TSA Air Cargo Security Program

1. TSA Air Cargo Security Program March 18, 2005

2. Vision ~ Air Cargo Security • DHS AIR CARGO VISION: A layered air cargo security solution that denies terrorists an opportunity to exploit the system by using an optimal combination of information and technology-based solutions… • MISSION: To provide the most effective security program possible, while maintaining effective stewardship of resources and without unduly impeding the flow of commerce • GOAL: To secure the air cargo supply chain including cargo, conveyances and people through the implementation of a layered, threat-based, risk-managed security system • RISK-MANAGED = 100% (physical / electronic) inspection of elevated-risk* cargo * to be defined by Freight Assessment Program

3. Current Air Cargo Landscape • Complex set of stakeholders operating under a myriad of different security programs…. • Stakeholders • 285 air carrier (domestic/foreign, passenger/all-cargo) operators • 3,800 registered IACs (indirect air carriers, also known as freight forwarders) • 1.5M known shippers (400K currently in the database) • US Air Carriers • Combined Passenger and Cargo Operations • Aircraft Operator Standard Security Program (AOSSP) • All-Cargo Operations • Domestic Security Integration Program (DSIP) • Twelve Five Standard Security Program (TFSSP) • Non-US Air Carriers (Operating Flights To, From, or Over U.S.) • Combined Passenger and Cargo Operations • Model Security Program (MSP) • All-Cargo Operations • Air Carrier International Security Procedure (ACISP)

4. “The Way Ahead” • Aviation Security Advisory Committee (ASAC) provided extensive recommendations on air cargo security (Oct 1, 2003) • The Air Cargo Strategic Plan, approved and signed by Secretary Ridge January 2, 2004, incorporates ASAC recommendations and lays out 5-year roadmap for air cargo security • Key components: • Known Shipper Program • Indirect Air Carrier Program • Freight Assessment Program • Increased Regulatory Oversight • Implementation will be via rulemaking

5. NPRM Addressed…. • Civil Aviation Security: General Rules (49 CFR 1540) • Airport Security (49 CFR 1542) • Foreign Air Carriers (49 CFR 1546) • Aircraft Operators (49 CFR 1544) • Indirect Air Carriers (49 CFR 1548)

6. NPRM Status • Public comment period closed on January 10th • Work of summarizing and analyzing the comments is complete • Received a total of 676 comments from 134 unique commenters • Much misunderstanding surrounding TSA intent regarding SIDA expansion and security threat assessments • Many commenters are looking for the “how” ~ which will be addressed in revised security programs • Internal TSA team is working at a very fast pace to consider all the comments and to draft necessary changes to the regulations • TSA executive level coordination will be followed by DHS and OMB coordination and clearance

7. Known Shipper Database • To strengthen the Known Shipper Program, TSA deployed a centralized Known Shipper Database [Feb 04] • Use is currently voluntary • Currently, 89 air carriers and over 500 Indirect Air Carriers participate and have contributed approximately 400,000 known shippers to the database • Total population of US known shippers estimated at 1.5 million • NPRM proposes to mandate participation in centralized database

8. Freight Assessment System ~ Objectives/Timing • Freight Assessment System (FAS) is the cornerstone of the Air Cargo Strategic Plan • Goal: Reduce risk of transporting cargo on passenger and all-cargo aircraft • Pre-screening will identify “elevated risk” cargo that must be inspected by carriers • Incorporates elements of Known Shipper and Indirect Air Carrier programs combined with shipment specific data to determine level of risk for each shipment • Reduces current reliance on random inspections • Will implement a flexible, scalable risk assessment process that will use cutting-edge technology to assist in identifying high-risk cargo for inspection • Supports the goals of the TSA Air Cargo Security Strategic Plan: • Enhance shipper and supply chain security • Identify elevated risk cargo through prescreening • Identify technology for performing targeted air cargo inspections • Secure all cargo aircraft through appropriate facility security measures • Planned Timeline: “Pilot” will be conducted by end of CY05, with deployment occurring during CY06 and CY07

