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


 
 100 PERCENT AIR CARGO SCREENING: REMAINING STEPS TO SECURE PASSENGER 
                                AIRCRAFT

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

                                HEARING

                               before the

                SUBCOMMITTEE ON TRANSPORTATION SECURITY
                     AND INFRASTRUCTURE PROTECTION

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 30, 2010

                               __________

                           Serial No. 111-73

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13


                                     

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

                               __________


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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             Daniel E. Lungren, California
Eleanor Holmes Norton, District of   Mike Rogers, Alabama
    Columbia                         Michael T. McCaul, Texas
Zoe Lofgren, California              Charles W. Dent, Pennsylvania
Sheila Jackson Lee, Texas            Gus M. Bilirakis, Florida
Henry Cuellar, Texas                 Paul C. Broun, Georgia
Christopher P. Carney, Pennsylvania  Candice S. Miller, Michigan
Yvette D. Clarke, New York           Pete Olson, Texas
Laura Richardson, California         Anh ``Joseph'' Cao, Louisiana
Ann Kirkpatrick, Arizona             Steve Austria, Ohio
Bill Pascrell, Jr., New Jersey       Tom Graves, Georgia
Emanuel Cleaver, Missouri
Al Green, Texas
James A. Himes, Connecticut
Mary Jo Kilroy, Ohio
Dina Titus, Nevada
William L. Owens, New York
Vacancy
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
Emanuel Cleaver, Missouri            Steve Austria, Ohio
James A. Himes, Connecticut          Peter T. King, New York (Ex 
Dina Titus, Nevada                       Officio)
Vacancy
Vacancy
Bennie G. Thompson, Mississippi (Ex 
    Officio)
                   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..........     6
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security..............................................     8

                               WITNESSES
                                Panel I

Mr. John Sammon, Assistant Administrator, Transportation Sector 
  Network Management, Transportation Security Administration:
  Oral Statement.................................................     9
  Prepared Statement.............................................    11
Mr. Stephen Lord, Director, Homeland Security and Justice Issues, 
  Government Accountability Office:
  Oral Statement.................................................    13
  Prepared Statement.............................................    15

                                Panel II

Mr. John Meenan, Executive Vice President and Chief Operating 
  Officer, Air Transport Association:
  Oral Statement.................................................    38
  Prepared Statement.............................................    40
Mr. Harald Zielinski, Head of Security and Environmental 
  Management, Lufthansa Airlines Cargo:
  Oral Statement.................................................    41
  Prepared Statement.............................................    43
Mr. Mike Middleton, Executive Vice President, SecureGlobal 
  Logistics:
  Oral Statement.................................................    46
  Prepared Statement.............................................    48
Mr. Fernando Soler, Owner, S.O.S. Global Express:
  Oral Statement.................................................    50
  Prepared Statement.............................................    52

                             FOR THE RECORD

Mr. Stephen Lord, Director, Homeland Security and Justice Issues, 
  Government Accountability Office:
  Chart..........................................................    14
The Airforwarders Association:
  Statement......................................................     4

                                APPENDIX

Questions From Chairwoman Sheila Jackson Lee of Texas for John 
  Sammon.........................................................    69


                   100 PERCENT AIR CARGO SCREENING: 
              REMAINING STEPS TO SECURE PASSENGER AIRCRAFT

                              ----------                              


                        Wednesday, June 30, 2010

             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 2:00 p.m., in 
Room 311, Cannon House Office Building, Hon. Sheila Jackson Lee 
[Chairwoman of the subcommittee] presiding.
    Present: Representatives Jackson Lee, DeFazio, Thompson (ex 
officio), Dent, and Austria.
    Also present: Representatives Harman and Markey.
    Ms. Jackson Lee. The subcommittee will come to order. The 
subcommittee is meeting today to receive testimony on ``100 
Percent Air Cargo Screening: Remaining Steps to Secure 
Passenger Aircraft.'' Our witnesses today will testify about 
TSA and the industry's progress and challenges in meeting the 
9/11 Act's requirement to screen 100 percent of cargo on 
passenger planes by August 2010.
    Let me first of all applaud the Chairman of this committee, 
of the full committee, for establishing the mark of oversight 
for Homeland Security. It is a particularly special 
responsibility that we have because we are amidst the front-
liners on securing the Nation. Oversight is key, and we in this 
committee and our subcommittees take an enormous sense of 
responsibility for this task. The witnesses who are here today, 
let it be very clear that you are part of the dictates of 
oversight, which really are part of securing this Nation.
    I would like to thank my Ranking Member for his cooperation 
in this effort and the Ranking Member of the full committee as 
he cooperates with our Chairman on making sure that this House 
committee follows its obligation and assesses the different 
modes of security for the Nation.
    I now recognize myself for 5 minutes for an opening 
statement.
    Today the 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 third hearing on this 
issue as Chairwoman of the subcommittee which has jurisdiction 
over TSA.
    Without doubt, the cargo screening mandate is critical to 
aviation security and our interest and oversight into TSA's 
progress in establishing this system will be continuing until 
and after we reach 100 percent.
    I would like to welcome my colleagues on the subcommittee 
and also thank them for their strong commitment to this issue. 
I would acknowledge Mr. Dent, the Ranking Member, and Mr. 
DeFazio, who is present here at this time.
    TSA is nearly 3 years into implementing and certifying the 
Certified Cargo Screening Program, known as the CCSP, and has 
also negotiated key international harmonization agreements with 
the United Kingdom, Australia, and Canada on 100 percent cargo 
screening measures. On both the domestic and international 
fronts, TSA has made progress but the law is clear. By August 3 
of this year, TSA must be able to report to Congress that 100 
percent of cargo traveling on commercial passenger aircraft is 
being screened for explosives. Today, we will ask TSA the hard 
questions concerning the status of the implementation of 
section 1602 of the 
9/11 Act.
    The subcommittee needs to understand that TSA has the 
necessary resources to educate, certify, inspect, and oversee 
CCSP and its thousands of private sector participants.
    We need assurance that our TSA is properly verifying the 
private sector screening. We need the right kinds of 
opportunities as well for the private sector so they have the 
standards and guidelines with which they can continue to 
produce new technology and serve the Nation as well.
    Finally, TSA must inform the subcommittee of its plan with 
milestones and deadlines for implementing its system for 
screening all cargo on passenger aircraft originating at 
foreign airports.
    If you ask why are we pushing TSA so hard, why is section 
1602 so important for cargo screening, the logic is clear. If 
we screen passengers and their checked baggage we must screen 
the cargo aboard the very same aircraft.
    Additionally, we must remind ourselves that even as we have 
screened passengers, we have seen the likes of the incident 
regarding the Northwest Airlines. We have seen the shoe bomber. 
We have seen the newness of ideas to harm this Nation. So 
obviously cargo has to fall right in the line of ensuring that 
we do everything we can to meet the goals of 100 percent air 
cargo screening.
    Our commitment as Members of this subcommittee and full 
committee has never wavered as we oversee the Department's 
implementation of the provisions contained in the 9/11 Act. If 
enacted properly, fulfillment of the cargo screening mandate 
will be a major milestone in aviation security, building upon 
previous mandates to conduct the 100 percent screening of 
checked bags, fortified cockpit doors, deploy Federal air 
marshals, secure airport checkpoints and perimeters, and 
improve the way we check passengers against the terrorist 
watchlist.
    One hundred percent cargo screening on passenger aircraft 
is the next step in improving aviation security, and the 
deadline is upon us.
    The scope of this hearing includes reviewing the cargo 
screening programs and regulations TSA has established, 
exploring TSA's compliance and verification standards for 
ensuring that screening is effective, and evaluating the 
Department's progress in certifying new screening technologies. 
In addition, we want to know whether TSA has adequate resources 
and personnel to accomplish this mission.
    As we review TSA's efforts to meet the screening deadline, 
we also want to understand the impact this is having on 
industry partners, including air carriers, freight forwarders 
and manufacturers, many of whom have made significant 
investments in purchasing cargo screening technology and in 
training their employees.
    GAO has completed its review of TSA's efforts and is 
releasing its report today. The issues raised in GAO's report 
bring us concern. During the first panel of this hearing, we 
will examine GAO's assessment and hear TSA's response.
    The second panel consists of representatives from the 
private sector involved in air, in cargo transportation 
logistics, private sector stakeholders certified to screen and 
securely transport cargo, are the critical linchpin in TSA's 
plan to ensure 100 percent screening.
    Finally, let me say that any statement I make about cargo 
screening must include a call for the Department to continue 
its outreach to scientists, researchers, and small businesses 
to develop new technologies and processes to help industry 
reach and maintain 100 percent cargo screening without supply 
chain dislocations and delays that would also include the 
science and technology section of the Department, effectively 
and efficiently reviewing the backlog of new ideas that have 
been submitted by small businesses and making sure that we come 
into the 21st Century as we work together to secure the 
homeland.
    Let me also take the time to thank our witnesses for coming 
before us today and helping us to shed light on this very 
critical issue.
    I would like to welcome Doug Brittin, the general manager 
for air cargo at TSA, who is in the audience. As we all know, 
Mr. Ed Kelly, former general manager for air cargo, passed away 
last fall. Mr. Kelly's considerable contributions to air cargo 
security will not be forgotten, and we welcome Mr. Brittin as 
one who is committed to the values and the work ethic of Mr. 
Kelly, and we wish him the very best.
    Before I offer into the record some materials, let me also 
acknowledge in his absence, Congressman Ed Markey, who was 
previously on this committee, actual committee, and is 
enormously interested in this issue as one of the issues that 
he initiated.
    He is presently in a markup and may attend, but I do want 
to offer my appreciation for his leadership on this very 
important issue.
    Might I also say that we have done some very important work 
on this committee and on the full committee. It is important to 
note that although today we are assessing air cargo security, 
that we have done great work on surface transportation, which 
we hope the Senate will see fit to join us in passing that 
legislation, join the House and this committee in its work to 
help ensure that security is expanded to all of our 
transportation modes.
    Let me also congratulate the new TSA Administrator, Mr. 
John Pistole, who I know is now confirmed. Congratulations. 
This is an important day for us. Let me also make it very clear 
that I look forward to seeing Mr. Pistole this week in person, 
as my office has requested and I hope that I will hear from DHS 
very quickly, along with TSA very quickly, on the scheduling of 
that appointment. Again, let me make sure that I am stating a 
physical appointment, if you will, not a phone call, and I 
would appreciate it if that could be conveyed as quickly as 
possible.
    At this time, without objection, I would like to enter into 
the record a statement from the Airforwarders Association. 
Hearing no objection, this has been submitted.
    [The information follows:]

               Statement of the Airforwarders Association
                             June 29, 2010

    Dear Chairwoman JacksonLee and Ranking Member Dent, the 
Airforwarders Association (AfA), the voice of the freight forwarding 
industry representing over 300 dues-paying member companies with 1,260 
facilities and 6,300 employees, respectfully submits the following 
comments in advance of the June 30 hearing on air cargo security. Our 
members include a broad range of businesses including both 
multinational logistics companies with hundreds of employees and 
facilities as well as small, ``mom and pop'' operations with a single 
facility.
    The Airforwarders Association and our members have been actively 
engaged with the development and launch of the Certified Cargo Screener 
Program (CCSP). We have worked closely with TSA to provide insight into 
the complexities of the air cargo supply chain, including the impact of 
time, temperature, and screening methodologies on the product. The AfA 
has consistently provided information and enthusiastically encouraged 
our members' enrollment in CCSP. We also coordinated with airlines and 
TSA to reach our customers, who were less aware of the regulations and 
its' impact on their products. The freight forwarding industry, 
including AFA members, has invested tens of millions of dollars to 
ensure that CCSP works as intended.
    Concerns remain regarding the efficacy of a 100 percent screening 
program (as opposed to a risk-based targeting system) and its ability 
to provide a robust and nimble security regime. The legislation is 
clear, however, and the screening deadline must be met by August 2010. 
The AfA is apprehensive that the bulk of screening responsibilities, 
including cost and liability, are shifted to the private sector. Still, 
given the other options to meet the deadline, we firmly believe that 
the time for complaints is over, and our focus must be on compliance 
through the CCSP.
    With only 5 weeks to meet the 100 percent screening mandate, we 
applaud the committee for examining the status of enrollment in CCSP as 
well as the overall progress in screening. While the TSA's phased-in 
approach to screening percentages, notably the narrow body amendment in 
October 2008 and 75 percent by May 2010, has presented challenges to 
the forwarding industry, it has resulted in compliance with few 
disruptions. As a result, the 100 percent mandate looks increasingly 
attainable now that the industry, particularly for domestic flights, is 
already screening the vast majority of cargo in passenger planes.
    Despite this progress, the members of the Airforwarders Association 
have several on-going concerns that we ask Congress and TSA to address 
in the days leading up to and after the August 2010 deadline.
    Preserving Just in Time Delivery.--There is no question that 
screening has the potential to substantially delay cargo. CCSP was 
designed to address this issue by moving screening into the supply 
chain so tendering screened cargo would eliminate delays at the 
airport. Given the lower rate of enrollment with shippers, this may not 
work as effectively as TSA originally anticipated. In a recent survey, 
our members have identified two of their most significant concerns as 
delays and earlier lock-out times.
Recommendations
    1. TSA should be provided additional budget to continue to 
        encourage enrollment in the program. Increased enrollment will 
        lower the amount of cargo that requires airline screening at 
        the airport. This is arguably the least efficient point in the 
        supply chain to screen cargo; the less cargo screened there 
        improves efficiency across the supply chain.
    2. It is imperative that additional budget dollars are allocated to 
        certify a method or equipment that is capable of screening an 
        entire pallet or ULD. This may also require an amendment to the 
        existing legislation to adjust the piece level mandate, which 
        would provide TSA with needed flexibility. Pallets contain up 
        to 300 individual pieces that must be screened, piece by piece, 
        since there is no approved technology that can effectively scan 
        the cargo. Unpacking and repacking the pallet is extremely 
        time-consuming and will result in delays. The pallet issue also 
        raises warranty concerns for shippers and security concerns 
        with loose cargo for airlines. The anticipation of screening 
        pallets is spurring airlines to have earlier lockout times for 
        cargo, which is problematic for sensitive cargo that cannot 
        easily handle additional time at the airport. It is our 
        understanding that such pallet screening equipment has been 
        certified for use at European airports.
    Minimizing Costs.--For some forwarders, the cost-benefit analysis 
and available capital provided ample incentive and opportunity to 
become a Certified Cargo Screening Facility (CCSF). Smaller and mid-
size forwarders do not have the same business case to justify an up to 
half million dollar investment in technology. The costs to the 
forwarding community (the largest percentage of CCSF's) are staggering. 
Without guarantees of certification past 2012, the purchase of 
technology becomes a serious financial risk. Airlines who have 
published screening policies and pricing information, notably American 
and Southwest, are providing an alternative by screening at the 
airport, but additional options should be explored.
Recommendations
    1. TSA should continue to develop and approve alternate screening 
        options. The AfA is working closely with TSA on concepts for 
        independent screeners and consortium approaches to screening. 
        TSA should certify the existing pilots, as well as provide 
        assistance to others wishing to establish a consortium or 
        independent facility.
    2. Congress should direct GAO to work with TSA and the industry to 
        prepare a report on the state of the industry no less than 6 
        months after the August deadline. A full report detailing the 
        economic impact on industry, areas of concern as well as areas 
        for improvement will assist in ensuring that Congressional 
        intent--providing a more secure air cargo environment without 
        disrupting commerce--has been achieved with the existing 
        programs and technology.
    The AfA welcomes the opportunity to share our concerns and 
questions about alternative options for screening, namely 
Federalization of screening by having TSA agents screen cargo. The call 
for Federal screening at airports ignores three key points: (1) There 
is already an airport alternative--the airlines--for forwarders; (2) 
the pricing for these services is kept competitive and affordable 
through market competition, rather than through an arbitrary fee for 
Federal screening; and (3) smaller markets and forwarders at Category I 
airports have been operating in a 100 percent screening environment 
since the narrow body amendment became effective in October 2008. We 
have virtually no complaints with pricing or service from our members 
on record since the amendment took effect 6 months ago.
    Our concerns with Federalized screening are on the record with this 
committee in our testimony from July 2009 and March 2008, but bear 
repeating. The private sector has the experience and expertise with 
sensitive cargo shipments, from how to handle the containers to what 
screening technology is most effective. There are fundamental flaws 
with Federalizing screening, ranging from the lack of existing facility 
space at many Category X airports to a lack of TSA budget and personnel 
to staff such an effort. We do not deny that the Federal Government has 
an important role to play, but we believe it should be through funding 
for participants in CCSP and enhancing technological capabilities.
    The Airforwarders Association looks forward to continuing our 
dialogue on these issues with the committee. The Airforwarders 
Association is the only dues-based association that represents the full 
spectrum of the forwarding industry and regularly polls our membership 
to assess a true sense of the issues that affect forwarders. We will 
continue to share this and other vital pieces of information to the 
committee and its staff.

    Ms. Jackson Lee. The Chairwoman now recognizes the Ranking 
Member, the gentleman from Pennsylvania, Mr. Dent. Again, let 
me thank him for his leadership and his work on this committee. 
For an opening statement.
    Mr. Dent. Thank you, Madam Chairwoman. Good afternoon. I 
would like to thank you for holding this important hearing 
today on the importance of security and cargo in passenger 
aircraft.
    Let me at the outset express my disappointment that I have 
to leave here shortly as I certainly wanted to be here for this 
important hearing. Unfortunately, I must attend a meeting of 
the Ethics Committee, which does require my attendance.
    But truthfully, I don't believe that the 100 percent cargo 
screening, whether it is in the aviation or maritime 
environment, will ever equal 100 percent security. When 
Congress enacted this mandate, we disregarded that 100 percent 
of screening requirements cannot guarantee security because 
there is always another point of vulnerability. Security must 
be risk-based, layered, and economically viable.
    The 100 air cargo percent screening mandate in the 9/11 Act 
was certainly a lofty goal, and while it sure sounds nice, it 
provides the appearance of increased security without any new 
increase in security.
    In 2007, this committee and this Congress moved away from 
its risk-based resourcing philosophy and placed an expensive 
and burdensome mandate without adding any tangible security 
benefit. We added another very expensive layer, but only 
domestically on mostly U.S. carriers. Foreign air carriers 
bringing cargo and passengers back into the United States are 
not nearly as impacted as U.S. carriers, and so we put our own 
airlines at a distinct disadvantage.
    I would be very interested if Lufthansa, who will be 
appearing here later today, could share with us as a ballpark 
estimate how much this U.S. mandate will cost them.
    Recently, I asked how TSA would determine the economic 
impact of this mandate on small and medium-sized businesses. 
How will they track how many businesses will go under and lay 
off employees because of the new mandate? The answer is they 
are not. They have no intention of tracking how many people 
lose their jobs over this mandate.
    Then there is the question of enforcement. How will such a 
mandate be enforced domestically? Is it just a review of 
paperwork like an IRS audit, or will there be some inspections?
    International enforcement is, very frankly, impossible. If 
we require Air China to inspect 100 percent of its cargo bound 
for the United States, would we expect China to allow TSA 
inspectors to verify its assurances on the mainland? Not 
likely.
    While I have concerns with the 100 percent screening 
mandate, and while I think it provides very little tangible 
security benefits, we are a Nation of laws and it is the law of 
the land. As such, as the Ranking Member of the subcommittee 
that oversees the TSA, I am going to ensure compliance with the 
law.
    I certainly want to commend Mr. John Sammon who is here 
with us again today, and the men and women from TSA for their 
efforts under these circumstances. It is certainly a difficult 
job, and, Mr. Sammon, you have been before this committee and 
subcommittee many times before and you have testified as to 
just how TSA's hard work is, given the daunting tasks 
associated with protecting our transportation security systems.
    Again, thank you and to the men and women of TSA for your 
combined efforts. We really appreciate it.
    While TSA has done an admirable job with its outreach and 
promotion of the domestic Certified Cargo Screening Program, 
the fact remains that too few companies have become certified 
cargo screening facilities.
    Cost certainly seems to be a driving factor, and I have 
real concerns that many of these smaller and mid-sized, medium-
sized freight forwarders will be unable to spend literally 
hundreds of thousands or millions of dollars to outfit their 
companies with the approved automated screening equipment.
    With respect to international cargo, I am very disappointed 
that TSA only very recently began collecting statistics on 
foreign in-bound cargo. This law was enacted on August 3, 2007. 
Why did it take until June, 2010, for TSA to begin to collect 
metrics on these in-bound aircraft? It seems like someone, 
somehow, forgot about these largest of the large-body aircraft.
    Having said that, we in Congress have left the TSA and this 
administration in the untenable position of trying to enforce 
U.S. mandates on foreign sovereign states. How many times are 
we going to be enacting laws that place mandates on our foreign 
counterparts before we realize they are simply unachievable?
    TSA has no clear plan in place to address foreign in-bound 
cargo, though the law demands it. Why is that? Not for lack of 
effort, but because of a lack of authority.
    I certainly commend Secretary Napolitano, Deputy Secretary 
Liddy, and the former Acting Assistant Secretary for TSA, Ms. 
Gail Racise, for the efforts to improve aviation security at 
the international level.
    Richard Reid, Umar Farouk Abdulmutallab, the liquid 
explosives plot, all of these were in-bound threats from 
international aircraft, not domestic flights. We need to 
improve international security standards, and I am pleased that 
TSA is moving in that direction.
    Finally, let me say publicly that I am looking forward to 
working with the newly confirmed Assistant Secretary for TSA, 
Mr. John Pistole. Like the Chair, I applaud him for his 27 
years of service to the FBI and for his willingness to take on 
such a challenging position.
    Madam Chairwoman, you and I have worked together very 
closely to improve our transportation security systems in a 
constructive and productive manner, and I look forward to 
continuing that relationship as we work with our new 
administrator, Assistant Secretary Pistole, and as a partner in 
this process.
    Thank you, Madam Chairwoman, and I yield back the balance 
of my time, as, unfortunately, I will have to depart the 
hearing a little early to go to an ethics meeting. Thank you.
    Ms. Jackson Lee. Thank you very much, Mr. Dent, and we will 
hold it down until you return. Thank you very much for your 
service.
    First of all, let me ask unanimous consent to allow the 
gentlewoman from California, who is a Member of the full 
committee, and Chair of the Subcommittee on Intelligence, Ms. 
Harman, to this subcommittee. Without objection. Hearing no 
objection, Ms. Harman is authorized to sit for the purpose of 
questioning our witnesses. Thank you.
    Let me also ask unanimous consent to welcome a former 
Member of the committee to this subcommittee, the gentleman 
from Massachusetts, a champion of cargo security, Mr. Markey, 
who is not present at this time, but he would likewise be 
authorized to sit for the purpose of questioning witnesses 
during the hearing today.
    Hearing no objection, so ordered, as was Ms. Harman.
    The Chairwoman now recognizes the Chairman of the full 
committee, the gentleman from Mississippi, likewise a champion 
of air cargo security, Mr. Thompson, for an opening statement.
    Mr. Thompson. Thank you very much, Chairwoman Jackson Lee, 
for convening this important hearing.
    Today we will evaluate progress made by TSA in implementing 
the 9/11 Act's requirement to screen 100 percent aboard all 
cargo passenger aircraft. I would like to take this moment to 
applaud the efforts of my colleagues on this committee for 
championing this important mandate and ensuring that we take 
all important steps towards 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 undoubtedly provided 
TSA with the necessary tools to implement the air cargo 
screening program.
    Additionally, through the subcommittee, I have continuously 
offered a public forum where an honest discussion of the air 
cargo screening mandate could be held. Developing a program to 
fulfill this mandate is no easy task. However, it is imperative 
that Congress and the administration continue an open dialogue 
on program challenges in identifying solutions that will 
ultimately yield greater security of the flying public.
    Last year, in conjunction with my colleague from 
Massachusetts, I requested the GAO to conduct an evaluation of 
TSA's air cargo screening program. Today I look forward to Mr. 
Lord's testimony in which he will shed light on key 
recommendations that will delve into the program's goals of TSA 
air cargo screening initiatives.
    Mr. Sammon, I look forward to your testimony, particularly 
with regard to TSA's perspective on the recommendations GAO has 
provided. Earlier this year, we learned that interagency 
cooperation continues to be a challenge within the Department.
    GAO has testified before this subcommittee, emphasizing the 
lack of coordinating efforts aimed at streamlining technology 
goals, which can be crucial in fulfilling mandates such as the 
100 percent air cargo screening deadline. Today I look forward 
to receiving a status update from TSA on coordination efforts 
between TSA, S&T, 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.
    We will also hear from stakeholders who have concern about 
TSA's plan to implement this mandate. I look forward to this 
input from the private sector, which is playing a critical role 
in this endeavor to screen all cargo on passenger planes. We 
are all interested in strengthening aviation security and 
protecting the traveling public.
    Again, I thank the Chairwoman for hosting this important 
hearing and thank the witnesses for appearing before us today.
    Ms. Jackson Lee. The gentleman yields back. Other Members 
of the subcommittee are reminded that under committee rules 
opening statements may be submitted for the record.
    At this time I welcome our first panel of witnesses. Our 
first witness is Mr. John Sammon, Assistant Administrator for 
Transportation Sector Network Management at TSA. Mr. Sammon 
leads a unified effort to protect and secure our Nation's 
transportation systems, bringing more than 25 years of 
transportation experience to his position, including management 
of customer networks for railroads, motor carriers, ocean 
carriers, petrochemical manufacturers, ports, and other public 
agencies.
    Our second witness, Mr. Stephen Lord, is Director of GAO's 
Homeland Security and 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 Government's progress in 
meeting 18 legislative security and economic benchmarks.
    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. Sammon. Mr. Sammon, you are 
recognized for 5 minutes.

