What is the Known Shipper Program and how does it benefit me?
The Known Shipper Program was originally created by the Federal Aviation Administration (FAA), and enhanced under the “Aviation and Transportation Security Act” (ATSA) in November 2001. The implementation and enforcement of the program fell under the role of the Transportation Security Administration (TSA) in 2003 under their “Air Cargo Strategic Plan” and again by the TSA in 2006 under the direction of the “Aviation and Transportation Security Act.” Known Shippers are vetted and approved by the TSA. The purpose of KSMS is to establish a vetted and trusted relationship between shippers and airlines.
Through the program, the TSA reviews and approves known shipper status for qualified shippers in the United States, allowing them additional air cargo shipping privileges once they qualify. The Known Shipper Management System (KSMS) is a database of shippers approved by the TSA for transporting cargo on passenger aircraft. The TSA reviews and approves known shipper statuses through the program, which allows that shipper to tender cargo to passenger aircraft (also known as “PAX” for short).
Aircraft operators, foreign air carriers, and Indirect Air Carriers (IAC) must comply with a range of security requirements to qualify their customers as known shippers.
A “known shipper” is an entity that has a business relationship with an IAC, an aircraft operator, or an air carrier. If it is an IAC, typically the records will include customer shipping history, shipping contracts, business history, and a site visit. The TSA uses many methods when determining if an entity is considered a known shipper. The TSA uses Dunn and Bradstreet for mailing address matching of the shipper’s name and address as well as for verification that your company has a financial history as an active business. If you are a fairly new company, there is a chance that you may not be approved.
The TSA does not specifically disclose information on how they approve shippers nor a list of requirements in KSMS, they evaluate each applicant individually as required under their mandate. Once a shipper is approved via KSMS, they are issued an identification number saved and by the air forwarder and/or IAC.
What is a Known Shipper?
A known shipper is a TSA-approved status given to companies shipping air freight using the TSA’s Known Shipper Management System. The only way to ship on passenger (pax) aircraft departing from the US is if the shipper is made “known” via TSA’s KSMS system by an indirect air carrier (IAC) who is typically an air freight forwarder also licensed by IATA (CNS in the USA).
Conversely, “Unknown Shippers” are shippers who were not able to be made known in KSMS, and as a result, have limited airline/routing options and sometimes shipping delays because their cargo can only move on cargo-only aircraft (aka Freighter) which usually means higher prices.
What are the benefits of being a Known Shipper?
Increased options – there are more routing options when you can fly on PAX, because the airlines have more options with faster transit times. PAX options also give you more flexibility because there may be multiple flights per day on the route you are looking for.
Lower costs – more airline options, expands the competition of airlines flying on that route, which reduces air freight costs. Known shippers typically have lower air freight rates because they have more airline options (i.e. Passenger aircraft in addition to cargo-only aircraft), better routings, and usually faster transit time.
Flexible aircraft delivery times – due to the increased number of flights on a route, you have more flexibility, especially for time-critical shipments to deliver them to the airline prior to the aircraft cutoff.
Keep in mind that most PAX have dimensional and weight restrictions per item. Most transpacific and transatlantic PAX aircraft have a height limitation of 63 inches.
How can I become a Known Shipper?
Ask your freight forwarder if they are a licensed Indirect Air Carrier (IAC) by TSA and verify if they can check if you are a known shipper. At Shipit Logistics, we are a licensed IAC and provide this service to our customers.
What if my Known Shipper Application is Rejected or Denied?
TSA can deny approval to a shipper through KSMS, they can also revoke Known Shipper status if a shipper is not compliant. If your application is denied, Shipit Logistics can appeal your application with additional information and reasoning for why you believe you should be approved as a known shipper.
Shipit Logistics is a licensed Air Cargo Agent of IATA (Air Forwarder), licensed by IATA via Cargo Network Services (CNS). View our license on IATA’s website.
Shipit Logistics is a TSA-licensed indirect air carrier (IAC).