Will Terror Threat Increase Air Cargo Costs?

Last Friday, cargo destination airports were put on high alert after investigators found two suspicious packages on cargo planes bound for the US. The packages were later found to have explosive devices.

Federal mandates now require the Transportation Security Administration (TSA) to screen 100 percent of packages aboard all passenger flights. But, there are no mandates currently in place for cargo aircraft.

Will this new terror threat change all that? Should you begin anticipating increased security measures, longer transit times and higher costs for air freight?

Steve Lord, GAO's director of Homeland Security and Justice said he expects recent events to prompt a debate on Capitol Hill about the screening of cargo flights. "This is a potential area of concern, and this may refocus Congress's attention on this in the next session of Congress," he said. Back in June, Lord testified before the House Subcommittee on Transportation Security and Infrastructure regarding cargo screening on passenger aircraft.

I found it interesting that the New York Times has reported on its blog that shippers are defending the security measures that are already in place:

Maury Lane, a spokesman for FedEx, the carrier for the package that was found in Dubai, said that though the package had arrived via a contract shipping company from Yemen, it had never made it onto a FedEx plane in Dubai. It was, he said, intercepted prior to being loaded on the aircraft, working with the F.B.I. and local authorities.'

An airline official, who did not want to be identified because the subject involved security procedures, said that major shipping companies have sophisticated screening procedures that in theory allow them to check packages and letters for explosives and radioactive material. Cargo companies, the official said, often know more about the packages they carry and their shippers than airlines do about their passengers.

Of course, this latest incident is raising questions about these current "sophisticated screening procedures." Most notably, I would like to know: Are they sufficient? What caused the lapse? And, on a practical level, what will it cost to keep air cargo secure?

TAGS: Finance
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