Mixing air cargo and terrorism

The unsettling discovery of explosives on board U.S.-bound cargo planes will take time to sort out, but one area sure to be examined - again - is the safety of air cargo coming into this country. The Transportation Security Administration is required to screen 100 percent of all cargo loaded onto passenger planes, but that's only 20 percent of all air cargo being transported. The stuff that's placed on FedEx and UPS planes gets handled, well, differently. Here's a snippet from a recent Heritage Foundation report:

The Trans­portation Security Administration (and its predecessors) have been attempting to deal with this vulnerability long before September 11, 2001, in the form of the "known shipper" program (KSP). This program is one in which air carriers and freight forwarders are allowed to accept shipments only from those com­panies designated by Customs and Border Protec­tion (CBP) as "known" shippers. In order to become a known shipper, a company must have an established and documented business history with a U.S. or international air carrier or freight forwarder, as well as customer records that clearly verify the validity of a company (providing a proven address, phone number, and sources of payment or credit history).

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The KSP recognizes that a majority of the cargo moving through the supply chain is legitimate and indeed not a threat to the United States, and that by figuring out who the "good guys" are, TSA will have more resources to focus on real threats. No cargo or packages that are from unknown shippers are per­mitted on passenger planes. In general, packages from anyone, known shipper or not, who has refused to give consent for search or inspection of cargo will also not be transported into the United States. All known shipper cargo is further subject to random screening by TSA and the airlines, as well as additional screening if cargo is identified to be high-risk, due to some sort of actionable intelligence obtained from CBP that demonstrates that the cargo could be used to conduct an act of terrorism.

Trouble is, the known shipper program hasn't been working all that well, at least according to a report last year by the Homeland Security's inspector general. From the Journal of Commerce:

The inspector general said that TSA does not sufficiently define the ways a carrier may verify a known shipper, nor can it validate entries in a database of known shippers. At the same time the Known Shipper Management System, which is to replace existing verification programs, has been delayed by technical problems and unresolved policy questions.

Why not just screen everything? Well, it would be expensive and very time-consuming. Consider that $254 billion worth of cargo entered the L.A Customs District in 2009. Who would pay for that? The government? You and me? From the Heritage report:

Delays are liable to cause higher consumer prices of products, increased air-shipping costs as air carriers seek to compensate for screening costs, and significant business losses. Furthermore, several cargo ship­pers have indicated that they will forgo passenger planes in favor of shipping their goods on cargo planes, which are subject to fewer regulatory requirements. Such a switch is likely to have a major economic impact on an already struggling passenger aviation industry where airlines rely on cargo for 20 percent to 25 percent of their profit.