Transporting cargo by air involves many participants, including manufacturers and shippers who make routine or occasional shipments, freight forwarders who consolidate shipments and deliver them to air carriers, and cargo facilities of passenger and all-cargo air carriers that store cargo until it is placed aboard an aircraft. Figure 1 depicts these participants and the two primary ways in which a shipper can send cargo by air. A shipper may take its packages to a freight forwarder, which consolidates cargo from many shippers and delivers it to air carriers, as illustrated in the top portion of figure 1. The freight forwarder usually has cargo facilities in or near airports and uses trucks to deliver bulk freight to commercial air carriers—either to a cargo facility or to a small-package receiving area at the ticket counter. Freight forwarders operate about 10,000 facilities nationwide. According to TSA, about 80 percent of shippers use freight forwarders. Another way for a shipper to send freight is to directly package and deliver it to an air carrier’s airport sorting center, as pictured in the bottom half of figure 1. Many large companies, including some that produce and distribute perishable goods, have direct accounts with either all-cargo or passenger air carriers. During fiscal year 2000, about 12.2 billion revenue ton miles of freight were shipped in the United States by air. About 22 percent of that total was carried on passenger aircraft; the remainder was carried on all-cargo aircraft. Freight is a significant source of income to airlines, accounting for about 10 percent of scheduled passenger airlines’ revenue and bringing in about $13 billion in 2001. DOT’s projections indicate, moreover, that the amount of freight transported by air will increase faster than the number of passengers in the coming years, thus adding to its importance. Figure 2 shows the amount of air cargo actually transported from fiscal years 1996 through 2001 and the amount that DOT projects will be transported from fiscal years 2002 through 2012. In addition to freight, air carriers also transport mail. In fiscal year 2000, about 2.5 billion revenue ton miles of mail were shipped in the United States by air and transported predominantly on passenger aircraft (about 70 percent of the total). In September 2001, the amount of domestic mail transported by air decreased significantly—down about 68 percent from the revenue ton miles of mail transported in September 2000. DOT’s forecast through 2013 indicates that the amount of domestic mail will resume growth in fiscal year 2004. However, the amount of mail transported by air is not expected to return to 2001 levels during the entire forecast period, in part because of security directives issued by TSA in the aftermath of the September 11th attacks. Figure 3 shows the amount of U.S. mail actually transported by air from fiscal years 1996 through 2001 and the amount that DOT projects will be transported from fiscal years 2002 through 2012. The December 1988 bombing of Pan Am flight 103, along with the crashes in 1996 of ValuJet flight 592 and TWA flight 800, led to increased national concerns about air cargo security. The federal government responded to these incidents with studies of the vulnerabilities in the civil aviation system and recommendations to enhance many aspects of the system, including air cargo security. (See app. I for a chronology of the incidents and the federal response.) For example, the Pan Am bombing led to the passage of the Aviation Security Improvement Act of 1990, which required FAA to begin an accelerated 18-month research and development effort to find an effective explosives detection system to screen baggage and cargo. Following the 1996 crashes, the White House Commission on Aviation Safety and Security (known as the Gore Commission) was created. The Commission recommended, among other things, that FAA implement a comprehensive plan to address the threat of explosives and other threat objects in cargo and work with industry to develop new initiatives in this area. After the 1996 crashes, FAA established the Baseline Working Group and, later, the Cargo Working Group—federal-industry partnerships—to find ways to enhance air cargo security. The terrorist attacks of September 11, 2001, renewed national concern with cargo security. The Aviation and Transportation Security Act, enacted in November 2001, requires the screening of all passengers and property, including cargo, U.S. mail, and carry-on and checked baggage, that is carried aboard commercial passenger aircraft. It also requires having a system in place as soon as practicable to screen, inspect, or otherwise ensure the security of cargo on all-cargo aircraft. The act transferred responsibility for aviation security from FAA to the newly established TSA. In November 2002, the Senate passed proposed legislation on air cargo security. Vulnerabilities have been identified in the air cargo system by the 1996 Gore Commission, DOT’s OIG, TSA, experts with whom we spoke, and other government and industry studies. Specifically, vulnerabilities have been identified in the security procedures of some air carriers and freight forwarders, including the adequacy of background investigations for all persons handling cargo. For example, TSA inspectors have found numerous security violations made by freight forwarders and