Vol. 9 No. 119                                                  WE COVER THE WORLD                                        Wednesday November 3, 2010

Security Post 100% Mandate

Nine Questions for Doug Brittin
TSA General Manager of Air Cargo

ACNFT:   How has 100 percent screening faired amongst stakeholders and shippers?
DB:    To date, no problems have been reported by the industry. We have been in close communication with airlines, forwarders and shippers, and so far all appears to be operating smoothly.
ACNFT:   Any surprises?
DB:    We haven't seen any surprises. We expected that the forwarders in the CCSP would screen the majority of the weight in the program, and that has indeed been the case. Shippers and ICSF's screen a large number of (smaller) shipments, but the majority of the weight screened is done by the forwarders who invested in larger equipment.
ACNFT:   The next stage being inbound, what is TSA doing to facilitate the international scene?
DB:    TSA continues to work through stakeholder groups (such as TIACA, ATA, IATA and others) to ensure they are fully informed of the issues and TSA plans to attain 100 percent screening of inbound cargo. We have stated that we expect industry can achieve this no later than 2013, possibly sooner.
ACNFT:   What schedule do you think is realistic for inbound screening and will that also be 100 percent?
DB: As noted above, we think 2013 or sooner is realistic for industry.
ACNFT:   How can issues be overcome; what is the mechanism or procedure that will help?
DB:   The key issues, as they were in the US, are information and awareness.
Because TSA currently regulates only the airlines, it is a challenge to keep all elements of the supply chain informed, and we rely on our stakeholders to share information freely to industry. As we have indicated in the past, there are really only two paths to 10 percent inbound: ramping up the airline programs to 100 percent, and/or TSA recognition of
     National Country Security Programs, which are commensurate with TSA requirements. TSA's Office of Global Strategies representatives are the primary point of contact for countries seeking information about the country recognition process.
ACNFT:   You assumed your current post six months ago after serving for and with Ed Kelly who pioneered the post. What are you doing that is the same and different from what the late Ed did?
DB:   Ed Kelly established a solid framework, and we are carrying out that plan as we move forward. All of the elements are already in place (CCSP in the US, expansion of the TSA screening technology list, NCSP process, etc) and we are proceeding at full speed.
  What is the biggest challenge and lastly, what surprised you once the post was yours?
DB:   The biggest challenge at the time I became GM was the continued awareness (or lack of it) among many shippers and even forwarders in the U.S. Many of them seemed to believe that TSA would back off from the 100 percent deadline for August, and provide some type of extension. Many did not believe that our "plan B" remained what we said at the outset—if it is not screened, it will not fly on a passenger aircraft.
ACNFT:   What do you hope to accomplish at TIACA Amsterdam today, Wednesday November 3?
DB:   Our goal is to continue to share the facts about our plans going forward. As we indicated last May at the session in Leipzig, the 2 paths to 100 percent, as noted above, are the key to attaining 100 percent for inbound cargo to the U.S. Time is of the essence, and we need to ensure that everyone is aware of what the eventual outcome will be, just as it was in the U.S.
     We hope that everyone walks away with the understanding that TSA is aware of the global challenges for industry, and just as we have done in the U.S., we want to continue to work together to attain the goal.
ACNFT:   What are the most important words you want to say to all that you can reach right now?
DB:   As I said earlier, I think many were thinking (or hoping?) that TSA would flinch on the 100 percent requirement, even though we continually stated that we could not. We are required to meet the screening mandate set forth in the 9/11 Act. We have now said that the international inbound must be attained by 2013, sooner if possible. By working together we believe that it is possible.

