must be thoroughly understood to establish the foundation for constructing responsive, efficient, secure supply chains.
Principle # 1 – Application to the Air Cargo Supply Chain
Supply chain security and logistics requirements vary greatly by type of shipper, commodity or product, operating location and destination. For example, the logistics and screening requirements for perishable flowers, certain fruits and live foodstuffs (i.e., Maine lobsters) which are packaged in boxes, crates and tanks respectively are very different than those for high-value semiconductor chips which are susceptible to electronic discharge and may be shipped in special, palletized containers. Other examples include jewelry, fine art and human remains, which are often shipped by air and must have special handling protocols because post screening re-inspection in the event of an alarm is problematic. All demand the speed of delivery provided by air freight, but storage and handling protocols, scanning and secure sealing techniques, and the chain of custody for each are very different.
These industry-specific requirements call for the development and use of unique procedures, security protocols, sealing and identification technologies and transportation strategies designed to speed processing and ensure the chain of custody from the shipper to the carrier. In turn, requirements will influence, and in some cases dictate, the supply chain management strategy. It is therefore imperative that shippers, air cargo logistics services providers and their industry associations work closely with the TSA to establish practical standards as quickly as possible if the impending deadline is to be met.
Principle # 2: Adopt Lean, Secure Operating Philosophies
Principle # 2: Concept
Over the last decade shippers, freight forwarders, 3PL’s, IAC’s and air carriers have focused on creating lean organizations and business processes. Internal lead times have been shortened and made more predictable, set up times and work-in-process inventories reduced. But for maximum supply chain efficiency, all supply chain trading partners must design, align, and execute their jointly operated processes so that the entire chain has the desired attributes: response times must be short, predictable and repeatable. Thus lean, secure supply chains must be designed as a system that responds quickly and predictably to fluctuations in demand and available capacity.
To date, most lean initiatives have been pursued within the enterprise. To attain maximum efficiency – with increased security – across the chain of custody, lean philosophies must be extended beyond the boundaries of individual organizations to include all supply chain partners. No combination of software systems and information technology can compensate for a poorly designed physical operating environment and inefficient, sloppy execution.
Principle # 2: Application to the Air Cargo Supply Chain
A recent study of the application of Business Process Reengineering (BPR) on the air cargo handling process identified substantial benefits in overall throughput through lean operations (4). Overall, the combined processes of operations, transportation, delay, inspection and storage were reduced from 120 steps to 18 steps and overall cycle time by 74%, while facility capacities and staffing remained constant. Delays in the process were almost completely eliminated through process improvement; no additional automation was incorporated to achieve these results.
Computer simulation models are powerful tools that can be used to guide lean process development for optimal facility efficiency, throughput and performance. For example, the Air Cargo Screening Facility (CSF) Operations Model (5) provides decision support and “what-if” analysis to answer questions that are encountered in the design and operational phases of an Air Cargo Screening Facility. This model has been used to plan requirements for storage and screening capacity, staffing, outbound logistics and material usage (e.g., tamper-evident tape and seals) and also to estimate facility throughput and in-process inventory levels to help develop accurate estimates of facility set-up and operating costs. For example, changes in the receiving and sorting processes recommended using this model resulted in projected reductions of late shipments by over 90% with the same level of resources.
Another study conducted with a major air carrier at Toronto Pearson Airport used a similar computer simulation technique to analyze air cargo operations at a new state-of-the-art cargo facility, equipped with automated material handling and fully computerized inventory control systems, validating the approach (6). The purpose of the study was to develop new processes to ensure that products and services were properly aligned with customers’ needs. The tool was used successfully to quantitatively evaluate and compare different policies, business practices and procedures within a given set of operational and business constraints. The model can also be used in evaluating scenarios such as the effect of an increase in cargo volumes or changing service level policies.
Principle # 3: Create a Secure Supply Chain Information Infrastructure
Principle # 3: Concept
The air cargo industry has taken advantage of advances in information technology to make great strides in improving its information infrastructure. Although actual performance frequently falls short of the desired level of performance, it is now possible for all partners in the secure air cargo supply chain to share demand information, shipment status and location, screening and logistics requirements and up-to-the-minute air carrier schedules.
But true collaboration requires more than just data exchange between successive supply chain partners. Rather, it requires joint planning of inventory, packaging, consolidation, screening and logistics strategies, and executing the resulting plans quickly and reliably on a continuing basis. How various capacities (inventory, transportation, storage, screening, air lift, peak load) are used daily and over longer time horizons must be considered from a systems perspective, not just a local point of view.
