=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/01/26/f= inancial0900EST0025.DTL ---------------------------------------------------------------------- Monday, January 26, 2004 (AP) For 'freight dogs,' checks are always in the mail J. LYNN LUNSFORD, The Wall Street Journal (01-26) 06:00 PST (AP) -- When pilot Fred Rime took off over the Dallas skyline, all was quiet in the back of the plane. Instead of passengers, the aging, twin-engine jet was loaded to the ceiling with 2,700 pounds of cargo -- including about $1 billion worth of checks. Mr. Rime, 65, is a "freight dog." He flies the same nightly run every Monday through Thursday, regardless of the weather. It's a routine that he has done so many times that he can usually predict to the minute when his jet will pull up to a stop in the next city. Hundreds of pilots like Mr. Rime are a crucial part of the U.S. banking system, shuttling an estimated 30 billion checks a year between major financial centers. Flying through the night, often in weather-beaten, propeller-driven planes, these pilots are carrying on a tradition that began with pioneers like Charles Lindbergh and Eddie Rickenbacker, who flew airmail and bank deposits in open-cockpit biplanes during the 1920s. Now the world of the freight dogs faces big change. Last year, President Bush signed into law a piece of legislation known as Check 21. It will allow banks to move into the 21st century by transferring facsimiles of checks electronically, rather than bundling them up and sending them by air. When the law takes effect Oct. 28, it theoretically will cut the time it takes a check to clear from days to hours. Already, charter cargo outfits are working harder to fill their holds. That's because consumers have been increasingly using debit cards instead of paper checks. Since 1997, the number of checks written in the U.S. has dropped 37 percent, according to the Federal Reserve. Checks hauled by freight dogs range from those written by average consumers to multimillion-dollar payments between huge companies. Companies like Mr. Rime's employer AirNet Systems Inc., which has 84 propeller-driven planes and 36 jets, compete for contracts to deliver checks to clearinghouses and Federal Reserve banks. The route networks of big air-freight carriers, which mainly fly larger planes, aren't set up to meet the tight deadlines demanded by the banks. In many cases, checks are delivered to freight dogs at the last possible moment, often as late as two or three minutes before takeoff. Bankers and Federal Reserve officials say technological and security hurdles posed by converting paper checks into electronic copies mean the services of freight dogs will be needed for several more years. But pilots who work for small freight haulers as a way to build the experience required by passenger airlines are wondering if this training avenue will go the way of the Pony Express. "It'll probably take a while, but someday people will look back and say 'Can you believe they used to fly these checks from city to city every night?"' says Gary Nelson, a 26-year-old private contractor who flies his aging twin-engine Beechcraft nightly among small towns in Georgia, Alabama and Mississippi. Though much of the business world has gone electronic, the basic processing of paper checks has changed little in 100 years. Before a check clears, the piece of paper must be sent to a bank clearinghouse or to the Federal Reserve branch nearest to the consumer's originating bank. A check deposit can't begin earning interest until it has been delivered. The lag time is known as the "float," and reducing this float by flying the checks overnight lets banks earn millions of dollars a year in interest. "From the time we show up at work, every second means money, and you better not miss a deadline," says Mr. Rime. He started flying for AirNet after Ronald Reagan fired him, along with thousands of other striking air-traffic controllers, in 1981. Mr. Rime says it was one of the best things that ever happened to him. "As a pilot, I've had in-flight emergencies like multiple hydraulic failures and warning lights saying my landing gear wouldn't come down," he says, "but none of that compares to the stress of one day in the radar room." The public rarely hears about these nocturnal cargo pilots unless there's an accident. Take the case of a pilot who crashed his single-engine Cessna into Penitentiary Mountain in Vandiver, Ala., on Jan. 11, 2001. The pilot was killed when the plane struck the top of the 1,400-foot mountain and skidded down the other side. The accident also spread several million dollars worth of checks through the trees. The banks whose cargo was aboard responded so quickly that by the time accident investigators arrived, dozens of private security guards were already picking the mountain clean of paper. Four times a week, Mr. Rime's jet leaves Dallas, making stops in Columbu= s, Ohio; Atlanta; and Memphis before returning to Dallas. On a recent run, the stop in Atlanta was so short -- nine minutes -- that he left one engine idling while the ground crew rolled out bins loaded with plastic bags full of bank drafts, exchanging them for ones on board. At 4:30 a.m., at AirNet's main sorting hub in Columbus, the ramp was full of activity. Jets pulled to a stop in rows, where crews with open-top cargo bins waited. As soon as the doors of the planes popped open, bags and boxes began flying from the hold. Once a plane was emptied, the crews would run, not walk, the bins into a brightly lit hangar where workers sorted cargo for its next flight. Inside the pilots' lounge, about 25 aviators milled about, drinking coff= ee and helping themselves to popcorn from a cart in the corner. One pilot played a hand-held electronic game while others swapped tales about their flights earlier in the evening. "We're sort of a cross between a pirate ship and an orphanage -- enough to entice any boy to run away from home," said pilot Walt Hunnicutt. Mr. Hunnicutt, 33, said he isn't worried about the future of small cargo carriers. "I don't see anybody needing anything delivered more slowly. It's always, 'Can you get it there by tonight?"' Most pilots at smaller cargo airlines, which typically pay far less than larger carriers, are just passing through. But some stay because they like the predictability of flying the same route every night and sleeping in their own beds afterward. As a veteran, Mr. Rime has trained dozens of co-pilots over the years. He says at least six have gone on to be captains for major passenger airlines. Mr. Rime says he enjoys hauling boxes and bags that don't complain about the service or the ride. Although on most nights he is transporting paper checks for amounts that total more than he could earn in a thousand lifetimes, he rarely thinks about it, he says, with one exception: During the mid-1990s mergers and acquisition boom, Mr. Rime was called to the Dallas airport for a special flight. When he arrived, a guard climbed out of an armored car carrying a single envelope. He delivered it to another waiting guard at New York's La Guardia Airport. "I have no idea what it was, but you can bet it was important," he said. =20 ---------------------------------------------------------------------- Copyright 2004 AP