```

[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]

               SECURING AIR CARGO: INDUSTRY PERSPECTIVES

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                           TRANSPORTATION AND
                          PROTECTIVE SECURITY

                                 OF THE

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 25, 2017

                               __________

                           Serial No. 115-24

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

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

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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Sheila Jackson Lee, Texas
Mike Rogers, Alabama                 James R. Langevin, Rhode Island
Jeff Duncan, South Carolina          Cedric L. Richmond, Louisiana
Lou Barletta, Pennsylvania           William R. Keating, Massachusetts
Scott Perry, Pennsylvania            Donald M. Payne, Jr., New Jersey
John Katko, New York                 Filemon Vela, Texas
Will Hurd, Texas                     Bonnie Watson Coleman, New Jersey
Martha McSally, Arizona              Kathleen M. Rice, New York
John Ratcliffe, Texas                J. Luis Correa, California
Daniel M. Donovan, Jr., New York     Val Butler Demings, Florida
Mike Gallagher, Wisconsin            Nanette Diaz Barragan, California
Clay Higgins, Louisiana
John H. Rutherford, Florida
Thomas A. Garrett, Jr., Virginia
Brian K. Fitzpatrick, Pennsylvania
Ron Estes, Kansas
                   Brendan P. Shields, Staff Director
             Kathleen Crooks Flynn,  Deputy General Counsel
                    Michael S. Twinchek, Chief Clerk
                  Hope Goins, Minority Staff Director
                                 ------                                

         SUBCOMMITTEE ON TRANSPORTATION AND PROTECTIVE SECURITY

                     John Katko, New York, Chairman
Peter T. King, New York              Bonnie Watson Coleman, New Jersey
Mike Rogers, Alabama                 William R. Keating, Massachusetts
Clay Higgins, Louisiana              Donald M. Payne, Jr., New Jersey
Brian K. Fitzpatrick, Pennsylvania   Bennie G. Thompson, Mississippi 
Ron Estes, Kansas                        (ex officio)
Michael T. McCaul, Texas (ex 
    officio)
             Krista P. Harvey, Subcommittee Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable John Katko, a Representative in Congress From the 
  State of New York, and Chairman, Subcommittee on Transportation 
  and Protective Security:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Bonnie Watson Coleman, a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Transportation and Protective Security:
  Oral Statement.................................................     4
  Prepared Statement.............................................     8
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................    28

                               Witnesses

Mr. Stephen A. Alterman, President, Cargo Airline Association:
  Oral Statement.................................................     9
  Prepared Statement.............................................    11
Mr. Brandon Fried, Executive Director, Airforwarders Association:
  Oral Statement.................................................    13
  Prepared Statement.............................................    15
Mr. Michael C. Mullen, Executive Director, Express Association of 
  America:
  Oral Statement.................................................    16
  Prepared Statement.............................................    17
Mr. Bart Elias, Specialist in Aviation Policy, Resources, 
  Science, and Industry Division, Congressional Research Service, 
  Library of Congress:
  Oral Statement.................................................    22
  Prepared Statement.............................................    23

                             For the Record

The Honorable Bonnie Watson Coleman, a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Transportation and Protective Security:
  Statement of the Air Line Pilots Association, International....     5

                                Appendix

Questions From Ranking Member Bonnie Watson Coleman for Stephen 
  A. Alterman....................................................    39
Questions From Ranking Member Bonnie Watson Coleman for Brandon 
  Fried..........................................................    40
Questions From Ranking Member Bonnie Watson Coleman for Michael 
  C. Mullen......................................................    41

 
               SECURING AIR CARGO: INDUSTRY PERSPECTIVES

                              ----------                              

                         Tuesday, July 25, 2017

             U.S. House of Representatives,
                Subcommittee on Transportation and 
                               Protective Security,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:02 p.m., in 
room HVC-210, Capitol Visitor Center, Hon. John Katko (Chairman 
of the subcommittee) presiding.
    Present: Representatives Katko, Watson Coleman, and Estes.
    Also present: Representatives Higgins, Fitzpatrick, 
Keating, and Thompson.
    Mr. Katko. The Committee on Homeland Security Subcommittee 
on Transportation and Protective Security will come to order.
    The subcommittee is meeting today to examine the current 
challenges to air cargo security, and assess Homeland Security 
policies and industry perspectives in order to better to 
protect air cargo. I now recognize myself for an opening 
statement.
    Terrorists are relentless in their efforts to target 
aviation. No matter how much we improve our security posture, 
they are always willing to adjust and pursue new ways to hurt 
us. As a recent laptop threat illustrates terrorists capability 
and persistence to target aviation is still very real today.
    Despite the creation of TSA and DHS and the major 
improvements to passenger screening and security after 9/11, 
our enemies have continued to find new avenues for attack. 
However, we as a Nation have always faced these challenges 
head-on and dedicated ourselves to harnessing innovation and 
collaboration in order to mitigate the threat.
    Our efforts to enhance cargo security demonstrate this 
dedication and resilience. In October 2010, two explosive 
devices concealed in cargo passages were discovered on separate 
flights originating in Yemen and bound for the United States.
    These explosives, disguised as printer cartridges, were 
only found after being transported on both passenger and cargo 
flights thanks to a tip from Saudi Arabian intelligence. We 
know all too well what the threat to passenger aircraft can do 
and has done to affect air travel in our global economy.
    The 9/11 attacks led to major overhauls of our 
transportation and aviation security sectors. Initially the 
attacks were made less inclined to--made people less inclined 
to travel and feel less confident in the Government's ability 
to stay ahead of the numerous threats facing this country.
    The potential impact is nearly identical for cargo 
security. Terrorists do not discriminate between a passenger 
plane and a cargo plane. They just want the image of a Western 
plane being brought out of the skies. Their desired impact is 
still the same; that it will change your way of life, instill 
fear in the American people, and leave us questioning our 
existing security infrastructure.
    While bringing down a cargo plane may not lead to the same 
number of casualties as a passenger plane, they can have a 
broader impact on our open and free society, leading to more 
regulations, slower supply chain operations, and major economic 
damage.
    Air cargo is crucial to the global economic engine--35 
percent of the total world trade value is carried by air--35 
percent. Over the next 20 years it is predicted that world air 
cargo traffic will grow 4.2 percent per year.
    Air cargo will remain a huge part of the modern globalized 
economy, which is why it is absolutely paramount that we do all 
we can to protect it. In order to continue our efforts to 
protect and secure air cargo, the Government and industry must 
work together and maintain a constant dialog.
    While cooperation is essential through all aviation 
security, it is especially important for cargo where every 
security decision made has a direct impact on the economy. We 
need the manufacturers, shippers, freight forwarders, and 
everyone else involved in the supply chain to engage with 
Congress and Homeland Security to explain how security 
decisions are impacting their businesses and what else can be 
done to address potential vulnerabilities.
    I commend Homeland Security for working with industry and 
seeking input as it aims to stay one step ahead of the threats 
we face on a daily basis. While we in Congress often blame the 
bureaucracy of the executive agencies, Homeland Security has 
made a concerted effort to think creatively in the cargo 
security space.
    The certified cargo screening program and the use of K-9s 
and technologies for domestic screening as well as the Air 
Cargo Advanced Screening pilot program and the National Cargo 
Security program for international screening, are evidence of 
those innovative ways TSA is approaching air cargo security.
    However, there is always more that can be done, and many 
questions that need to be answered. Is TSA adapting fast enough 
to the evolving security threats and economic issues involved 
in air cargo? Are there new technologies that could improve 
both security and supply chain speed?
    Why are third-party K-9 teams not authorized for screening 
cargo, especially where certain technologies are incapable? 
This is where Congress can assist.
    As you are all aware, this committee addressed many of 
these issues in our bipartisan Homeland Security Authorization 
bill that overwhelmingly passed the House last week. It is the 
first reauthorization of Homeland Security ever.
    The authorization bill mandates permanent implementation of 
the Air Cargo Advanced Screening program, which will ensure 
that customs and TSA have access to important security data and 
enhanced screening, excuse me, enhanced ability, excuse me, to 
protect against threats to air cargo.
    The bill also direct TSA to issue standards for certifying 
third-party K-9s for use in the air cargo sector. This will 
expand the number of K-9s available for cargo screening and 
enhance security in an operationally efficient manner.
    We appreciate the input from all of our witnesses today as 
we seek to improve the security of the homeland, especially the 
air cargo sector. We believe these improvements in the Homeland 
Security Authorization bill will have positive impacts on both 
the security and efficiency of the air cargo sector.
    But we know there are many more that can be addressed. We 
ask all of our witnesses today to continue to do what you have 
always done, and that is give us your honest feedback and 
perspective on the challenges we face with air cargo and what 
else can be done to improve both security and industry options.
    I think I speak for myself and Mrs. Watson Coleman and 
other Members of this committee that we always welcome your 
input. It is only--we are here together to make this country a 
safer place and that make our transportation system safer.
    We must maintain an open dialog and continue to support a 
strong collaboration between industry and Government in order 
to successfully mitigate this very real threat. I thank all of 
you for being here today and for your continued support and 
engagement with this committee.
    [The statement of Chairman Katko follows:]
                    Statement of Chairman John Katko
                             July 25, 2017
    Terrorists are relentless in their efforts to target aviation. No 
matter how much we improve our security posture, they are always 
willing to adjust and pursue new ways to hurt us, and as the recent 
laptop threat illustrates, terrorists' capability and persistence to 
target aviation is still very real today.
    Despite the creation of TSA and DHS--and the major improvements to 
passenger screening and security after 9/11--our enemies have continued 
to find new avenues for attack. However, we as a Nation have always 
faced these challenges head-on, and dedicated ourselves to harnessing 
innovation and collaboration in order to mitigate the threat. Our 
efforts to enhance cargo security demonstrate this dedication and 
resilience.
    In October 2010, two explosive devices concealed in cargo packages 
were discovered on separate flights originating in Yemen and bound for 
the United States. These explosives--disguised as printer cartridges--
were only found after being transported on both passenger and cargo 
flights, thanks to a tip from Saudi Arabian intelligence.
    We know all too well what the threat to passenger aircraft can do, 
and has done, to affect air travel and our global economy. The 9/11 
attacks led to major overhauls of our transportation and aviation 
security sectors. Initially, the attacks made people less inclined to 
travel and feel less confident in the Government's ability to stay 
ahead of the numerous threats facing the country.
    The potential impact is nearly identical for cargo security. 
Terrorists do not discriminate between a passenger plane and a cargo 
plane. They just want the image of a Western plane being brought down. 
And their desired impact is still the same--that it will change our way 
of life, instill fear in the American people, and leave us questioning 
our existing security infrastructure. While bringing down a cargo plane 
may not lead to the same number of casualties as a passenger plane, it 
can have a broader impact on our open and free society--leading to more 
regulations, slower supply chain operations, and major economic damage.
    Air cargo is crucial to the global economy. Thirty-five percent of 
the total world trade value is carried by air. And over the next 20 
years, it's predicted that world air cargo traffic will grow 4.2 
percent per year. Air cargo will remain a huge part of the modern, 
globalized economy, which is why it is absolutely paramount that we do 
all we can to protect it.
    In order to continue our efforts to protect and secure air cargo, 
the Government and industry must work together and maintain a constant 
dialogue. While cooperation is essential for all aviation security, it 
is especially important for cargo, where every security decision made 
has a direct impact on the economy. We need the manufacturers, 
shippers, freight forwarders, and everyone else involved in the supply 
chain to engage with Congress and DHS to explain how security decisions 
are impacting their businesses and what else can be done to address 
potential vulnerabilities.
    I commend DHS for working with industry and seeking input as it 
aims to stay one step ahead of the threats we face on a daily basis. 
While we in Congress often blame the bureaucracy of the executive 
agencies, DHS has made a concerted effort to think creatively in the 
cargo security space. The Certified Cargo Screening Program and the use 
of canines and technologies for domestic screening, as well as the Air 
Cargo Advance Screening pilot program and the National Cargo Security 
Program for international screening, are evidence of the innovative 
ways TSA is approaching air cargo security.
    However, there is always more that can be done and many questions 
that need to be answered. Is TSA adapting fast enough to the evolving 
security threats and economic issues involved in air cargo? Are there 
new technologies that could improve both security and supply chain 
speed? Why are third-party canine teams not authorized for screening 
cargo, especially where certain technologies are incapable?
    This is where Congress can assist. As you are all aware, this 
committee addressed many of these issues in our bipartisan DHS 
Authorization bill that overwhelmingly passed the House last week. The 
Authorization bill mandates permanent implementation of the Air Cargo 
Advance Screening program, which will ensure that CBP and TSA have 
access to important security data and enhanced ability to protect 
against threats to air cargo. The bill also directs TSA to issue 
standards for certifying third-party canines for use in the air cargo 
sector. This will expand the number of canines available for cargo 
screening and enhance security in an operationally efficient manner. We 
appreciate the input from all of our witnesses today as we seek to 
improve the security of the homeland, especially the air cargo sector.
    We believe these improvements in the DHS Authorization bill will 
have positive impacts on both the security and efficiency of the air 
cargo sector. But we know there may be more that can be addressed. We 
ask all of our witnesses today to continue to do what you have always 
done--give us your honest feedback and perspective on the challenges we 
still face with air cargo and what else can be done to improve both 
security and industry operations. We must maintain an open dialogue and 
continue to support a strong collaboration between industry and 
Government, in order to successfully mitigate this very real threat.
    I thank all of you for being here today and for your continued 
support and engagement with this committee.

    Mr. Katko. Now, I am pleased to recognize the Ranking 
Member of this subcommittee, the gentlelady from New Jersey, my 
friend, Mrs. Watson Coleman for her opening statement.
    Mrs. Watson Coleman. Thank you, Chairman Katko. Thank you 
for holding today's hearing, and I would also like to thank our 
witnesses for joining us today and sharing their expertise. 
Today's topic, air cargo security, is not one that usually 
receives a lot of headlines and attention, yet it is critical 
to our economy.
    In fact, according to the International Air Transport 
Association, air cargo accounts for approximately 35 percent of 
the value of all products that are traded world-wide.
    An attack on our cargo industry could have devastating 
effects on commerce. Since many cargo department shipments are 
made and are placed in the belly of passenger planes, such an 
attack could also result in significant loss of life.
    Unfortunately, the lack of headlines surrounding air cargo 
has not kept it hidden from our adversaries. As Chairman Katko 
has stated, in 2010, terrorists attempted to hide bombs inside 
printer cartridges that were shipped out of Yemen. Only a last-
minute intelligence tip from a foreign partner prevented these 
explosives from flying on an aircraft bound for the United 
States.
    While no similar attempts against cargo have been reported 
since 2010, terrorists continue to seek new ways to attack our 
transportation systems. Given the threat, TSA must consistently 
partner with industry stakeholders to enhance air cargo 
security.
    Next week will mark the 10th anniversary of one of the most 
significant Homeland Security laws ever enacted, the 
Implementing Recommendations of the 9/11 Commission Act of 
2007.
    Our leader on this panel, Ranking Member Thompson, was the 
author of this measure, that, among other things, required 100 
percent screening of cargo on domestic and international in-
bound passenger flights within 3 years.
    Complying with this mandate was a massive undertaking for 
TSA and industry, and we should all be very proud that together 
they were able to achieve compliance for domestic passenger 
flights in 2010 and international inbound passenger flights in 
2012.
    The 10-year anniversary of the passage of the Implementing 
9/11 Commission Act is a great time to reflect on how far we 
have come and to be grateful that no attacks against our air 
cargo system have been carried out.
    However, we cannot rest on our laurels. We must constantly 
improve our security to keep up with the evolving threat. We 
must continue to prioritize the security of our transportation 
systems and invest in security measures that really make a 
difference, like those that help secure our cargo rather than 
wasting billions on a border wall that will not improve 
security.