air carriers during routine inspections of their facilities. Freight forwarders and air carriers are required to have TSA-approved cargo-security programs, and only freight forwarders with an approved security program are permitted to ship freight on passenger aircraft. In addition, DOT’s OIG has reviewed TSA’s known shipper program—which allows shippers that have established business histories with air carriers or freight forwarders to ship cargo on planes—and TSA’s procedures for approving freight forwarders, checking for possible security weaknesses. The known shipper program is TSA’s primary approach for ensuring air cargo security and complying with the cargo-screening requirements of the Aviation and Transportation Security Act. Other security vulnerabilities include possible tampering with cargo during land transport to the airport or at the cargo-handling facilities of air carriers and freight forwarders. The amount of cargo theft that occurs in these locations indicates the security problem. The National Cargo Security Council, a coalition of public and private transportation organizations, estimates that cargo theft among all modes of transportation accounts for more than $10 billion in merchandise losses each year. Furthermore, the Federal Bureau of Investigation estimates that the majority of cargo theft in the United States occurs in cargo terminals, transfer facilities, and cargo-consolidation areas. This type of theft also occurs in other parts of the world. For example, during a series of robberies that took place at the Brussels airport in 2001, robbers stole $160 million in diamonds from the holds of Lufthansa jets. DOT has reported that thefts are often committed by employees or with employee cooperation, and provided examples of thefts perpetrated at the Port of New York/New Jersey (which includes Kennedy International Airport) and the Port of Boston (which includes Logan International Airport). FAA or TSA has implemented a number of key recommendations or mandates to improve air cargo security made over the past 12 years by the Aviation Security Improvement Act of 1990, the Gore Commission, the Cargo Working Group, and DOT’s OIG. (See fig. 4.) For example, in 1999, FAA, in cooperation with the air cargo industry, developed security training guides for air carriers and ground personnel who handle air cargo. However, other recommendations by those groups, such as conducting research and operational tests of technology to screen cargo for explosives, are ongoing and not yet completed by TSA or have not been implemented. According to TSA officials, in 1999 FAA requested funds to conduct a feasibility study on a system of third-party inspections, but the study was not funded by the Congress. Additional information on the key recommendations is provided in appendix III and in the subsequent section of this report. Our research identified numerous actions that would enhance air cargo security in the near-term. These actions include and expand upon some of the key recommendations made since 1990, as well as best practices identified for cargo security in government reports. These actions include using existing technologies, such as explosives detection devices, which are currently used to screen baggage, and conducting further research and development of new technologies, such as blast-hardened cargo containers, that have the potential to improve air cargo security. These actions also include instituting additional security procedures and best practices, such as developing an industrywide cargo profiling system and conducting background checks on all individuals who convey and handle air cargo. Our research identified a number of technologies, such as electronic seals, that have the potential to strengthen air cargo security by making it more difficult for freight to be tampered with during transport by truck from the shipper to the aircraft and in cargo-handling facilities. Other technologies, such as x-ray machines and explosives detection equipment, could be used to screen cargo before it is loaded on aircraft. While each technology has security-enhancing benefits, each one also has potential limitations to implementation that need to be weighed. Table 1 describes these technologies as well as the potential cost, benefits, and drawbacks associated with each. Some of the technologies are discussed in greater detail after the table. Screening Technologies. Both the Gore Commission and the Cargo Working Group recommended using existing technology to screen cargo for explosives and developing new technologies to screen cargo for explosives. Trace explosives detection devices and bulk explosives detection systems, which are currently used to screen passenger baggage for explosive material, could also be used to screen cargo containers. According to TSA, the use of trace devices to screen cargo has shown few problems. Canines have been identified as one of the most effective ways to screen cargo and their use has expanded significantly in recent years, based upon recommendations from the Gore Commission and others. In addition to screening cargo, canine teams are used at airports to respond to suspicious events, such as bomb threats. According to TSA, security experts, and industry officials, canine teams have proven successful at detecting explosives and are the most promising method for screening cargo.