[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                       100% AIR CARGO SCREENING: 
                     CAN WE SECURE AMERICA'S SKIES?

=======================================================================


                                HEARING

                               before the

                SUBCOMMITTEE ON TRANSPORTATION SECURITY
                     AND INFRASTRUCTURE PROTECTION

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 18, 2009

                               __________

                           Serial No. 111-10

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13


                                     

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                     COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California          Peter T. King, New York
Jane Harman, California              Lamar Smith, Texas
Peter A. DeFazio, Oregon             Mark E. Souder, Indiana
Eleanor Holmes Norton, District of   Daniel E. Lungren, California
    Columbia                         Mike Rogers, Alabama
Zoe Lofgren, California              Michael T. McCaul, Texas
Sheila Jackson Lee, Texas            Charles W. Dent, Pennsylvania
Henry Cuellar, Texas                 Gus M. Bilirakis, Florida
Christopher P. Carney, Pennsylvania  Paul C. Broun, Georgia
Yvette D. Clarke, New York           Candice S. Miller, Michigan
Laura Richardson, California         Pete Olson, Texas
Ann Kirkpatrick, Arizona             Anh ``Joseph'' Cao, Louisiana
Ben Ray Lujan, New Mexico            Steve Austria, Ohio
Bill Pascrell, Jr., New Jersey
Emanuel Cleaver, Missouri
Al Green, Texas
James A. Himes, Connecticut
Mary Jo Kilroy, Ohio
Eric J.J. Massa, New York
Dina Titus, Nevada
Vacancy
                    I. Lanier Avant, Staff Director
                     Rosaline Cohen, Chief Counsel
                     Michael Twinchek, Chief Clerk
                Robert O'Connor, Minority Staff Director
                                 ------                                

 SUBCOMMITTEE ON TRANSPORTATION SECURITY AND INFRASTRUCTURE PROTECTION

                 Sheila Jackson Lee, Texas, Chairwoman
Peter A. DeFazio, Oregon             Charles W. Dent, Pennsylvania
Eleanor Holmes Norton, District of   Daniel E. Lungren, California
    Columbia                         Pete Olson, Texas
Ann Kirkpatrick, Arizona             Candice S. Miller, Michigan
Ben Ray Lujan, New Mexico            Steve Austria, Ohio
Emanuel Cleaver, Missouri            Peter T. King, New York (Ex 
James A. Himes, Connecticut              Officio)
Eric J.J. Massa, New York
Dina Titus, Nevada
Bennie G. Thompson, Mississippi (Ex 
    Officio)
                     Michael Beland, Staff Director
                   Natalie Nixon, Deputy Chief Clerk
              Joseph Vealencis, Minority Subcommittee Lead



                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas, and Chairwoman, Subcommittee on 
  Transportation Security and Infrastructure Protection..........     1
The Honorable Charles W. Dent, a Representative in Congress From 
  the State of Pennsylvania, and Ranking Member, Subcommittee on 
  Transportation Security and Infrastructure Protection..........     8
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security..............................................     9
The Honorable Edward J. Markey, a Representative in Congress From 
  the State of Massachusetts.....................................    10

                               WITNESSES
                                Panel I

Mr. Edward Kelly, General Manager, Air Cargo, Transportation 
  Security Administration:
  Oral Statement.................................................    12
  Prepared Statement.............................................    13
Mr. Stephen M. Lord, Director, Homeland Security and Justice 
  Issues, Government Accountability Office:
  Oral Statement.................................................    17
  Prepared Statement.............................................    19

                                Panel II

Mr. Andre L. Johnson, Chief Executive Officer, FreightScan:
  Oral Statement.................................................    42
  Prepared Statement.............................................    43
Mr. Jack Boisen, Chairman, The International Air Cargo 
  Association:
  Oral Statement.................................................    45
  Prepared Statement.............................................    46
Mr. Brandon Fried, Executive Director, Airforwarders Association:
  Oral Statement.................................................    49
  Prepared Statement.............................................    51
Mr. James C. May, President and Chief Executive Officer, Air 
  Transport Association of America, Inc.:
  Oral Statement.................................................    53
  Prepared Statement.............................................    54

                             For the Record

Mr. John Costanzo, President, Express Delivery and Logistics 
  Association (XLA):
  Letter, Submitted by Chairwoman Sheila Jackson Lee.............     4
Mr. Michael Whatley, Air Cargo Security Alliance:
  Letter, Submitted by Chairwoman Sheila Jackson Lee.............     4
Mr. Kip Hawley, Assistant Secretary, Transportation Security 
  Administration, Department of Homeland Security:
  Letter, Submitted by Chairwoman Sheila Jackson Lee.............    67


                   100 PERCENT AIR CARGO SCREENING: 
                     CAN WE SECURE AMERICA'S SKIES?

                              ----------                              


                       Wednesday, March 18, 2009

             U.S. House of Representatives,
                    Committee on Homeland Security,
Subcommittee on Transportation Security and Infrastructure 
                                                Protection,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:10 p.m., in 
Room 311, Cannon House Office Building, Hon. Sheila Jackson Lee 
[Chairwoman of the subcommittee] presiding.
    Present: Representatives Jackson Lee, DeFazio, Lujan, 
Cleaver, Massa, Thompson (ex-officio), and Dent.
    Also present: Representative Markey.
    Ms. Jackson Lee. The subcommittee will come to order, and I 
thank you for your indulgence.
    It is interesting that this happens to be a full calendar 
day. A number of committees are meeting, which include 
committees that I participate in; and it seems like it is 
timely because we are listening to testimony of Mr. Liddy in 
one committee and discussing legislation regarding no more 
greed. You would wonder why this is a timely hearing because 
all of them are operating with the, if you will, somewhat shock 
of the Congress that laws that we have passed or that 
statements that we have made have not been, if you will, 
adhered to.
    We now are in a hearing where instructions have been given 
by this full committee and subcommittee on the issue of cargo 
screening; and it has come to our attention that the full 
impact, full action on our instructions have not been pursued. 
It raises an issue of security to the crisis level of great 
concern. So this hearing is about fixing it, about the 
instructive oversight that we should have on these issues and 
about fixing it; and this subcommittee intends to work 
diligently to do so.
    Also, we will look forward to our hearings in the future 
being on a Tuesday, which will help all of us in terms of the 
schedule. So I thank all of you for your indulgence.
    I am delighted to acknowledge the presence of the Ranking 
Member, Mr. Dent; the presence of the full committee Chairman, 
Mr. Thompson; Members of the subcommittee, Mr. DeFazio, Mr. 
Lujan, and Mr. Cleaver--we thank you for your presence--and our 
guest, a former Member of the Homeland Security Committee and 
this subcommittee, Mr. Markey.
    The subcommittee is meeting today to receive testimony on 
``100 Percent Air Cargo Screening: Can We Secure America's 
Skies?'' Our witnesses today will testify about TSA and 
industry's progress and challenges to meet the 9/11 Act 
requirement to screen 100 percent of all passenger plane cargo 
by August, 2010.
    Before I begin my opening statement, I would like to 
welcome the gentleman from Massachusetts, a former Member of 
the subcommittee and a champion of cargo security, Mr. Markey. 
Without objection, it will be our privilege to authorize Mr. 
Markey to sit on the dais, provide an opening statement and 
question our witnesses during the hearing today.
    Mr. Dent. Madam Chair, I have no objections. I just wanted 
to ask the Chair's consideration should a Member of the 
minority party wish to make an address to this committee or a 
5-minute opening, I would hope that you would receive that 
request favorably.
    Ms. Jackson Lee. Hearing no objection, so ordered.
    Today, this subcommittee will continue its commitment to 
robust oversight of one of the most important issues addressed 
by Congress in the 9/11 Act, the screening of cargo on 
commercial passenger aircraft. This is my second hearing on 
this issue as Chairwoman of the subcommittee which has 
jurisdiction over aviation security, and we will continue to 
monitor TSA's progress in screening cargo during the 111th 
Congress.
    I look forward to engaging with my colleagues on the 
subcommittee and learning from our witnesses about how TSA and 
industry are working together to achieve the cargo screening 
mandate. This mandate is a critical step toward securing 
aviation. Might I add, as I started out, it is important when 
Congress issues mandates to note that they are for the 
betterment of the American people; and we will work diligently 
to comply.
    The subcommittee is determined to work with the new 
administration and conduct thoughtful oversight to make sure we 
can move forward and complete implementation of this essential 
element of the 9/11 Act.
    The logic is clear. If we screen passengers and their 
checked baggage, we must screen the other cargo on-board the 
same aircraft. It is my intent to view a number of airports and 
to really see in action whether or not we are utilizing 
officers or, in fact, at these major airports, what are we 
doing to comply with the 100 percent screening.
    Section 1602 of the 9/11 Act established two deadlines: the 
first required screening of 50 percent of cargo on passenger 
planes by February 3, 2009--already passed--the second requires 
100 percent screening by August 3, 2010.
    The February deadline has passed, as I indicated. Aside 
from receiving an e-mail from TSA stating that it had begun to 
enforce the 50 percent screening requirement on air carriers, 
this subcommittee has not received any further, more detailed 
confirmation that this requirement is being satisfied. Today, 
we are more than a month past the deadline; and I was concerned 
when I read GAO's testimony which states that TSA cannot verify 
that screening is being done at the mandated 50 percent level.
    Now, let me at least say to the two witnesses here, this is 
not an attempt to excoriate either one of you. We hope you will 
present us with very forthright testimony. It is an attempt to 
express, again, the word of the day, ``outrage.'' It fits quite 
squarely with actions of financial markets and what is 
happening here in this security area. Which means that the word 
``verify''--just as there could be no explanation of Saturday 
night bonuses given out, there seems to be no explanation. You 
cannot ``verify.'' That is the word for me.
    This is not to say that TSA has not been working with 
industry stakeholders to fulfill the Section 1602 requirements. 
I know it has made progress in this endeavor, but the question 
remains can TSA positively verify that 50 percent of cargo on 
passenger planes are being screened and can this be formally 
reported to Congress? That is our large question here today.
    Still, the most important thing is to achieve 100 percent 
screening by August, 2010, and we therefore need to be able to 
verify the 50 percent so that we can move forward to fulfill 
the 100 percent by August, 2010.
    This afternoon, we will also examine whether TSA is on 
track again to meet the 2010 deadline. The scope of this 
hearing includes reviewing the programs and regulations that 
have been put in place in its efforts to achieve 100 percent 
screening by TSA on cargo screening on passenger aircraft, 
exploring TSA compliance and verification standards for 
ensuring that screening is taking place, and evaluating DHS 
progress in certifying new and effective screening 
technologies.
    In addition, we want to know whether TSA has adequate 
resources and personnel to accomplish this mission. We want to 
know what kind of oversight and initiatives or new legislative 
action needed are to be taken by this subcommittee to draw upon 
the seriousness of our mission along with the full committee.
    As we review TSA's efforts to meet the screening deadlines, 
we also want to review the impact this is having on our 
industry partners, including air carriers, freight forwarders, 
and manufacturers who must make significant investments who 
have the greatest stake in an effective and efficient 
implementation process.
    The importance of achieving 100 percent cargo screening 
cannot be understated. As such, and based on what we will learn 
here today, I will be asking GAO to conduct a follow-up 
assessment for the subcommittee to keep us informed about how 
the implementation process is progressing and alert us to any 
new hurdles that may arrive. I hope that the Ranking Member, 
Mr. Dent, will join me in making this request so we can proceed 
in a bipartisan manner.
    I would like to thank our witnesses for coming today and 
presenting to us what I hope will be helpful in shedding light 
on this critical endeavor. I know that much work has been done, 
but there is still a lot more to be accomplished in order to 
achieve 100 percent screening by next summer.
    We are always reminded that we have not had a terrorist act 
on our soil since 2001. One, it gives us comfort, but then it 
gives those who believe that we focus too much on security and 
the securing of our homeland or that we shouldn't worry about 
it or why are you getting so excited, it gives them, I guess, 
the extra fodder for their belief.
    But I am always mindful of our good Boy Scouts, and that is 
to make your camp better than you found it and to be prepared. 
We are not prepared. If we cannot verify 50 percent, then we 
are certainly not prepared; and any moment a small package of 
any kind sent by anyone who endeavors to do this Nation harm 
can again create the atmosphere for a terrorist act on our 
soil.
    It is well-known from hearings that we have had that we 
have decentralized terrorism. They can be found anywhere. So I 
am delighted that we have the opportunity to show that we mean 
business. All of the witnesses today are experienced, 
knowledgeable veterans of the aviation industry; and I look 
forward to hearing from all of you and working with you to make 
our skies secure.
    I would like to enter into the record two statements, the 
first is by the Express Delivery and Logistics Association and 
the second is from the Air Cargo Security Alliance.
    Is there any objection?
    Hearing no objection, so ordered.
    [The information follows:]
Statement for the Record Submitted by John Costanzo, President, Express 
                Delivery and Logistics Association (XLA)
    The Express Delivery and Logistics Association (XLA) understands 
that the Air Cargo Security Alliance is a coalition that was started to 
combat the 100% screening mandate. The alliance was established with 
the singular intent of charging the Transportation Security 
Administration and the Department of Homeland Security with screening 
at the airports much in the way that they have taken over passenger 
screening. In order to cover the resources required by TSA and DHS, the 
alliance is proposing to add a $0.05 surcharge per pound on cargo to be 
borne by customers of Indirect Air Carriers.
    Following discussions with our Government Affairs Committee and the 
security subcommittee as well as XLA members at large, the XLA Board of 
Directors has taken a position not to support or join the ACSA 
initiative. XLA will continue to endorse Certified Cargo Security 
Program (CCSP) and TSA's current implementation plan that is well 
underway. Our membership has embraced CCSP with many members certified 
or in the process of being certified, some with considerable 
investments in the project. Consequently we have recommended to our 
members that, should they be approached, they not lend their name or 
any other form of support to this effort.
                                 ______
                                 
   Statement for the Record Submitted by Michael Whatley, Air Cargo 
                           Security Alliance
                             March 18, 2009
                              introduction
    The Air Cargo Security Alliance would like to thank Chairwoman 
Jackson Lee, Ranking Member Dent and the other Members of the 
Subcommittee on Transportation Security and Infrastructure Protection 
for the opportunity to submit testimony for today's hearing.
    Today's hearing topic--whether we can secure America's skies with a 
100% air cargo screening mandate--is timely and critical to both our 
national security and the air cargo industry. My testimony focuses on 
TSA implementation of the 100% screening mandate and its impact on the 
thousands of small and mid-size freight forwarders whose very existence 
depends on reliable access to passenger aircraft for shipping cargo.
    The Air Cargo Security Alliance (ACSA) is an alliance of over 225 
indirect air carriers, direct shippers, airlines, airport authorities, 
customs brokers, and affiliated businesses Nation-wide that represent 
every part of the air cargo industry. Formed in 2008, ACSA is dedicated 
to developing and implementing an air cargo screening program that will 
meet our homeland security needs and allow all members of the air cargo 
industry to continue providing world-class service to their customers.
    ACSA's mission is ensure a level playing field for the entire air 
cargo industry through the development of a multi-layered air cargo 
screening program that relies on two very important components: First, 
voluntary screening by members of the air cargo industry and, second, a 
robust Federal screening program physically located at America's 
airports. Any program that fails to include both of these elements will 
create economic and logistical obstacles to effective screening and 
fair competition.
                               background
    The air cargo industry is made up of over 4,200 registered indirect 
air carriers (IACs), which operate at over 10,000 separate facilities 
and utilize over 450 airports Nation-wide, as well as dozens of 
airlines which carry air cargo and millions of companies that rely on 
IACs (also known as freight forwarders) to move their goods through the 
air cargo supply chain. The volume of cargo that is shipped via 
commercial airplanes is immense--more than 50,000 tons a day, with over 
12 million pounds moving on commercial passenger planes daily.
    Air cargo can range from very small packages to loads that weigh 
several tons. On any typical day the cargo shipped on passenger planes 
will include anything from perishable foods and flowers to machinery 
and equipment. The cargo can be shipped in numerous forms including 
individually wrapped packages, wooden crates, assembled pallets, and 
large containers called unit-loading devices.
    The companies that make up the air cargo industry are as diverse as 
the freight that they move. Obviously, there are several very large 
companies such as integrators, which own their own planes, trucks, and 
warehouses (such as FedEx, UPS, and DHL). However, the vast majority of 
the companies that make up the industry are small companies that do not 
own or operate aircraft, own limited (or no) warehouse space and 
contract with trucking companies for their trucking needs rather than 
own fleets of trucks.
    Typically, when a small or mid-size IAC gets an order to move cargo 
from one city to another on a specific, time-sensitive schedule, the 
company will make arrangements with a commercial air carrier to 
transport the cargo and contract with a trucking company to deliver the 
cargo from its origination point to the airport for loading on the 
passenger plane. They will also contract with another company to pick 
the freight up at the airport following the flight and deliver it to 
its final destination. At no point during this transaction does the 
cargo go to a warehouse or central clearing station owned or operated 
by the IAC.
    The consequences of the 100% air cargo screening mandate apply 
equally to every participant in the air cargo industry; from the 
shipper, trucker, and IAC to the airline and the ultimate consignee. It 
is vitally important to the existence of all of these companies that 
the mandate be implemented in a manner that takes into consideration 
their unique needs and business model.
               9/11 act and bush administration response
    The Transportation Security Administration (TSA) is responsible for 
securing the air cargo transportation system without unduly impeding 
the flow of commerce.\1\ In order to carry out this mission, TSA is 
responsible for establishing security requirements governing all 
domestic-originating flights (whether on domestic or foreign passenger 
air carriers) that transport cargo, overseeing the implementation of 
air cargo security requirements by air carriers and freight forwarders, 
and conducting research and development of air cargo security 
technologies.\2\
---------------------------------------------------------------------------
    \1\ Transportation Security Administration, Air Cargo Strategic 
Plan, November 2003.
    \2\ GAO, Transportation Security Administration May Face Resource 
and Other Challenges in Developing a System to Screen All Cargo 
Transported on Private Planes, Testimony before the Subcommittee on 
Transportation Security and Infrastructure Protection, July 2008.
---------------------------------------------------------------------------
    In order to meet these security requirements, TSA developed a 
multilayered, risk-based system that requires airlines to screen a 
percentage of cargo transported on passenger aircraft, requires IACS to 
screen (or provide to TSA for screening) all cargo that meets certain 
high-risk criteria and includes TSA screening of all cargo at Category 
II-IV airports.
    Pursuant to the language enacted in the Implementing 
Recommendations of the 9/11 Commission Act of 2007 (``the 9/11 Act''), 
TSA is also required to establish a system to screen 100 percent of air 
cargo transported on domestically originated passenger aircraft.
    Section 1602 of the 9/11 Act requires this system to provide a 
level of security commensurate with the level of security for the 
screening of passenger checked baggage, requires that 50% of all cargo 
be screened by February 2009, and require 100% of all cargo be screened 
by August 2010. The 9/11 Act also provides TSA with the authority to 
develop additional methods to ensure that cargo does not pose a threat 
to transportation security--including the development of a program to 
certify the security methods used by shippers.
    The 9/11 Act defines the term ``screening'' to mean ``a physical 
examination or non-intrusive method of assessing whether cargo poses a 
threat to transportation security.'' Examples of such methods include 
X-ray systems, EDS, ETD, explosives detection canine teams, and a 
physical search with manifest verification.
    The costs of meeting the 100% screening mandate will be 
significant--in a 2007 study, the Center for American Progress 
estimated the total costs of screening 100% of the cargo tendered on 
passenger planes will be at least $600 million annually.\3\
---------------------------------------------------------------------------
    \3\ PJ Crowley and Bruce Butterworth, Keeping Bombs Off Planes, 
Center for American Progress, May 2007.
---------------------------------------------------------------------------
    In response to the enactment of the screening requirements set 
forth in the 9/11 Act, the Bush administration announced that TSA would 
not conduct any screening of air cargo, but would instead develop a 
two-pronged approach that will rely on screening by air carriers and 
the development of the Certified Cargo Screening Program (CCSP).
    The CCSP is designed to allow the screening of air cargo to take 
place at various points throughout the air cargo supply chain. 
Participants in the CCSP, including freight forwarders, direct 
shippers, manufacturing facilities, and perishable shippers, will be 
designated at Certified Cargo Screening Facilities (CCSFs) upon meeting 
security requirements established by TSA. In order to prove the 
validity of the CCSP approach, TSA has initiated a pilot program, in 
which TSA has purchased screening equipment for a limited number of 
large IACs in 18 major cities.
    In addition to the development of the CCSP, TSA implemented 
regulations which require 100% of all cargo transported on narrow-
bodied planes (airplanes that have only one aisle) to be screened. Due 
to the fact that the CCSP has not yet been fully implemented, 
compliance with this rule, which became effective on October 1, 2008, 
has fallen largely on the shoulders of air carriers.
    Airline compliance with the Narrow-Body Rule, as well as industry 
participation in the CCSP Pilot Program are expected to achieve the 50% 
screening mandate set forth in the 9/11 Act.
                  impacts of the current tsa approach
    The Air Cargo Security Alliance applauds TSA's commitment to a 
multi-layered approach to air cargo security and the creation of the 
CCSP program. However, ACSA believes that CCSP must be a complement 
to--rather than a substitute for--a Federal air cargo screening program 
at America's airports.
    In order to participate in the CCSP, a freight forwarder will be 
required to purchase screening equipment, acquire (or already own) 
warehouse space to facilitate the screening, and hire and train 
employees to conduct the cargo screening.
    As discussed above, the small and mid-sized companies that make up 
the vast majority of freight forwarding industry have very limited 
warehouse space--and operate at many airports where they do not have 
any warehouses at all. Unlike the integrators, who move all of their 
cargo through their own warehouses located at the airports prior to 
placing it on their planes, freight forwarders rely on a Nation-wide 
network of trucking companies to route their cargo directly from the 
original pick-up point to the airport for tender with the airline for 
the vast majority of their shipments.
    Given the business model that freight forwarders use, the costs of 
securing warehouse space, acquiring screening equipment, hiring 
employees to conduct the screening and training those employees in 
order to participate in the CCSP can be simply overwhelming. The 
purchase of the screening equipment alone will cost between $150,000 
and $500,000 or more per facility.\4\ For a typical freight forwarder 
or customs broker, this will add up to an investment of several million 
dollars merely to continue servicing existing clients and accounts.
---------------------------------------------------------------------------
    \4\ Testimony of Cindy Allen, National Customs Broker and 
Forwarders Association of America, before the Subcommittee on 
Transportation Security and Infrastructure Protection, July 15, 2008.
---------------------------------------------------------------------------
    Although there are some companies which can afford these types of 
investments, there is simply no way that the vast majority of the 4,200 
IACs Nation-wide have the financial resources to participate in such a 
program. In order to remain competitive with the multi-national freight 
forwarders or integrators who can afford the investment in screening 
equipment, small and medium-sized IACs are forced to make a tough 
choice--they can either purchase the screening equipment (provided that 
lenders are able to extend them credit), or they face a continuing loss 
of business and are forced to downsize their operations. Considering 
the current economic contraction, the burden of making such a 
tremendous investment could not be placed on small business owners at a 
worse time.
    In addition to the direct costs, the air cargo industry will also 
face reduced air cargo service because airlines have been forced to 
invest millions in cargo screening equipment in order to continue 
providing air cargo services. Given the volume of air cargo traffic, 
airlines are likely to make these investments at major hub-airports. 
However, airlines are simply not economically capable of making the 
substantial investments required to continue servicing all non-hub 
airports that are currently used by IACs.
    In fact, over the last 6 months, air carriers have announced 
reduced or eliminated air cargo service to several regional airports 
including Colorado Springs, Anchorage, Palm Springs, and Buffalo. As 
airlines are faced with the costs of purchasing screening equipment, it 
is reasonable to assume that airlines will scale back air cargo 
services to hub airports only. This pull-back in cargo service will 
essentially force IACs and their customers to rely solely on hub-
airports--and will likely force many to lay off workers and close their 
doors.
    The impact that TSA's reliance on CCSP and airline screening to 
meet the 100% screening mandate will have on the air cargo industry 
will be devastating.
    In addition to forcing airlines to restrict air cargo services to 
hub-airports only, denying them much-needed cargo revenues, it will:
   Force airlines them to spend millions of dollars in 
        screening equipment at a time when they are least able to make 
        such investments,
   Significantly reduce (or completely eliminate) cargo volumes 
        at hundreds of regional airports Nation-wide,
   Force IACS to choose between spending millions to 
        participate in the CCSP program or face restricted (and more 
        expensive) access to passenger fleets for air cargo service,
   Significantly drive up shipping costs for businesses that 
        rely on the air cargo industry to move their goods on an 
        expedited basis, and
   Cause job losses as both regional airports and small to mid-
        size IACs lose air cargo volume.
        a federal air cargo screening program--a better approach
    The Air Cargo Security Alliance believes that there is a better way 
to achieve the 100% screening mandate. In the 9/11 Act, Congress 
instructed TSA to establish an air cargo screening program 
``commensurate with'' the checked baggage screening program already run 
by TSA.
    In order to comply with the clear Congressional intent in the 9/11 
Act, and in order to ensure that the thousands of small companies that 
make up an integral part of the air cargo industry are not 
significantly or unfairly disadvantaged, we recommend that TSA 
establish a Federal air cargo screening program that will operate at 
all American airports.
    In order to be a fair and effective, a Federal screening program 
would ideally:
   Be funded by a $0.05 per pound security surcharge modeled on 
        the passenger screening program currently operated by TSA,
   Provide screening at all American airports,
   Allow the screened cargo to go onto any airline that 
        provides air cargo services,
   Reimburse any airline that conducts screening for the costs 
        of such screening, and
   Work in conjunction with the CCSP program.
    Such a program would preserve hundreds of thousands of jobs in the 
air cargo industry, enhance air cargo security, ensure that the entire 
air cargo industry would retain the ability to service their customers 
and maximize the flow of cargo at all American airports.
    In addition to protecting hundreds of thousands of high-paying jobs 
in the air cargo industry, this Federal screening program would:
   Create thousands of new jobs without raising taxes or adding 
        to the Federal deficit,
   Allow non-CCSP participants to continue to drop cargo at the 
        airport,
   Allow non-CCSP participants to ship cargo on any airline,
   Allow companies to choose whether they want to participate 
        in CCSP or not, and
   Effectively set a ceiling on screening charges.
    Furthermore, where the individual IAC operating as a CCSF will 
screen only a limited amount of cargo, the Federal screening program 
would screen cargo received from multiple IACs, providing a much better 
return on investment.
                               conclusion
    The air cargo industry is as diverse as the shipping community it 
services. The companies that make up this industry come in all sizes 
and offer ``niche'' services as well as a full menu of offerings from 
managed global transportation to warehousing, distribution, trade 
compliance, and even financial services. The small to mid-size 
forwarder with an entrepreneurial bent can provide equally competitive 
service offerings as multi-national companies given a level playing 
field.
    However, TSA's current cargo screening regime will take away that 
level playing field and force the small to mid-size IACS to face 
insurmountable costs and logistical hurdles in order to remain in the 
market-place. For many, a 100% screening mandate without a Federal 
screening program operating at all American airports is a threat to 
their very existence.
    The Air Cargo Security Alliance calls upon Congress and the Obama 
administration to fulfill the clear Congressional intent of the 9/11 
Act and protect the air cargo industry by creating a Federal air cargo 
screening program that will operate at all American airports. As a 
Nation committed to both homeland security and economic growth, we must 
allow IACs to continue to serve their clients and provide essential 
services that create hundreds of thousands of jobs, ensure the timely 
delivery of essential goods worldwide and bolster the American economy.
    Thank you for the opportunity to submit this testimony to the 
subcommittee.

