Known Shipper Program: What is it? How does it help?

Posted May 18, 2012

In response to the events of 9/11 the U.S. Department of Homeland Security (DHS) implemented new rules with the goal of insuring the safety of domestic and international air flights. The Transportation Security Administration (TSA) was made accountable for implementing these new rules and programs as well as being charged with oversight responsibility of all transportation security via truck, rail, ocean and air.

One of the programs the TSA took over, refined and implemented is the Known Shipper Management System (KSMS). Created by the Federal Aviation Administration (FAA) before the September 2001 terrorist attacks the KSMS is one of TSA’s key components in the effort to strengthen air cargo security by establishing procedures for air carriers and indirect air carriers (aka freight forwarders) to distinguish between known and unknown shippers who tender cargo for air transportation.

In the post 9/11 age, shipper’s identity’s that have been submitted by air carriers or freight forwarders to the TSA and have been properly vetted by them are considered “Known Shippers”. Shippers holding this official status are able, with some restrictions, to present their freight for shipment on both passenger and cargo only aircraft. Conversely, “Unknown Shippers” movements are limited to cargo only aircraft having limited service options and higher prices. These rules apply to both domestic and international shipments originating in the United States.

A “Known Shipper” is defined as a person or company who has an established business relationship with an indirect air carrier, an aircraft operator, or an air carrier based on such proof items as customer records, shipping contracts, business history, and either a site visit or a current Dun and Bradstreet vetting. It’s clear there are no short cuts to getting onto the known shipper list but neither is it insurmountable so shippers should not be discouraged in efforts to obtain this status; in fact we encourage shippers do so.

Shippers exporting via air who are not on the known shippers list can face delays, higher costs and longer more circuitous flights as their cargo can ship solely on cargo only aircraft. To take advantage of better costs, fewer delays, increased shipping options and more direct flights of passenger aircraft exporters should ensure their suppliers, as well as their own warehouses, offices and other supply chain facilities and vendors are known shippers of their freight forwarder.

As a shipper it’s sometimes a challenge finding a freight forwarder you’re comfortable with who is knowledgeable, can offer competitive pricing, and make sure your shipments move as you need them to with no surprises. What kind of surprise you may ask? Did you know TSA rules require, regardless of the known shipper indicated on the airway bill (AWB), that all vendors of the shipper shown on the AWB providing freight for any given shipment also be known shippers to that freight forwarder? Your freight forwarder does.

The procedure to obtain Known Shipper Status can be a quick and easy process if you have the right assistance so choose your freight forwarder carefully. The benefits are many; cost, efficiency, fewer delays due to regulatory reasons, etc., so it makes sense to work closely with your freight forwarder and let them help you. If you’re interested in the program, have questions or would just like more information, give us a call.

Take Care

Terry Grisamore
Senior Air Export Account Representative

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