9. FAS Guiding Principles ~ and Results • Design, develop and implement a FAS that is inclusive of all relevant efforts within DHS • Reuse and incorporate solutions already identified by CBP or elsewhere within DHS to avoid duplication of effort and inefficient use of resources (i.e., “No stovepipe systems”) • Avoid requiring industry to provide same data to multiple USG agencies ------------------------ • TSA is partnering with CBP to leverage capabilities being developed as part of CBP Automated Commercial Environment (ACE) modernization program •  FAS is fully aligned with the ACE schedule • As of Feb 15th, TSA developers working side-by-side with CBP developers to jointly develop software to be hosted on CBP systems  

10. FAS Risk Model Data Elements f (current) = Random Inspection + IAC + Shipper (Not currently based upon risk assessment) (Approved: Y/N) (Known: Y/N) Known Shipper Risk External Factor Risk Carrier & Flight Risk IAC Risk Shipment Risk + f (pilot)= + + + Data used in Pilot Risk Model

11. FAS Architecture

12. Freight Assessment System Pilot Timeline

13. Innovative Regulatory Programs • Focus cargo inspections, Phase II (began Nov 2004) • 15 airports selected monthly for focus inspections • Broad system look at air carrier and IAC compliance • Cargo strikes (began Sep 2004) • Concentrated week-long inspections of IACs at a specific airport • Typically includes about 15 TDY cargo inspectors (C-ASIs) from HQ and field sites • Very effective ~ measures regulated party compliance and provides superb training for C-ASIs • Special emphasis assessments (SEAs), Phase I • New program on our 2005 roadmap • SEAs target another area of potential vulnerability, acceptance of cargo from unknown shippers for transport on passenger aircraft • Involves realistic testing

14. Initial Cargo Strikes Have Targeted Highest Volume Areas • Cargo strikes target the higher-volume commercial carrier airports • Cargo strikes (conducted or planned for near-term execution) involve airports that handle almost half of total cargo volume, and 60% of the passenger air carrier cargo volume

15. Metrics ~ Overarching Conclusions • Overall inspections: • Show that compliance is improving • IACs represent the greatest compliance challenge, and also • …. the greatest compliance opportunity • Cargo Strikes: • Targeted towards passenger carrier airports with the highest cargo volume • Utilize human resources efficiently and flexibly to target greatest vulnerabilities (IACs and violations commonly found at IACs) • Have an immediate impact on compliance • Education and Outreach Efforts: • Conducted with regulated parties to improve understanding of security rqm’ts • Helps to improve compliance across-the-board

16. TSA Has Developed Infrastructure To Record Inspections and Violations • TSA has electronically recorded results from more than 40,000 cargo inspections since January 2003 • The overall violation rate for all inspected entities for the last two years was 11% • TSA has strategically used technology to track and target inspections. As evident in the chart, there was a sharp increase in the number of inspections recorded in PARIS beginning in January ’04. This tool dramatically enhances the organization’s ability to record, analyze, and share vital information with multiple stakeholders simultaneously.

17. IACs Represent the Greatest Compliance Opportunity • IAC inspections have led to a greater incidence of violations than all other inspection types combined. Violations found from IAC inspections account for approximately 72% of total violations* while only 23% of inspections** for the last two years . IAC inspections & violations *3186 violations from the Domestic Indirect Carrier Inspections and Focus Cargo Inspections for Indirect Air Carriers out of 4409 total violations. **9454 Domestic Indirect Carrier Inspections and Focus Cargo Inspections for Indirect Air Carriers out of 40372 total inspections

18. Progress on Key Congressional Mandates • Tripling of inspection requirements for passenger air carriers [DHS Appropriations Act] • Draft AOSSP change issued to passenger carriers on February 15th • 30-day comment period complete • Hiring 2d 100 cargo aviation security inspectors (C-ASIs) [DHS Appropriations Act] • Approximately half of positions have already been filled by trained inspectors • Have worked closely with HR on an accelerated competitive hiring process for remainder • More than 7,500 applications received • Certification lists have been issued for all remaining vacancies and local hiring managers are in final stages of interviews/selection • Set an aggressive internal goal of having all 100 on board by March 31st • Hardened container pilot [Intelligence Reform Act] • Detailed planning underway • Office of Technology is lead; Air Cargo Programs Office is partnering and cost-sharing • 2 certified vendor products (Telair and Galaxy) • 2 potential airline partners (Continental and United) • Pilot to commence NLT June 15th • Air Cargo final regulations [Intelligence Reform Act] • Due within 240 days of enactment • On track to meet that timeline