    Additionally, we cannot allow the attention we rightfully 
pay to passenger security to come at the expense of focusing on 
air cargo security. Just as the threat landscape constantly 
evolves, so too does the nature of commerce.
    The emergence of e-commerce sites like Amazon and eBay has 
caused a seismic shift in not only how Americans buy goods, but 
also their expectations about how quickly they will receive 
them. This, of course, has huge implications for the air cargo 
sector.
    I will be interested in hearing from our witnesses on how 
these changes are affecting air cargo security, as well as what 
changes industry, TSA, and Congress should consider to improve 
security.
    I do believe it is important that we hear from all of our 
stakeholders.
    With that Mr. Chairman, I would like to ask unanimous 
consent to submit testimony for the record from the Airline 
Pilots Association.
    [The information follows:]
      Statement of the Air Line Pilots Association, International
                             July 25, 2017
    The Air Line Pilots Association, International (ALPA), represents 
more than 57,000 professional airline pilots flying for 33 airlines in 
the United States and Canada. ALPA is the world's largest pilot union 
and the world's largest non-Governmental aviation safety organization. 
We are the recognized voice of the airline piloting profession in North 
America, with a history of safety and security advocacy spanning more 
than 85 years. As the sole U.S. member of the International Federation 
of Airline Pilots Associations (IFALPA), ALPA has the unique ability to 
provide active airline pilot expertise to aviation safety and security 
issues world-wide, and to incorporate an international dimension to 
safety and security advocacy.
                                overview
    We applaud the subcommittee's demonstrated interest in cargo 
security by holding this hearing. ALPA was at the forefront of today's 
adoption of risk-based security because airline pilots have a vested 
interest in ensuring the safety and security of their flights to the 
maximum, practical extent. Airline pilots feel a strong moral and 
professional obligation to safeguard the millions of passengers and 
tons of freight carried on their aircraft each year. Our members are 
concerned that another successful, large-scale terrorist attack against 
aviation could severely damage the North American and/or world's 
economies and greatly harm, or even destroy, their profession and 
livelihood.
    In the world of cargo operations, however, the level of concern is 
especially acute. Since September 11, 2001, and the establishment of 
the Department of Homeland Security and its sister organization, the 
Transportation Security Administration, there have been significant 
improvements made to address security threats to passenger airline 
operations. From the reinforcement of cockpit doors, advances in 
screening technologies, to the expansion of the Federal Air Marshal 
Service and other layers of security, passenger airline security 
measures have been aggressively deployed to address emerging threats. 
Unfortunately, the same cannot be said regarding all-cargo operations 
which in many ways continue most of the same security measures that 
were in place on September 11. This situation exists despite evidence 
that, according to intelligence sources, terrorists continue to show 
the desire to utilize cargo aircraft as a weapon against the United 
States, and our allies.
    On October 28, 2010, British police were called to the East 
Midlands airport at 3:28 a.m. to check out a suspicious package that 
was shipped aboard a UPS airplane. The parcel contained a printer with 
an ink cartridge and protruding wires, and a circuit board partly 
covered in a white powder; it was ultimately determined that the parcel 
contained explosives. After further investigation, a plot originating 
in Yemen was uncovered that included similar explosives loaded onto a 
total of four cargo aircraft, which were to be used in a coordinated 
attack.
    At the recent Council for New American Security Conference, 
Homeland Security Secretary John Kelly stated, ``The threat has not 
diminished. In fact, I am concerned that we are seeing renewed interest 
on the part of terrorist groups to go after the aviation sector--from 
bombing aircraft to attacking airports on the ground.''
    The threat continues to be real, ever-evolving, and is not focused 
solely on passenger carriers.
                   needed cargo security improvements
    All-cargo airlines fly the same types of aircraft, take off from 
the same airports, use the same airspace, and fly over the same cities 
as passenger aircraft. From both safety and security standpoints, 
therefore, there is every reason to hold cargo operations to the same 
standards as passenger operations.
    The air-cargo supply chain is a complex, multi-faceted mechanism. 
It begins when a shipper tenders goods for transport, and it 
potentially involves numerous intermediary organizations such as 
Indirect Air Carriers (IACs), freight forwarders, and other industry 
personnel who accommodate the movement of goods. Ultimately, a shipment 
is received by air carrier personnel, loaded on an airliner, and 
delivered to its intended destination. An effective air-cargo 
protective system must focus on the components of the entire supply 
chain, and anticipate opportunities for, and provide reasonable 
measures to prevent or interrupt, the perpetration of malicious acts. 
Such a system must certify the integrity of the goods that are offered 
and the reliability of the shipper, verify the trustworthiness and 
proper training of all personnel who maintain access to shipments, and 
ensure a reliable, secure operating environment as tendered goods move 
through the system. Significant progress has been made in better 
securing the portion of the air-cargo supply chain that is facilitated 
by passenger airline operations, but there is considerably more work to 
do in the all-cargo domain. Following are several areas in which we see 
on-going threats and our recommendations for addressing them.
    Fortified Cockpit Doors.--After September 11, 2001, the Federal 
Government required existing and future passenger airliners, but not 
all-cargo airliners, to be equipped with reinforced flight deck doors. 
Notwithstanding this fact, some cargo airlines have voluntarily 
installed hardened flight deck doors on their aircraft. Today, however, 
a significant number of all-cargo airliners are still operated without 
the benefits of hardened flight deck doors, leaving them without a 
means of adequately separating the flight crew from personnel riding 
aft of the bulkhead and potential cargo-hold stowaways. In fact, new 
wide-body cargo airplanes are being built and delivered to all-cargo 
operators without the protections afforded by the reinforced door. The 
potential for a significant lapse in security due to these conditions 
is magnified by the fact that all-cargo airliners frequently carry 
third-party, non-crew personnel (known as ``supernumeraries''), such as 
couriers and animal handlers. This situation is exacerbated by the fact 
that all-cargo airliners and their cargo are not afforded the same 
security protections as their passenger-carrying counterparts while on 
the ground.
    The lack of a mandate for reinforced flight deck doors on cargo 
aircraft is hard to justify when the Government has stated that it 
considers the hostile takeover of an all-cargo aircraft to be a 
critical risk. Events in the post-9/11 era have proven that stowaways 
represent a very real and significant threat to all-cargo airliners. To 
deter those persons with malicious intent and impede their ability to 
attack all-cargo flight crewmembers, gain access to aircraft controls, 
or otherwise execute a hostile takeover of an all-cargo airliner, 
physical barriers must be designed and installed to separate the all-
cargo airliner's flight deck from accessible passenger and cargo areas. 
All-cargo flight decks must be clearly delineated and physically 
protected in the same fashion as the flight decks of passenger 
airliners, including the provision of reinforced flight deck doors and 
enhanced flight deck access procedures for crew members.
    All-Cargo Aircraft Security on the Ground.--The lack of protection 
of all-cargo aircraft at airports is one of the most significant 
differences between passenger and all-cargo security practices. 
Employees at passenger airlines and around passenger terminals must go 
through an extensive security process as well as security screening in 
many instances to be granted authority to enter security identification 
display areas (SIDA) unescorted. Flight ramps and gates for passenger 
operations all fall within the SIDA. In contrast, ramp areas used by 
cargo aircraft may not be required to be included in an airport 
operator's SIDA, and if not, they are more easily accessible. In some 
cases, they are protected solely by a locked door or a chain-link 
fence, neither of which may be monitored. SIDA protections should be 
mandated for air operations areas of all airports that support FAR Part 
121 aircraft operations.
    Criminal History Records Checks (CHRCs).--All-cargo operations face 
security threats that are not always immediately apparent. For example, 
all-cargo aircraft often carry live animals, and animal handlers 
accompany them on the flight. In many circumstances, these handlers 
carry tranquilizing drugs for use on the animals during flight. Most of 
the animal handlers are not airline employees, and many are foreign 
nationals, which limits the ability to conduct a criminal history 
records check on these individuals. This creates a significant risk to 
the cargo flight and crew when they are not protected from these 
potential threats by an intrusion-resistant cockpit door. We believe 
that any individual traveling on an all-cargo flight should be subject 
to the same level of security vetting and screening as flight crew 
members. Fingerprint-based Criminal History Records Checks (CHRCs) 
should be conducted on all employees and agents of aircraft operators, 
foreign air carriers, and indirect air carriers (IACs) in the United 
States, who have unescorted access to FAR Part 121 all-cargo aircraft 
and to cargo intended to be shipped on them.
    All-Cargo Common Strategy.--Anti-hijacking procedures referred to 
as the ``common strategy'' were created in the early 1970's by the FBI, 
the FAA, airlines, and ALPA, and revised after 9/11. They are intended 
to address all types of security threats encountered during passenger 
and all-cargo operations, and are based on the premise that there will 
be aircraft equipped with intrusion-resistant cockpit doors, properly 
trained people, and procedures for handling direct security incidents 
and threats. This approach is sound and provides for needed layers of 
security, if all three measures are available. Unfortunately, for cargo 
aircraft not equipped with these intrusion-resistant cockpit doors, the 
tactics, techniques, and, therefore, procedures designed to provide 
crews with sufficient time to react to threats to the cockpit are 
meaningless. In addition, all-cargo flight crews are not required to be 
trained in the common strategy to the same degree as passenger crews, 
which defeats the purpose of the common strategy, which is intended to 
be used by all crews during line operations. If the crew is not 
properly trained and required to utilize the strategy, there is no way 
it can be implemented effectively. ALPA believes an all-cargo common 
strategy and training curriculum should be mandated for all-cargo 
operations.
    FOIA Protection for Security Reports.--While voluntary safety 
reporting programs, including the Aviation Safety Action Program 
(ASAP), have proven to be a significant benefit to the safety of our 
industry, we do not yet have similar programs in place for front-line 
employees to confidentially report security-related events and 
incidents. Airline pilots and other front-line aviation employees are 
well-suited to serve as the ``eyes and ears'' of the industry. They 
know their workplace very well, they will recognize something that is 
out of place or suspicious because of their intimate knowledge of the 
aviation domain, and they want to help make aviation more secure. 
Developing and implementing a security-focused enhancement to ASAP 
would provide TSA and FAA with near real-time data that could be used 
to identify security risks to our aviation system and enhancements to 
mitigate those risks.
    One of the impediments to developing and implementing confidential 
reporting programs for security is the lack of protections from Freedom 
of Information Act (FOIA) disclosure by TSA of voluntarily submitted 
information. For FAA safety ASAP reports, the confidential data 
submitted is exempted from FOIA disclosure per legislation in the 
Federal Aviation Reauthorization Act of 1996 (Pub. L. 104-264). That 
exemption should be extended to TSA for confidential security-reporting 
programs.
                            recommendations
   Congress should ensure one level of safety and security for 
        all-cargo and passenger airline operations.
   The FAA should mandate the installation of intrusion-
        resistant flight deck doors on Part 121 all-cargo aircraft 
        manufactured after a specified date.
   FAR Part 121 cargo operations should be required to be 
        conducted within a SIDA.
   Congress should require TSA to implement all-cargo common 
        strategy training and procedures.
   All animal handlers, escorts, or couriers traveling on all-
        cargo aircraft should be subject to the same screening and 
        security procedures as flight deck crew members, including a 
        criminal history records check, or be restricted to operations 
        on aircraft equipped with intrusion-resistant doors.
   Congress should expand the FOIA exemption already in force 
        for ASAP reports submitted to the FAA per the Federal Aviation 
        Reauthorization Act of 1996 (Pub. L. 104-264) to security-
        related reports submitted to the TSA.
   TSA, in collaboration with the FAA and industry partners, 
        should expand the use of the ASAP reporting process--along with 
        its enforcement protections for the reporting employee--to 
        specifically include security-related information from front-
        line employees.
                                summary
    ALPA appreciates the opportunity to provide this statement to the 
subcommittee. The TSA has a difficult, thankless job in keeping 
transportation secure, and support from Congress to bring all-cargo 
airline security measures up to par with their passenger airline 
counterparts is clearly needed. We stand ready to assist.

    Mr. Katko. Without objection, so ordered.
    Mrs. Watson Coleman. Thank you. Again I thank the witnesses 
for being here, and I yield back the balance of my time.
    [The statement of Ranking Member Watson Coleman follows:]
           Statement of Ranking Member Bonnie Watson Coleman
                             July 25, 2017
    Today's topic, air cargo security, is not one that usually receives 
a lot of headlines and attention, yet it is critical to our economy. In 
fact, according to the International Air Transport Association, air 
cargo accounts for approximately 35% of the value of all products 
traded world-wide.
    An attack on our cargo industry could have devastating effects on 
commerce, and since many cargo shipments are placed in the ``belly'' of 
passenger planes, such an attack could also result in significant loss 
of life.
    Unfortunately, the lack of headlines surrounding air cargo has not 
kept it hidden from our adversaries. In 2010, terrorists attempted to 
hide bombs inside printer cartridges shipped out of Yemen. Only a last-
minute intelligence tip from a foreign partner prevented the explosives 
from flying on aircraft bound for the United States. While no similar 
attempts against cargo have been reported since 2010, terrorists 
continue to seek new ways to attack our transportation systems.
    Given the threat, TSA must consistently partner with industry 
stakeholders to enhance air cargo security. Next week will mark the 
tenth anniversary of one of the most significant homeland security laws 
ever enacted--``The Implementing Recommendations of the 9/11 Commission 
Act of 2007''.
    Our leader on this panel, Ranking Member Thompson, was the author 
of this measure that, among other things, required 100% screening of 
cargo on domestic and international inbound passenger flights within 3 
years. Complying with this mandate was a massive undertaking for TSA 
and industry, and we should all be proud that, together, they were able 
to achieve compliance for domestic passenger flights in 2010, and 
international inbound passenger flights in 2012.
    The 10-year anniversary of the passage of the Implementing 9/11 
Commission Act is a great time to reflect on how far we have come and 
be grateful that no attacks against our air cargo system have been 
carried out.
    However, we cannot rest on our laurels. We must constantly improve 
our security to keep up with the evolving threat. We must continue to 
prioritize the security of our transportation systems and invest in 
security measures that really make a difference, like those that help 
secure our cargo, rather than wasting billions on a border wall that 
will not improve security.
    Additionally, we cannot allow the attention we rightfully pay to 
passenger security to come at the expense of focusing on air cargo 
security. And just as the threat landscape constantly evolves, so too 
does the nature of commerce.
    The emergence of ``e-commerce'' sites like Amazon and eBay has 
caused a seismic shift in not only how Americans buy goods but also 
their expectations about how quickly they will receive them. This, of 
course, has huge implications for the air cargo sector.
    I will be interested to hear from our witnesses how these changes 
are affecting air cargo security, as well as what changes industry, 
TSA, and Congress should consider to improve security.

    Mr. Katko. Thank you, Mrs. Watson Coleman. Other Members of 
the subcommittee are reminded that opening statements may be 
submitted for the record.
    We are pleased to have a distinguished panel here to 
testify before us today on this very important topic.
    Let me remind the witnesses that their entire written 
statements will appear in the record so there is no need to--if 
it is a very long statement maybe you can abbreviate it a 
little bit, but hopefully within 5 minutes to 10 minutes is 
fine.
    Our first witness it Mr. Stephen Alterman. Mr. Alterman 
began his career in aviation in 1968 as a trial attorney at 
Bureau of Enforcement for United States Civil Aeronautics Board 
and was subsequently promoted to chief of the legal division. 
Mr. Alterman joined the Cargo Airline Association in 1975 and 
currently serves as its president.
    In addition, Mr. Alterman is the chairman of the TSA 
Aviation Security Advisory Committee, a member of the FAA 
management advisory council and a member of the Department of 
Transportation National Freight Advisory Committee.
    The Chair now recognizes Mr. Alterman for his opening 
statement.

  STATEMENT OF STEPHEN A. ALTERMAN, PRESIDENT, CARGO AIRLINE 
                          ASSOCIATION

    Mr. Alterman. Thank you, Chairman Katko, Ranking Member 
Watson Coleman, Members of the subcommittee. I was going to 
introduce myself, but I don't think I have to. Thank you Mr. 
