Boeing is looking to take the air cargo industry to new places when it comes to transportation security. Though the company is best known for its passenger planes, Boeing also has decades of defense contracting expertise. Even more important for the new world of air security, Boeing also accomplished what many regarded as a near-miracle in the last year. It installed systems for scanning checked passenger luggage at more than 430 airports all over the United States in the space of just six months.

Members of the air cargo industry are horrified at the very idea that their business may wind up facing the same inspection rules and requirements that the passenger side does. Regulations written by Congress seem to imply that this will be the case.

"If you look at the Transportation Security Administration's appropriation bill, you'll see that the House version has a rider in it that would essentially bar all cargo from passenger planes unless it is physically screened," says respected aviation industry expert David Harris.

Chaos looms if legislation passes

While it's not yet certain that the Senate version will have the same rule, the very possibility that such legislation might be considered is terrifying for the air cargo industry. "If it would become law that all cargo on passenger airplanes was to be physically screened to the same standards as passenger bags, it would throw the air cargo into chaos in this country, because at present, there's no way to do that," Harris says.

Creating such solutions has become a high priority for companies of all kinds that deal with the air transport industry. Fresh from its victory on the passenger side, Boeing is now focusing on cargo-ocean cargo, that is.

"You can't justify the expense of shipping something by air compared to shipping it by ground if the restrictions become so strict it takes the same amount of time to move the goods," Harris says. "You need some way to provide security without slowing things down or getting shipping cargo on top of it."

Supply chains to get a high-tech look

Creating a system that will do just that is Boeing's new goal, but in the ocean sector. That's because the company just won a $4.2 million grant to demonstrate sophisticated supply chain technology dealing with globe-spanning markets as part of Operation Safe Commerce.

Established to support the development of new technology policies, procedures, strategies and technologies, Operation Safe Commerce had a very rough start. Although Congress approved tens of millions of dollars for the program, the Bush Administration strenuously resisted funding it.

As recently as mid-summer, the Transportation Security Administration attempted to divert Safe Commerce funds to the air passenger industry. Loud protests by Democratic Senators Patty Murray and Ernst Hollings stopped that from happening, and now the air industry may reap significant benefits from an ocean-industry oriented effort.

Using networks and information to create security

Boeing's project is designed to improve security by using the company's network and database expertise to closely and constantly examine every aspect of the supply chain. That means the systems Boeing and its partners develop for the maritime world will probably prove useful for the air industry as well.

"We're going to be doing a 10-month pilot program working with a handful of other companies that will track cargo from the time it leaves factories to the time it reaches retailers," says Boeing spokesperson Fernando Vivanco.

Three "load centers" are at the focus of Operation Safe Commerce: LA/Long Beach, the ports of Washington State, and the Port of New York/New Jersey. Boeing's Homeland Security & Services unit is going to be handling a portion of the LA/Long Beach project. In effect, the venture will attempt to take some of Boeing's extensive expertise in the defense marketplace and apply it to maritime supply chains.

Executives from Boeing view the project as a chance to show the Department of Homeland Security what they can do. "We're pleased to have this opportunity to demonstrate, to the Department of Homeland Security, our integrated and comprehensive solution to securing the cargo container supply chain," says Rick Stephens, vice president and general manager of Boeing Homeland Security and Services.

Partners including leading security providers

According to Boeing, the company is "integrating numerous advanced technologies to create a highly sophisticated and multi-layered system that analyzes intelligence, detects and prevents terrorist threats, protects critical infrastructure and coordinates a response in the event of an emergency."

A number of different companies are working with Boeing on the project. They include Boca Raton, Florida-based ADT Security Services, Inc., which develops and provides security technology, systems and services for a wide variety of uses, technology, systems and services for industry and governments; New York, New York-based Global Marine Security Systems Company, which specializes in maritime and logistics services.

Other companies working on the project are Arlington, Virginia-based satellite communications service provider Iridium Satellite LLC and project planning and construction company Parsons Commercial Technology Group Inc. of Charlotte, North Carolina.