The secure air cargo supply chain information infrastructure must be capable of responding effectively to frequent changes in demand and logistics requirements. Re-planning the use of capacities may need to be done daily and in some cases on an hour-to-hour, minute-to-minute basis for maximum responsiveness and efficiency.
Principle # 3: Application to the Air Cargo Supply Chain
One of the world’s leading international freight forwarders is currently implementing an innovative, integrated information system in its CCSF’s (7). The system is capable of capturing all of the information about an air cargo shipment, down to the piece level, from the moment it arrives at the facility until it exits the facility for delivery to the air carrier.
For inbound cargo shipments the system records the delivery truck driver’s ID and photo, and scans in the Bill of Lading. Once in process, the CCSF operator records the Master Air Way Bill (MAWB) number and weight, identifies the technology used to perform the screening and then records the House Air Way Bill (HAWB) number and weight. The system automatically generates and records bar coded, tamper-evident package tape and seals and allows recording of pallet and/or ULD and truck seal numbers, as necessary, to uniquely identify the screened items and establish a secure chain of custody. All transactions are time-stamped for later retrieval and analysis, should it prove desirable or necessary. The system also generates all the CCSP-related reports required by the TSA automatically, periodically or on demand. Optionally, the system can be interfaced to screening devices to capture images and data related to the screened cargo, and linked external databases to perform personnel checks and incorporate truck and air carrier schedule updates in real-time.
In addition to the obvious productivity benefits, the data captured by the system can be used for forensic track and trace should it prove necessary, and provides the foundation for collaborative planning and scheduling with supply chain partners and air carriers to better coordinate supply chain activities and expedite cargo flow. Used with simulation tools, the data can also be used to optimize material flow, capacity utilization and facility throughput. Systems like this one are essential to maintaining air cargo supply chain security while expediting the flow of commerce in a cost effective manner.
Principle # 4: Integrate Business Processes
Principle # 4: Concept
Business processes must be established both intra- and inter-organizationally. These processes, coupled with the information infrastructure, support the efficient flow of material through the supply chain. While much attention has been placed on understanding business processes within shipper and air cargo handling organizations, it is essential to understand what processes must be built inter-organizationally – among trading partners and logistics services providers – to leverage, enhance and optimize their capabilities to expedite the flow of commerce.
Principle # 4: Application to the Air Cargo Supply Chain
The shortest distance between two points is a straight line, and the quickest, and cheapest, most secure route in the CCSP supply chain is directly from shipper to airside, without passing “Go” (i.e., through an intermediate node). The CCSP allows for this, and it is the right answer for many shippers. However, it is dependent upon collaborative, integrated business processes and between shipper and air carrier, or Freight Forwarder/ ICSF / IAC and air carrier, enabled by tightly coupled information systems as illustrated in Principle # 3.
Prerequisites are sharing and knowledge of up-to-date, real time flight status information; optimal load configurations of screened cargo; tamper-evident packaging and sealing to ensure a secure chain of custody; rapid delivery and capacity for unloading at the airport; knowledge of exactly what’s coming in, when, on the part of the carrier to help consolidate, weigh / balance and expedite handling of outbound loads; and readily verifiable cargo integrity. These conditions can only be realized by tightly integrated, collaborative business processes; the procedural discipline and information capture demanded by the “extra step” in the CCSP create an environment within which this is possible.
Benefits include more predictable lead and flow times, reductions in cargo handling, storage costs and wait times, better facility and aircraft utilization and increased velocity with less inventory in the air cargo supply chain.
Having said this, the current air cargo supply chain is extremely complex, and the requirements for 100% screening at the piece level create new challenges. For example, there is a need to segregate screened and unscreened cargo at the airport, and (at this writing) between incoming international and outbound domestic flights. These problems can be addressed through process reengineering, the application of lean, secure operating philosophies and simulation tools such as those described in Principle #2, and by Principle #5, the implementation of unified, advanced Decision Support Systems.
Principle # 5: Unify Decision Support Systems
Principle #5: Concept
Researchers have designed supply chain Decision Support System (DSS) environments for the air cargo industry for decades. These environments are typically based on different philosophical models. Also, they differ in how they forecast demand and how they drive logistics, handling and storage decisions. Their goal is to generate plans and schedules that consider some of the elements of the supply chain. No matter which approach is taken, these systems and their embedded rules dictate many daily supply chain activities. Therefore, they have a substantial impact on operating behavior, and consequently on overall supply chain performance, operational effectiveness and security. How much they enhance air cargo supply chain performance depends upon both the accuracy of their input data and the modeling approaches employed. We believe that these decision support systems need to address uncertainty in an explicit manner – most do not.