Katko.
    Mr. Katko. You are very well-known by us anyway so that is 
all right.
    Mr. Alterman. That is what I was afraid of, Mr. Katko. The 
all-cargo carriers and the customers in airports they serve are 
a unique portion of the aviation marketplace.
    Customers around the world depend on our services to 
transport high-value, time-sensitive products such as medical 
devices and related components of the medical supply chain, 
computers and other electronics, automobile parts.
    In calendar 2016, the all-cargo segment of the industry 
operated 89 percent of the domestic revenue ton-miles and 70.8 
percent of the international RTMs. In operating these services, 
the safety and security of our cargo, our facilities, aircraft, 
employees, and the public are of utmost importance.
    It is simply bad policy and bad business not to take these 
issues seriously. In the area of security we strongly believe 
that the best security is achieved when Government and industry 
work together to identify vulnerabilities and to design and 
implement mitigation strategies.
    Over the past few years, TSA has moved in this direction, 
and we look forward to working with the agency as the outcome-
based model of regulation matures.
    At this point I want to thank this committee and the 
committee staff, who sometimes go unnoticed, for H.R. 2825. I 
actually wrote my testimony before the bill was enacted by the 
full House and so I am not going to go into much detail on some 
of the provisions there.
    However I would like to thank them specifically on behalf 
of our members for several measures in the bill. We thank you 
for the third-party K-9 provisions of the bill, and we 
enthusiastically support the language of it.
    We also support a 5-year term for the administrator of the 
TSA. When Admiral Pekoske is sworn in as the next administrator 
of the TSA it will be the sixth administrator or acting 
administrator that I have worked with as chair of ASAC in the 
past 3 years.
    That does not lead to much stability within the agency, and 
I really strongly thank you for putting a 5-year term in and 
hope that the Senate does the exact same thing.
    In addition, and I know Mr. Mullen will talk about this in 
more detail, the provisions on the Air Cargo Advanced Screening 
project were definitely appreciated.
    My written testimony goes into some detail, but it 
basically mirrors the language of the provisions in H.R. 2825, 
so thank you very much.
    The third-party K-9 program is only one of many initiatives 
that have been studied by ASAC over the past several years.
    Another thanks and shout-out to the committee is that ASAC 
is now a permanent committee and you fixed the one glitch in 
the regulation by providing that the 2-year terms can be 
extended if no new committee is actually formed at the end of 
the 2-year terms. We really appreciate that.
    The other portion of the legislation that we really 
appreciate is the exemption from the Federal Advisory Committee 
Act. For the first time after that legislation we were able to 
meet in secret, not trying to hide things from the public, but 
rather so we can discuss sensitive security issues without the 
public being there. That has played a very big part in our 
deliberations and enables us to do some really interesting 
things.
    The ASAC membership is diverse, with representatives from 
virtually every segment of the aviation community, as well as 
users and victims groups. The committee is supported by an 
array of subcommittees and ad hoc working groups.
    I just want to mention that our Air Cargo Subcommittee of 
ASAC has been one of the most active subcommittees on the 
committee and it has put forth many initiatives in the air 
cargo sphere.
    In addition, again as a result of legislation, ASAC's 
relatively new Security Technology subcommittee has now been 
charged with exploring potential innovative technologies 
capable of performing improved screening of air cargo. They are 
just beginning on that project, but we are looking forward to 
their work.
    I think, again going back to the 5-year term for the 
administrator, it simply does not lead to stability in the 
agency, and we really need that stability if we need to move 
forward on these issues. Thank you very much, and I would be 
obviously glad to answer any questions.
    [The prepared statement of Mr. Alterman follows:]
                Prepared Statment of Stephen A. Alterman
                             July 25, 2017
    Chairman Katko, Ranking Member Coleman, and Members of the 
subcommittee: Good morning. My name is Steve Alterman and I am the 
president of the Cargo Airline Association, the Nation-wide 
organization representing the interests of the all-cargo segment of the 
aviation community.\1\ I also have the honor of currently serving as 
the chairman of the Aviation Security Advisory Committee (ASAC), the 
Federal committee established by Congress to advise the TSA 
administrator on issues relating to all areas of aviation security. 
Thank you for inviting me to testify today.
---------------------------------------------------------------------------
    \1\ Association members include direct air carriers ABX Air, Atlas 
Air, Federal Express Corporation, Kalitta Air and United Parcel Service 
Co., as well as Associate Members Amazon, DHL Express, Memphis Airport, 
Louisville Airport, Ft. Wayne Airport, Columbus (OH) Airport, Spokane 
Airport, and the Alaska Airport System.
---------------------------------------------------------------------------
    The all-cargo carriers, and the customers and airports they serve, 
are a unique portion of the aviation marketplace. Our member carriers 
employ upwards of 1 million workers world-wide, account for over 10% of 
the U.S. gross domestic product and approximately 4% of the world's 
gross product. Annual revenues of our members top $100 billion. 
Customers depend on our services to transport high-value, time-
sensitive, products such as medical devices and related components of 
the medical supply chain, computers and other electronics, and 
automobile parts. In calendar 2016, all-cargo carriers operated 89.0% 
of domestic revenue ton miles (RTMs) and 70.8 percent of international 
RTMs.\2\
---------------------------------------------------------------------------
    \2\ FAA Aerospace Forecast, 2017-2037, March 2017.
---------------------------------------------------------------------------
    In operating these services, the safety and security of our cargo, 
our facilities and aircraft, and our employees and the public are of 
utmost importance. It is simply bad policy, and bad business, not to 
take these issues seriously. In the area of security, we strongly 
believe that the best security is achieved when Government and industry 
work together to identify vulnerabilities and to design and implement 
mitigation strategies. Over the past few years, TSA has also moved in 
this direction and we look forward to working with the agency as the 
outcome-based model of regulation matures.
    Having said that, it is important to understand that perhaps the 
most important element of providing effective security for the air 
cargo supply chain is the timely sharing of intelligence information 
both among Government agencies and between the Government and industry 
stakeholders. Without this intelligence, it is difficult to design the 
most effective counter-measures for identified threats. While progress 
has also been made in this area, much more needs to be done and members 
of our industry are in the forefront of this effort.
    In terms of current specific challenges, probably the most pressing 
current need for the all-cargo carriers as business and cargo screening 
requirements expand is an ability to use third-party canines as a 
primary means of screening. The technology to screen freight in a 
manner consistent with the operational needs of the industry simply 
does not today exist. However, the ``low-tech'' use of canines can fill 
this gap. Since there are not enough canines owned by the TSA to 
accomplish this objective, we continue to urge TSA to establish a 
program whereby TSA would establish standards that would be used by 
third-party vendors and certify other third-parties to ensure that the 
vendors are, in fact, correctly applying the standards established. TSA 
would also audit the process to ensure compliance with all applicable 
requirements. The vendors could then provide the dogs to stakeholders 
wishing to use them (at the carriers' expense). TSA has taken the first 
steps in this direction, but the bureaucracy often moves slowly and our 
needs are becoming more urgent. We therefore thank this committee for 
including a third-party canine mandate in the DHS Authorization bill 
(H.R. 2825) that overwhelming passed the House last week. We now look 
forward to similar action in the Senate. The establishment of this 
program would also be consistent with the recommendations of the ASAC 
that has, on several occasions, urged TSA to move forward with the 
program.
    The third-party canine program is only one of many initiatives 
studied by ASAC over the past several years. By way of history, while 
ASAC has existed for many years, it was finally established as a 
permanent advisory committee by Congress several years ago with the 
passage of the Aviation Security Stakeholder Participation Act of 2014. 
At that time, Congress also exempted ASAC from the provisions of the 
Federal Advisory Committee Act (FACA), an exemption that has allowed 
committee Members to discuss the details of security issues without the 
fear of public disclosure of sensitive information. ASAC membership is 
diverse with representatives from virtually every sector of the 
aviation community, as well as user and accident victims' groups, and 
the committee is supported by an array of subcommittees and ad hoc 
working groups that study specific issues that are either self-
generated, requested by TSA, or sometimes required by Congress. One of 
the most active subcommittees is our Air Cargo Subcommittee that has a 
history of recommending important initiatives in the air cargo sphere. 
In addition, ASAC's relatively new Security Technology Subcommittee has 
been charged with exploring potential innovative technologies capable 
of performing improved screening of air cargo.
    Finally, I would like to offer one suggestion for Congressional 
action in this session. In my opinion, one of the major impediments to 
positive change within TSA is instability at the top of the 
organization. In the last 3 years, there have been two administrators 
and three acting administrators. When the new administrator is 
confirmed, he will be the sixth head of the agency in the last 3 years.
    To provide stability, and to allow the administrator the time to 
implement changes that may be necessary, the TSA administrator should 
be given a fixed 5-year term similar to that currently held by the 
administrator of the Federal Aviation Administration. Such an action 
would go a long way to providing the stability needed to accomplish the 
very important objectives of the agency. Again, we thank this committee 
for its action to make this goal a reality.
    Thank you very much. I would be happy to answer any questions.

    Mr. Katko. Thank you Mr. Alterman. Just to respond briefly, 
I totally agree with you. The yeoman's work that staff on both 
sides did. The minority staff did a terrific job and so did the 
majority staff, and together they came up with, I think, a 
truly groundbreaking bill to reauthorize Homeland Security and 
its subsidiary agencies.
    I think it is critically important to the function of all 
of these places, all of these agencies going forward that they 
had this reauthorization. I think that the 5-year term for the 
administrator was probably one of the best provisions 'cause I 
thought of it.
    [Laughter.]
    Mr. Katko. I am just kidding, I did think of it, but it is 
an important provision just like many others. And I think 
making ASAC a permanent part of our on-going processes here is 
really important.
    As you know, for the last 3 years ASAC has grown in 
prominence and importance, and we routinely rely on your input. 
We hope you continue to provide us that good leadership from 
the ASAC, because it has been very good. So thank you with 
that.
    Now, we appreciate your testimony Mr. Alterman.
    I would like to introduce our second witness, Mr. Brandon 
Fried. Mr. Fried has more than 38 years of experience in the 
air freight forwarding industry and was appointed as the 
executive director of the Air Forwarders Association in 2005.
    He also serves as a member of the TSA Aviation Security 
Advisory Committee, the U.S. Department of Commerce committee 
on supply chain competitiveness, and the Custom and Border 
Protection Commercial Operations advisory committee. I defy you 
to fit all that on one business card.
    I now recognize Mr. Fried for his opening statement.

 STATEMENT OF BRANDON FRIED, EXECUTIVE DIRECTOR, AIRFORWARDERS 
                          ASSOCIATION

    Mr. Fried. Chairman Katko, Ranking Member Watson Coleman, 
and Members of the subcommittee, thank you for this opportunity 
to present the views of the Airforwarders Association on air 
cargo security. The Airforwarders Association represents 250 
air freight forwarders and supporting companies, employing tens 
of thousands of employees and dedicated contractors.
    Our members range from small businesses employing fewer 
than 20 people to large firms employing well over a thousand. 
Business models vary from domestic-only operations to world-
wide operations. Additionally, a few of our members operate 
their own aircraft. In short, we are the travel agents for 
cargo.
    We move cargo throughout the United States and the world in 
the most time and cost efficient manner, be it on aircraft, 
truck, rail, or ship.
    Security is at the forefront of our business. We work 
closely with TSA since its inception, and we have committed 
several million dollars over the past 16 years to ensure that 
our role in the security supply chain is secure.
    For example, our members have invested millions of dollars 
in security screening equipment, secure systems and facilities, 
employee background checks, maintaining compliance with the 
known shipper management system and the indirect air carrier 
management system, along with annual security training to 
secure our portion of the global supply chain.
    In short, we play an integral role to ensure the safety and 
security of shipments traveling on both domestic and 
international airlines. We take this role seriously. We know 
that terrorists remain interested in airplanes and therefore 
are looking for any possible vulnerabilities in the system.
    Throughout the past 16 years we have rolled up our sleeves 
to meet the requirements of the Aviation Transportation 
Security Act, the 100 percent screening requirement for all 
shipments on passenger planes, and finally the initiatives 
following the 2010 Yemen incident, as referred to earlier. We 
know what is at stake, and we will do our part.
    So today I would like to focus on three key points. First, 
the consistent interpretation of regulations being essential. 
Our members operate facilities throughout the United States and 
therefore many inspectors inspect our facilities.
    Like any business investigated by the U.S. Government, we 
rely on the consistent interpretation of regulations from 
facility to facility. We understand that people are people and 
100 percent consistency is not always attainable.
    That is why we urge the new perspective TSA administrator, 
when confirmed, to move the inspectors at TSA under the policy 
division within the agency. Interpretation of policy and 
implementation of policy should be joined at the hip.
    At the end of the day, security deteriorates when operators 
do not have a clear understanding of regulations due to 
inconsistent policy interpretations. So a standardized form of 
training is critical. Properly-trained employees are the 
backbone of security, and our community has relied on the TSA 
to provide training materials to assist the indirect air 
carriers with the training requirements in the regulations.
    But recently we have learned that the agency will no longer 
provide this training curriculum. The absence of this 
standardized educational tool will likely lead to stakeholder 
confusion and misinterpretation of vital security elements 
inherent in the program.
    The known shipper program needs to be updated. Now, the 
known shipper program traces its origin back to the Aviation 
and Transportation Security Act, and in 2001 e-commerce was a 
nascent industry. Per the Census Department, e-commerce had 
almost $500 billion in U.S. retail sales over the past year.
    Now, we are not advocating for the elimination of the known 
shipper program, but we firmly believe that the known shipper 
program needs to be reframed to reflect today's e-commerce 
reality. So I would like to also comment on just a couple of 
additional security items.
    The attempted printer cartridge bombings of all-cargo 
flights from Yemen in 2010 taught us that while 100 percent 
physical screening of cargo is essential, such inspection does 
not mean that our skies are 100 percent secure. We are 
therefore supportive of the governments' air cargo advanced 
screening, ACAS initiative, in which vital information from the 
bill of lading is analyzed for threat assessment.
    A few of our members have been participating in the on-
going voluntary ACAS pilot program. Our only comment is that 
forwarders should not be the only ones required to submit data, 
and this cache should be accessible through a readily available 
Government portal.
    Finally, we have long been supportive of additional tools 
to the security toolbox. Private, third-party-provided K-9s for 
air cargo screening is a relatively inexpensive tool that we 
have long advocated for, and we are encouraged by the recent 
developments signaling that third-party K-9s for air cargo 
screening will finally become a reality.
    However, Congress must assure that TSA receives the 
necessary oversight funding to manage the program and hold the 
agency accountable for its implementation. I would like to 
thank you for the opportunity to share the Airforwarders 
Association view today.
    [The prepared statement of Mr. Fried follows:]
                  Prepared Statement of Brandon Fried
                             July 25, 2017
    Chairman Katko, Ranking Member Watson Coleman, and Members of the 
subcommittee, thank you for this opportunity to present the views of 
the Airforwarders Association (AfA) on air cargo security.
    The Airforwarders Association (AfA) represents 250 airfreight 
forwarders and supporting companies employing tens of thousands of 
employees and dedicated contractors. Our members range from small 
businesses employing fewer than 20 people to large firms employing well 
over 1,000 and business models vary from domestic only operations to 
world-wide operations. Additionally, a few of our members operate their 
own aircraft. In short--[we are the travel agents for cargo]. We move 
cargo throughout the United States and the world in the most time- and 
cost-efficient manner be it on aircraft, truck, rail, or ship.
              security is at the forefront of our business
    We have worked closely with TSA since its inception, and we have 
committed several million dollars over the past 16 years to ensure that 
our role in the security chain is secure. For example, our members have 
invested millions of dollars in security screening equipment; secure 
systems and facilities, employee background checks, maintaining 
compliance with the Known Shipper Management System and the Indirect 
Air Carrier Management System along with annual security training to 
secure our portion of the global supply chain. In short, we play an 
integral role to ensure the safety and security of shipments traveling 
on both domestic and international airlines. We take this role 
seriously. We know that terrorists remain interested in airplanes and 
therefore are looking for any possible vulnerabilities in the system. 
