Forwarders urge U.S. to properly test all supply chain scenarios before issuing new air cargo security rule.
The U.S. Transportation Security Administration and Customs and Border Protection should resolve lingering issues associated with an ongoing demonstration program for collecting advance shipment data to guide selective pre-departure inspections of U.S.-bound cargo before publishing a rulemaking requiring the electronic security filing, four trade associations representing freight forwarders said in separate letters to agency chiefs on June 2.
A major concern is how the Homeland Security components will work together to use the Air Cargo Advanced Screening Pilot (ACAS) as a common tool for their joint, yet distinct, security regimes and develop measures that mesh with air cargo security regimes being developed by other governments.
Customs officials have completed a draft rule based on lessons from the ACAS. The proposed regulation is being scrutinized by the agency’s lawyers before being sent to the White House for review by other agencies and administration policy staff. But many within the air cargo sector, including some air carriers, feel the government is moving ahead without enough answers to ensure supply chains won’t experience disruptions.
ACAS is a 3.5-year-old program that was co-created with express delivery companies after a package bomb from Yemen was found on an express delivery plane and has since expanded to cover passenger and all-cargo segments of the airline industry. Under the pilot program, the carriers and freight forwarders voluntarily pre-file seven data elements about their consignments as early as possible prior to departure so CBP can run them through threat-assessment software and order any necessary inspections. Normally, shipment data is included in the automated manifest filed by the carrier with information about the aircraft and flight. But the manifest is not filed until after departure in most cases, preventing security officials from detecting potential devices smuggled aboard to destroy a plane in mid-air. ACAS is designed to split out the consignment information, which is usually available much sooner, so it can undergo risk profiling.
So far, very few of the 160 million security transmissions have been referred for elevated screening.
ACAS has widespread industry support in large part because it was designed to work within the existing operating environment and with different business models. Participants can submit data to CBP in any format that suits them and the rules are expected to be separately tailored for express carriers, all-cargo carriers, passenger airlines and forwarders.
Trade specialists also say that by providing more reliable data earlier in the process, and then being able to update it as better information becomes available, they can reduce the number of inspections and improve customs clearance times upon arrival. Forwarders that directly file information may be able to reduce airline fees for electronic document filing and gain greater insight about the status of their cargo. The ability to update manifests with fresh information also helps reduce fines faced by carriers for inaccurate or incomplete manifest information.
CBP officials say they want to tailor the new rules to the differing business models of express carriers, freighter operators and logistics companies.
ACAS, however, is operating in an environment under which TSA has authority for the security of aircraft and requires inspection of all cargo carried on passenger aircraft flying in and out of U.S. airports. TSA’s inspection regime is frequently at odds with CBP’s risk-based targeting approach.
In their letters, the four groups (the Airforwarders Association, The International Air Cargo Association (TIACA), the Express Delivery and Logistics Association, and the National Customs Brokers and Forwarders Association of America) questioned why ACAS has not yet tested rule sets setting lower inspection thresholds for trusted shippers to minimize the volume of shipments referred for an examination.
After the Yemen incident, TSA instituted a trusted shipper concept based on a company’s cargo volume and said it would program that into ACAS so if a shipper reached the volume threshold it could avoid more intense screening methods. With the actual shipment data in hand, the trusted forwarder in theory could also forego providing a paper certificate to the carrier stating that everything on the airway bill meets the volumetric standard and can move under its individual security program with TSA. The program is especially relevant for passenger airlines in meeting the 100-percent screening requirement for cargo since reviewing shipment information isn’t a substitute for inspection. For the all-cargo sector, ACAS helps by using an automated rule set to identify high-risk cargo to screen. ACAS potentially benefits passenger airlines by providing a tiered approach for the amount of scrutiny applied to shipments, depending on their risk rating. Known shippers repeatedly transporting large volumes of the same merchandise on the same route, and who aren’t drawing intelligence concerns, might only need their cargo to go through one type of detection process, such as x-ray imaging, while a shipment about which there is little, or derogatory information, may also need to go through explosive trace detection or have cartons physically opened, or both.
But early indications are that high-volume shippers would end up with a higher level of inspections and more shipments flagged as potentially risky under ACAS, according to the trade associations.
They also recommended that any rulemaking be limited to the existing data elements filed from the last point of departure and that “go/stop” messages with regard to loading on an aircraft should not include instructions to resolve any security concerns because that falls within TSA’s bailiwick.
Responsibility for air cargo security within the U.S. government is like “a Venn diagram,” so care needs to be exercised to avoid a customs regulation inadvertently triggering a civil aviation screening protocol that has not been fully developed yet, TIACA Secretary General Douglas Brittin said in a phone interview.
The industry coalition further urged CBP to continue the pilot; test multi-dimensional supply chains; test dual-filing scenarios where data is sent to CBP and the carrier; include a lengthy phase-in period before penalties are assessed for non-compliant data as was done with the Importer Security Filing on the ocean side; and involve more forwarders before promulgating a rule.
Almost three dozen companies are cooperating with Customs on ACAS, but only seven large, multinational forwarders are involved despite recruiting efforts. Midsized and small independent transportation management companies primarily based in the United States have largely stayed away for two reasons: much of their business involves outbound shipments and they do not have offices overseas, relying instead on agents to arrange customer deliveries to the airlines. Industry officials say most of them will simply rely on the carrier to do the filing for them.