Fear Of Security Impediments To Global Trade

     The possible banning of air freight shipments from being transported in the belly-hold compartments of passenger aircraft will destroy the current intercontinental supply chains.
     "This kind of embargo would bring global commerce to a halt," stated Emirates SkyCargo´s VP Ram Menen (left) during a panel discussion yesterday at the Amsterdam-held TIACA gathering.
     "I hope sanity will prevail and a ban of cargo carriage on passenger aircraft will not happen," the manager added. This mode of transport is indispensable especially on thin trade lanes that offer too little volumes to be operated by freighter aircraft.
     ACMI provider Atlas Air’s Senior VP and Chief Commercial Officer Michael Steen (right) warned authorities and governments from overreacting after a number of explosive devices had been detected in different places during the weekend and yesterday.
     "As an industry we have to react fast and raise our voice to rationalize the heated debate before governments and authorities take any action," the manager said.
     For setting universal standards to secure air freight from start to end, Menen referred to the IATA project called "secured freight" that, if globally imposed, would be a major improvement in this critical field. The concept mainly consists of checks and controls of every cargo item from the door of the shipper to the delivery to the final consignee. Ram admitted however, that additional control processes along the supply chain will make air freight more expensive.
Heiner Siegmund


Weber Envisions A Stronger Global Lufthansa

     Juergen Weber, former CEO and current head of Lufthansa´s supervisory board has strongly recommended a liberalized and barrier-free future of global aviation. Today, carriers still are restricted in developing internationally by mergers or takeovers, he said during a press meeting in Hamburg, Germany.      
      Despite some progress, like open skies treaties during the last fifteen to twenty years, there remain huge numbers of national hurdles like traffic right restrictions that have to be set aside one after another, urged Weber.

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       He criticized U.S. laws that forbid foreign airlines to acquire a stake majority of U.S. national carriers.      "This policy is outdated and should be revised by the U.S. Government and other countries that protect their airlines accordingly," he emphasized.
     A liberalized aviation environment is a prerequsite for carriers like Lufthansa to further stretch its wings.      "Our offspring Lufthansa Technik shows us the way we should go," Weber said, pointing to the growing global presence of the repair, maintenance and overhaul subsidiary.
     "Currently 12,000 staff are working for us in Germany with 18,000 in Hungary, Malta, the Philippines and more places abroad,’ said Lufthansa Technik´s CEO August Wilhelm Henningsen at the meeting.
     "I strongly believe in a globalized Lufthansa in maybe twenty years from now,” said Weber.
     Weber was awarded a honorary membership in the Association of German Aviation Journalists (Luftfahrt-Presse-Club), an influential organization of media representatives.
     Since he declined accepting the post for an additional five more years, Weber´s term as chairman of Lufthansa´s supervisory board ends in 2013. He might be followed by the carrier´s current CEO Wolfgang Mayrhuber, who steps down from the crane´s throne at the end of this year.
Heiner Siegmund



Cargo Must Achieve Security Consensus

     "Here in USA an issue amongst U.S. Freight Forwarders who act as Indirect Air Carriers (IACs) is that truckers are not regulated directly by the TSA.
     In fact, the definition of the relationship between IACs and their truckers precludes direct regulaion and enforcement by the TSA.
     Truckers are not a regulated entity: by law no fines or enforcement can be levied against truckers by the TSA.
     Forwarders have been made directly responsible for the security protocol of their authorized agents (truckers), who are often operating in multiple states.
     To expect that more than 1000,000+ trucking companies and their employees can be monitored by 4,000_ IACs is not realistic, and of course, the airlines have the same challenges.
     Unregulated truckers are shared and hired by both sectors of the airfreight industry.
     For this reason, the U.S. Air Freight Association (AfA) and IATA Cargo Network Services (CNS) should join forces to discuss this topic, inform members about potential risks, and ultimately take the case to the government.
     CNS is a great venue—the only one in the world where forwarders and airlines are sitting standpoints on certain issues, there are other important matters like security and screening where CNS could have a great impact with government agencies to the benefit of the transportation industry as well as the shipper and traveling public at large.
     It is lamentable that CNS in its present form has not been allowed to expand beyond the USA.
     This unique forum which allows us to focus on common ground, should play a larger role in global government policy making.
     The AfA, under the leadership of Brandon Fried has done a great job of representing the forwarding industry in their discussions with government agencies and expressing our concerns about legal and regulatory matters is a step in the right direction that CNS and AfA are working more closely together than before.
     Streamlining their policies will produce a more powerful voice in government circles."
Jennifer Frigger-Latham