Throughout the past 16 years, we have rolled up our sleeves to meet the 
requirements of Aviation Transportation Security Act, the 100 percent 
screening requirement for all shipments on passenger planes and finally 
the initiatives following the 2010 Yemen incident. We know what is at 
stake and we will do our part.
    Today I would like to focus on three key points.
         consistent interpretation of regulations is essential
    Our members operate facilities throughout the United States, and 
therefore many inspectors inspect the facilities. Like any business 
investigated by the United States Government, we rely on the consistent 
interpretation of regulations from facility to facility. We understand 
that people are people and 100 percent consistency is not attainable. 
That is why we urge the new prospective administrator when confirmed to 
move the inspectors under the policy division at TSA. Interpretation of 
policy and implementation of policy should be joined at the hip. At the 
end of the day, security deteriorates when operators do not have a 
clear understanding of regulations due to inconsistent policy 
interpretations.
               standardized form of training is critical
    Properly-trained employees are the backbone of security. Our 
community has relied on the TSA to provide training materials to assist 
Indirect Air Carriers with the training requirements in the regulations 
but recently we have learned that the agency will no longer provide 
this training curriculum. The absence of this standardized educational 
tool will likely lead to stakeholder confusion and misinterpretation of 
vital security elements inherent in the program.
               known shipper program needs to be updated
    The Known Shipper program traces its origin to the Aviation 
Transportation Security Act. In 2001, e-commerce was a nascent 
industry. Per the Census Department--e-commerce had almost $500 billion 
of U.S. retail sales over the past year. We are not advocating for the 
elimination of Known Shipper, but we firmly believe that the Known 
Shipper program needs to be reframed to reflect today's e-commerce 
reality.
    I would also like to comment on a couple additional security items.
    The attempted printer cartridge bombings of all-cargo flights from 
Yemen in 2010 taught us that while 100 percent physical screening of 
cargo is essential, such inspection does not mean our skies are 100 
percent secure. We are therefore supportive of the Government's Air 
Cargo Advanced Screening (ACAS) initiative in which vital information 
from the Bill of Lading analyzed for threat assessment. A few our 
members have participated in the on-going Voluntary ACAS pilot. Our 
only comment is that forwarders should not be the only ones required to 
submit data and this task should be accessible through a readily-
available Government portal.
    Finally, we have long been supportive of adding additional tools to 
the security toolbox. Private, third-party-provided canines for air 
cargo screening is a relatively inexpensive tool that we have long 
advocated for, and we are encouraged by the recent developments 
signaling that third-party canines for air cargo screening will finally 
become a reality. However, Congress must assure that TSA receives the 
necessary oversight funding to manage the program and hold the agency 
accountable for its swift implementation.
    Thank you for this opportunity to share the Airforwarders view.

    Mr. Katko. Thank you, Mr. Fried. We appreciate you being 
here as well and taking the time out of your busy schedule.
    Our third witness is Michael Mullen, executive director of 
the Express Association of America. Prior to joining the EAA, 
Mr. Mullen was the assistant commissioner for International 
Affairs and Trade Relations at U.S. Customs and Border 
Protection where he served from 2004-2009.
    Earlier, he was a senior associate at Booz Allen Hamilton 
and a director of nonprofit organizations focusing on trade 
issues in the Asia-Pacific region. Mr. Mullen concluded a 20-
year career as a Navy officer, for which we are grateful, with 
an assignment as an assistant naval attache at the U.S. embassy 
in Tokyo.
    Sir, thank you for your service again, and I now recognize 
you for your opening statement.

  STATEMENT OF MICHAEL C. MULLEN, EXECUTIVE DIRECTOR, EXPRESS 
                     ASSOCIATION OF AMERICA

    Mr. Mullen. Chairman Katko, and Ranking Member Watson 
Coleman, and Members of the subcommittee, I want to focus my 
testimony today on a critically important development in air 
cargo security in the past decade, the Air Cargo Advanced 
Screening or ACAS pilot program.
    ACAS was born out of the terrorist attack on air cargo 
supply chains in late 2010, as both the Chairman and the 
Ranking Member mentioned. It was started by the three members 
of the Express Association of America, DHL, FedEx, and UPS.
    ACAS now has 20 members, including passenger airlines, 
heavy cargo airlines, and freight forwarders. These companies 
voluntarily provide a subset of manifest information to Customs 
and Border Protection and TSA as early as possible in the 
supply chain.
    CBP assesses this data to identify high-risk shipments for 
threats to aviation--80 percent of the air cargo entering the 
United States today is covered by ACAS members.
    The Government has analyzed ACAS data on over 440 million 
shipments in the last 6.5 years. Any shipments considered 
higher-risk are subjective to screening in accordance with TSA 
regulations. To date, no threats to aviation have been 
detected.
    TSA, CBP, and DHS have been discussing a draft ACAS 
regulation over the past few years, but have yet to issue a 
proposed rule. The ACAS pilot was extended last week until July 
2018.
    We believe some important lessons have been learned from 
the pilot that we would like to see incorporated into the 
regulation. Several of these were addressed in the Homeland 
Security reauthorization, to which I also want to add my 
appreciation. That was an excellent piece of legislation from 
our viewpoint.
    So these lessons include, first, when industry and 
Government truly work together as partners, the results are 
dramatic. ACAS has been called the best public-private 
partnership in history. Both sides work together to develop a 
solution that was operationally feasible for industry, while 
satisfying Government's security requirements. The process has 
become known as co-creation.
    Second, the 7 ACAS data elements are sufficient for risk 
targeting. Government agencies should seek to minimize required 
data elements to those they truly need to perform their 
mission.
    Third, the data provided for ACAS is raw data, and we have 
learned that small errors do not substantially affect the value 
of the information for targeting purposes.
    Fourth, ACAS targeting and risk assessment are done from a 
centralized location. This approach is far better than allowing 
individual ports to conduct their own targeting, which can lead 
to a lack of consistency.
    Fifth, ACAS members can complete the necessary actions in 
response to a request for screening at an operationally optimum 
point in the supply chain. That has great value in reducing the 
commercial impacts in terms of additional costs or delays.
    Sixth, because ACAS data is provided early in the supply 
chain and the Government accepts that it is raw data, no 
penalties are applied in ACAS for data timeliness or accuracy. 
While industry accepts that an ACAS regulation may include 
penalties, they should only apply in cases of gross negligence 
or fraud.
    ACAS has proven Government can place a high level of trust 
in its industry partners. Government should not now start 
handing out parking tickets for minor data discrepancies.
    Seventh, Government intelligence regarding a specific 
shipment must be shared with the private sector so screeners 
know what they are looking for.
    Eighth, air cargo operators are highly motivated to ensure 
their systems are not targeted by a terrorist weapon and have 
made major investments in creating a secure aviation network 
which is based on multiple layers of Government regulations and 
their own corporate security measures. ACAS is just one more 
layer in that process.
    Finally, international harmonization is critical for 
ensuring effective aviation security. The U.S. Government 
should seek alignment with international organizations in other 
countries to develop common standards and procedures for 
providing advance shipment data so that the private sector is 
not presented with dozens of different requirements.
    Thank you for the opportunity to testify today, and I look 
forward to your questions.
    [The prepared statement of Mr. Mullen follows:]
                Prepared Statement of Michael C. Mullen
                             July 25, 2017
    This testimony is provided by the Express Association of America 
(EAA) on behalf of EAA members DHL, FedEx Express, and UPS, the three 
largest express delivery service providers in the world, providing fast 
and reliable service to the United States and more than 200 other 
countries and territories. These three companies have estimated annual 
revenues in excess of $200 billion, employ more than 1.1 million 
people, utilize more than 1,700 aircraft, and deliver more than 30 
million packages each day.
    EAA will focus its testimony on the contribution of the Air Cargo 
Advance Screening (ACAS) project to air cargo security. In October 
2010, the all-cargo aircraft industry and larger supply chain was a 
target of a terrorist attack out of Yemen. The ACAS pilot was created 
as a response to this incident and has demonstrated that a close 
partnership with industry across Government agency jurisdictions in 
development and execution of new security measures can improve the 
safety and security of global networks while minimizing negative 
operational and economic impacts. First developed with express carriers 
in late 2010, ACAS has expanded to include passenger air carriers, all-
cargo carriers, and freight forwarders, and now includes 20 fully 
operational members, covering 80 percent of the air cargo shipments 
entering the United States. The ACAS project has been highly successful 
and has screened over 440 million shipments without detecting any 
imminent threats to aviation. Several key lessons have been learned 
during the pilot, and any rulemaking effort to formalize ACAS through 
regulation should consider these lessons, as follows:
          industry and government working together as partners
    Seeking industry input before proposed rulemakings are drafted 
allows for broader operational impacts to be considered in order to 
improve effectiveness. This further minimizes the defensive posture or 
even anxiety as the private sector faces a Government ``mandate.'' The 
absence of penalties during the ACAS pilot phase further reduced 
``threshold anxiety'' as a barrier to participation. Additionally, the 
coordination between TSA and CBP enabled industry to accept that the 
U.S. Government had a unified approach and industry would not be 
subjected to differing rules and requirements.
Going Forward
    Penalties should only be imposed in cases of gross negligence or 
willful circumvention of the rules, and not for the timeliness or 
accuracy of information (for reasons outlined immediately below). 
Similar to the move from transaction-based to account-based management 
of trade parties found in other customs' spheres, the overall 
compliance level of the ACAS transmitter should be a key factor in the 
penalty scheme that is developed. This would be consistent with the 
spirit of trusted partnership that has been the core of the success of 
the ACAS effort.
    Further, CBP and TSA must both be included in ACAS discussions with 
industry in order to ensure the unity of effort across the U.S. 
Government and avoid duplicative and even contradictory approaches.
                  7+1 data is effective to target risk
    Separation of shipment and transport data was a necessary 
precondition to providing information earlier in the supply chain. The 
information on the shipment transmitted for ACAS (seven data elements 
plus the bill number--called ``7+1 data'') is available much earlier 
than other data required for customs clearance, and ``Risk-Based 
Targeting'' against this 7+1 data set has proven effective with risk 
assessment sufficient to identify a shipment of interest. Mandating 
additional transport data such as master airway bill routings or flight 
numbers, full automated manifest system information, harmonized tariff 
system (HTS) numbers or any other commercial data as part of the 
advanced security filing not only fails to significantly improve 
targeting, but would also challenge the operational feasibility to 
provide data in a timely manner. Further, the pilot has shown:
    1. Data provided for ACAS can be ``raw data'' where typographical 
        or other clerical errors do not substantially affect the 
        targeting capabilities.
    2. The 7+1 data set is sufficient to determine whether or not a 
        shipment is a potential threat to aviation security. Upon 
        analysis of the 7+1 data set, if a particular shipment is of 
        concern, then additional data can be requested on a shipment-
        specific basis or additional screening can be required. This 
        screening can be conducted early in the supply chain due to the 
        submission time line for ACAS data. In the majority of cases, 
        shipments already have been screened as a result of standard 
        security program and other requirements, and the results of 
        that screening can satisfy the ACAS referral.
    3. The centralized approach to targeting, risk assessment, 
        selection, and referrals for additional screening can be 
        successfully run through joint CBP/TSA teams coordinating all 
        aspects of this process from a single location. This 
        coordination and information sharing between the agencies could 
        be strengthened.
    4. ACAS pilot participants can manage the requests for data and 
        physical screening successfully from a central, corporate 
        inspection system, without requiring requests to be filed with 
        field office locations, thereby improving timeliness, 
        consistency, and accuracy of response.
    5. The private-sector parties can complete the necessary actions in 
        the event of a referral at an operationally optimum point in 
        the supply chain, thereby reducing the commercial impacts in 
        terms of cost and delays. If the Government has a question 
        about the ACAS data or the data is incomplete, the shipment 
        keeps moving while the additional data is being provided and/or 
        the question is being answered.
    6. Any expansion of the ACAS data set beyond the 7+1 elements would 
        be inconsistent with the WTO SAFE Framework on air cargo 
        security.
Going Forward
    Future initiatives looking at advanced cargo data should:
   Recognize that raw, 7+1 shipment data can effectively target 
        risk without requiring data elements needed for other customs 
        functions.
   Specify the last point of departure of the flight that 
        delivers the shipment to the United States as the deadline for 
        submission of the data. Choosing any other deadline for data 
        submission will add unnecessary complexity and is likely to 
        affect operational feasibility, as shipment routing is often 
        not known at origin.
   Accept that shipment-specific data is sufficiently accurate 
        to determine any potential threat by the shipment, and shipper-
        based approaches associated with a shipper's volume are often 
        not feasible in the advanced data context due to the timeliness 
        of information and the need of the carriers to segregate 
        shipments based on the shipper before building the pallets or 
        other unit load devices (ULD). Further, shipper-based 
        determinations are often redundant, and the shipment has 
        already been singled out for screening prior to the shipper-
        based determination.
   Express carriers have a centralized database for tracking 
        the results of shipment screening, that includes screening 
        caused by ACAS referrals, which could be made available to TSA 
        for auditing purposes. Based on this information, TSA could 
        provide exemptions to standard security program screening 
        requirements for some ACAS participants.
                  acas analysis is limited to security
    While it is tempting to use advanced data for other purposes, the 
success of ACAS has been in part driven by the common goal to prevent a 
bomb from entering the network. This singular focus of utilizing air 
cargo advanced data for security risk assessment remains the top 
priority among private- and public-sector participants. Regulatory risk 
assessment to interdict IPR violations, illegal drugs or other 
controlled substance trafficking, or other trade functions can and 
should be the focus of CBP officers upon arrival in the United States. 
Any attempt to expand the ACAS scope to achieve the simultaneous 
completion of both security and regulatory risk assessments pre-
departure would undermine achieving the primary goal of protecting the 
supply chain against terrorist attacks.
Going Forward
    This singular focus on security must be maintained for ACAS.
               flexibility is critical for effectiveness
    Three distinct types of flexibility needed:
    1. IT Systems Can and Should Be Flexible
     ACAS has demonstrated that data can be transmitted via 
            multiple types of IT systems and in various formats. This 
            flexibility in the interface reduces the barrier to 
            participation and avoids unnecessary costs and time delays 
            associated with updating a company's IT system. 
            Furthermore, the flexibility reduces the risk of 
            competitive disadvantages arising from existing differences 
            in the functionality and capacity of corporate IT systems.
     Where a ``dual filing'' approach is taken with a separate 
            ACAS filer and carrier, a rapid confirmation for the 
            carrier of ACAS submission and the shipment's security 
            status is important. The timeliness of verification across 
            systems is most difficult with time-definite shipments, yet 
            this is also the most essential.
     The differing business models of express/integrated and 
            non-express/conventional will require that the IT system 
            provide different functionality for these, in particular 
            with regard to security status messaging.
Going Forward
    The final IT filing system developed for ACAS must remain flexible. 
It should continue to accommodate multiple data submission formats and 
provide for the return messaging options required by some business 
models of the entities utilizing the system.
    2. Screening Methods and Locations Need to Adapt to Country and 
        Operational Limitations
     The screening is being conducted outside U.S. borders, 
            often well before the U.S. jurisdiction to control and 
            mandate screening. This provides a screening and security 
            level far greater than the United States could mandate and 
            helps ensure the security of cargo movements throughout the 
            entire supply chain, not just from the last point of 
            departure. However, this also understands that there may be 
            challenges to screening with a particular method at every 
            point globally.
     The screening method available at a particular country 
            early in the supply chain may not offer AT X-ray, and the 
            shipment should be allowed to be physically screened by 
            other appropriate methods as approved at that location or 
            allowed to move to the next point at which the cargo could 
            be screened.