      STATEMENT OF JOHN SAMMON, ASSISTANT ADMINISTRATOR, 
   TRANSPORTATION SECTOR NETWORK MANAGEMENT, TRANSPORTATION 
                    SECURITY ADMINISTRATION

    Mr. Sammon. Good afternoon, Chairman Thompson, Chairwoman 
Jackson Lee, Ranking Member Dent, and distinguished Members of 
the subcommittee. I am pleased to report on TSA's considerable 
progress in establishing a system for screening 100 percent of 
cargo on passenger aircraft. First, thank you for the guidance 
of your subcommittee, and I would also like to thank Chairwoman 
Jackson Lee and other Members of the subcommittee for your kind 
and warm recognition of the late Ed Kelly's contributions to 
air travel safety and security.
    In less than 3 years, TSA has created a Safety Act-approved 
Certified Cargo Screening Program, issued an interim final Air 
Cargo rule, reached out to over 100,000 businesses, doubled the 
U.S. air cargo screening capacity by certifying 790 new 
screening facilities, approved 77 screening technologies, 
vetted 300,000 air cargo workers, added 114 canine teams, 
trained 450 inspectors to certify cargo facilities, eliminated 
nearly all screening exemptions, screened all air cargo on 96 
percent of U.S.-originated flights 1\1/2\ years ahead of 
schedule, required screening on high-risk international cargo, 
and engaged all aspects of the international community to raise 
overseas cargo screening standards.
    The TSA plan is based upon increased screening capacity 
coupled with Government inspection. Consistent with what TSA 
has told Congress over the past several years, we expect to 
meet the August 2010 screening requirement for U.S.-originated 
cargo, but in-bound international will take several years 
longer because many sovereign foreign governments have yet to 
implement the verifiable, 100 percent cargo screening programs. 
Without verifiable Government cargo programs, TSA cannot fully 
confirm that cargo is being screened overseas.
    In the United States, TSA's plan is built on airlines, 
forwarders, and shippers and TSA canines doing the screening 
with TSA inspectors verifying the screening. Our estimate shows 
sufficient capacity for the United States, but we have also 
added capacity with 67 independent facilities and by training 
our 450 inspectors to certify freight forwarders and shippers.
    TSA's international plan is built upon continuously raising 
airline screening requirements while we work with foreign 
governments to create cargo screening capacity and inspection.
    TSA's plan estimates that 82 percent of all cargo will be 
screened by August 2010, 90 percent by 2011, 96 percent by 
2012, and 100 percent by 2013. Enforcement in the United States 
is through the 450 cargo inspectors and TSA covert and overt 
testing. International enforcement, on the other hand, 
ultimately relies on foreign government cargo programs and 
inspectors.
    Despite much progress, a number of challenges remain. 
First, it is getting sustainable, foreign government screening 
programs in place.
    The second challenge is cargo screening technology. While 
TSA has approved 77 technologies from various manufacturers, we 
need large aperture, affordable, multi-commodity technologies. 
We share the committee's concern about the pace to develop and 
improve new technologies.
    The third challenge is to continuously improve cargo 
screening, training, and effectiveness.
    The fourth challenge is tightening chain of custody 
standards related to seals, tamper-evident packaging, and 
information transfer.
    TSA appreciates the professionalism and expertise of Steve 
Lord and his team at GAO. We have worked closely with them, and 
I would like to discuss their recommendations.
    The first recommendation is to establish milestones for the 
completion of TSA staffing study. TSA concurs, and we will have 
that study done this fall.
    Second, develop a mechanism to verify the accuracy of all 
screening data. TSA concurs with the need for in-bound cargo 
data, but the ability to verify reported in-bound data will be 
a challenge.
    Third, develop a plan for screening in-transit cargo. TSA 
has implemented in-transit screening requirements effective 
August 1, 2010.
    Fourth, develop a contingency plan for meeting the mandate 
for domestic cargo. TSA does not concur and intends to enforce 
the mandate for domestic cargo in the United States.
    No. 5, develop an in-bound cargo. TSA concurs and is 
finalizing plans.
    In closing, I again would like to thank the committee and 
would be happy to answer any questions. Thank you.
    [The statement of Mr. Sammon follows:]

                   Prepared Statement of John Sammon
                             June 30, 2010

    Good afternoon Chairwoman Jackson Lee, Ranking Member Dent, and 
distinguished Members of the subcommittee. I am pleased to appear 
before you today to update you on our progress in implementing a system 
for screening 100 percent of cargo carried aboard passenger aircraft. 
First, let me thank you for the on-going guidance and oversight your 
subcommittee has provided and continues to provide as we work through 
this considerable challenge. I would also like to thank the Government 
Accountability Office, whose professionalism and expertise have 
provided additional assistance as we proceed forward.
    My message to you today is twofold: First, both we and the industry 
are ready--as of August 1, 2010, no unscreened cargo will be uploaded 
onto a passenger aircraft departing an airport in the United States. 
Quite simply, if it isn't screened, it won't fly. All segments of the 
air cargo community are prepared, and we expect that this will happen 
with little disruption.
    Second, international in-bound air cargo on passenger aircraft is 
more secure than it has ever been, with 100 percent of currently 
identified high-risk cargo now being screened. Although 100 percent 
screening of all in-bound air cargo cannot reasonably be achieved by 
August 1, 2010, we are making substantial progress toward meeting the 
100 percent mark in the next few years.

   SECURITY OF DOMESTIC CARGO--THE CERTIFIED CARGO SCREENING PROGRAM

    As you know, from the time the 100 percent screening requirement 
was enacted in August 2007 as part of the Implementing Recommendations 
of the 9/11 Commission Act of 2007 (9/11 Act), everyone recognized that 
the air carriers could not do it alone. Thus began the Transportation 
Security Administration's (TSA) unprecedented outreach to all elements 
of the cargo industry in the United States (to over 100,000 companies) 
and an intense collaborative effort among TSA, air carriers, freight 
forwarders, the shipping community, and major associations such as Air 
Forwarders Association and the Air Transport Association.
    The centerpiece of this program continues to be the Certified Cargo 
Screening Program (CCSP), under which responsibility for the screening 
of cargo is distributed throughout the supply chain to improve security 
while minimizing the potential negative impact on the integrity and 
movement of commerce--precisely what would happen if we allowed a 
screening bottleneck to occur at the Nation's airports. After piloting 
the concept, the CCSP was permanently established in 2009 through an 
Interim Final Rule. As of today, TSA has certified more than 760 
entities as Certified Cargo Screening Facilities, which are currently 
contributing over 47 percent of the screened cargo volume (by weight) 
transported on passenger aircraft departing U.S. airports. These 
entities have reported that they already have capacity to screen nearly 
the entire remaining unscreened volume as we approach the August 2010 
deadline, if it becomes necessary.
    Beginning in October 2008, TSA has been steadily increasing the 
required percentage of screened air cargo. As of October 1, 2008, TSA 
has required 100 percent screening of cargo transported on narrow body 
aircraft, resulting in full protection of 96 percent of all domestic 
passenger flights. And as we know, it is about the passengers, not the 
boxes; it is more than noteworthy that screening of cargo on these 
flights translates into protection of more than 86 percent of all 
passengers flying domestically.
    While industry is positioned to achieve the 100 percent screening 
mandate, challenges remain in screening specific commodity types and 
cargo configurations such as bulk configurations (i.e., large skids and 
pallets), perishables, electronics, chemicals, and pharmaceuticals. 
Nonetheless, there continue to be limits on the capability of specific 
screening technologies. In the past 2 years, TSA has qualified or 
approved 77 different screening technology models to help industry make 
effective capital investment decisions and provide screening options to 
meet the requirement.

               SCREENING INBOUND INTERNATIONAL AIR CARGO

    As TSA has consistently indicated in many settings, including in 
prior testimony before this subcommittee, the challenges presented by 
the international setting have made it unlikely that Congress's 
ambitious schedule for 100 percent screening could be met with respect 
to in-bound air cargo. The genesis of the challenge is simple: An 
estimated 2.8 billion pounds of air cargo arrives on passenger aircraft 
from 94 different sovereign nations annually via a global air cargo 
supply chain with a vast number of participants. Those 94 nations have 
unique air cargo security programs and regulatory requirements, many of 
which differ significantly from those required by TSA.
    Accordingly, TSA's approach to international in-bound air cargo 
must necessarily be flexible and diplomatic. We have been pursuing many 
options that have already significantly increased the security of in-
bound air cargo and are finalizing a strategy for achieving 100 percent 
screening.
    In general, the milestone can be reached via two major avenues--
cooperation with key foreign government partners to explore possible 
recognition of National air cargo security programs that we have 
examined and determined to be commensurate with U.S. standards; and by 
imposing a timeline for requiring additional screening by air carriers. 
The former is the preferred course, as it would permit airlines flying 
into the United States to adhere to either the TSA security program or 
a foreign country's commensurate security program.
    In the mean time, we are also working with stakeholders, including 
Federal agencies and international partners, to continually strengthen 
security standards for in-bound air cargo. TSA's efforts focus on 
strengthening air cargo security standards through information sharing 
and direct engagement with international organizations and partner 
countries. TSA is currently engaged in multiple bilateral and 
multilateral initiatives and has made significant progress recently in 
its work with the European Commission (EC) to assess the comparability 
of air cargo security standards of European Union Member States. 
Engaging in such initiatives and establishing partnerships increases 
the cross-sharing of information regarding international air cargo 
security best practices and will identify potential candidate countries 
whose security regimes can be recognized as National cargo security 
programs (NCSP), that is, programs with security standards commensurate 
with those of the United States.
    In March 2009, TSA's proposal to the International Civil Aviation 
Organization (ICAO) to incorporate key air cargo supply chain security 
and threat detection concepts into the security Standards and 
Recommended Practices (SARPs) of Annex 17 to the Convention on 
International Civil Aviation of 1944 (the Chicago Convention) was 
accepted by ICAO's Aviation Security Panel. The proposal, which 
strengthens ICAO's standards by stressing the importance of detection 
methods in screening over security controls alone, is currently being 
reviewed by ICAO Contracting States, after which it will be submitted 
to the ICAO Council for consideration and approval. TSA worked closely 
with the International Air Transport Association (IATA) and foreign 
government partners on this effort.
    TSA is also working closely with U.S. Customs and Border Protection 
(CBP) to explore the feasibility of leveraging CBP's Automated 
Targeting System (ATS) to collect, pre-departure, information on 
international in-bound air cargo, which will allow TSA to perform 
baseline threshold targeting. Though it will not fulfill the screening 
requirement of the 9/11 Act, the use of ATS will provide a greater 
level of shipment information, thereby enabling TSA to even more 
effectively identify elevated-risk cargo that would be subject to 
additional screening prior to departure.
    As with our domestic screening, program TSA's stakeholder outreach 
has been vigorous. TSA's international outreach efforts have included 
the IATA and other industry associations such as the International Air 
Cargo Association, as well as numerous U.S.- and foreign-flag air 
carriers. TSA has participated in meetings and conferences throughout 
the world, directly engaging with industry representatives and also 
continues to engage with its foreign government counterparts around the 
globe. This is evidenced by TSA's recent participation in the Asia 
Pacific Economic Cooperation Air Cargo Security Conference in 
Singapore, recent meetings with the European Commission, and 
participation in the Association of Asia Pacific Airlines conference in 
Kuala Lumpur, Malaysia. TSA will continue to focus on comprehensive 
outreach activities and engage all stakeholders as it moves forward 
with these efforts.
    The success of a 100 percent screening requirement will depend in 
part on an effective inspection and enforcement program--we cannot 
simply impose a requirement and declare victory. The domestic screening 
program will be monitored by a robust, on-going process of inspection 
and enforcement. We currently have 500 cargo inspectors in the United 
States who are already conducting focused inspections to ensure 
compliance. In the international milieu, many of the same 
considerations that are challenging us in creating a screening program 
will also be a challenge with respect to inspection of that program. 
TSA cannot enter and inspect in foreign countries without the consent 
of the host country, and even with consent, would not have nearly the 
same level of access as we have in the United States. As with other 
aspects of international screening we will have to rely on foreign 
government programs to validate that the screening is occurring as 
required. This can only be accomplished through the recognition and 
acceptance of NCSPs, through which we would have access to their 
inspection data.
    In closing, it bears repeating that our success in this endeavor 
thus far and going forward depends upon the dedication of and 
collaboration among all of our partners--the aviation industry, freight 
forwarders, shippers, as well as our international partners. Together, 
and with the continued guidance and oversight of this subcommittee, I 
am confident that the goal of 100 percent screening of domestic air 
cargo by August 1, 2010, will be achieved. In concrete terms, this 
means the domestic screening program will be securing 250 million 
pounds of cargo per month, or over 3 billion pounds of cargo per year. 
I am likewise confident that, working with industry and our 
international partners, we will continue to address and overcome the 
unique challenges of securing inbound international air cargo to 
achieve the same milestone in the next few years.
    Thank you again for the opportunity to testify. I am happy to take 
any questions you may have.

    Ms. Jackson Lee. Thank you for your testimony. I now 
recognize Mr. Lord to summarize his statements for 5 minutes. 
Mr. Lord, you are recognized.

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

    Mr. Lord. Thank you, Madam Chairwoman. I am really excited 
about the opportunity to testify today on the report that we 
are releasing just today to your committee on TSA's air cargo 
screening program.
    What I would like to do today is highlight some of the key 
findings and recommendations of our report; namely, TSA's 
progress towards meeting the mandate and also some of the 
associated challenges it faces in doing so.
    As noted by my distinguished TSA colleague, I would like to 
first note that TSA has taken a number of important actions to 
address the screening mandate for domestic cargo. This includes 
establishing the so-called Certified Cargo Screening Program, 
the CCSP, which allows screening to take place earlier in the 
air cargo supply train.
    TSA initiated this program at 18 major gateway airports and 
later expanded it to all airports in early 2009. TSA is also 
taking some important steps to test and qualify various 
technologies for screening cargo. For example, in November 
2008, they issued a list of technologies approved for screening 
air cargo. This is very useful for the entities out there 
screening. Also, in early 2009, they initiated a qualification 
process to help ensure that these technologies met TSA 
technical requirements.
    However, despite these promising developments, TSA faces 
several significant challenges in establishing a system to 
screen 100 percent of domestic air cargo. One major issue is 
industry participation, and we have a graphic prepared for the 
hearing today I would like to turn your attention to. I am not 
sure if you can read it from there, but I would like to draw 
your attention to two trends. Overall screening levels have 
increased steadily through March 2010. TSA reports to us they 
are now screening 68 percent of all cargo as of March 2010.
    However, the line I want to draw your attention to is the 
amount being screened by shippers, which is an essential part 
of their business model. If you look at the top dark shaded 
line in each bar, that is the amount being screened by 
shippers. As you see, it has held relatively static since they 
started recording the data.
    [The information follows:]

    
    
    Mr. Lord. So it is clear to us a significant number of 
shippers are sitting on the fence waiting to see what happens, 
and you really need their participation to make this business 
model work.
    Although TSA often reports to us that unscreened cargo is 
not going to fly, I am also concerned about the potential for 
unscreened cargo remaining at airports that does not fly. That 
is potentially disruptive to commerce. So I was hoping today's 
hearing could help us get a little more perspective on that 
issue; what happens to the cargo that remains on the ground.
    Another key challenge is despite what some vendors may have 
told you and your staff, the TSA has not approved or qualified 
any technology for screening the so-called unit loading pallets 
and containers, and these are the large devices commonly used 
to load cargo on wide-body aircraft. Because of these daunting 
challenges in the report we issued today, we suggested that TSA 
come up with a so-called plan B, a contingency plan, to 
identify some additional options for meeting the mandate, given 
all the challenges we had laid out.
    Some of these alternatives could include requiring CCSP; 
that is the screening program participation, instead of relying 
on voluntary participation or mandating that more of the cargo 
be screened before it is loaded on to these big large ULD 
pallets and containers.
    TSA could also strategically redeploy some other assets to 
these 18 major airports to help minimize the disruptions that 
could occur. Although TSA did not agree with the recommendation 
in this report, we continue to think it is really important to 
come up with a so-called plan B.
    The good news is TSA did agree with several other of our 
report recs. This includes identifying the number of inspectors 
you are going to need to conduct oversight of the program, 
screening the so-called in transit cargo and, as Mr. Sammon 
pointed out also, improving the accuracy of the TSA screening 
data that TSA tallies, which is ultimately reported to this 
committee.
    So in closing, screening the cargo entering the United 
States is also a significant outstanding issue and TSA 
confirmed that it will not, I repeat, not be able to meet the 
August deadline for the in-bound cargo.
    That concludes my statement. I would be happy to answer any 
questions that you or other Members may have.
    [The statement of Mr. Lord follows:]

                   Prepared Statement of Stephen Lord

                             June 30, 2010
    Madam Chairwoman and Members of the subcommittee: I appreciate the 
opportunity to participate in today's hearing to discuss air cargo 
screening. In 2008, about 7.3 billion pounds of cargo was transported 
on U.S. passenger flights--approximately 58 percent of which was 
transported domestically (domestic cargo) and 42 percent of which was 
transported on flights arriving in the United States from a foreign 
location (in-bound cargo).\1\ The 2009 Christmas day plot to detonate 
an explosive device during an international flight bound for Detroit 
provided a vivid reminder that terrorists continue to view passenger 
aircraft as attractive targets. According to the Transportation 
Security Administration (TSA), the security threat posed by terrorists 
introducing explosive devices in air cargo shipments is significant, 
and the risk and likelihood of such an attack directed at passenger 
aircraft is high.\2\ To help enhance the security of air cargo, the 
Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11 
Commission Act) mandated the Department of Homeland Security (DHS) to 
establish 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\ 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.\4\ The Act also requires 
that such a system provide a level of security commensurate with the 
level of security for the screening of checked baggage.
---------------------------------------------------------------------------
    \1\ For the purposes of this statement, domestic 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 air carriers, and 
in-bound cargo refers to cargo transported by both U.S. and foreign air 
carriers from a foreign location to the United States. These cargo 
statistics were provided by the Transportation Security Administration 
from the Bureau of Transportation Statistics.
    \2\ Specific threat details are classified and are not discussed in 
this statement. Generally, the threat that has been identified by TSA 
is that of an improvised explosive device.
    \3\ Pub. L. No. 110-53,  1602, 121 Stat. 266, 477-80 (codified at 
49 U.S.C.  44901(g)).
    \4\ See 49 U.S.C.  44901(g)(5). For the purposes of this 
statement, physical screening is generally used to describe screening 
for purposes of the air cargo screening mandate.
---------------------------------------------------------------------------
    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. Although the mandate is applicable to both 
domestic and inbound cargo, TSA stated that it must address the mandate 
for domestic and in-bound cargo through separate systems because of 
differences in its authority to regulate domestic and international air 
cargo industry stakeholders. My statement is based on a report we are 
publicly releasing today that assesses TSA's progress and related 
challenges in meeting the air cargo screening mandate.\5\ It addresses 
the following key issues in our report: Progress TSA has made in 
meeting the 9/11 Commission Act screening mandate as it applies to: (1) 
Domestic air cargo and (2) in-bound air cargo and related challenges it 
faces for each.
---------------------------------------------------------------------------
    \5\ GAO, Aviation Security: TSA Has Made Progress but Faces 
Challenges in Meeting the Statutory Mandate for Screening Air Cargo on 
Passenger Aircraft, GAO-10-446 (Washington, DC: June 28, 2010).
---------------------------------------------------------------------------
    For our report, we reviewed documents such as TSA's air cargo 
security policies and procedures. We also conducted site visits to four 
category X U.S. commercial airports and one category I U.S. commercial 
airport that process domestic and in-bound air cargo.\6\ We selected 
these airports based on airport size, passenger and air cargo volumes, 
location, and participation in TSA's screening program. At these 
airports, we observed screening operations and technologies and 
interviewed local TSA officials, airport management officials, and 
representatives from 7 air carriers, 24 freight forwarders, 3 shippers, 
and 2 handling agents to obtain their views on TSA's system to 
implement the screening mandate.\7\ We selected these air carriers, 
freight forwarders, shippers, and handling agents based on input from 
TSA and industry stakeholders. More detailed information about our 
scope and methodology is included in our June 2010 report. We conducted 
this work in accordance with generally accepted Government auditing 
standards.
---------------------------------------------------------------------------
    \6\ 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.
    \7\ For the purposes of this statement, the term freight forwarder 
only includes those freight forwarders that are regulated by TSA, also 
referred to as indirect air carriers. A freight forwarder is a company 
that consolidates cargo from multiple shippers onto a master air 
waybill)--a manifest of the consolidated shipment--and delivers the 
shipment to air carriers for transport.
---------------------------------------------------------------------------
    In summary, TSA has taken a number of actions to meet the screening 
mandate as it applies to domestic cargo, including creating a voluntary 
program to allow screening to take place at various points in the air 
cargo supply chain and mandating that, effective May 1, 2010, 75 
percent of all cargo transported on passenger aircraft is screened. 
However, TSA faces several challenges in developing and implementing a 
system to screen 100 percent of domestic air cargo, and it is 
questionable, based on reported screening rates, whether 100 percent of 
such cargo will be screened by August 2010 without impeding the flow of 
commerce. Moreover, TSA has made some progress in meeting the screening 
mandate as it applies to in-bound cargo, but challenges exist, in part 
related to TSA's limited ability to regulate foreign entities. TSA does 
not expect to achieve 100 percent screening of in-bound air cargo by 
the mandated August 2010 deadline. We made five recommendations to TSA 
to address these challenges. TSA concurred with three of these 
recommendations, partially concurred with one, and did not concur with 
the remaining recommendation, which we discuss in more detail later in 
this statement.
 tsa has made progress toward screening 100 percent of domestic cargo, 
   but remaining challenges highlight the need for a contingency plan
    TSA has made progress in meeting the 9/11 Commission Act air cargo 
screening mandate as it applies to domestic cargo, and has taken 
several key steps in this effort, such as increasing the amount of 
domestic cargo subject to screening, creating a voluntary program to 
allow screening to take place at various points along the air cargo 
supply chain, and taking steps to test air cargo screening 
technologies, among other actions. However, TSA faces several 
challenges in fully developing and implementing a system to screen 100 
percent of domestic air cargo, including those related to industry 
participation and technology.
Progress Made
    TSA has taken several steps to address the air cargo screening 
mandate as it applies to domestic cargo including the following.
    TSA increased the amount of domestic cargo subject to screening. 
Effective October 1, 2008, TSA established a requirement for 100 
percent screening of nonexempt cargo transported on narrow-body 
passenger aircraft.\8\ In 2008, narrow-body flights transported about 
24 percent of all cargo on domestic passenger flights.\9\ Effective 
February 1, 2009, pursuant to the 9/11 Commission Act, TSA also 
required air carriers to ensure the screening of 50 percent of all 
nonexempt air cargo transported on all passenger aircraft. Furthermore, 
effective May 1, 2010, air carriers were required by TSA to ensure that 
75 percent of such cargo was screened. TSA also eliminated or revised 
most of its screening exemptions for domestic cargo.
---------------------------------------------------------------------------
    \8\ TSA exempts some categories of air cargo from physical 
screening and requires alternative methods of screening, such as 
verifying shipper and cargo information and visually inspecting the 
cargo shipment, rather than opening the shipment and physically 
searching its contents or screening it with technology. For the 
purposes of this statement, the phrase ``exempt cargo'' and the word 
``exemption'' refer to cargo that is subject to such alternative 
screening measures. Narrow-body aircraft, such as Boeing 737s and 
Airbus 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 unit load devices (ULD) that allow packages 
to be consolidated in a container or pallet. Wide-body aircraft are 
also defined by fuselage diameter and can carry ULDs.
    \9\ According to statistics provided by TSA from the Bureau of 
Transportation Statistics, narrow-body aircraft make up 97 percent of 
domestic passenger flights and transport more than 90 percent of 
passengers traveling on domestic passenger flights.
---------------------------------------------------------------------------
    TSA created a voluntary program to facilitate screening throughout 
the air cargo supply chain. Since TSA concluded that relying solely on 
air carriers to conduct screening would result in significant cargo 
backlogs and flight delays, TSA created the voluntary Certified Cargo 
Screening Program (CCSP) to allow screening to take place earlier in 
the shipping process, prior to delivering the cargo to the air carrier. 
Under the CCSP, facilities at various points in the air cargo supply 
chain, such as shippers, manufacturers, warehousing entities, 
distributors, third-party logistics companies, and freight forwarders 
that are located in the United States, may voluntarily apply to TSA to 
become certified cargo screening facilities (CCSF). TSA initiated the 
CCSP at 18 U.S. airports that process high volumes of air cargo, and 
then expanded the program to all U.S. airports in early 2009.
    TSA is conducting outreach efforts to air cargo industry 
stakeholders. Starting in September 2007, TSA began outreach to freight 
forwarders and subsequently expanded its outreach efforts to shippers 
and other entities to encourage participation in the CCSP. TSA is 
focusing its outreach on particular industries, such as producers of 
perishable foods, pharmaceutical and chemical companies, and funeral 
homes, which may experience damage to their cargo if it is screened by 
a freight forwarder or an air carrier.
    TSA is taking steps to test technologies for screening air cargo. 
To test select screening technologies among CCSFs, TSA created the Air 
Cargo Screening Technology Pilot in January 2008, and selected some of 
the Nation's largest freight forwarders to use these technologies and 
report on their experiences.\10\ In a separate effort, in July 2009, 
DHS's Directorate for Science and Technology completed the Air Cargo 
Explosives Detection Pilot Program that tested the performance of 
select baggage screening technologies for use in screening air cargo at 
three U.S. airports. In November 2008, in addition to the canine and 
physical search screening methods permitted by TSA to screen air cargo, 
TSA issued to air carriers and CCSFs a list of X-ray, explosives trace 
detection (ETD), and explosives detection systems (EDS) models that the 
agency approved for screening air cargo until August 3, 2010.\11\ In 
March 2009, TSA initiated a qualification process to test these and 
other technologies that it plans to allow air carriers and CCSP 
participants to use in meeting the screening mandate against TSA 
technical requirements.
---------------------------------------------------------------------------
    \10\ Initially, the Air Cargo Screening Technology Pilot was 
limited to high-volume freight forwarders (i.e., freight forwarders 
processing at least 200 shipments annually per location that contain 
cargo consolidated from multiple shippers). However, in November 2008, 
TSA sought additional high-volume freight forwarders and independent 
cargo screening facilities to apply for the pilot. Moreover, entities 
that do not participate in the pilot will not receive TSA funding to 
purchase screening technology.
    \11\ ETD requires human operators to collect samples of items to be 
screened with swabs, which are chemically analyzed to identify any 
traces of explosive material. EDS uses computer-aided tomography X-rays 
to examine objects inside baggage and identify the characteristic 
signatures of threat explosives. In December 2009, TSA extended the 
expiration date of the approved technologies to January 2012.
---------------------------------------------------------------------------
    TSA expanded its explosives detection canine program. TSA has taken 
steps to expand the use of TSA-certified explosives detection canine 
teams. According to TSA, in fiscal year 2009, TSA canine teams screened 
over 145 million pounds of cargo, which represents a small portion of 
domestic air cargo. As of February 2010, TSA had 113 dedicated air 
cargo screening canine teams-operating in 20 major airports--and is in 
the process of adding 7 additional canine teams. TSA also deployed 
canine teams to assist the Pacific Northwest cherry industry during its 
peak harvest season from May through July 2009, to help air carriers 
and CCSFs handling this perishable commodity to meet the 50 percent 
screening requirement without disrupting the flow of commerce.
    TSA established a system to verify that screening is being 
conducted at the mandated levels. The agency established a system to 
collect and analyze data from screening entities to verify that 
requisite 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 and weight of shipments screened.
Challenges Facing TSA
    TSA faces industry participation, technology, planning, oversight, 
and other challenges in meeting the air cargo screening mandate as it 
applies to domestic cargo.
    Industry Participation. Although TSA is relying on the voluntary 
participation of industry stakeholders to meet the screening mandate, 
far fewer shippers and independent CCSFs have joined the program than 
TSA had targeted. As shown in figure 1, TSA officials have estimated 
that an ideal mix of screening to achieve the 100 percent mandate as it 
applies to domestic cargo without impeding the flow of commerce would 
be about one-third of cargo weight screened by air carriers, one-third 
by freight forwarders, and one-third by shippers and independent 
CCSFs.\12\
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    \12\ The CCSP allows air cargo industry stakeholders, such as an 
air cargo handling agent, to establish independent cargo screening 
facilities to provide screening services for shippers or freight 
forwarders that have not joined the program and do not want the air 
carriers to screen their cargo. These independent facilities screen 
cargo for a fee, according to CCSP guidelines. For the purposes of this 
statement, we refer to independent cargo screening facilities as 
independent CCSFs. 



