The longest day

August’s 100% screening deadline in the US is expected to delay air freight initially, according to the industry.

Carriers have been working hard to ensure that shippers and forwarders are joining the Certified Cargo Screening Programme (CCSP), which will mean that freight arrives at the airport already screened. However, airlines have warned that customers who have not made arrangements to screen freight could be subject to delays.

“Security is at the top of everyone’s mind for 2010 – not just for airlines, but the whole logistics community,” says Dave Brooks, president and CEO of American Airlines Cargo.

“We have invested millions of dollars in equipment for freight that comes in unscreened. But the most important activity is to try to get as many forwarders and shippers to get certified by the Transportation Security Administration [TSA] to be able to screen themselves, which will avoid expense and potential delays.”

The problem for airlines is that they don’t yet know how much cargo will need to be screened at the airport. Not only are freight volumes uncertain in the current economy, but the amount of pre-screening that will be done is largely unknown.

“I don’t know how many shippers and forwarders are already part of the CCSP, so I really don’t know how much pre-screened cargo we will get,” admits Brooks. “Customers have different locations, and need to be certified in each one. As much as we have planned, communicated and educated, we really won’t know till day-one what will show up.”

Bellyhold cargo carriers have tried to encourage their customers to prepare for the deadline. “We’re big fans of CCSP,” says Jim McKeon, MD of Continental Airlines Cargo.

“We’d like most major forwarders to get into the screening process, and it helps if shippers develop those processes to make it more secure for the forwarder. I can understand the hesitancy of some, with a difficult economy, but with the deadline looming, you have to make it happen.”

Most major forwarders have already signed up to the CCSP, but are still concerned about possible delays.

“Our US offices are fully compliant and can handle our own pre-screening, as we have invested a lot in resources,” says Jonathan Blackney, general manager air freight at SBS Worldwide. “I don’t think we will see much pre-screened cargo from shippers – they feel it’s the forwarder’s role.”

He admits he has worries about the August deadline. “If freight goes in unscreened, do the carriers have the equipment and trained staff to deal with it?”

The TSA, which qualifies companies for the CCSP, also admits it doesn’t know how much freight will need to be screened by the airlines.

“The people who can screen cargo themselves will be able to move it in a more efficient manner,” says Dwayne Baird, of the TSA’s office of strategic communication and public affairs. “We continue to have forwarders and shippers qualifying for CCSP – it’s an ongoing process.

“But our first and foremost concern is aviation security, and only then the commercial aspect of moving cargo.”

An air cargo scanner

For shippers and forwarders that still haven’t signed up to the CCSP, there are alternatives, such as using freighters, which do not need 100% screening, flying into Canada and then trucking freight to the US, or by using ships.

“Those shippers and forwarders that have chosen not to screen know they will need an alternative come August,” explains Brooks. “They will either find an alternative CCSP or move the freight by some other mode.

“I doubt we will lose much business to freighters. 

"With half of the world’s air freight on passenger aircraft, there is not enough room in the freighter fleet to absorb it. The other reason is that people who ship on passenger planes do it for a reason – it’s a regular, reliable service and costs are better value. 

"Some customers will go to FedEx or UPS instead, but I think shippers will find it more cost-effective to use passenger airlines.”

However, the costs of screening will be passed on to the shipper. Airlines are charging a security fee for unscreened cargo, and most forwarders are also planning to charge for screening.

But despite the additional costs involved, the industry doesn’t believe it will harm the attractiveness of air freight. 

Olivier Bijaoui, CEO and president of ground handler Worldwide Flight Services

“I don’t think the costs will push a modal shift,” says Olivier Bijaoui, CEO and president of ground handler Worldwide Flight Services. “Shippers will stick to their models. Goods sent by air are expensive - the security fees are nothing to do with the transportation, and it’s marginal to the retail price. A lot of goods can’t spend even a few days on a wet environment like a ship.”

He adds that he doesn’t think the time taken to screen cargo will be significant to shippers either.

“The security measures don’t delay cargo to the extent that makes sea freight attractive. We are used to security in Europe, and yes, it’s a constraint on the supply chain, but the delay incurred is not much – a few hours. It’s more or less a question of logistics and how you handle the situation.”

Even if large volumes of unscreened freight arrive at airport gates in August, airlines don’t believe the delays will cause significant backlogs.

“I don’t share the view that we will see huge bottlenecks,” says Brooks. “The industry is very engaged in informing the community – we are pretty well focused on this problem, and we have a pretty good idea of customers who aren’t in the programme.

“We are proactively reaching out to encourage them, or make them face the fact that it will be more expensive if they aren’t in the CCSP. If they screen their own freight, we won’t charge a screening fee. Those fees could change, it’s too early to say. We are trying to persuade our customers to do whatever they can.”

He adds that the TSA has been helpful in allowing shippers with well-documented packing processes to gain CCSP with relative ease.