     When there is a U.S. Government-recognized National Cargo 
            Screening Program (NCSP) of another government's cargo 
            security program, the NCSP recognized screening methods can 
            be effectively applied to mitigate risk. The NCSP methods 
            were--by definition--already accepted by TSA as offering a 
            level of security commensurate with the United States, and 
            local screeners cannot be trained to apply differing 
            screening standards whether it is getting a U.S.-ACAS-based 
            screening referral or a locally-based screening referral.
Going Forward
    The United States should continue to allow cargo selected for ACAS 
referral screening to be screened at the most operationally feasible 
location and allow the local screening standards to be applied for a 
screening referral when the cargo is in an NCSP recognized country. 
These National Cargo Security Program recognitions have become a 
critical facilitator of seamless cargo movement through major transit 
hubs.
    3. Operational Requirements Need To Be Flexible Based On Different 
        Business Models
     The air cargo industry is not one-size-fits-all; the 
            regulations and programs should not be either. Challenges 
            and opportunities differ between business models, and the 
            system can be flexible regarding who transmits the data and 
            when. While the jointly-held overriding goal is to 
            intercept a high-risk shipment as early as possible, data 
            can be transmitted by multiple partners, depending on who 
            may be in possession of the shipment data. No specific time 
            limit is necessary, as long as data can be transmitted in 
            raw form as soon as available. Further, Government 
            targeters have the ability to prioritize shipment reviews 
            based on the urgency/timeliness of the shipment itself, 
            thereby helping to address concerns for last-minute 
            shipments in the just-in-time supply chain.
Going Forward
    The Government must continue to recognize the different components 
and business models in the larger air cargo industry and avoid putting 
burdens on all segments that are not appropriate for individual 
segments. This includes ensuring that the screening referral goes to 
the party who filed the ACAS data--even if that party is a forwarder 
and not a carrier--in order to ensure the timely interception of a 
suspect shipment.
                    information sharing remains key
    The private sector is providing shipment-level data to the 
Government. At the same time, any Government-held intelligence of 
concern regarding a specific shipment must be shared with the private-
sector ACAS participants when appropriate. When a screening referral 
has been issued, CBP/TSA have been able to provide specific 
intelligence as to why that shipment is targeted and what screeners 
should look for on that specific shipment if there is a specific 
threat. Although there has been some hesitance to provide broader 
intelligence sharing with the private sector, use of other Government 
bodies, such as the Office of the Director of National Intelligence 
(ODNI), could be utilized more effectively to include both domestic and 
international parties involved in the ACAS system.
Going Forward
    Information sharing should include:
   ACAS participants should be provided with specific concerns 
        for that shipment, thereby improving their detection capability 
        on a targeted shipment.
   For a shipment that rises to the level of a DNL, the carrier 
        in possession of the shipment must be given all information to 
        quickly identify and isolate both that shipment and others in 
        the network that may be similar.
   Other ACAS participants must also be made privy to the full 
        information--for them to identify and isolate similar high-risk 
        shipments.
   Finally, a secure means to provide broader threat 
        information to the appropriately-selected security staff within 
        the ACAS carrier is needed. It would improve internal risk 
        targeting prior to a shipment ever entering the network. This 
        type of ``bridge line'' conference call can and should be 
        tested with industry more effectively.
                 the air cargo network is highly secure
    Air cargo operators are highly motivated to ensure their systems 
are not targeted by a terrorist weapon and have made major investments 
in creating a secure aviation network based on multiple layers both 
from Government regulations and additional corporate security measures. 
Of the hundreds of millions of shipments screened through ACAS over a 
period of nearly 7 years, less than one-half of 1 percent has required 
additional measures to verify the contents, and no terrorist threats 
have been detected. This indicates that existing measures are working 
effectively to deter attempts to exploit the network for terrorist 
purposes.
Going Forward
    Before any new regulations are proposed to improve the security of 
what is already a very secure air cargo system, Government agencies 
should conduct a cost/benefit appraisal, consider the operational 
impacts and weigh those against the marginal increase in security. This 
is the backbone of ``Risk-Based Security.''
  international harmonization is critical for long-term effectiveness
    Most of the industry partners involved in the ACAS pilot are 
operating on a global scale. There are several initiatives similar to 
ACAS being discussed in multiple countries. It is vital that the U.S. 
Government seek early alignment with international organizations and 
other partners/countries to develop internationally recognized 
standards, procedures, and processes for advanced shipment data 
provision to minimize the level of variability of systems and 
requirements and avoid duplication of data submission and security risk 
assessment where possible.
Going Forward
    It is vital to develop a common global solution that recognizes and 
supports the different air cargo business models and to achieve mutual 
recognition of security programs and risk assessment results. The 
global solution should harmonize data requirements and eliminate 
duplication by ensuring shipment data is only submitted to one country 
for a single security risk assessment that is accepted by partners with 
whom that country has a mutual recognition agreement. This will allow 
international trade partners to share information globally and quickly, 
both reducing unnecessary cost and complexity while improving 
Governments' risk assessment capabilities.

    Mr. Katko. Thank you Mr. Mullen. There are several things I 
will be following up with you on during my questioning, and we 
appreciate you for being here as well.
    I always admire anyone who has served in the military. I 
just swore my son in as a second lieutenant, so he is embarking 
on his career now, and he will be going to Fort Benning, 
Georgia next month to start the infantry officer training 
stuff. He could have been a pilot, but he decided he wanted to 
do infantry instead. So there goes listening to your old man, I 
guess, right?
    Mr. Mullen. Right.
    Mr. Katko. So our fourth witness is Mr. Bart Elias, 
specialist in aviation policy at the Congressional Research 
Service. Mr. Elias received his Ph.D. from Georgia Tech in 1994 
and spent the next 5 years at the Air Force Research 
Laboratory.
    In 1999, he became an aviation human performance 
investigator at the National Transportation Safety Board, where 
he worked on several major accident investigations, including 
the crash of John F. Kennedy, Jr.'s private plane.
    In addition to his work with CRS, Mr. Elias has also served 
on the Transportation Research Board's Committee on Aviation 
Security and Emergency Management, chairing its subcommittee on 
aviation safety.
    I now recognize Mr. Elias for his opening statement.

    STATEMENT OF BART ELIAS, SPECIALIST IN AVIATION POLICY, 
   RESOURCES, SCIENCE, AND INDUSTRY DIVISION, CONGRESSIONAL 
             RESEARCH SERVICE, LIBRARY OF CONGRESS

    Mr. Elias. Chairman Katko, Ranking Member Thompson, Ranking 
Member Watson Coleman, and Members of the subcommittee, thank 
you for the opportunity to testify today on the topic of air 
cargo security.
    The air cargo industry serves business and consumer demand 
for the transport of the high-value and time-critical goods. 
Forecasts project continued growth at air cargo over the next 
two decades, spurred by expanding global economy and the growth 
of e-commerce. My remarks today will focus on four key aspects 
of air cargo security: Insider threats, risk-based targeting of 
shipments, physical screening, and in-flight protection from 
explosives.
    Insiders, individuals with access to and detailed knowledge 
of the air cargo system, pose a vexing threat. Adding to the 
challenge is the fact that the air cargo system and air cargo 
is often stored and prepared for shipment at off-airport 
facilities that arrives in airports in bulk.
    Complex supply chains involve large numbers of individuals 
who handle and transport cargo, as well as individuals 
responsible for routing and tracking shipments. Historically, 
these supply chains have been infiltrated by organized crime 
and there is some concern that terrorist networks could 
likewise infiltrate airports, distribution centers, and ground 
transportation and operations.
    Efforts to address insider threats have focused on worker 
vetting. Recent statutory changes allow for more detailed 
records checks of certain cargo workers, but systematic reviews 
of the process and available options to improve vetting 
techniques may be beneficial.
    Vetting of shippers and shipments is another key element of 
the multi-layered approach to air cargo security. The known 
shipper program serves as the primary means for vetting 
shipments. Only consignments received from known shippers can 
fly aboard passenger airplanes.
    In addition, Customs and Border Protection utilizes its 
automated targeting system to evaluate inbound international 
cargo. Building on this, CBP and TSA continues to pilot test 
the Air Cargo Advanced Screening or ACAS system.
    Under this system, freight forwarders and airlines 
voluntarily submit key data elements of cargo manifests for 
pre-departure vetting. While the ultimate objective is to 
develop uniform regulations for advanced cargo screening, 
progress has been relatively slow, despite favorable views of 
the concept and active industry participation.
    Last year, the Aviation Security Advisory Committee 
expressed concern that after more than 5 years of testing, the 
system had still not been fully developed. In its view, TSA had 
not devoted adequate staffing and resources to the project.
    In 2007, the 9/11 Act mandated 100 percent screening of air 
cargo placed on passenger flights. Mandatory screening is 
primarily accomplished under the voluntary certified cargo 
screening program. This program has been widely viewed by 
industry as a successful example of a voluntary initiative that 
addresses statutory requirements while providing flexibility to 
address industry-specific challenges.
    However, projected future growth in air cargo may pose a 
challenge, especially if facilities do not appropriately plan 
for it. If cargo shipments spike, some facilities may have 
difficulty acquiring additional screening equipment promptly.
    Industry growth could create opportunities to upgrade 
screening technologies and streamline processes, but it also 
introduces investment risks if cargo activity later falls off.
    Another option under consideration is the possible use of 
TSA-approved third-party explosives-detection K-9 teams to 
screen air cargo. While many in industry support the idea, TSA 
put the concept on hold after a 2011 pilot project failed to 
demonstrate reliable results.
    TSA is currently re-evaluating available options, and it is 
premature to say whether private K-9 teams could help address 
air cargo screening needs effectively.
    Finally, the 9/11 Commission recommended deployment of at 
least one hardened cargo container on every passenger aircraft. 
This concept was widely regarded as being too costly and too 
complex to implement, but new technologies may make it 
practical.
    For example, light-weight bomb-resistant bags have been 
successfully tested in the United Kingdom. This may address the 
weight concerns associated with designs tested and certified in 
the United States over a decade ago.
    In summary, while a comprehensive framework for air cargo 
security exists in the United States, several elements of this 
framework, including the Air Cargo Advanced Screening System 
remain incomplete.
    This concludes my prepared statement, and I look forward to 
your questions.
    [The prepared statement of Mr. Elias follows:]
                    Prepared Statement of Bart Elias
                             July 25, 2017
    Chairman Katko, Ranking Member Watson Coleman, and Members of the 
subcommittee, thank you for the opportunity to testify today on the 
topic of air cargo security on behalf of the Congressional Research 
Service (CRS). In accordance with our enabling statutes, CRS does not 
advocate policy or take a position on legislation.
    The air cargo industry serves business and consumer demand for the 
domestic and international transport of high-value and time-critical 
goods. The air cargo industry has experienced somewhat of a slump over 
the past decade, but recent data show that it has largely recovered. 
The Federal Aviation Administration (FAA) and others anticipate it will 
experience growth over the next two decades spurred by an expanding 
global economy and the growth of e-commerce.\1\ Data from the first 
quarter of 2017 show that, by weight, domestic and U.S.-international 
air cargo shipments are up almost 8 percent from last year, and 
international shipments between the United States and both the Asia-
Pacific region and Latin America are each up over 10 percent.\2\ 
Renewed growth in the air cargo industry will likely pose security 
challenges, but could also present opportunities for implementing more 
effective air cargo security measures.
---------------------------------------------------------------------------
    \1\ Federal Aviation Administration, FAA Aerospace Forecast: Fiscal 
Years 2017-2037, https://www.faa.gov/data_research/aviation/
aerospace_forecasts/media/FY2017-37_FAA_Aero- space_Forecast.pdf; 
Boeing Company, World Air Cargo Forecast 2016-2017, http://
www.boeing.com/commercial/market/cargo-forecast.
    \2\ U.S. Department of Transportation, Bureau of Transportation 
Statistics, Air Cargo Summary Data, https://www.transtats.bts.gov/
freight.asp?pn=0&display=data2.
---------------------------------------------------------------------------
    Existing multi-layered approaches to air cargo security incorporate 
access controls, surveillance and physical security measures, physical 
screening of cargo shipments, supply chain security measures (such as 
tamper-evident and tamper-resistant packaging), shipper vetting, and 
air cargo worker vetting.
    My remarks will focus on four areas: Insider threats; risk-based 
targeting of shipments; physical screening; and in-flight protection 
from explosives.
                            insider threats
    Insiders, individuals with access to detailed knowledge of the air 
cargo system, pose a vexing threat to aviation security. Adding to the 
challenge is the fact that air cargo is often stored and prepared for 
shipment at off-airport facilities and arrives at airports in bulk. 
This complex supply chain involves large numbers of individuals who 
handle and transport cargo prior to its loading, as well as individuals 
responsible for the routing and tracking of shipments. Historically, in 
the United States, these air cargo supply chains have been infiltrated 
by organized criminal elements conducting systematic theft and 
smuggling operations. There is concern among some that terrorist 
networks could similarly infiltrate airports, distribution centers, and 
ground transport operations to gather information about possible 
weaknesses and exploit vulnerabilities in the air cargo supply chain.
    Regulations promulgated in 2006 mandate access restrictions to 
cargo aircraft and cargo operations areas and are designed to deter 
individuals from introducing weapons, explosives, and other threats 
into the system, but 100 percent physical screening of air cargo 
workers has been widely regarded as too costly, complex, and inflexible 
to meet the demands of air cargo and airport operations. Consequently, 
efforts to address insider threats have focused on worker vetting. This 
includes all regulated air cargo workers employed by airports, 
airlines, and freight forwarders, as well as employees of 
manufacturers, warehouses, distribution centers, and so on, that 
voluntarily participate in the Transportation Security Administration's 
(TSA's) Certified Cargo Screening Program.
    Enhancing vetting capabilities through more detailed lookbacks and 
periodic reviews of cargo workers' potential ties to criminal activity 
and terrorism could potentially enhance threat detection. Recent 
statutory changes allow for more detailed records checks of certain 
cargo workers,\3\ but systematic reviews of the process and available 
options to improve vetting techniques might be beneficial.
---------------------------------------------------------------------------
    \3\ See the FAA Extension, Safety, and Security Act of 2016, Pub. 
L. 114-190.
---------------------------------------------------------------------------
                    risk-based vetting of shipments
    In addition to vetting air cargo workers, vetting of shippers and 
shipments serves as another key element in the multi-layered approach 
to air cargo security. The known shipper program, first developed in 
the mid-1990's and refined in 2006, continues to serve as the primary 
means for vetting shipments: Only consignments received from known 
shippers can fly aboard passenger airplanes. In addition, Customs and 
Border Protection (CBP) utilizes its Automated Targeting System to 
evaluate in-bound international cargo and select cargo for inspection. 
Building on this, CBP and TSA continue to pilot test the Air Cargo 
Advance Screening (ACAS) system, under which freight forwarders and 
airlines voluntarily submit key data elements of cargo manifests for 
pre-departure vetting. Based on results of the pilot program, CBP and 
TSA are seeking to identify the appropriate data elements to require 
and to determine how much advance notice they need in order to identify 
shipments that require closer scrutiny.
    The ACAS pilot program began in 2010. In July 2016, CBP extended it 
for an additional year.\4\ While the ultimate objective is to develop 
uniform regulations for advance cargo screening, progress has been 
relatively slow, despite favorable views of the concept and active 
industry participation. Last year, the Aviation Security Advisory 
Committee, a group of industry advisers to TSA, expressed concern that, 
after more than 5 years of pilot testing, the system had still not been 
fully developed. In the committee's view, TSA had not devoted adequate 
staffing and resources to the project.\5\
---------------------------------------------------------------------------
    \4\ U.S. Customs and Border Protection, ``Extension of the Air 
Cargo Advance Screening (ACAS) Pilot Program,'' 81 Federal Register 
47812-47813, July 22, 2016.