    To achieve TSA's ideal mix of screening by August 2010, shipper and 
independent CCSF screening efforts would need to increase by over 
sixteen-fold. As shown in figure 1, the total percentage of reported 
screened cargo rose on average by less than a percentage point per 
month (from 59 to 68 percent) from February 2009 through March 
2010.\13\ At these rates, it is questionable whether TSA's screening 
system will achieve 100 percent screening of domestic cargo by August 
2010 without impeding the flow of commerce. Effective May 1, 2010, TSA 
requires that 75 percent of air cargo transported on passenger aircraft 
be screened. However, even if this requirement is met, an additional 25 
percent of domestic air cargo would still need to be screened in the 3 
months prior to the August 2010 deadline, including some of the most 
challenging types of cargo to screen, such as unit load device (ULD) 
pallets and containers.
---------------------------------------------------------------------------
    \13\ The screening percentages in fig. 1 have been rounded to the 
nearest percentage point. The actual percentages for March 2010 sum to 
68 percent.
---------------------------------------------------------------------------
    TSA and industry officials reported that several factors, such as 
lack of economic and regulatory incentives, are contributing to low 
shipper participation levels. TSA and the domestic passenger air 
carrier and freight forwarder industry association officials we 
interviewed stated that many shippers and freight forwarders are not 
incurring significant screening costs from air carriers. This decreases 
the financial pressure on the entities to join the CCSP and invest 
resources into screening cargo, factors that are making TSA's outreach 
efforts more challenging.
    Screening Technology. There is currently no technology approved or 
qualified by TSA to screen cargo once it is loaded onto a ULD pallet or 
container--both of which are common means of transporting air cargo on 
wide-body passenger aircraft. Cargo transported on wide-body passenger 
aircraft makes up 76 percent of domestic air cargo shipments 
transported on passenger aircraft.\14\ Prior to May 1, 2010, canine 
screening was the only screening method, other than physical search, 
approved by TSA to screen such cargo. However, TSA officials still have 
some concerns about the effectiveness of the canine teams, and 
effective May 1, 2010, the agency no longer allows canine teams to be 
used for primary screening of ULD pallets and containers.\15\ Canine 
teams still may be used for secondary screening of ULD pallets and 
containers; however, secondary screening does not count toward meeting 
the air cargo screening mandate.
---------------------------------------------------------------------------
    \14\ Cargo may be screened before it is loaded onto ULD pallets or 
containers.
    \15\ TSA canine teams conduct primary and secondary screening of 
cargo. Primary screening counts toward meeting the air cargo screening 
mandate. Secondary screening provides spot checks of the screening 
already conducted by air carriers and CCSFs.
---------------------------------------------------------------------------
    In addition, TSA is working to complete qualification testing of 
air cargo screening technologies; thus, until all stages of 
qualification testing are concluded, the agency may not have reasonable 
assurance that the technologies that air carriers and program 
participants are currently allowed to use to screen air cargo are 
effective. Qualification tests are designed to verify that a technology 
system meets the technical requirements specified by TSA. Because of 
the mandated deadlines, TSA is conducting qualification testing to 
determine which screening technologies are effective at the same time 
that air carriers are using these technologies to meet the mandated 
requirement to screen air cargo transported on passenger aircraft. 
While we recognize that certain circumstances, such as mandated 
deadlines, require expedited deployment of technologies, our prior work 
has shown that programs with immature technologies have experienced 
significant cost and schedule growth.\16\ We reported that these 
technology challenges suggest the need for TSA to consider a 
contingency plan to meet the screening mandate without unduly affecting 
the flow of commerce.
---------------------------------------------------------------------------
    \16\ See GAO, Defense Acquisitions: Measuring the Value of DOD's 
Weapon Programs Requires Starting with Realistic Baselines, GAO-09-543T 
(Washington, DC: Apr. 1, 2009).
---------------------------------------------------------------------------
    Contingency Planning. Although TSA faces industry participation and 
technology challenges that could impede the CCSP's success and the 
agency's efforts to meet the 100 percent screening mandate by August 
2010, the agency has not developed a contingency plan that considers 
alternatives to address these challenges. Without adequate CCSP 
participation, industry may not be able to screen enough cargo prior to 
its arrival at the airport to maintain the flow of commerce while 
meeting the mandate. Likewise, without technology solutions for 
screening cargo in a ULD pallet or container, industry may not have the 
capability to effectively screen 100 percent of air cargo without 
affecting the flow of commerce. We have previously reported that a 
comprehensive planning process, including contingency planning, is 
essential to help an agency meet current and future capacity 
challenges.\17\ Alternatives could include, but are not limited to, 
mandating CCSP participation for certain members of the air cargo 
supply chain--instead of relying on their voluntary participation--and 
requiring the screening of some or all cargo before it is loaded onto 
ULD pallets and containers. In the report being released today, we 
recommended that TSA develop a contingency plan for meeting the mandate 
as it applies to domestic cargo that considers alternatives to address 
potential CCSP participation shortfalls and screening technology 
limitations. TSA did not concur with this recommendation and stated 
that a contingency plan is unnecessary since effective August 1, 2010, 
100 percent of domestic cargo transported on passenger aircraft will be 
required to be screened. The agency also stated that there is no 
feasible contingency plan that can be implemented by TSA that does not 
compromise security or create disparities in the availability of 
screening resources. However, we continue to believe that there are 
feasible alternatives that TSA should consider to address potential 
CCSP participation shortfalls and screening technology limitations. 
Thus, it is prudent that TSA consider developing a contingency plan 
that would allow for the security and legitimate flow of air cargo.
---------------------------------------------------------------------------
    \17\ GAO, Federal Law Enforcement Training Center: Capacity 
Planning and Management Oversight Need Improvement, GAO-03-736 
(Washington, DC: July 24, 2003).
---------------------------------------------------------------------------
    Inspection Resources. While TSA has amended its Regulatory 
Activities Plan to include inspections of CCSP participants, the agency 
has not completed its staffing study to determine how many inspectors 
will be necessary to provide oversight of the additional program 
participants when the 100 percent screening mandate goes into effect. 
According to TSA, the agency's staffing study is continuing through 
fiscal year 2010 and is therefore not yet available to provide guidance 
in helping to plan for inspection resources needed to provide 
oversight. According to our analysis of TSA data, in the next year, 
inspectors will need to at least double their comprehensive inspections 
of CCSFs to reach the agency's inspection goals. We recommended that 
TSA create milestones to help ensure completion of the staffing study. 
TSA concurred and stated that as part of the staffing study, the agency 
is working to develop a model to identify the number of required 
transportation security inspectors and that this effort would be 
completed in the fall of 2010. If this model includes an analysis of 
the resources needed to provide CCSP oversight under various scenarios, 
it will address the intent of our recommendation.
    Reported Screening Data. While TSA reported to Congress that 
industry achieved the February 2009 50 percent screening deadline 
domestically, questions exist about the reliability of the screening 
data, which are self-reported by industry representatives, because TSA 
does not have a mechanism to verify the accuracy of the data reported 
by the industry. We recommended that TSA develop a mechanism to verify 
the accuracy of all screening data through random checks or other 
practical means. TSA stated that verifying the accuracy of domestic 
screening data will continue to be a challenge because there is no 
means to cross-reference local screening logs--which include screening 
information on specific shipments--with screening reports submitted by 
air carriers to TSA that do not contain such information. However, TSA 
could consider a quality review mechanism similar to the compliance 
measurement program used by CBP, which includes regular quality reviews 
to ensure accuracy in findings and management oversight to validate 
results.
    In-Transit Cargo. Cargo that has already been transported on one 
leg of a passenger flight--known as in-transit cargo--may be 
subsequently transferred to another passenger flight without undergoing 
screening. According to TSA officials, though the agency does not have 
a precise figure, industry estimates suggest that about 30 percent of 
domestic cargo is transferred from an in-bound flight. TSA officials 
stated that transporting in-transit cargo without screening could pose 
a vulnerability, but as of February 2010, the agency was not planning 
to require in-transit cargo transferred from an in-bound flight to be 
physically screened because of the logistical difficulties associated 
with screening cargo that is transferred from one flight to another. We 
recommended that TSA develop a plan with milestones for how and when it 
intends to require the screening of in-transit cargo. TSA concurred 
with our recommendation and stated that the agency has implemented 
changes, effective August 1, 2010, that will require 100 percent of in-
transit cargo to be screened unless it can otherwise be verified as 
screened. Because this is a significant change and potentially 
operationally challenging, it will be important to closely monitor the 
industry's understanding and implementation of this requirement to help 
ensure that 100 percent screening of in-transit cargo is being 
conducted.

TSA HAS MADE PROGRESS BUT FACES SEVERAL CHALLENGES AND LACKS A PLAN FOR 
           ACHIEVING 100 PERCENT SCREENING OF IN-BOUND CARGO

    TSA has taken steps to increase the percentage of in-bound cargo 
transported on passenger aircraft that is screened, but the agency has 
not developed a plan, including milestones, for meeting the mandate as 
it applies to in-bound cargo. Consequently, TSA officials have stated 
that the agency will not be able to meet the mandate as it applies to 
in-bound cargo by the August 2010 deadline.

Steps Taken
    Steps TSA has taken to increase the percentage of in-bound air 
cargo that is screened include the following:
   Revising its requirements for foreign and U.S. air carrier 
        security programs, effective May 1, 2010, to generally require 
        air carriers to screen a certain percentage of shrink-wrapped 
        and banded in-bound cargo and 100 percent of in-bound cargo 
        that is not shrink-wrapped or banded.\18\ According to TSA, 
        implementation of this requirement will result in the screening 
        of 100 percent of in-bound cargo transported on narrow-body 
        aircraft since none of this cargo is shrink-wrapped or 
        banded.\19\
---------------------------------------------------------------------------
    \18\ Details on TSA's screening requirements are Sensitive Security 
Information and are not discussed in this statement. Prior to May 1, 
2010, TSA generally required air carriers to screen 50 percent of 
nonexempt in-bound cargo transported on passenger aircraft and a 
certain percentage of all in-bound cargo transported on passenger 
aircraft. Banded cargo is cargo with heavy-duty metal, plastic, or 
nylon bands that secure all sides of the cargo shipment or secure the 
cargo shipment to a skid.
    \19\ According to statistics provided by TSA from the Bureau of 
Transportation Statistics, in 2008, narrow-body flights made up 69 
percent of in-bound flights and transported 45 percent of in-bound 
passengers.
---------------------------------------------------------------------------
   Obtaining information from foreign countries on their 
        respective air cargo screening levels and practices to help 
        assess the rigor and quality of foreign screening practices.
   Working to harmonize security standards with those of 
        foreign nations.\20\
---------------------------------------------------------------------------
    \20\ 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.
---------------------------------------------------------------------------
Challenges TSA Faces
    According to TSA, screening in-bound air cargo poses unique 
challenges, related, in part, to TSA's limited ability to regulate 
foreign entities. As such, TSA officials stated that the agency is 
focusing its air cargo screening efforts on domestic cargo and on 
screening elevated-risk in-bound cargo as it works to address the 
challenges it faces in screening 100 percent of in-bound cargo. In 
April 2007, we reported that TSA's screening exemptions for 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.\21\ TSA 
agreed with our recommendation, but beyond its requirement to screen 
100 percent of in-bound cargo transported on narrow-body aircraft and a 
certain percentage of shrink-wrapped or banded in-bound cargo, has not 
reviewed, revised, or eliminated in-bound screening exemptions, and did 
not provide a time frame for doing so. We continue to believe that TSA 
should assess whether these exemptions pose an unacceptable security 
risk.
---------------------------------------------------------------------------
    \21\ GAO, Aviation Security: Federal Efforts to Secure U.S.-Bound 
Air Cargo Are in the Early Stages and Could Be Strengthened, GAO-07-660 
(Washington, DC: Apr. 30, 2007).
---------------------------------------------------------------------------
    In addition, identifying the precise level of screening being 
conducted on in-bound air cargo is difficult because TSA lacks a 
mechanism to obtain actual data on all screening that is being 
conducted on in-bound air cargo. TSA officials estimate that 55 percent 
of in-bound cargo by weight is currently being screened and that 65 
percent of in-bound cargo by weight will be screened by August 2010. 
However, these estimates are based on the current screening 
requirements of certain countries and are not based on actual data 
collected from air carriers or other entities, such as foreign 
governments, on what percentage of cargo is actually being 
screened.\22\ We recommended that TSA develop a mechanism to verify the 
accuracy of all screening data through random checks or other practical 
means and obtain actual data on all in-bound screening. TSA concurred 
in part with our recommendation, stating that as of May 1, 2010, the 
agency issued changes to air carriers' standard security programs that 
require air carriers to report in-bound cargo screening data to TSA. 
However, as noted in our report, these requirements apply to air 
carriers and the screening that they conduct and not to the screening 
conducted by other entities, such as foreign governments. Thus, TSA 
will continue to rely in part on estimates to report in-bound cargo 
screening levels. TSA officials stated that it may be challenging to 
obtain screening data from some foreign governments and other entities 
that conduct cargo screening, but TSA has not developed a plan for how 
it could obtain these data. We recognize that it may be challenging for 
TSA to obtain cargo screening data from foreign governments; however, 
similar to domestic reporting requirements, the agency could require 
air carriers to report on cargo screening for all in-bound cargo they 
transport, including the screening conducted by other entities.
---------------------------------------------------------------------------
    \22\ According to TSA officials, the agency does not know the 
screening requirements for every country that transports air cargo into 
the United States. TSA assumes that other countries are in compliance, 
at a minimum, with TSA's regulation that a certain percentage of in-
bound air cargo be screened.
---------------------------------------------------------------------------
    Moreover, the 9/11 Commission Act requires the establishment of a 
system to screen 100 percent of cargo transported on passenger 
aircraft, including in-bound cargo. As we have reported in our prior 
work, a successful project plan--such as a plan that would be used to 
establish such a system--should consider all phases of the project and 
clearly state schedules and deadlines.\23\ TSA officials reported that 
the agency is unable to identify a time line for meeting the mandate 
for in-bound cargo, stating that its efforts are long-term, given the 
extensive work it must conduct with foreign governments and 
associations. However, interim milestones could help the agency provide 
reasonable assurance to Congress that it is taking steps to meet the 
mandate as it applies to in-bound cargo. In our June 2010 report, we 
recommended that TSA develop a plan with milestones for how and when 
the agency intends to meet the mandate as it applies to in-bound cargo. 
TSA concurred with our recommendation and stated that the agency is 
drafting milestones as part of a plan that will generally require air 
carriers to conduct 100 percent screening by a specific date. If 
implemented effectively, this plan will address the intent of our 
recommendation.
---------------------------------------------------------------------------
    \23\ GAO, 2010 Census: Cost and Design Issues Need to Be Addressed 
Soon, GAO-04-37 (Washington, DC: Jan. 15, 2004).
---------------------------------------------------------------------------
    Madam Chairwoman, this concludes my statement. I look forward to 
answering any questions that you or other Members of the subcommittee 
may have.

