A majority of the air cargo carried aboard passenger ...



Cargo Screening Requirements Impact Aviation Ground Service Providers

Aviation ground service providers, under contract from commercial airlines, handle a majority of the air cargo carried aboard passenger aircraft in the United States. Many of these service providers handle a multitude of tasks for airlines in addition to cargo including, but not limited to, catering, deicing, aircraft grooming, aircraft security sweeps, ramp handling, passenger handling and fueling. Since the 9-11 attacks, continuously evolving security requirements have led to large increases in ground service operating costs, particularly in the cargo handling sector, with disproportionately small compensation adjustments from the airlines they service.

Airline services companies are regulated indirectly through security directives (SD) issued by the Transportation Security Administration (TSA) to commercial airlines. In establishing contracts for ground-based services, airlines pass down security requirements, which must be adhered to by the service provider. Airlines typically charge a (security) fee to cover a host of services provided including the secure handling of cargo. However, airlines rarely pass this additional fee on to the ground service provider, instead opting to abide by the existing contract with the service provider.

Airlines are also compensated in part by the federal government for the costs incurred by increased security requirements. While the TSA directly compensates the airlines for the security requirements, airlines usually do not pass the funds on to the service providers, instead opting to keep the current contract in place. As a result, ground service providers in recent years have been tasked with a much greater workload as a result of new security directives, with little additional funding to accomplish this goal.

Since the 9-11 attacks, the definition of security in the aviation industry has changed dramatically. Prior to 9-11, “security” for most ground service providers meant protection against theft of cargo. However, the 9-11 attacks brought terrorism concerns to the forefront, with ground service providers now responsible for increased screening of cargo for explosives, including weapons of mass destruction (WMD). In today’s environment and with limited investment in new screening technologies, service provider employees have accepted higher levels of risk to their personal safety. Despite the increased workload and higher levels of risk assumed by ground service providers, the contracts for service between the airlines and the ground-based companies have changed little if at all.

Action Needed

Congress must alter the current funding system for air cargo security screening to ensure that the airlines, the shippers or the federal government directly compensates the companies performing the actual screening. Failure to do so would continue the trend of inadequate compensation for the necessary security services provided, which could drive cost cutting measures that could adversely affect aviation security.

The current system of funding for air cargo screening leaves many ground service providers without guarantees that they will be reimbursed for the increased costs incurred as a result of any additional screening requirements. Potential solutions to improve cargo funding for Congressional consideration include the following:

❑ Establish a program that would compensate ground service providers similar to the way private passenger screening companies participating in the “opt out” program are compensated. In the “opt out” program, private screening participants are directly compensated by the TSA rather than through the airport authority where the company operates.

❑ Another possible funding system is to establish a cargo security fee similar to the Federal Aviation Administration’s (FAA) Passenger Facility Charge (PFC), which is added directly to passenger tickets. All cargo carried on aircraft must have an airway bill. Appropriate cargo screening fees could be added directly to the airway bill and paid directly to the service provider.

Cargo handling companies have consistently acted as responsible corporate citizens when aviation security is at stake. Reasonable and fair compensation for the security services provided by these companies will result in continuously improving levels of security. With Congress soon to take action to expand existing cargo security and screening practices, it is imperative that those who conduct these screening functions for cargo placed in passenger aircraft be compensated for all services rendered.

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