    \5\ Aviation Security Advisory Committee, Meeting Minutes, February 
29, 2016, https://www.tsa.gov/sites/default/files/
asac_meeting_minutes_29feb2016-508.pdf
---------------------------------------------------------------------------
                            cargo screening
    The Implementing Recommendations of the 9/11 Commission Act of 2007 
(Pub. L. 110-53) mandated 100 percent screening of air cargo placed on 
passenger flights. In contrast to its functional role in airline 
passenger and baggage screening, TSA serves primarily in a regulatory 
capacity with respect to air cargo screening. Mandatory screening is 
primarily accomplished by airlines and freight forwarders, as well as 
manufacturers, shippers, and cargo consolidators that are certified by 
TSA under the voluntary Certified Cargo Screening Program. TSA approves 
and oversees participants in this program and conducts security threat 
assessments of workers who handle air cargo shipments at certified 
facilities. The program has been widely viewed by industry as a 
successful example of a voluntary initiative that addresses the 
statutory requirements while providing adequate flexibility to address 
industry-specific challenges. However, projected future growth in air 
cargo may pose a challenge to this layer of security in particular, 
especially if facilities do not appropriately plan for it. If cargo 
shipments spike, some of these privately-owned facilities may have 
difficulty acquiring additional screening equipment to meet increased 
demand in the near term. Industry growth could create opportunities to 
upgrade screening technologies and streamline processes, but it also 
introduces investment risks if cargo activity later falls off.
    Another option under consideration is the certification and 
deployment of TSA-approved third-party explosives detection canine 
teams to screen air cargo. While many in industry support the idea, TSA 
had put the concept on hold after results from a 2011 pilot project 
failed to demonstrate reliable conformity to TSA performance standards 
among canine teams provided by outside contractors.\6\ TSA is currently 
re-evaluating available options to take advantage of third-party canine 
teams, and it is premature to say whether this approach may provide a 
viable means to address cargo screening needs.
---------------------------------------------------------------------------
    \6\ Transportation Security Administration, Canine Teams 
Effectiveness for Securing Transportation Systems, Statement by Melanie 
Harvey and Annmarie Lontz before the House Committee on Homeland 
Security, Transportation Security Subcommittee, June 24, 2014, https://
www.tsa.gov/news/testimony/2014/06/24/canine-teams-effectiveness-
securing-transportation-systems.
---------------------------------------------------------------------------
                           in-flight measures
    The majority of security experts believe that the most meaningful 
air cargo security measures involve identifying threats through risk-
based measures and physical screening before explosives or incendiary 
devices can be placed on an aircraft.\7\ However, it may also be 
possible to limit the damage from a device that might go undetected and 
be loaded into a cargo hold. The 9/11 Commission recommended the 
deployment of at least one hardened cargo container on every passenger 
aircraft,\8\ but doing so was widely regarded as being too costly and 
too complex to implement.
---------------------------------------------------------------------------
    \7\ See, for example, U.S. Government Accountability Office, 
Aviation Security: Actions Needed to Address Challenges and Potential 
Vulnerabilities Related to Securing In-bound Air Cargo, GAO-12-632, 
June 11, 2012, http://www.gao.gov/products/GAO-12-632; International 
Air Transport Association, Recommended Practice 1630: Air Cargo 
Security, http://www.iata.org/whatwedo/cargo/security/documents/csc-
recommended-practice1630.pdf.
    \8\ National Commission on Terrorist Attacks Upon the United 
States, The 9/11 Commission Report, p. 393, https://9-11commission.gov/
report/.
---------------------------------------------------------------------------
    Alternative approaches for explosive containment may be further 
evaluated. For example, lighter-weight bomb-resistant bags that can 
absorb the energy of an explosion have been successfully tested in the 
United Kingdom.\9\ This technology may address the weight concerns 
associated with the hardened unit loading device designs that were 
tested and certified in the United States over a decade ago.
---------------------------------------------------------------------------
    \9\ David Shukman, ``Aircraft `Bomb Bag' Limits On-Board Explosion 
Impact,'' BBC News, July 24, 2015, http://www.bbc.com/news/science-
environment-33650713.
---------------------------------------------------------------------------
                               conclusion
    In summary, while a comprehensive framework for air cargo security 
exists in the United States, several elements of this framework, 
including the Air Cargo Advance Screening system, remain incomplete. In 
addition, there are potential opportunities to improve the vetting of 
air cargo employees, refine risk-based approaches to identify and 
appropriately screen high-risk cargo, and improve the likelihood that 
an aircraft can survive an explosion or in-flight fire.

    Mr. Katko. Thank you, Mr. Elias, I appreciate your 
testimony. I am particularly interested in following up with 
you either during the hearing today or at some point afterwards 
about the problem I see with new technologies from the time the 
idea is born until the time they get them on the front lines to 
help out.
    I think there is still applied mentality in the bottleneck 
that is within Homeland Security's real problem and perhaps you 
could shed some light on that for us, if we have time today. 
But I do appreciate your testimony.
    I want to recognize the Ranking Member Mr. Thompson, who is 
here with us today. In a moment he will be asking questions as 
well.
    I now recognize myself for 5 minutes of questions.
    Mr. Mullen, I think I will begin with you. You mentioned 
something that I am always interested in and that is the 
public-private partnerships. I think that increases 
dramatically the efficiencies of Government by basically 
providing user tools and getting the heck out of the way and 
just providing appropriate oversight.
    I want to talk to you about the Air Cargo Advanced 
Screening pilot program. I stress the word pilot because, it 
has been a pilot program for way too long.
    I would to like hear your opinions on, you know, by taking 
away that and just making it part of our overall apparatus that 
we requested in the authorization bill that came out of the 
House, what that will do to benefit, if anything, with the 
program?
    Mr. Mullen. Thank you, Mr. Chairman. Well, ACAS was unique 
in the way it was created because what the Yemen bomb plot 
indicated was that our existing regulation, which was the Trade 
Act of 2002 that required manifest information to be submitted 
4 hours before the arrival of the aircraft, was not adequate.
    That would have been way too late if those bombs hadn't 
been discovered the way they were when they were still over in 
Europe and the Middle East. So essentially CBP and TSA 
presented that problem to industry and said we need this 
information earlier or we need a subset of the data on each 
shipment earlier than we are getting it now. But they allowed 
industry to devise the most effective approach to providing 
that information earlier.
    The thing was, the flexibility the Government adopted was 
also very important. Many different members have joined ACAS, 
and the Government has been able to adopt a flexible I.T. 
approach with each company where they can adapt their ability 
to receive the data to the capability of the industry to submit 
it.
    So I think the measures that are outlined in the Homeland 
Security reauthorization are enormously important. But what is 
going to be required to make it work is that willingness to, 
you know, treat each other as co-equals, as trusted partners 
going forward, and Government's ability to adapt, which is 
essentially an industry solution to a security problem.
    Mr. Katko. Well, thank you, Mr. Mullen and I couldn't agree 
more. I trust that going forward if we are successful in 
getting this authorization passed out of the Senate and signed 
into law and that this becomes a permanent entity, that you 
will continue to interact with us to keep us abreast of issues 
that we need to address, if any going forward.
    Mr. Fried, I appreciate your testimony as well, and, you 
know, just talk about the National cargo security program in 
general, but in particular the known shipper program and the 
indirect air carrier program. Are there any improvements that 
can be made to those programs that we should be aware of or 
that we need to address, which we haven't?
    Mr. Fried. As I stated in my testimony, I believe that the 
known shipper program has to be streamlined to reflect today's 
economic and electronic realities. E-commerce didn't exist a 
number of years ago.
    So we want to be able to get as many shippers as possible 
onto these planes, because you have got to remember that all 
cargo is now screened on the piece level, physically screened. 
But at the same time if the known shipper management system 
can't quickly accommodate these transactions, that is where we 
have some issues.
    So we need to get a group together, maybe a joint task 
force from TSA and stakeholders, in coming up with ways to 
streamline the management system so that we can get more of 
these shippers on planes.
    Mr. Katko. All right, thank you very much.
    Mr. Elias, briefly, as I only have a minute left, we do 
have a little time, I have been vitally concerned since I have 
been in Congress about the stop-gap, if you will, the 
bottleneck, I should say, of getting technology from idea to 
implementation--it has just been a mess at Homeland Security.
    I see so many vendors out there and so many people with 
great ideas. Either it is the RFP process, which is like Lucy 
holding the football and pulling it away from Charlie Brown at 
the last second, they keep changing the RFPs down the road. 
They are not--the willingness not to think outside the box as 
much as they should.
    So could you comment on some of that and what you think we 
could do moving forward to help expedite that process in the 
cargo security arena?
    Mr. Elias. In terms of expediting the process, that may be 
difficult in the context of Federal acquisition law. But I will 
comment in general on the air cargo industry in that the CCSP 
in particular is a system where there is a list that TSA 
provides of approved screening equipment that the industry then 
purchases for screening the cargo.
    That may offer an opportunity for some flexibilities in 
terms of the ability for TSA to more quickly identify approved 
screening equipment, as opposed to going through the full 
Federal acquisition process.
    Mr. Katko. Thank you, Mr. Elias.
    Then my time is up, but I will just note, Mr. Alterman, I 
haven't forgotten about you. My time is up, but I do want to 
thank you again for all you have contributed over the years to 
the industry.
    I hope you remain a robust member of the ASAC for a long 
time because your input has been very valuable and the input I 
have received back from the ACAS committee as a whole since I 
have been Chairman of this subcommittee has been 
extraordinarily helpful.
    So bottom line, just keep it up, OK?
    Mr. Alterman. Thank you.
    Mr. Katko. All right. You are welcome.
    The Chair now recognizes the Ranking Member of the Homeland 
Security Committee as a whole, Mr. Thompson, for his questions.
    Mr. Thompson. Thank you very much, Mr. Chairman, and I 
would like to submit my written testimony for the record.
    Mr. Katko. Without objection, so ordered.
    [The statement of Mr. Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                             July 25, 2017
    DHS Secretary John Kelly has described the threat to aviation as 
``sophisticated'' and ``very real.'' I concur with Secretary Kelly's 
assessment of the aviation threat. That said, the demands of the ever-
evolving threat environment demand that TSA not only give significant 
attention to passenger screening but also be vigilant about other 
aviation security threats--such as those related to air cargo.
    The threat to air cargo came into full view in 2010 when al-Qaeda 
in the Arabian Peninsula (AQAP) designed a plot in which explosives 
hidden within printer cartridges were to be detonated on U.S.-bound 
aircraft. If successful, this plot would have killed innocent people 
and caused catastrophic economic disruption.
    As AQAP explained in its on-line magazine, Inspire, ``It is such a 
good bargain . . . to spread fear amongst the enemy and keep him on his 
toes in exchange of a few months of work and a few thousand bucks.''
    Well before the 2010 AQAP air cargo plot, Congress recognized the 
need to bolster air cargo security. Next week will mark the tenth 
anniversary of the enactment of the Implementing Recommendations of the 
9/11 Commission Act of 2007, legislation I authored that then-President 
George W. Bush signed into law. A key provision of this comprehensive 
homeland security law was a mandate that all cargo on domestic and 
international in-bound passenger planes be screened.
    TSA and the stakeholder community deserve a lot of credit for 
coming together to develop an approach to implementation that, since 
2012, has kept air passengers secure from the threat of a cargo-based 
explosion. While I have been pleased with all that was done to achieve 
the mandate, more must be done.
    It is my hope that today's hearing will be a part of an on-going 
conversation that will help us identify opportunities where TSA can 
work better with cargo stakeholders to further enhance security and 
operations.

    Mr. Thompson. You know, I think this is a watershed moment 
for air cargo screening in this country. When we first talked 
about it, people said it can't be done. You know, I refused to 
believe it then, and I think now we have done a very good job 
at not only keeping security uppermost, but we have also been 
able to keep commerce moving in the process.
    So, I think Congress was right to mandate the 100 percent. 
It just took us a little while to get there but, nonetheless we 
are there.
    So I guess the question that I have, and then I will start 
with Mr. Elias is, what transformation have you seen from the 
beginning to now that is you think important for this committee 
to understand? What is the take-away going forward for us to 
continue this effort?
    Mr. Elias. Well, I think some of the transformation that 
you describe really does reflect your view of the notion that 
it was impossible or improbable to accomplish 100 percent 
screening. Before it was enacted, I know talking to folks in 
industry, that there was real concern that how were we going to 
accomplish this?
    There was a transformation to a view where now we have been 
faced with this mandate what do we need to do to work together 
to meet the requirements and at the same time meet the 
industry-specific needs to keep cargo moving through the 
system.
    You know, that was a process that took a few years. You 
know, domestically it probably took on the order of 3 years to 
accomplish and closer to 5 years to work with our international 
partners to accomplish that.
    But, you know, moving forward, as you said it has been a 
bit of a transformation in terms of the view of how the 
screening could work effectively in the comprehensive multi-
layered approach to air cargo security.
    Mr. Thompson. Thank you. I guess to other members of the 
panel, you have kind-of seen that metamorphosis of where we are 
now. Can you give us, Mr. Alterman, and going forward, your 
opinion?
    Mr. Alterman. Yes. Thank you very much for the question. 
One of the things that I have noticed, and I agree with Mr. 
Elias, but one of the things that Yemen taught us was that the 
key element in air cargo security, indeed on all security, is 
good intelligence. That plot would not have been resolved 
without the Saudis giving us good intelligence.
    One of the things that has happened over the last few years 
is that the ability to share intelligence information both 
among the Government agencies and between Government agencies 
and the industry, has become crucially important, perhaps more 
important than anything else that we can do from a regulatory 
standpoint.
    So what we discovered as a result of Yemen and the years 
following is there are a whole number of organizations in the 
U.S. Government with intelligence oversight. They don't always 
talk to each other.
    To be perfectly honest, TSA cannot tell us what they don't 
know. So we have to make sure that the intra-Government 
relationships on intelligence sharing get to the people who can 
share it with the industry.
    The second part of that is that TSA must be able and 
willing to share that information with key people and the 
members of their stakeholder community. Because it doesn't do 
any good for TSA to have that intelligence information if it is 
not transmitted to the people who can actually act on that in 
the industry.
    Again, that goes back to some of the first things that 
Chairman Katko said, and that is that security works best when 
industry and Government work together to identify the issues 
and then design the mitigation strategies for that.
    It is crucially important in the intelligence area. We need 
the Government to get the information to the TSA. The TSA must 
not only say here is the information, they must work with the 
stakeholders to say what is the result of this information, and 
how can we mitigate it?
    Don't just put on, you know, here is the information and 
here is what you shall do. Again, it goes back to a cooperative 
agreement.
    But I think what I have discovered in going back to your 
question, was the advancement of intelligence information and 
the recognition that intelligence is so crucial, really needs 
to come to the forefront.
    Mr. Thompson. Thank you. My time is up. At some point I 
would love to hear that response from the other two panelists.
    Mr. Katko. We have some leeway, Mr. Thompson, so please go 
ahead.
    Mr. Thompson. OK.
    Mr. Fried, if you would like to take a chance?
    Mr. Fried. Thank you, Mr. Thompson. You know, the certified 
cargo screening program is a shining example of success born 
out of both Government and private partnerships working 
together because we knew that failure was not an option.
    So we had to make this 100 percent screening mandate work. 
For the past 7 years or so we have been screening using this 
risk-based multi-layered approach, and it has worked. So we 
have physical screening and it is throughout the United States 
on, as you said, flights leaving and coming and everywhere.
    But I think within TSA, I agree with what Mr. Alterman just 
said about the need for information sharing. But I also think 
it is incumbent upon TSA to provide swifter policy 
interpretation within our industry, so that we are not left 
guessing on the stakeholder side as to how to interpret 
policies that are coming out of the agency. That is 
particularly concerning to us, because obviously safety is at 
stake.
    Mr. Thompson. Thank you.
    Mr. Mullen.