Mrs. Latham is Director-Global Network, EMO Trans based in Freeport New York.She has been involved in the freight forwarding business from an early age, when she accompanied her father to the office on weekends. She also worked in Germany in freight forwarding and has been in the business for over 10 years during which she completed her studies at the New School in New York with an M.A. degree. Prior to her present position, Jenni worked in Freeport, JFK and San Francisco and was Branch Manager of EMO in Philadelphia. At that time she also served on the board of directors of the traffic and transportation club in Philadelphia.
EMO-Trans a global logistics provider since 1965 has 30 offices in the USA and more than own 60 offices worldwide with an extensive global partnership network.
In addition to being beautiful and smart, Jenni has been nominated to join the Board of Director at the U.S. based Air Forwarders Association. AFA members who vote, should move at all deliberate speed to confirm that nomination.
The group would be damn lucky to have her involvement as it moves—Forward!



Boeing Predicts Constant Cargo Growth

      U.S. plane maker Boeing has forecast a global average annual air freight growth of 5.4 percent until 2029. The analysis was presented yesterday at the Amsterdam-held TIACA.
      The predicted long-term increase will differ from market to market, estimates Boeing. According to the air freight study the main growth of air freight will occur within China triggered by domestic flights (+9.2%), followed by the intra Asian traffic (+ 7.9%), volumes between Asia and North America (+6.7%) and on roundtrips between Asia-Europe (+6.6%).
      Roughly 46 percent of the total global tonnage is carried in the belly-hold compartments of passenger aircraft with the remaining 56 percent being transported by full freighters, Boeing says.
      All in all, tonnage will triple within the next 20 years, predicted Jerry Allyne, Boeing´s VP, Strategic Planning and Analysis during his presentation in Amsterdam. Accordingly the fleet of pure freighters will grow from 1,755 today to approximately 3,000 in 2029. There is a trend to larger aircraft, Allyne said. Today the plus 80 tonnage cargo aircraft account for 27 percent of the global freighter fleet whereas their number will have grown to a total of 33 percent by 2029.
      According to manager Allyne, the cargo industry should no longer count on a peak season during the last quarter of a year. This traditional business pattern is becoming increasingly obsolete due to faster production cycles of an increasing number of consumer goods, namely iPads, cell phones and other fast-to market products. That´s why in the coming years the peak season in air freight might occur in the first or second quarter, depending on the industry´s offerings and the demand of consumers. The old and familiar high season at the end of a calendar year is more or less over, predicted Allyne. The cargo industry should adapt to this new setting as quickly as possible, Allyne recommended.
Heiner Siegmund


