Who Is Going to Pay for Air Cargo Screening?

“Legislate first, analyze later (if at all)” has been the rule Congress has followed ever since 9/11, passing costly mandates without any solid analysis of what they will cost or how effective they’re likely to be. That’s certainly true of such feel-good measures as the large expansion of air marshals and the $5 billion a year passenger and baggage screening circus we’ve been stuck with since shortly after 9/11.

More recently Congress decided to close a “loophole” in airline security. To be specific, although every piece of checked luggage must, by law, be screened for explosives, packages and cargo pallets go into the same cargo holds in the belly of passenger planes with only spot-checks and assurances that they have been sent to the airport by “known shippers,” vetted by the Transportation Security Administration. To be sure, this approach to airline “belly cargo” is inconsistent with the 100% checked-bag screening requirement. But the alternative way of fixing the inconsistency would be to shift the policy on checked bags to something more sensible and less costly.

But 100% belly cargo screening is now the law, and understandably, airlines, airports, and freight forwarders are upset about this new unfunded mandate. The big problem is not small packages, which is mostly what goes in the belly compartments of single-aisle planes like 737s. The problem occurs with wide-bodies (like 767s) whose belly is large enough to hold cargo pallets. Those large pallets often include lots of different items shrink-wrapped onto the pallet—making an object way too big for the kinds of expensive CAT-scan-type devices used for luggage screening. Unless, that is, the pallet is disassembled and the individual items sent through the scanner—a labor-intensive and time-consuming process.

So the freight forwarders are asking for federal funding to help them buy the much bigger machines they’d need to scan entire pallets. It’s an understandable request, and I’m generally on the side of those faced with costly unfunded mandates from government. But this example raises the larger question of who should pay for aviation or transportation security—all taxpayers, or those who use a particular mode of transportation? Air cargo competes with other modes of shipping—trains, trucks, and ships. If aviation is, in fact, a much bigger terror target than these other modes, shouldn’t the cost of shipping by air reflect that higher cost of securing that mode? If the freight forwarders have to pay for the machines themselves, that cost will get factored into the cost of shipping goods by air rather than via some other mode.

They do this in Canada by means of a tax on aviation customers aimed at covering the full cost of aviation security. The alternative is simply to let the providers of air transportation pay the costs of whatever security is mandated, and build that cost into what they charge their customers. Today, in the United States, we use a patchwork mix of airline and passenger security taxes, general taxpayer funding, and mandated private-sector expenditures (unfunded mandates). It would be far cleaner and more transparent to do it Canada’s way.

But more than anything else, we need to start making aviation security (and all homeland security) policy based on risk-analysis and cost-effectiveness analysis. That would very likely reduce the cost substantially, regardless of who pays for the resulting security expenditures.