    Mr. Mullen. Congressman, I would just note that the results 
of the Yemen incident really served to highlight the enormously 
robust security programs that members of the air cargo industry 
had in place for decades. It ranges from employee vetting and 
training, through screening of shipments from high-risk 
countries, to a whole range of measures that those companies 
use to protect their own assets and their brand.
    The measures like ACASS add an additional layer to those, 
but it has been effective because there was already a very 
solid foundation--100 percent screening was feasible because a 
lot of these companies were already screening all the shipments 
coming from certain high-threat countries.
    So that is the key going forward, is the Government and 
industry continue to work together that way while recognizing 
the very good foundation that we have in place already.
    Mr. Thompson. Thank you.
    I appreciate the Chair's indulgence. Thank you.
    Mr. Katko. Certainly, Mr. Thompson.
    The Chair welcomes to the committee the gentleman from 
Kansas, Mr. Estes, and recognizes him for his 5 minutes of 
questioning.
    Mr. Estes. Thank you, Mr. Chairman. The previous question 
asked by Mr. Thompson kind-of centered around one of the 
questions that I wanted to start with is, you know, what are 
additional resources that TSA maybe particularly needs?
    So I don't know if there are other things, tools, or 
techniques out there. Can you embellish upon that?
    Maybe just open it up for all of you to start with, Mr. 
Alterman?
    Mr. Alterman. Yes, and I am not sure additional resources, 
although they always help, you know, probably the personnel 
policies and organization of TSA is probably none of my 
business, but it does relate to the question you asked.
    That is that once upon a time at TSA, we had an Air Cargo 
Division that concentrated on air cargo and we had scores of 
people working in it. That has shifted away so we don't have 
that organization anymore.
    More than additional resources, I think there should be 
concentration of recognizing the unique place that air cargo 
plays in the world. One of the ACAS recommendations a while 
back was to reconstitute the air cargo office within the Office 
of Security Policy and Industry Engagement.
    I am not sure it needs 40 people, but I sure as heck think 
that what we really need within TSA is a shifting of 
priorities. Brandon hit on this, you know, on a more specific 
basis.
    But I really think that we need an office of air cargo 
policy that brings together all the disparate people within TSA 
that work on air cargo so we don't wind up with different 
policies and different interpretations of the same policy. That 
reorganization type of operation would do a tremendous amount 
to increase air cargo security.
    Mr. Fried. Mr. Estes, I would agree with what Mr. Alterman 
just said. I would also tell you that, you know, air cargo is 
seemingly a simple business, but it is fraught with complexity.
    You do need people who are focused and dedicated to the 
workings of air cargo. To just mix them in with this general 
aviation umbrella, I think, does air cargo a disservice, and I 
think it does air cargo security a disservice as well.
    Mr. Estes. Mr. Mullen.
    Mr. Mullen. Congressman, I would just add that I think 
there are some novel approaches to focusing the existing 
Government resources a little bit better than we are doing 
right now.
    CBP has a personnel shortfall right now, but they have 
developed a program where the private sector can come to them 
and propose projects where the private sector provides some 
resources. It might be office space. It might be overtime 
salaries. There is a range of things that the private sector 
can provide, and CBP will work with them to provide their 
officers to focus inspection activities in a certain area at a 
certain time, perhaps weekends or off hours.
    So I think it is programs like that where the Government 
can work with industry to focus the existing resources a little 
bit more effectively.
    Mr. Estes. Mr. Elias, did you have any thoughts as well 
along the same lines?
    Mr. Elias. Just some brief thoughts really to build on 
that, just to leverage some of the capabilities of industry to 
work with TSA. As I mentioned before in response to Chairman 
Katko's comment, within the CCSP, there may be some 
opportunities to look at things like novel approaches to 
screening technology, those types of things, through 
partnership with industry.
    Mr. Estes. Thank you. My next question, maybe it is one 
that is already well-understood by the other committee Members, 
but coming from a new Member. We talked a little bit about the 
third-party K-9 program, and how that is being added in.
    I guess I will ask you, Mr. Alterman, since you brought it 
up first is, what were some of the specific things that we were 
wanting to see accomplished with that that wasn't being done 
now internally?
    Mr. Alterman. Well, historically at TSA there has been a 
pushback against allowing third-party K-9s to screen cargo. TSA 
has a cadre of wonderful dogs, but there aren't enough of them, 
and they are TSA dogs. There has always been a pushback from 
the agency about doing a third-party K-9 program.
    They have moved somewhat in the direction of allowing this, 
but your legislation, I think, pushed it over the edge. What 
they are doing now, at least on our last meeting with them, is 
exactly what the language of the 2825 says.
    You know, the devil is always in the details. We don't know 
exactly what the program is going to look like when it comes 
out of the other end of the sausage grinder, but we have been 
told that it will conform to the language of the act.
    We are a little concerned that things never move fast 
enough within Government agencies, and TSA in particular, and 
we are a little concerned that the details may be concerning. 
We had a meeting with them, and they promised to show us where 
they were going before they actually started implementing it.
    We haven't heard back from them, but the good news was that 
I did speak to someone who said they were going to try to have 
a program in place by October 1 of this year, which is very 
aggressive and very good if they actually do it.
    The industry continues to be in a show-me state because of 
the traditional reluctance to do this. But with the help of the 
legislation, and hopefully when the Senate gets around to doing 
the same thing, we think that we are on the right path there. I 
think that we are overcoming the reluctance.
    Mr. Estes. Thank you. It is interesting you mentioned the 
sausage-making process. I was informed on the floor today, that 
using that terminology to talk about our legislative process 
denigrates sausages.
    So, you know, Mr. Chairman, I yield back.
    Mr. Katko. Thank you, Mr. Estes.
    The Chair now recognizes the Ranking Member Mrs. Watson 
Coleman for 5 minutes of questions.
    Mrs. Watson Coleman. Thank you, Mr. Chairman. Thank you 
each for your information. It is very helpful to me. I have so 
many questions regarding this issue. I want to start with this. 
This is for all three of you actually.
    I would like to hear from the three members of the private 
sector witnesses about the security of our cargo screening 
system. Because it appears to me that the approach TSA takes in 
addressing cargo security relies a lot on effective 
communication and coordination among industry and TSA and a 
limited degree of oversight.
    So one could argue that, given the nature of the threat, 
there should be more agency oversight and compliance 
inspections of cargo security screening. I would appreciate it 
if the three of you could briefly tell me now, or for the 
record, why this system we have in place is effective at 
preventing successful attacks via cargo, and what, if any more, 
should we be doing?
    I also want you to know that I am very impressed, and very 
concerned, about the disbursement of the sort-of functions 
throughout TSA, if something that seems to belong in one sort-
of centralized location, and would love for someone to tell me 
when and why that happened if you could? Thank you.
    Mr. Fried. Mrs. Watson Coleman, I can probably address the 
oversight issue at the TSA. I would tell you that, you know, 
that TSA has 500 cargo inspectors out in the field overseeing 
approximately 4,000 indirect air carriers and freight 
forwarders.
    So most of or all of our members and freight forwarders 
throughout the United States, see the TSA personnel on a very 
frequent basis, both through the front door and through the 
back door, testing our facilities making sure they are 
hardened, making sure that our securities are, in fact, secure.
    So there is a tremendous amount of oversight, especially in 
the certified cargo screening program. They are constantly 
coming in looking at our video tapes, looking at the screening 
process itself. I----
    Mrs. Watson Coleman. [Inaudible.]
    Mr. Fried. It could range from several times a week to a 
few times a month. It depends on how they see fit. And----
    Mrs. Watson Coleman. Some agents--are they not looking at 
smaller facilities or how are they deciding where to 
concentrate their effort if they have only got 500?
    Mr. Fried. Well, and I didn't mean to imply that there are 
those indirect air carriers that are not supervised or not 
overseen or checked. They are checked on, I assume, a random 
basis. I don't know exactly what the algorithm is within TSA's 
inspection force, but I can tell you they are frequent visitors 
to our facilities.
    So I, you know, the oversight I think is there. But what we 
really need to be doing is focusing on ways to increase the 
amount of technology that is out there, improve--as an example, 
right now, I don't know if you knew this or not, but there is 
no technology in existence that TSA has validated and 
certified, that will screen many types of commodities on a 
pallet.
    So that is one of the reasons why we have to move forward 
very quickly to make sure that these K-9s are, in fact, 
provided on a third-party basis to the stakeholders, to the 
forwarders, so that we can begin this screening in that 
fashion. We assume that there will be very aggressive TSA 
oversight.
    Mrs. Watson Coleman. What do you think is the biggest 
problem getting these K-9s that can be trained? I mean, I read 
the sort-of information and briefing on it, and it seemed like 
TSA just didn't find K-9s that met the grade. Why is that?
    Mr. Fried. Well, I could tell you--I can't speak to 
whatever happened prior to this in the pilot program for a 
number of years ago. But I can tell you that there is a robust 
industry of K-9 providers out there that are ready to train to 
TSA standards.
    There is a pretty large number of dogs ready to go 
throughout wherever needed. So, you know, once again, the 
private sector can come in and assist the TSA.
    Now what is causing the delay? I think that, you know, this 
is something that the TSA is reluctant to release out of its 
control because obviously they have had such strict oversight 
over these K-9s for a number of years.
    But I think that over time, their confidence will build 
that in fact the private sector can rise to the occasion and by 
the way, even exceed the standards.
    Mrs. Watson Coleman. Let me ask you one quick question. I 
know that other two gentlemen didn't get a chance to respond to 
my question. Who mentioned the bomb bags?
    Mr. Fried. You mean the containers?
    Mr. Elias. That was me.
    Mrs. Watson Coleman. Well, the word was bags. So I just 
wanted to know what was that, how does that work, and what is 
the problem with having that used here if it has been 
determined to be effective?
    Mr. Elias. So that is on-going research in the United 
Kingdom on bomb bags. They are about an inch thick, soft-sided 
bags that can contain an explosion on-board an aircraft. They 
have done demonstrations that that has been effective on old 
aircraft parked in the United Kingdom.
    So in my testimony I mentioned that the last time the 
United States has looked at the hardened cargo container 
technology was essentially a decade ago, building off of FAA 
research. The TSA followed up with that based on a legislative 
mandate in 2004. So, you know, this U.K. technology seems 
promising so it may be something worthy of reexamining.
    Mrs. Watson Coleman. Mr. Chairman, I just have a lot of 
questions that I had to do with the, sort-of, chain of custody 
of things that ultimately get on airplanes, and I would just 
love to hear, and perhaps you could send that to us, what your 
ideas are to ensure that that sort-of chain of custody is 
secure and that we can be confident that this is working the 
way it is supposed to be.
    With that I yield back. Thank you.
    Mr. Katko. No, I think that is a particularly good point 
given the perceived technological advances by the bad guys, 
right? So it is something we should definitely be noteworthy of 
and I look forward to hearing your responses on that as well. 
You can have 10 legislative days in which to send that back. I 
would appreciate it.
    The Chair now recognizes the gentleman from Louisiana, Mr. 
Higgins, for 5 minutes of questions.
    Mr. Higgins. Thank you, Mr. Chairman.
    Mr. Mullen, is cargo ever transferred from a dedicated 
cargo flight onto a commercial passenger flight in order to 
arrive at perhaps a smaller airport with no dedicated cargo 
terminal?
    Mr. Mullen. Yes, sir. That happens routinely.
    Mr. Higgins. OK.
    Mr. Chairman on December 21, 1988, and I thank the Ranking 
Member earlier for speaking on the amount of time we have been 
talking about this. On December 21, 1988, Pan-Am flight 103 was 
blown from the sky over Lockerbie, Scotland by the placement of 
a Semtex bomb in luggage transferred from--the flight went from 
Helsinki through Frankfurt to London and was en route to New 
York. Two hundred and seventy people died, 259 crew and 
passengers and 11 on the ground where the wreckage fell.
    Two weeks prior to that attack, the FAA received a detailed 
warning. This is what the investigation disclosed is what I am 
sharing today. A detailed warning describing the attack 
precisely as it took place. It was taken very seriously by the 
FAA and all the airlines were warned.
    Pan-Am itself began collecting a $5 security surcharge 
promising and I quote: ``A program that will screen passengers, 
employees, airport facilities, baggage, and aircraft with 
unrelenting thoroughness.'' This was almost 30 years ago, and 
yet we still discuss it today.
    So I would ask my question to you Mr. Elias, given your 
background and your area of specialty, sir. Considering the 
modern capability to digitally construct and shape Semtex 
plastic explosives, it seems to me that the detection of the 
chemical compound itself for plastic explosives has to be our 
goal.
    What can Department of Homeland Security do to enhance the 
industry's ability to detect plastic explosives and as a 14-
year cop, I am a great believer in K-9s. I think you are right, 
sir.
    Mr. Fried you mentioned that there is a robust industry of 
K-9 providers. These dogs can be trained. They can be deployed 
rather inexpensively compared to some of the technologies out 
there.
    But Mr. Elias, I defer to your greater wisdom here, sir, 
and I ask you your response?
    Mr. Elias. So your question really gets at the use of 
technology and what technologies are adopted, as well as 
alternatives to technologies, such as K-9 teams and how they 
could work in concert with each other.
    Mr. Higgins. To detect plastic explosive, yes, sir.
    Mr. Elias. To detect explosives, yes, absolutely, plastic 
and other explosives. So explosive trace detection technologies 
certainly have the capability to look at those chemical 
signatures of various different explosives.
    K-9s certainly can be trained to do similar tasks. So the 
use of both of those technologies can augment other methods, 
such as explosives detection systems which work on matter 
density and so forth, to look at explosives without looking at 
the chemical aspects of those explosives.
    So there is a host of technologies available. We really 
haven't gotten to the point to really field any other 
technologies other than those trace technologies, although 
there are some technologies that have been in the laboratory 
for years. They just haven't been seen as feasible to really 
move out into the field.
    The K-9 teams certainly are seen as one potential option 
for looking at ways to detect chemical traces in the 
explosives.
    Mr. Higgins. Thank you for that answer.
    Mr. Fried.
    Mr. Fried. Mr. Higgins, I am a graduate of Syracuse 
University and several students were on Pan-Am 103 returning 
from their semester abroad in Europe.
    Mr. Higgins. I am sorry for that pain, sir.
    Mr. Fried. As were we in the Syracuse community. I would 
tell you that there is not a day that goes by that we don't 
think of Pan-Am 103.
    I would also say that this is a risk-based multi-layered 
approach to security. There is not one magic bullet to actually 
detect every single threat. That is why everything has got to 
be working in concert--all these tools. I think that K-9s are a 
very viable tool that needs to be implemented as soon as 
possible.
    But technology is constantly evolving and that is one of 
the reasons why TSA has got to use an aggressive approach to 
making sure they are considering every new piece of technology 
possible and making those new technologies available in the 
field so that they can work in concert with these K-9s when 
necessary.
    Mr. Higgins. Mr. Fried, that was a thoughtful and 
comprehensive answer.
    Mr. Chairman, I yield back.
    Mr. Fried. Thank you.
    Mr. Katko. Thank you. Mr. Fried, I must know that I am very 
happy to hear that you are from Syracuse University, as am I. 
So----
    Mr. Fried. Thank you.
    Mr. Katko [continuing]. Great minds think alike I guess, 
right.
    Mr. Fried. Jim Boeheim was hired in my freshman year.
    Mr. Katko. Is that right?
    Mr. Fried. Actually my sophomore year.
    Mr. Katko. You are dating yourself. I hope----
    Mr. Fried. I am dating myself.
    Mr. Katko. I hope you didn't dress as poorly as he has over 
the years. He has gotten better lately, but I would like to 
thank all of you for your testimony today.
    It has been very helpful. It has been long past due for 
this subcommittee to pay attention to air cargo from a 
committee standpoint. We pay attention to it every day, but 
talking about it in this setting is very, very important, and I 
appreciate all of your testimonies. It is a very impressive 
panel.
