updated 11/1/2010 4:19:58 PM ET 2010-11-01T20:19:58

The glaring weakness of the cargo shipping system has been laid bare by the Yemen-based mail bomb plot — but the cost of fixing it may be too high for governments, airlines and shippers to stomach during a global downturn.

Analysts warn that the cost of screening every piece of air cargo that enters the shipping system in a bid to prevent terror gangs from downing airliners might bankrupt international shipping companies, hobble the already weakened airlines, and still wouldn't provide comprehensive protection.

"In a worst case, it would stop world trade," said James Halstead, a longtime consultant with the Aviation Economics firm. "UPS and FedEx would probably go bust, we'd have a full disaster scenario. The cost of the extra effort involved in putting in security checks to find these sorts of bombs would be almost too much to consider."

He said many countries already conduct extensive checks of cargo but that the increasingly sophisticated technology used by terrorist groups makes further refinements extremely difficult.

  1. More must-see stories
    1. The Hartford Courant, Political
      Wild Wall St.

      Has the market volatility got you nervous? These cartoons may give you a little comic relief.

    2. Cyber-thieves create fake Kelley Blue Book site
    3. US says Reebok toning shoes don't really
    4. Can you live on $9 an hour? Play the game

"They do as much checking as they can in many places, but it's the danger of these small items that is the problem," he said.

The problem is compounded by the frequent use of passenger flights to carry cargo, some of which has not been properly screened, as shown by the transport of a mail bomb on two Qatar Airways passenger flights before the plastic explosives were discovered in Dubai.

More than half of the cargo flown into the United States comes via passenger planes, making cargo bombs a tempting way for terror groups to attack civilian passengers.

The Yemen-based branch of al-Qaida has expanded its use of PETN plastic explosives in the last year, posing severe detection problems, particularly in locations where shipping companies and airlines use older, rudimentary equipment to scan cargo.

Some new generation machines can pick up traces of chemical explosives, but the costs are extremely high. Swabbing packages individually for explosives is considered the most effective way to scan, but that's not a practical option for the millions of packages that crisscross the globe every day.

A comprehensive switch to these swabbing devices would create massive delays of everything from clothing to iPods. Relatively inexpensive cargo transport would become a thing of the past, with draconian implications for world trade.

The cost of these machines would likely be in the billions of dollars, and would be economically impossible for some countries. In the U.S. alone, it's estimated that the Aug. 1 mandate that requires 100 percent of cargo on passenger planes entering or traveling inside the United States to be screened would cost roughly $700 million and require 9,000 employees in just the first year, according to the Airforwarders Association.

"The technology exists," said aviation systems expert Philip Butterworth-Hayes. "It's horrendously expensive and will take many years to install at all the various cargo depots and freight-forwarding places. If you add up all the places cargo can access the airside at airports, there are many thousands of places, and to put screening units in all those places is very complicated."

He said that to put up-to-date screening equipment in every location would not be possible in the next two years even if money was available.

Butterworth-Hayes said governments — not airlines or shippers — should pay for the new equipment since national security is at stake.

European airport operators have cautiously endorsed more screening measures but are urging that national governments shoulder at least a portion of the rapidly expanding costs of aviation security, which in Europe are borne by the airport companies.

"The economics of security is definitely an angle we've been concerned with for some time," said Robert O'Meara, spokesman for the European branch of Airport Council International, an international association.

Statistics show that security currently accounts for 35 percent of airport operating costs in Europe, in contrast to just 5 percent to 8 percent before the 9/11 attacks. Forty percent of all airport employees at the continent's 313 airports are now security-related staff.

Any additional requirements for the closer screening of air cargo will likely drive up those costs still further.

Magnus Ranstorp, a specialist with the Swedish National Defense College, said it would be too expensive to try to establish a foolproof system because of the constantly changing tactics of concealment used by terrorist groups.

Instead, he said, efforts should be made to keep cargo off of passenger planes — a change that in itself would prove extremely costly for airlines, which derive substantial revenue from cargo — and eliminate cargo service from high-risk countries such as Yemen.

"You have to economize, and this is not a very frequent tactic," he said. "Now you eliminate Yemen as a route, that will partially take care of the problem. You just have to be more rigorous, because these groups are constantly coming up with innovations. They will move onto something else. They are incredibly innovative."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: CNBC: The weakest links


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%