A Check Hauler Gets Set to Embrace the Future

Fast Forward Solutions LLC, a subsidiary of Columbus, Ohio-based air-freight hauler AirNet Systems Inc., is gearing up AirNet's seven regional hubs to handle Fast Forward's new business: transporting image-replacement documents for banks converting from paper checks to check imaging. Within six weeks, says Jeff Harris, the former banker and AirNet executive who now runs Fast Forward, the company should be able to announce its first clients. Under the Check Clearing for the 21st Century Act (Check 21), which takes effect in October, check images and their printed versions, IRDs, will carry the same legal force as paper checks. AirNet, which carries some 70% of the nightly cross-country check volume currently for banks, formed Fast Forward late last year to take advantage of the new law and hedge against declining check traffic. Banking-related revenue for AirNet, which also carries freight for other time-critical markets, including medical supplies, has leveled off at $102 million a year with the erosion in check usage. “That revenue will (continue to) fall off,” says Harris. “Is it a gradual slope or a cliff, that we don't know.” Fast Forward is taking advantage of AirNet's relationships with the country's 100 largest banks to sell its new IRD service. Clients will transmit check images to Fast Forward, which is setting up specialized printers at its parent company's hubs to print IRDs from the images and cart them to the banks served by each hub. Fast Forward has set up an alliance with NetDeposit Inc., a Salt Lake City-based company that produces payment-processing software, to allow clients to use NetDeposit's system to process checks and send images to the AirNet hubs. Fast Forward's service will also allow banks to take advantage of a later deadline for next-day check settlement, since the IRDs will have to be flown only within the regions served by each hub rather than cross-country, as with conventional checks. And, with transportation accounting for about one-fifth of total check-handling costs, Harris expects to chop clients' overall processing expense from around 10 cents an item to 8 cents and possibly less, depending on volume. Harris concedes that banks will increasingly adopt full-fledged image exchange for checks as they install the necessary back-office equipment and as the banking industry settles on imaging standards. But he sees Fast Forward as a way for AirNet to take advantage of the transitional time between paper checks and check imaging while the carrier continues to diversify into non-banking markets, including passenger charter. “This allows us to fly aircraft and use our existing hubs,” he says. “And I can put non-bank work on aircraft where there was limited capacity previously.” He figures many banks, including Fast Forward's larger clients, are likely to embrace IRDs as a bridge to image exchange. Still others may well continue to pass paper checks (Check 21 encourages but does not mandate replacement of checks by electronic alternatives). That, he says, means Fast Forward's service should be filling AirNet's 140 planes for several years to come.