A massive overhaul of federal guidelines for the air cargo security and air cargo screening industries is now fully underway and many companies in the business are trying to grapple with how they will meet these new demands.

The new guidelines, expected to cost the cargo industry between $3 billion and $4 billion over the decade, appear to demand that cargo shippers purchase their own screening equipment—an expensive endeavor that many say will put them out of business.  essentially leaves shippers such as Flynn with two options: purchase costly screening equipment, or hope for the best.

“It’s absolutely tragic,” says Ross Flynn owner of Panmet Group Logistics Inc. in a recent article in Medill Reports.  Flynn said: “It will destroy the industry and put thousands of people out of work.”

The new guidelines, which were signed into law last August following the recommendations of the 9/11 Commission, will require the screening of 50 percent of all cargo transported on passenger aircraft by February 2009. By August of 2010, 100 percent of the 6 billion pounds worth of cargo transported on passenger planes will have to be screened.

Unlike the 1.5 million pieces of luggage screened each day at the nation’s airports, however, the Transportation Security Administration will not perform the screening of cargo.

Instead, screening will largely be the responsibility of the more than 4,000 air cargo handling businesses that serve as the middlemen between manufacturers needing to ship cargo and the airlines that transport merchandise for them. That has left air fowarders wondering why they have been assigned a costly role that, for passenger luggage anyway, has historically been a government function.

Air forwarders are concerned that they will not have the funds to pay for the costs of the screening technology required to fill the mandates, which may cost upwards of into the low millions, according to the report.  Many companies will be seeking federal grants and other government assistance to help offset the costs, but there is widespread concern that many of the little guys will have to close down because, even with assistance, they won’t be able to afford to stay in business.

Stay tuned…

Tags: air cargo

This entry was posted on Monday, February 2nd, 2009 at 12:13 am and is filed under Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.