    Ms. Jackson Lee. The Chair now recognizes the Ranking 
Member, the gentleman from Pennsylvania, Mr. Dent, for an 
opening statement.
    Mr. Dent. Thank you, Madam Chairwoman.
    Today, we plan on discussing the Transportation Security 
Administration's attempt to meet a congressionally mandated 100 
percent air cargo screening requirement included in the 
Implementing Recommendations of the 9/11 Commission Act. This 
law requires, ``Not later than 3 years after the date of 
enactment the Secretary of Homeland Security shall establish a 
system to screen 100 percent of cargo transported on passenger 
aircraft operated by an air carrier.''
    At the outset, let me compliment the TSA on their hard 
work. The men and women of the TSA labor tirelessly to ensure 
the security of our traveling public; and, quite frankly, air 
cargo security has not always received the time, attention, or 
funding it deserves. So, further, the Congress has seen fit to 
place upon you unrealistic mandates in order to score political 
points.
    While 100 percent screening never equals 100 percent 
security, I did vote for the passage of the 9/11 Commission 
Act; and, despite these unrealistic 100 percent mandates, I 
will require the Department to meet the mandates of the law. I 
am therefore disappointed with what I perceive as the 
Department's intention to provide the appearance of meeting its 
security mandate without actually meeting, at least in my mind, 
the actual mandate. The TSA's use of fuzzy math to artificially 
inflate its aviation screening statistics is intellectually 
dishonest, and I look forward to hearing our first panel on 
this matter.
    I am also disappointed that, with the 2010 deadline just a 
year off, the TSA is unable to tell me what consequences an in-
bound aircraft might be subject to if it is determined to 
possess a piece of freight that has not already been screened. 
If it were an international flight bound for the United States, 
would it be diverted to another country? Would a domestic 
flight be required to land? What are the consequences of 
failing to comply with the law?
    Ultimately, I hope for an honest and open discussion about 
what challenges the TSA expects to encounter in implementing 
the air cargo screening requirements over the next 17 months.
    The TSA has a relatively small number of certified cargo 
screening facilities and relatively few transportation security 
inspectors authorized to inspect and enroll these facilities. 
Perhaps the biggest hurdle is that TSA has no clear way ahead 
in managing foreign air carriers bound for the United States 
with cargo. Much like the 100 percent screening requirement for 
maritime containerized cargo, screening air cargo overseas 
requires significant levels of international cooperation, which 
dramatically complicates the TSA's efforts to meet its 
congressional mandate. So I look forward to hearing from both 
panels on these many challenges and the way ahead for the TSA 
as it tries to meet this congressional mandate.
    I think this is a very important discussion to have; and I 
thank you, Madam Chairwoman, for having this hearing today.
    At this time, I would yield back the balance of my time.
    Ms. Jackson Lee. Thank you very much, Mr. Dent.
    The Chair now recognizes the Chairman of the full 
committee, the gentleman from Mississippi, Mr. Thompson, for an 
opening statement.
    Mr. Thompson. Thank you very much, Madam Chairwoman, for 
convening this important hearing today.
    I also welcome our panel of witnesses, both the first and 
second, for bringing their important testimony to us.
    This afternoon's hearing will evaluate progress made by TSA 
in implementing the 9/11 Act's requirement to screen 100 
percent of all cargo aboard passenger aircraft. Section 1602 of 
the 9/11 Act also requires TSA to screen 50 percent of all 
cargo aboard passenger aircraft by February, 2009.
    I would like to take this opportunity to applaud the 
efforts of my colleagues on this subcommittee and the full 
committee and champion this important mandate in ensuring that 
we take all necessary steps toward enhancing the Nation's 
aviation security. After all, the 9/11 Commission Report 
recommended that TSA intensify its efforts to identify, track, 
and appropriately screen potentially dangerous cargo in 
aviation. In an effort to fulfill this recommendation, Congress 
has provided TSA with the necessary tools and a great deal of 
flexibility.
    Today, I would like to know if TSA can verify that it has 
met the 50 percent deadline and whether it will be able to meet 
the 100 percent deadline next year.
    Mr. Kelly, I am particularly looking forward to your 
testimony, not because this is your first time on the Hill, but 
I want to hear what you have to say. I am interested in TSA's 
perspective on the challenges it faces in meeting the 100 
percent deadline.
    As you know, I am also interested in hearing about DHS's 
progress in exploring innovative technologies that can be 
applied to fulfill the requirements of this law.
    It is important to evaluate any existing research and 
coordinating efforts between TSA and industry. We need to 
ensure that the work in progress made by industry relevant to 
screening can be leveraged by TSA to effectively screen and 
detect explosives hidden in air cargo.
    Today, we will also hear from stakeholders who have 
concerns about TSA's plan to implement this mandate. This 
hearing is not just about TSA checking the box. It is about 
strengthening aviation security and protecting the traveling 
public.
    This hearing is also being hosted well in advance of the 
August, 2010, deadline so that we can address the concerns of 
Government and industry stakeholders early in the process and 
remedy or avert potential obstacles to implementation.
    Again, I thank the Chairwoman for hosting this important 
hearing and thank the witnesses again for appearing before us 
today.
    Ms. Jackson Lee. I thank the Chairman of the full committee 
for his insightful remarks.
    I am noting that the Ranking Member of the full committee 
is held up in another committee.
    We will recognize the gentleman from Massachusetts, Mr. 
Markey, for a statement of 5 minutes.
    Mr. Markey. I thank the gentlelady for extending this 
courtesy to me. This is the first time in 7 years that I have 
not been a Member of the Homeland Security Committee, and it is 
a great honor and privilege that you have extended to me to 
participate in today's hearing.
    As you know, on 9/11, there were two planes hijacked up in 
Boston that had 150 people on those two planes that were then 
flown into the World Trade Center. Obviously, that is still at 
the heart of my concern about these issues. Those two planes 
still and all of those people and their families who I knew who 
died that day still live on with me in terms of making sure 
that we not see another recurrence of that.
    In 2007, when Congress passed the landmark legislation to 
implement the recommendations of the 9/11 Commission, it 
included the mandate to screen 100 percent of the air cargo 
carried on passenger planes within 3 years and 50 percent of 
cargo screened within 18 months. Now that last month's 
statutory deadline to screen 50 percent of cargo on passenger 
planes has passed, today's hearing, Madam Chairwoman, is 
particularly timely and important.
    A year ago, Chairman Thompson and I requested that the GAO 
assess TSA's progress in implementing the cargo screening 
mandate to ensure that the agency's approach is consistent with 
congressional intent. I am pleased that today, Mr. Lord, you 
will provide GAO's preliminary findings and recommendations in 
this area.
    GAO's testimony raises several important questions about 
whether the system that the Bush administration developed to 
fulfill the 100 percent screening mandate will meet the 
requirements of the law.
    Specifically, GAO's testimony notes that:
    No. 1, TSA cannot verify that it has met the February, 2009 
deadline, for screening 50 percent of cargo on passenger planes 
as required by law.
    No. 2, TSA does not expect to achieve 100 percent screening 
of in-bound air cargo, that is, cargo on passenger planes 
entering the United States from overseas, by the mandated 
deadline of August 2010. In-bound cargo is almost half of the 
total volume of cargo on passenger planes, accounting for 44 
percent of the total, or 3.3 billion pounds of cargo each year.
    No. 3, the system developed by TSA relies heavily on 
shippers, freight forwarders, and others in the supply chain to 
screen cargo before it reaches the airport. However, as GAO has 
noted, there is a real risk that if these private-sector firms 
decide not to participate in TSA's system, it would make it 
difficult, if not impossible, to meet the 100 percent mandate.
    These are critically important shortcomings in the 
implementation of this law that the Obama administration has 
inherited but which it needs to move quickly to correct. TSA 
has a duty to ensure that the 100 percent screening mandate is 
met and that the level of security that is applied to air cargo 
is commensurate with the level of security applied to 
passengers' checked bags pursuant to the law.
    Again, it is my great honor, Madam Chairwoman, and I thank 
you, Mr. Dent, for the opportunity to testify. I have invested 
7 years of my career in this provision; and it means a lot to 
me that the two of you, along with Chairman Thompson and the 
rest of the committee Members, have allowed me to participate.
    Thank you.
    Ms. Jackson Lee. We thank you for your testimony, Mr. 
Markey. We thank you for your on-going interest on this very 
vital issue.
    Let me also acknowledge a Member of our committee, Mr. 
Massa's, presence here today; and we thank him so very much.
    We look forward to engagement of all of our Members.
    Again, I welcome our panel of witnesses.
    Our first witness is Mr. Edward Kelly, General Manager for 
Cargo at TSA. Mr. Kelly joined TSA in September 2006 and brings 
with him a wealth of knowledge and over 30 years of experience 
in the supply chain in the cargo industry. In his current 
capacity as general manager, he manages a $70 million budget, 
with a staff of 55 transportation security experts, program 
managers, and contractors.
    Our second witness, Stephen Lord, is a Director of GAO 
Homeland Security in the Justice Issues Division and is 
responsible for directing numerous GAO engagements on aviation 
and surface transportation issues. Mr. Lord was a key member of 
the 2007 Iraq Benchmarks Assessment Team that received a GAO 
integrity award for exceptional analysis of the Iraq governance 
progress for meeting 18 legislative, security, and economic 
benchmarks, which I believe would make him quite appropriately 
trained for the challenge we have before us.
    Without objection, the witnesses' full statements will be 
inserted in the record.
    I now ask each witness to summarize his statement for 5 
minutes.
    Mr. Kelly, we thank you for your service for this Nation. 
We thank you for the 30 years that you bring to the Department 
of Homeland Security in serving the Nation, and we look forward 
to the concept of fixing our problems together.
    You are recognized, Mr. Kelly, for 5 minutes.

    STATEMENT OF EDWARD KELLY, GENERAL MANAGER, AIR CARGO, 
             TRANSPORTATION SECURITY ADMINISTRATION

    Mr. Kelly. Good afternoon, Chairwoman Jackson Lee, Ranking 
Member Dent, Chairman Thompson, Mr. Markey, and distinguished 
Members of the subcommittee. I am pleased to be here today to 
discuss progress by the Transportation Security Administration 
on the air cargo requirements of the Implementing 
Recommendations of the 9/11 Commission Act of 2007. The 9/11 
Act gives TSA the responsibility to ensure that the airline 
industry screens 100 percent of the cargo on passenger aircraft 
by August, 2010, with an interim milestone of 50 percent by 
February 2009.
    First, I want to assure the subcommittee that all 
indications are that the cargo industry has met the February 
deadline. This week, TSA began receiving from the airlines 
February's cargo screening data; and we will validate that the 
50 percent screening milestone was, in fact, achieved. We will 
share the results with you by mid-April.
    Thank you for your patience.
    To achieve this milestone, TSA and our industry partners 
put in a great deal of effort to creatively rethink the 
logistics of air cargo security. Together, we have dramatically 
changed air cargo operation.
    The key elements to TSA's approach is the Certified Cargo 
Screening Program. This program screens cargo at the most 
efficient and effective point in the supply chain. It provides 
optimal security with minimal economic disruption. TSA 
recognizes that air cargo is a vital part of our economy, and 
this approach to security supports the financial health of the 
airline industry.
    Another step in achieving 100 percent screening is the 
requirement for all airlines operating narrow-bodied passenger 
aircraft from U.S. airports to screen 100 percent of the cargo 
transported on this aircraft. I am pleased to report that TSA 
achieved this milestone in October 2008, a full 22 months 
before the deadline. One hundred percent of the cargo on 96 
percent of the flights originating in the United States is now 
screened. This point is worth emphasizing: 85 percent of the 
passengers flying each day from U.S. airports are on planes 
where all of the cargo has been fully screened. We have 
improved security significantly.
    A number of challenges remain as we move toward the goal of 
100 percent screening. The characteristics of cargo are vastly 
different than those of checked baggage. For example, 75 
percent of air cargo is tendered on skids that cannot be 
screened with existing TSA-approved equipment. TSA is working 
with the DHS Science and Technology Directorate to develop 
technology adapted to the cargo screening environment. We are 
testing technologies now previously used to screen cargo for 
explosives such as metal detectors, vapor trace detectors, 
radio wave devices, and hand-held detection equipment.
    Another challenge is to develop screening requirements for 
air cargo in-bound from foreign countries. To date, industry 
has accomplished 50 percent system-wide screening for 
international in-bound air cargo. However, TSA cannot implement 
a security regimen in a foreign country without extensive 
cooperative planning with and acceptance by our international 
partners.
    Given these challenges, TSA does not expect that a 100 
percent screening will be available for in-bound cargo on 
passenger aircraft by August 2010. Nonetheless, significant 
efforts toward reaching the 100 percent mark are on-going.
    Through bilateral and multi-lateral arrangements, a 
proposed amendment to the International Civil Aviation 
Organization standards and partnering with CBP to use its 
automated tracking system, we are improving security on in-
bound cargo. With the cooperation of the entire air cargo 
community, we are well on our way to achieving the 100 percent 
air cargo screening mandate of the 9/11 Act for domestic cargo.
    We appreciate the important oversight of Congress and 
notably the support of this subcommittee. We will continue to 
work closely with the Government Accountability Office 
represented here today. We will continue to be transparent and 
to keep you informed of our progress.
    Finally, I would like to recognize the efforts of the 
industry and the TSA employees who have worked tirelessly on 
developing innovative solutions to a daunting task.
    I will be happy to answer any questions you may have.
    [The prepared statement of Mr. Kelly follows:]
                   Prepared Statement of Edward Kelly
                             March 18, 2009
    Good afternoon Chairwoman Jackson Lee, Ranking Member Dent, and 
distinguished Members of the subcommittee. It is my pleasure to appear 
today to discuss the progress the Transportation Security 
Administration (TSA) is making toward fulfilling the air cargo security 
requirements of the Implementing Recommendations of the 9/11 Commission 
Act of 2007 (9/11 Act), Pub. L. 110-53. These requirements mandate the 
screening of 50 percent of cargo transported on passenger aircraft by 
February 2009 and 100 percent by August 2010.
    I am happy to report that while much remains to be done to fulfill 
this requirement, we are confident that the industry is currently 
screening at least 50 percent of air cargo transported on passenger 
aircraft on flights originating in the United States and we anticipate 
that the 100 percent screening requirement will be met by August 2010 
for domestic cargo through our Certified Cargo Screening Program 
(CCSP). The requirement in the 9/11 Act to screen 100 percent of 
inbound air cargo continues to present significant challenges. Although 
it is unlikely that we can meet the ambitious timetable set by 
Congress, we are working with our international partners to address the 
many challenges and expect to continue to see significant improvements 
in the level of security for in-bound air cargo on passenger aircraft 
as we move forward.
         collaborative development and transparency of process
    As TSA has previously noted in testimony and reports, the only 
means of meeting the 100 percent cargo screening requirement without a 
significant negative impact on commerce is through creative and 
dedicated collaboration throughout the air cargo community. Our 
involvement of stakeholders has been broad and inclusive in the 
planning stages and will continue as we implement the program. Since 
September 2007, we have reached out to more than 2,500 stakeholders in 
virtually all industry segments that are potentially affected by the 
screening mandate, including both individual entities and associations 
of air carriers, cargo forwarders, and shippers. Beyond meeting with 
stakeholders, we have brought into TSA a number of individuals with 
significant industry experience to provide key practical expertise to 
our program development and execution.
    We have also reached out to other countries in an effort to draw on 
the lessons learned from air cargo security programs throughout the 
world, and to our Federal partners, particularly United States Customs 
and Border Protection (CBP), which also has responsibilities with 
respect to the security of in-bound air cargo. As I will discuss below, 
this work will serve us well as we address the special issues of 
securing in-bound international cargo.
    Throughout the development and implementation of TSA's air cargo 
security program we have been, and remain, dedicated to providing 
transparency. We appreciate the important oversight responsibilities of 
Congress and its various committees--and notably this subcommittee. We 
also continue to work closely with the Government Accountability Office 
so that they can fulfill their role to independently inform Congress on 
our air cargo security program. We will continue to brief you 
periodically and to facilitate field visits to key air cargo industry 
sectors to assure that you get both reports of our progress and an 
opportunity to see first-hand how the program is designed and 
implemented as it proceeds.
                      50 percent milestone reached
    As noted above, I am confident that the industry is currently 
screening 50 percent of air cargo transported by passenger aircraft. 
Our confidence is based on numerous discussions with regulated parties 
and industry associations, coupled with the historically solid record 
of compliance with TSA security programs industry-wide. We are 
currently receiving hard data from airlines for the month of February. 
We are aggressively working to summarize this data and report back to 
you in mid-April. We will keep the subcommittee informed of our 
progress in that regard. We also understand that the 50 percent target 
is not a static figure, and we anticipate a continual increase as we 
move toward the August 2010 date for 100 percent screening.
    A key component of achieving this milestone is the requirement, 
developed in coordination with air carriers and other stakeholders, 
that 100 percent of cargo transported on narrow-body (single-aisle) 
aircraft be screened. This requirement went into effect in October 
2008.
    The passenger security impact of this screening is significant: 
although these aircraft carry only 25 percent of domestic air cargo on 
passenger aircraft, they account for the majority--approximately 95 
percent--of domestic passenger flights. More importantly, these flights 
carry more than 80 percent of all passengers on flights originating in 
the United States. Thus, even at the statutory deadline for screening 
50 percent of air cargo aboard passenger aircraft, we are effectively 
protecting the vast majority of the flying public.
              supply chain approach to securing air cargo
    The dramatic shift in the air cargo security legal requirement--the 
addition of a 100 percent physical screening requirement to our 
otherwise layered, risk-based security regimen--has required a creative 
re-thinking of the logistics of security. The practical problems with 
physically screening all cargo on-site at airports throughout the 
Nation are formidable. Simply put, there is neither adequate space at 
airports to accommodate such an operation nor sufficient time at that 
point in the journey of cargo to accomplish 100 percent screening 
without crippling the flow of commerce. As we discussed in testimony 
before this subcommittee on July 15, 2008, we have designed and are 
implementing a total supply chain approach to air cargo security, the 
Certified Cargo Screening Program (CCSP). Under this program, the 
responsibility for screening is distributed throughout the supply chain 
to improve security while minimizing the potential negative impact on 
the integrity and movement of commerce.
    This supply chain approach allows cargo screening at the most 
efficient and effective point in the supply chain for optimal security 
and minimal economic disruption. For example, screening might be 
performed at a shipper's facility before packing or at the facility of 
an indirect air carrier (IAC), or a freight forwarder, before 
consolidation and transport to an airport. Furthermore, sensitive 
commodities--such as foodstuffs and other perishable items and fragile 
goods--can be screened by the shipper or manufacturer and not have to 
be reopened at the airport, thus minimizing the potential for damage.
    The CCSP is a voluntary program--facilities that seek approval as 
certified cargo screening facilities (CCSF) will be required to meet a 
variety of rigorous security standards and will be regulated by TSA. 
For example, a CCSF would be required to submit to security threat 
assessments of personnel, adhere to specified physical security 
standards, and maintain a strict chain of custody for cargo they screen 
and forward to the air carrier as a condition of its acceptance as 
screened cargo by the air carrier. A key characteristic of the system 
will be rigorous tracking of the chain of custody, including the use of 
tamper-evident technology to assure that, once screened, cargo remains 
secured in transit to the aircraft. Under the CCSP the air carrier will 
continue to have ultimate responsibility for ensuring that cargo has 
been screened prior to flight; if the air carrier cannot verify that 
cargo has been screened, the carrier must screen it before allowing it 
to be transported.
    CCSP shippers will benefit from participation in several ways. By 
screening their own shipments, shippers can significantly reduce the 
possibility that their cargo may be physically opened, and they can 
still tender full skids of cargo without having them taken apart to be 
screened. Additionally, they can bypass the expected delays that could 
occur if all screening is performed only by carriers. Similarly, IACs 
benefit by these same measures, and may also continue to take advantage 
of typical airline reduced rates for cargo tendered in bulk 
configurations.
    As discussed above, we have effectively addressed screening for 
narrow-body aircraft with a 100 percent screening requirement. To 
address the broader task, we have concentrated our efforts by piloting 
the CCSP at the 18 U.S. airports that originate 96 percent of cargo 
transported on wide-body passenger aircraft, or more than 65 percent of 
cargo transported on all passenger aircraft. By focusing outreach in 
the pilots on IACs and shippers using the airports with the highest 
volume of cargo transported on wide-body passenger aircraft, we have 
been able to maximize the impact of the pilots. To date we have 
validated over 200 facilities in the pilot program and plan to 
ultimately roll out the program Nation-wide.
                     challenges of cargo technology
    As we address the security of the entire air cargo supply chain, we 
are simultaneously turning our attention to the development of 
appropriate technology for the screening of air cargo. One of the 
challenges we face is the limitations of the currently available 
technology--specifically, the effectiveness of existing technology for 
detecting explosives in cargo, its operational feasibility, and its 
general availability for deployment to the industry to meet the mandate 
of the 9/11 Act. Until recently the focus of research and development 
of explosives detection technology has been on the development of 
screening technology for checked baggage, not cargo. This has been 
dictated in no small measure by the fact that Congress imposed 
comprehensive checked baggage screening requirements on an aggressive 
time-table when it created TSA in 2001, while the comprehensive 
screening requirement for air cargo is relatively new.
    The characteristics of checked baggage are vastly different from 
those of cargo--in size, weight, variety of content, and configuration. 
Consequently the technology designed to screen one is not automatically 
suitable to screen the other. Because checked baggage screening 
technology (for example, Explosives Detection Systems (EDS), Explosives 
Trace Detection (ETD), and X-Ray) is available, however, TSA is working 
with the DHS Science and Technology Directorate (S&T) to explore ways 
in which checked baggage screening technology can be adapted to the 
cargo screening environment. To this end, TSA has created a list of 
approved technologies to screen cargo based on checked baggage 
screening technologies. To ascertain the effectiveness of baggage 
technologies on screening cargo, we are conducting a voluntary pilot 
program with certain IACs participating in the CCSP pilot. To 
participate in this technology pilot, an IAC must agree to purchase 
specified technologies to screen cargo and report to TSA on its 
effectiveness. TSA is partially funding this research and the IACs are 
responsible for the remainder of the costs.
    On a parallel front, we are partnering with S&T to test 
technologies that have not been previously used to screen cargo for 
explosives. These include types of metal detectors, vapor trace 
detectors, radio wave devices, and hand-held ETD equipment. American 
Airlines has agreed to allow S&T to set up test sites at two of its 
cargo facilities (New York and Miami) in order to test the 
effectiveness of some of these technologies in a real environment.
    TSA has also deployed its proprietary canine teams at the 18 high-
volume airports participating in the CCSP pilot. All of the 85 teams 
funded through the U.S. Troop Readiness, Veterans' Care, Katrina 
Recovery, and Iraq Accountability Appropriations Act, 2007, Pub. L. 
110-28, will have graduated by the end of 2009. These teams dedicate 
100 percent of their time to cargo screening functions. We foresee a 
greater use of these valuable assets in the air cargo screening 
environment as their experience base expands. In addition, we will 
continue to evaluate the appropriate number of proprietary canine teams 
devoted to air cargo screening.
    Among other things, cost, effectiveness, and feasibility are all 
being weighed to determine the right mix of resources to accomplish 
this task, given the multitude of types and the configurations of 
commodities tendered as air cargo.
                           in-bound air cargo
    Meeting the screening requirements with respect to air cargo in-
bound from foreign countries presents unique challenges. As noted 
earlier, collaboration with all involved stakeholders is critical to 
implementation of a mandate as ambitious as 100 percent cargo 
screening. Nowhere is collaboration more critical to success than in 
the international arena. As is true domestically, the physical space at 
foreign airports is often constrained; moreover, screening is regulated 
and often conducted by a variety of State authorities, each with its 
own requirements. Domestically, TSA is addressing this issue through 
the CCSP. As a practical matter, however, TSA cannot implement a 
security regimen such as CCSP in a foreign country absent extensive 
cooperative planning with and acceptance by our international partners.
    TSA has the legal authority to require that a given percentage of 
in-bound cargo be screened before it reaches the United States. Given 
the physical limitations of many airports, however, requiring U.S. and 
foreign air carriers to screen 100 percent of in-bound cargo by a given 
date would significantly impede the flow of commerce into the United 
States. For example, a unilateral mandate of 100 percent screening 
would cause significant delays at origin airports because, as is the 
case in the United States, carriers are not equipped to perform this 
level of screening. Where all-cargo flights exist as an alternative, 
shippers would be forced to divert business away from passenger 
airlines, which rely on cargo as a major generator of revenue and 
profit. Such a reduction in volume would most likely be reflected in 
higher passenger ticket prices. Additionally, taking a unilateral 
approach would significantly undermine TSA's long-term efforts to 
develop common platforms and standards for air cargo security with our 
international partners, including work toward the development of 
commensurate systems of security partners cooperatively to enhance the 
security of civil aviation globally; our efforts in this regard are 
discussed below.
    Another major complexity of the international environment is the 
sheer number of entities across a broad geographic span that handle and 
ship cargo to the United States and the nearly infinite points of 
origin for each cargo supply chain. In 2006, more than 2.4 million 
unique shippers and manufacturers shipped cargo to the United States on 
passenger aircraft. Moreover, TSA's assessment of the risks associated 
with the international environment indicates that the risks vary by 
location and demography. These risks begin well beyond our borders and 
are compounded by the fact that security practices vary with the 
foreign location.
    Given these challenges, at this time TSA does not expect that 100 
percent screening will be attainable for in-bound cargo on passenger 
aircraft by August 2010. This is a complex, long-term process. 
Nonetheless, significant efforts toward reaching the 100 percent mark 
are on-going. First, TSA has revised its security programs to improve 
the screening of cargo imported into the United States and we believe 
we have accomplished system-wide screening at 50 percent for 
international in-bound cargo. Countries such as the United Kingdom, 
Ireland, France, and Israel have programs similar to our CCSP. Through 
bilateral and quadrilateral arrangements, TSA is working with a number 
of countries to introduce the supply chain approach to securing air 
cargo into their programs and regulations. Our foreign partners 
involved in these arrangements are Canada, Australia, and the 27 Member 
States of the European Union.
    In 2007, a total of 98 countries imported cargo to the United 
States on passenger flights. These countries all implement the 
Standards and Recommended Practices set by the International Civil 
Aviation Organization (ICAO) in Annex 17 to the Convention on 
International Civil Aviation and the associated air carriers are 
required to carry out the measures set forth in our security programs. 
TSA will be recommending an amendment to the Annex 17 standards on 
securing air cargo that would introduce the supply chain screening 
paradigm. A similar recommendation (called Secure Freight) is being 
submitted by the International Air Transport Association (IATA). This 
will undoubtedly be a long-term process, but if ICAO adopts this 
approach in Annex 17, all 190 Contracting States would be encouraged 
and obligated to implement a supply chain approach to screening.
    CBP currently assesses the risk of the presence of illegal 
contraband, including explosives, in in-bound international air cargo 
as part of its supply-chain security programs and advance cargo 
requirements, and TSA and CBP are actively working on better 
integrating those processes to ensure air travel safety and security. 
For example, an opportunity we are actively exploring is using CBP's 
Automated Targeting System (ATS) to assess risk on in-bound freight. 
ATS is a proven system for evaluating certain risks associated with in-
bound cargo based on information provided by airlines. We are proposing 
an enhancement to the system to perform an evaluation of risk for 
explosives in cargo shipments. If we find that this is an effective 
tool, we will work with CBP to have the information supplied early 
enough to assure that evaluations could be done prior to a flight's 
departure.
                       compliance and enforcement
    TSA has a robust compliance and enforcement regimen to support the 
implementation of air cargo security requirements. Since 2008, TSA has 
been authorized a total of 450 cargo inspectors dedicated exclusively 
to the oversight of air cargo. Over 420 inspectors have been trained 
and deployed to date. Our air cargo inspectors receive specific 
instruction on the security requirements of the CCSP as well as cargo 
screening technology and improvised explosive device (IED) recognition.
    Our inspectors regularly assess all air carriers, freight 
forwarders, and their authorized representatives; those entities that 
have had previous compliance issues are inspected more frequently and 
thoroughly. The TSA-led canine teams discussed earlier are an integral 
part of our inspection program.
                               conclusion
    With the cooperation of the entire air cargo community, we are well 
on our way to achieving the 100 percent air cargo screening mandate of 
the 9/11 Act. We are comfortable that the 50 percent screening 
requirement has been met overall and, when fully developed, our CCSP 
promises to provide the framework for timely achieving 100 percent 
screening domestically. We will continue to work with our international 
partners to find a path to overcoming the considerable challenges of 
achieving the same mark with respect to in-bound international air 
cargo.
    As always, TSA appreciates this subcommittee's support of our 
efforts as we move ahead with this important aviation security program. 
We look forward to our continued work together in finding the optimal 
path to full implementation of this important security mandate.
    I will be happy to answer any questions you may have.