    Ms. Jackson Lee. Thank you both, Mr. Sammon, Mr. Lord. I 
will remind each Member that he or she will have 5 minutes to 
question the panel. I will now recognize myself for 5 minutes.
    Following up on your testimony, Mr. Lord, your report 
raises several questions for TSA regarding its cargo screening 
system. In fact, as I look at your graph, that also raises 
several questions.
    You mentioned that a staffing study needs to be done to 
determine the appropriate staffing levels for CCSP oversight.
    Will TSA in your estimation be able to conduct adequate 
oversight of the CCSP with its current staffing levels, will it 
have to increase personnel resources, will it need to employ 
third-party inspection and validation of firms?
    In looking at this graph, will they be able to ramp up with 
outside air cargo inspection entities to meet their goals 
established by law for August 2010?
    Mr. Lord. Well, that is a key issue we laid out in our 
report. Obviously their oversight function, their requirements 
are going to increase dramatically. We laid out some numbers. 
As of March they had 583 facilities in the program. Given TSA's 
requirement to conduct two comprehensive inspections a year, if 
I am doing the math correctly, that is 1,166 inspections alone, 
and more players are entering the system.
    On the other hand, their inspection resources have grown 
only slowly. So we posed the question, how are you going to 
conduct all this oversight with the amount of inspectors you 
currently have? So we thought that it was important for them to 
do some additional analysis, to do a study to identify the 
needed resources.
    The goods news is they agreed to our recs, but we have yet 
to see the final study.
    Ms. Jackson Lee. Can you add to that point that was made in 
my opening testimony, and I believe also Mr. Dent, they are a 
partner, besides the inspection there is also the vetting of 
new technologies that will involve air cargo inspection in the 
private sector.
    Would you just stretch your analysis as to what needs to 
be, or how TSA needs to handle the S&T part of it when so many 
technologies that might be new and useful are seemingly not 
being approved?
    Mr. Lord. Well, because of the looming deadline, TSA 
unfortunately was forced to field some of this technology at 
the same time it is being, it is undergoing qualification 
testing. So that was another issue we raised in our report.
    Yet in TSA's defense they cited the deadline. Well, they 
basically had no other option. So they were simultaneously 
testing the technology, effectiveness of the technology, at the 
same time carriers, freight forwarders and others are using it. 
So perhaps Mr. Sammon might want to comment on that one.
    Ms. Jackson Lee. You view that as a concern?
    Mr. Sammon. Oh, yes. We highlighted that as one of the key 
challenges in our report, yes, Madam Chairwoman.
    Ms. Jackson Lee. Mr. Sammon, then following up on that line 
of questioning, the President's fiscal year 2011 budget 
flatlined the request for TSA cargo inspectors. We need 
assurance that TSA has resources to inspect certified 
facilities for compliance and to verify that self-reported 
screening data submitted by air carriers and CCSP participants 
is accurate.
    Can you, No. 1, tell me about your oversight resources for 
this purpose, including where you are lacking and may need more 
people, equipment, other resources? So that is a budget 
question. But, let me ask, No. 2, the statute, and this is the 
premise of the GAO report, the statute, the law, is quite clear 
in setting the August 3 deadline for screening all cargo on all 
passenger aircraft. So is the committee to understand from your 
testimony that you will be able to report to this committee on 
August 4 that 100 percent screening will be occurring for all 
domestic flight and how will TSA verify that this is the case 
and what are the milestones and time line for reaching 100 
percent on the international in-bound flights? Of course, those 
two are intertwined because part of that is budget and 
staffing.
    Mr. Sammon.
    Mr. Sammon. Thank you. On the staffing and inspector 
staffing, if what we are looking at, we expect to have by 
August 1, approximately one--just under 1,000 certified 
screening facilities throughout the country, United States, I 
am talking about domestic. We have approximately another 7-, 6- 
or 700 or so air cargo facilities at airports.
    So if you think about where the actual screening activity 
is taking place, we are talking about 1,500 or so, 1,500, 1,600 
facilities. With just under 500 inspectors, that is about three 
facilities per inspector.
    So we think that because what has happened now is that we 
have increased the focus on the facilities where screening is 
actually taking place, it actually makes the inspection job 
much more focused and we can put the resources where they need 
to be.
    The large majority of the activity, in terms of the tonnage 
of cargo, takes place at about 18 gateway airports. We are 
focusing the inspector activity there, the canine teams and the 
other resources that are necessary to, with the canine teams' 
help, to screen but also to verify with the inspectors that the 
cargo is actually being screened.
    We do a large number of inspections every year throughout 
the country. We expect to continue to do what we call cargo 
strikes, which are unannounced showing up at cargo facilities 
and inspecting all portions of the activity there, not just 
inspecting paperwork and records, and so on and so forth.
    In terms of our expectation, as you asked, as of August in 
2010, we expect that 100 percent of the cargo will be screened 
in the United States. We are going to have a very visible 
presence throughout the country with our inspectors and 
inspector teams, and we expect that the international cargo, 
with the addition of international and domestic, that we should 
be about 83 percent this year, about just under 90 percent the 
next year, about 95 percent in 2012, and approximately 100 
percent by 2013.
    Now, I think you are going to hear from a gentleman from 
Lufthansa a little later, and he may talk to you a little bit 
about what the EC is doing. Obviously the European Community is 
a large trading partner with the United States, a lot of cargo 
going back and forth. We have been working closely with them on 
similar kinds of cargo screening programs and that is the kind 
of time frame they are looking at also.
    What we want to do is make sure, particularly overseas 
because it is a difficult program, we want to make sure that we 
have sustainable programs that are verifiable by a government 
entity. We can't march U.S. inspectors in and around the world 
and inspect these facilities, but if there is a verifiable 
program in place overseas and we can be assured that the 
government of that nation is inspecting it, we have greater 
confidence that the cargo is being screened.
    Ms. Jackson Lee. You will not be able on August 4 to say 
100 percent screening, is that correct?
    Mr. Sammon. I will not be able to say 100 percent screening 
worldwide, no, ma'am.
    Ms. Jackson Lee. Let me yield to the full committee Chair 
for 5 minutes of questioning. Mr. Thompson.
    Mr. Thompson. Thank you very much, Madam Chairwoman.
    Mr. Sammon, I applaud you for meeting the deadline on the 
100 percent domestic screening, cargo screening. It is the 
right thing to do. I wish we could do some important stuff and 
other stuff equally as timely, but that is for another hearing.
    If we do 100 percent this year, where are we now with the 
international?
    Mr. Sammon. Our estimate right now is that it will be about 
62 percent in August.
    Mr. Thompson. Of this year?
    Mr. Sammon. Of this year, yes, sir.
    Mr. Thompson. Okay.
    Mr. Sammon. We would be about 80 percent in 2011, we 
estimate that we would about 92 percent in 2012, and that the 
combination of our efforts and the efforts overseas, we just 
had a team returning from Asia working with foreign specific, 
foreign governments there to put in place cargo security 
programs, again, verifiable programs.
    Because, again, the key is what we have done in the United 
States has been able to almost double the capacity of people 
who can screen by extending up the supply chain, by adding the 
freight forwarders and the shippers.
    Mr. Thompson. The point I am trying to get to now is if we 
meet the 100 percent, does this mean that all the cargo is 
shipped or does it mean that all that is shipped is screened?
    Mr. Sammon. That is a good question. Well, we estimate 
about 250 million pounds a month is shipped, and we estimate 
the capacity to be going into August slightly above that. We 
have right now about 67 independent facilities that haven't 
even been tested yet and we see another 10 percent of capacity 
out there with these people who have gone into business simply 
to screen freight for small shippers, small businessmen, and 
small freight forwarders.
    Mr. Thompson. So I take that to mean that some will not get 
shipped?
    Mr. Sammon. Well, sir, what we want to make sure that in 
August that we are clear about that mandate, yes, sir. There 
may be certain shippers----
    Mr. Thompson. Well, let me get to another issue. Where will 
this not get shipped cargo end up?
    Mr. Sammon. Well, I think there are two things, actually, 
there are alternate means. Within the United States, there are 
trucks and there are all cargo carriers such as Federal 
Express, UPS. Also, if you look at the shipping volumes and 
patterns, typically there are about 2 peak days during the week 
which the shipping pattern and volume are about 15 to 20 
percent higher than others. So it may be delayed a day. It may 
miss shipping to the next day, so you may not make service. We 
also know that some carriers will prioritize certified cargo, 
the prescreened cargo that comes in that gets on the plane 
first.
    Mr. Thompson. Thank you.
    Mr. Sammon. Yes, sir.
    Mr. Thompson. Two problems. One is it didn't get shipped. 
The second is, unless it is kept in a sterile area, it is a 
vulnerability because someone could put something on that cargo 
that conceivably could cause harm, and that is why I raised the 
question.
    Mr. Lord, do you see that as an issue in my line of 
questioning with Mr. Sammon?
    Mr. Lord. Yes, definitely do. There are two aspects you 
have to focus on, the commercial implications and the security 
implications. Obviously if you hold it overnight you have to 
worry about who is watching it. Is it a secure area? But there 
is also a commercial dimension that I think is very important. 
For example, if you are shipping fish, I don't think it is an 
option to ship it in a truck that is going to take 3 days to 
get from the Pacific Northwest to your plate here. I mean, some 
of this stuff has to move.
    Mr. Thompson. Well, Mr. Sammon, have we allowed for 
perishable cargo in this process?
    Mr. Sammon. Yes, sir. In fact, we have worked with some of 
the prominent shippers; there is a prominent shipper of 
lobsters out of Boston. We have the Washington Cherry 
Association, and I think the carriers also recognize the 
perishable nature of certain products that we give priority to 
in shipping out rather than having a whole container of fish 
sit there and melt on the dock.
    Mr. Thompson. Well, could you provide the committee with 
whatever guidance you provided staff with, with respect to 
perishable cargo and that with respect to this 100 percent 
screening?
    Mr. Sammon. Yes. In terms of----
    Mr. Thompson. Is there a written directive on this?
    Mr. Sammon. I am sorry?
    Mr. Thompson. Is there a written directive?
    Mr. Sammon. There is not a specific written directive, but 
we have worked with the perishable people, also worked very 
hard in terms of the technology angle to get metal detection as 
a means of screening for the perishable commodities, which is 
helpful.
    Mr. Thompson. I am a little concerned that although we 
might do the 100 percent, and it is the right thing to do, the 
issue of cargo not being included in the screening, being left, 
is a vulnerability and from the standpoint of the commercial 
side it is obviously a loss leader for the individual who is 
shipping it. I would like to see, Madam Chairwoman, some 
additional involvement from TSA on making sure that those 
standards are uniform and pushed out to at least staff in 
writing so they understand.
    I yield back.
    Ms. Jackson Lee. I thank the Chairwoman. This is an 
important inquiry that we need to make.
    I recognize the gentleman from Oregon, Mr. DeFazio, for 5 
minutes for questioning.
    Mr. DeFazio. I thank the Chairwoman. In the GAO report on 
page 10, we are talking about reported screening data, and it 
says: Questions exist about the reliability which are self-
reported by industry representatives. TSA does not have a 
mechanism to verify the accuracy of the data reported by the 
industry recommending random checks or other practical means.
    I would like you both to comment on that. That seems to me 
to be a bit problematic, and do you want to expand on that at 
all, Mr. Lord? You are still looking forward there.
    Mr. Lord. Undoubtedly, we have the data. Since it is self-
reported, we thought it would be useful to establish some sort 
of quality assurance process, again random spot checks, other 
practical means to help ensure the data is in fact reliable. We 
did have some concern, you know, nobody was scrubbing it. Since 
this data is ultimately rolled up and reported to Congress in 
the quarterly reports, we think it is important to do that. It 
is also used as a metric to help show progress in meeting the 
August 2007 air cargo screening mandate.
    So being from GAO, we are always concerned about the 
quality of the data, and it concerned us they didn't have a 
quality control mechanism established yet.
    Mr. DeFazio. Mr. Sammon, would you comment on that, please?
    Mr. Sammon. We concurred that the difficulty of using self-
reported data coming from overseas. We intend to do after-the-
fact spot checks over here. But, again, the system is always 
suspect from an accountability standpoint, and that is why we 
have been reluctant to declare victory to say 100 percent is 
going to be screened, until we are more comfortable that there 
are governmental agencies who can inspect facilities and 
inspect processes and programs overseas on a random basis.
    So the reporting is, we agree with the recommendation that 
GAO has made, but it is still going to be something that you 
have to look at with a certain amount of, you know, what the 
veracity of it is.
    Mr. DeFazio. Mr. Lord, was this just concerns about 
overseas data or was this also domestic data?
    Mr. Lord. We raised the concern about both data, the in-
bound and the domestic. So on the in-bound side, as Mr. Sammon 
noted, some of the screening is conducted by foreign 
governments. U.S. Government in general, TSA in particular has 
no access to that, so we raised that as an issue.
    On the domestic side, it is interesting, TSA is actually 
getting two streams of data. One is provided by the air 
carriers directly to headquarters and the other is the 
inspectors go out and look at screening logs, you know, do 
detailed inspections of particular warehouses, but there is no 
way to reconcile those two streams of data. So we thought 
perhaps there was a way to do that but, you know, we left it to 
their expertise and perspective.
    In our report we did notice that Customs and Border Patrol, 
they are confronted with a similar dilemma, yet they have 
implemented a quality assurance process to get at that. You 
know, to scrub the data they are getting from their customers, 
their clients, so to speak.
    Mr. DeFazio. Right. That is what, Mr. Sammon, you did only 
address foreign and I thought domestic----
    Mr. Sammon. I am sorry. No, that is why we concurred with 
the recommendation, but particularly the challenge of putting a 
system in to ultimately verify the in-bound international would 
be difficult.
    Mr. DeFazio. Right. But let's deal with the domestic.
    Mr. Sammon. We concur with the recommendation. We agree.
    Mr. DeFazio. Okay. So you are going to develop some sort of 
random or quality assurance program for the domestic?
    Mr. Sammon. Yes. We will work closely with GAO to do that 
to make sure that it satisfies their requirements.
    Mr. DeFazio. I wasn't quite certain of the response to the 
Chairman's question about these new, apparently there are new 
independent screening entities who have inserted into the 
chain, now people bring things to them. What is the chain of 
custody at that point? I mean, who establishes, okay, it came 
to the independent shipper, who I assume has been vetted, 
background checked, everything else, yes?
    Mr. Sammon. Yes.
    Mr. DeFazio. Okay. But what is the chain of custody after 
they have put it through some sort of device?
    Mr. Sammon. The chain of custody would begin at the 
independent screening facility to the airport.
    Mr. DeFazio. Who is responsible at that point, the airline?
    Mr. Sammon. The chain of custody to the airport is that 
independent screening facility. They will turn it over to a 
reputable, certified agent to take it and under a sealed, 
tamper-evident packaging, so on and so forth, to the airport.
    Mr. DeFazio. Okay. So you are confident in that, and you 
have been verifying and monitoring that, that these independent 
shippers, that we have got, you know, basically a very good and 
verifiable chain of custody from there to delivery to the 
airline?
    Mr. Sammon. Well, they have met our requirements for 
certification. Because the deadline has not taken, has not been 
enforced yet, the 67 facilities out there really are not 
handling much freight. People aren't using them, they are doing 
it on a fee basis. So we expect those people, and they are 
available in key cities to--their business to pick up once the 
deadline approaches. But until then people are at a lower 
threshold for screening requirements, so they are just not 
pushing all the freight through the system.
    Mr. DeFazio. Okay. Thank you. Thank you, Madam Chairwoman.
    Ms. Jackson Lee. I thank the gentleman, and I recognize the 
gentlelady from California, Ms. Harman, for 5 minutes.
    Ms. Harman. Thank you, Madam Chairwoman. I am pleased to be 
accommodated as a participant on this subcommittee hearing 
panel, and I recognize that we have a vote on, so I will be 
very brief. Not only am I interested in this general subject, 
but I came here to brag.
    The Certified Container Shipping Program is, as we all 
agree, one of a number of layers of security in place at the 
U.S. airports. At LAX we have a model program conducted by 
Mercury Air, a firm located in my district, which is one of the 
largest privately owned aviation services companies in the 
world, with business operations on five continents and more 
than 60 locations.
    I am very pleased that TSA has selected Mercury Aviation's 
services program as a model for the CCSP and will be 
highlighted at an upcoming press conference in Los Angeles.
    I visited this facility last year and was impressed with 
the strong relationship between Mercury Aviation and TSA as 
they collaborated to improve air cargo security. CCSP allows 
businesses to screen cargo where it is packaged, often in-
house, which avoids screening delays at airports, something we 
just heard about.
    The screening program is supported by the air freight and 
air carrier industries, because it leverages best practices 
from a variety of global supply chain programs and allows 
businesses to choose the best and most effective model for 
their needs.
    Ms. Harman. So my question is, has either witness ever 
visited Mercury Air's screening facility near LAX?
    Mr. Sammon. I have not been, but I believe Ed Britton, our 
general manager of cargo, has been, yes, ma'am.
    Ms. Harman. Mr. Lord.
    Mr. Lord. We visited LAX as part of our review, and I can't 
recall if we met with Mercury or not, but I can provide that 
for the record if you are so interested.
    Ms. Harman. Well, it is an opportunity for both of you for 
future activity. I mentioned that the CCSP leverages best 
practices. That is a good thing. How might CCSP take advantage 
of, from what I understand, the excellent work that has been 
going on at Mercury Aviation?
    Mr. Lord. Well, I think personally it would be useful if 
TSA summarized the leading practices among all the players and 
disseminated it more broadly, especially to people who are new 
entrants to the program. That is how you accumulate knowledge 
and share knowledge. I think that would be a useful start.
    Ms. Harman. What is your reaction to that, Mr. Sammon?
    Mr. Sammon. I agree. In terms of standing up, we have been 
very busy trying to stand up the program and trying to catch 
our breath here a little bit. I think it is an excellent 
recommendation. Mercury is a great participant. We are very 
happy to have them in the program.
    Ms. Harman. Well, I invite you anytime to visit paradise, 
and I do think what is going on there is excellent and I think 
it is a great idea to share information and, once in a while, 
to celebrate some good news, don't you?
    Thank you, Madam Chairwoman. I yield back.
    Ms. Jackson Lee. I thank the gentlelady from California for 
providing that insightful line of questioning.
    Let me very quickly--you raised some additional questions 
for the record. The Congresswoman is correct; we are having 
votes on-going, and we will soon call the hearing in recess.
    But quickly, Mr. Sammon, some freight forwarders--we posed 
this question--but before I do that, let me go back to the 
report. On April 4, will you be able to give us a report that 
you are able to screen 100 percent domestic cargo?
    Mr. Sammon. Reporting for cargo screening will come 
probably in September when the data is gathered.
    Ms. Jackson Lee. Will you be able to report 100 percent 
domestic screening in September?
    Mr. Sammon. Yes, ma'am.
    Ms. Jackson Lee. Our surface transportation bill gave you 2 
years to finish this work. It appears that you are asking now 
for 3 years to complete the work on international air cargo 
inspection.
    Mr. Sammon. I am estimating that the amount of time to 
finish it, we are looking at the EC and their time frame, and 
what we would like to do is make sure that member states, our 
member states around the world, we have a long-term sustainable 
government-based program, as opposed to putting a deadline down 
that may not be sustainable.
    Ms. Jackson Lee. In September 2010, what will you be able 
to report to us on international cargo screening?
    Mr. Sammon. I would guess our estimate would be 62 percent.
    Ms. Jackson Lee. So as far as the same percentages that you 
gave us previously in your testimony?
    Mr. Sammon. Yes, ma'am.
    Ms. Jackson Lee. What do you perceive to be the most 
difficult issue around international screening?
    Mr. Sammon. It is the time frame for each government to set 
up a similar program to allow other people in the supply chain 
to do the screening, and for them to have their inspectors 
capable of inspecting those facilities.
    Ms. Jackson Lee. We know that is the problem. But let me 
just say that I am going to want to have a report to this 
committee on why we cannot expedite that process. I will take 
that in writing, and we will probably have to have some further 
meetings on that.
    You know that general shippers have been complaining, small 
businesses, that they have not been certified to screen at a 
sufficient rate and that such freight forwarders bear the brunt 
of the cargo screening.
    Can you tell me why we haven't been able to move along on 
certification?
    Mr. Sammon. I think in terms of the certification rate, the 
application rate after we went to 50 percent dropped off and 
laid fairly flat for the low level. It has within this year 
started picking up rather rapidly, and we have several--in the 
past months, added several hundred applicants. We have trained 
all our inspectors to be able to certify, to go out and meet 
those people and review their facilities and certify them. So I 
think that the ability to get into the program, we are standing 
that up pretty quickly.
    Ms. Jackson Lee. Would you please provide this committee 
with a report on the backlog, what is remaining, or what do you 
characterize as the remaining companies that need to be 
screened?
    On technology, that has been a complaint and certainly an 
issue in this committee.
    We hear that canines are effective particularly for cargo 
screening. Can you tell me the scope of the TSA canine program? 
I need cryptic remarks. Time is running out on the vote, but I 
wanted to get this answer in. Would you discuss how the 
industry, TSA, and DHS are addressing the large pallet 
screening issue?
    Mr. Sammon. Yes. We have added 114 proprietary canine teams 
which go anywhere. They are not restricted to the airport, so 
they can go off airport.
    One of our important needs, as I mentioned in my oral 
testimony, is large aperture pallet screening on multicommodity 
technology. We have that technology in the testing labs right 
now, hoping for approval on metal detectors. It would help all 
the perishable people. There are several large aperture X-rays 
available, and we are working with S&T and the labs on 
automated ETD technologies.
    So there are technologies in the hopper, but again we share 
your frustration and concern about this pace and development of 
the technology. We simply do have to pick that up.
    Ms. Jackson Lee. I am now going to have this committee 
stand in recess, gentlemen. I may have have an additional 
question for you when we return.
    [Recess.]
    Ms. Jackson Lee. Thank you to the witnesses for your 
patience, and let me finish.
    Question to you, Mr. Lord, before I yield to a 
distinguished Member.
    We heard the line of questioning on the international cargo 
screening deadline, and I guess the new component, not so much 
new component but what probably will be expected is the 
individual country agreements. My thought would be, in addition 
to the resources that were utilized in DHS for international 
agreements, this may be a place for State Department 
involvement.
    But my question to you is to give us what you think are the 
most serious challenges for meeting the 100 percent screening 
on international in-bound flights. Is it geography, countries? 
What were the obstacles that we did not see, and why can't 
those obstacles be resolved expeditiously?
    Mr. Lord. Excellent question. I think the impediments are 
well known. Essentially you are dealing with foreign 
governments, their own sovereign entities, beyond the direct 
control or authority of TSA. So essentially you have to 
negotiate a diplomatic agreement.
    The other complication is you have to attack the problem at 
two levels. You have the multilateral issue, the ICAO standards 
have to be updated and revised. You also have to enter into 
bilateral agreements individually with separate countries. 
Again, foreign governments, they are their own sovereign 
beings, and quite simply, you have to negotiate with them. That 
takes time.
    The 2013 date that Mr. Sammon identified, that is the first 
time I have heard that today, but that seems a reasonable 
amount of time to me. It is going to take 3 years to get all 
these agreements in place and to have the screening conducted 
at the 100 percent level. That does not surprise me.
    Ms. Jackson Lee. I could continue down this line of inquiry 
for a period of time, but let me yield now to Mr. Austria 5 
minutes for questioning.
    Mr. Austria. Thank you, Chairwoman Jackson Lee, and thank 
you to our panel. Thank you for doing it. I think it is very 
important that we be updated and understand what is in place 
and the impact it is having.
    Let me first of all start with you, if I could, Mr. Sammon. 
Can you provide maybe just an overview of the TSA's 
consideration in vetting and approving certified cargo 
screening facilities in comparison with the 760 certified 
entities; and any you have rejected and if so, why? What is the 
status on that, if you could update this committee?
    Mr. Sammon. Yes, sir, be happy to. What we look for when we 
look for the certification, one is, first of all, background 
checks of the employees who are going to be handling the cargo. 
We look for physical security and integrity of the area where 
the screened cargo will be handled. We also look for the 
overall security practices in terms of how they handle 
sensitive material and paperwork regarding shipments going onto 
airplanes, and then also their ability to establish a secure 
chain of custody from the facility to the airport.
    I don't have off the top of my head the number of 
facilities that have been rejected, but facilities are 
rejected. People have applied, and they may not have one or all 
of those pieces involved, or they may have key employees who 
handle the cargo who would not pass a background check for 
various reasons.
    Mr. Austria. I would be interested in those numbers, if it 
is a common occurrence as far as being rejected; or if it is an 
isolated-type situation, what those numbers are, if you would 
be able to provide that, and the effectiveness.
    Mr. Sammon. Yes. Well, initially the process starts out 
with an interview with one of our inspectors with the facility, 
and then an application by that organization. Early on, most 
organizations understand whether they will be able to pass the 
requirements or not.
    Many times, people will have an initial contact, we will 
have an interview with them, go over the facilities, and we may 
tell them, Look, you have to install this kind of access 
control or secure area. Then the person says, Well, you know, 
that might cost me a certain amount of money, so I am not 
really interested; or they may follow up and establish those. 
So oftentimes the rejections come early on in the process.
    Mr. Austria. Mr. Lord, let me ask you a question. I know 
there have been some concerns that have been raised such as 
with the business community. In your opinion of GAO, that 100 
percent of the screening equates to 100 percent security; does 
the screening of all air cargo eliminate the dangers to our 
aviation system, in your opinion, or do other vulnerabilities 
exist, and is the CCSP verification system in your opinion 
effective or working?
    Mr. Lord. Well, I think that is important to note. Even 
when TSA reports they have achieved the 100 percent screening 
levels, it is important to note there are some exemptions to 
screening requirements. For example, as we note in our report 
we issued today, a significant percentage, I can't tell you the 
exact amount, is considered sensitive security information; a 
significant percentage of in-bound cargo is exempt from TSA 
screen requirements. So theoretically, you could be reporting 
you achieved 100 percent, but that is not to be confused with 
100 percent of all cargo arriving in the United States. Until 
you eliminate all the exemptions, you won't technically have 
achieved that level.
    Mr. Austria. I guess, what is that mix as far as the 
screening side? Do we have to screen air carriers, freight 
forwarders, shippers, independents? Is it a third, a third, a 
third, in your opinion, or what is that balance?
    Mr. Lord. Well, the ideal mix, as we highlighted in the 
graphic earlier today, is a third--one third, one third, and 
one third; that is, the carriers are reasonably expected to 
screen a third of the cargo; the intermediaries, freight 
forwarders a third; and TSA.
    Mr. Austria. Is there anything we can do to incentivize and 
generate the industry participation in the CCSP?
    Mr. Lord. Well, that is a key concern we raised in the 
testimony today. From the data we have looked at, it appears 
that a significant amount of shippers are still not 
participating in the program, and in their business model, 
their participation is absolutely essential to make it work. I 
mean, there are still a few weeks left. There has obviously 
been some increased shipper interest in the last few weeks but, 
again, shipper participation has held relatively constant, 
about 2 percent over the last few months, not the 33 percent 
considered the ideal. So we are concerned about that. So 
really, again, to make the model work, you need the shippers to 
be actively involved. We don't see that yet.
    Mr. Austria. I think that is important as that mandatory 
deadline is approaching.
    I know my time is up. So Chairwoman Jackson Lee, thank you 
and thank you, panel. I yield back my time.
    Ms. Jackson Lee. I thank the gentleman. Mr. Austria, we are 
delighted to have you sitting in as the Ranking Member for what 
I think is a very constructive and instructive, if you will, 
hearing. So thank you very much.
    Earlier today, we asked unanimous consent to allow the 
distinguished gentleman from Massachusetts Mr. Markey, a former 
Member of this committee and a champion of air cargo screening 
for domestic cargo and international, to be able to both sit in 
and ask questions. There was no objection heard and it was so 
ordered.
    So at this time, I recognize the gentleman from 
Massachusetts, Mr. Markey, for 5 minutes of questioning.
    Mr. Markey. I thank the gentlelady, and I thank her for her 
courtesy and for her leadership on these issues.
    This GAO report that we are discussing is something that I 
drafted up the questions, and working with the Chairman of the 
full committee and the gentlelady from Houston, you know, 
requested the GAO to put together. So we are here now with it 
being delivered back to the Congress.
    My first question is to Mr. Sammon. Why doesn't TSA have a 
contingency plan, a plan B, for screening all cargo on 
passenger planes beyond simply grounding all of this cargo if 
it is unscreened?
    Mr. Sammon. When we started the program some time ago and 
talked to the public, talked to shippers, talked to airlines, 
and we talked about that there was going to be a date at which 
people were going to be required to screen cargo, most people 
thought we were going to delay the date. Most people thought we 
would give certain people exceptions and exemptions and so on. 
So we found, particularly early on, lots of apathy. People 
didn't believe that the Federal Government would make this 
happen, that the legislation that the Congress put forward, 
particularly as it applies in this country, would be enforced.
    So what we have done, we worked diligently with the air 
carriers, with the air forwarder community, and they have 
stepped forward in the program. We believe that there is 
sufficient capacity between the shippers, the forwarders, the 
airlines and the canine teams we have in place to screen the 
cargo come April 1.
    There are still people out there, and there was a recent 
survey, very recent survey, by the air forwarding community, 
wherein 67 percent of the respondents----
    Mr. Markey. Did you mean April 1 or August 1?
    Mr. Sammon. August 1--where 67 of the respondents stated 
that they thought it was the forwarders' job, that it wasn't 
the shippers' job. Yet we have prominent shippers, such as the 
Smithsonian Institution; we have pharmaceutical companies such 
as Eli Lilly; we have manufacturers/retailers such as Calloway 
Golf who have signed up.
    Mr. Markey. They just didn't believe that the Department of 
Homeland Security was going to bring the hammer down and make 
them do it; is that what you are saying?
    Mr. Sammon. A lot of people thought we were not serious.
    Mr. Markey. That is I think a big problem.
    Mr. Lord, do you see situations like this where there is no 
plan B, or we are just left here in no man's land without 
asking----
    Mr. Lord. That is a key recommendation of our report is for 
TSA to develop a contingency plan, a so-called plan B, that 
will help them identify some additional alternatives they could 
use to help meet the mandate. That is our recommendation and we 
think that is important.
    Mr. Markey. Well, will you put together a plan B, Mr. 
Sammon?
    Mr. Sammon. We intend to enforce the mandate, and I think 
that there is sufficient capacity. There are also alternative 
transportation means for the shipments to be made.
    Mr. Markey. When will TSA comply with the requirement that 
cargo on planes coming into the United States from overseas be 
screened? That was also something that I wrote into the law 
back in February 2007, like this mandate for domestic cargo. As 
we all know, 40 percent of all cargo that flies over the United 
States on domestic planes comes in from overseas. Only 60 
percent of it is on domestically originated flights.
    When are you going to meet the deadline for international 
flights, Mr. Sammon?
    Mr. Sammon. As I said in my oral testimony early on today, 
we expect to take several more years, following getting 
programs in foreign countries in place that are enforceable by 
those countries; we see that that is taking several more years 
perhaps than to----
    Mr. Markey. Which country gives you the most problem?
    Mr. Sammon. I am not going to go into that here.
    Mr. Markey. Here is the problem that I have. I think it is 
just a lack of will, to be honest with you. I think if the 
United States Government said to these other governments, we 
don't want to run the risk of having another group of Mohammed 
Attas and the other nine--they were up in my Congressional 
district, and there were 150 passengers from Boston on those 
two planes that flew into the World Trade Center.
    So my concern about the issue goes back to that day, okay. 
Plus, it goes back to the day that Abdelghani Meskini, the 
millennium bomber, jumped off of the LNG ship coming in from 
Algeria in my district, and the people that got arrested in 
Watertown in my district a couple of weeks ago, who are 
terrorists we think, and the Russian spies that were arrested 
yesterday up in my district. So I kind of think this is 
something that can happen if you allow the apertures to open.
    I think these are very intelligent people. They are 
targeting us, and I think the technology is there, and I just 
don't think the Department of Homeland Security does a good 
enough job enforcing this as something that the governments in 
other nations have to take seriously. We don't put enough 
political capital on it.
    Al-Qaeda is looking for the weak link. That is what 
Mohammed Atta found up in Boston with the other nine. They 
found the weak link, and this is still an opening, it is still 
an aperture where they can put these deadly explosives on 
planes. I still don't understand why this deadline has slipped 
3 years.
    There was no discretion that was in the law that, in my 
opinion, has been met by any justifiable criteria that you have 
established. Okay? Just saying, Well, these other governments 
are just too tough on us doesn't prove to me that our 
Government has been tough enough on them to establish the 
standards, at least someplace, in some part of the world, that 
we are demonstrating that we are doing it, and the domino--the 
positive domino effect then begins to work, Mr. Sammon.
    Mr. Sammon. We have been working with ICAO, with the 
European Community. They have specific, in terms of the cargo, 
screening processes. ICAO has adopted it in terms of it is a 
procedure to go forward. They have not voted it with the full 
membership. The European Community expects to adopt it, and the 
time frame they are looking at is the time frame that I 
outlined. I think if you want to----
    Mr. Markey. Is this going to be risk-based? What is your 
goal? Is the goal to make it risk-based, or is the goal to have 
physical screening? What is your goal?
    Mr. Sammon. The goal is to have actual physical screening. 
If you want that in place on a sustainable basis that is 
inspectable by a government authority, you need to have these 
agreements in place. If you want to just declare people have to 
screen everything, I can't inspect it, you have no program.
    Mr. Markey. I do not believe the Department of Homeland 
Security is doing a good enough job. I don't think they are 
pressing and it is a high enough priority. I don't think we are 
seeing results that are commensurate with the risks that our 
country runs, okay. I am going to insist on much more thorough, 
periodic reports in terms of what the administration is doing; 
and it just can't be: Well, we can't tell you which country.
    It is like a secret exam out there of the world without 
really knowing, you know, where the obstacles are, because once 
you put in place the first 15 countries that have all signed 
up, the first 20 countries, it makes it much more hard for all 
of the other countries to say no.
    By the way, if I may, the same thing is true for screening 
of nuclear materials on incoming ships into our country. We 
know that al-Qaeda is trying to get the loose nukes, put it on 
a ship, bring it into a port in America. Postponing that and 
using the erroneous argument, again, that you can't agreements 
with other countries and the technologies don't exist is just 
absolutely untrue. The technologies exist. It can be done. The 
Department of Homeland Security has to do an infinitely better 
job in telescoping the time frame it takes to close these 
apertures of risk that these brilliant terrorists will try to 
exploit if we don't deploy in a timely fashion.
    I thank the gentlelady and I apologize.
    Ms. Jackson Lee. The gentleman's time has expired. We look 
forward in this committee to be as diligent as the gentleman 
has articulated, and none of this is taken lightly, and that is 
why we are following up.
    Let me pursue the gentleman's questions, just for a moment 
as I move to dismiss this panel, to quickly ask Mr. Lord. In 
your report you have argued for contingency plans for TSA, and 
we would like to hear what you are speaking of, what kind of 
contingency plans might even respond to the example that Mr. 
Markey has just articulated, particularly with loose nuclear 
materials. But other than that, what kind of contingency plans 
would you want TSA to have?
    Mr. Lord. Well, we thought given the looming deadline and 
the nature of some of the challenges, it would be advisable to 
consider other alternatives for helping meet the mandate. One 
thing you could do, you could strategically redeploy TSA assets 
to help minimize the disruption in, for example, the 18 major 
gateway airports. That is one possible option.
    You could consider making some aspects of the program 
mandatory. The CCSP is now a voluntary program, but that would 
be up to the TSA to decide. They are the experts.
    Or you could require more screening of the packaging 
earlier in the process before it is loaded onto ULD pallets and 
containers. Essentially the earlier you do the screening, the 
easier it is to deal with the problem. If it arrives at an 
airport in a ULD container, unscreened, it is going to be more 
difficult to address the problem, given there is no technology 
that has been qualified to screen the ULD containers. But, 
again, these are just suggested alternatives.
    Again, from our perspective it seemed there were some other 
options to consider. We just left it to TSA to decide. But we 
basically recommended to think more broadly.
    Ms. Jackson Lee. Mr. Sammon, do you have any contingency 
plans? Are you in the midst of constructing any contingency 
plans?
    Mr. Sammon. Ma'am, no. If I can explain why. Getting this 
program going and convincing people that we were really serious 
about doing this was a long and difficult process. Many people 
didn't believe us, many people didn't want to become involved, 
and so we have been very serious all along. We have testified, 
I testified here in 2008 that if 100 pounds are screened, 100 
pounds will fly. We are serious.
    A lot of people originally didn't believe us, they didn't 
believe Ed Kelly; but many have, and many have signed up. We 
believe we have sufficient capacity to screen the freight.
    Those who haven't, there is always going to be a group of 
people who say: It is not my job, I don't have to do anything, 
I am not going to worry about it, I will push it off to 
somebody else.
    If we say August 1: Don't worry, we'll take care of you, 
those people aren't going to do anything. This is all people 
acting in self-interest. Either they are going to act in their 
self-interest and get off and sign up with the program, or 
align themselves with independent facilities who can screen it 
or not.
    But if there are contingencies--I learned when I was in 
second grade, when the teacher said your homework was due on 
Tuesday, and she said Sally will do it for you, or you can get 
it done Friday. If homework was due on Tuesday, I would do my 
homework; but if I knew I had until Friday, I wouldn't do my 
homework. It is the same kind of thing.
    People can sign up the process. It is a very huge process. 
We are set up to handle people, and it is simply folks who are 
sitting on the sideline saying: It is not my job, it is 
somebody else's job. If we let that down, the process to sign 
up will drop off immediately.
    Ms. Jackson Lee. Well, that is fair enough, Mr. Sammon. Let 
me just conclude by asking a stakeholder question.
    The relationship that you have had with ASAC has lapsed 
again in April 2010. We consider them an important advisory 
committee we use to facilitate stakeholder input across the TSA 
security policies.
    What is TSA doing to ensure consultation with stakeholders, 
particularly as it rolls out new requirements related to the 
100 percent cargo screening standard; and how does TSA plan to 
communicate with stakeholders about any implementation issues 
related to the August 100 percent screening? Which really plays 
into what I hear you saying is, that we are going to be firm 
and immovable as relates to our goals and commitments to the 
law. So how are you communicating to stakeholders?
    Mr. Sammon. We have been communicating with stakeholders 
all along. I think Brandon Fried is here from Airforwarders 
Association. All the folks from the airline associations are 
here. We have been reaching out to those people. We have been 
working with the National Association of Manufacturers, the 
Chamber of Commerce, a wide variety of groups, to not only 
communicate that here is the looming deadline, but also here is 
how you can get into the program, and we think it is an 
achievable thing.
    We found out a number of the shippers who signed up, it 
really hasn't cost them a lot of money. It is not an expensive 
process if you have security processes and programs in place. A 
number of shippers have found it has actually improved their--
by signing up, it has improved their logistics security and 
safety programs.
    But we have outreached. We have pushed out, we believe, 
communications to over 100,000 businesses. We have personally 
talked to 26,000 individuals since January. So we have been 
doing an unprecedented amount of outreach to people to get the 
message across not only in terms of the deadline, but what we 
can offer in terms of using freight forwarders and using--or 
for shippers, how to sign up for the program.
    Ms. Jackson Lee. The ASAC agreement, is that something that 
you are going to reignite, using a play on words?
    Mr. Sammon. Yes. The ASAC in terms of--we held an ASAC 
meeting this past year. We want to revise that and have that to 
be a more active portion of the process. We have been probably 
busy focused on getting the various aspects of this program in 
place, and I think probably have overlooked ASAC as a good tool 
to use in this process.
    Ms. Jackson Lee. Let me thank the witnesses. Hearing no 
further questions for our first panel, I thank the witnesses 
for appearing before the subcommittee today.
    I thank the GAO, Mr. Lord, for responding to the inquiry 
made by myself, Mr. Markey, and the Chairman of the full 
committee; and I thank Mr. Sammon for taking seriously this 
report and attending to some of the very serious concerns and, 
more importantly, making a very firm statement here today that 
you are going to adhere to the law with regard to the obstacles 
and challenges, but not to allow them to overcome you.
    I believe that there is a great deal of room for the 
variety of occurrences, creative occurrences that come about 
through franchise terrorism, meaning that we do not look to a 
certain country, we look to individuals who may find themselves 
within our boundaries or elsewhere, moving about individually, 
attempting to do this Nation harm.
    So I think that this is an important hearing for the very 
fact that we are the wedge standing between foreign materials. 
When I say that, not necessarily from foreign countries, but 
materials that would do us harm from many different entities 
coming into the United States or, for that matter, being moved 
around the United States in domestic cargo.
    I would hold you to the testimony, gentlemen, that you have 
made today, and that we will as a committee continue our 
oversight on this matter.
    The Members of the subcommittee may have additional 
questions for you, and we ask that you respond to them 
expeditiously in writing.
    We now welcome our second panel. You are very much 
appreciated. Thank you, and thank you to the subcommittee 
Members.
    I welcome our second panel of witnesses, gentlemen, and now 
you are expected to have all of the answers.
    Our first witness is Mr. John Meenan, Executive Vice 
President and Chief Operating Officer for the Air Transport 
Association, the Nation's oldest and largest airline trade 
association. Mr. Meenan joined the association as the assistant 
general counsel in 1985, following 9 years with the U.S. Secret 
Service, and has been involved in airport issues including 
noise abatement, airport access, environmental impact, slot 
restriction, airport and airway systems financing, and FAA 
reform.
    Our second witness is Mr. Harald Zielinski, who is 
responsible for worldwide security programs at Lufthansa Cargo, 
one of the world's leading international cargo carriers. He has 
been working in the security area at Lufthansa since 1988. 
Prior to that, he was a police officer at Frankfurt Airport 
where he specialized in airline security but also trained as a 
chief negotiator for skyjacking and hostage incidents.
    Let me take the special privilege of introducing the third 
witness, as I listened to Ms. Harman on a company located in 
her Congressional district. Let me acknowledge Mr. Mike 
Middleton from Houston, Texas. He is Executive Vice President 
of Secure Global Logistics which operates a TSA-certified cargo 
screening facility and provides air forwarding and other air 
cargo transport services. Mr. Middleton sits on the board of 
directors and serves as a North American director for the World 
Freight group, an alliance of companies providing freight 
services in more than 388 air- and seaports throughout the 
world.
    I had the privilege of visiting the offices of Secure 
Global Logistics in Houston, Texas, near Bush Intercontinental 
Airport, and I, too--as Ms. Harman was with her company in her 
district--was impressed with the technology and the quality of 
performance of this company. I look forward, Mr. Middleton, to 
your testimony. That will be instructive to all of us.
    Our fourth witness is Mr. Fernando Soler of SOS Global 
Express. Mr. Soler is a founding member of the Air Cargo 
Security Alliance. We welcome you.
    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. Meenan.