Principle # 5: Application to the Air Cargo Supply Chain
A recent study applied advanced Decision Support Systems techniques for planning and scheduling to the problem of scheduling truck arrivals at the Hong Kong International Airport – HKIA (8). Assumptions included collaborative sharing of current flight schedules with air carriers, a focus on air cargo handling operations for outbound flights only, and adequate docking capacity at the airport. There are a number of outbound flights with confirmed air waybills; the terminal operator schedules arrivals of the delivery trucks so that some of the shipments can be transferred directly to the departing flights without requiring extra handling and storage at the terminal, an approach that is analogous to that permitted in the CCSP for screened cargo.
The model also considers that multiple shipments (for different air carriers) may be delivered to the airport on a single truck, and that cargos come in different sizes and weights, which adds complexity to the cost minimization computation, but accurately reflects the way things work in the “real world”.
The benefits of using the advanced scheduling algorithm relative to the random, “First Come, First Served” (FCFS) in the current system at HKIA were substantial, with an average cost savings of 39.2%. The savings are due to the ability of the advanced scheduling approach to coordinate the arrivals of trucks so that a larger percentage of shipments can be transferred directly to the line-up areas, saving their handling and storage costs.
In addition to cost savings, this advanced scheduling approach has the added advantage of avoiding congestion at the air cargo terminal and guarantees that all shipments will arrive on time, eliminating late shipments (an average of 3.9% of all shipments in the FCFS approach) and reducing truck wait times, which averaged 99 minutes from arrival to unloading, substantially. As previously noted, the less time cargo is in transit and waiting means fewer opportunities for tampering, theft and sabotage.
Planned follow-on research will incorporate stochastic programming techniques to explicitly represent uncertainty in the scheduling process.
6. CCSP Benefits: “Security is Free”
Although few would disagree with the need for increased air cargo security, most shippers and the air cargo community view the mandate for 100% screening as a cost burden and impediment to supply chain flow. We believe that proper implementation of the CCSP can meet the dual objectives of security while maintaining, and in some cases accelerating, supply chain flow through improved collaboration and better use of information to take advantage of inefficiencies in the current system.
Analogies can be drawn between the implementation of manufacturing quality programs in the 1970’s and 80’s to improve the U.S.’s competitiveness in the face of low-cost, high quality products from Japan. American manufacturers were reluctant to take on the quality programs practiced by Japanese manufacturers that were viewed as costly and burdensome. Phillip Crosby, quality control manager of the Pershing missile program, implemented a “Zero Defects” program that yielded a 25% reduction in the overall rejection rate and a 30% reduction in scrap costs, more than paying for the program. Crosby’s prescription for quality improvement was a 14-step program outlined in his landmark 1979 book, “Quality is Free” (9), which quickly became the rallying cry of the manufacturing quality movement in the U.S. He believed companies that established similar initiatives could realize savings returns that would more than pay for the cost of their quality programs.
In the same way, we believe that shippers, freight forwarders and ICSF’s that embrace the air cargo security program in the CCSP together with advanced collaborative supply chain management techniques will find that the benefits far outweigh the costs. These may come from a variety of sources, including:
- Reduced Annualized Loss Expectancy (ALE) from lower exposure factors due to the introduction of enhanced security measures and fewer occurrences of loss;
- reduced loss from theft and mishandling of cargo resulting in lower insurance costs;
- shipment visibility and a consistent, monitored, auditable chain of custody across the air cargo supply chain for enhanced shipment flow, tracking and traceability;
- improved operational efficiency, lower supply chain system inventories, increased customer service levels and cash flow through process optimization and advanced supply chain planning and scheduling techniques;
- and of course, a significantly reduced possibility that catastrophic terrorist acts will occur.
Given the program’s potential benefits, the mantra of the CCSP may soon become “Security is Free”.
7. The Shipper’s Dilemma: “to screen or not to screen”
For shippers, the decision to participate in the CCSP and screen goods “in-house” versus outsourcing screening to an intermediary or an air carrier involves the evaluation of many variables, among them facility set-up costs and operating costs, inventory policies and customer service and satisfaction concerns. The following tables summarize these considerations:
A. Cost Considerations
2. Other Business Considerations
A chart that may be useful to companies trying to decide on participating in the CCSP can be found in Appendix II (2): “Are you prepared for 100% screening?”