    I want to echo what I said earlier and that is this is not 
a one-time deal. We routinely rely on you all feeding 
information to our committee's staffs and for us to shape 
policy and shape laws and accordingly. So please keep up the 
interaction between all of us.
    I applaud you on the public-private partnerships. I applaud 
you on doing a terrific job in carrying out Ranking Member 
Thompson's mandate from years ago. I mean, I think it was his 
legislation that started this.
    And good for him, and I wish he was here for me to throw a 
compliment at him cause I don't do it very often.
    Mrs. Watson Coleman. I will let him know.
    Mr. Katko. All right. It is on the record so he should make 
a record of it. But I do thank you for it, and I do thank Mrs. 
Watson Coleman as always and all of the Members of the 
committee and the staff, who did a great job on this.
    Let's keep moving on this and if there is legislation that 
you need for us to take a look at of course it is our job to do 
that and please keep it coming. The last thing I can say is go 
orange. Thank you very much.
    So Members of the committee may have some additional 
questions for the witnesses. We will ask you to respond to 
those in writing. Pursuant to committee rule VII(D), the 
hearing record will be held open for 10 days.
    Without objection the subcommittee stands adjourned.
    [Whereupon, at 3:12 p.m., the subcommittee was adjourned.]

                            A P P E N D I X

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  Questions From Ranking Member Bonnie Watson Coleman for Stephen A. 
                                Alterman
    Question 1. The Government's approach to securing air cargo relies 
significantly on effective communication and coordination among 
industry stakeholders and the TSA, and the TSA has limited resources to 
ensure compliance and oversight. Please provide your thoughts on the 
effectiveness of the current construct for air cargo security. Should 
TSA increase its resources for compliance and oversight? What more can 
be done to ensure effective communication, coordination, and oversight?
    Answer. The Cargo Airline Association agrees that effective 
communication and coordination between industry stakeholders and TSA is 
essential in today's security environment. This communication and 
coordination is especially important in an era of diminishing 
resources.
    This question can be broken down into two separate components--the 
communication and coordination piece and the oversight issue. With 
respect to the ``current construct for air cargo security'', as we 
noted in oral testimony, policy affecting air cargo has largely been 
spread across the agency rather than being centralized in one place. 
This dispersion of policy responsibility has often led to conflicting 
interpretations of TSA policy leaving industry caught in the middle of 
internal agency struggles. This problem has been exacerbated by the 
disbanding several years ago of the Air Cargo Office within the Office 
of Security Policy and Industry Engagement (OSPIE). We believe that, 
without this office, effective air cargo policy gets lost among other 
competing interests. While we understand that re-creating the office 
with the scores of personnel previously employed is probably not viable 
in today's environment, we strongly believe that an Air Cargo 
Operations and Policy Office, dedicated to working with industry 
stakeholders, would go a long way toward a better understanding of the 
industry and a more secure air cargo supply chain.
    In terms of TSA's oversight function, in our opinion the key is not 
more resources, but rather the continued development of a program for 
non-punitive information sharing that will allow TSA to develop data on 
potential security gaps and to work with industry on mitigation 
strategies. Coupled with more robust intelligence sharing both among 
Government agencies and between Government and industry, this 
cooperative effort will provide the best air cargo security.
    Question 2. How does the cargo industry and TSA ensure a secure 
chain of custody for air cargo as it transits through the supply chain 
prior to loading on aircraft? What more can be done to ensure a secure 
chain of custody?
    Answer. The security of the air cargo supply chain is governed by 
the various Standard Security Programs governing industry operations. 
The specific provisions are considered Sensitive Security Information 
(SSI) and cannot be divulged in a public context. Therefore, this 
question is more appropriately addressed to TSA who can provide the 
information on a confidential basis.
    Having said that, it is important to note that the air cargo 
industry is composed of a number of diverse entities all of which play 
a role in securing the supply chain. Because of the diversity of 
operations, each entity (passenger airlines, all-cargo airlines and air 
freight forwarders) operates under a separate security program tailored 
to specific threats. Where the operations of these entities intersect, 
the various programs contain provisions that provide security 
requirements for the transfer of freight among the parties.
    In terms of possible improvements, the various programs should be 
reviewed with a view to making them more outcome-based and tailored to 
specific company operational requirements. As a practical matter, ``one 
size does not fit all'' prescriptive programs across a broad spectrum 
of the industry are less effective than risk-based programs designed 
for each company in the supply chain. One way of accomplishing this 
objective would be for TSA to establish the outcomes necessary and 
having each company develop the specific ways that they would comply--
with TSA approving each company's methodology.
    Question 3. The rise of e-commerce business has affected the cargo 
industry significantly in recent years. How has the rise of e-commerce 
business impacted air cargo security, and what changes should be made 
to current security programs to reflect these changes in the industry?
    Answer. The rise of e-commerce has radically altered the buying 
habits of consumers around the world. On-line purchases have meant 
significantly more freight moving through the air cargo supply chains. 
While the industry has adequately adapted to this influx of traffic, 
there are two enhancements that can be made as we move forward. Both of 
these enhancements were described in some detail in oral testimony of 
the industry witnesses.
    First, in order to deal with increasing volumes and regulatory 
requirements, the use of third-party canines for the primary screening 
of air cargo is absolutely essential. Canines have consistently proven 
effective in such screening in international markets and these private 
canines can provide an extra level of security for all supply chains. 
TSA is in the process of developing such a program and the recently 
passed H.R. 2825 also would require a viable third-party canine 
program. A rapid deployment of this ``low-tech'' screening method is 
extremely important.
    Second, the Air Cargo Advance Screening (ACAS) program where 
companies submit shipment information for analysis as early as possible 
in the supply chain should be made fully operational as soon as 
possible. The program has been in a pilot stage for over 6 years and 
full implementation should be a Government priority. Indeed, 
consideration should be given to expanding ACAS, now an international 
program, to domestic operations.
 Questions From Ranking Member Bonnie Watson Coleman for Brandon Fried
    Question 1. How does the cargo industry and TSA ensure a secure 
chain of custody for air cargo as it transits through the supply chain 
before loading on aircraft? What more can be done to ensure a secure 
chain of custody?
    Answer. Freight forwarder members of the Airforwarders Association 
are governed by the Indirect Air Carrier Standard Security Program when 
securing their cargo as it transits through the supply chain before 
loading on aircraft. Specific provisions of the program are considered 
Sensitive Security Information (SSI) and cannot be divulged in the 
public context.
    Members of the Airforwarders Association have been ensuring the 
safe transit of air cargo through a complex supply chain for many 
years. However, more needs to be done, especially regarding our 
interaction with the Transportation Security Administration.
    For example, as mentioned in my recent testimony, the air cargo 
supply chain is comprised of many complexities more fully understood by 
those individuals who have had extensive industry experience. For this 
reason, we feel that TSA should reestablish a stand-alone air cargo 
division within the agency, comprised of personnel who are industry-
educated and capable of engaging stakeholders in the development of 
sound policy positions which can be quickly understood and applied.
    There are over 4,000 TSA-certified Indirect Air Carriers throughout 
the United States utilizing the air cargo supply chain daily and 
abiding by the agency security program. Many participants require the 
uniform and consistent understanding of the provisions and requirements 
included within the security program itself. TSA should, therefore, 
develop and provide standard training modules with appropriate testing 
elements to assure this knowledge consistency throughout the Indirect 
Air Carrier community. Consistent use of TSA authored standard training 
and testing modules and, in many cases, hiring third parties to help 
manage the process, allows Indirect Air Carriers to know that any 
individual who has received TSA-provided training has received 
instruction that comports with TSA's interpretation of the Indirect Air 
Carrier Standard Security Program. This structure promotes air cargo 
security by providing uniformity of practice and procedure.
    Also, TSA should expedite the implementation of private, third-
party-provided canine teams allowed for use by forwarders, airlines, 
and other entities participating in the Certified Cargo Screening 
Program. While technology is useful in screening most cargo, many 
commodities, due to an irregular shape, size, and volume cannot be 
screened using conventional tools. Therefore, using trained and 
certified canines to perform the task is not only faster but more 
efficient.
    Question 2. The rise of e-commerce business has affected the cargo 
industry significantly in recent years. How has the rise of e-commerce 
business impacted air cargo security and what changes should be made to 
current security programs to reflect these changes in the industry?
    Answer. The increase of shipments ordered on-line by consumers is 
steadily growing each day, and the Known Shipper Program must be 
changed to streamline and address the new reality of these 
transactions. TSA should work with industry to accomplish necessary 
modifications in the Known Shipper requirements by naming a joint task 
force, comprised of industry experts and agency personnel that can re-
frame the program while providing the necessary knowledge about the 
sender required for safe transportation.
    Also, we urge the Department of Homeland Security to release its 
Notice of Proposed Rulemaking for the Air Cargo Advance Screening 
Program (ACAS) as soon as possible. Often, knowing who is doing the 
shipping, receiving, and describing the shipment is as important as 
physical screening itself. ACAS focuses on import traffic to the United 
States where TSA's influence and oversight are less direct than with 
U.S. export and domestic shipments. TSA's focus is understandably and 
rightfully on the ``last point of departure'' and not the actual origin 
of the cargo which could be anywhere in the world. Our current air 
cargo supply chain is secured through a successful risk-based, multi-
layered approach and ACAS provides an additional and efficient layer.
    Finally, using private, third-party canines to assist in the 
screening of air cargo mentioned previously is essential. Canines have 
consistently been proven effective in providing screening in 
international markets and using this seemingly ``low-tech'' solution 
can provide an effective level of additional security to address the e-
commerce challenge.
  Questions From Ranking Member Bonnie Watson Coleman for Michael C. 
                                 Mullen
    Question 1. The Government's approach to securing air cargo relies 
significantly on effective communication and coordination among 
industry stakeholders and the TSA, and the TSA has limited resources to 
ensure compliance and oversight. Please provide your thoughts on the 
effectiveness of the current construct for air cargo security. Should 
TSA increase its resources for compliance and oversight? What more can 
be done to ensure effective communication, coordination, and oversight?
    Answer. The question has two parts. The first is communication and 
coordination, and the second is compliance and oversight. In performing 
these two functions, different groups within TSA would be affected. TSA 
needs to increase resources devoted to coordination and communication 
by reestablishing the Air Cargo Policy Division that was disbanded 
several years ago. Without a dedicated group focusing on air cargo, the 
communication and coordination between industry and TSA has been 
greatly weakened. This has resulted in TSA implementing policies in 
response to security incidents without consultation with industry, 
causing confusion and challenges to the industry that could be easily 
avoided with close coordination.
    TSA resources dedicated to compliance and oversight are considered 
adequate and need to be maintained. One EAA member had nearly 550 
audits, visits, or contacts from TSA inspectors in the first 6 months 
of this year at its station locations. Only five of these visits 
resulted in a letter of investigation noting a discrepancy, which is a 
compliant rate above 99%. This clearly is a level of oversight 
sufficient to ensure a company is fully compliant with the regulations. 
TSA's own reviews and analysis show that the all-cargo industry is very 
effective in complying with TSA regulations. Outcome-focused compliance 
(OFC), the new process that TSA is implementing, is definitely the way 
to move forward for future compliance needs and will create a new level 
of cooperation with industry. TSA should continue to work closely with 
the industry to develop OFC policies that enhance security and do not 
impede the flow of legitimate commerce.
    Question 2. How does the air cargo industry and TSA ensure a secure 
chain of custody for air cargo as it transits through the supply chain 
prior to loading on aircraft? What more can be done to ensure a secure 
chain of custody?
    Answer. Express consignment operators (ECO) operate a ``closed 
loop'' system. The carriers are governed by multiple regulations, 
depending on the country of origin and the carriers' individual TSA 
Security Plan. When a shipment is received, there are a variety of 
multi-tiered controls that are utilized. These include: Accepting 
shipments at a customer location or an ECO facility by a direct 
employee or authorized representative; requiring employees and agents 
to be vetted through a thorough pre-employment background check, such 
as a Security Threat Assessment (STA) or Secure Identification Display 
Area (SIDA) badging process, or a vetting process approved by the 
Appropriate Authority in the respective country; training all employees 
in security measures as required by the TSA and the local government.
    Additionally, after cargo is accepted, a variety of controls exist 
that enhance the secure chain of custody, such as: Cargo traveling in a 
locked and monitored vehicle until it reaches an ECO facility; ECO 
facilities protected by access control systems, on-site security 
guards, and/or closed-circuit television; physical screening by X-ray, 
explosive trace detection (ETD), physical search, or other acceptable 
means that are approved by the local Government overseas, virtual 
vetting of shipments based on data; radiation screening prior to being 
shipped to the United States; suspicious package screening and 
reporting to the appropriate authorities; tracking shipments through an 
electronic scanning system that constantly updates the location and 
status of the shipment as it moves through an ECO network. ECOs adhere 
to all cargo acceptance, control, custody, and transfer measures 
outlined in the TSA Security Program, including the required ID checks 
of customers and continual TSA audits of ECO locations and staff to 
ensure compliance with the regulations.
    ECOs transfer a small percentage of cargo to passenger air 
carriers, which is screened prior to transporting according to TSA 
standards for passenger carriers. This cargo is either screened at the 
passenger aircraft operator's facility or screened at one of the ECO 
Certified Cargo Screening Facilities (CCSF). CCSF locations are ``on 
airport,'' so the freight is screened via X-ray or ETD and then moved 
in a sealed container under escort. The freight never leaves the SIDA 
after it is screened.
    ECOs go above and beyond the requirements in the TSA Security 
Programs and historically have dedicated enormous resources to ensuring 
secure supply chains in order to protect their people, property, 
shipments, and brand every day. TSA and other Government security 
measures are additional layers on top of the major investments in 
security the express industry already has made. The security record of 
the express industry is a testament to the effectiveness of these 
systems.
    Question 3. The rise of e-commerce business has affected the cargo 
industry significantly in recent years. How has the rise of e-commerce 
business impacted air cargo security, and what changes should be made 
to current security programs to reflect changes in the industry?
    Answer. E-commerce is a global phenomenon that has provided new 
opportunities for small entrepreneurs to access a world-wide 
marketplace for their goods. Always a leader in innovation, the United 
States is benefitting from the growth of e-commerce as our 
entrepreneurs find new markets for their products and our consumers 
have access to the highest-quality goods at the best price. Micro, 
small, and medium enterprises have been the primary beneficiaries of 
the boom in e-commerce and have become the primary creators of new jobs 
in the U.S. economy. Moreover, numerous manufacturing processes rely on 
e-commerce to ensure timely supply of components and parts.
    Government plays a key role in ensuring e-commerce continues to 
thrive by adopting facilitative policies to expedite the clearance of 
goods across the border, while maintaining the security and safety 
controls that interdict security threats and prevent illicit goods from 
entering U.S. commerce. An important step the U.S. Government took to 
achieve these goals was the passage of the Trade Facilitation and Trade 
Enforcement Act (TFTEA) of 2015.
    E-commerce is in most respects no different from traditional 
commerce in terms of maintaining strict security controls and clearing 
the shipments as they come across our border. The data ECOs provide on 
every shipment to the Government indicates there is no evidence that e-
commerce traders are more prone to engage in fraud, counterfeiting, 
smuggling, or other illicit behaviors than is the case with all trade. 
U.S. Customs and Border Protection has developed a robust and highly 
reliable targeting system, based on manifest information, to interdict 
such security threats and illegal activities, and it is being applied 
to e-commerce shipments every day, very effectively. Express 
consignment operators have invested millions of dollars to comply with 
TSA security programs and support CBP's and their own targeting efforts 
against the full range of potential security threats and illicit goods, 
and these investments are demonstrating a high level of effectiveness. 
A vital part of these investments has been the Air Cargo Advance 
Screening (ACAS) program, which I described in my oral and written 
testimony. This program is providing data to the Government as early as 
possible in the supply chain on every shipment carried by its 
participants. ACAS has been in a pilot stage for over 6 years and 
should be implemented in regulations now.

                                 [all]
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