    Ms. Jackson Lee. Let me recognize Mr. Lord to summarize his 
statement for 5 minutes.
    Mr. Lord, you are recognized.

 STATEMENT OF STEPHEN M. LORD, DIRECTOR, HOMELAND SECURITY AND 
        JUSTICE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Lord. Good afternoon, Madam Chairwoman, Ranking Member 
Dent, Members of the subcommittee, Chairman Thompson. I am 
pleased to be here today to discuss TSA's efforts to meet the 
congressional mandate for screening air cargo. This is an 
important issue as each year over 7 billion pounds of air cargo 
is flown on U.S. passenger flights.
    As you know, Congress has mandated the establishment of a 
system to screen 50 percent of cargo by February, 2009, and 100 
percent by August, 2010. Since TSA is addressing this mandate 
through two separate systems, my testimony will discuss TSA's 
efforts to meet the screening mandate for domestic and in-bound 
cargo separately.
    Today, I would like to discuss two issues: first, TSA's 
progress in meeting the screening mandate as it applies to 
domestic cargo; second, the challenges that TSA and industry 
stakeholders may face in meeting the mandate, including 
challenges related to in-bound cargo.
    To its credit, TSA has taken several important steps to 
meet the screening mandate.
    First, TSA established a new screening requirement for air 
carriers. For example, effective October, 2008, and several 
months before the first mandated deadline, TSA required 100 
percent screening of cargo carried on narrow-bodied passenger 
aircraft, such as Boeing 737s. These narrow bodies carry about 
26 percent of the cargo and most of the passengers on domestic 
flights, as Mr. Kelly mentioned in his testimony.
    Second, TSA revised or eliminated most of its screening 
exemptions for domestic but not in-bound air cargo.
    Third, TSA created a voluntary program known as the 
Certified Cargo Streaming Program to allow screening to take 
place by freight forwarders, shippers, and others before it was 
consolidated and delivered to the airport.
    Finally, among other steps, TSA established a technology 
pilot to allow industry participants to test approved screening 
technology.
    In our recent discussions, TSA officials stated they are 
confident that the 50 percent screening mandate, as it applies 
to domestic air cargo, has been achieved based on feedback they 
received from industry stakeholders. However, it is important 
to note that TSA does currently not have an empirical basis for 
verifying that these mandated screening levels have been met. 
According to TSA, air carriers will provide the first set of 
screening data this month, and by next month TSA will be in a 
position to determine whether the mandated screening levels are 
being met. Until it completes this important analysis, TSA 
cannot verify that the mandated screening levels established by 
Congress are, in fact, being achieved.
    A related question concerns TSA's current screening 
process. While the details of its screening requirements are 
considered sensitive security information, the implications are 
not. Thus, I am hoping that today's hearing will help us better 
understand how TSA's efforts to meet the screening mandate may 
result in variations in the percentage of cargo screened on 
individual passenger flights.
    I will now discuss the potential challenges that TSA faces 
in meeting the screening mandate.
    First, although voluntary industry participation in the 
certified screening program is vital to its success, it is 
unclear whether TSA will be able to attract the necessary 
industry participation. This is an important issue as TSA 
estimates that freight forwarders and shippers will conduct the 
majority of screening by the August, 2010, deadline.
    Second, TSA faces a number of challenges related to 
technology. For example, TSA is evaluating the effectiveness of 
several technologies at the same time that screening entities 
are using these technologies to screen air cargo.
    Third, TSA also faces challenges overseeing the Certified 
Cargo Screening Program due to the size of the inspection 
workforce and the thousands of newly regulated entities that 
may join the program.
    Finally, with respect to in-bound cargo, TSA does not 
expect--I repeat--does not expect to achieve 100 percent 
screening of in-bound air cargo by the mandated deadline of 
August, 2010. This is due in part to existing in-bound 
screening exemptions and to challenges TSA faces in harmonizing 
air cargo standards with those of other foreign nations.
    Madam Chairwoman, this concludes my statement. I look 
forward to answering any questions that you or other Members of 
the committee may have and thank you for giving me the 
opportunity for to appear before your subcommittee today.
    [The statement of Mr. Lord follows:]
                 Prepared Statement of Stephen M. Lord
                             March 18, 2009
                             gao highlights
    Highlights of GAO-09-422T, a testimony before the Subcommittee on 
Transportation Security and Infrastructure Protection, Committee on 
Homeland Security, House of Representatives.
Why GAO Did This Study
    The Implementing Recommendations of the 9/11 Commission Act of 2007 
mandates the Department of Homeland Security (DHS) to establish a 
system to physically screen 50 percent of cargo transported on 
passenger aircraft by February 2009 and 100 percent of such cargo by 
August 2010. This testimony provides preliminary observations on the 
Transportation Security Administration's (TSA) progress in meeting the 
mandate to screen cargo on passenger aircraft and the challenges TSA 
and industry stakeholders may face in screening such cargo. GAO's 
testimony is based on products issued from October 2005 through August 
2008, and its on-going review of air cargo security. GAO reviewed TSA's 
air cargo security programs, interviewed program officials and industry 
representatives, and visited two large U.S. airports.
What GAO Recommends
    GAO has made recommendations to DHS and TSA in prior reports to 
increase the security of air cargo, including completing vulnerability 
assessments and re-examining existing screening exemptions. DHS 
generally agreed with these recommendations and plans to address them. 
GAO discussed the preliminary observations in this statement with TSA 
officials. TSA agreed with GAO's findings.
  aviation security.--preliminary observations on tsa's progress and 
challenges in meeting the statutory mandate for screening air cargo on 
                           passenger aircraft
What GAO Found
    TSA has made progress in meeting the air cargo screening mandate as 
it applies to domestic cargo. TSA has taken steps that will allow 
screening responsibilities to be shared across the air cargo supply 
chain--including TSA, air carriers, freight forwarders (which 
consolidate cargo from shippers and take it to air carriers for 
transport), and shippers--although air carriers have the ultimate 
responsibility for ensuring that they transport cargo screened at the 
requisite levels. TSA has taken several key steps to meet the mandate, 
including establishing a new requirement for 100 percent screening of 
cargo transported on narrow-body aircraft; revising or eliminating most 
screening exemptions for domestic cargo; creating the Certified Cargo 
Screening Program (CCSP) to allow screening to take place at various 
points in the air cargo supply chain; and establishing a screening 
technology pilot. Although TSA estimates that it achieved the mandated 
50 percent screening level by February 2009 as it applies to domestic 
cargo, the agency cannot yet verify that the requisite levels of cargo 
are being screened. It is working to establish a system to do so by 
April 2009. Also, TSA's screening approach could result in variable 
percentages of screened cargo on passenger flights.
    TSA and industry stakeholders may face a number of challenges in 
meeting the screening mandate, including attracting participants to the 
CCSP, and technology, oversight, and in-bound cargo challenges. TSA's 
approach relies on the voluntary participation of shippers and freight 
forwarders, but it is unclear whether the facilities needed to meet 
TSA's screening estimates will join the CCSP. In addition, TSA has 
taken some steps to develop and test technologies for screening air 
cargo, but the agency has not yet completed assessments of these 
technologies and cannot be assured that they are effective in the cargo 
environment. TSA's limited inspection resources may also hamper its 
ability to oversee the thousands of additional entities that it expects 
to participate in the CCSP. Finally, TSA does not expect to meet the 
mandated 100 percent screening deadline as it applies to in-bound air 
cargo, in part due to existing in-bound screening exemptions and 
challenges it faces in harmonizing security standards with other 
nations. 


    Madam Chairwoman and Members of the subcommittee: I appreciate the 
opportunity to participate in today's hearing to discuss the security 
of the air cargo transportation system. In 2007, about 7.6 billion 
pounds of cargo was transported on U.S. passenger flights--56 percent 
of which was transported domestically and 44 percent of which was 
transported on flights to the United States (in-bound cargo).\1\ In 
response to the terrorist attacks of September 11, 2001, the Aviation 
and Transportation Security Act (ATSA) was enacted in November 2001.\2\ 
ATSA created the Transportation Security Administration (TSA) and 
required it to provide for the screening of all passengers and 
property, including cargo, U.S. mail, and carry-on and checked baggage 
that is transported on passenger aircraft. Recognizing the need to 
strengthen the security of air cargo, Congress passed, and the 
President signed into law, the Implementing Recommendations of the 9/11 
Commission Act of 2007 (9/11 Commission Act), which mandates the 
establishment of a system to physically screen 50 percent of cargo on 
passenger aircraft--including the domestic and in-bound flights of 
foreign and U.S. passenger operations--by February 2009, and 100 
percent of such cargo by August 2010.\3\
---------------------------------------------------------------------------
    \1\ For the purposes of this statement, domestic air cargo refers 
to cargo transported by air within the United States and from the 
United States to a foreign location by both U.S. and foreign-based air 
carriers, and in-bound cargo refers to cargo transported by air from a 
foreign location to the United States.
    \2\ Pub. L. No. 107-71, 115 Stat. 597 (2001).
    \3\ Pub. L. No. 110-53,  1602, 121 Stat. 266, 477-80 (codified at 
49 U.S.C.  44901(g)).
---------------------------------------------------------------------------
    The 9/11 Commission Act establishes minimum standards for screening 
air cargo, and requires that such standards provide a level of security 
commensurate with the level of security for the screening of checked 
baggage. Although the mandate is applicable to both domestic and in-
bound air cargo, TSA stated that it will address the mandate for 
domestic and in-bound cargo through two separate systems. For example, 
while TSA interprets these standards to mean that all cargo, with 
certain exceptions, must be screened by TSA-approved methods, the 
exceptions vary greatly between domestic and in-bound cargo. This 
testimony will therefore address efforts to meet the screening mandate 
as it applies to domestic and in-bound cargo separately.
    My testimony today includes preliminary observations on: (1) TSA's 
progress in meeting the 9/11 Commission Act mandate to screen air cargo 
transported on passenger aircraft as it applies to domestic cargo, and 
(2) the challenges TSA and industry stakeholders may face in screening 
such cargo, including challenges TSA may face in meeting the mandate as 
it applies to in-bound cargo. My comments are based on GAO reports and 
testimonies issued from October 2005 through August 2008 addressing the 
security of the air cargo transportation system.\4\ More detailed 
information on our scope and methodology appears in our published 
reports.
---------------------------------------------------------------------------
    \4\ GAO, Review of the Transportation Security Administration's Air 
Cargo Screening Exemptions Report, (Washington, DC: August 15, 2008); 
Aviation Security: Transportation Security Administration May Face 
Resource and Other Challenges in Developing a System to Screen All 
Cargo Transported on Passenger Aircraft, (Washington, DC: July 15, 
2008); Transportation Security: Transportation Security Administration 
Has Strengthened Planning to Guide Investments in Key Aviation and 
Surface Transportation Security Programs, but More Work Remains, 
(Washington, DC: May 13, 2008); Aviation Security: Federal Efforts to 
Secure U.S.-Bound Air Cargo Are in the Early Stages and Could Be 
Strengthened, (Washington, DC: April 30, 2007); and Aviation Security: 
Federal Action Needed to Strengthen Domestic Air Cargo Security, 
(Washington, DC: October 17, 2005).
---------------------------------------------------------------------------
    This statement also includes information from our on-going review 
of air cargo security requested by the Chairman of the House Committee 
on Homeland Security, Bennie G. Thompson, and Congressman Edward J. 
Markey. The results of this review will be issued later this year. To 
determine the progress TSA has made in meeting the 9/11 Commission Act 
mandate, and to identify any on-going challenges, we reviewed TSA's air 
cargo security programs, and interviewed TSA air cargo program 
officials and representatives from various air cargo industry 
associations. We also conducted site visits to two large U.S. 
commercial airports that process domestic and in-bound air cargo to 
observe screening operations and technologies, and interviewed local 
TSA officials and representatives from air carriers, freight 
forwarders, and shippers to obtain their views on TSA's system to 
implement the screening mandate.\5\ Our site visits and interviews with 
industry stakeholders were based on a judgmental sample and are not 
generalizable to the entire air cargo industry.
---------------------------------------------------------------------------
    \5\ There are about 450 commercial airports in the United States. 
TSA classifies airports into one of five categories (X, I, II, III, and 
IV) based on various factors, such as the total number of takeoffs and 
landings annually, the extent to which passengers are screened at the 
airport, and other special security considerations. In general, 
category X airports have the largest number of passenger boardings, and 
category IV airports have the smallest.
---------------------------------------------------------------------------
    We conducted our work in accordance with generally accepted 
Government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives.
                                summary
    TSA has taken several key steps to meet the air cargo screening 
mandate of the 9/11 Commission Act. These include the following:
   Requiring that each air carrier ensure that 100 percent of 
        domestic cargo transported on its narrow-body passenger 
        aircraft is screened as of October 1, 2008, and that each air 
        carrier ensure that 50 percent of domestic cargo transported on 
        its entire passenger aircraft fleet is screened as of February 
        1, 2009.\6\ Effective February 2009, TSA also revised or 
        eliminated most of its screening exemptions for domestic, but 
        not in-bound, cargo;\7\
---------------------------------------------------------------------------
    \6\ Narrow-body aircraft, such as B-737s and A-320s, are defined by 
fuselage diameter, and most narrow-body aircraft have only one aisle. 
Narrow-body aircraft that fly in the United States do not carry any 
consolidated pallets or unit loading devices (ULD) that allow packages 
to be consolidated in one container. Wide-body aircraft are also 
defined by fuselage diameter, and can carry consolidated pallets or 
ULDs.
    \7\ Details on TSA's screening exemptions are Sensitive Security 
Information and are not discussed in this statement.
---------------------------------------------------------------------------
   Creating the Certified Cargo Screening Program (CCSP) to 
        allow screening to take place earlier in the shipping process 
        and at various points in the air cargo supply chain;
   Conducting outreach to inform air cargo industry 
        stakeholders about the new industry requirements and the CCSP;
   Establishing the Air Cargo Screening Technology Pilot to 
        allow freight forwarders and shippers to operationally test 
        approved screening technology; and:
   Expanding its explosives detection canine program to include 
        85 canine teams dedicated to screening air cargo at 20 major 
        airports.
    However, while TSA estimates that it achieved the February 2009 50 
percent screening mandate as it applies to domestic cargo, the agency 
cannot yet verify that requisite screening levels are being met. In 
addition, although TSA believes its current screening approach enables 
it to meet the statutory screening mandate as it applies to domestic 
cargo, some of the ways in which TSA has defined the terms for 
screening cargo could result in variable percentages of screened cargo 
on passenger flights.
    TSA faces several challenges in meeting the air cargo screening 
mandate. For example, it is unclear whether the facilities needed to 
meet TSA's screening estimates will join its new CCSP, in part because 
the costs could be prohibitive. Moreover, TSA faces a number of 
challenges related to technology--for instance, TSA has not yet 
completed assessments of the technologies it plans to allow air 
carriers and CCSP participants to use to meet the 100 percent cargo 
screening mandate. TSA also faces challenges overseeing compliance with 
the CCSP due to the size of its current transportation security 
inspector (TSI) workforce. In addition, with respect to in-bound cargo, 
TSA does not expect to achieve 100 percent screening of in-bound air 
cargo by the mandated deadline of August 2010. This is due, in part, to 
existing in-bound screening exemptions, and to challenges TSA faces in 
harmonizing the agency's air cargo security standards with those of 
other nations.\8\
---------------------------------------------------------------------------
    \8\ The term harmonization is used to describe countries' efforts 
to coordinate their security practices to enhance security and increase 
efficiency by avoiding duplication of effort. Harmonization efforts can 
include countries mutually recognizing and accepting each other's 
existing practices--which could represent somewhat different approaches 
to achieve the same outcome, as well as working to develop mutually 
acceptable uniform standards.
---------------------------------------------------------------------------
    GAO has made recommendations to the Department of Homeland Security 
(DHS) and TSA in prior reports to increase the security of air cargo, 
including completing vulnerability assessments and re-examining 
existing screening exemptions. DHS generally agreed with these 
recommendations and plans to address them. We discussed the preliminary 
observations that are contained in this statement related to our on-
going work with officials from TSA. TSA officials agreed with our 
findings. TSA also provided us with technical comments, which we have 
incorporated as appropriate.
                               background
    Air cargo ranges in size from 1 pound to several tons, and in type 
from perishables to machinery, and can include items such as electronic 
equipment, automobile parts, clothing, medical supplies, fresh produce, 
and human remains. Cargo can be shipped in various forms, including 
large containers known as unit loading devices (ULD) that allow many 
packages to be consolidated into one container that can be loaded onto 
an aircraft, wooden crates, consolidated pallets, or individually 
wrapped/boxed pieces, known as loose or bulk cargo. Participants in the 
air cargo shipping process include shippers, such as individuals and 
manufacturers; freight forwarders; air cargo handling agents, who 
process and load cargo onto aircraft on behalf of air carriers; and air 
carriers that load and transport cargo.\9\ A shipper may take or send 
its packages to a freight forwarder who in turn consolidates cargo from 
many shippers onto a master air waybill--a manifest of the consolidated 
shipment--and delivers it to air carriers for transport. A shipper may 
also send freight by directly packaging and delivering it to an air 
carrier's ticket counter or sorting center, where the air carrier or a 
cargo handling agent will sort and load cargo onto the aircraft.
---------------------------------------------------------------------------
    \9\ For the purposes of this statement, the term freight forwarders 
only includes those freight forwarders that are regulated by TSA, also 
referred to as indirect air carriers.
---------------------------------------------------------------------------
    According to TSA, the mission of its air cargo security program is 
to secure the air cargo transportation system while not unduly impeding 
the flow of commerce. TSA's responsibilities for securing air cargo 
include, among other things, establishing security requirements 
governing domestic and foreign passenger air carriers that transport 
cargo and domestic freight forwarders. TSA is also responsible for 
overseeing the implementation of air cargo security requirements by air 
carriers and freight forwarders through compliance inspections, and, in 
coordination with DHS's Directorate for Science and Technology (S&T 
Directorate), for conducting research and development of air cargo 
security technologies. Of the nearly $4.8 billion appropriated to TSA 
for aviation security in fiscal year 2009, approximately $123 million 
is directed for air cargo security activities. TSA was further directed 
to use $18 million of this amount to expand technology pilots and for 
auditing participants in the CCSP.
    Air carriers and freight forwarders are responsible for 
implementing TSA security requirements. To do this, they utilize TSA-
approved security programs that describe the security policies, 
procedures, and systems they will implement and maintain to comply with 
TSA security requirements. These requirements include measures related 
to the acceptance, handling, and screening of cargo; training of 
employees in security and cargo screening procedures; testing for 
employee proficiency in cargo screening; and access to cargo areas and 
aircraft. Air carriers and freight forwarders must also abide by 
security requirements imposed by TSA through security directives and 
amendments to security programs.
    The 9/11 Commission Act defines screening for purposes of the air 
cargo screening mandate as a physical examination or nonintrusive 
methods of assessing whether cargo poses a threat to transportation 
security.\10\ The act specifies that screening methods include X-ray 
systems, explosives detection systems (EDS), explosives trace detection 
(ETD), explosives detection canine teams certified by TSA, physical 
search together with manifest verification, and any additional methods 
approved by the TSA Administrator.\11\ For example, TSA also recognizes 
the use of decompression chambers as an approved screening method.\12\ 
However, solely performing a review of information about the contents 
of cargo or verifying the identity of the cargo's shipper does not 
constitute screening for purposes of satisfying the mandate.
---------------------------------------------------------------------------
    \10\ See 49 U.S.C.  44901(g)(5).
    \11\ EDS uses computer-aided tomography X-rays to examine objects 
inside baggage and identify the characteristic signatures of threat 
explosives. ETD requires human operators to collect samples of items to 
be screened with swabs, which are chemically analyzed to identify any 
traces of explosives material. Certified explosives detection canine 
teams have been evaluated by TSA and shown to effectively detect 
explosive devices. Physical search together with manifest verification 
entails comparisons between air waybills and cargo contents to ensure 
that the contents of the cargo shipment matches the cargo identified in 
documents filed by the shipper.
    \12\ Decompression chambers simulate atmospheric pressures 
affecting aircraft by simulating flight conditions, which can cause 
explosives that are attached to barometric fuses to detonate.
---------------------------------------------------------------------------
tsa has made progress in meeting the screening mandate as it applies to 
  domestic cargo; however, tsa cannot yet verify whether the mandated 
                           level is being met
TSA Has Made Progress in Meeting the 50 Percent and 100 Percent 
        Mandated Screening Levels as They Apply to Domestic Cargo
    TSA has taken several key steps to meet the 9/11 Commission Act air 
cargo screening mandate as it applies to domestic cargo. TSA's approach 
involves multiple air cargo industry stakeholders sharing screening 
responsibilities across the air cargo supply chain. TSA, air carriers, 
freight forwarders, shippers, and other entities each play an important 
role in the screening of cargo, although TSA has determined that the 
ultimate responsibility for ensuring that screening takes place at 
mandated levels lies with the air carriers. According to TSA officials, 
this decentralized approach is expected to minimize carrier delays, 
cargo backlogs, and potential increases in cargo transit time, which 
would likely result if screening were conducted primarily by air 
carriers at the airport. Moreover, because much cargo is currently 
delivered to air carriers in a consolidated form, the requirement to 
screen individual pieces of cargo will necessitate screening earlier in 
the air cargo supply chain--before cargo is consolidated. The specific 
steps that TSA has taken to address the air cargo screening mandate are 
discussed below.
    TSA revised air carrier security programs. Effective October 1, 
2008, several months prior to the first mandated deadline, TSA 
established a new requirement for 100 percent screening of nonexempt 
cargo transported on narrow-body passenger aircraft. Narrow-body 
flights transport about 26 percent of all cargo on domestic passenger 
flights.\13\ According to TSA officials, air carriers reported that 
they are currently meeting this requirement. Effective February 1, 
2009, TSA also required air carriers to ensure the screening of 50 
percent of all nonexempt air cargo transported on all passenger 
aircraft. Although screening may be conducted by various entities, each 
air carrier must ensure that the screening requirements are fulfilled. 
Furthermore, effective February 2009, TSA revised or eliminated most of 
its screening exemptions for domestic cargo. As a result, most domestic 
cargo is now subject to TSA screening requirements.
---------------------------------------------------------------------------
    \13\ According to TSA officials, narrow-body aircraft make up most 
domestic passenger flights, and transport most passengers traveling on 
domestic passenger flights.
---------------------------------------------------------------------------
    TSA created the Certified Cargo Screening Program (CCSP). TSA also 
created a program, known as the CCSP, to allow screening to take place 
earlier in the shipping process and at various points in the air cargo 
supply chain. In this program, air cargo industry stakeholders--such as 
freight forwarders and shippers--voluntarily apply to become Certified 
Cargo Screening Facilities (CCSF).\14\ This program allows cargo to be 
screened before it is consolidated and transported to the airport, 
which helps address concerns about the time-intensive process of 
breaking down consolidated cargo at airports for screening purposes. 
TSA plans to inspect the CCSFs in order to ensure they are screening 
cargo as required. TSA initiated the CCSP at 18 major airports that, 
according to TSA officials, account for 65 percent of domestic cargo on 
passenger aircraft. TSA expects to expand the CCSP Nation-wide at a 
date yet to be determined. CCSFs in the program were required to begin 
screening cargo as of February 1, 2009.
---------------------------------------------------------------------------
    \14\ Other facilities that can become CCSFs are manufacturing 
facilities, third-party logistics providers, warehouse/distribution 
centers, and independent cargo screening facilities.
---------------------------------------------------------------------------
    While participation in the CCSP is voluntary, once an entity is 
certified by TSA to participate it must adhere to TSA screening and 
security requirements and be subject to annual inspections by TSIs. To 
become certified and to maintain certification, TSA requires each CCSF 
to demonstrate compliance with increased security standards to include 
facility, personnel, procedural, perimeter, and information technology 
security. As part of the program, and using TSA-approved screening 
methods, freight forwarders must screen 50 percent of cargo being 
delivered to wide-body passenger aircraft and 100 percent of cargo 
being delivered to narrow-body passenger aircraft, while shippers must 
screen 100 percent of all cargo being delivered to any passenger 
aircraft. Each CCSF must deliver the screened cargo to air carriers 
while maintaining a secure chain of custody to prevent tampering with 
the cargo after it is screened.
    TSA conducted outreach efforts to air cargo industry stakeholders. 
In January 2008, TSA initiated its outreach phase of the CCSP in three 
cities and subsequently expanded its outreach to freight forwarders and 
other air cargo industry stakeholders in the 18 major airports. TSA 
established a team of nine TSA field staff to conduct outreach, educate 
potential CCSP applicants on the program requirements, and validate 
CCSFs. According to TSA officials, in February 2009, the agency also 
began using its cargo TSIs in the field to conduct outreach. In our 
preliminary discussions with several freight forwarders and shippers, 
industry stakeholders reported that TSA staff have been responsive and 
helpful in answering questions about the program and providing 
information on CCSP requirements.
    TSA established the Air Cargo Screening Technology Pilot and is 
conducting additional technology pilots. To operationally test ETD and 
X-ray technology among CCSFs, TSA created the Air Cargo Screening 
Technology Pilot in January 2008, and selected some of the largest 
freight forwarders to use the technologies and report on their 
experiences. TSA's objectives for the pilot are to determine CCSFs' 
ability to screen high volumes of cargo, test chain of custody 
procedures, and measure the effectiveness of screening technology on 
various commodity classes. TSA will provide each CCSF participating in 
the pilot with up to $375,000 for purchasing technology. As of February 
26, 2009, 12 freight forwarders in 48 locations are participating in 
the pilot.\15\ The screening they perform as part of the operational 
testing also counts toward meeting the air cargo screening mandate.
---------------------------------------------------------------------------
    \15\ Initially, the Air Cargo Screening Technology Pilot was 
limited to freight forwarders. However, in November 2008, TSA issued a 
second announcement seeking additional freight forwarders and 
independent cargo screening facilities to apply for the pilot. Entities 
that are not part of the technology pilot must still report screening 
volumes to TSA, but not the screening technology data. Moreover, 
entities that do not participate in the pilot will not receive TSA 
funding to purchase screening technology.
---------------------------------------------------------------------------
    TSA expanded its explosives detection canine program. To assist air 
carriers in screening consolidated pallets and unit loading devices, 
TSA is taking steps to expand the use of TSA-certified explosives 
detection canine teams. TSA has 37 canine teams dedicated to air cargo 
screening--operating in 20 major airports--and is in the process of 
adding 48 additional dedicated canine teams. TSA is working with the 
air carriers to identify their peak cargo delivery times, during which 
canines would be most helpful for screening.
    In addition, we reported in October 2005 and April 2007 that TSA, 
working with DHS's S&T Directorate, was developing and pilot testing a 
number of technologies to screen and secure air cargo with minimal 
effect on the flow of commerce.\16\ These pilot programs seek to 
enhance the security of cargo by improving the effectiveness of 
screening for explosives through increased detection rates and reduced 
false alarm rates. A description of several of these pilot programs and 
their status is included in table 1.
---------------------------------------------------------------------------
    \16\ GAO-06-76; GAO-07-660.