 STATEMENT OF JOHN MEENAN, EXECUTIVE VICE PRESIDENT AND CHIEF 
          OPERATING OFFICER, AIR TRANSPORT ASSOCIATION

    Mr. Meenan. Madam Chairwoman, thank you very much.
    On behalf of the Air Transport Association member airline, 
we appreciate the opportunity to brief the committee on the 
progress we have made toward the 100 percent cargo shipping 
goal. We also would like to commend the committee for its 
leadership and support in meeting this goal, and join you in 
saluting the legacy of Ed Kelly and the legacy he left with Ed 
Britton and the team.
    I am pleased to report that the airline industry has 
fulfilled its interim goals of 50 percent cargo screening by 
February 2009 and 75 percent by May 1 of this year. What that 
experience has taught us is that this getting to 100 percent is 
going to require a great deal of additional work. We are 
engaged in that right now, but we know it is going to require a 
great deal of cooperation between the airlines, TSA, the 
freight forwarders and shippers, both here in the United States 
and overseas.
    The biggest challenge in meeting this August 2010 deadline 
continues to be the lack of certified screening technology 
capable of inspecting large palleted shipments. As you may 
know, the great bulk of air cargo is carried aboard wide-body 
aircraft. Seventy-five percent of that cargo in the United 
States is palletized, and that gives you a sense of the 
magnitude of the problem we are dealing with here.
    Shippers and freight forwarders typically create these 
palletized shipments before they are tendered to the airlines. 
The challenge has always been, is that screening is required at 
the individual carton level. The nature of our business and 
available screening equipment continue to be badly mismatched.
    We identified this challenge when we testified before this 
subcommittee last March, and the situation remains unchanged. 
While the certified cargo shipper program is helping to address 
the problem by implementing screening protections upstream, a 
far more practical solution remains to be found with the 
eventual TSA certification of screening technology for large--
compatible with the cargo we carry.
    Breaking down consolidated shipments at an airport cargo 
facility is simply not practical. Shipment size, time 
constraint, and facility limitations are the main difficulties. 
A better alternative has to be found.
    Particularly in light of recent changes in TSA regulations 
relating to the handling of in-bound international air cargo, 
work is on-going with TSA to identify practical measures to 
both assure security and facilitate the important flow of 
cargo. We believe that through this combined effort of industry 
and Government, a practical solution will be in place before 
the upcoming deadline.
    Going forward, however, the most practical approach 
internationally rests with the approval of government-to-
government compatible security programs. As Mr. Sammon 
testified earlier, they are projecting a 3-year timeline. We 
would respectfully suggest that perhaps that be reduced by 
half, and with a particular effort being made to target the 
high-volume countries with whom we do business.
    We have long been on record as supporting the CCSP as an 
indispensable tool in meeting the August 2010 deadline, and the 
Department of Homeland Security is to be complimented for the 
high tempo effort it has made in implementing that program.
    There are basically four remaining key challenges as far as 
we are concerned:
    The first one is that TSA has dramatically increased the 
number of certified cargo screening shipping facilities among 
freight forwarders and other TSA-certified indirect carriers. 
The certification of large key shippers and manufacturers 
remains to be improved upon. We are concerned that in some 
regions and at some airports, some shippers may experience 
delays after August. As Mr. Sammon testified today, we 
understand that the pressure will be put on them to 
participate, but we do want to see that process facilitated in 
order to get them on-line as quickly as possible.
    Although we recommended last year that TSA expand as 
swiftly as possible the use of TSA-certified explosive 
detection canines to screen large air cargo consolidation, we 
have not yet seen the number of teams throughout that we would 
like to see. We appreciate the authorization of this committee 
for additional teams, but we are looking forward to seeing more 
paws on the pavement, I guess is the best way to put it, and I 
think more pressure in that area would be appreciated.
    As noted previously a major push is to improve the 
compatible host country security programs, and that remains 
critically important.
    Finally, we all recognize that the best solution remains 
the development of certified, efficient screening technologies.
    The airlines recognize that on August 1, 2010, the deadline 
means that only complying shipments will be transported after 
that date. We are committed to meeting that deadline, but also 
to meeting the needs of the domestic and world economies for 
reliable air cargo service. These goals must both be met and we 
look forward to continuing a cooperative effort with the 
Government to see to it that that happens.
    Thank you.
    [The statement of Mr. Meenan follows:]

                   Prepared Statement of John Meenan
                             June 30, 2010

    On behalf of the Air Transport Association member airlines, we 
appreciate the opportunity to brief the committee on our progress in 
achieving 100 percent screening of cargo transported on passenger-
carrying aircraft by August 2010. The airlines are committed to do 
their part in meeting that requirement of the 9/11 Commission 
Recommendations Act, and to work cooperatively with the Transportation 
Security Administration (TSA) in doing so. We would like to commend the 
committee for its leadership and support in meeting this goal and to 
recognize, in particular, the important contributions made by Ed Kelly 
at the Transportation Security Agency, who we all greatly miss.
    I am pleased to report that the airline industry fulfilled interim 
requirements that 50 percent of such cargo be screened by February 2009 
and 75 percent by May 1 of this year. This impressive achievement 
reflects hard work; this was not an easy task. That experience taught 
us an important lesson: Achieving the 100 percent level will require 
the continued close collaboration of the airlines, TSA, freight 
forwarders and shippers, both in the United States and overseas.
    The biggest challenge in meeting the August 2010 deadline continues 
to be the lack of 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 challenge has 
always been that screening is required at the individual carton level. 
Existing technology cannot screen large consolidated shipments. The 
nature of our business and available screening equipment continue to be 
badly mismatched. We identified this challenge when we testified before 
this subcommittee last March, and the situation remains unchanged. 
While the Certified Cargo Shipper Program (CCSP) is helping to address 
this problem, by implementing screening-protection upstream, a far more 
practical solution remains to be found with the eventual TSA 
certification of screening technology that is compatible with the cargo 
that we carry.
    Breaking down consolidated shipments at an airport cargo facility 
is not practical. Shipment size, time constraints and facility 
limitations are the main difficulties. Dismantling an air-cargo pallet 
or unloading a container and screening each piece would result in the 
significant disruption of air commerce. Airport cargo facilities and 
ramps were not designed to be high-volume disassembly and reassembly 
locations, and are not big enough to perform that role, especially at 
peak times. A better alternative must be found.
    Particularly in light of recent changes to TSA regulations relating 
to the handling of in-bound international air cargo, work is on-going 
with the TSA to identify practical measures to both assure security and 
facilitate important cargo flows. We believe that through the combined 
efforts of industry and Government, a practical solution will be in 
place before the upcoming deadline.
    Going forward, however, the most practical approach internationally 
rests with the approval, at the government-to-government level, of 
compatible security programs. TSA indicates that it will pursue 
recognizing the screening regimes of additional host countries beyond 
the countries with previously approved programs. We enthusiastically 
support this effort. Success will eliminate what today often results in 
the duplicative screening of air cargo by security personnel at the 
foreign airport and/or the locally authorized freight forwarder, as 
well as by the air carrier. While TSA anticipates a 3-year approval 
process, we would respectfully urge an initiative to reduce this time 
frame by at least one-half, with a prioritized effort to move our major 
trading partner countries to the head of the approval queue.
    We have long been on record in support of the CCSP as an 
indispensable tool in meeting the August 2010 deadline. We have 
repeatedly noted that if enough shippers and forwarders are not 
certified, attaining that deadline will be at risk. The Department of 
Homeland Security is to be complimented for its high-tempo 
implementation of the CCSP. Its performance has been admirable but, 
despite best efforts, the number of U.S. shippers certified to date is 
not as robust as we had hoped. Again, just as the airlines are 
accelerating compliance plans to meet the August deadline, we would 
hope to see a companion Government effort to address the remaining key 
challenges as follow:
    1. Although TSA has dramatically increased the number of Certified 
        Cargo Screening Facilities among freight forwarders and other 
        TSA-certified Indirect Air Carriers, the certification of key 
        large shippers and manufacturers has not been as successful. We 
        are concerned that in some regions and at some airports, some 
        shippers may experience delays after August, and request 
        attention to these key shippers.
    2. Although we recommended last year that TSA expand as swiftly as 
        possible the use of TSA-certified explosive-detection canines 
        to screen large air-cargo consolidations, and the Department 
        directed additional funding to the TSA proprietary canine 
        cargo-screening program, little real change has yet to occur. 
        We continue to believe that canines offer a very valuable tool 
        to help meet the August deadline, and would hope to see a 
        significant application of existing and future TSA resources in 
        this area. We appreciate the committee's authorization of 
        additional canine teams and hope to see Government action soon 
        to get more ``paws on the ground'' to assist in this important 
        work.
    3. As noted previously, a major push to approve compatible host-
        country security programs remains critically important.
    4. And finally, as we all recognize, the best solution remains in 
        the development and certification of efficient screening 
        technologies for large palletized and containerized cargo.
    The airlines recognize that the August 1, 2010 deadline means that 
only complying shipments will be transported after that date. We are 
committed to meeting that deadline but also to meeting the needs of the 
domestic and world economies for reliable air-cargo service. These 
goals must both be met, and we look forward to a continuing cooperative 
effort with the Government to see that they are accomplished.

