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Signed, Sealed, Delivered

'Freight dogs' fly bundles of checks worth billions in a nightly race to keep banks balanced. But electronic transfers could ground them.

January 11, 2005|P.J. Huffstutter | Times Staff Writer

CHICAGO — As Tawn Makela grapples with the controls of the weather-ragged Learjet, she hears the wind rustle pieces of the American economy.

Crammed inside the plane is a mountain of clear plastic bags, each stuffed with checks: Paychecks. Rent checks. Mortgage checks. Tax refund checks. Checks to buy companies. Checks to settle divorces.

She's carrying nearly 2,500 pounds of paper worth more than $1.5 billion. That's just for the first leg of Makela's shift, which takes her from Chicago to Columbus, Ohio.

By the time the sun rises, and she returns home, she will have spent nearly nine hours in the air -- picking up and dumping off a fortune in Syracuse, N.Y.; Windsor Locks, Conn.; and St. Paul, Minn.

For The Record
Los Angeles Times Thursday January 13, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 32 words Type of Material: Correction
Check pilots -- An article in Tuesday's Section A about freight pilots who fly bundles of checks worth billions of dollars around the country misspelled the town of Bolingbrook, Ill., as Bollingbrook.

"It's more money than most small countries have in their entire economy," said Makela, 35, a Chicago-based pilot for AirNet Systems Inc. "What we do is cool. It's cool to say that you are responsible for so much cash."

To collect their money, U.S. banks depend on pilots such as Makela -- known by some as "freight dogs" -- to transport an estimated 36.7 billion checks a year from one financial center to another.

Sometimes this pricey cargo is sent directly to a bank's regional offices, which will process the check and pay out the money. Other times, the checks go to a clearinghouse -- such as a branch of the Federal Reserve -- which, for a fee, will route the funds appropriately.

But that's about to change. And the freight pilots' way of life is threatened.

Check 21, a federal law that took effect in late October, lets financial institutions send digital copies of these checks to one another over the Internet. That will allow banks to collect payment sooner, and eliminate the physical process of moving checks across the country.

The nation's leading financial groups say they will gradually phase in electronic processing this year. The Federal Reserve Banks, which already have rolled out new Check 21 software and services, will cut their number of check-processing centers by nearly half over the next year.

At the same time, consumers are leaving their checkbooks behind in favor of debit and credit cards.

In 2003, the number of electronic payments surpassed check payments, according to a survey conducted by the Federal Reserve and electronic payments companies. Payments made by paper check have declined at an annual rate of 4.3% since 2000, according to Federal Reserve officials. Electronic transfers, however, have grown 13.2% annually.

"In a computer-based society, it seems antiquated and old-fashioned to still be flying these pieces of paper across the country," said John Hall, spokesman for the American Bankers Assn. "It's not going to happen overnight, but banks will make this change. Unless cargo companies can fill those planes with other goods, it's inevitably going to impact the pilots."

AirNet employs 165 freight pilots to fly paper checks for more than 100 of the nation's top financial institutions. These pilots see themselves as daredevils -- the toughest and scrappiest men and women in the skies. They boast that they do whatever it takes to get the checks delivered on time, even if it means flying in bad weather or helping with the loading and unloading of the cargo itself. Theirs is a lineage that includes World War I ace Eddie Rickenbacker and Charles Lindbergh, who flew bank deposits during the 1920s.

AirNet's 128 planes, many of them speedy Learjets, are small enough and nimble enough to pack and leave at a moment's notice. Safety is important, but so are deadlines."If there's a runway, we'll fly. Ice? No problem. Tornadoes? Go around 'em," said pilot Joe Pyka. "We had guys flying checks to the banks during the hurricanes in Florida, even though the banks were shut down. Nothing stops us."

But Pyka, 31, wonders how long freight pilots like him will be needed, whether flying checks or other cargo that must move quickly.

"People worry about it," said Pyka, who joins Makela on her nightly routes. "I've heard people ask, 'Are we going the way of the buggy whip? Are we going to be obsolete?' All you can do is hope and keep flying."

'Study the Sky'

Most nights, the pilots follow the same monotonous paths through the sky, marking the miles by the glow of each town and the occasional appearance of the northern lights.

"At a certain point, you've talked about everything there is to talk about," said Makela, who has worked for AirNet for the last five years. "So you sit and study the sky."

She dreamed of flying as a child, and often lay in the grass near her home in Bollingbrook, Ill., to watch planes crisscross the sky.

It wasn't a destination that drew her, or the lure of faraway lands. She longed to be up in the air, to live among wet clouds and the rush of speed.

Her parents gave her a flight on an aerobatic glider as a 16th birthday gift. She steered the glider through upside-down loops and twists that left her giddy.

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