The cost of lax security

The cost of lax security

With shippers increasingly wondering where their security charges to cargo carriers are going, the government is offering clearer information on the costs of failing to meet anti-terror strictures.

The Transportation Security Administration detailed a list of offenses and related fines that could cost air-cargo carriers and forwarders up to $25,000 per offense for violating rules aimed at guarding the country against airborne terrorism.

When the Homeland Security Act of 2002 became law, maximum security violation fines for passenger and all-cargo air carriers rose to $25,000 per infraction from a ceiling of $10,000. The TSA now has issued its detailed guidelines about the levels of fines that may be levied against air carriers and airfreight forwarders for specific infractions.

The rules range from guidelines for perimeter security around air-cargo operations to screening of shippers and freight handlers. Cargo operators say they have spent millions of dollars since Sept. 11, 2001 to harden their operations against potential terrorism. Many companies have added security surcharges to pay for the new defenses.

The TSA guidelines issued on Feb. 18 set maximum, moderate and minimum levels for fines. For airlines, maximum fines range from $18,000 to $25,000; moderate fines from $9,000 to $17,999; and minimum fines from $2,500 to $8,999. For both airports and indirect air carriers, the maximum fine range is $6,000 to $10,000; the moderate range is $3,000 to $5,999; and the minimum range is $1,000 to $2,999.

Before the Homeland Security Act took effect in January 2003, the maximum fine for carriers was $10,000, and the maximum for other parties was $1,100.

Examples of reasons to impose maximum-level fines on airlines include not complying with TSA-issued security directives, failing to meet security requirements regarding accepting, controlling and screening cargo and not properly securing aircraft and restricted areas at airports.

The TSA said carriers and forwarders that alert the agency to problems on their own are likely to be treated more leniently than those who show violations under an investigation or, worse, try to cover it up.

As with other aviation-related fines, one security problem can result in more than one security violation and therefore multiple fines.

Some airfreight carriers are concerned that the new enforcement strategy will be uneven, with different standards being followed across the U.S.

"The proof is sort of in the pudding on this one, how it's actually done," said Stephen A. Alterman, president of the Cargo Airline Association. "I'm a little bit concerned about lack of oversight from the national headquarters just because I'm concerned about consistency of application. But that's a theoretical concern, and we won't know until it actually happens."

Although passenger fines, including against individuals who try to carry prohibited items aboard flights, have gotten the most press, many of the fine categories focus on cargo security and on indirect air carriers who tender cargo to airlines.

Alterman said he has no problems with the fine levels, which should not concern his member airlines, he said, if they follow proper security procedures. "It's no big deal for the industry if it's correctly applied," Alterman said. "It could hurt the industry. But if correctly applied, the only way this would be a financial hurt for any airline is if they've done something majorly wrong."

Not everyone is skeptical. David Wirsing, executive director of the Airforwarders Association, said clarifying the penalty process could help the industry do its job better. He said that at first glance, the TSA document does not appear to invoke changes.

David Bolger, a UPS spokesman, said the Atlanta-based company's chief concern is that the regulations be applied consistently and uniformly.

"They seem to be decentralizing many of the procedures, bringing it down to the local level," Bolger said. "And it really depends on the details. It depends on if there's uniformity in this decentralization and if Miami's operating like Cleveland does and like LA. If there's consistency, then I think decentralization could be effective."