Once ACAS becomes mandatory, forwarders are expected to have the option of submitting the house air waybill to CBP and the carrier, or transmitting as normal to the carrier and letting the carrier file the advance shipment data to CBP. Forwarders issue house air waybills for each customer, spelling out what is being shipped and the terms of service. Forwarders typically tender consolidated shipments to airlines and will fold multiple house bills into a master air waybill for the carrier, which in turn uses master bill data to file its manifest to Customs.
“I cannot see a scenario where there are a multitude of forwarder filers,” Brandon Fried, executive director of the Airforwarders Association, said.
It only makes sense for air forwarders to file ACAS on their own if they have large consolidations running every night on the same route so they don’t run into delays waiting for the carrier to process all the filings or have to drop off cargo earlier to make departure, he explained.
Others say it’s a good idea for independent forwarders to join ACAS because it will prepare them for complying with similar air cargo security requirements being developed in other countries based on the ACAS model.
The European Union, for example, is developing an advance data program called PRECISE (Pre-Departure Consignment Information for Secure Entry), which is scheduled to become effective May 1, 2016. Canada’s program is called PACT (Pre-Load Air Cargo Targeting).
The forwarding industry also endorsed the February recommendation of the Department of Homeland Security’s Commercial Operations Advisory Committee that filers not be required to be part of trusted shipper programs such as the Customs-Trade Partnership Against Terrorism.
The trade organizations raised concerns about whether other countries will have the same data standards and response protocols as the United States if a high-risk shipment is identified, and how procedures to resolve security questions about a consignment will be coordinated among various parties.
When a high-risk shipment is flagged under ACAS, CBP transmits a message instructing that the package be held for inspection by civil authorities, the carrier or forwarder. But cargo security programs vary by country, so TSA has to recognize the national cargo-screening program of the foreign country as meeting its criteria for high-risk screening. TSA has strict standards on the type of screening that must be used for air cargo on passenger planes, including that inspections be done at the piece level. A forwarder that is a regulated agent of a carrier in a country with a certified cargo-screening program may screen cargo prior to tendering it to a passenger carrier, similar to how many logistics providers do in the United States. Not all recognitions cover passenger and all-cargo modes or forwarders. The logistics companies want to know whether TSA will accept the foreign country’s methods for resolving a suspicious shipment, how TSA will communicate inspection procedures to a forwarder in countries that don’t have established protocols since forwarders do not fall under the regulatory reach of TSA, and how carriers will be notified that screening has been completed by the forwarder or local authorities, according to copies of the letters obtained by American Shipper.
The benefit of the dual filing is that the forwarder can resolve an anomaly by supplying additional information if requested by CBP, self-screening a package, or segregating packages in advance so the airline doesn’t have to break down pallets or containers at the airport and thus allowing enough time to get the goods loaded before departure. The forwarder must still notify the carrier of the shipment’s security status because the airline is ultimately responsible for cargo loaded onto its planes.
Essentially, once the forwarder consolidates all its house bills that have been analyzed by Customs into a master air waybill it is able to tell the carrier that the individual packages within the larger shipment have been cleared by Customs or if there are any that need to be screened at a higher level, either through x-ray detection, explosives-trace detection or physical inspection.
“Airlines are going to be pushing customers to get the information in advance, otherwise they will be subject to delays if info comes with the cargo and there is a hold,” Brittin, who until last summer headed air cargo programs at TSA, said. “So advantage of dual filing is significant, but the messaging channels to get that done still require a lot of work. The back-and-forth process of connecting all those lines has not been tested yet. And that’s important because everyone needs to know whether the cargo can fly.”
The trade associations are also seeking clarification on whether additional screening will be required if a shipment makes an intermediate stop at another foreign airport and how those instructions will be communicated. Re-screening transshipment cargo, except in the case of shipments originating from high-threat markets, would be costly and inefficient for the air cargo industry, officials say.
On the outbound side, they urged TSA to try and make its inspection protocols consistent with those of other countries so that forwarders aren’t subject to extra work load and training to meet potentially stricter requirements in overseas airports.
“The market place that serves the air cargo supply chain is highly competitive, very complex, and extremely diverse. There are over 4,000 Indirect Air Carriers registered with TSA. These range in size from huge multi-national organizations with company operated offices around the world to small ‘mom and pops’ that rely on an extensive network of independent agents at overseas airports. The size and scope of their technology infrastructure and varies widely. When constructing a workable advance-screening model, governments must take care not to disturb the competitive balance that has been achieved among these diverse players in the marketplace,” the letters said.
“Therefore, any ACAS rule should maintain the level playing field for all filers. No requirement should create an unfair competitive business advantage for one filer over another, regardless of industry segment. This is not to say that all requirements must be the same (one size need not fit all). However, a thorough review of competitive repercussions must be applied to any proposed requirements, and a range of solutions provided to meet these diverse needs and capabilities.”
Meanwhile, express carriers, forwarders, and airlines are urging governments to align their air cargo security programs, but are also working with the World Customs Organization and International Civil Aviation Organization to establish global standards for both international cargo security administered by customs agencies and conveyance security, which is the responsibility of civil aviation or homeland security authorities. The industry hopes countries will base their programs on common standards so advance data elements, filing times and the analytical rule sets are internationally consistent, making it easier for industry to meet the requirements.
This article was published in the July 2014 issue of American Shipper.