    Ms. Jackson Lee. Thank you very much for your testimony.
    We now call upon Mr. Zielinski for 5 minutes.

      STATEMENT OF HARALD ZIELINSKI, HEAD OF SECURITY AND 
       ENVIRONMENTAL MANAGEMENT, LUFTHANSA AIRLINES CARGO

    Mr. Zielinski. Chairwoman Jackson Lee and distinguished 
Members of the subcommittee, it is my pleasure to testify 
before you today on behalf of Lufthansa Cargo.
    My statement will comprise the four steps titled ``smart 
security'': communication, mutual recognition, technology, and 
training standards.
    First, a brief snapshot of our U.S. presence. The Lufthansa 
Aviation Group is proud of its 10,000 employees living and 
working in cities and towns across America. We invest billions 
of dollars in U.S. goods and services. Lufthansa is the launch 
customer for the fuel-efficient Boeing 747-800.
    As for Lufthansa Cargo, we currently serve over 300 
destinations worldwide by 400 passenger aircraft, 17 MD-11 
freighters, and road feeder service. We serve some 65 cities in 
all 48 contiguous States.
    Security is an uncompromised priority and purposeful 
investment at Lufthansa Cargo. All of our U.S. airport stations 
are equipped with self-owned security equipment consisting of 
trace detection and advanced technology X-ray systems at our 
gateway stations.
    The requirement to screen 100 percent did not simply apply 
to screening alone, but also required changes to our 
operations, budget, resource allocation, productivity, and 
processes. Despite these challenges, we are very much pleased 
to report that Lufthansa Cargo will achieve the 100 percent 
outbound screening mandate by tomorrow.
    We commend TSA on its robust communication effort within 
the United States to increase public awareness and 
understanding of the mandate. We also acknowledge their 
extensive efforts in developing and allowing industry to adopt 
a key tool for the success for this mandate within the U.S. 
CCSP program.
    The plan regarding the 50 percent and 100 percent 
milestones were effectively communicated; however, the 
intermediary milestones for both U.S. and foreign in-bound 
cargo were mandated without industry consultation nor adequate 
notice effective May 1 of this year. We encourage TSA to engage 
industry as expeditiously and extensively as possible in order 
to fulfill any necessary incremental requirements.
    Determining the time table for 100 percent foreign in-bound 
screening or any additional interim regulatory steps is 
uncertain. Crucial towards this process is the way TSA will 
plan to engage other governments in order to assess their 
security programs for mutual recognition. Due to the 
complexities of the air cargo industry, we must look beyond a 
one-size-fits-all approach to security, and commend TSA in 
recognizing the complexity of the international air freight 
market.
    The security policy of Lufthansa Cargo is based on risk 
management. Furthermore, our implementation of the European 
Union framework and the German Aviation Security plan provides 
a robust regulated environment for air cargo that has and 
continues to develop.
    EU 300, Rule 185, is a comprehensive program that mirrors 
the basic fundamentals of the TSA regulatory programs for U.S. 
origin flights.
    General EU requirements have adopted a structure with the 
regulated agent and certified consigner that is of familiar 
intent and requirements of the TSA recognized indirect air 
carrier and non-shipper screening under the CCSP program.
    As a regulated entity, we are not in a position to directly 
address the international challenges and concerns which require 
a government-to-government dialogue and engagement on this 
issue. We encourage TSA to adopt an international policy in 
collaboration with foreign governments to address security 
concerns and the development of mutually recognized programs.
    As TSA has provided the tools necessary to complete the 
outbound U.S. screening requirements and have further indicated 
that the CCSP program is critical in meeting the 100 percent 
mandate in the United States, such tools are imperative 
overseas in the area of mutual recognition in order to achieve 
the same level of success.
    Operational testing is critical to evaluate the real life 
challenges demanded of our industry and the complexity of cargo 
commodities and packaging. We urge TSA to bolster and expand 
the field testing of the large aperture screening technologies, 
the current associated restrictions, the expanded research and 
use of trace detection, and the further recognition of 
international canine teams.
    Training is to us an essential component in order to 
effectively operate equipment and carry out security 
requirements. Currently, there is a tremendous disparity within 
the industry on how training and testing is fulfilled. Training 
standards should be reviewed and amended in order to develop a 
stronger framework for the industry.
    In conclusion, ladies and gentlemen, smart security depends 
upon the responsible allocation of justified resources in order 
to invoke the most efficient flow of operations while 
maintaining a balanced and reliable security environment.
    Madam Chairwoman, I thank you again for the opportunity to 
appear before this distinguished subcommittee. We applaud the 
committee and staff on your leadership to address the modes of 
transportation security. Lufthansa Cargo is looking forward to 
continuing a strong dialogue with the committee, TSA, and the 
industry.
    I was very much pleased by the invitation to your House and 
this wonderful city, and I would be pleased to answer any 
questions you may have. Thank you.
    [The statement of Mr. Zielinski follows:]

                 Prepared Statement of Harald Zielinski
                             June 30, 2010

    Chairwoman Jackson Lee, Ranking Member Dent, and Distinguished 
Members of the subcommittee, it is my pleasure to testify before you 
today on behalf of Lufthansa Cargo. Thank you for the opportunity to 
present our views on one of the most important issues facing the air 
cargo industry: Cargo screening.
    My statement today will address several key aspects of the 100 
percent screening requirement and further identify steps towards 
``smart security.'' Based on Lufthansa Cargo's experience, TSA has done 
an outstanding job of developing and communicating about the CCSP and 
ensuring that air cargo stakeholders are aware of the pending August 1 
deadline for 100 percent screening of U.S. origin cargo. In comparison, 
some cases, the confidential security measures, as a result of this 
mandate, were not communicated with sufficient notice. We are unclear 
about how TSA will proceed with measures relating to foreign in-bound 
cargo. Finally, we believe more could be done to evaluate cargo 
screening technologies and to foster the development of applied 
training to support the effectiveness on use of the technologies.
    Deutsche Lufthansa Group Overview.--Please allow me to offer a 
brief introduction of the Deutsche Lufthansa Aviation Group. Our 
portfolio of business units consist of Passenger Airlines services, 
Cargo, Logistics, Technical services as the largest Maintenance Repair 
and Overhaul provider globally, IT services through Lufthansa Systems 
and catering via LSG Sky Chefs. As one of the world's largest airlines, 
Lufthansa currently flies to 191 destinations in 78 countries, with 
hubs in Frankfurt, Munich, and with its recent acquisition of Austrian 
Airlines and SWISS--Vienna and Zurich.
    From our 17 gateways in the United States, Lufthansa serves some 
400 destinations in more than 100 countries. Our Group is proud of the 
10,000 employees living and working in cities and towns across America, 
contributing to local economies and communities. We also believe in 
being a good corporate citizen. Annually we invest hundreds of millions 
of dollars within the United States for goods, services, and equipment. 
This year we celebrate our 50 years of cooperation with the Boeing 
Company, and we are proud to be the launch customer for the new Boeing 
747-8 jetliner--a multi-billion dollar order--that will serve as one of 
the industry's most fuel-efficient aircraft. As an industry innovator, 
this strategic investment embraces our long-standing commitment at the 
Lufthansa Group dedicated to environmental care and sustainability.
    We rely on many U.S. partners and suppliers including General 
Electric, United Technologies, Honeywell and numerous ground handling, 
security, contract, and service providers domestically. In addition, we 
closely cooperate with our Star Alliance partners United Airlines, US 
Airways, and most recently Continental Airlines.
    Specifically for Lufthansa Cargo, we serve 300 destinations 
worldwide by aircraft and/or truck. Currently, we operate with over 400 
passenger aircraft and 17 MD-11 Freighters. Additional capacity is 
available to Lufthansa Cargo through the part ownership of Jade Cargo 
in China operating new Boeing 747 freighters and AeroLogic GmbH with 
new Boeing 777 freighters. Effective July 1 of this year, 102 
additional aircraft from Austrian Airlines will be available to 
Lufthansa Cargo for capacity. Our total U.S. import tonnage in 2009 was 
136,488 Tons. Our total export U.S. Tonnage for 2009 was 123,593 Tons. 
The capacity share is 41 percent freighter vs. 59 percent passenger 
cargo capacity. We serve some 65 cities in all 48 contiguous States by 
our Road Feeder Service.
    Lufthansa Cargo Approach.--Cargo security is an uncompromised 
priority and purposeful investment at Lufthansa Cargo. All of our 
airport stations in the United States are equipped with self-owned 
security equipment consisting of explosive trace detection equipment 
and large aperture, advanced-technology X-ray systems at our gateway 
stations.
    When Congress passed the Implementing Recommendations of the 9/11 
Commission Act of 2007 into law, mandating 100 percent cargo screening 
on-board passenger aircraft in the United States, Lufthansa Cargo 
adopted a comprehensive strategy. This was supported immediately by our 
executive board and senior leadership. For Lufthansa Cargo, the 
requirement to screen 100 percent did not simply apply to screening 
alone, but also required changes to our operations, resource 
allocation, productivity, and processes. We directed extensive funding 
to our United States operations for the investment in technology and 
the cost for increased resources.
    As our business is in the service sector, it is reliant upon our 
customer base. Integral to this strategy was establishing an effective 
communication campaign to promote awareness of the mandate. The key to 
this communication was to ensure an understanding by our customers on 
the need for readiness. Lufthansa Cargo initiated and hosted two 
security conferences in New York in 2008 and 2010 bringing together our 
industry partners and customers, academia, and U.S. Government 
representatives to address the increased regulatory framework in the 
United States. Additionally, we led two security conferences in 
Germany, which included representatives from TSA, in order to continue 
the outreach plan on the U.S. and EU regulatory frameworks and the need 
for mutual recognition of security measures.
    A tremendous effort has been incorporated into our business plan to 
ensure the mandate is accomplished successfully. It is important to 
highlight that these measures were adopted when the economic climate in 
2009 was focused on business survival. I am very proud to report to you 
that these extensive efforts by Lufthansa Cargo will allow us to 
achieve the screening mandate in the United States 1 month early, 
effective July 1, 2010. Albeit a massive challenge, considerable 
resources, money, and time were allocated to adopt and carry out this 
strategy effectively and to ensure a robust business continuity plan.
    U.S.-origin flights.--We commend TSA on its robust communication 
effort within the United States to increase public awareness and 
understanding of the mandate. This included various road-shows, public 
outreach seminars, and webinars to address the dynamics of the 
regulation and the operational challenges to industry. We also 
acknowledge TSA's extensive efforts in developing and allowing industry 
to adopt a key tool for the success for this mandate within the United 
States, the Certified Cargo Screening Program (CCSP). This program, 
although still in its infancy, is critical to ensure all partners share 
in the screening effort to maintain commercial flows, close-out times 
and to limit facility and airport congestion. We would encourage TSA to 
continue the outreach on the CCSP and invigorate the program beyond 
August 1, 2010. We further commend TSA in meeting with specialty 
shippers in the pharmaceutical and sensitive goods markets to encourage 
adopting a plan to ensure the flow of commerce within these markets are 
not impeded.
    Although TSA has been effective in its communication plan regarding 
the 50 percent and 100 percent milestones, intermediary milestones for 
both U.S. and foreign origin cargo were mandated without industry 
consultation and without adequate notice effective May 1, 2010. 
Lufthansa Cargo had strategically aligned our budgets, resource 
scheduling and technology delivery schedules based on the initial 
mandates. In the future, we would encourage TSA to engage industry as 
expeditiously and extensively as possible in order to fulfill any 
necessary incremental requirements. While we recognize that TSA is 
responsible for developing the regulatory protocols, it is critical for 
industry to be well informed in order to best execute these regulations 
on multiple complex operational and management levels.
    Foreign in-bound cargo.--TSA has communicated openly regarding the 
concerns and necessary policy adaptations to properly address 100 
percent screening of cargo on-board passenger aircraft in-bound to the 
United States. However, we are not certain of TSA's time table for 
implementing 100 percent foreign in-bound screening, of any additional 
interim regulatory steps it may take, or of the process by which TSA is 
engaging other governments to assess and recognize their security 
programs and factor this into compliance for foreign in-bound 
shipments. Due to the complexities of the air cargo industry, we must 
look beyond a ``one-size-fits-all'' approach to security. It is 
critical that measures fulfilled under foreign programs that meet or 
exceed the measures anticipated by TSA be fully assessed and evaluated 
for mutual recognition. We are a global company operating in a global 
industry, and duplication and redundancy in implementing multiple 
country-specific cargo security efforts would impede the flow of 
commerce, create unnecessary costs, and diminish efficiencies within 
supply chains. In the air freight market, we need to deliver products 
today, not tomorrow.
    We commend TSA for recognizing the complexity of the international 
air freight market and the need to address the 100 percent in-bound 
criteria with legitimate prudence to preserve trade and commerce among 
global partners, and we stand ready to engage in an active dialogue 
with TSA on this subject.
    The security policy of Lufthansa Cargo is based on risk management. 
Furthermore, our implementation of the European Union framework and the 
German Aviation Security plan provides a robust regulated environment 
for air cargo that has and continues to develop.
    The German Aviation Security Program and the newly released 
European Union Framework 300, Rule 185, is a comprehensive program that 
mirrors the basic fundamentals of the TSA regulatory programs for U.S. 
origin flights. The basic fundamentals implemented thus far in the 
United States are currently mandated or underway for development within 
the European Union and each respective member state. In some areas 
these programs exceed TSA's requirements, such as in the areas of 
access control and employee screening prior to entering the secure 
area. General EU requirements have adopted a structure with the 
regulated agent and certified consignor that is of similar content and 
requirements of the TSA recognized indirect air carrier and known 
shipper who conducts screening under the CCSP program. Any entity in 
the EU issuing the security status of a shipment must be a regulated 
agent approved by the national competent authority. A certified 
consignor within the EU must apply and be subject to site-specific 
audits by the national competent authority. Additionally, road feeder 
service providers must also have a regulated status with the authority 
or be contractually connected to the regulated agent or airline.
    Although we understand and respect that within the regulations 
imposed by TSA the airline is the regulated entity, we are not in a 
position to directly address the international challenges and concerns 
which require a ``government to government'' dialogue and engagement on 
the issues. We strongly encourage this official communication to be 
expedited between TSA and each member state within the EU to discuss 
the existing security measures that are currently applied in the United 
States and respective member state. TSA needs to adopt an international 
policy and program whereas protocols are developed and communication is 
strengthened. As TSA has provided the tools necessary to complete the 
outbound-U.S. screening requirement and have further indicated that the 
CCSP program is critical in meeting the 100 percent mandate in the 
United States, such tools are imperative overseas in the area of mutual 
recognition in order to achieve the same level of success.
    Lufthansa Cargo looks forward to work in continued collaboration 
with Government and industry in the development of future security 
measures as they evolve or change with the continuous assessment of 
risks. In the effective approach to define risk, we recognize 
Government to assess the threats; whereas industry can elaborate when 
it comes to realizing vulnerabilities and business consequence 
modeling. At Lufthansa Cargo we constantly review and evaluate the need 
for future security enhancements. We look forward to the opportunity to 
address a robust, comprehensive security program based on the supply 
chain and not based on the type of aircraft flown.
    Technology for air cargo screening.--We appreciate and recognize 
the requirements in the Implementing the 9/11 Recommendations Act of 
2007 that cargo must be screened to ``commensurate with checked 
baggage'', however, the fact remains that cargo does not have the same 
characteristics as checked baggage. Cargo consists of bulk packaging, 
odd sizes, various commodities and sensitivities that require enhanced 
technology. This would include the requirement to use larger aperture 
X-ray use beyond the current restrictions, expanded research on the use 
of trace detection applications and the further recognition of 
international canine teams. Lufthansa Cargo believes that based on our 
experience in dealing with millions of kilograms and hundreds of 
flights weekly we urge TSA to evaluate the need for requiring 
complicated screening percentage evaluations and manually reported 
data. ``Smart security'' depends upon the responsible allocation of 
justified resources to order to invoke the most efficient flow of 
operations while maintaining a balanced and reliable security 
environment.
    Operational Testing and Training.--Lufthansa Cargo has instituted 
best demonstrated practices for our security operation in the area of 
operational testing and training. In working closely with manufacturers 
we are extensively evaluating and field testing new technologies in 
Europe and the United States. Operational testing is critical to 
evaluate the real-life challenges demanded of our industry and the 
complexity of cargo commodities and packaging. When evaluated outside 
the laboratory environment, the expansion of use for the technologies 
can be effectively realized. We urge TSA to bolster and expand field 
testing of large aperture screening technologies in order to address 
current restrictions. Equally, training is critical in order to 
effectively operate equipment and carry out security requirements. 
Lufthansa Cargo is confident that our training programs surpass any 
previous industry benchmark and believes that effective training will 
demonstrate effective security. Currently there is a tremendous 
disparity within the industry on how training and subsequent testing is 
developed and disseminated to the operational staff and 
representatives. We would welcome any opportunity to review these 
standards with TSA to develop a stronger framework for the industry.
    Through our existing partnerships with TSA in exploring effective 
freighter screening technologies and the early evaluation stages for 
the CCSP program, we look forward to other areas of collaboration where 
we can find suitable solutions for the extremely complex environment 
that poses such significant challenges.
    In conclusion, Madam Chairwoman, I thank you again for the 
opportunity to appear before this distinguished subcommittee. We 
applaud you and the committee and staff for your leadership on the 
numerous efforts to ensure all modes of transportation are secure. We 
at the Lufthansa Group look forward to continuing a strong dialogue 
with you, the TSA and industry to address the challenges specific to 
air cargo. I am pleased to answer any questions you may have.

    Ms. Jackson Lee. Thank you very much for your testimony.
    Mr. Middleton, you are recognized for 5 minutes.

    STATEMENT OF MIKE MIDDLETON, EXECUTIVE VICE PRESIDENT, 
                     SECUREGLOBAL LOGISTICS

    Mr. Middleton. Madam Chairwoman, greetings from your 
constituents in Houston, and distinguished Members of the 
committee, it is my pleasure to be here today represent project 
SecureGlobal Logistics and our frontline efforts in support of 
TSA as a participant in the cargo screening program.
    In our role as an indirect air carrier, we were early 
adopters of TSA's screening program. We were initially 
certified as a cargo screening facility prior to the February 
2009, 50 percent screening requirement. We subsequently applied 
for and were accepted into TSA's pilot program, and we received 
grants enabling us to procure AT X-ray equipment and trace 
detection equipment.
    We have been screening at the 100 percent level since 
February 2009, first using manual inspection techniques and 
later utilizing X-ray and trace technologies provided by TSA 
reimbursement.
    Funding from TSA as a pilot program participant was the key 
for our company to bring technology to bear on the screening 
process. Ours is a low-margin industry and capital funding for 
non-revenue producing services like cargo screening would be 
prohibitive for companies like ours. In fact, in our city, 
there are more than 1,000 companies similar to ours, and yet 
less than 40 have become certified cargo screening facilities. 
Of those, I would suspect that the majority are not purchasing 
technology but only utilizing manual open and inspect 
procedures in order to avoid the substantial capital investment 
required to obtain screening equipment.
    However, manual inspection presents several inherent 
challenges. The first and most obvious is the dependence upon 
the skill set of those who were trained to perform manual 
screening operations. Even with the best of training those 
typically carrying out manual open and inspect are usually 
entry-level employees in most companies. These are typically 
hourly warehouse workers, where turnover rates can be higher 
than normal, and the cost of TSA-mandated training and 
conducting security threat assessments for this more transient 
group of employees can be quite challenging.
    The second challenge to manual open and inspect processes, 
is that it create a bottleneck to the supply chain. Imagine, if 
you will, a company like ours requiring pallets upon pallets of 
cargo with boxes in it and having to break down every single 
pallet, every single box and inspect every single one. Now 
multiply that across the entire customer base that we have, and 
you can see that it can create a substantial bottleneck in the 
supply chain.
    A third challenge to manual open and inspect relates to 
certain sensitive cargoes for which the client would not want 
their cargo opened. There are a host of commodities ranging 
from pharmaceutical to high-tech equipment that just would be 
compromised by the open and inspect method.
    So technology-based screening processes have created better 
alternatives. X-ray and trace detection do not slow down the 
supply chain in the same way as manual inspection. Rather than 
opening each and every box or crate and looking inside complex 
equipment, we simply move the material through an X-ray device 
or swipe it and we can obtain a quick reading.
    Additionally, these X-ray technologies can, in fact, create 
some additional benefit for our client. For instance, we can 
check the cargo inside a box that we are screening by X-ray to 
see if the total number of pieces matches the manifest. If it 
doesn't, we can alert the client in advance. You don't have 
enough pieces in your box based on your manifest. You may want 
to reissue this cargo. Solve a problem for them before the 
shipment ever occurs. We can also check for broken pieces 
inside X-rayed boxes as well and alert the client in advance of 
shipment. These are some advantages of the technology.
    Our cargo can be everything from multiple boxes on a pallet 
to odd length pipe, to very dense valve bodies. Our cargo is a 
wide range of different commodities. By having different 
screening technologies, we can use the different technologies 
to bear on the specific commodities that we are screening and 
match those up appropriately.
    As we approach the August mandate for 100 percent 
screening, facilities like ours are generally well suited to 
the challenge. We have a history of screening at the 100 
percent level, we have already put in place the facility 
security requirements, conducted the training and managed our 
staff properly to be able to conduct this process 
appropriately. In other words, companies that have taken this 
mandate seriously and who have embraced the program will be 
ready.
    However, companies like ours are in the minority. In the 
United States, there are less than 800 certified cargo 
screening facilities. As I mentioned, there are a thousand 
companies like ours in Houston alone.
    I can't speak for all companies, but I do know that for a 
company like ours the cost of program participation can be 
onerous. Facility security measures alone cost us approximately 
$80,000. Training our staff in CCSF procedures and OEM 
equipment training cost approximately $20,000. The X-ray and 
trace detection equipment was $300,000. All in all, we have 
approximately $500,000 invested in the CCSF program. That is 
quite a burden for a company of our size.
    The air carriers can speak for themselves in regard to the 
issues that might impact their operations should the cargo be 
tendered to them primarily unscreened, but we are advising our 
clients that prescreened cargo will receive priority booking 
and will go to the head of the line for loading in aircraft, 
and it is not difficult to imagine that unscreened cargo will 
of necessity take second priority and experience delays until 
the carriers are able to effect screening.
    We are grateful to participate with TSA in this pilot 
program and as a fully functional certified cargo screening 
facility. We make ourselves available to you in the days ahead 
for any additional input we may be able to offer in support of 
the screening programs.
    [The statement of Mr. Middleton follows:]

