DC Velocity - December 2010

NRF exec urges 10+2-type rule for
air cargo
go figure …

9. 3 million The positive “net absorption,” or the amount of square feet being leased relative to the space being vacated, of the top nine U.S. industrial property markets through September. Strong Q3 leasing demand helped markets recover from losses earlier this year. Much of the demand is coming from large occupiers in prime distribution hub markets.

The federal government should consider implementing a program for air-cargo security similar to the so-called “ 10+ 2” rule now in place for oceangoing shipments, a leading retailing executive said.

Jonathan Gold, the National Retail Federation’s vice president, supply chain and customs, told an international trade group in Boston that federal authorities should consider a “model … like [the Importer Security Filing] for air cargo.” The Importer Security Filing or ISF program is more popularly known as the “ 10+ 2” rule because it requires 10 data elements from importers and two from ocean carriers—all of which must be submitted to CBP before containerized cargo is loaded on vessels bound for the United States.

Speaking at the Coalition of New England Companies for Trade (CONECT) Annual Northeast Cargo Symposium in Boston on Nov. 4, Gold said shippers would rather see risk-based assessments of data similar to those developed for ocean cargo than a screening and inspection regime. Federal law now requires either the screening or physical inspection of all cargo to be loaded in the lower holds of passenger planes at U.S. airports. There are currently no such rules governing cargo flown on all-cargo aircraft, however.

In the wake of the discovery Oct. 29 of two bombs shipped on all-cargo aircraft bound for the United States, the Transportation Security Administration (TSA) and Bureau of Customs and Border Protection (CBP) are under “a tremendous amount of pressure” from Congress to immediately improve the security of all-cargo aircraft. However, they should resist that pressure and not rush into anything, said Gold.

SOURCE: JONES LANG LASALLE

Screening mandate eyed If Rep. Ed Markey (D-Mass.) has his way, however, the federal agencies may not have a choice. Markey, who authored legislation signed into law in 2007 to require 100 percent screening and inspection of all belly cargo at U.S. airports, introduced legislation in mid-November to expand the mandate to all-cargo operations.

Under the legislation, all cargo transported on freighter planes would be screened or inspected within three years, with a 50-percent mandate required within 18 months. In addition, a system would be established to inspect shipping facilities in the United States and overseas to ensure that appropriate security protocols were being followed.

A security executive at a major transportation company said that in the wake of the Oct. 29 incidents, it would just be a matter of time before the all-cargo air carriers are subject to the same screening and inspection mandates as their passenger brethren.

The idea of screening freight on all-cargo planes “has been in the background all the time. All that was needed was a catalyst to push it over the edge,” said the executive, who asked not to be identified. The events of Oct. 29 could be that catalyst, the executive said.

Although they are not subject to screening or inspection mandates, all-cargo carriers are still required to comply with a number of government security standards. Among the requirements is a 2003 CBP directive mandating that cargo airlines operating international service into the United States file their manifests no later than four hours before a plane’s arrival. For flights two hours or less, manifests must be filed no later than when the aircraft goes “wheels up.” Both CBP Commissioner Alan Bersin and TSA Administrator John S. Pistole told Congress that they are re-evaluat-ing the regulations because the time windows to file manifests are not lengthy enough to deter a possible terrorist attack. ;

The air-cargo industry might be in turmoil over security issues. But as far as commerce is concerned, the business seems to be doing fine.

World air-cargo traffic has grown so rapidly in the past 12 months that it will regain its 2007 peak by the end of 2010, the Boeing Co. projected in its latest biennial forecast, World Air Cargo Forecast 2010–2011.

The aircraft manufacturer said global cargo traffic will expand at a 5.9-percent annual rate over the next two decades, with traffic expected to triple through 2029.

Volumes rebounded strongly in November 2009 and continued to climb through the first eight months of 2010, the company said.

The aircraft manufacturer projected the world’s freighter fleet will increase to 2,967 airplanes from 1,755 during the 20-year period. Large freighters like the company’s 777 and 747 will account for one-third of the total fleet by that time, compared to 27 percent today.

Boeing expects global freighter demand to be met by 743 new airplanes as well as the conversion of passenger and passenger-freighter combination aircraft to an all-cargo configuration. ;