   TABLE 1.--TSA AND DHS DIRECTORATE FOR SCIENCE AND TECHNOLOGY PILOT
      PROGRAMS TO TEST TECHNOLOGIES TO SCREEN AND SECURE AIR CARGO
------------------------------------------------------------------------
         Pilot Program               Description            Status
------------------------------------------------------------------------
Air cargo explosives detection   Tests the use of     Consistent with
 pilot program.                   explosives           the conference
                                  detection systems,   report
                                  explosives trace     accompanying the
                                  detectors,           Department of
                                  standard X-ray       Homeland Security
                                  machines, canine     Appropriations
                                  teams,               Act, 2006, DHS's
                                  technologies that    S&T Directorate
                                  can locate a         is required to
                                  stowaway through     report on the
                                  detection of a       initial results
                                  heartbeat or         of the pilots
                                  increased carbon     every 6 months
                                  dioxide levels in    after initiation
                                  cargo, and manual    of the first
                                  screening of air     pilot.* DHS last
                                  cargo.               submitted a
                                                       report dated July
                                                       2008. According
                                                       to DHS officials,
                                                       the final report
                                                       is currently
                                                       undergoing DHS
                                                       executive review
                                                       and DHS plans to
                                                       provide this
                                                       report to
                                                       Congress in March
                                                       2009.
Explosives detection systems     Tests the use of     TSA planned to
 (EDS).                           computer-aided       complete this
                                  tomography to        pilot program in
                                  compare the          May 2008. In
                                  densities of         February 2009,
                                  objects to locate    TSA officials
                                  explosives in air    stated that the
                                  cargo and to         pilot was
                                  determine the long-  completed in
                                  term feasibility     December 2008,
                                  of using EDS         and the final
                                  equipment as a       report should be
                                  total screening      available in July
                                  process for bulk     2009.
                                  air cargo.
Air cargo security seals.......  Explores the         In February 2009,
                                  viability of         TSA officials
                                  potential security   stated that the
                                  countermeasures,     agency is waiting
                                  such as tamper-      for vendors to
                                  evident security     produce
                                  seals, for use       technology that
                                  during transport     it can test and
                                  of screened cargo.   evaluate. TSA
                                                       then plans to
                                                       issue operational
                                                       requirements to
                                                       industry. In
                                                       March 2009, TSA
                                                       officials stated
                                                       that the agency
                                                       has not set time
                                                       frames for this
                                                       process.
------------------------------------------------------------------------
Source: GAO analysis of information provided by TSA.
* H.R. Conf. Rep. No. 109-241, at 53 (2005) (accompanying Pub. L. No.
  109-90, 119 Stat. 2064 (2005)).

TSA Cannot Yet Verify that Screening Is Being Conducted Domestically at 
        the Mandated Level, and TSA's Current Approach Could Result in 
        Variable Percentages of Screened Cargo
    TSA estimates that it achieved the mandate for screening 50 percent 
of domestic cargo transported on passenger aircraft by February 2009, 
based on feedback from air cargo industry stakeholders responsible for 
conducting screening. However, TSA cannot yet verify that screening is 
being conducted at the mandated level. The agency is working to 
establish a system to collect data from screening entities to verify 
that requisite screening levels for domestic cargo are being met. 
Effective February 2009, TSA adjusted air carrier reporting 
requirements and added CCSF reporting requirements to include monthly 
screening reports on the number of shipments screened at 50 and 100 
percent.\17\ According to TSA officials, air carriers will provide to 
TSA the first set of screening data by mid-March 2009. By April 2009, 
TSA officials expect to have processed and analyzed available screening 
data, which would allow the agency to determine whether the screening 
mandate has been met. Thus, while TSA asserts that it has met the 
mandated February 2009, 50 percent screening deadline, until the agency 
analyzes required screening data, TSA cannot verify that the mandated 
screening levels are being achieved.
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    \17\ Details on TSA's reporting requirements are Sensitive Security 
Information and are not discussed in this statement.
---------------------------------------------------------------------------
    In addition, although TSA believes its current screening approach 
enables it to meet the statutory screening mandate as it applies to 
domestic cargo, this approach could result in variable percentages of 
screened cargo on passenger flights.\18\ This variability is most 
likely for domestic air carriers that have a mixed-size fleet of 
aircraft because a portion of their 50 percent screening requirement 
may be accomplished through the more stringent screening requirements 
for narrow-body aircraft, thus allowing them more flexibility in the 
amount of cargo to screen on wide-body aircraft. According to TSA, 
although this variability is possible, it is not a significant concern 
because of the small amount of cargo transported on narrow-body flights 
by air carriers with mixed-size fleets. However, the approach could 
result in variable percentages of screened cargo on passenger flights 
regardless of the composition of the fleet. As explained earlier, TSA 
is in the process of developing a data reporting system that may help 
to assess whether some passenger flights are transporting variable 
percentages of screened cargo. This issue regarding TSA's current air 
cargo security approach will be further explored during our on-going 
review.
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    \18\ Details on TSA's screening approach are Sensitive Security 
Information and are not discussed in this statement.
---------------------------------------------------------------------------
    Lastly, TSA officials reported that cargo that has already been 
transported on one passenger flight may be subsequently transferred to 
another passenger flight without undergoing additional screening. 
According to TSA officials, the agency has determined that this is an 
approved screening method because an actual flight mimics one of TSA's 
approved screening methods.\19\ For example, cargo exempt from TSA 
screening requirements that is transported on an in-bound flight an be 
transferred to a domestic aircraft without additional screening, 
because it is considered to have been screened in accordance with TSA 
screening requirements. According to TSA, this scenario occurs 
infrequently, but the agency has not been able to provide us with data 
that allows us to assess how frequently this occurs. TSA reported that 
it is exploring ways to enhance the security of cargo transferred to 
another flight, including using canine teams to screen such cargo. This 
issue regarding TSA's current air cargo security approach will be 
further explored during our on-going review.
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    \19\ Details on TSA's approved screening methods are Sensitive 
Security Information and are not discussed in this statement.
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  tsa faces participation, technology, oversight, and in-bound cargo 
              challenges in meeting the screening mandate
It Is Unclear Whether TSA Will Be Able to Attract the Voluntary 
        Participants Needed to Meet the 100 Percent Screening Mandate
    Although industry participation in the CCSP is vital to TSA's 
approach to spread screening responsibilities across the supply chain, 
it is unclear whether the number and types of facilities needed to meet 
TSA's screening estimates will join the CCSP. Although TSA is relying 
on the voluntary participation of freight forwarders and shippers to 
meet the screening goals of the CCSP, officials did not have precise 
estimates of the number of participants that would be required to join 
the program to achieve 100 percent screening by August 2010. As of 
February 26, 2009, TSA had certified 172 freight forwarder CCSFs, 14 
shipper CCSFs, and 17 independent cargo screening facilities 
(ICSF).\20\
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    \20\ An independent cargo screening facility is a facility that 
will accept cargo from freight forwarders and shippers, and screen it 
for a fee, according to CCSP guidelines.
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    TSA estimates that freight forwarders and shippers will complete 
the majority of air cargo screening at the August 2010 deadline, with 
shippers experiencing the largest anticipated increase when this 
mandate goes into effect. According to estimates reported by TSA in 
November 2008, as shown in figure 1, the screening conducted by freight 
forwarders was expected to increase from 14 percent to 25 percent of 
air cargo transported on passenger aircraft from February 2009 to 
August 2010, while the screening conducted by shippers was expected to 
increase from 2 percent to 35 percent. For this reason, increasing 
shipper participation in the CCSP is necessary to meet the 100 percent 
screening mandate. 


    As highlighted in figure 1, TSA estimated that, as of February 
2009, screening of cargo delivered for transport on narrow-body 
aircraft would account for half of the mandated 50 percent screening 
level and 25 percent of all cargo transported on passenger aircraft. 
TSA expected screening conducted on cargo delivered for transport on 
narrow-body passenger aircraft to remain stable at 25 percent when the 
mandate to screen 100 percent of cargo transported on passenger 
aircraft goes into effect.\21\ TSA anticipated that its own screening 
responsibilities would grow by the time the 100 percent mandate goes 
into effect. Specifically, TSA anticipated that its canine teams and 
transportation security officers would screen 6 percent of cargo in 
August 2010, up from 4 percent in February 2009. It is important to 
note that these estimates--which TSA officials said are subject to 
change--are dependent on the voluntary participation of freight 
forwarders, shippers, and other screening entities in the CCSP. If 
these entities do not volunteer to participate in the CCSP at the 
levels TSA anticipates, air carriers or TSA may be required to screen 
more cargo than was projected.
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    \21\ TSA expects air carriers operating wide-body aircraft to 
screen approximately 5 percent of cargo as of February 2009, and 9 
percent when the 100 percent mandate goes into effect in August 2010.
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    Participation in the CCSP may appeal to a number of freight 
forwarders and shippers, but industry participants we interviewed 
expressed concern about potential program costs. In preliminary 
discussions with freight forwarders, shippers, and industry 
associations, stakeholders told us that they would prefer to join the 
CCSP and screen their own cargo in order to limit the number of 
entities that handle and open their cargo. This is particularly true 
for certain types of delicate cargo, including fresh produce. Screening 
cargo in the CCSP also allows freight forwarders and shippers to 
continue to consolidate their shipments before delivering them to air 
carriers, which results in reduced shipping rates and less potential 
loss and damage. However, TSA and industry officials with whom we spoke 
agreed that the majority of small freight forwarders--which make up 
approximately 80 percent of the freight forwarder industry--would 
likely find prohibitive the costs of joining the CCSP, including 
acquiring expensive technology, hiring additional personnel, conducting 
additional training, and making facility improvements.\22\ TSA has not 
yet finalized cost estimates for industry participation in air cargo 
screening, but is in the process of developing these estimates and is 
planning to report them later this year. As of February 26, 2009, 12 
freight forwarders in 48 locations have joined TSA's Air Cargo 
Screening Technology pilot and are thus eligible to receive 
reimbursement for the technology they have purchased. However pilot 
participants, to date, have been limited primarily to large freight 
forwarders. TSA indicated that it targeted high-volume facilities for 
the pilot in order to have the greatest effect in helping industry 
achieve screening requirements.
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    \22\ A freight forwarder's size is determined by its annual sales. 
For example, a freight forwarder with $5 million or less in annual 
sales is considered to be small.
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    In response to stakeholder concerns about potential program costs, 
TSA is allowing independent cargo screening facilities to join the CCSP 
and screen cargo on behalf of freight forwarders or shippers. However, 
it is unclear how many of these facilities will join. Moreover, 
according to industry stakeholders, this arrangement could result in 
freight forwarders being required to deliver loose freight to screening 
facilities for screening. This could reduce the benefit to freight 
forwarders of consolidating freight before delivering it to air 
carriers, a central part of the freight forwarder business model.
TSA Has Taken Some Steps to Develop and Test Technologies for Screening 
        Air Cargo, but Has Not Yet Completed Assessments to Ensure 
        Their Effectiveness
    TSA has taken some steps to develop and test technologies for 
screening and securing air cargo, but has not yet completed assessments 
of the technologies it plans to allow air carriers and program 
participants to use in meeting the August 2010 screening mandate.\23\ 
To date, TSA has approved specific models of three screening 
technologies for use by air carriers and CCSFs until August 3, 2010--
ETD, EDS, and X-ray.\24\ TSA chose these technologies based on its 
subject matter expertise and the performance of these technologies in 
the checkpoint and checked baggage environments. According to TSA 
officials, the agency has conducted preliminary assessments, but has 
not completed laboratory or operational testing of these technologies 
in the air cargo environment.
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    \23\ Technologies that successfully pass lab assessments and 
independent testing and evaluation become eligible to undergo 
additional operational testing and evaluation in an operational 
environment. Technologies that successfully pass independent and 
operational evaluation will be added to a list of qualified products.
    \24\ Decompression chambers are also approved for use by air 
carriers.
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    After the technology pilot programs and other testing are complete, 
TSA will determine which technologies will be qualified for screening 
cargo and whether these technologies will be approved for use after 
August 3, 2010. However, TSA is proceeding with operational testing and 
evaluations to determine which of these technologies is effective at 
the same time that screening entities are using these technologies to 
meet air cargo screening requirements. For example, according to TSA, 
ETD technology, which most air carriers and CCSFs plan to use, has not 
yet begun the qualification process. However, it is currently being 
used to screen air cargo as part of the Air Cargo Screening Technology 
Pilot and by air carriers and other CCSFs. Although TSA's acquisition 
guidance recommends testing the operational effectiveness and 
suitability of technologies prior to deploying them, and TSA agrees 
that simultaneous testing and deployment of technology is not ideal, 
TSA officials reported that this was necessary to meet the screening 
deadlines mandated by the 9/11 Commission Act. While we recognize TSA's 
time constraints, the agency cannot be assured that the technologies it 
is currently using to screen cargo are effective in the cargo 
environment, because they are still being tested and evaluated. We will 
continue to assess TSA's technology issues as part of our on-going 
review of TSA's efforts to meet the mandate to screen 100 percent of 
cargo transported on passenger aircraft.
    Although TSA is in the process of assessing screening technologies, 
according to TSA officials, there is no single technology capable of 
efficiently and effectively screening all types of air cargo for the 
full range of potential terrorist threats. Moreover, according to 
industry stakeholders, technology to screen cargo that has already been 
consolidated and loaded onto a pallet or ULD may be critical to meet 
the 100 percent screening mandate. Although TSA has not approved any 
technologies that are capable of screening consolidated pallets or ULDs 
containing various commodities, according to TSA, it is currently 
beginning to assess such technology. TSA officials reported that they 
do not expect to qualify such technology prior to the August 2010 
deadline.
    Air cargo industry stakeholders we interviewed also expressed some 
concerns regarding the cost of purchasing and maintaining screening 
equipment for CCSP participants. Cost is a particular concern for the 
CCSP participants that do not participate in the Air Cargo Screening 
Technology Pilot and will receive no funding for technology or other 
related costs; this includes the majority of CCSFs. Because the 
technology qualification process could result in modifications to TSA's 
approved technologies, industry stakeholders expressed concerns about 
purchasing technology that is not guaranteed to be acceptable for use 
after August 3, 2010. We will continue to assess this issue as part of 
our on-going review of TSA's efforts to meet the mandate to screen 100 
percent of cargo transported on passenger aircraft.
    In addition to the importance of screening technology, TSA 
officials noted that an area of concern in the transportation of air 
cargo is the chain of custody between the various entities that handle 
and screen cargo shipments prior to its loading onto an aircraft. 
Officials stated that the agency has taken steps to analyze the chain 
of custody under the CCSP, and has issued cargo procedures to all 
entities involved in the CCSP to ensure that the chain of custody of 
the cargo is secure. This includes guidance on when and how to secure 
cargo with tamper-evident technology. TSA officials noted that they 
plan to test and evaluate such technology and issue recommendations to 
the industry, but have not set any time frames for doing so. Until TSA 
completes this testing, however, the agency lacks assurances that 
existing tamper-evident technology is of sufficient quality to deter 
tampering and that the air cargo supply chain is effectively secured. 
We will continue to assess this issue as part of our on-going review of 
TSA's efforts to meet the mandate to screen 100 percent of cargo 
transported on passenger aircraft.
Limited Staffing Resources May Hamper TSA's Ability to Effectively 
        Oversee the Thousands of Additional Entities Involved in 
        Meeting the Air Cargo Screening Mandate
    Although the actual number of cargo TSIs increased each fiscal year 
from 2005 to 2009, TSA still faces challenges overseeing compliance 
with the CCSP due to the size of its current TSI workforce. To ensure 
that existing air cargo security requirements are being implemented as 
required, TSIs perform compliance inspections of regulated entities, 
such as air carriers and freight forwarders. Under the CCSP, TSIs will 
also perform compliance inspections of new regulated entities, such as 
shippers and manufacturers, who voluntarily become CCSFs. These 
compliance inspections range from an annual review of the 
implementation of all air cargo security requirements to a more 
frequent review of at least one security requirement. According to TSA, 
the number of cargo TSIs grew from 160 in fiscal year 2005 to about 500 
in fiscal year 2009. However, cargo TSI numbers remained below levels 
authorized by TSA in each fiscal year from 2005 through 2009, which, in 
part, led to the agency not meeting cargo inspection goals in fiscal 
year 2007. As highlighted in our February 2009 report, TSA officials 
stated that the agency is still actively recruiting to fill vacant 
positions but could not provide documentation explaining why vacant 
positions remained unfilled.\25\ Additionally, TSA officials have 
stated that there may not be enough TSIs to conduct compliance 
inspections of all the potential entities under the CCSP, which TSA 
officials told us could number in the thousands, once the program is 
fully implemented by August 2010. TSA officials also indicated plans to 
request additional cargo TSIs in the future, although the exact number 
has yet to be formulated. According to TSA officials, TSA does not have 
a human capital or other workforce plan for the TSI program, but the 
agency has plans to conduct a staffing study in fiscal year 2009 to 
identify the optimal workforce size to address its current and future 
program needs. Until TSA completes its staffing study, TSA may not be 
able to determine whether it has the necessary staffing resources to 
ensure that entities involved in the CCSP are meeting TSA requirements 
to screen and secure air cargo. We will continue to assess this issue 
as part of our on-going review of TSA's efforts to meet the mandate to 
screen 100 percent of cargo transported on passenger aircraft.
---------------------------------------------------------------------------
    \25\ GAO, Aviation Security: Status of Transportation Security 
Inspector Workforce, GAO-09-123R (Washington DC: February 6, 2009).
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TSA Has Taken Some Steps to Meet the Screening Mandate as It Applies to 
        In-bound Cargo but Does Not Expect to Achieve 100 Percent 
        Screening of In-bound Cargo by the August 2010 Deadline
    To meet the 9/11 Commission Act screening mandate as it applies to 
in-bound cargo, TSA revised its requirements for foreign and U.S.-based 
air carrier security programs and began harmonization of security 
standards with other nations. The security program revisions generally 
require carriers to screen 50 percent of nonexempt in-bound cargo. TSA 
officials estimate that this requirement has been met, though the 
agency is not collecting screening data from air carriers to verify 
that the mandated screening levels are being achieved. TSA has taken 
several steps toward harmonization with other nations. For example, TSA 
is working with foreign governments to improve the level of screening 
of air cargo, including working bilaterally with the European 
Commission (EC) and Canada, and quadrilaterally with the EC, Canada, 
and Australia. As part of these efforts, TSA plans to recommend to the 
United Nations' International Civil Aviation Organization (ICAO) that 
the next revision of Annex 17 to the Convention of International Civil 
Aviation (due for release in 2009) include an approach that would allow 
screening to take place at various points in the air cargo supply 
chain.\26\ TSA also plans to work with the International Air Transport 
Association (IATA), which is promoting an approach to screening cargo 
to its member airlines.\27\ Finally, TSA continues to work with U.S. 
Customs and Border Protection (CBP) to leverage an existing CBP system 
to identify and target high-risk air cargo.
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    \26\ ICAO is a specialized agency of the United Nations with the 
primary objective to provide for the safe, orderly, and efficient 
development of international civil aviation.
    \27\ IATA is an industry association that represents about 230 air 
carriers constituting 93 percent of international scheduled air 
traffic.
---------------------------------------------------------------------------
    However, TSA does not expect to achieve 100 percent screening of 
in-bound air cargo by the August 2010 screening deadline. This is due, 
in part, to TSA's in-bound screening exemptions, and to challenges TSA 
faces in harmonizing its air cargo security standards with those of 
other nations. TSA requirements continue to allow screening exemptions 
for certain types of in-bound air cargo transported on passenger 
aircraft.\28\ TSA could not provide an estimate of what percentage of 
in-bound cargo is exempt from screening. In April 2007, we reported 
that TSA's screening exemptions on in-bound cargo could pose a risk to 
the air cargo supply chain and recommended that TSA assess whether 
these exemptions pose an unacceptable vulnerability and, if necessary, 
address these vulnerabilities.\29\ TSA agreed with our recommendation, 
but has not yet reviewed, revised, or eliminated any screening 
exemptions for cargo transported on in-bound passenger flights, and 
could not provide a time frame for doing so. Furthermore, similar to 
changes for domestic cargo requirements discussed earlier, TSA's 
revisions to in-bound requirements could result in variable percentages 
of screened cargo on passenger flights to the United States. We will 
continue to assess this issue as part of our on-going review of TSA's 
efforts to meet the mandate to screen 100 percent of cargo transported 
on passenger aircraft.
---------------------------------------------------------------------------
    \28\ Details on TSA's screening exemptions are Sensitive Security 
Information and are not discussed in this statement.
    \29\ GAO-07-660.
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    Achieving harmonization with foreign governments may be 
challenging, because these efforts are voluntary and some foreign 
countries do not share the United States' view regarding air cargo 
security threats and risks. Although TSA acknowledges it has broad 
authority to set standards for aviation security, including the 
authority to require that a given percentage of in-bound cargo be 
screened before it departs for the United States, TSA officials caution 
that if TSA were to impose a strict cargo screening standard on all in-
bound cargo, many nations likely would be unable to meet such standards 
in the near term. This raises the prospect of substantially reducing 
the flow of cargo on passenger aircraft or possibly eliminating it 
altogether. According to TSA, the effect of imposing such screening 
standards in the near future would be, at minimum, increased costs for 
international passenger travel and for imported goods, and possible 
reduction in passenger traffic and foreign imports. According to TSA 
officials, this could also undermine TSA's on-going cooperative efforts 
to develop commensurate security systems with international partners.
    TSA agreed that assessing the risk associated with the in-bound air 
cargo transportation system will facilitate its efforts to harmonize 
security standards with other nations. Accordingly, TSA has identified 
the primary threats associated with in-bound air cargo, but has not yet 
assessed which areas of in-bound air cargo are most vulnerable to 
attack and which in-bound air cargo assets are deemed most critical to 
protect. Although TSA agreed with our previous recommendation to assess 
in-bound air cargo vulnerabilities and critical assets, it has not yet 
established a methodology or time frame for how and when these 
assessments will be completed. We continue to believe that the 
completion of these assessments is important to the security of in-
bound air cargo.
    Finally, the amount of resources TSA devotes to in-bound compliance 
is disproportionate to the resources for domestic compliance. In April 
2007, we reported that TSA inspects air carriers at foreign airports to 
assess whether they are complying with air cargo security requirements, 
but does not inspect all air carriers transporting cargo into the 
United States.\30\ Furthermore, in fiscal year 2008, in-bound cargo 
inspections were performed by a cadre of 9 International TSIs with 
limited resources, compared to the 475 TSIs that performed domestic 
cargo inspections. By mid-fiscal year 2008, international compliance 
inspections accounted for a small percentage of all compliance 
inspections performed by TSA, although in-bound cargo made up more than 
40 percent of all cargo on passenger aircraft in 2007. Regarding in-
bound cargo, we reported in May 2008 that TSA lacks an inspection plan 
with performance goals and measures for its international inspection 
efforts, and recommended that TSA develop such a plan.\31\ TSA 
officials stated in February 2009 that they are in the process of 
completing a plan to provide guidance for inspectors conducting 
compliance inspections at foreign airports, and intend to implement the 
plan during fiscal year 2009. Finally TSA officials stated that the 
number of international TSIs needs to be increased.
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    \30\ GAO-07-660.
    \31\ GAO-08-487T.
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    Madam Chairwoman, this concludes my statement. I look forward to 
answering any questions that you or other Members of the subcommittee 
may have at this time.