8. Summary and Conclusion: a Call to Action
The Congressional mandate for 100% screening of cargo carried on passenger aircraft will take effect in August, 2010. This is a fact; it will not change. The air cargo supply chain is built for speed; adding another step to the process for the purpose of ensuring security has the potential to slow down and disrupt the system with severe economic consequences.
The air cargo system obeys the Laws of Supply Chain Physics; speedy, efficient operations and security are complementary. Adherence to the 5 Principles will allow shippers, the air cargo community and air carriers to develop collaborative management systems and deploy Best Practices solutions to secure the supply chain and expedite the flow of commerce; however, this will take time to implement. The TSA’s Certified Cargo Screening Program provides a flexible framework to enable these systems.
At this writing, a great deal of work remains to be done. The apparent, but deceiving, availability of excess capacity in the current system, combined with a lack of awareness and, in some cases, denial, of the impending deadline and tools available through the CCSP, particularly among the shipping community, threatens to undermine the program and preclude deployment of effective solutions in time to forestall serious, disruptive bottlenecks when the mandate takes full effect.
It is imperative that shippers become aware and knowledgeable of the CCSP to make informed business decisions about how to best participate. At the same time, shippers, their industry associations and the air cargo community must immediately begin working together to develop the standard procedures, protocols and collaborative business processes needed to provide the requisite levels of security without compromising supply chain throughput.
This can still be accomplished, but the clock is ticking. The alternative is to let the “invisible hand”, aided and abetted by the TSA, sort the problem out over time, as it inevitably will. This messy, costly and painful process is avoidable and unnecessary. The time to act is now.
1. Muckstadt, J.A.; Murray, D.H; Rappold, J.M.; “Principles of Supply Chain Leadership”, unpublished. http://www.cayugapartners.com/casestudies.html
2. Menachof D, Russell, G. (2009), ‘Shocks and Longer Term Effects of 100% Air Cargo Screening’, Distribution Business Management Journal, Volume 8, 2009; [Peer Reviewed]
3. Muckstadt, J.A.; Murray, D.H; Rappold, J.M.; Collins, D.E.; “Guidelines for Collaborative Supply Design and Operation”, Information Systems Frontiers , Volume 3 , Issue 4; December, 2001 http://www.cayugapartners.com/casestudies.html
4. M.R. Rotab Khan; “Business process reengineering of an air cargo handling process”, Int. J. Production Economics 63 (2000) 99}108
5. Cayuga Partners / Cargo Security Alliance; http://www.securecargo.org/content/air-cargo-screening-facility-csf-operations-model-0
6. Nsakanda, A.L.; Turcotte, M.; Diaby, M.; “Air cargo operations evaluation and analysis through simulation”, Simulation Conference, 2004. Proceedings of the 2004 Winter Start Page: 1790 End Page: 1798 vol.2 ISSN: ISBN: 0-7803-8786-4 Volume: 2 Issue:
7. Regiscope “Cargo Cam” and “Screening Cam”; www.regiscope.com
8. Ou, Hsu and Li: “Scheduling Truck Arrivals at an Air Cargo Terminal”, Production and Operations Management, pp. 1–15, r 2009 Production and Operations Management Society.
9. Crosby, Philip; Quality is Free. New York: McGraw-Hill, 1979.
1. TSA Chart: Supply Chain approach to Air Cargo Screening
2. Self Evaluation Card: “Are you prepared for 100% Screening?”
Today’s U.S. airport security policy rests on a fallacious proposition. By applying equal screening resources to all passengers and all bags, the system acts as if security officials believe that every passenger and every bag is equally likely to be a threat. This premise wastes limited security resources on low-risk passengers and bags, thereby devoting less resources to higher-risk passengers and bags. In addition, this approach has created a “hassle factor” at airports that drives away airline passengers.
Credible estimates put the lost airline business due to this factor in the vicinity of $3 billion per year.
A more intelligent approach to airport security is to apportion security resources to passengers and baggage in proportion to estimated risk—just as law enforcement agencies do in other circumstances, ranging from the stalking of public figures to family violence. Risk-based airport security would mean a reduced focus on finding bad objects and an increased focus on identifying potentially bad people—those most worthy of additional scrutiny. Screening resources would then be applied in accordance with a passenger’s risk category. This report shows how a risk-based system can be implemented without posing a threat to the privacy of air travelers.