Balancing trade and security in the sky

The air cargo industry and governments are in a constant balancing act when it comes to security. Parties want the tightest security possible without standing in the way of trade.

That’s the goal of the U.S.’s Air Cargo Advance Screening (ACAS) program, and similar programs in the European Union and Canada.

Two months after the Yemen cargo bomb incident in October 2010, U.S. Customs and Border Protection (CBP) and the Transportation Security Administration (TSA) partnered together for ACAS, a voluntary pilot that enables participants to send and receive advance security filing data for airfreight through CBP’s Automated Targeting System.

“The concept there was to take a subset of the full customs import filing that’s filed by the carriers and look at information, determine a level of risk for each individual air cargo shipment,” says Doug Brittin, secretary general of The International Air Cargo Association (TIACA).

More than three years and 120 million shipments later, the pilot has 34 participating entities, made up of express carriers, all-cargo airlines, passenger airlines that carry cargo and freight forwarders. Participants submit data before cargo is on the aircraft. It goes to the National Targeting Center in Virginia staffed by CBP and TSA personnel, who look at the submitted information and make a risk determination on each shipment.

After the analysis is made, a message goes back electronically to the carrier or forwarder.

“We think ACAS will make the basis, or a very big part of the basis, of future international security regimes,” Steve Alterman, president of the Cargo Airline Association (CAA) in the U.S., says.

ACAS participants have regularly given their feedback on the pilot to CBP since its inception in December 2010.

“We know how to improve it and make sure we’re not only strengthening security but ensuring we’re facilitating trade as well,” says Regina Park, cargo and conveyance security at CBP’s Office of Field Operations. “So the type of feedback we’ve gotten was essentially [to] keep to the core principles of the pilot that it was founded on.”

Those principles call for ACAS to be simple and not burden existing business practices.

ACAS is voluntary, but now, there are plans in the works for it to become mandatory. The EU and Canada’s counterpart programs – Pre-Departure/Loading Consignment Information for Secure Entry (PRECISE) and Pre-Load Air Cargo Targeting Pilot (PACT), respectively – view the U.S. as a model.

“Those other nations or countries are looking to us as an example,” Brandon Fried, executive director of the U.S. Airforwarders Association, says. “They’re going to take the empirical evidence from our voluntary pilot and use that as a basis for theirs.”

Air Cargo World primarily interviewed people in the U.S. who are involved with ACAS because they have more experience with the issue than their overseas counterparts, who got their programs underway after the U.S. did.

“It’s truly a global issue,” Brittin says.

Fried sits on the Advisory Committee on Commercial Operations of Customs and Border Protection (COAC), which gives feedback about ACAS to CBP.

“The Yemen attempted bombings three or four years ago validated what we had been saying all along. That was that 100 percent physical screening did not necessarily equate to 100 percent cargo security and that the very act of physical screening could miss things that intelligence might have been able to detect,” he says.

Seko, a freight forwarding company, has participated in ACAS since October 2012. Sandra Scott, senior director of compliance for Seko Logistics and a member of the COAC group, says joining a pilot has benefits.

“If we could have a part in providing the correct information to the government to make some good decisions before the shipments are loaded, that would be great,” she says. “You have a direct impact on how the program will be designed and implemented.”

The airfreight industry, including Seko, supports ACAS.

“The pilot is really the base of everything. I think that from a freight forwarder perspective being part of the COAC working group on ACAS, that we have called continually,” she says. “We actually get into a lot of the working details behind the scene.”

CAA members, which include FedEx, UPS and Atlas Air, have favorable reviews of ACAS.

“They’re encouraged by it,” Alterman says. “They think it’s going to be a major portion of international security, but the feedback is we’re still working the bugs out.”

Like many of the people interviewed, Scott says CBP has been responsive in regard to ACAS.

“It’s been a very positive experience,” she says. “It’s been a lot of dialogue going back and forth between the trade and between Customs, which is expected on something like this because this will really determine what the future’s going to be in regards to getting the information in advance for air cargo.”

But associations voice some concerns about ACAS and international programs like it.

Fried, Brittin and Alterman point out the diverse parties in the airfreight supply chain. Integrated carriers, forwarders and airlines have different business models, so the question is how each party submits data.

