Vol. 8 No. 16                                            WE COVER THE WORLD                                                        Monday February 9, 2009

TSA Compliance Form Frenzy

      Just when you thought the paperwork jungle in air cargo was beginning to see the value of the digital communications era, came that TSA mandate for USA air cargo that demands 50% screening compliance enacted in early February as preamble some think for a more draconian date with 100% screening ramping up in a little over a year and half down the road.
      We spoke to a well respected senior industry consultant who isn’t so sure that stakeholders both inside and outside and, depending on the air cargo industry are not in for a rough ride from this point forward.
      “There seems to be more developing as we speak, things we either did not know but should know, or attorneys making things up which is not good for any shipper in this country,” says Albert Saphir.
      “Here are two sample authorization forms that shippers received last week from air freight forwarders.
      “No one had seen anything like this from TSA before or knew it was coming.
      “Nothing like this was mentioned by TSA at any of the meetings I attended, so you can think that this comes as a complete surprise to shippers in this country, if indeed it is accurate.
      “We can only wonder what is going on?
      “Has TSA required any such authorizations?
      “Or are some lawyers going crazy.”

      Albert Saphir is a consultant with 30 years of management experience in international air and ocean freight forwarding, domestic and international transportation management, domestic and international parcel shipping and benchmarking, logistics and supply chain analysis, trade compliance and customs security compliance.
      He has worked in sales and operations management positions for multi-national logistics and regional companies during his career in freight forwarding in Germany and the U.S.
      For over 10 years now, he has been an independent logistics, transportation and trade compliance consultant for domestic and international manufacturers, distributors, importers, exporters and global transportation companies.
      His work focuses on transportation negotiations and procurement, value analysis, freight and audit/billing management for all modes of domestic or international transport.
      Combined with his services for customs and trade compliance, including complete C-TPAT and ISF 10+2 (Importer Security Filing) program developments, he strives to offer “Supply Chain Harmony – Logistics and Trade Compliance Synchronized for Optimal Performance” to his customers.
      “The point is that these forms could open a whole lot of cans of worms.
      “If indeed TSA needs such a form, it has to be made public by the TSA and also it needs to be determined who should sign them.”
      “The Pilot Form seems professionally written; sounding very official using the wording ‘Cargo Security Consent to Screening Authorization’.
      “I must admit before now I had not heard that phrase anywhere before.
      “Right now every shipper should review what is probably a forest of new forms entering the market with their legal department before signing them.
      “Who knows what can happen here?
      “In my view the Concordia Form is unfortunately misleading and inaccurate I am sorry to say!
      “First of all, there is absolutely no legal requirement for a USPPI (U.S. Principal Party of Interest) to sign a SLI (shippers letter of instruction)!
      “Also incorporating the TSA screening authorization in the format and wording used seem out of place in my view.
      “In any case it is worth pointing out that so much of our exports are considered “export routed transactions” per 15CFR Part 30, which really puts a whole new spin on things as the forwarder really has no agreement with the U.S. shipper (USPPI) but rather with the FPPI (Foreign Principal Party of Interest).
      “So technically, would it not be the FPPI who would need to sign such consent forms and be responsible for any losses or damages as titles are transferred to them upon pick-up from the loading dock of the U.S. supplier?”
      “But just to get a sounding about all of this I spoke to a few smaller IACs (indirect air carriers). They are not aware of any such requirement from TSA.
       “Others indicated that they had received some instructions of similar nature from their head office but did not know their meaning or their source.
      “Come to think of it, not even the airlines they are using are asking for anything like this. So why the need for the IAC?
      But getting TSA screening right while leveling the playing field will take some time.
      “Now we have heard today (Friday February 6) that Lufthansa discontinued their screening fee.
      “It really is an extremely competitive business environment out there right now, air freight volumes are down dramatically.
      “Airlines need to cut cost right now, not increase it, hopefully they will make it through these times financially.
      “Also, some may have difficulties with screening, possibly purchased the wrong equipment.
      “Personally I think ETD (explosion trace device) are most practical for cargo screening, but many airlines purchased other, even more expensive equipment and that may prove now to be more difficult and costly to operate.
      “I also feel for IACs at the many non TSA pilot airports, they are “stuck between a rock and a hard place”, as they are for now completely left out of the screening program, which can put them at a significant competitive disadvantage.
      “Many puzzle pieces that still need to come together.
      “I am optimistic eventually all will work out well, but in the interim we are facing very turbulent times here in the U.S. on the air cargo side.”
Geoffrey