AMS Keeling Talks Up Little Guy

     On Wednesday, November 3, Julian Keeling cast a spotlight upon the small to mid-sized forwarder at the TIACA Air Cargo Forum, currently going on in Amsterdam, saying:
     “The Holy Grail of the forwarder in any mode of transport remains enduring, delivering freight in a safe, reliable and hassle-free manner, with complete integrity and fulfillment to the shipper.”
     "The key, I think, is that small and medium forwarders should concentrate fully on the individual customer, rather than the big multi-nationals "whose customers become numbers and not names."
     The outspoken and often contriversial CEO of Los Angeles based Consolidators International, Inc added:
     "Personal service is not a cliché, but the difference either in retaining or losing a customer.
     "Responding to the customer's needs with integrity and care must be the driving force in any forwarder-client relationship. Technological bells and whistles alone are not sufficient to satisfy the client," observed the wholesaler/forwarder.
     Keeling warned, however, that "success is not automatic. The smaller forwarder must evolve as the air cargo market inevitably changes, driven by dynamic economic forces."
     To Keeling, evolving does not mean the forwarder should offer a wide array of ancillary services, such as inventory control or warehousing "which generally are loss leaders," but become an expert in every phase of transportation. "The air freight forwarder should look beyond moving goods strictly via air. Shippers are shifting their focus, demanding their agents be fully knowledgeable in transporting their products by air, sea, truck or rail or any combination thereof. The smaller forwarder must respond to these often shifting demands or the consolidator has one less customer," averred the Los Angeles-based executive.
     Keeling said the smaller forwarder must solicit business with a rifle, not a shotgun. "Pick your targets carefully," he asserted. The transport executive suggested targeting a number of markets, which the "big boys" have either overlooked or consider too small to bother with.
     "There is any number of 'hidden' markets which the smaller forwarder can pursue successfully," said Keeling. "These include cargo bound for smaller destinations where a constant supply of consumer and business products is required, but in lesser quantities," stated Keeling.
     He pointed to CII's success in cultivating the American Samoan market where his company now generates 80 percent of the air forwarding business to that South Pacific Island in addition to heavy container sea traffic. "American Samoa is a small island with only 65,000 population. No one really cultivated it until CII saw an opportunity there."
     Keeling also pointed to "niche" markets like skateboarding, fly fishing, and special testing machinery for computers as examples of businesses that can be profitable to the smaller forwarder. The CII executive cautioned "against too much reliance on a single, large account, which can unbalance your entire business.”      Lose the account and the result invariably is staff lay-offs, shuttered offices and frantic attempts to replace the business.
     Keeling advises smaller and mid-sized forwarders to have a balanced group of accounts with no one customer generating more than 10 or 15 percent of revenues.
     While Keeling is optimistic about the future of the small to mid-sized forwarder—"God must love us as He has made so many – 10,000 in the U.S."
     Alone—he is less certain about the uninterrupted future growth of air freight. He noted that air cargo growth has dropped from the 10 to 15 percent rate at the beginning of this century to just 2 or 3 percent today.
     "The recent severe recession cannot be blamed entirely for this sharp drop in growth," he averred. "Ocean traffic has grown at a more rapid pace, with many shippers switching from air to sea. With only 4 percent of international traffic, air cannot afford to lose market share," stressed Keeling.
     "Indeed, we must grow it," he emphasized.


Tulsi Mirchandaney

Lise Marie Turpin

Lisa Schoppa

Karen Avestruz

Gabriela Ahrens


Contact! Talk To Geoffrey

RE: The Bomb Printer Cartridge

Dear Geoffrey,

     When an aircraft departs for a U.S. airport, upon wheels up, the manifest must be electronically transmitted to CBP, matched by house waybill level corresponding information, linked by the air waybill as the key.
     Anyone scanning the manifest possibly considered how improbable it may be in this day and age to ship printer cartridges from – all places in the world, Yemen – to the U.S., and to top it off, to a Jewish organization?
     Mind you, I presume the German Customs system may also require transit data from 3rd countries through Germany – in this case CGN – to be reported.
     This goes to the heart of cargo security – is such information scanned purely by computers programmed to identify predefined commodities and shippers, or is there a thinking human involved who might ponder that a printer cartridge may be an odd item to be shipped from Yemen to a synagogue in Chicago. Clearly, next time it can be something completely different, just an innocuous item.
     It may sound drastic, but banning all import to western countries from Yemen is not that likely to bring the Chamber of Commerce crashing one’s door, or is it?
     Keep up the good work, Flying Typers.

Name withheld.

Thanks for the comment. maybe that's what tipped off law enforcement? Meantime we amend a comment we made in the article saying "We don't know everything referring to air cargo security. We should have said we don't know anything other than what's in the public domain.

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