Forwarder’s Forum: Tough lessons from the regulatory trenches

BrandonFriedFTForwarders are some of the toughest business people you will ever meet. They compete in a global marketplace of more than 100,000 competitors, in which the delivery of just one shipment can mean the dif­ference between success and failure. Customers demand re­lentlessly reliable service, often at a low price, rendering mistakes costly and the need for accurate industry knowledge essential.

If that’s not enough, the brewing “alphabet soup” of regu­lations shows no sign of ending anytime soon and promises to make the road ahead even more challenging for even the toughest competitors. Here are some examples of this.

TSA: Where’s our security program revision?

For more than a year, industry stakeholders have been working with the Transportation Security Administration (TSA) to reduce complex regulatory requirements that no longer provide a clear security benefit in the age of 100 per­cent cargo screening.

Forwarders had hoped to see some relief from these out­dated measures, but recent leadership changes and appar­ent discord on air cargo strategy within TSA has stalled the long-awaited program change. As we enter the traditionally busy fall shipping season, forwarders want to see these an­ticipated changes now to avoid further market share erosion brought about by unbalanced security policy that has not kept pace with changing times.

CBP: The ACAS rulemaking proposal

Millions of shipments have been scrutinized since the Air Cargo Advanced Screening (ACAS) voluntary pilot program began through a Customs and Border Protection (CBP) and TSA joint initiative that has yet to produce a notice of proposed rulemaking. Since the United States promised that its program would set the global standard for preloading advanced data targeting, shouldn’t ACAS be moving along faster, so other countries don’t take matters into their own hands and initiate programs that may not correspond with ours?

As CBP rolls out its Export Manifest Voluntary Pilot Program, we look ahead to forwarders not only taking an active role in the pilot, but also in providing insight about the challenges and feasibility of providing house air waybill shipment data to CBP well in advance of aircraft loading. However, we need to remember that this participation poses a paradigm shift for both forwarders and their airline part­ners. Previously, the responsibility for submitting this data belonged to the carrier, which had up to four days after de­parture to perform the task.

Trucker hiring standards

Forwarders are watching instances in which personal-injury attorneys have brought a number of successful cases in state courts against brokers on grounds that they were negligent in reviewing a carrier’s safety history before hiring them to move a shipper’s load of cargo.

Forwarders hire truckers on a transactional basis, and the drivers are not on our payrolls. So after vetting a carrier’s safety fitness beforehand through a government-sponsored database fixed to a national hiring safety standard, forward­ers and brokers should not be held responsible for negli­gence in that choice of carrier. We hope to see successful passage of legislation in the upcoming Highway Bill that results in a nationwide hiring standard for carriers setting specific criteria for choosing a safe motor carrier.

As of this writing, lawmakers are facing a tight deadline to pass a bill to fund highways and related road projects. The government spends about US$50 billion per year on trans­portation projects, but the gas tax — not increased since 1993 — only brings in about $34 billion. Short-term fixes have been approved more than 30 times since 2009, but such extensions are useless in multi-year projects, especially if officials know the money will run out in five or six months. A long-term extension is essential to ensure our country’s competitiveness in providing adequate road infrastructure to get freight to and from the ports.

Lithium Batteries: Where do we go from here?

Boeing has issued warnings to all passenger airlines that bulk shipments of lithium-ion batteries in their cargo holds could cause destructive fires. These are the rechargeable batteries used in cell phones, laptops and other electronic devices, and they are becoming increasingly important in automobile manufacturing and residential solar energy sup­port applications. Supply chains frequently rely on interna­tional airlines to support these important markets. Boeing’s guidance urges airlines to refrain from carrying shipments of the batteries until safer methods of packaging and transport are established and implemented.

Since forwarders often arrange shipments containing lithium batteries, pursuing an effective solution to this challenge is more important than ever. Industry and government should be working hand-in-hand to encourage the packaging industry to develop an effective solution that protects shipments against in-flight catastrophes.

Government oversight is equally as important as protec­tive packaging is for these ubiquitous power sources. Gov­ernments are clearly responsible for establishing regulations to prevent unsafe shipment of materials on flights, and they should — and must — enforce them vigorously. Forwarders already toughened by competitive market conditions now must get even tougher by refusing shipments from custom­ers who are intent on breaking the rules, thereby placing the flying public at risk.

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