    Ms. Jackson Lee. I thank both gentlemen for their 
testimony.
    I remind each Member that he or she will have 5 minutes to 
question the panel.
    I now recognize myself for 5 minutes.
    When I make that statement, I think there is probably an 
appropriate sigh that might come after that before I even enter 
into the questions, because we are all here to try to make 
Government work, and I mentioned the word ``verify,'' Mr. Lord, 
quite frequently in my testimony. So I really think I am going 
to go directly to you.
    The verifying question gives me pause, the formula for 
verifying gives me added pause, and I would like to have you 
restate your concerns about verification, whether or not it is 
the approach, the formula that is being used, the cooperation 
of our aviation industry. So I have given you three points 
there.
    Then I want to go to a point that was raised in a letter 
that we received from TSA that talks about commensurate--were 
you able to determine what kind--what level of screening does 
it equate to? Passenger luggage? Or are we at a lesser level 
than that? Did your research or your investigation take you to 
that level? If it did not, then I think I am going to add 
another aspect to our inquiry when we seek to ask you for more 
review.
    Mr. Lord.
    Mr. Lord. I would be glad to respond to that.
    In the first phase of our assignment, we focused on what 
data the agency had in place to verify compliance with the 
legislative mandate. We spent a lot of time trying to 
understand the system; and, to its credit, TSA is putting in 
place a system that they expect will help answer that question 
next month.
    The broader issue of whether the entire process provides a 
level of security commensurate with checked baggage, that is 
something we are looking at. We are consulting closely with 
TSA, our counsel's office, their counsel's office. I understand 
that is the overall----
    Ms. Jackson Lee. So we don't have an answer at this time. 
Is the data that you looked at, is that a degree of software 
that you find adequate for this review?
    Mr. Lord. Excuse me?
    Ms. Jackson Lee. The data that you looked at, does that 
include software that you think is adequate for this review?
    Mr. Lord. They have designed a system. They have initial 
reports streaming in and out. It is up to them to, No. 1, judge 
whether the data is reliable, scrub the data, and then analyze 
it.
    Ms. Jackson Lee. Where does the data come from? Is this 
submission by airline companies?
    Mr. Lord. Yes.
    Ms. Jackson Lee. What about the question about verifying? 
Where are we in that? That was a question that you raised in 
your testimony or in your report.
    Mr. Lord. That is our job. We help this committee conduct 
oversight, and we typically focus on the data. We are trained 
to study the data, trends in data. Our position is we haven't 
seen the data.
    Ms. Jackson Lee. You were also saying you question whether 
TSA can verify what is going on, that they are doing 50 
percent.
    Mr. Lord. That is true. We typically look at the system, 
the agencies that put into place, to judge performance. That is 
the basic point of our testimony. They are in the process of 
putting into place a system. So even though they are confident 
they have met the threshold, there is no analytical basis to 
determine that at this point.
    Ms. Jackson Lee. We thank you.
    Mr. Kelly, why don't you tell me about your assessment as 
to whether TSA will be able to meet the 100 percent screening 
mandate--which, in essence, I am sort of putting the cart 
before the horse, but where are you now specifically with 
respect to the 50 percent deadline that was on--that just 
passed in February?
    Mr. Kelly. Madam Chairwoman, in order to ascertain whether 
the airlines have achieved the requirement of 50 percent 
screening, what we have done is we have done polls of the 
airlines, we have talked to each of the airline security--the 
people at the security part of the airlines to discuss with 
them what their airlines are doing and are they achieving the 
goal. No. 2, we have our inspectors--our cargo inspectors out 
at the airline facility spot checking each of the individual 
airlines to make sure that they are complying with the----
    Ms. Jackson Lee. Is this manual? Airlines are giving you 
written pieces of paper or somebody is standing there standing 
in front of your inspector and giving them information?
    Mr. Kelly. It is both. The airlines feed to us the data 
which we have asked them to furnish to us, which is the 
screening data, which we will take and we are putting it into a 
system to accumulate it by airport, by airline; and we are also 
sending our inspectors out to observe what is being done at 
each of the facilities that they are inspecting.
    Ms. Jackson Lee. Mr. Kelly, I know that you have just come 
on in the last 2 or 3 years. You have an Office of Science and 
Technology. There have been a lot of small businesses that have 
offered new technology that would have led up to being prepared 
for this challenge. Has anyone put on your desk new 
technologies that small businesses, such as one that we will 
have as a witness, but, in any event, that has come to your 
attention that could help utilize or help airlines utilize to 
help so this process can move forward?
    Mr. Kelly. Yes, we have been coordinating with the Science 
and Technology Director to look at what I would consider non-
standard screening technologies. It is not X-ray. It doesn't 
have to be X-ray or EDS. What we are looking at are things such 
as metal detectors to screen cargo, produce.
    Ms. Jackson Lee. Are any of those in place now?
    Mr. Kelly. No, there are none in place. We have them at the 
science and technology facilities.
    Ms. Jackson Lee. I would appreciate that if you could 
gather that and provide this committee with a list of what you 
are looking at and the progress of their being able to be 
utilized.
    Mr. Kelly. Absolutely, yes.
    Ms. Jackson Lee. Let me finish in my question here. I am 
still trying to hear, of the 50 percent deadline verification 
that was due this past February, where exactly is TSA in that 
ability to verify?
    Mr. Kelly. We are in the process today or this week of 
receiving the data from the airlines, and we are putting it 
into a system, and we will analyze the output of that system 
and then report it to you by mid-April of this year.
    Ms. Jackson Lee. Is your airline selective, or are all of 
the airlines flying in the Nation's skies today?
    Mr. Kelly. It is every airline in every airport by month.
    Ms. Jackson Lee. We will probably have another inquiry to 
get that list in some format, and I am going to try to 
formulate the question.
    Let me now recognize the distinguish Ranking Member, Mr. 
Dent of Pennsylvania, for his 5 minutes of questioning.
    Mr. Dent. Mr. Kelly, in your written statement you indicate 
that the industry is, ``currently screening at least 50 percent 
of air cargo transport on passenger aircraft on flights 
originating in the United States.'' When compared to the actual 
language of the 9/11 Act, your statement includes some 
qualification that I wish to explore further here today.
    Why does your statement include qualifications such as 
``originating in the United States''? Does the TSA not include 
in its calculations air cargo transported by international 
flights?
    Mr. Kelly. We do, and we state that we have met the 50 
percent requirement for both in-bound international freight and 
in freight originating in flights out-bound from the U.S. 
airports.
    Mr. Dent. Based on TSA's statistics, 50,000 tons of air 
cargo are transported daily. Of these, 7,500 tons are carried 
on passenger aircraft. How much is carried on in-bound foreign 
air carriers?
    Mr. Kelly. Those numbers you are referencing are out-bound 
U.S. originated cargo. The total cargo moving on passenger 
airplanes is about 7 billion bounds a year. Four billion of 
that is out-bound from the United States; 3 billion is in-bound 
to the United States.
    Mr. Dent. So 3 billion in-bound?
    Mr. Kelly. Yes.
    Mr. Dent. When TSA provides the Congress its statistics for 
the amount of cargo screened, do you include this exempted 
cargo, or do you take that off the top and not include it in 
your calculations?
    Mr. Kelly. We include all cargo, including cargo that is 
subject to alternate means.
    Mr. Dent. So the TSA is required to provide an inspection 
regime commensurate with that covering passenger baggage. How 
does TSA propose to ensure that foreign air carriers bound for 
the United States provide this commensurate level of security 
for in-bound cargo?
    Mr. Kelly. TSA is working with our foreign partners to 
harmonize our programs so that their level of screening is 
equal to ours. Until they get to that, what they have to follow 
is our model security program, which we verified through our 
international inspection force.
    Mr. Dent. I would like to get to the issue of harmonization 
here in a second. I will turn to Mr. Lord on that subject.
    I am concerned that no matter what the Herculean efforts 
that TSA may apply, the statutory requirements for TSA's 
mandate to truly screen 100 percent of air cargo will not and 
cannot be achieved for many years because of the need for 
significant international discussions or harmonization. Would 
you agree that TSA will not meet its statutory requirement for 
the screening of 100 percent of all air cargo?
    Mr. Kelly. I would have to agree.
    Mr. Dent. I would have to ask Mr. Lord.
    Mr. Lord. Yes. TSA has already informed us as part of our 
on-going engagement they don't plan to meet the 100 percent 
deadline.
    Mr. Dent. Do you agree that TSA's most significant hurdle 
to meeting the congressional mandate for 100 percent of all air 
cargo will be the necessary cooperation with foreign 
governments?
    Mr. Kelly. We identified two issues, addressing the 
exemption issues and harmonization standards with other 
nations. They are both very important issues that need to be 
addressed before we will be able to achieve the 100 percent.
    Mr. Dent. So the TSA has been throwing around percentages, 
but these have included a series of qualifiers. They use words 
like ``domestic'' or ``out-bound.'' Do these qualifiers mask 
the actual percentages being reached by the industry?
    Mr. Kelly. Could you repeat the question again, sir?
    Mr. Dent. I was talking about these qualifiers, that the 
TSA has been throwing around percentages, and they have these 
various series of qualifiers that use words like ``domestic'' 
or ``out-bound''. Do these qualifiers mask the actual 
percentage being reached by the industry?
    Mr. Kelly. I don't think those two qualifiers do. Out-
bound, they basically segregate the data: domestic, which 
includes flights originating in the United States flying out of 
the country, then in-bound. But they have--it is a separate set 
of issues for both. But those are commonly understood terms, as 
I understand it.
    I think the issue is, though, to what extent the in-bound 
cargo traffic is exempt from screening. You have to understand 
the significance of these exemptions to really understand 
whether they are going to be able to achieve the 100 percent on 
the in-bound.
    Mr. Dent. How much cargo is being exempted, and how much is 
being screened by means other than what is listed in the 9/11 
Act?
    Mr. Lord. That is a great question. We asked TSA what--for 
example, regarding the in-bound, what percent of the cargo was 
currently exempted from screening; and they reported to us they 
weren't--they didn't have the data at their disposal to answer 
that. Even if they did, I would caution that is considered 
sensitive security information, the exact percentages. We 
wouldn't be able to discuss that in an open forum anyway, the 
significance of the exemptions.
    Mr. Dent. Mr. Kelly, did you want to address that last 
question on how much is being exempted and how much is being 
screened?
    Mr. Kelly. Like Mr. Lord said, that is sensitive 
information. We would be happy to talk about it off-line.
    Mr. Dent. I would love to have that opportunity, Madam 
Chairwoman. I realize my time has expired.
    Ms. Jackson Lee. We will engage with TSA in a briefing 
along with other security organizations with this issue.
    It is now my privilege to recognize the full committee 
Chairman, Mr. Thompson, for 5 minutes of questioning.
    Mr. Thompson. Thank you very much, Madam Chairwoman.
    Mr. Kelly, you mentioned that with the Narrow Body 
Amendment TSA is screening cargo on flights carrying 85 percent 
of the public. Can you tell me what lessons learned, if any, 
the Department has obtained from that?
    Mr. Kelly. Well, I think what it has done is, No. 1, we 
have learned a lesson that we could make a small step in the 
process and make a huge step in securing the traveling public. 
I think that is one of the key lessons that we have learned.
    The other lesson is that, while this may be low-hanging 
fruit, it is probably not--it doesn't foretell the level of 
complexity and difficulty that is going to be encountered by 
the air cargo industry in getting from the 50 percent to the 
100 percent.
    Mr. Thompson. Since you raised the 50 percent, please tell 
the committee why did TSA miss the February deadline?
    Mr. Kelly. Well, Mr. Thompson, I would argue that we didn't 
miss the deadline. We have missed the ability to report on it. 
But we consider, and all indications are, is that the airline 
did, in fact--the airlines have, in fact, accomplished the 50 
percent screening.
    Mr. Thompson. Mr. Lord, do you agree with what Mr. Kelly 
just said?
    Mr. Lord. I have a lot of respect for Mr. Kelly and what he 
said was--it may turn out to be accurate. But, at this time, 
since I am from GAO and we are trained to look at the data, my 
simple retort is, ``show me the data.''
    Mr. Thompson. Did you see anything?
    Mr. Lord. We know they are in the process of gathering it 
and analyzing it, but as of yet have they met the threshold or 
not? We simply don't know.
    Mr. Thompson. So I take it, Mr. Kelly, that you disagree 
with Mr. Lord?
    Mr. Kelly. I would never disagree with Mr. Lord.
    No. Really, as I said, we feel that the industry has 
accomplished the milestone; and we will be able to verify that 
to the committee by mid-April.
    Mr. Thompson. So in the absence of submitting the 
information in a timely manner, you will stipulate that you 
missed the congressional-mandated February deadline?
    Mr. Kelly. So stipulated.
    Mr. Thompson. Thank you.
    From the standpoint of technology, what has been your 
experience within TSA for how long it takes new ideas to get 
through the system and implement it?
    Mr. Kelly. I don't know if I have been around long enough 
to really answer that question accurately, but I find that most 
of the research that has been done for screening has been 
centered around the efforts of screening baggage and passengers 
at the checkpoints. There has been very little time and money 
devoted to screening of cargo.
    Now, in the last 6 months, we have had a lot of discussions 
with the science and technology group and our own technology 
force internally to TSA, and they recognize where the 
shortfalls are, and they are making a concerted effort to try 
to find technologies that will fill the gaps that we have in 
the cargo screening theater.
    Mr. Thompson. Are you involved in that process at all?
    Mr. Kelly. Absolutely.
    Mr. Thompson. Even though you haven't been around a long 
time and you know that this mandate for screening is upon you, 
can you give the committee a guesstimate of how long it takes 
for new technology to get through TSA's system of review?
    Mr. Kelly. Honestly, I can't. I don't have that 
information.
    Mr. Thompson. Okay. Can you then tell me, is it an issue 
that you don't have the money to do it or you don't have the 
staff or both of--why you can't provide that?
    Mr. Kelly. I think, as I said, TSA was more focused on 
baggage screening than they were on cargo screening; and that 
has now shifted with the introduction of the 9/11 Act. That 
emphasis has shifted, and they are now looking at the issues 
related to screening of air cargo. I think what we have tried 
to encourage with the Science and Technology Directorate is to 
look outside the box and look for innovative ways of screening 
cargo. I think they are right now doing that; and, hopefully, 
we will find technologies that are good.
    Mr. Thompson. Well, I beg the indulgence of the committee, 
Madam Chairwoman.
    Can you provide the committee with whatever those new ideas 
or new technologies are that you presently have under review?
    Mr. Kelly. Absolutely, yes.
    Mr. Thompson. Thank you.
    Ms. Jackson Lee. I thank the Chairman. I think we have 
asked the same questions, so I hope that we will be able to put 
that in writing so that you can understand it appropriately.
    I think we have enough time to yield again. So let me 
indicate the Chair will now recognize other Members for 
questions they may wish to ask the witnesses. In accordance 
with our committee rules and practice, I will recognize Members 
who were present at the start of the hearing based on the 
starting of the subcommittee, alternating between the majority 
and minority. Those coming in later will be recognized as they 
arrive.
    We will now recognize Mr. Lujan for 5 minutes.
    Mr. Lujan. Thank you, Madam Chairwoman.
    My questions fall exactly in line with where Chairman 
Thompson left off and talking specifically about the technology 
and some of the advantages that we could be using to assist you 
in meeting these goals.
    In your testimony, Mr. Lord, it clearly states, as you 
point out, that TSA faces a number of challenges related to 
technology. You highlighted the effectiveness while TSA 
contractors are utilizing technologies before standards have 
been met, in utilizing technology and creating these standards 
with technological advances with other nations as we move 
forward.
    My question specifically, I guess, Mr. Kelly, is what can 
be done to be able to utilize the technology that we are using 
here in the United States to be able to create these standards 
and formalize these standards with other nations?
    Mr. Kelly. Well, one thing we are doing in working with the 
science and technology group is we have set up I guess what I 
would call live labs at airline facilities--one in New York and 
one in Miami--where we are actually placing the technologies 
that we hope will work with screening cargo in these facilities 
so that we can test it on a live environment, rather than do it 
in a lab.
    We find that if you are working in a lab, people wearing 
white coats and white gloves, there is no dirt around, and 
whereas if you can put it in a cargo facility, it is going to 
be what is actually going to happen with the equipment, and we 
get a better result on the effectiveness of that equipment.
    Mr. Lujan. Okay. Mr. Lord, again, your testimony points out 
that the 9/11 Act defines screening for the purposes of the air 
cargo screening mandate as a physical examination or 
nonintrusive methods for assessing whether cargo poses a threat 
to transportation security with examples of various 
technologies.
    I would go back, Mr. Kelly, to maybe embrace some of the 
work that is being done with some of the labs and in the lab 
environment.
    Los Alamos National Labs, which is a national laboratory in 
my district, is developing a variety of technologies that could 
make air cargo screening more effective and more affordable. 
The national labs are developing technologies that will improve 
the safety and affordability of air cargo screening and air 
travel in general.
    For example, the Magvid scanner is capable of identifying 
liquids and gels within sealed cargo or baggage using 
technology similar to the magnetic resonance imaging systems.
    They are also developing the advanced active interrogation 
systems and advanced spectroscopic portal monitors, which are 
capable of detecting nuclear and radiological materials and can 
be adapted for cargo screening.
    My specific question is, how are--and this would be to both 
of you--how, specifically, is TSA or other organizations 
incorporating the new innovative technologies being developed 
by national laboratories across the country in its protection 
of air passengers?
    Mr. Kelly. Well, I can't speak for the S&T Directorate, but 
I know that they are very heavily involved with the various 
laboratories throughout the United States in what they are 
developing at those laboratories.
    Mr. Lujan. Madam Chairwoman, what I would like to do, if at 
all possible, is submit to the committee, and maybe we can 
submit it to TSA as a recommendation, various technologies that 
are being explored by national laboratories around the country 
that maybe can assist us in meeting these goals.
    I know we are short on time, Madam Chairwoman, so, with 
that, I yield back.
    Ms. Jackson Lee. We would be happy to receive that from the 
gentleman. I am not sure if he has a list now that he would 
like to submit into the record?
    Mr. Lujan. Later.
    Ms. Jackson Lee. So the gentleman will submit it later.
    Let me yield to the distinguished gentleman from Missouri, 
Mr. Cleaver.
    Mr. Cleaver, we are trying to get you in and allow these 
gentlemen to depart. You are yielded at this time. Thank you, 
Mr. Cleaver.
    Mr. Cleaver. Thank you, Madam Chairwoman.
    Mr. Kelly, my concern is that we, I mean, we have so many 
challenges, it seems, still before us. We are told that there 
are not enough inspectors. Is that accurate?
    Mr. Kelly. Well, I think presently we have enough 
inspectors to do at the level of screening that we are at 
today. But, as the system grows, as the Certified Cargo 
Screening system grows, we will probably have to re-evaluate 
the needs of our inspectors, and staff accordingly.
    Mr. Cleaver. Now, if we don't have the sophisticated 
screening equipment that would allow us to actually screen 
crates with cargo over 10 feet long, then it means--this is a 
question--it means that we would have to do it manually, that 
we would have to actually open up crates and screen the 
material; is that accurate?
    Mr. Kelly. Yes, it is. But also, if the facility that 
crated the goods was a Certified Cargo Screening facility, then 
they would screen it before they closed up the crate, and it 
would be considered screened at that point.
    Mr. Cleaver. Okay. But how do we--I mean, it seems like we 
are going to have a traffic jam, you know, as we move toward 
fulfilling the congressional mandate that--I mean, you are 
saying you have enough people at this moment to do the work, 
but we are talking just another year. You know, I am frustrated 
now in my questioning because I know we have to go vote, and I 
am not able to get into the depths of this whole issue.
    Mr. Kelly. Well, if you want, we could meet with you and 
talk to you.
    Mr. Cleaver. Yeah, I am very much interested in the 
problems, or apparent problems, of lack of inspectors, and 
particularly in light of the fact that you have a short 
timeline.
    Mr. Kelly. Well, the TSA inspectors don't screen cargo. 
What they do is they are inspectors to make sure that the 
airlines or the screening facilities comply with the 
regulation. So they are not physically screening the cargo.
    Mr. Cleaver. Then who is?
    Mr. Kelly. The airlines will do it, the freight forwarders 
will do it, the shippers will do it, manufacturers.
    Mr. Cleaver. We are just estimating that we are at 50 
percent?
    Mr. Kelly. No.
    Mr. Cleaver. We know?
    Mr. Kelly. Well, we will verify that and advise you mid-
April as to the status of where we are.
    Mr. Cleaver. But it won't be an estimate?
    Mr. Kelly. It won't be an estimate, no.
    Mr. Cleaver. Okay.
    Madam Chairwoman, thank you. I yield back the balance of my 
time.
    Ms. Jackson Lee. I thank the gentleman.
    Mr. DeFazio. Can I ask one really quick question? You can 
leave and I will take over as temporary Chair if you are 
worried about the time.
    Ms. Jackson Lee. I will be happy to yield to the gentleman. 
Two of us have clarifying questions, and we are trying to 
dismiss them.
    Mr. DeFazio. Right. I just want to express a concern. I 
would love to follow up with Mr. Kelly. That is all.
    Ms. Jackson Lee. The gentleman from Oregon is recognized.
    Mr. DeFazio. I would love to follow up with you. It is a 
particular parochial concern; all politics are local. It has to 
do with cherries and the, sort of, improbabilities and 
possibilities of how we are going to screen the 2 months' worth 
of intense cherry exports we have by air freight every year, a 
very valuable commodity. I just need to follow up with you and 
see if there is some way we can deal with this, because right 
now we don't think it is going to work.
    Mr. Kelly. All right. Fine.
    Mr. DeFazio. I will have my staff follow up.
    Mr. Kelly. Okay. We have had a lot of discussions----
    Mr. DeFazio. Yeah, and we will point to what we think are 
still some problems. Your one person--your one person--out 
there in the whole Northwest is doing a great job, but he 
probably needs to be cloned, duplicated, replicated.
    Mr. Kelly. Well, thank you. I appreciate that.
    Ms. Jackson Lee. Mr. DeFazio, let's get his name, he or 
she, that is doing a great job. We want to make sure we do 
clone him.
    I have a clarifying question, and then we will dash--thank 
you very much, Mr. DeFazio--we will dash and be able to dismiss 
this particular panel. So I yield myself just a brief moment.
    Mr. Kelly, let me understand, have you conceded or admitted 
that you missed the deadline of February 9, No. 1? No. 2, you 
are not verifying 50 percent? Have you conceded to both of 
those points?
    Mr. Kelly. No----
    Ms. Jackson Lee. You missed the deadline of February 9 to 
meet 50 percent, and you also say you are not able to verify 50 
percent cargo inspection. Is that what you are saying to us 
today?
    Mr. Kelly. We are in the process of verifying the 50 
percent cargo----
    Ms. Jackson Lee. But right now, today, you cannot verify 
that.
    Mr. Kelly. Right now we cannot verify it, no.
    Ms. Jackson Lee. Mr. Lord, what did you say? You are 
agreeing that they can't verify it. Do you expect they will 
ever be able to verify it?
    Mr. Lord. I indicated they are in the process of verifying; 
they can't do it today.
    Ms. Jackson Lee. Pardon me?
    Mr. Lord. I indicated they are in the process of verifying, 
but, as of today, they can't tell you whether they have met it 
or not.
    Ms. Jackson Lee. All right.
    Last point, Mr. Kelly, on airlines, are you saying airlines 
are cooperating, giving you information, or you are getting 
information from them?
    Mr. Kelly. They are cooperating, and they are feeding the 
information to us.
    Ms. Jackson Lee. Okay. I would like to get, again--I think 
I asked the question--a list of the airlines, and we will 
pursue that at a later time.
    I yield to the gentleman, Mr. Dent of Pennsylvania.
    Mr. Dent. Thank you, Madam Chairwoman.
    Very quickly, Mr. Kelly, do you consider exempted cargo 
when conducting your statistical analysis?
    Mr. Kelly. We include all cargo in the base of what we 
are--to how we get to the 50 percent, we include all cargo.
    Mr. Dent. Including exempted cargo?
    Mr. Kelly. Yes.
    Mr. Dent. Okay. Then, without going into detail, do you 
right now know the amount of cargo you exempted in 2008 from 
screening, yes or no?
    Mr. Kelly. No.
    Mr. Dent. So I guess the question then is, how is that 
possible?
    Mr. Kelly. Well, I mean, I don't know, and I don't know if 
I can find out. But I could look to see.
    Mr. Dent. Okay. I would appreciate your following up. We 
have to go run to vote, so thank you.
    Ms. Jackson Lee. Thank you, Mr. Dent.
    There being no further questions for our first panel, I 
thank the witnesses for appearing before the subcommittee 
today. Again, they are great public servants. We appreciate 
that.
    The Members of the subcommittee may have additional 
questions for you, and we ask that you respond to them 
expeditiously in writing.
    We now will ask that you graciously accept the fact that 
this committee is in recess. When we return, we will start with 
our second panel.
    The committee now stands in recess.
    [Recess.]
    Ms. Jackson Lee. This hearing will now be reconvened, and 
let me thank all of you for your patience.
    I thought I would acknowledge the Ranking Member for both 
his diligence and his support for the product in his district. 
He has wanted to emphasize the bipartisanship of this 
particular subcommittee, and you will see it as we go forward. 
These are Peeps marshmallow chicks that he has graced the 
Chairwoman with. It will suggest to you that if we do not see 
you before the holidays are approaching, we wish you 
wonderfully blessed holidays. If someone starts failing 
physically, we will be willing to share one of the marshmallow 
chicks with you.
    Thank you, Mr. Dent.
    Mr. Dent. Madam Chairwoman, you are most welcome. I would 
be happy to make sure that we provide it to the Chairman of the 
full committee some Easter Peeps, as well, for when he needs a 
little sugar.
    Ms. Jackson Lee. He is on the Agriculture Committee, and I 
think he might take great interest in this.
    Mr. Dent. The name of the company is Just Born, Bethlehem, 
Pennsylvania. There you go.
    Ms. Jackson Lee. Oh, my goodness. Thank you for your 
kindness, Mr. Dent.
    I welcome our second panel of witnesses.
    Our first witness is Mr. Andre Johnson, who is responsible 
for strategic direction as well as financial and overall 
management of FreightScan. FreightScan, a California-based 
company, is a leader in the development and deployment of 
customer-driven technology. As well, it is a company that has 
evidenced its interest in the area that we are discussing. 
These solutions for the freight and logistics industry are the 
basis of the customer-driven technology solutions that this 
company is engaged in. Mr. Johnson has practical knowledge and 
experience in all sizes of business, from entrepreneurial to 
Fortune 100 companies.
    Welcome, Mr. Johnson.
    Our second witness is Mr. Jack Boisen, who recently retired 
as the head of Continental Airlines Cargo. After an auspicious 
14-year career leading global operations, sales, marketing, 
customer service, and postal affairs, he continues his role as 
the chairman of the International Air Cargo Association. Mr. 
Boisen has spent more than 40 years in the airline industry, 
handling positions of increasing stature and responsibility. He 
served Houston-based Continental as vice president of the cargo 
division since 1994. I will not be biased toward Mr. Boisen 
because of his former affiliation with my hometown airline.
    But thank you and welcome, Mr. Boisen.
    Our third witness is Mr. Brandon Fried. Mr. Fried was 
appointed to serve as the executive director of the 
Airforwarders Association in November 2005. Mr. Fried has more 
than 25 years of experience in the air freight industry. He 
started his career as a sales representative in Los Angeles and 
then moved to Washington, DC, where he founded, owned, and 
operated the Washington office of Adcom Worldwide, a global 
freight forwarder specializing in time-definite air cargo 
transportation.
    We welcome you, as well, Mr. Fried, to the panel.
    Our fourth witness is Mr. James May, president and CEO of 
the Air Transport Association of America, the Nation's oldest 
and largest air trade association. He joined ATA in February 
2003 and has lead the association through an especially 
challenging time in its history. Prior to joining ATA, Mr. May 
served as an executive vice president of the National 
Association of Broadcasters, vice president for public affairs 
for the Coca-Cola Bottling Company of New York, and directed 
Government relations for PepsiCo, and served as vice president 
for public affairs for the Grocery Manufacturers of America.
    We welcome you, Mr. May.
    Without objection, the witnesses' full statements will be 
inserted in the record. I now ask each witness to summarize his 
statement for 5 minutes, beginning with Mr. Johnson.
    Welcome, Mr. Johnson.

