Sequestration Could Mean Big Delays for Air Freight, AfA Head Says
The potential impact of sequestration on trade, resolving some issues involving security screening of cargo, and dealing with some trucking issues are likely to be the main government policy focus of air forwarders in 2013, said Airforwarders Association Executive Director Brandon Fried in an interview with us and a speech Jan. 31 at Air Cargo 2013 in New York City.
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Sequestration could potentially have a big impact on the ability to move goods, Fried said: "We're really worried about anything that could result in a slowdown at ports." He said sequestration, which would result in forced spending cutbacks at CBP, the Federal Aviation Administration and elsewhere, could mean, for example, cutbacks or complete closings of 246 air traffic control towers. It also could mean fewer personnel to clear cargo.
"Any type of issue that creates slowdowns amounts to trade barriers," Fried said. "That makes the U.S. less competitive." He said the AfA will be "advocating for more staff -- the more staff, the faster the clearances go." He said even before sequestration there are "sporadic delays" in clearing freight.
The solution isn't "just throwing more people at it," Fried said. "We also have to be smarter in how we do it." ACE is a good step, he said, but it "has been slowed," partially due to CBP funding issues. "When [ACE] is done it will be a great tool," he said. "But it's not done yet."
The big issue on security remains how small air forwarders will handle trusted shipper programs, Fried said. Most don't have offices overseas, where shipments originate, and instead use local agents. That means those agents need access to the CBP's trusted shipper database, but there currently isn't a good online portal to do that, Fried said: "CBP left it to the market to work that out." He said the "challenge is waiting to see who will come up with a portal" but it's "working itself out. Private vendors are stepping up to the plate."
Knowing the shipper is "probably as important as" screening the shipment, in terms of boosting security, Fried said. ACAS (see ITT's Online Archives 12112727 is potentially a big step he said: "That is what we are working on now."
The big trucking issue is surety bonds that the highway bill required air forwarders to post if they connect freight to trucks. The $75,000 bonds aren't a big issue for large forwarders, Fried said, but can be a burden for smaller ones. There's also concern about new driving hour limits, he said, and about the new rating system for trucking companies, which he said can force a forwarder to face liability for something the trucker does.
Lithium batteries continue to be a "heartache," Fried said, and the recent lithium ion battery problems with the Boeing 787 could make it even worse. Batteries in cargo have been suspected in two aircraft crashes, though the cause hasn't been proven. After the 787 issues, some "people are jumping to conclusions," Fried said: "We're saying wait a minute." He noted that the 787 batteries are in the active mode when those problems arise, and those in freight typically are not: "This is something we are watching carefully." -- Mike Feazel