                  Prepared Statement of Mike Middleton
                             June 30, 2010

    Chairwoman Jackson Lee and Members of the committee, it is my 
pleasure to be here today representing SecureGlobal Logistics and our 
front-line efforts in support of TSA as a participant in the Certified 
Cargo Screening Program.
    By way of overview, SecureGlobal Logistics is licensed by the 
International Air Transportation Association as an air freight 
forwarder, by U.S. Customs as a licensed Customs Broker, and we are 
certified by the Federal Maritime Commission as an ocean freight 
forwarder and NVOCC (Non-Vessel Operating Common Carrier). Our role is 
as an intermediary between the shipper and the air and ocean carriers, 
providing freight handling, bookings, and door deliveries to virtually 
every point internationally. We are also a Service Disabled, Veteran 
Owned Company and participate actively in support of many U.S. Prime 
Contractors who are supplying material to our war fighters in Iraq and 
Afghanistan.
    In our role as an ``Indirect Air Carrier'' we were early adopters 
of TSA's screening program. We were initially certified as a cargo 
screening facility prior to the February 2009 50 percent screening 
requirement. We subsequently applied for and were accepted into TSA's 
Pilot Program and received grants enabling us to procure AT X-ray 
equipment and Trace Detection equipment. We have been screening at the 
100 percent level since February 2009, first using manual inspection 
techniques and later utilizing X-ray and Trace technologies provided by 
TSA reimbursement.
    Funding from TSA as a pilot program participant was the key for our 
company to bring technology to bear on the screening process. Ours is a 
low margin industry and capital funding for non-revenue producing 
services like cargo screening would be prohibitive for companies like 
ours. In fact, in our city there are more than 1,000 companies similar 
to ours and yet less than 40 have become Certified Cargo Screening 
Facilities. Of those, I would suspect that the majority are not 
purchasing technology, but only utilizing manual open and inspect 
procedures in order to avoid the substantial capital investment 
required to obtain screening equipment.
    However, manual inspection whether it occurs at the shipper's 
facility or with an Indirect Air Carrier like our company, presents 
several inherent challenges. The first and most obvious is a dependence 
upon the skill set of those trained to perform manual screening 
operations.
    Even with the best of training, those typically carrying out manual 
``open and inspect'' processes are usually the entry-level employees in 
most companies. These are typically hourly warehouse workers, where 
turnover rates can be higher than normal. The cost of TSA-mandated 
training and conducting Security Threat Assessments for this more 
transient group of employees can be challenging.
    The second challenge to the manual ``open and inspect'' process is 
that it can create a substantial bottle neck to the supply chain. 
Imagine a company like ours receiving dozens of pallets per day and on 
each pallet there might be dozens of boxes. Now imagine someone having 
to open each box, look inside, and inspect for IED components. Multiply 
that scenario by the number of clients moving air cargo through our 
facility each day and you can readily see that our ability to move air 
cargo quickly to the air carrier becomes compromised. And if a customer 
is moving cargo by air rather than by ocean, a much more economical 
mode of transport, they are doing so for a reason; it is time critical. 
Delaying client cargo for a slow, manual screening process is not an 
acceptable business model.
    A third challenge to manual open and inspect relates to certain 
sensitive cargoes for which the client would not want their cargo 
opened. For instance, we have a client who manufacturers equipment over 
which they apply a protective film that if cut, broken, or unsealed, 
can void their warranty. There are a host of commodities from 
pharmaceuticals to high-tech equipment that require various protection 
methods such as seals against moisture penetration and electrostatic 
shock inhibitors which can be compromised by the open and inspect 
method.
    Technology-based screening processes create better alternatives. 
While still performed by the same warehouse personnel with some of the 
same personnel vulnerabilities, X-ray and Trace Detection technologies 
do not slow down the supply chain in the same way as manual inspection 
procedures. Rather than opening each and every box or crate, or looking 
inside complex equipment, we can simply move the material through an X-
ray device or swipe it and obtain a quick reading.
    Additionally these technologies, particularly the X-ray equipment, 
can provide a value-added benefit to our clients. For instance, if the 
shipper's manifest indicates that a box should contain 3 pieces, we are 
able to ascertain via the X-ray process if indeed three pieces are in 
the box. If not, we can alert the client in advance of shipment, 
enabling them to correct the problem before the cargo is moved. This 
saves the client time, money, and potential problems with their buyers. 
With the X-ray equipment we might also determine if there is breakage 
inside the box, again, solving a problem for the client before the 
shipment is moved. These value-added features create opportunities for 
us to sell the advantages of the Cargo Screening Program to a 
suspicious clientele who are concerned that the program will slow down 
their cargo and increase their cost of shipments. That said, X-rays are 
simply a means to see. They require careful and sometimes tedious 
interpretation by the same entry-level warehouse personnel and high 
turnover in such positions creates costly training and retraining 
scenarios.
    Being located in Houston, our primary client base is comprised of 
oilfield service companies. So we are moving everything from neatly 
boxed equipment to manufactured hardware and equipment used in every 
facet of drilling, exploration, and production. Our cargo can be 
everything from multiple boxes on a pallet to odd-length pipe, to very 
dense valve bodies. These varying commodities each present their own 
screening challenges.
    A dense cast iron valve, for instance, cannot be adequately screen 
by X-ray equipment. It has no ability to see inside the valve. In this 
instance, trace detection by swiping the material and reading for 
explosive residue is a better alternative. For clients moving cargo in 
cardboard boxes or wood crates, X-ray provides a fast and efficient 
option. For a single piece of cargo that has no internal elements, 
manual inspection can be done quickly and efficiently. Being empowered 
to utilize multiple screening methodologies enables us to bring to bear 
the most suitable screening technique for a given commodity type.
    One area of criticism in the use of X-ray technologies has been a 
lack of training in IED-specific X-ray interpretation. The primary 
focus of the OEM training was on system utilization such as turning the 
equipment on and off, cleaning, and maintenance. There should be a 
tighter connection between the TSA CCSF training process which does 
provide IED specific training and the X-ray equipment manufacturers who 
simply don't address this subject in their equipment training.
    As we approach the impending August 3 mandate for 100 percent 
screening, facilities like ours are generally well-suited to the 
challenge. We have taken the time to become certified for manual 
inspection. Through the Pilot Program we have obtained both AT X-ray 
and Trace Detection equipment. And with a history of screening at the 
100 percent level for a year and a half, we have already put into place 
the facility security requirements, conducted the required CCSF 
training with our staff and certified our employees on the original 
equipment from the manufacturers of the screening equipment. In other 
words, companies that have taken this mandate seriously and who have 
embraced the program will be ready.
    However companies like ours are in the minority. As mentioned 
previously, there are more than 1,000 companies like ours in Houston, 
Texas alone. Yet in the entire USA there are less than 650 Certified 
Cargo Screening Facilities.
    I cannot speak for all companies, but I do know that for a company 
like ours, the costs of program participation can be onerous. Facility 
security measures alone cost us approximately $80,000. Training for our 
staff in TSA CCSF procedures and training in the OEM equipment amounted 
to approximately $20,000. X-ray and Trace Detection Equipment used in 
our facility totaled approximately $300,000.
    There are few companies in our industry that can afford almost a 
half a million dollars of capital investment for services that are non-
revenue generating. Had we not obtained a grant from TSA for the Pilot 
Program, we would be in the same position as many of our colleagues who 
have no plans to participate in the screening program, will only become 
certified in manual inspection, will outsource this service to a third 
party, or simply leave it to the airlines.
    Even some of the largest companies in our industry are foregoing 
the purchase of equipment in each facility and are opting for regional 
screening centers. This inevitably leads to delays in cargo uplift as 
cargo is trucked from one airport hub to another in an attempt to 
consolidate cargo for screening in a central facility.
    The air carriers can speak for themselves on the issues that might 
impact their operations should the majority of air cargo be tendered to 
them as unscreened. But we are advising our clients of the 
communication we are receiving from various air carriers who are 
advising that pre-screened cargo will receive priority booking and will 
go to the head of the line for loading to the aircraft. It is not 
difficult to imagine that unscreened cargo will of necessity take 
second priority and experience delays until the carriers are able to 
affect screening.
    Once we are past the August 3 deadline and the full impact of the 
mandate can be evaluated, it is possible that new alternatives will 
become necessary. We have spoken with the Houston Airport System about 
the possibility of developing a Centralized Screening Facility on the 
airport property. The concept would require all Indirect Air Carriers 
to tender cargo to a central location where it would be screened by 
professional operators in a controlled environment and transferred 
directly to the airlines. This concept could substantially consolidate 
costs. And, if properly equipped, with automated screening processes, 
could retain the current speed of the supply chain. It is not unlike 
the current passenger screening philosophy currently in use and could 
be either a public/private partnership or a TSA-staffed facility.
    We are grateful to participate with TSA in the Pilot Program and as 
a fully functional Certified Cargo Screening Facility and make 
ourselves available to you in the days ahead for any additional input 
we may be able to offer in support of the screening program.

    Ms. Jackson Lee. Thank you very much for your testimony and 
your participation in the program as well.
    It is now time to recognize Mr. Soler for 5 minutes.

   STATEMENT OF FERNANDO SOLER, OWNER, S.O.S. GLOBAL EXPRESS

    Mr. Soler. I would like to thank Chairwoman Jackson Lee, 
Ranking Member Dent, Chairman Thompson, Ranking Member King, my 
Congressman, and other Members of the subcommittee for if the 
opportunity to testify at today's hearing.
    In addition to our submitted comments, I would like to 
offer the following. First, I am the majority owner of SOS 
Global Express, which is a minority-owned business. From modest 
beginnings 25 years ago, we service our clients around the 
country 24/7/365. We use over 100 airports in all 50 States to 
accomplish our work. We employ over 130 full-time employees and 
provide them with competitive wages, 100 percent company-paid 
medical benefits, 401(k), and additional compensation.
    Second, SOS Global is typical of thousands of small and 
medium-sized forwarders all across this Nation. We support the 
highest level of security for air cargo. Like safe highways are 
vital to the trucking industry, safety in air cargo is 
paramount. We are concerned that TSA's current path to 100 
percent screening will substantially hurt the small and medium 
businesses in our industry.
    We believe the CCSP program is a valid and appropriate 
approach for many companies. However, our company and thousands 
of others have needs not addressed by this program.
    In our business model, like many others, our cargo is 
picked up and taken directly to the airport by our trucking 
companies. We don't own or use warehouses to clear the vast 
majority of our freight.
    For us to participate in CCSP, we would have to set up 
warehouses and screening equipment at over 100 airports which 
would cost between $150- and $500,000 per facility. Although 
CCSP is a good fit for many shippers, it will not work for the 
business models of our clients. Today, many of our clients do 
not have products waiting to ship from a warehouse. Instead, 
they use many third parties to supply inventory for immediate 
demand, which means that we have to make cargo pickups in many 
different places.
    Third, as a non-CCSP company, we will face significant 
delays and cost in getting our freight onto planes. Any delay 
in the movement of air cargo is unacceptable to our clients. We 
are very concerned airlines will drop screening options and/or 
cargo services at smaller airports to focus on bigger markets. 
We are also very concerned about increased prices and delay.
    Announced screening fees for August are running from 10 to 
33 percent higher than last year's costs. We expect to see more 
and higher. This is especially difficult for small forwarders 
and shippers with little pricing power. Airlines are also 
promising faster access to flight for screened cargo, put non-
CCSP companies at competitive disadvantage. Without equal and 
open access to move air cargo, we are marginalized and 
effectively limited to compete.
    Finally, today America is a world leader in air cargo. Any 
shipper of any size can compete globally using the passenger 
cargo system with or without a freight forwarder. Our clients 
are usually small and medium businesses that depend on low cost 
and effective movement of air cargo to compete in the global 
marketplace. We need a level playing field and cost-effective 
options to offer our clients.
    In order to ensure that small and medium forwarders like 
SOS continue to have a level playing field and a fair shot to 
compete within the air cargo industry, we have called on TSA to 
establish and operate Federal air cargo screening facilities at 
all airports. We believe these facilities should operate in 
conjunction with CCSP and airline screening.
    We also believe that these facilities should be paid for 
with a per pound screening fee rather than taxpayer dollars.
    Finally, we believe this will allow SOS and others to 
continue competing while continuing to meet the 100 percent air 
cargo mandate.
    Again, I would like to thank the committee for this 
opportunity and would be happy to answer any questions.
    [The statement of Mr. Soler follows:]

                  Prepared Statement of Fernando Soler
                             June 30, 2010

                              INTRODUCTION

    I 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 present testimony 
for today's hearing.
    Today's hearing topic--what steps does the Transportation Security 
Administration need to take to 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 percent 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.
    I am honored to testify today as the owner of SOS Global Express, a 
small freight forwarder based in New Bern, NC. We ship cargo on 
passenger planes out of more than 120 airports Nation-wide on an annual 
basis and employ approximately 150 employees in eight States. In the 
areas that we operate, our employees make wages that are substantially 
higher than others with similar educations and we are proud of our 
ability to help them provide for their families.
    I am also speaking as a founding member of the Air Cargo Security 
Alliance (ACSA). ACSA is a coalition of over 300 Indirect Air Carriers, 
direct shippers, 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, 
the presence of Federal screening centers 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 percent 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 TSA 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 percent of all 
cargo be screened by February of 2009, and require 100 percent 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 percent screening mandate will be 
significant--in a 2007 study, the Center for American Progress 
estimated the total costs of screening 100 percent 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, TSA announced that it 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 that require 100 percent of all cargo transported on 
narrow-bodied planes (airplanes that have only one aisle) to be 
screened. Due to the fact that participation in the CCSP has not been 
robust, compliance with this rule, which became effective on October 1, 
2008, has fallen largely on the shoulders of air carriers.