        STATEMENT OF ANDRE L. JOHNSON, CEO, FREIGHTSCAN

    Mr. Johnson. Thank you, Madam Chairwoman. My name is Andre 
Johnson, the CEO of FreightScan. We are a company that provides 
innovative technology solutions for transportation companies. 
FreightScan is a trustee member of the International Air Cargo 
Association, member of the Air Forwarders Association also.
    Chairwoman Jackson Lee, Ranking Member Dent, and Members of 
the distinguished subcommittee, let me extend my sincere 
appreciation and gratitude for your inviting me to provide this 
testimony this afternoon.
    Chairman Thompson, thank you for coming also.
    I am here to speak on behalf of the small entrepreneurial 
companies that are at the forefront of developing new 
technology to solve problems for both the private and public 
sector. Can we secure American skies? I believe we can. The 
story of FreightScan illustrates how small companies can play a 
significant role, meeting the air cargo screening requirements 
mandated by Congress in the 
9/11 Act.
    FreightScan was formed several years ago with a mission to 
offer business solutions for the freight industry, with an 
initial focus on air cargo. The first problem we set out to 
solve was how to automatically capture dimensions and images of 
cargo without disrupting workflow. Solving this problem will 
enable air carriers to accurately charge for large, light-
weight shipments, generating hundreds of millions of dollars in 
profits. FreightScan developed and deployed a solution, and in 
late 2007 we introduced the FS100.
    As our team traveled around the world promoting the FS100, 
we kept hearing the same question: If this technology can 
capture dimensions and images, can we use it to screen cargo? 
FreightScan has always taken great pride in being customer-
focused, and we committed to developing a screening solution 
that would not slow the flow of commerce. The result is 
CargoVizion, a system which will detect potential threat 
objects in cargo during the standard acceptance process of 
shipments.
    Our next step was to get CargoVizion validated and tested 
for inclusion on the Qualified Product List, or QPL. Our 
initial entree to the QPL process was frustrating. The roadmap 
to presenting our technology was not clear, and we couldn't get 
specifications for what threats we had to detect or various 
other critical pieces of information we needed to complete our 
development.
    We fully support and understand the need to protect 
sensitive information; however, a defined QPL process, without 
classified data, would have accelerated our ability to get 
details about our technology to TSA for evaluation. We could 
not afford any more delays, so we eventually validated the 
technology internally and presented the information to the TSA 
in the hopes it was a format that they could accept.
    That said, let me be clear: This is in no way a criticism 
or indictment of the TSA and its related agencies. Our initial 
point of contact at TSA made it clear the agency was besieged 
by companies large and small claiming to have solutions. We 
always believed that the TSA wanted to find a screening 
solution as much as we wanted to deliver one.
    The proof of the TSA's commitment to finding and validating 
potential solutions for 100 percent screening could be proven 
where we are today. Just a few short weeks after we convinced 
the TSA that we have a potentially viable solution, the pace 
has picked up significantly. Since then, we have had number of 
positive, constructive calls and e-mails with the TSA and the 
TSL lab in Atlantic City, and we are finalizing a cooperative 
research and development agreement to test and validate our 
technology.
    There are many positive outcomes for FreightScan's journey. 
We were able to obtain private funding and develop our 
screening solution in record time without burdening the U.S. 
Government for resources or funding. We have demonstrated the 
solution in industry events, and there are several companies 
waiting to implement CargoVizion immediately after being added 
to the QPL. We have hired 20 additional employees in the last 
12 months, in spite of the current economic downturn, all of 
whom enjoy a safe working environment, full health insurance 
for them and their families, and many other benefits.
    Securing American skies is a difficult task, and, 
therefore, the ability to validate related technology is also 
very difficult. My hope is that FreightScan's story will 
inspire other small companies and also encourage the hard-
working men and women at TSA to make the QPL process 
transparent for both large and small companies. This will 
encourage others to attempt the demanding but important duty of 
securing America. I understand that TSA is working on this, and 
we applaud them for their efforts.
    In conclusion, let me thank industry leaders like Jack 
Boisen and Brandon Fried and also the TSA leadership for their 
encouragement and communication. FreightScan is one example of 
a company that had the determination to navigate the very 
challenging process. The reward is a working partnership with 
the TSA that will certainly contribute to everyone's goal of 
securing American skies.
    Thank you, again, for the opportunity to appear before you 
today. It would be my honor to return before this distinguished 
subcommittee before the August recess, and it is my hope I will 
be able to report that our solution is in use, as I believe 
CargoVizion can make a significant contribution to meeting the 
August 2010 deadline for screening 100 percent of cargo.
    Thank you.
    [The statement of Mr. Johnson follows:]
                 Prepared Statement of Andre L. Johnson
                             March 18, 2009
    Good afternoon. My name is Andre Johnson. I am the Chief Executive 
Officer of FreightScan, a company that provides innovative technology 
solutions for transportation companies. FreightScan is a trustee member 
of The International Air Cargo Association, as well as a member of the 
Air Forwarders Association.
    To Chairwoman Jackson Lee, Ranking Member Dent, and the Members of 
this distinguished subcommittee, let me extend my sincere appreciation 
and gratitude to you for inviting me to provide testimony this 
afternoon.
    I am here today to speak on behalf of the small, entrepreneurial 
companies that are at the forefront of developing new technology to 
solve problems for both the private and public sector. Can we secure 
American Skies? I believe we can, and the story of FreightScan 
illustrates how small companies can play a significant role meeting the 
air cargo screening requirements mandated by Congress in the 9/11 Act.
    FreightScan was formed several years ago with a mission to offer 
business solutions for the freight industry with an initial focus on 
air cargo. The first problem we set out to solve was how to 
automatically capture dimensions and images of cargo without disrupting 
workflow. Solving this problem would enable air carriers to accurately 
charge for large lightweight shipments, generating hundreds of millions 
of dollars in profits. FreightScan developed a solution, and in late 
2007 we introduced the FS100, an automated dimensioning system that 
captures dimensions of cargo in four seconds.
    As our team traveled the United States and around the world 
promoting the FS100, we kept hearing the same question: If this 
technology can capture dimensions and images, can we use it to screen 
cargo?
    FreightScan has always taken great pride in being a small, agile 
company that is customer-focused and we committed to developing a 
solution that would screen cargo without slowing the flow of commerce. 
The result is CargoVizion, a system which will automatically detect 
potential threat objects in cargo during the standard acceptance 
process of shipments. Our next step was to get CargoVizion validated 
and tested for inclusion on the Qualified Product List, or QPL, and we 
set out to introduce our company and technology to the authorizing 
Federal agencies.
    Our initial entree to the QPL process was frustrating. The roadmap 
to presenting our technology to the TSA was not clear, and we couldn't 
get specifications for what threats we had to detect, or various other 
critical pieces of information we needed to complete our development.
    We fully support and understand the need to protect sensitive 
information. However, a defined QPL process, without classified data, 
would have accelerated our ability to get details about our technology 
to TSA for evaluation and our efforts to bring CargoVizion to the cargo 
industry. We eventually decided that we could not afford any more 
delays, and so we validated the technology internally and presented 
that information to the TSA in the hopes it was in a format they could 
accept.
    That said, let me be clear, this is in no way a criticism nor 
indictment of TSA and its related agencies. Our initial point of 
contact at TSA made it clear the agency was besieged by companies large 
and small claiming to have solutions, and they were doing what they 
could to respond. We recognized the enormity of the task and at no time 
did we take the obstacles to progress personally. To the contrary, we 
always believed that the TSA wanted to find a screening solution as 
much as we wanted to deliver one. The proof of TSA's commitment to 
finding solutions for 100% air cargo screening can be seen in where we 
are today.
    Just a few short weeks ago, after we convinced the TSA that we have 
a potentially viable solution, the pace picked up significantly. Since 
then, we have had a number of very constructive calls with the TSA and 
the TSL, and we are finalizing a Cooperative Research and Development 
Agreement to test and validate the equipment. TSA and TSL 
representatives have been responsive and helpful, and I believe we are 
very close now to being in a position to offer the freight industry a 
new method for screening cargo transported on passenger planes in an 
efficient and practical manner.
    There are many positive outcomes from FreightScan's journey. In our 
pursuit to gain the attention of TSA, we were able to obtain private 
funding and develop an innovative screening solution in record time 
without burdening the U.S. Government for resources or funding. We have 
demonstrated the solution at industry events, resulting in a list of 
airlines and freight forwarders who waiting to implement CargoVizion 
immediately after being added to the QPL. We have hired 20 additional 
employees in the last 12 months in spite of the current economic 
downturn, all of whom enjoy a safe working environment, health 
insurance for their families, and many other benefits such as sharing 
in the pride of knowing that they are participating in making our great 
country stronger and safer for all.
    Securing American skies is a difficult task; and therefore the 
ability to validate related technology is also difficult. My hope is 
that FreightScan's story will inspire other small companies to work 
through the process, and also encourage the hard-working men and women 
at TSA to make the QPL process transparent for both large and small 
innovative companies. This will encourage others to attempt the 
demanding but important duty of securing America. I understand that the 
TSA is working on this, and we applaud them for their efforts.
    In conclusion, let me thank industry leaders like Jack Boisen and 
Brandon Fried, and also the TSA leadership for their encouragement and 
communication. FreightScan is one example of a company that had the 
determination to navigate a very challenging process. The reward is a 
working partnership with the TSA that will most certainly contribute to 
everyone's goal of securing American skies.
    Thank you again for the opportunity to appear before you today. It 
would be my honor to return before this distinguished subcommittee 
before the August recess. It is my hope that I will be able to report 
that our solution is in use, as I believe CargoVizion can make a 
significant contribution to meeting the August 2010 deadline for 
screening 100% of cargo.

    Ms. Jackson Lee. Thank you, Mr. Johnson, for your 
testimony.
    I now recognize Mr. Boisen to summarize his statement for 5 
minutes.

STATEMENT OF JACK BOISEN, CHAIRMAN, THE INTERNATIONAL AIR CARGO 
                          ASSOCIATION

    Mr. Boisen. Chairwoman Jackson Lee, Ranking Member Dent, 
Chairman Thompson, and distinguished Members of the 
subcommittee, it is my pleasure to testify today on behalf of 
the The International Air Cargo Association, or TIACA, for 
which I serve as chairman. Thank you for the opportunity to 
present our views in one of the most important issues facing 
the air cargo sector: the screening mandates established by so-
called 9/11 Act.
    First, allow me to introduce TIACA. We represent all major 
segments of the air cargo supply chain, including airlines, 
forwarders, airports, ground handlers, all cargo carriers, road 
carriers, customs brokers, third-party logistics companies, 
integrators, shippers, and aircraft manufacturers. Because of 
the diversity of our membership, TIACA members are affected by 
all of TSA's security protocols. Our members are committed to 
ensuring the safety and security of air cargo while maintaining 
the viability of the air cargo supply system.
    In assessing current and future air cargo screening and the 
question of whether we can secure America's skies, it is 
important to understand that it is not possible to design a 
one-size-fits-all approach to air cargo security. Operating 
realities are different for each segment of the industry, and 
security policies need to take these distinctions into account. 
TIACA commends TSA for its sensitivity to this fact.
    TSA has determined that, because of the realities of the 
air cargo supply chain, the best way to implement the 9/11 air 
cargo screening mandates is to spread the screening 
responsibilities throughout the supply chain via the Certified 
Cargo Screening Program, or CCSP. TIACA agrees with this 
approach. We do not believe that screening can be the sole 
responsibility of the airlines, nor do we support the efforts 
of some entities to Federalize all air cargo screening.
    We believe Federalization of airline-only screening would 
unduly crowd this function onto airport grounds, potentially 
creating significant bottlenecks to impose a one-size-fits-all 
approach to air cargo screening. While this might work in 
certain locales, it would likely produce commercial gridlock at 
many U.S. airports. The flexibility allowed under CCSP is a 
better fit with the diverse needs of the air cargo supply 
chain.
    While TIACA supports the general concept of CCSP, we have 
several concerns about implementation of the air cargo 
screening mandates. I would like to highlight a few of them in 
my testimony today.
    First, TIACA is concerned about the cost likely to be 
incurred by its members due to the new screening obligations. 
Those companies that become certified screeners will need to 
acquire costly equipment. There will be other costs incurred, 
as well, including facility security improvements, training, et 
cetera. We hope the U.S. Congress can consider providing some 
relief to these companies, perhaps through tax incentives.
    Second, we are quite concerned that much of the equipment 
currently certified for use is most appropriate for the 
passenger screening environment and not to the air cargo 
environment, where palletized or other consolidated shipments 
are the norm. We believe TSA should expedite this review of 
technologies geared toward the air cargo environment.
    Third, we are unclear on how TSA will be verifying 
compliance with the February 2009 and August 2010 screening 
standards and how potential stoppages due to noncompliance will 
be handled.
    Fourth, there is confusion within the air cargo sector 
about how the air cargo screening standards will be applied to 
flights originating from foreign airports. At this point, we do 
not know the extent to which foreign security protocols may 
have to change to meet the August 2010 100 percent screening 
standard or what the impact might be on airlines, forwarders, 
shippers, and others.
    Fifth, TIACA is also concerned that there is occasionally a 
breakdown between TSA headquarters' interpretation of policy 
and the actions that are taken by inspectors in the field.
    Sixth, TIACA believe the Aviation Security Advisory 
Committee, known as ASAC, and its vital Air Cargo Working Group 
should be resuscitated as quickly as possible. We believe both 
would serve as vital conduits for industry-Government 
discussion of the implementation issues as we move toward the 
100 percent air cargo screening.
    Seventh, TIACA believes it is essential that the Department 
of Homeland Security better leverage the security programs of 
TSA and U.S. Customs and Border Protection, CBP, with a view 
toward increasing efficiency and eliminating redundancies.
    In summary, many challenges remain as we move toward August 
2010 and the 100 percent air cargo screening mandate. TIACA 
commends the subcommittee for its strong leadership on this 
issue and hopes to continue working with you and with the TSA 
to address these challenges and ensure viable implementation of 
the new air cargo screening standards and the security of 
America's skies.
    I thank you again for the opportunity to testify before you 
today.
    [The statement of Mr. Boisen follows:]
                   Prepared Statement of Jack Boisen
                             March 18, 2009
    Chairwoman Jackson Lee, Ranking Member Dent, and distinguished 
Members of the subcommittee, it is my pleasure to testify today on 
behalf of The International Air Cargo Association, or TIACA, which I 
serve as chairman. I am also a veteran of more than 40 years in the air 
cargo industry, having served most recently as Vice President of 
Continental Airlines' Cargo Division for 14 years.
    Thank you for the opportunity to present our views on one of the 
most important issues facing the air cargo sector, the screening 
mandates established by the Implementing Recommendations of the 9/11 
Commission Act of 2007. The law requires that 50% of all air cargo on 
passenger aircraft be screened as of February 2009 and that all such 
cargo be screened as of August 2010. Obviously, we are currently 
operating in an environment where the 50% standard is applicable and 
are less than 17 months away from the comprehensive requirement.
    First, allow me to introduce TIACA. We represent all major segments 
of the air cargo supply chain, including airlines, forwarders, 
airports, ground handlers, all-cargo carriers, road carriers, customs 
brokers, third-party logistics companies, integrators, shippers, 
aircraft manufacturers, and educational institutions. Because of the 
diversity of our membership, TIACA members are affected by all of TSA's 
security protocols. As a result, we actively engage with TSA on a wide 
range of air cargo security issues, and implementation of the 9/11 
Act's air cargo screening mandates is one of our top priorities. Our 
members are committed to ensuring the safety and security of air cargo 
while maintaining the viability of the air cargo supply chain.
    In assessing current and future air cargo screening, and the 
question of whether we can secure America's skies, it is important to 
understand that, because of the many different entities in the air 
cargo supply chain, it is impossible to design a one-size-fits-all 
approach to air cargo security. Operating realities are different for 
passenger airlines, all-cargo airlines, express operators, air freight 
forwarders (or indirect air carriers), ground transportation providers, 
and shippers. Different airports have distinct footprints, and tend to 
handle different types of cargo. Security policies need to take these 
distinctions into account if they are to offer workable approaches. 
TIACA commends TSA for its sensitivity to the diverse range of 
operators in the air cargo supply chain, and for its recognition of the 
need to maintain flexible policies because of that diversity.
    TSA has determined that, because of the realities of the air cargo 
supply chain, the best way to implement the 9/11 Act's 50% and 100% air 
cargo screening mandates is to spread screening responsibilities 
throughout the supply chain via the Certified Cargo Screening Program, 
or CCSP. Fundamentally, TIACA agrees with this approach. We do not 
believe that screening can be the sole responsibility of the airlines, 
nor do we support the efforts of some entities to federalize all air 
cargo screening, making it a TSA function and locating it solely on 
airport grounds. We believe federalization or airline-only screening 
would unduly crowd this function onto airport grounds, potentially 
creating significant bottlenecks, and would impose a one-size-fits-all 
approach to air cargo screening. While this approach might work in 
certain locales, it would likely produce commercial gridlock at many 
U.S. airports. The flexibility allowed under CCSP is a better fit with 
the diverse needs of the air cargo supply chain.
    While TIACA supports the general concept of CCSP, we have several 
concerns about implementation of the air cargo screening mandates. I'd 
like to highlight a few of the issues that are particularly important 
for TIACA members in my testimony today.
    First, TIACA is concerned about the costs likely to be incurred by 
its members due to the new screening obligations. Those companies that 
become certified screeners will need to acquire costly equipment for 
each of their certified facilities. Passenger airlines may face 
additional equipment acquisition costs as well. This is significant, 
particularly given the current economic downturn which has reduced air 
cargo volumes by roughly 25%, threatening the viability of many 
companies. We hope the U.S. Congress can consider providing some relief 
to companies that incur the substantial cost of screening equipment 
acquisition. For example, establishing tax incentives or credits for 
such companies could provide significant financial relief.
    Second, we are quite concerned that much of the equipment currently 
certified for use is most appropriate for the passenger screening 
environment and is ill-suited to the air cargo environment where 
palletized or other consolidated shipments are the norm. We believe TSA 
should expedite its review of technologies geared towards the air cargo 
environment. Given the looming August 2010 deadline, it is essential 
that new technological options be made available very soon. Without new 
equipment capable of screening consolidated shipments, we may face 
considerable disruption to air cargo commercial flows in a 100% 
screening environment. In this regard, TIACA strongly supports 
increased funding for and use of canine screening teams for air cargo 
and believes expanded use of canines could help ensure smoother 
implementation of the comprehensive screening mandate.
    Third, we are unclear about how TSA will be verifying compliance 
with the February 2009 and August 2010 screening standards. TIACA 
members have advised that they are in compliance with the reporting 
requirements TSA has placed on them with respect to the February 2009 
screening standard, and report they are meeting the 50% standard. 
However, we are unclear about how TSA is processing and validating that 
information, individually and across the entire supply chain. We are 
also unsure whether there might be future disruptions to trade based on 
TSA determinations of cases where the 50% standard may not be met, and 
how that information will be communicated to others in the supply 
chain. Furthermore, once the 100% standard is in place, the potential 
for unforeseen stoppages in trade may increase. We do not know what 
sort of notification there will be in such instances, nor how difficult 
it may be for shippers, forwarders, or airlines to adjust their 
schedules to ensure service.
    Fourth, there is confusion within the air cargo sector about how 
the air cargo screening standards will be applied to flights 
originating from foreign airports. Up until recently, TSA had 
maintained that the 9/11 Act's screening mandates applied only to 
flights originating from U.S. airports. Under this interpretation, non-
U.S. airlines would be required to meet the 9/11 Act's screening 
standards for flights they operated out of U.S. airports, just as would 
U.S. airlines. However, neither U.S. nor foreign airlines would be 
required to meet the screening thresholds for flights originating from 
foreign airports. Instead, those flights would be subject to the 
security protocols in the country of departure.
    Roughly 6 months ago, TSA modified its interpretation and concluded 
the 9/11 Act mandates also apply to foreign-origin flights. At this 
point, we do not know the extent to which foreign security protocols 
may have to change to meet the August 2010 100% screening standard, how 
TSA will factor in-bound cargo into its calculations of whether the 
threshold is met, or what the impact might be on screening methods, 
technologies, certified cargo programs, etc.--let alone what all this 
will mean for airlines, forwarders, shippers, and others.
    In this uncertain environment, it is critical that TSA and its 
counterpart agencies in other countries work closely with industry 
groups to ensure timely communication to those in the air cargo supply 
chain so that widespread commercial disruption is avoided. We simply 
cannot afford commercial bottlenecks due to confusion over security 
regimes, on top of the damage already caused by the global economic 
crisis. TIACA stands ready to do its part by addressing member concerns 
and questions to TSA, liaising with security authorities, and conveying 
key information to its members. We urge all parties to cooperate in an 
effort to ensure that security standards are met and commercial chaos 
is avoided.
    Fifth, TIACA is also concerned that there is occasionally a 
breakdown between TSA headquarters' interpretation of policy and the 
actions that are taken by inspectors in the field. We will continue to 
raise issues of inconsistency with TSA and urge the agency to ensure 
coordination between headquarters and the field through better 
education and communication.
    Sixth, TIACA believes the Aviation Security Advisory Committee 
(ASAC) should be reinvigorated as quickly as possible. In the past, 
this body served as a vital conduit for industry-government 
collaboration on issues critical to air cargo, but it has been shut 
down for well over a year due to issues related to its re-chartering. 
The former ASAC created an Air Cargo Working Group, which fostered a 
highly productive dialogue between TSA and all elements of the air 
cargo industry. Without the ASAC umbrella, there is no formal mechanism 
for reactivating that dialogue and resuming the valuable work of that 
group. Unfortunately, that means that now, during the critical months 
leading up to the August 2010 deadline, this vital means of 
communication is silenced.
    We understand that new ASAC members have been selected, but the re-
chartered ASAC has yet to meet. We believe it is particularly important 
to reactivate the dialogue of the Air Cargo Working Group so it can 
address implementation issues related to the 100% screening mandate, 
and we encourage this subcommittee to do what it can to ensure that the 
ASAC and this critical working group are resuscitated.
    Seventh, TIACA believes it is essential that the Department of 
Homeland Security better leverage the security programs of TSA and U.S. 
Customs and Border Protection, or CBP. Both agencies operate extensive 
national security programs, and both are part of the same department--
yet industry partners are generally unable to leverage participation in 
one agency's programs with those of the other agency. DHS should more 
aggressively explore synergies between TSA and CBP cargo screening 
programs, including use of automation, risk-based assessment, 
personnel, and Government-industry partnerships such as the Customs-
Trade Partnership Against Terrorism (or C-TPAT) and the CCSP, with a 
view towards increasing efficiency and eliminating redundancies.
    Finally, on a related matter, TIACA is closely monitoring CBP's 
implementation of the so-called 10+2, or Importer Security Filing, 
regulation. While this initiative currently applies solely to maritime 
shipments, CBP has indicated at various times that it might consider 
rolling it out to other modes. TIACA believes that, if such a rollout 
were to occur, CBP must take into account the unique aspects of each 
mode of transportation and differentiate the requirements based on the 
realities of each mode. In particular, if CBP were to consider an 
importer security filing for air, it would need to articulate why such 
an approach is warranted in light of the fact that 100% screening, by 
TSA, would already be applicable as of August 2010. This is in stark 
contrast to the maritime environment, where CBP has specifically 
advocated 10+2 as a preferable alternative to 100% scanning of maritime 
shipments.
    In summary, many challenges remain as we move towards August 2010 
and the 100% air cargo screening mandate. TIACA commends this 
subcommittee for its strong leadership on this issue, and hopes to 
continue working with you and with TSA to address these challenges and 
ensure viable implementation of the new air cargo screening standards 
and the security of America's skies.
    I thank you again for the opportunity to testify before you today.