GeoPost Takes India Express

     A move that is certain to boost India's image as an atmosphere for investment, La Poste GeoPost Group, the express parcel arm of La Poste, has been cleared by the Indian government to buy into in express parcel delivery firm Continental Air Express.
     GeoPost now holds a 60 percent stake in the privately-held Indian company. The clearance has come, however, with a restriction:
     GeoPost will only deal in Business-to-Business express parcel deliveries with each parcel weighing more than two
kilograms.
     GeoPost's willingness to take a stake in the Indian company had been rejected a number of times by India and the permission came, according to senior officials in the Finance Ministry, came only after an intervention from the French Ambassador to India, Jérôme Bonnafont (right).
     The Ambassador wrote a letter to the then Finance Minister P. Chidambaram (left, he is now the Home Minister) asking him to personally intervene in the GeoPost case.
     The objections to the investment had come from the agency that looks at foreign investors, the Foreign Investment Promotion Board.
     The Board had been told by the Indian Department of Posts—which would face direct competition, if GeoPost was allowed to operate in the country that the action would go against international postal conventions if it came in to the country.
     Indeed, the rules are clear: any postal agency, which wants to operate in any country outside its own, must have an agreement with the postal operator of that country.
     GeoPost's stand, however, was equally clear.
     It said that its operations would not pose a challenge to India Post since it focused on the premium express parcel segment and did not deliver letters and postal parcels or express parcels weighing more than two kilos.
     GeoPost also pointed out that there were no objections to DHL India operations—a company owned by Germany's Deutsche Post.
     According to industry-watchers, the permission to GeoPost could trigger a change in the India Post Office Act.
     Apparently, one of the amendments to the act seeks to limit foreign investment in express and courier companies to 49 percent from the present 100 percent.
     Now all of that is changed.
Tirthankar Ghosh

Shanghai Hongqiao Airport Expansion

     The RMB15.3-billion invested expansion project of Shanghai Hongqiao Airport is making remarkable progress, as the new terminal, key part of its expansion, celebrated the building’s structural roof-sealing recently.
     "Operational and technical testing is planned to start this July or August on the new terminal and runway to prepare for their opening around the end of next March," Hu Jianzhong, a chief project engineer of Shanghai Rainbow Investment Corp, operator of the expansion project told Air Cargo News FlyingTypers.
     The second terminal and runway are expected to help double the airport's current turnover of nearly 20 million passengers a year, and expand its cargo capacity to 1 million tons from the current 0.4 million.
     Besides this new terminal and runway, the government-invested project also involves a multi-level traffic center (pictured right) connected to the new terminal.
     The traffic center includes a railway station for future express lines from Shanghai to Beijing and Nanjing.
     The land hub also incorporates five Metro lines, two bus centers and underground parking lots.
Mr. Hu said:
     “Construction of the underground waiting hall for the express train station, a key step in the project, was mostly completed and work would start soon on platforms and rail tracks.
     “The station will be shared by future Shanghai-Beijing and the Shanghai-Nanjing express lines.”
     China is investing more in civil aviation to stimulus the economy, building, modifying and expanding more domestic airports.
     As part of the huge economy stimulus package, China adds RMB200 billion to the planned RMB100 billion investment in civil aviation construction for 2009.
David