                  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 supplemented by 
Federal air cargo screening centers at America's airports in order to 
ensure that all companies have the ability to utilize the air cargo 
network.
    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 (which is often owned by a third-party and leased by 
the forwarder)--and typically 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 with 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, since TSA's announcement of the narrow-body screening 
program, 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 eventually 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 percent 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.
            the need for federal air cargo screening centers
    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 and operate Federal air cargo screening centers that will 
operate at all American airports.
    Such Federal screening centers would ideally:
   Be funded by a per-pound screening fee 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, and
   Work in conjunction with the CCSP program.
    The presence of such screening centers at American airports 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 air cargo.
    If TSA were to implement ACSA's proposal and establish Federal 
screening centers, they would:
   Protect 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
   Allow U.S. businesses to continue to complete globally--by 
        ensuring that they can continue to rely on air cargo services 
        to get their products into the market in a timely and reliable 
        manner.
    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 percent screening mandate without Federal 
screening centers 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 Federal air cargo 
screening centers 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. Thank you very much, Mr. Soler, for your 
testimony, and thank very much all the gentlemen for your 
presentation today and accepting my invitation.
    It is now my pleasure to yield to the gentleman, Mr. 
Austria, for 5 minutes for his questioning.
    Mr. Austria. Thank you, Chairwoman Jackson Lee and thank 
you to the entire panel for your testimony. I appreciate you 
taking time out of your busy schedules to be here.
    First of all, let me just follow up, Mr. Soler, with your 
testimony, if I may. You mentioned that you believe that the 
Federal screening centers can work in conjunction with the 
TSA's Certified Cargo Screening Program. You are looking at 
leveling the playing fields, in other words?
    Mr. Soler. Correct.
    Mr. Austria. Let me just, in your testimony, you mentioned 
that in order to ensure survival of many of our small 
businesses, numerous small companies that make up a significant 
part of the air cargo industry, TSA needs to establish Federal 
air cargo screening centers at all American airports. You also 
mention that these Federal air cargo screening centers would 
ideally work in conjunction with the CCSP program, and that is 
where my question comes in.
    How do you envision the Federal screening centers would 
operate in conjunction with CCSP program? If TSA provided 
Federal screening center options, you know, wouldn't that 
undermine the CCSP program, or can you help us understand how 
you envision that working together?
    Mr. Soler. Sure. CCSP is a wonderful program for certain 
types of shippers. If you are a manufacturer bringing in raw 
materials on the front side of your building and exporting it 
out the back, you have a grand opportunity to use CCSP to 
inspect your cargo and have it arrive at the airport untouched 
from there forward.
    Unfortunately, that doesn't really bring a lot of value to 
a lot of other shippers that do not have brick and mortar, that 
rely on third-party warehouses, rely on vendors to supply 
materials, on immediate demand for export or movement.
    They can coexist. The value of CCSP is to the companies 
that use it themselves, such as a museum. A museum would love 
nobody to touch or open their packages like antiques, things 
like that. However, there are many other companies that have to 
take cargo from places that are not CCSP, such as a third-party 
warehouse, and immediately get it to the airport for export, 
for transportation. In air cargo minutes count. So if you take 
it to a different facility to then offload, screen, reload, and 
go, you will spend significant dollars and time.
    Mr. Austria. I appreciate that. But let me also follow up, 
without participation in the CCSP program and valid 
implementation of the Federal air cargo screening centers, is 
there any other way that your company and other small 
businesses or small companies, in your opinion, along with 
other IACs, will be able to meet the upcoming 100 percent 
screening mandate? I know it is a big concern with small 
companies.
    Mr. Soler. Oh, absolutely. Well, we would like to think of 
this as plan B that was mentioned earlier, but we have talked 
to stakeholders, we have talked to the Congress, we have talked 
to the TSA. We have had various meetings with the TSA. We are 
very open to anything that allows a level playing field, allows 
us and our clients to operate effectively and efficiently.
    They are using the cargo system to compete globally. They 
can't allow--they won't allow additional costs to filter in. So 
we are open to anything that makes sense.
    However, we have looked hard at it, we have talked to a lot 
of people. This seems to make sense for a lot of not only 
freight forwarders, direct shippers. There are very large 
companies that use the airlines directly that have nothing to 
do with a freight forwarder for many years, and their whole 
history, and they need an open airport. They need access to the 
flights. It is their lifeline. It is their sales for the year.
    Mr. Austria. Let me kind of move to the other end of the 
panel. Mr. Meenan, much of your testimony was devoted to the 
lack of technology capable of significantly screening large air 
cargo pallets. You indicated that a practical solution remains 
to be found with the eventual TSA certification screening 
technology to address these concerns.
    Has ATA, in your opinion, in collaboration with TSA, seen 
any progress in developing technology that can adequately 
screen these type of cargos, such cargo?
    Mr. Meenan. There are a number of technologies in 
development. They have not been certified at this point as 
satisfying TSA's requirements. We think many of them hold a 
great deal of promise. We think more investment needs to be 
made in that area. Certainly Government investment could be of 
assistance as well.
    One of the great interim steps that we believe is very 
valuable is the expanded use of canines, as we mentioned 
repeatedly. They are the best thing we have got going at this 
point in terms of being able to handle some large shipments 
that would not otherwise be capable of being screened in an 
efficient manner. So that is sort of the low-tech solution 
until we get that certified equipment out there, is more paws 
on the pavement, as we put it.
    Mr. Austria. One other question if I may, Madam Chairwoman. 
Let me ask Mr. Zielinski, with your company and your situation, 
what is Lufthansa's capacity for screening cargo bound for the 
United States? Because I know you already have infrastructure 
in place in the United States with out-bound flights, and how 
hard is that to replace that, this process, for your last point 
of departure, airports bound for the United States?
    Mr. Zielinski. It is definitely a burden for us to fulfill 
the 100 percent security as requested in-bound to the United 
States.
    I cannot share with you in front of the public the number 
of shipments we are screening for flights into the United 
States, but earlier mentioned by the gentleman from TSA, there 
was a number by 65 percent. We are doing more than this 
mentioned 65 percent by screening cargo in-bound to the United 
States.
    I have to explain maybe a little bit the system on European 
cargo. Screening is not the only thing we are doing to secure 
cargo. There is a secure supply chain, and I can guarantee 
for--as the one who is charge for responsibility beside those 
which are not screened--100 percent of our shipments leaving 
for the United States and for any other destination is 100 
percent secured without any doubt.
    Mr. Austria. Thank you and thank you to the panel. I yield 
back the rest of my time, Madam Chairwoman.
    Ms. Jackson Lee. Thank you very much, Mr. Austria, for your 
questioning. I think that all of these questions that Members 
are asking will move us closer to our goal, and that is to 
stand, as I said, in the breach between the American people and 
those who desire to do us harm. So we thank all of you for your 
involvement.
    Mr. Meenan, let me try to discern how we are doing as U.S. 
carriers and whether or not U.S. carriers have worked with 
foreign governments in meeting their screening requirements and 
has U.S. cargo screening mandate put the U.S. carriers in a 
better position to meet screening mandates in foreign countries 
such as the United Kingdom?
    Mr. Meenan. We work with both the foreign governments and 
the U.S. Government. We are regulated by the TSA as far as the 
security requirements are concerned, but when we are serving a 
foreign government, we are there at the sufferance of the host 
government we work with and comply with their security 
requirements as well.
    As the TSA witness has testified, it is a complicated 
process. You have got sovereign nations on both sides of the 
water on most of these flights, and it is really something that 
we look to the governments to work out the appropriate 
understandings between themselves.
    As we are really the party in the middle here, we try to 
satisfy, we do satisfy the demands on both sides. But I think 
it is far more efficient if we can get the governments to agree 
among themselves so that we don't end up having to duplicate 
procedures in Europe and again in the United States and 
carriers coming from the United States to Europe don't have to 
do the same kind of thing.
    Ms. Jackson Lee. But as it presently stands, do you try to 
cooperate with the laws of the countries of which you are 
engaged with?
    Mr. Meenan. Absolutely. We do cooperate. We are there 
essentially at the sufferance of those countries, and we are 
honored to cooperate with their laws because that is part of 
the way we do business.
    Ms. Jackson Lee. The movement that we have now in screening 
standards that we have now established, including our march 
towards 100 percent screening on in-bound, but is that helping 
our U.S. carriers work better at times with the government such 
as the United Kingdom?
    Mr. Meenan. I can't comment specifically to the 
relationship with the United Kingdom, but the fact is that the 
standards applied in different countries are technically 
different in some instances, and the way TSA might decide to 
provide security may not be identical with, but in many cases, 
the foreign government will say that its measures are more 
effective. TSA might say that it is measures are more 
effective. So you get really a mix of different perspectives on 
things.
    We believe the best way to resolve this is for the 
governments themselves to establish the meeting of the minds 
where they both can understand the procedures in place in the 
various countries and they can, just as we do on certification 
of aircraft and safety issues, we honor the foreign 
authorities' expertise as much as they honor ours and we work 
in a mutually supportive way in that environment.
    Ms. Jackson Lee. Would you perceive domestic carriers that 
have been screening all cargo on narrow-body aircraft since 
2008--I guess the question is: Domestic carriers have been 
screening all cargo on narrow-body passenger aircraft since 
2008: What are the challenges in screening cargo going onto 
wide-body aircraft?
    Mr. Meenan. Well, as I said, the cargo on narrow-body 
aircraft in general is not containerized, and so it is 
generally smaller shipments, it is individual cartons, it is 
things that are more susceptible to being screened using 
existing technologies.
    The cargo that is carried on wide-body aircraft is 
generally palletized or containerized in some way prior to its 
delivery to the airport. That actually is the great bulk of air 
cargo that is carried. It is 75 percent of the cargo. It is 
carried in wide-body aircraft in palletized or containerized-
type circumstances.
    Those containers and pallets are not susceptible to 
screening using the existing technologies that have been 
certified to date, and that is why we are so eager to see more 
work devoted to accelerating that certification effort. In the 
mean time, as I say, one of the better alternatives, we 
believe, remains canines, and we are continuing to work with 
TSA on that front as well.
    Ms. Jackson Lee. Mr. Soler has made a suggestion that we 
have Federal screening sites at every airport. What do you 
think about that proposal?
    Mr. Meenan. I would defer to the TSA on that. That is 
something, you know, we are where we are in implementing the 9/
11 Act at this point. We are close to July 1 with 100 percent 
deadline on August 1. The decisions have been made as to how, 
why we got here and how we got here. I think, reversing course 
at this point presents a number of difficulties, but I am not 
really the one to be answering that kind of question.
    Ms. Jackson Lee. Well, let me do this. Let me put TSA aside 
and ask you what would be your assessment of the challenges of 
having that kind of structure?
    Mr. Meenan. It is a matter of the application of TSA 
resources. We believe that under the current arrangement going 
forward to August 1 that the technology and the equipment and 
the facilities and the investments that we have made to this 
point will facilitate the flow, the continued flow of air 
cargo.
    There may be some difficulties that are encountered. We 
anticipate that. We are hopeful they will not be significant, 
but as the process proceeds, I think we will have a better 
understanding of whether or not what we believe has been done 
to date will be sufficient to take care of the interests of the 
shippers.
    There may be some delays. It may encourage people to do 
some additional things to get that cargo moved to the front of 
the line as opposed to be waiting to be screened at the 
airport.
    But I think the bottom line, as far as we are concerned at 
this point, is that Congress and the administration has made 
the decisions that has brought us to this point and we are 
prepared to go forward.
    We clearly accept that come August 1, no cargo will board 
any of our aircraft that isn't compliant with TSA regulation. 
If those regulations change, if there is another way to 
facilitate that, if there are better ways to approach this, we 
are certainly amenable to that.
    Ms. Jackson Lee. If that is not the case, however, that 
would mean going back to point A, would it not?
    Mr. Meenan. As I say, we are hopeful and reasonably 
confident that we have the facilities to take care of shipments 
as they are expected at this point. We certainly are always 
amenable to looking at these things again and certainly having 
TSA look at them again.
    I think Mr. Sammon's point was a valid one, that 
encouraging people to be compliant with this is the best way to 
really facilitate getting the program in place.
    Ms. Jackson Lee. I think you are referring to his second 
grade homework story.
    Mr. Meenan. I wouldn't use that analogy.
    Ms. Jackson Lee. I thought it got the point over.
    Mr. Meenan. He did.
    Ms. Jackson Lee. I think that if we give options, or I 
think we always want to look for a new idea. But if we give 
options, we are in the category of starting again from point A 
on something that is enormously serious.
    Mr. Zielinski, again, we appreciate you being here. So we 
ask the question from your perspective how TSA can work more 
effectively with foreign governments to establish reciprocal 
screening agreements. Can foreign air carriers assist in this 
process?
    My assessment is that as a member of the Foreign Affairs 
Committee, I am very respectful of sovereign governments, but 
this is a very slow, painful process. Do you have any insight 
on how this can be moved along more quickly? I imagine you 
might comment on the European Union or European Commission that 
is working on some of these issues.
    Mr. Zielinski. Thank you, ma'am. I definitely cannot 
comment on the European Commission but I am observing the 
process going on. It is painful, definitely.
    We, as airline representatives, have contacts to TSA and 
other entities doing cargo security all over the world, but 
there is a lack of mutual recognition, harmonization, and 
conversation, I would say. I was told by the senior 
representatives of the European Commission just a few days ago 
there is a movement to be seen, but it took quite a long time, 
without any doubt.
    But from my perspective, it is still a challenge, and we as 
an industry, we are absolutely keen to help and open doors by 
talking to the European Commission. As I said, there is a 
movement going on, a positive one, and also as a representative 
of a German airline in talking to the German government, I was 
told on my return I have the possibility to talk to senior 
representatives of the Ministry of Traffic in Germany and 
already spoke to the gentleman of the TSA to arrange as 
facilitator, maybe, for a meeting between those governments.
    All I can do is sharing information. The mutual 
recognition, and the further steps have to be done between the 
governments.
    Ms. Jackson Lee. As you assess the task that we have, is 
there a more effective way of working with foreign governments 
as it relates to this air cargo question?
    Mr. Zielinski. If I got your question right, ma'am.
    Ms. Jackson Lee. Do we work through our colleagues such as 
yourself or are there other methods for TSA to work?
    Mr. Zielinski. I would say they should, as soon as 
possible, they should look for direct contracts to the 
representatives of the European Commission and the government 
involved. We can be helpful for that, but the initiation, if I 
may, must come from one side, and there is still a lack of 
communication. Not as big as it has been, but we are working 
really hard. The industry is working really hard on closing 
this lack.
    Ms. Jackson Lee. We will work on that, and that is to both 
collaborate with our colleagues such as yourself and then work 
to directly connect with governments.
    We know that the European Union is on its way to 
establishing air cargo standards. Do you have an assessment, 
because of your travels and expertise, of what the particular 
hotspots may be around the world that would be more difficult 
to implement these standards?
    Mr. Zielinski. Difficult to be answered by me, ma'am. I am 
traveling all over the world, especially in the European Union, 
and see the great harmonization done by the European Commission 
in the past. It is definitely the case, from my personal 
perspective, we are not reaching always the absolute same way 
of reaching security, as it may be written in this law, because 
there is space for definitions left.
    But I have to say from my perspective, we are very close to 
a very, very good security regime, mirroring the most, and it 
seems not to be known here all the time, mirroring very close 
the sense of the U.S. security regime for cargo. Therefore, I 
am repeating myself, it would be the first and most important 
step that this would cover from my personal perspective at 
least 50 percent of the open questions, to sit together, to 
combine and to see where the measures are mirrored to each 
other and to mutual--recognize what the other countries are 
doing.
    I don't see any serious threat on my side, not at all, by 
the European regulations. As always, there is room for 
improvement. But coming back to my statement, they should sit 
together, and this is my recommendation, and discuss really 
where obstacles are left but I guess they are not so much any 
more. Good conversation could solve many of those open 
questions.
    Ms. Jackson Lee. So I think your premise is that we work 
together with members of the European Union and look at 
obstacles but try to resolve them together.
    Would you see outside of the European Union any challenges 
and hotspots around the world?
    Mr. Zielinski. Yes, ma'am. Please don't get me wrong if I 
say I do not like to mention hotspots on aviation security in 
front of the public. I know many, many countries where maybe 
there is room for improvement, definitely.
    When it comes to an airline like ours, but I guess this is 
for other airlines the same, all security measures are based on 
the risk metrics. We do not fly cargo out of cities or 
countries where we do not trust in the security measures. But 
we always fulfill the requested rules by the EU 300 and 185. So 
to make sure that for an airline like ours there is no piece of 
cargo anywhere on board which is not secured under the best and 
reliable circumstances. Not the best given circumstances, we 
may take the opportunity not to fly, not to export cargo from 
several countries, but again, please, this is confidential. I 
would love to share that later with you in another meeting but 
not in front of the public, please.
    Ms. Jackson Lee. We thank you for your explanation. What I 
would leave you with is, one, we will accept that opportunity, 
I will have staff work with you on how we can communicate that 
information. But just answer this plain, straightforward 
question: There are hotspots around the world?
    Mr. Zielinski. Yes, ma'am.
    Ms. Jackson Lee. Thank you. Thank you very much for your 
testimony.
    Mr. Middleton, again, thank you again for coming from 
Houston and representing the industry and, of course, the 
business community that has been engaged in this process.
    Just let me ask you about a component of the TSA 
certification, and that is the ability to review technology 
that may be designed.
    Would you speak to me about some of the challenges of maybe 
a newly discovered technology that SecureGlobal Logistics might 
have and how challenging the review process in Science and 
Technology in DHS has been?
    Mr. Middleton. Absolutely. We partnered with a company 
called ICx Technology just about 18 months ago to bring in a 
prototype that had been in use in Iraq screening parcels for 
the U.S. military. The equipment is called ParcelPoint. It is 
actually a multisensor technology that screens for chemical, 
nuclear, radiological, biological.
    The thing that we like about this technology is that it is 
not only scanning for IED, but it is a multi-threat detection 
system.
    The other thing that we like about it is it is an automated 
system. It is not dependent upon user intervention or user 
interpretation. So the skill set for those operators utilizing 
the equipment can be quite varied.
    The other aspect of it that we like is that its portal can 
basically be sized to any size requirement. So it could screen 
at the pallet level, it could screen at the piece level. We 
have had Dr. Anne Hultgren in from Science and Technology as 
well as other members from Homeland Security and TSA 
demonstrating this equipment, and they have reviewed the 
equipment and promised to take it under consideration.
    Again, we started that process about 18 months ago. We have 
not seen any of that approval process come out of the other 
side of that chain yet, but I do know that there are 
technologies like this that are available currently. If we 
could get approval speedily done, they could be put into place. 
That could increase supply chain velocity and not inhibit it. 
From a commercial standpoint, that is a major consideration.
    Ms. Jackson Lee. Is there any suggestion on moving this 
oversight over vetting the technology faster?
    Mr. Middleton. Well, I would have to leave that to the 
experts at TSA. I am not familiar with their process for 
approval or how their systems work. I do know that placing 
equipment in an environment like ours, where you can do live 
testing, I think has great value to it. I know they have to 
test in a controlled setting, but we have had this equipment in 
our facility for a long time and have had the opportunity to 
test it on a daily basis, to be able to stream live data in 
terms of its performance.
    I believe those types of scenarios could be quite 
beneficial to Homeland Security as well.
    Ms. Jackson Lee. How long has it been placed in your 
facility?
    Mr. Middleton. We have had it just over 18 months.
    Ms. Jackson Lee. Give us again where it stands with DHS?
    Mr. Middleton. Still under review.
    Ms. Jackson Lee. You submitted it how long ago?
    Mr. Middleton. Approximately 18 months ago.
    Ms. Jackson Lee. I would just like to state for the record 
that time frame and ask that we get a report from TSA, 
generally speaking, on the time frame of the vetting of 
technology and specifically speaking on the inquiry regarding 
this technology, particularly since it has been utilized in 
Iraq. So I would appreciate that response coming.
    Let me continue my line of questioning. We are going to 
reach, I believe, the 100 percent screening. We have just heard 
from TSA, the technology approach that they are taking and the 
research that they are doing to meet the standards set by the 
law. What are you hearing from your colleagues in the industry 
on being able to make 100 percent cargo screening by August 
2010?
    Mr. Middleton. I will speak both from my client level as 
well as the colleague level.
    Ms. Jackson Lee. Do you see any challenges in making that 
goal?
    Mr. Middleton. I absolutely do. I know that the model is 
built around a high degree of participation by shippers. I can 
tell you that out of the thousands of shippers that we work 
with, I have only one that has actually shown any interest 
whatsoever in becoming a certified screening facility.
    The shippers see it as our issue, as the airlines' issue, 
not as their issue.
    In terms of my colleagues in the freight forwarding 
industry, there has been a watch and see approach. I think to 
some extent there has been some concern that the system or that 
the program would change and they didn't want to make a 
commitment to purchase equipment until they saw that the system 
itself was going to be solidified, the program itself. So there 
has been some reluctance to embrace the program.
    I think now that we are facing the impending deadline in 
August, many of them are beginning to panic and recognize that 
they need to get certified at some level. Most of them have 
great concerns about their financial ability to be able to 
acquire the technology. So most of them, if they are going to 
become certified, are planning to do so on a manual basis only.
    As I outlined in my presentation in the beginning, manual 
open and inspect has great limitations to it.
    Ms. Jackson Lee. So you see the obstacles as confusion or 
lack of resources or lack of commitment?
    Mr. Middleton. I think it is all of the above. But I 
believe commitment has been a huge part of this.
    I believe that many in our industry have been unsure or 
uncertain that this mandate was going to hold. I think, to your 
credit, you should hold the time frame and require that people 
get in line with the program.
    Ms. Jackson Lee. Well, I would say this, we hope that this 
hearing sends a signal that we are serious, that TSA is 
serious, and that we all need to work together. We need to 
understand the challenges, but we need to work together.
    If I can have this message recorded, shippers should begin 
to assess their resources and ability to move forward to make a 
full commitment to compliance with the law. It will be 
enforced.
    I think part of the reasoning was evidenced today, maybe 
not so much by testimony, but by some of the anecdotal comments 
made by Congressman Markey, who seems to have a district that 
has become quite instructive of what can happen.
    We are trying to stand in front of what can happen. So I 
think it is important for shippers to partnership with you and 
companies like yours so that we can work out the solutions.
    I am very glad to hear these concerns, and we are going to 
work with TSA on these points that you have made.
    Let me pursue the line of questioning, if I might. Should 
there be more Federal funding or resources such as grants 
awarded to the private sector to purchase screening technology? 
Does this create an economic disadvantage to firms not 
receiving Federal assistance for screening equipment, sort of 
going back to the point, I think, that you have just made?
    Mr. Middleton. Well, I think funding is absolutely 
necessary. I think in order for us to get a broad-based 
platform of screening facilities to handle the volume of cargo 
that is going to move through the system, we have to have more 
participants with more technology. Funding is the drawback to 
the use of technology. So I think without a doubt we have to 
find a way to release funding to create additional screening 
centers.
    Now, that can create competitive obstacles, as was already 
mentioned. I don't know how we resolve that issue, quite 
frankly, unless we go to a centralized screening concept.
    But I think to go back to a centralized screening concept 
at this point would be difficult. We have gotten to this point 
with the program, and I think going backwards would be a 
significant step back.
    Ms. Jackson Lee. I think you would understand that in the 
scheme of responsibilities of this Government as a whole, 
Federal screening centers cast all over the country would be 
almost an enormous challenge of impossibility. We believe in 
the possibility of the impossible, but that would be an 
enormous challenge.
    So you believe that we could work with extra resources and 
grants that would help bring a number of these companies in 
line?
    Mr. Middleton. I do. In fact, we are already beginning to 
work with our colleagues in a way that is almost unprecedented 
for our industry. I have other freight forwarders coming to me 
asking if we will partner with them to provide screening for 
their cargo.
    Now, that is almost unheard of in our industry, because the 
exposure of your client base from one company to another is 
something that no one wants to risk. Yet they understand that 
the cargo must be screened and they need to work with someone 
that has the technology to do that. So we are seeing almost 
unprecedented cooperation with colleagues in this regard.
    I think it is because the mandate has been made and people 
are looking for creative alternatives. I think if we stick to 
that you will see these types of solutions arise.
    Ms. Jackson Lee. Well, we will look forward with this 
committee being in touch with all of you so that we can be 
apprised of the obstacles as we proceed toward a very firm 
date.
    I might just finish, Mr. Middleton, with you, to try to 
assess whether you feel that this is a burden of small 
businesses and whether expanding on your earlier answer what 
can be done to lessen that impact.
    What do you consider your shippers' size in terms of the 
general population which your company deals with?
    Mr. Middleton. I am sorry, what was the last part of your 
question?
    Ms. Jackson Lee. The shippers that you deal with, what 
range or size are they?
    Mr. Middleton. Oh, I see. Well, we work with companies that 
are quite large. Being in Houston, Texas, obviously, we are the 
oil field capital of the world and so we work with some of the 
largest oil field companies in the world, and we work with 
companies of that size down to very small mom-and-pop type 
operations.
    But in terms of the impact on companies like ours, I would 
say one of the areas that I think there must be some 
collaboration is between the OEM equipment manufacturers and 
TSA with regard to training. The OEM manufacturers train you on 
how to turn the equipment on and how to service it.
    TSA has told us how to screen for IEDs, but there is very 
little bridging between the training that we receive from TSA 
and the original equipment manufacturers. In other words, we 
need to know how to utilize X-ray machines and trace detection 
equipment in a way that is more specific toward the detection 
of IEDs than the training that comes from the OEM 
manufacturers.
    So some bridging of training between these two entities, I 
think, would be very important in helping us to do a better job 
as screeners on the front line of this process.
    Ms. Jackson Lee. That would be training that would 
complement the TSA with the manufacturers?
    Mr. Middleton. That is correct.
    Ms. Jackson Lee. That kind of side-by-side training or 
expanded training.
    Mr. Middleton. That is correct.
    Ms. Jackson Lee. Mr. Meenan, do you have any comment on the 
training element?
    Mr. Meenan. I think because of the experience of our people 
operating this equipment, they are pretty well up to speed. I 
would suspect that some of the other players in the industry 
today who are getting into the security business for the first 
time have not had that level of experience.
    Ms. Jackson Lee. Let me follow up, Mr. Soler. Thank you, 
Mr. Meenan. I just wanted to see if you had an added comment on 
that. Mr. Middleton, thank you.
    Mr. Soler, we want to be helpful to you. Do you have a list 
of your membership? How large is your membership?
    Mr. Soler. It is approximately 300 members.
    Ms. Jackson Lee. So would you be willing to work with the 
committee so that we can assess how we might be helpful on this 
question that you have raised?
    Mr. Soler. Absolutely.
    Ms. Jackson Lee. Would grants help your membership in some 
of the requirements that we have in place?
    Mr. Soler. We would never turn down money. I find that 
would probably be just problematic. Again, we are bringing 
freight to a certain point outside the airport for screening 
that is coming, many times, from long distances to bring into a 
facility.
    There are concerns where the screening process off the 
airport is just problematic. It works for some, it is 
wonderful. It is a very, manufacture-base type of thinking. But 
in a service economy, many clients are going from their vendors 
directly to their point-of-sale, their construction project or 
so on. So going to many, many CCSPs at the airport becomes 
quite a problem.
    We would take the money, obviously. We would take, and we 
would be thrilled to help the process.
    Our key point is a level playing field. Our key point is 
cost. A lot of these ideas bring a lot of costs into the 
equation for transportation, and our clients are extremely 
cost-sensitive in a global marketplace that demands an 
efficient process and a price.
    Ms. Jackson Lee. At the same time many stakeholders say 
that the private sector can screen more effectively and 
efficiently than the Government sector. Do you not agree with 
that if the right kind of procedures and resources are in 
place?
    Mr. Soler. Oh, I am sure, absolutely. I think that private 
screeners can compete with anybody. We don't have any problem 
with that. We question whether you really need the number of 
CCSPs Nation-wide to process the cargo and that in and of 
itself is a very effective method. But, it certainly can be 
very competitive.
    We are not saying the Federal Government should be the 
answer; we are saying the Federal Government should allow the 
small and medium businesses of the industry, as freight 
forwarders and shippers, the opportunity to compete as well 
as--and let the marketplace decide who are the winners and 
losers.
    Ms. Jackson Lee. Well, I imagine if we instructed the 
Government to do the millions and millions of pounds of cargo, 
we certainly might expect some level of delay if we didn't 
include the private sector, would you not think so?
    Mr. Soler. Oh, absolutely. In our vision CCSP and airline 
screening is a partner in this process. It is a very big 
business. There is a lot of cargo. It needs to be spread out.
    Ms. Jackson Lee. Well, let me take you up on your offer and 
have staff try to discern the issues more carefully and, as we 
understand it, there are about 300 members, and are those 
members in one region of the country?
    Mr. Soler. No, we are dispersed throughout the United 
States. As a matter of fact we have one in your district and we 
also have one in Congressman Austria's district as well, 
throughout the United States.
    Ms. Jackson Lee. Well, we will look forward to your 
constructive input on how we move the very firm date that we 
now have for domestic screening at 100 percent and then the 
progressive structure that we now have for the international 
in-bound cargo that is coming in. We think your testimony has 
been instructive, but we want to move to solve those concerns 
as quickly as possible.
    Let me just ask this last question of the gentlemen, 
starting from Mr. Meenan. How important do you think moving 
forward on the screening of cargo at the level of 100 percent 
is to the Nation's security, both domestic and then as we move 
forward for international?
    Mr. Meenan. We obviously think, we take the law very 
seriously. We understand why it was put in place, and we are 
committed 100 percent to compliance with the law.
    You know, it is, there is nothing more important to the 
airlines than the safety of their passengers and their crews, 
and this is just another measure, another set of measures, 
another layer to improve the security overall.
    Ms. Jackson Lee. Internationally, Mr. Zielinski, how 
important do you think it is to have a worldwide standard that 
allows us to screen airplane cargo?
    Mr. Zielinski. To me, Madam, it is the top importance of 
all to have screening harmonized and having 100 percent 
screening to make sure there is nothing harmful inside any 
shipment.
    That is our top target, anyhow, worldwide, for operation. 
We as a company do security on our own, especially in Europe, 
using our own machines, our own stuff. But worldwide, again, it 
is the No. 1 target for our industry to offer 100 percent 
security for our customers as soon as possible.
    Ms. Jackson Lee. Thank you very much. Mr. Middleton, your 
assessment of how important this effort is.
    Mr. Middleton. Well, we believe it is very important. That 
is why we were early adopters of the CCSF program. We also look 
forward to the day when this becomes a multimodal requirement 
and a multisensor requirement so that we are looking for all 
threats, not just IED, and believe that when that day 
approaches that we will be that much closer to a standard that 
fully secures our country.
    Ms. Jackson Lee. Thank you, Mr. Middleton. Mr. Soler, is 
this an important step that we are now making?
    Mr. Soler. Absolutely. We believe that air cargo security 
is paramount, it is the whole goal. It is vital to the health 
of the industry, long term, short term. We are anxious and 
ready to participate in every level that we can possibly afford 
and practically provide.
    Also, I would like to point out that everybody here has a 
Houston office at some point. I do, too.
    Ms. Jackson Lee. Well, I am delighted that that is the 
case. Members are enriched by the presence of businesses in 
their Congressional district. So thank you very, very much.
    Let me acknowledge to the witnesses, as I close, these 
simple comments regarding this hearing and to thank the 
previous panel, the Government witnesses, and to particularly 
thank Panel II, which gives us more than a bird's-eye view into 
the work that we have to do, the challenges that we have.
    Mr. Middleton, I think you are right. I look forward to a 
day of multimodal concepts and would never want us to be 
narrowed into one way of looking at a target or a potential 
target of materials or items to be shipped, because whenever we 
do that we obviously limit our ability to secure the homeland.
    I think this is key for one reason. As we sit in this 
building and proceed with this hearing, there are how many 
takeoffs and landings of families and businesspersons and 
others, for whatever reason, are flying in the Nation's 
airlines and in the international group of airlines.
    As we sit here comfortably in this building, there is no 
question that there are possibilities of someone attempting to 
do us harm. That was the way it was on the very bright, shining 
day on September 11, 2001, and not a single person in this room 
will forget where they were and how bright a day in most parts 
of the country that day was.
    So we hold this hearing for that very reason, and we ask 
for you to be present for that very reason. We are 
interconnected around the world. One tragedy in Germany is a 
tragedy that impacts the American people, and one tragedy in 
the United States as well impacts the people in Europe and also 
around the world.
    So your testimony was crucial today. We will look forward 
to working on some of the issues that have been broached and 
raised here. We may have additional questions, and I would hope 
that you would provide us those answers in writing.
    The committee will look forward to you expeditiously 
providing us with those answers, and we will speak to some of 
you as we ask some questions that you indicated that you would 
provide to us in a manner away from the public setting. We 
respect that, and we will look forward to having that occur.
    Hearing no further business, the subcommittee stands 
adjourned.
    [Whereupon, at 5:20 p.m., the subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              

 Questions From Chairwoman Sheila Jackson Lee of Texas for John Sammon

    Question 1. What is TSA's plan and schedule for negotiating 
harmonization agreements with foreign countries regarding explosives 
detection screening for in-bound cargo? Specifically, what countries is 
TSA engaging with to establish a system to screen in-bound cargo on 
passenger aircraft in accordance with Section 1602 of the 
``Implementing Recommendations of the 9/11 Commission Act of 2007''?
    Answer. Response was not received at the time of publication.
    Question 2. Explain the scope of training, including screening and 
secure transport protocols, provided by TSA to private sector employees 
regarding the implementation of security provisions required of 
Certified Cargo Screening Program (CCSP) participants.
    Answer. Response was not received at the time of publication.
    Question 3. According to the Government Accountability Office (GAO) 
analysis of TSA's screening data, shippers, and independent Certified 
Cargo Screening Facilities (CCSFs) are to screen approximately one-
third of all domestic cargo traveling on passenger aircraft in order 
for TSA to meet the 100 percent screening mandate; however, as of March 
2010, shippers and independent CCSFs only screened about 2 percent of 
such cargo. How does TSA plan to increase CCSP participation among 
shippers so that cargo is effectively screened in the supply chain 
without dislocations and undue delays?
    Answer. Response was not received at the time of publication.
    Question 4. How many personnel does TSA have dedicated for 
inspecting and certifying CCSFs, and for training employees at CCSP 
firms?
    Answer. Response was not received at the time of publication.
    Question 5. What cargo screening exemptions are currently in place 
for passenger aircraft cargo and what are TSA's plans to address or 
eliminate these exemptions?
    Answer. Response was not received at the time of publication.
    Question 6. What is the current backlog of firms who have applied 
to have a facility certified as a CCSF but have not yet had the 
facility approved for certification?
    Answer. Response was not received at the time of publication.
    Question 7. What is the current number of TSA proprietary and non-
proprietary canine teams engaged in cargo screening activities? Will 
this amount increase or stay the same over the next 12 months? What is 
TSA's schedule for implementing a pilot program to test the safety and 
reliability of third-party explosives detection canine teams?
    Answer. Response was not received at the time of publication.
    Question 8. What provisions has TSA made for the screening of 
perishables cargo carried on passenger aircraft?
    Answer. Response was not received at the time of publication.
    Question 9. What quality control measures has TSA implemented to 
verify reported screening data from private sector CCSP participants?
    Answer. Response was not received at the time of publication.
    Question 10. What are TSA's plans for re-chartering the Aviation 
Security Advisory Committee (ASAC) and its Cargo Working Group? Outside 
of the ASAC, how is TSA engaging with stakeholders on CCSP 
implementation?
    Answer. Response was not received at the time of publication.
    Question 11. Will enacting the 100 percent screening mandate make 
the Known Shipper program obsolete? With scarce resources available to 
both industry and Government, is Known Shipper an unnecessarily 
duplicative program, given that all cargo will be screened for 
explosives on and after August 3, 2010?
    Answer. Response was not received at the time of publication.
    Question 12. What are the available technologies certified by TSA 
for screening large palletized cargo? What coordination is taking place 
between TSA and DHS S&T in developing screening technologies for large 
palletized cargo?
    Answer. Response was not received at the time of publication.

                                 
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