    Ms. Jackson Lee. Thank you very much for your testimony, 
Mr. Boisen.
    I now recognize Mr. Fried to summarize his statement for 5 
minutes.

 STATEMENT OF BRANDON FRIED, EXECUTIVE DIRECTOR, AIRFORWARDERS 
                          ASSOCIATION

    Mr. Fried. Chairwoman Jackson Lee, Ranking Member Dent, 
Chairman Thompson, and Members of the committee, thank you for 
the opportunity to appear before the House Committee on 
Homeland Security to discuss the challenges in meeting the 
first screening deadline, as well as the challenges we 
anticipate the next 50 percent.
    As you are aware, the air freight industry has been working 
hard to meet the 100 percent passenger air cargo screening 
mandate. The Airforwarders Association is committed to 
facilitating compliance and remains confident that the 100 
percent benchmark will be met. We urge Congress and the TSA to 
maintain the CCSP against calls for Federalization, provide 
funding mechanisms for participants to reduce the barrier to 
participation, and resist any further moves away from a risk-
based approach to cargo security.
    More than a quarter of the facilities currently certified 
to screen cargo are Airforwarders Association members. It seems 
that, for the vast majority of the industry, reaching the 50 
percent benchmark has not been particularly problematic. While 
the economic environment has had the effect of lowering cargo 
volume, remarkable progress made by TSA, forwarders, air 
carriers, and shippers deserves most of the credit. The ease of 
attaining the first portion of the screening mandate should be 
both a sign of encouragement and caution. Let me outline the 
remaining challenges with the remainder of my time.
    Last year, I had the privilege of addressing this 
subcommittee and outlined the concerns forwarders have about 
meeting the 100 percent mandate. Unfortunately, some of the 
more serious issues have yet to be resolved. The following 
three elements need to be resolved in order for CCSP to be a 
viable security program: No. 1, the appropriation and 
availability of additional Federal funding or incentives for 
eligible participants; No. 2, the encouragement of all entities 
involved in the supply chain as full participants in the act of 
screening; and, No. 3, the availability of efficient and cost-
effective solutions to screening for all TSA-certified Indirect 
Air Carriers and other qualified participants.
    In the absence of certified technology, the focus will be 
on examining pallets and containers. Each pallet or unit load 
device contains nearly 200 pieces of varying size, shape, and 
commodities. The space and time involved in breaking up cargo 
poses an increased level of risk of theft or tampering, as idle 
cargo is a security concern.
    The Air Forwarders Association has been working with 
carriers, shippers, and forwarders to ensure that there are 
many options available to forwarders of all sizes. As such, we 
believe that market competition and innovation, rather than the 
TSA screening operation at each airport facility, is the best 
way to provide efficient and effective options for all in the 
supply chain.
    Encouraging TSA's screening to the maximum extent possible 
removes the supply chain's experience and problem-solving 
skills for a system with delays, higher costs, and less 
accountability. We urge TSA to continue to work with their 
Science and Technology Office, as well as vendors, to identify, 
test, and approve equipment that can effectively and 
efficiently screen palletized cargo. In the absence of that, we 
urge Congress to allocate additional funds for the canine 
program.
    Even as advancements are made with technology, the 
significant amount of capital required to purchase technology 
is a barrier for participation. Forwarders participating in 
CCSP must purchase technology for which the cost may range from 
$50,000 to $500,000 per facility, a price tag that cannot be 
met by many forwarders, particularly smaller forwarding 
businesses. As a result, they may face market disadvantages and 
longer lines at the air carrier if alternate options are not 
available. This lost revenue in the current economic 
environment could force forwarders out of business.
    For those in the pilot program, this need was addressed by 
a TSA-funded grant. We ask Congress and TSA to provide funding 
to ensure that thousands of jobs in the air freight industry 
are not lost and the American economy does not face more harm 
due to delay and market shrinkage.
    Finally, as we face the future, it is critical to look back 
on the mission of the Department of Homeland Security and TSA, 
which is not only to secure the Nation's borders but also to 
maintain an efficient flow of commerce. I agree that aviation 
security is critically important, but we must not abandon all 
consideration of international trade, economic security, and 
our supply chain, particularly in these troubled times.
    For that reason, the Airforwarders Association has been 
working with the Safe Commerce Coalition to assess the most 
effective way to secure cargo for the future. Noted experts, 
including the Government Accounting Office, have stated that 
abandoning a risk-based security program may actually make the 
Nation less safe. Forwarders know it is an unwise use of finite 
resources to treat each piece of cargo as if it has the same 
threat level. The industry has already demonstrated its 
willingness to comply with the law and will continue. However, 
without a vigilant eye on the actual impact of our actions, I 
fear we may have achieved a mandate without achieving its 
goals.
    I appreciate the opportunity to be here today and address 
this important topic, and I look forward to your questions.
    [The statement of Mr. Fried follows:]
                  Prepared Statement of Brandon Fried
                             March 18, 2009
                              introduction
    Chairwoman Jackson Lee, Ranking Member Dent and Members of the 
committee, thank you for the opportunity to appear before the House 
Committee on Homeland Security, Subcommittee on Transportation Security 
and Infrastructure Protection to discuss the challenges the forwarding 
industry has addressed in meeting the first screening deadline, as well 
as the challenges we anticipate with the next 50 percent. I ask that my 
full statement be entered into the record.
    As you are aware, the air freight industry has been working hard 
with the administration to meet the 100 percent passenger air cargo 
screening mandate. It is our firm belief that the full implementation 
of the Certified Cargo Screening Program (CCSP) is the most efficient 
and only realistic method of attaining the mandate. The Airforwarders 
Association is committed to facilitating compliance across the 
forwarding industry, and remains optimistic that the 100 percent 
mandate as defined by TSA will be met. We urge Congress and the TSA to 
maintain the CCSP, provide funding mechanisms for participants to 
reduce the barrier to participation and resist any further moves away 
from a risk-based approach to cargo security.
                               background
    My name is Brandon Fried and I am the executive director of the 
Airforwarders Association. It is a pleasure to address this 
distinguished panel today on the important issue of air cargo security.
    I was appointed to serve as the Executive Director of the 
Airforwarders Association in November 2005 and have over 25 years of 
experience as a forwarder myself. In my position as Executive Director, 
I represent the Association on all security matters and currently serve 
on the Aviation Security Advisory Committee (ASAC) working group in 
counsel to the Transportation Security Administration.
    The Airforwarders Association is an alliance of Indirect Air 
Carriers, Cargo Airlines, and affiliated businesses located throughout 
the United States that play a vital role in ensuring the continuous 
movement of global commerce. There are over 4,000 registered indirect 
air carriers who are responsible for the planning, oversight, and 
transporting of companies' goods and products--anything from flowers 
and seafood to pallets of humanitarian supplies. The parameters of this 
service include steps such as pick-up of goods, customs clearance, 
transportation, warehousing, regulatory compliance and delivery; we 
work from one end of the supply chain to the other.
                               discussion
    Products such as automobile assembly line parts, high-tech 
electronics, pharmaceuticals, and vital consumer goods are transported 
in the cargo holds of passenger planes on virtually every flight. 
During the cold winter, our families enjoy fresh vegetables flown from 
the warm west coast and South America on passenger flights. As we 
speak, thousands of pounds of seafood are in flight to be served 
tonight in restaurants in places like Albuquerque, Minneapolis, Omaha, 
and St. Louis. In some cases our members help save lives by assisting 
medical companies and hospitals ship urgently needed heart valves, 
blood samples, and human organs across the country to waiting doctors 
and patients.
    It is the urgent need or ``just in time'' nature of cargo, coupled 
with the variance in the products shipped and the sensitivity to 
excessive handling or delay, that makes the task of screening so 
challenging. It is also the reason that the supply chain, from shippers 
of pharmaceuticals that cannot have their packages opened by a screener 
due to product integrity issues, to the forwarder whose business 
depends on meeting a deadline and even the air carriers all support 
CCSP and screening throughout the supply chain.
    However, we believe that the following three elements need to be 
put in place in order for CCSP to be a viable security program: The 
appropriation and availability of additional Federal funding or 
incentives (e.g. tax relief on privately purchased screening equipment) 
for eligible participants; the encouragement of all entities involved 
in the supply chain as full participants in the act of screening; and 
the availability of efficient and cost-effective solutions to screening 
for all TSA-certified Indirect Air Carriers (IACs) and other qualified 
participants.
Support for CCSP
    Complex supply-chain dynamics and the broad range of facility and 
cargo screening capabilities at our airports prevent a ``one-size-fits-
all'' solution to the complex cargo screening dilemma. This complexity 
has motivated us to work cooperatively to ensure that many solutions 
are available to the commercial concerns that participate in the supply 
chain to meet air cargo screening mandates. Screening a high percentage 
of air cargo upstream is a critical part of the solution, especially 
where U.S. manufacturing and supply chain logistics involve secure bulk 
packaging that must be maintained for the integrity of the product.
    Another part of the solution is some airport screening by airlines 
and the Transportation Security Administration (TSA). The Airforwarders 
Association supports a system of cargo screening that offers forwarders 
multiple options as to where and how to screen cargo, but those options 
must work. We remain concerned that a system other than CCSP that would 
screen the bulk of air cargo at a single facility at the airport does 
not work and will most assuredly lead to significant delays, 
bottlenecks, and increased costs and ultimately will jeopardize the 
economic stability of the air transportation sector without providing 
greater assurance of cargo safety.
    Although it is a voluntary program, CCSP is a key part of the risk-
based multi-layered approach to air cargo security that strengthens 
security throughout the global supply chain and balances the need for 
increased security while also meeting the needs of the shipping public. 
We believe the strength of CCSP is that it provides for multiple 
options throughout the supply chain, including the use of centralized 
third-party screening centers, third-party logistics providers, shipper 
or exporters, and freight-forwarder screening facilities, which will 
lead to robust competition and, ultimately, the reduction of screening 
costs. Additionally, all members of the supply chain have a vested 
business interest in a strong chain of custody to maintain the 
integrity of cargo. As a result, relying on the shippers, forwarders 
and airlines that have a strong record of safety and security to handle 
the delicate screening operations for the wide spectrum of cargo will 
increase cargo security in an effective manner.
Lessons Learned From the First 50 Percent
    More than a quarter of the facilities currently certified to screen 
cargo are Airforwarders Association members. Based on an informal poll, 
it seems that for the vast majority of the industry, reaching the 50 
percent benchmark has not been particularly problematic. Of the 
problems experienced, most were relatively minor misunderstandings 
about paperwork and tendering screened shipments to air carriers. These 
did not have a substantial impact on cut-off times to deliver cargo, or 
result in delays in shipment. While the economic environment has had 
the effect of lowering cargo volume and therefore probably helped ease 
the burden, remarkable progress made by TSA, forwarders, air carriers, 
and shippers deserves most of the credit.
    TSA began certifying participants in December and has been working 
diligently to expand the number of certified participant facilities. 
Dialogue has improved, as has information sharing, and TSA, despite the 
transition to a new administration, has remained steady in its guidance 
to industry. I believe participants in the pilot have learned that they 
do have a trusted partner in TSA, and the learning curve will continue 
to improve as we move closer to the 100 percent deadline.
    Additionally, forwarders have found that their other partners in 
the supply chain--shippers and air carriers--are actively responding to 
the screening mandate as well. As more shippers come into the program, 
the burden on forwarders to be the primary screener will decrease. 
Additionally, air carriers have rapidly deployed technology and trained 
employees to screen freight and are doing so in an efficient and 
effective manner.
    The ease of attaining the first portion of the screening mandate 
should be both a sign of encouragement and caution. It proves that our 
industry and its airline partners can collectively rise to any 
challenge and implement effective solutions. It also means that the 
road ahead may be rough and lessons learned today will be well used as 
tomorrow unfolds.
Concerns About the Next 50 Percent
    Last year, I had the privilege of addressing this subcommittee and 
outlined the concerns forwarders have about meeting the 100 percent 
mandate. Unfortunately, some of the more serious issues have yet to be 
resolved. Specifically, those are the lack of approved pallet screening 
technology, on-going financial barriers to participation, and the 
future of air cargo security policy in general.
    In the absence of certified technology, the focus will be on 
examining pallets and containers, each needing to be unpacked to meet 
the piece-level screening requirement. This poses serious logistical 
and security concerns. Each pallet or unit load device (ULD) contains 
nearly 200 pieces of varying size, shape, and commodity. Breaking up 
the shipment of that size will require facility space large enough to 
accommodate multiple unpacked pallets, a resource not all airports 
have. Additionally, breaking up cargo poses an increased level of risk 
of theft or tampering, as idle cargo is a security concern.
    We urge TSA to continue to work with their Science and Technology 
office, as well as vendors, to identify, test, and approve equipment 
that can effectively and efficiently screen palletized cargo. In the 
absence of that, we urge Congress to allocate additional funds for the 
canine program, as it is an effective stop-gap solution.
    Even as advancements are made with technology, the significant 
amount of capital required to purchase technology and adapt business 
practices is a barrier to participation. Forwarders participating in 
CCSP must purchase technology for which the cost may range from $50,000 
to $500,000 per facility--a price tag that cannot be met by many 
forwarders, particularly smaller forwarding businesses. As a result, 
they will face delays at the airport for cargo screening, causing them 
to miss flights and lose revenue. This lost revenue, in the current 
economic environment with high fuel surcharges and razor-thin profit 
margins, could force forwarders out of business. This consolidation of 
the market, with the resulting impact on competition, is bad for 
forwarders, manufacturers, and the American consumer.
    For those who were selected, based on size or commodity, to 
participate in the pilot program, this need was recognized and 
addressed by a TSA-funded grant for the purchase of technology. The 
Airforwarders Association calls on Congress and TSA to provide funding 
to ensure the hundreds of thousands of jobs in the air freight industry 
are not lost and the American economy does not face serious harm due to 
delays in goods and products being delivered. The Airforwarders 
Association supports grants to fund CCSP as well as additional funding 
or reallocation of TSA's budget to provide funding for equipment and 
personnel devoted to cargo screening. We also support expanded funding 
for canine detection units for use for large consolidations and 
possibly also in other facets.
    Finally, as we face the future of air cargo screening, it is 
critical to look back on the mission of the Department of Homeland 
Security and TSA, which is not only to secure the Nation's borders but 
also to maintain an efficient flow of commerce. As a frequent flier, I 
understand and agree that aviation security is critically important but 
we must not abandon all consideration of international trade, economic 
security and our supply chain, particularly in these troubled economic 
times. For that reason, the Airforwarders Association has been working 
with the Safe Commerce Coalition to assess the most effective way to 
secure cargo for the future.
    Noted experts, including the GAO, have stated that abandoning a 
risk-based security program in favor of screening may actually make the 
Nation less safe. Forwarders know that TSA has limited resources, both 
financially and in terms of personnel, and it is an unwise use of those 
finite dollars and employees to treat each piece of cargo as if it has 
the same threat level. The industry has already demonstrated its 
willingness to comply with the law, and will continue to do so. 
However, without a vigilant eye on the actual impact of our actions, I 
fear we may have achieved a mandate without achieving its goals.
    I appreciate the opportunity to be here today to address this 
important topic and look forward to your questions.

    Ms. Jackson Lee. Thank you, Mr. Fried, for your testimony.
    Now I recognize Mr. May to summarize his statement for 5 
minutes.

   STATEMENT OF JAMES C. MAY, PRESIDENT AND CHIEF EXECUTIVE 
      OFFICER, AIR TRANSPORT ASSOCIATION OF AMERICA, INC.

    Mr. May. Madam Chairwoman, it is a pleasure to be here. I 
will truly summarize my statement for you.
    No. 1, we are pleased to announce that we have met the 
initial target of 50 percent across our membership.
    No. 2, by definition, some of our carriers are narrow-body 
carriers exclusively, so they are already at 100 percent of the 
cargo they are carrying. We recognize that getting to that 100 
percent target for all cargo, for all passenger aircraft is 
going to be a real challenge.
    The challenge is that we are going to wide bodies. As has 
been stated here already, going to wide bodies means that we 
are going to have palletized loads. Why is that a problem? No. 
1, we don't have current technology; can't handle big portal. 
We may have some--Mr. Johnson's technology may prove out to be 
the exception to the rule.
    No. 2, we have a lot of shippers, in particular those who 
have high-value products, that are not interested in having us 
tear those palletized loads down. There could be as many as 200 
individual pieces. It takes an average of 75 minutes to tear 
down and repack, and that doesn't include the screening time. 
So what do we do? We rely on dogs. I would suggest to Mr. 
DeFazio, as I will tomorrow, that his cherry problem will 
probably be solved by dogs, because they are the least 
intrusive, least expensive, most efficient explosives-detecting 
technology available to us today.
    We will work very hard to make the full 100 percent target. 
We have every reason to think it can be done. But we know that 
there are three or four things that need to happen. No. 1, we 
have to have the continuing cooperation between our friends in 
the freight forwarder community, the TSA, and ourselves.
    No. 2, we have to rely on upstream checking, which is part 
of this CCSP program that you have heard a lot about today 
already. It is critical for all of us that that work 
effectively. No. 3, because it is a very expensive proposition, 
the committee and the Congress needs to look at ways to help 
offset those expensive costs for our friends that are doing 
that screening upstream for us.
    Finally, you really need to think hard about providing the 
funding to further expand canine technology. As I said a minute 
ago--I have told Chairman Thompson this a number of times--it 
is simply the single best solution to be used from a cost 
perspective, a coverage perspective, speed, and all the other 
principal elements.
    I am delighted to be here to answer your questions. Thank 
you for your time.
    [The statement of Mr. May follows:]
                   Prepared Statement of James C. May
                             March 18, 2009
    We appreciate the opportunity to inform you of the airline 
industry's progress in achieving 100 percent screening of cargo 
transported on passenger-carrying aircraft by August 2010. The Air 
Transport Association members are committed to do their part in meeting 
that key requirement of the 9/11 Commission Recommendations Act.
    I am pleased to report that the airline industry has fulfilled the 
interim requirement that 50 percent of such cargo be screened by 
February 2009. This impressive achievement reflects hard work; this was 
not an easy task. That experience has taught us an important lesson: 
Achieving the 100 percent level will be difficult and will require the 
continued close collaboration of the airlines, the Transportation 
Security Administration, freight forwarders and shippers.
    The biggest challenge in meeting the August 2010 deadline is the 
lack of TSA-certified screening technology to inspect large air cargo 
pallets. Most pieces of cargo transported on wide-body aircraft are 
consolidated into large shipments and 75 percent of cargo is 
transported on wide-body aircraft. That fact gives you an idea of the 
magnitude of the challenge that we face.
    Shippers and freight forwarders typically create these pallet-size 
shipments before they are tendered to an airline. The dilemma is that 
screening is required at the piece level but existing technology cannot 
screen large consolidated shipments. The nature of our business and 
available screening equipment are, at least for the time being, badly 
mismatched.
    Breaking down consolidated shipments at an airport cargo facility 
is not practical. Shipment size, time constraints, and facility 
limitations are the main difficulties. A pallet can have as many as 200 
pieces on it. Dismantling it and screening each piece is labor-
intensive and time-consuming. To place this in some perspective, it can 
take 75 minutes for two employees to break down and reassemble a 
pallet. In addition, airport cargo facilities were never designed to be 
high-volume disassembly and reassembly locations. They are not big 
enough to perform that role, especially at peak times.
    We therefore need to be very careful that airport cargo facilities 
do not become choke points. Screening each piece from a consolidated 
shipment at those facilities would undercut what air cargo service is 
supposed to be all about: speedy movement of freight. Complicating this 
situation is the fact that shippers of high-value items, such as 
electronics and pharmaceuticals, for their own security reasons do not 
want their consolidated shipments to be broken down.
    Canine screening is the only easily-applied screening method that 
does not require pallets to be disassembled. Because of that, for the 
foreseeable future they will be the most effective and least costly 
screening method for all types and configurations of cargo. 
Unfortunately, there are not enough canines deployed at airports to 
screen such shipments on every wide-body passenger flight. This means 
that alternative screening measures that are both effective and 
efficient need to be implemented.
    The Certified Cargo Screening Program (CCSP) is such a measure. 
This program enables a high percentage of air cargo screening to be 
performed ``upstream'' in the supply chain. Upstream security 
measures--avoiding the airport cargo facility--are essential in the 
current environment. Under CCSP, screening occurs at the shippers' or 
freight forwarders' premises, where the cargo can be screened at the 
piece level as TSA requires. These are known as Certified Cargo 
Screening Facilities. This procedure is a very practical but expensive 
solution. Freight forwarders and other supply-chain participants must 
purchase equipment and train employees to carry out the program. This 
has imposed an additional financial burden on the forwarder industry. 
Nevertheless, if applied widely, it is a workable solution.
    The Department of Homeland Security is to be complimented for its 
high-tempo implementation of the CCSP. Its performance has been 
admirable. Going forward, it cannot falter in maintaining that tempo. 
The CCSP is an indispensable tool in meeting the August 2010 deadline. 
If enough shippers and forwarders are not certified, attaining that 
deadline will be at risk.
    While we very much appreciate the Department's efforts, it needs to 
act immediately in three areas to assure timely achievement of the 100 
percent screening mandate:
    1. Enlarge rapidly the number of Certified Cargo Screening 
        Facilities at large shippers, manufacturers, freight forwarders 
        and other TSA-certified Indirect Air Carriers.
    2. Expand as swiftly as possible the use of TSA-certified 
        explosive-detection canines to screen large air cargo 
        consolidations, and direct additional funding to the TSA 
        proprietary canine cargo screening program.
    3. Provide for additional Federal funding or incentives (e.g., tax 
        relief for privately purchased screening equipment) for all 
        TSA-certified indirect air carriers and other qualified CCSP 
        participants. This will enable small and medium-size companies 
        to participate in the CCSP and enable large companies to 
        continue to invest in screening equipment.
    We are committed to achieving the 100 percent screening mandate. 
The three initiatives described above will enable that statutory 
mandate to be realized on time and in a way that will minimize adverse 
effects on the shipping public. We ask that you support us in this 
endeavor.