Entire transportation system could benefit

Systems developed by Boeing will wind up benefiting the entire transportation sector, Stephens says. "Our solution provides for the secure and efficient movement of containerized goods on a global scale-from manufacturer, to a port of entry and on to retailers," he says.

Using Boeing's "network-enabled architecture," the test system will integrate real time container transit information with other networks and databases. The visibility that results will make it easier to detect threats and deal with them, Boeing says. At the same time, such systems will improve supply chain productivity and reduce shrinkage, the company says.

Including air cargo is definitely an option for Boeing, Vivanco says. "On the airline side, there is concern about cargo security as well, so part of the project could definitely be validating the contents of cargo going on to an aircraft," he says. "We're still at the early stages of this pilot program, and that is something we're looking at."

Sidebar: Southern California Logistics Airport Taking Off
By Lara L. Sowinski

Situated less than 100 miles from the ports of Los Angeles and Long Beach is the Southern California Logistics Airport (SCLA) in Victorville, California. Although it hasn't yet achieved the cargo volumes of Los Angeles International Airport (LAX), the SCLA is getting plenty of attention for its ability to save time and money for air carriers and shippers alike.

From 1999 to present, SCLA received more than 3,220 tons of air cargo. Most flights were international and included charters with such carriers as FedEx Express, Atlas Air, Polar Air, and Malaysia Air. Carriers also benefit from onsite customs clearances of 747s in less than 2 hours and four-minute taxi times to the terminal. The airport also features 24/7 air tower operations, two intercontinental runways, a 2,000-acre Foreign Trade Zone, and onsite bonded warehouse and refrigerated storage facilities.

The SCLA is currently developing a 1,200-acre rail complex that will be served by both BNSF and Union Pacific. The rail complex is a solution for the growing distribution needs and supply chain congestion of Southern California. With 65 percent of all imported goods being transported through Victorville to the Eastern United States already, SCLA will enhance the regional transportation system by offering rail, ground and airfreight distribution, thereby reducing congestion at the ports and along the region's freeway system.

Some of SCLA's tenants include The Boeing Company, General Electric Aircraft Engines, U.S. Customs, and Arrowhead Mountain Spring Water.

In June, DHL Danzas Air & Ocean and The Pasha Group, a third-party logistics provider, announced their decision to use SCLA as the new location for the North American distribution hub for consumer electronics manufacturer Go-Video.

"We are investing in Southern California Logistics Airport as the solution for a severely congested supply chain," said Don McKnight, president of The Pasha Distribution Group. "While Go-Video's logistics operation gains time and cost benefits by locating closer to its customers, they will benefit even more when the rail line gets connected directly into SCLA."

WORLD TRADE Magazine and NITL Sponsor Trade Law Seminar "Steering the Right Course Through International Trade"

Trade and international transportation are inseparable. Understanding the latest rules and requirements applicable to U.S. international trade will make the difference between a company's success or failure.

"Savvy trade and transportation professionals know this and stay on top of the latest developments regarding government tariffs and duties and how they apply in moving their products," says NITL acting director, Peter Gatti. "Without this knowledge, they would be unprepared in negotiating their international transportation service needs and that can make the difference in whether a company enjoys a profit or suffers a loss."

"Steering the Right Course Through International Trade" is designed to give attendees a comprehensive working knowledge of: the functions of the Office of the U.S. Trade Representative; the impacts of a free trade agreement on a company's cost savings; and, how "trade duties" and "suspensions" can offset freight rate increases. This one-day program is a "must" for anyone involved in international trade including importers, exporters, brokers, terminal operators, and suppliers.

The seminar's venue will be Loews L'Enfant Plaza Hotel; 80 L'Enfant Plaza, S.W. Washington, D.C.

To register, contact www.nitl.org. Reference "Steering the Right Course Through International Trade."

Links

• NITL