    Ms. Jackson Lee. Let me thank you very much for your 
testimony.
    I will, at this time, yield myself 5 minutes. As I do so, I 
would like to remind each Member that he or she will have 5 
minutes to question the panel. I will begin.
    Mr. Johnson, why don't you tell us how long ago or how long 
a period of time did you begin this process of trying to reach 
DHS and thinking that you had a contribution to make with 
respect to air cargo security?
    Mr. Johnson. We originally contacted TSA about May 2006.
    Ms. Jackson Lee. So, technically, we can say 3 years.
    Mr. Johnson. Yeah.
    Ms. Jackson Lee. Would you give us an abbreviated 
recitation of what that encounter was like and how you have 
been processed or engaging since that time?
    Mr. Johnson. Well, in the beginning, it was a matter of 
just trying to explain what are we trying to solve. As 
engineers and as small companies, we have to decide what is the 
problem to solve and the best way to solve it first. We had 
heard from what the industry had and what they wanted to know, 
and we were curious as to what the TSA side of it was.
    We just couldn't get the answers in the beginning, all the 
way until 2007, when we officially met with the TSA here in 
Washington about what can be done. We wrote a proposal, an 
unsolicited proposal at the time, asking for--release the 
technology, what do we have to find? That took about 5 months. 
We heard a resounding ``not interested'' at that time.
    Ms. Jackson Lee. Let me stop you. So you, sort of, followed 
regular order, you got your materials in or your research or 
your proposal in, and you were doing this in the backdrop of 
understanding that we had these deadlines? Were you aware, as a 
business person, that we had a 2009 and 2010 deadline?
    Mr. Johnson. Absolutely.
    Ms. Jackson Lee. So you saw the sense of urgency.
    Mr. Johnson. We saw it as a sense of urgency. With a 
mandate like that, we just want a chance to complete. We never 
said we were the best solution or the only solution, but we 
felt that there might----
    Ms. Jackson Lee. You are a small business, but you might 
also be counted as a minority business?
    Mr. Johnson. Yes.
    Ms. Jackson Lee. Do you think, without a self-serving 
comment, that if the technology that you offered, or maybe 
there were some competitors of yours, but if they had been 
processed, would we have been further along with the issues 
that we are addressing today about 50 percent and then 100 
percent by 2010?
    Mr. Johnson. I think we would be further along. 
Secondarily, I think if process is defined, it makes it easy to 
fund, from the capital markets perspective. It is much easier 
to go to the private investors in the private sector looking 
for funding when you know the solution you are trying to solve. 
Because if you can prove it to investors, you can usually raise 
the capital that is needed to prove it to the Government.
    Ms. Jackson Lee. I think the key, however, is that this 
technology could have been--and that is up to the selection 
process of TSA--but it could have been part of the solution, 
not part of the problem.
    Mr. Johnson. Yes, absolutely. I am biased about that.
    Ms. Jackson Lee. I understand.
    Mr. Boisen, you mentioned that you had difficulty in 
understanding what kind of technology would be required of your 
constituents, the companies that you represent. What was your 
encounter with TSA? Do you have a private-sector response as to 
why TSA has not been able to verify 50 percent?
    Mr. Boisen. Well, I believe part of it is in the timing 
issue, having been on the other side of it as a carrier. The 
carriers all report on a day-to-day basis within their own 
system during the month of February and collect data. Some 
carriers have that data automated, and some receive a written 
document, whether it is an e-mail or such, from every single 
location. Then it takes a few days to accumulate those numbers. 
Those are sent, I believe, to TSA. They are in the process of 
trying to, I guess, organize those numbers.
    Ms. Jackson Lee. But your membership, have they developed 
the kind of equipment that they would like to use? Have they 
submitted it in? Do they know what TSA expect of them? What is 
your issue? What is keeping your constituents from complying or 
helping to comply?
    Mr. Boisen. Well, many of ours are in compliance with the 
50 percent, I believe. We are all in compliance.
    Ms. Jackson Lee. Okay. If you are, would you provide us 
with that list, those who are in compliance of up to 50 
percent?
    Mr. Boisen. I believe I can acquire that from our 
membership.
    Ms. Jackson Lee. So do you have equipment? Has it been 
certified? Are people using their own equipment that they have 
been using in the past?
    Mr. Boisen. I think it is a variety. A number of our 
members, our airlines, are also members of ATA. Having been on 
that side of it, we have acquired equipment some time ago, 
generally trace-detection equipment. I know one carrier that I 
am very close to had met the 50 percent months and months and 
months ago. If it is there, it is very, very feasible if you 
focus and commit yourself to do it.
    Ms. Jackson Lee. So what would help you get better than 
where you are today?
    Mr. Boisen. As it has been mentioned before, it is that 
cargo that is very difficult to measure and to monitor in 
today's environment, the containers.
    Now, TSA, in the past, has tried to find some technology 
and, frankly, spent a lot of money on fast-pulse neutron 
devices, that type of thing, that sits in Houston today 
gathering dust, without ever going through that step of 
developing something for the industry without any input back 
from the industry. You know, they spent, I understand, some $6 
million on a device that has never worked, and this output 
would have been six containers an hour, which is totally almost 
useless.
    Ms. Jackson Lee. Is this designed by the industry, or this 
was given to you by TSA?
    Mr. Boisen. No. This was TSA.
    Ms. Jackson Lee. So it has never worked.
    Mr. Boisen. It has never worked.
    Ms. Jackson Lee. So these are some of the obstacles: 
Getting the right technology?
    Mr. Boisen. Getting the right technology.
    Ms. Jackson Lee. Getting it certified by TSA?
    Mr. Boisen. Yes. And working with the industry to say, 
``What do you want?'' and working together.
    Ms. Jackson Lee. So you will know what to purchase or move 
in what direction.
    Mr. Boisen. In partnership, we believe. We have volunteered 
for a number of pilot projects, whether it is on technology or 
whether it is on software, over the years. We are the first to 
say, ``Try us. We will try. We will work with anybody.''
    But, frankly, I think, as Mr. Johnson has indicated, the 
focus was not on cargo, from the technology standpoint. It just 
wasn't there. Fortunately, we had the dogs, which, as Mr. May 
indicated--I have been a dog advocate for years. They are 
wonderful.
    Ms. Jackson Lee. But you don't have enough.
    Mr. Boisen. But we don't have enough, and they have a tough 
union. You know, you can only work them 30 minutes, you have to 
scratch them behind the ears and feed them, you know. There 
aren't enough of them.
    Ms. Jackson Lee. I have seen that happen. Thank you, Mr. 
Boisen.
    Let me just quickly, Mr. May, this is just a quick 
question. I thank you for testifying. I noticed that your, 
again, your membership is not here, but you are here 
representing them.
    What is the greatest difficulty for airlines to be part of 
the compliance of 100 percent, 50 percent now in February 2009, 
and then 2010? Compliance with cargo inspections.
    Mr. May. We are in compliance for the 50 percent. We were 
by the deadline in February. I think the whole issue there is 
making sure that TSA has the forms from us that they can 
aggregate and then report back to you and others to prove that 
point. But I have no doubt in my mind that we are at 50 percent 
right now.
    Some of our carriers----
    Ms. Jackson Lee. So you would be willing to give us a list 
of the airlines that represent that they are at 50 percent.
    Mr. May. Sure, sure. We are happy--it is the ATA 
membership. I am happy to give it to you. By definition, some 
of our carriers are at 100 percent because they are exclusive 
wide-body carriers. Southwest Airlines is a good example, from 
your home State.
    So the real challenge going forward, as I said in my oral, 
No. 1, we now have to tackle wide bodies. Wide bodies take 
palletized loads. Palletized loads are difficult to trace 
because of their size, so you have to break them down, unless 
that screening is done upstream. That is where our friends from 
the freight forwarder community come in. They have to be 
certified, they have to have the technology.
    So the real challenge, it is a 25/75 formula right now, 
just to put it in perspective, 25 percent of cargo goes on 
narrow bodies, 75 percent goes on wide bodies. So the hurdle, 
you know, has just jumped up a few feet, and that becomes the 
real challenge.
    We don't have enough dogs. We don't have any wide-portal 
technology. We need to get more people certified upstream. That 
is expensive, and there needs to be some accommodation for 
those folks buying that technology upstream. So those are the 
challenges.
    Ms. Jackson Lee. Well, you have laid out the top of the 
mountain for us. We thank you for your testimony.
    Mr. Dent is recognized for his questioning.
    Mr. Dent. Thank you, Madam Chairwoman.
    Following up, I guess, with Mr. May, as you know, we have 
this 100 percent goal here. Do you think we can meet that 100 
percent goal given the issues you just outlined with the wide-
bodied planes and other issues, you know, too, in terms of how 
we are going to get foreign governments to collaborate with us 
as it relates to the in-bound and out-going foreign cargo?
    I mean, I understand how we can get this up to 85 percent, 
but how do you get to 100 percent? Do you think we can actually 
get to 100 percent realistically?
    Mr. May. I don't think you can get to 100 percent as many 
would define it, which is 100 percent of every piece of cargo 
carried on every commercial passenger aircraft, because some of 
that cargo is coming in from overseas, and it may not be 
screened to the same levels of technology that you demand here.
    I can tell you that we are going to make every effort for 
all domestic and out-bound to comply with the law when it is 
time for it to be 100 percent. We are going to work our tails 
off to make sure that happens.
    Assuming that we have a good partnership with TSA, assuming 
that they get the funding for additional canine teams, assuming 
that Mr. Johnson and his competitors continue to work on wide-
portal screening technology that can be efficient, effective, 
quick--it can't be six pallets an hour, as Jack points out; we 
have to have something that really moves--and if we have a good 
upstream program, I think making 100 percent for domestic and 
out-bound is very doable.
    If you want to be pure and have an absolute 100 percent of 
everything, then I think it is going to be a challenge because 
of the problems working out internationally.
    Mr. Dent. Thank you.
    I would like to follow up with Mr. Fried, if I could. I 
would be happy to hear you address that same issue. But, also, 
I wanted to make a comment, too, that your comments regarding 
the future of air cargo screening were of real interest to me. 
TSA, as you know, must balance its security missions with the 
need to ensure the efficient flow of commerce.
    How do you think TSA could better manage its resources to 
ensure it addresses the highest risks to air cargo while not 
impeding the safe flow of low-risk cargo?
    Mr. Fried. Well, I think it is important not to abandon 
this targeted risk-based approach. I mean, I know we are 
screening every single piece of cargo, but I think that the 
agency needs to be mindful of making sure that risks, specific 
risks, are addressed in the screening of cargo itself. I think 
that, if we continue to use that approach going forward, the 
agency will be effective.
    I also think this is, as Mr. May has said, this is a 
question of resources, and TSA needs as many resources as 
possible to continue to expand the CCSP program. So it is a 
question of finances.
    Mr. Dent. I guess my next question to you, Mr. Fried, is 
this: How are freight-forwarding employees vetted and 
investigated to ensure that they are trustworthy employees?
    Mr. Fried. Currently, the TSA has a security threat 
assessment program that is instituted on anyone in the air 
cargo and, I believe, airline industry, as well.
    Mr. Dent. Are your facilities currently regulated with 
respect to facility security minimum standards? Would those in 
the CCSP be regulated by TSA?
    Mr. Fried. Yes and yes. The TSA is a constant visitor to 
all of our facilities. Of course, all Certified Cargo Screening 
Program participants are, in fact, vetted, validated, and then 
subsequently audited by TSA.
    Mr. Dent. Thank you.
    Then to Mr. Johnson, your frustrations with TSA's Qualified 
Product List are heard loud and clear. Navigating any 
bureaucracy, as you know, is difficult, but there are few more 
difficult, perhaps, than at the Department of Homeland 
Security. So it must have been particularly challenging for you 
as a smaller business.
    When you first sought to enter the Qualified Product List 
program with TSA, how did you know where to look?
    Mr. Johnson. Actually, I had met Mr. Kelly at an industry 
conference and asked him the best way to start, and he referred 
me to someone on his staff. That is how we started.
    Mr. Dent. That is interesting. Is there any Web site or any 
form or any handout explaining the process in an easy-to-
understand formats? Or is this just all word of mouth, like 
through Mr. Kelly?
    Mr. Johnson. There probably is a Web site or a place, but I 
saw the guy at the top 10 feet away from me, so I went there.
    Mr. Dent. That works. What was it that finally enabled you 
to break through the ceiling? I guess it was just that, going 
through Mr. Kelly.
    Mr. Johnson. I think what really changed things is we had 
been talking to the science group at the TSA, and the way we 
explained our technology didn't make sense to them. The 
challenge we had as a small business is the information they 
were asking us and the things they wanted us to deploy to them 
were the core of our technology. If I told them that, now it is 
a matter of public record and it could interfere with my patent 
ability. So we had this Catch-22 of, if we tell you how it 
works, you will get excited about it, but what is to say it is 
not now a matter of public record or somebody else doesn't get 
the same technology?
    So we took a chance very recently and just said, ``This is 
how it works. This is why it works.'' We got everybody to start 
nodding their heads, saying, ``Okay, this actually looks like 
it could work.''
    What we didn't know is that someone had told a very similar 
story. I think that has been the challenge, is TSA has heard it 
a hundred times from a hundred people saying, ``We can do it,'' 
and it never really comes out. You know, build the passive 
neutron system or do something else.
    Going back to the point, we tried to come up with a 
business solution first: What is the process, as it sits today? 
How do we add the screening process to it without interfering 
with the workflow? Since all we focus on is cargo, we spend all 
of our time in warehouses, we heard it from the ground up, so 
it made us a lot easier for us. We just needed the TSA to 
validate the technology.
    Mr. Dent. By the way, congratulations on your additional 
hires. I know that has to be pretty tough in these times. But 
just a real quick question: How many employees does your 
company currently have?
    Mr. Johnson. Thirty-three.
    Mr. Dent. Thirty-three. Okay, thank you.
    I will yield back my time.
    Ms. Jackson Lee. I thank the gentleman for his questions.
    Right now I am pleased to yield 5 minutes for questioning 
to the full committee Chairman, Mr. Thompson of Mississippi.
    Thank you, Mr. Dent.
    Mr. Thompson. Thank you very much, Madam Chairwoman.
    I appreciate the honesty of the witnesses.
    I want to briefly paint a picture before I offer my 
question to the panel. One of the challenges we have is to try 
to protect the good people of America. Congress has tried to 
say, given the vulnerability that exists in this space we are 
talking about today, that we have to do something about it. 
Now, whether or not the 100 percent target we have set is 
valid, we have to have some idea of what is coming to our 
shores, we have to have some idea of what is traveling on 
passenger planes.
    We believe and hope that nothing bad will happen. But the 
problem is, if we don't do our duties and something bad 
happens, shame on us. So, to that end, we are trying to get us 
to a point where we can, with a reasonable assurance, give the 
traveling public and others confidence that our systems work.
    Now, the systems might be dogs, it might be men, it might 
be technology, but aggregate that and we have a system that is 
100 percent.
    So, if the challenge for industry is, ``Well, if you give 
100 percent, we can't get cargo to our markets fast enough, and 
that delay costs money,'' sure. But if we create a process that 
provides all the assurances and gets goods to market in that 
period of time, then I think we all succeed.
    So, to that end, Congress tried to set these time tables. 
Granted, if we have to push them back, so be it. But our goal 
still has to be the 100 percent. To the extent that we can 
accomplish that within a period of time, we have to do it.
    So I guess my issue for you, Mr. Johnson, is, your solution 
that you have offered is a different approach to what we are 
talking about getting us there. What makes yours different from 
X-ray?
    Mr. Johnson. From a pure technology perspective, we don't 
use any radiation, so it is a safe working environment. We 
actually use a microwave, so we don't require any shielding, 
and it doesn't require--it is not heavy, it can be deployed 
very easily.
    Secondarily, I think the biggest difference is we try to do 
it in the standard flow of commerce in the process. So our 
technology is deployed at the scale or on the floor where the 
cargo is already naturally being stopped to be weighed or 
measured, and that is where we try to do the screening.
    So, from a technology perspective, we are safer, in my 
opinion. Then secondarily, we are automatically inserted in the 
process, so it is not an extra step, it is not another place 
you have to go, or another part.
    We make it so that you don't have to check an image and 
say, ``Is this image something suspicious?'' It is a simple red 
light/green light approach. You put the cargo on the scale, it 
takes the weight, our system takes the measurements, it takes 
the digital picture, and it screens the cargo in seconds, all 
in one step.
    Mr. Thompson. Mr. Boisen, you heard the panel of witnesses 
before, especially our TSA representative. Given that testimony 
and what your experience is being with TSA, do you have an idea 
of whether they are moving on the front of a proven technology 
at a pace where it does not impede commerce? Or the 100 percent 
mandate, coupled with the ebb and flow of technology, might be 
a problem, based on your observation?
    Mr. Boisen. Well, my current observations are limited to 
Mr. Johnson, and I have known his technology for some time. 
But, without a doubt, there seems to be--the pace is picking 
up. There seems to be greater attention to it.
    I am concerned that--you know, some 5 years ago, I was 
involved with another conference, involved with a lot of smart 
people, Sandia Labs and Livermore Labs, et cetera, talking 
about technology and that it was just 5 years away. That was 5 
years ago. A lot of it--we have not heard anything promising 
coming out of those sources again.
    So I think it is one thing to say, we need technology. It 
is another to actually find it. How do you get it out of the 
lab? How do you make it functional into a pretty harsh 
environment?
    Mr. Thompson. Mr. Fried, do you want to comment on that?
    Mr. Fried. Yeah. You know, TSA tells us that the technology 
for screening pallets and containers with multiple commodities 
is a few years away. While we hear some tales of promising 
machines over in Europe, they say that the false alarm rates, 
the false positive rates, as they are referred to, are too high 
to be accepted by TSA.
    So, you know, we do our best to encourage the agency to 
look at as many different technologies out there as possible, 
including, of course, Mr. Johnson's. You know, our opinion is 
that they just can't roll it out fast enough. But, you know, of 
course, it has to meet TSA's standards.
    Mr. Thompson. Yeah.
    I guess, Madam Chairwoman, I could not get a time frame 
from TSA on any of what we are talking about. I think, from a 
business perspective, if I wanted to do business in this space, 
I would like to have some idea of how long we are talking about 
to either say yea or nay, but I don't really want to just be 
drawn out over a period of time, because time is money, and if 
I am doing research and development, that is a challenge.
    Mr. May, I agree with you. Dogs, canines, clearly, at this 
point, is the immediate issue for us to have, to do this. But 
if we know that the notion of having dogs in enough quantity to 
get things done is almost impossible, then I think we have to 
look to technology. If we can assure, you know, your membership 
that should this technology come forth it would not impede 
commerce, do you see your membership being supportive of that 
effort?
    Mr. May. Mr. Chairman, if I understand your question 
correctly, I will give you an answer.
    We are all in favor of new technology. We just want it to 
be--we want it to work. That is to say, it has to meet the 
TSA's standards. It has to have low false positives and so 
forth. It has to do what it is purported to do. It, No. 2, has 
to be quick and efficient. No. 3, there has to be a discussion 
about cost-benefit, who is paying for this equipment, who is 
going to run it, where is it going to be, and that sort of 
thing.
    But nobody is opposed to new technology. The problem is--
you and I have had the conversation about how long it takes to 
train dog teams. Unfortunately, it seems to me like technology 
has taken a whole lot longer than that.
    Mr. Thompson. Well, you are absolutely correct. I don't 
think we got the answer from the Department today that we are 
looking for, because we are trying to encourage them to move 
along and get it done. It just appears that, until recently, 
the effort and energy to make that happen was not taking place.
    So, again, we are going to have to get that. As a Member of 
Congress, somebody who chairs this committee, I would not want 
something to happen that can be put at the door of an imperfect 
screening system as to the reason it occurred. If that 
happens--and we all agree that if you think the AIG furor over 
bonuses is something, you can imagine what the public furor 
over something happening with this would be.
    So we are all prepared to work together to try to come up 
with a solution. I just wanted to let you know that the time 
table is an issue, and we will have to continue to pursue it.
    Mr. May. We fully concur with you, Mr. Chairman. I would 
just reiterate that the CCSP program is going to become a major 
component of our success in reaching 100 percent, especially 
with wide-bodied palletized loads. So we need to make sure that 
they have the resources to get going to it.
    Mr. Thompson. Well, I asked that resource question of the 
first panel. I wanted to make sure that if the Department needs 
additional money, we can give it to them. Whatever it is to get 
us to where we need to be, we are prepared to make it happen.
    Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Cleaver [presiding]. Thank you.
    The Chair will return shortly. I will yield myself 5 
minutes.
    This morning we were called to votes, and so I was not able 
to get in depth with those who were on the first panel.
    But, Mr. Johnson, one of the issues I raised this morning 
was the GAO report, which said that screening cannot be done to 
crates 10 feet and larger. I am interested in and concerned 
about what we do to that. What do you foresee in terms of 
technology, emerging technologies, that would allow that to 
happen?
    Mr. Johnson. Well, I think for us, in particular, we see a 
lot more cargo on a pallet, a 48-by-40-inch wooden pallet, than 
we do necessarily in the, what we would call a cookie sheet, 
the 10-foot-by-10-foot. That cargo goes on a lot of all-cargo 
carriers who are technically part of this regulation. I think 
if we could screen at the palletized level, along with the 
CCSP, we could definitely solve the 100 percent screening.
    Mr. Cleaver. Why can't we?
    Mr. Johnson. Right now? The technology that it would take 
to--the power you need to get through that dense of cargo is 
not safe for humans. It is just very difficult to stand by it. 
The technology we are trying to deploy--and there are other 
people out there trying to deploy solutions that require low 
power that have great penetration to tell you if that pallet is 
safe or not at a piece level.
    You have 20 pieces on the pallet; each one of those pieces 
are safe and, therefore, can be put on the plane. That is the 
solution we are out trying to solve, without stopping the flow 
of commerce and during the natural process of accepting the 
cargo.
    Mr. Cleaver. Okay. You know, if I have a business in my 
district, Gates Bar-B-Q, they want to ship slabs of short ends 
or, you know, some beef sandwiches, frozen beef sandwiches, 
they are a small business, is the cost prohibitive for small 
businesses?
    Mr. Fried. To participate in the Certified Cargo Screening 
Program?
    Mr. Cleaver. Yes. Yes.
    Mr. Fried. No. In that case, absolutely not. Most of the 
businesses would not have to buy technology, because they are 
doing their own packing of their boxes. Their people would have 
to be certified. They would be security-threat-assessed by the 
TSA. They would have to provide a sterile area for preparation 
for packing. But I would tell you, generally speaking, no.
    Mr. Cleaver. So they could do that in their own little 
plant?
    Mr. Fried. Absolutely.
    Mr. Cleaver. The cost would be minimal.
    Mr. Fried. Minimal cost. They have to just make sure that 
their perimeter--they have controlled access to their 
environment. But, generally speaking, I would say no.
    Mr. Cleaver. So if we said that right now, in the middle of 
this reinvestment and recovery--I am the only one saying it; we 
fail to get everybody to say that. Everybody wants to say 
``stimulus,'' but it is the Recovery and Reinvestment Act. One 
of the big concerns we have, of course, in this bill that we 
approved is, how do we help small businesses?
    So, one of the issues that small businesses are concerned 
about is, you know, in order for them to expand, they are going 
to have to expand their markets, and that means, you know, 
transatlantic business deals. My concern was--and I think you 
have answered the question--that they are not going to be put 
through any expense that they could not bear.
    Mr. Fried. Right. The actual shippers, the people giving us 
the boxes, that is correct.
    Mr. Cleaver. One final question. Maybe this is not the--I 
mean, the panel, I let them escape, because the bell saved them 
this morning, because I wanted to know how we are doing 
business with small and minority businesses.
    I am pleased, Mr. Johnson, to see you here, but, I mean, 
that was a question I wanted to raise with them. But, I mean, 
your presence, I guess, would suggest that there is at least 
some level of openness and sensitivity. You didn't have any 
unusual challenges, other than the challenges that people 
normally have as a business person?
    Mr. Johnson. I would agree that it is more defined by the 
bureaucracy of the process. I didn't think that I was treated 
any different or slighted because we were a small business. The 
challenge was just getting in front of them and telling our 
story. Since then, it has gone really fast.
    I would say the TSA has helped us find a solution. They 
want to solve the problem just as bad as we want to give one to 
the industry. I don't think they care if it is small, large, or 
medium, as long as it makes sense for the industry and it can 
hit the 100 percent screening mark.
    Mr. Cleaver. Sounds like the coach from Alabama, Bear 
Bryant, said he didn't want black players until Southern Cal 
had a running back named Bam Morris, ran about 3 million yards 
on him. Then he said, you know, I don't have any problems with 
having those--I don't want to use the word he used--but having 
those on my team. So I guess, you know, if you have something 
to offer people, they want to get it.
    One of the other questions that I wanted to ask--
incidentally, the Chairwoman will be back shortly--do you think 
that, Nation-wide, region to region, TSA is focusing in the 
right places and the right points in the supply chain to meet 
the 100 percent screening mandate, congressional mandate?
    Mr. Fried. I would say yes. I mean, the Certified Cargo 
Screening Program is a smart solution. Spread the security task 
into the supply chain is--it is a smart way to make sure that 
we reach this mandate in the absence of certified technology.
    Get the shippers involved. Make sure that TSA is well-
funded so that it has adequate personnel on hand to actually 
carry out the vetting and the audit function over the shippers, 
and I think that we will achieve this mandate without 
hesitation.
    Mr. Cleaver. Do all of you think that we are going to meet 
the congressional mandate? If you would just go down from Mr. 
Johnson all the way down to Mr. May.
    Mr. Johnson. I would qualify it the same way Mr. May did. I 
would say domestic and out-going, absolutely. But I have spent 
enough time internationally, and the harmonization challenge 
you have is that most in many countries believe that their 
security standard is superior to the TSA's. So when the TSA is 
trying to enforce upon them a standard that they believe they 
are superior to, it is very difficult to call it harmonization.
    Mr. Cleaver. But have we looked at any international--any 
other international systems? I mean, for example, El Al is at 
least spoken of as the superior system on the planet. Have we 
had any contact with or involvement with El Al?
    Mr. Fried. Yes, I spent a week over in Tel Aviv back in 
May. I can tell you that, from what my experience was with the 
Israelis, is that cargo is a conundrum to them, as well. One of 
the solutions they have is to hold cargo for 2 days prior to 
shipment.
    Mr. Boisen's airline had service in and out of Tel Aviv, so 
he could probably tell his personal experiences, but----
    Mr. Cleaver. I have had personal experiences. You can't 
take a beef sandwich on El Al.
    Mr. Kelly. Right. As a passenger, if you plan on committing 
a malicious act, obviously that is not the place to do it. But, 
you know, cargo has its challenges.
    Mr. Cleaver. Yes.
    Madam Chairwoman.
    Ms. Jackson Lee [presiding]. We call this a cooperative 
spirit. I thank Mr. Cleaver from Missouri. He has come to be a 
valued Member of this committee, and I look forward to us 
working to solve these problems.
    Let me thank the members of this panel. I think you have 
enlightened us as to the private sector's involvement but also 
the concerns that you have expressed.
    I do want to add to the record, to reinforce its addition 
to the record, an October 30, 2008, letter from the 
Transportation Security Administration to Chairman Thompson and 
the committee that defines transportation, as to what the 
transportation system means, what ``commensurate'' means, which 
I think is going to be important to future legislation.
    I ask unanimous consent to submit it into the record. 
Hearing no objection, so ordered.
    [The information follows:]
    
    
    
    
    Ms. Jackson Lee. I yield myself just a minute just to ask 
Mr. Johnson, what is your latest encounter--and I ask this 
generically for small businesses--but what is your encounter 
with TSA?
    Mr. Johnson. Actually, we spoke this morning with the TSL 
about setting a date to start the screening process.
    Ms. Jackson Lee. Let me just say this broadly. I have 
asked, I think, Mr. Kelly to provide us with a list, maybe 
extensive, of small businesses similarly situated and the 
status of the technology that they may be offering.
    Let me say on behalf of the committee, we hope that that 
meeting that you are having, as well as others who are in line 
to answer the question of Mr. Boisen and Mr. Fried and Mr. May 
on technology, moves quickly. I am also going to write a letter 
to TSA to ask for them to give us their process of moving 
technology and assessing that technology.
    I do think there is a gaping hole of consciousness between 
the urgency that Congress puts into legislation like the 9/11 
legislation, giving specific dates of 2009 and 2010, and there 
is a disconnect between the kind of technology that needs to be 
in place for the job to get done.
    Mr. Boisen, on behalf of your constituents, we are going to 
ask for some understanding of the process of certification and 
providing information to your constituents to be able to now 
have you assess which technology you can use and the 
determination of whether or not the equipment that some of your 
clients, customers, constituents are using is adequate.
    Also, I had to rush away because I gave testimony to the 
Budget Committee. I will be revising my statement to include 
issues regarding transit and air cargo and asking for funding 
that will answer some of the concerns about staffing and some 
of the concerns about funding as it relates to the full 
screening of cargo by 2010 and certainly to maintain the 50 
percent that we have at this point.
    I think I asked Mr. Boisen to give me a list of his 
constituents, in terms of their compliance or representing that 
they are at 50 or 100 percent, and I would like you to 
designate who is at 100.
    Mr. May, likewise, I would like you to do so, as well.
    I would like to ask my staff, staff director, Mr. Beland, 
that we have a briefing with airlines. We understand their 
hesitancy to be at a hearing, but we hope that we will have 
full attendance at a briefing so that we can be informed and be 
working effectively on this issue. We may call upon those of 
you who are here again.
    With that, I believe I have come to a conclusion. I think I 
will just simply say, no, we have not met the test, and the 
test is to secure America. Frankly, I hope that this hearing 
will set a wake-up call for us to do so.
    I thank the witnesses for their valuable testimony and the 
Members for their questions.
    The Members of the subcommittee may have additional 
questions for the witnesses, and we ask that you respond to 
them expeditiously in writing.
    In addition, I think this hearing has generated what I 
believe is necessity for further legislation on this matter to 
clarify, but also instructions to the industry and to TSA. We 
look forward to introducing that legislation.
    Hearing no further business, the subcommittee stands 
adjourned.
    [Whereupon, at 6 p.m., the subcommittee was adjourned.]

                                 
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