An EU source who declined to be identified says the EU’s PRECISE program is just for air cargo carriers, but similar programs are being started for express carriers and postal consignments.

TIACA feels concerned that the government is moving out of the ACAS pilot phase too quickly, making it mandatory before it’s ready.

“Industry’s concern is that not enough is understood about this to make that a requirement,” Brittin says. “There’s still a pretty small subset of carriers and forwarders even participating in the pilot.”

CAA agrees, saying many aspects of ACAS remain unknown.

“There are a lot of the practical, real-world implications that we’re still working on, and yet CBP is apparently – I don’t know the exact status of it – but apparently forging ahead to make this mandatory,” Alterman says. “Our only point is don’t not make it mandatory, but make it mandatory when we’ve got all the bugs worked out.”

CBP bristles at the idea that the agency is moving too quickly.

“We’ve been in the pilot for over three years now. It got launched December 2010. We’ve assessed over 120 million shipments. We’ve held extensive tabletop exercises with all of our participants so they are very well-apprised of all the protocols in case of an emergency like the Yemen incident that happened in October 2010, and really we think we’ve collected enough data,” Park says. “So I’m not sure where some of the comments are coming from.”

She says ACAS’ 34 participants, which she calls a good sample size, make up the majority of the air cargo industry that’s importing into the U.S. CBP doesn’t foresee a significant effect on its operations when ACAS becomes mandatory, but the agency is taking precautions so it has sufficient resources to support the increase in companies.

Fried agrees with TIACA that a longer pilot is needed to obtain more data – but it comes to a point where the government needs to move on and get it implemented.

“They’re not going to wait forever,” he says.

The air cargo industry’s biggest concern is harmonization of regulations between nations.

“If one party goes down that path, meaning the U.S., is the EU going to do something the same or different when they come to their rulemaking? Is Canada going to do something different when they come to their rulemaking?” Brittin says.

For example, if a shipment from South Africa transits Europe to go to the U.S., it would be easier if the U.S. accepted the EU’s risk analysis.

“The carrier would conceivably not have to re-file the same data to U.S. Customs and be told that because they’ve analyzed it differently, they have to find a shipment in the middle of a cargo container somewhere in Heathrow and pull it out and do higher-level screening when another regulatory party’s already said it looks good to them,” Brittin says. “There could be some very big operational impacts if all these programs are not aligned as closely as possible.”

Alterman echoes this sentiment, saying the different security regimes should be compatible.

“To the extent possible, we’d love the international community to get together and agree on security regimes that make sense worldwide,” he says. “It’s a big bite to take, but the fact is that if we’re complying with multiple regimes with the same freight, that could slow things down.”

But governments seem aware of this issue.

Karine Martel, media relations adviser at Transport Canada (TC), says the U.S. and Canada are working to reduce duplication of efforts and processes when it comes to Canada’s PACT, which is a joint pilot program of TC and the Canada Border Services Agency (CBSA).

“TC and CBSA are working with participants, such as air carriers and freight forwarders, helping us to gather data and are using this information gathered from the pilots to evaluate and assess viability,” Martel says. “We are also working with Canada’s international partners to share lessons learned and best practices from similar advance data pilots, building international consistency where possible.”

The EU source says there are plans to make PRECISE require the same information from operators as its international counterparts.

“We are conducting our pilot of course, which is taking into account the experience that the U.S. ACAS has achieved,” he says. “We are in dialogue with Americans and Canadians that in order not to cause distortions and avoid duplications and harmonize as much as possible – find common denominators for the different regimes possibly in place in the future.”

Park says CBP has spoken with governmental organizations, such as the International Civil Aviation Organization, to make sure there is global consensus on steps forward. But right now, CBP is hesitant to give a date or even timeframe for when ACAS would become mandatory, though Park says this will not be in the near future.

Before ACAS can become mandatory, there is a notice of proposed rulemaking (NPRM) and a comment period. Fried says he expects an NPRM by spring.

Scott says she encourages everyone in the industry to read through ACAS and voice their opinions during the comment period.

People interviewed have different views on how making these regulations – ACAS, PRECISE and PACT – mandatory will affect the worldwide airfreight industry.

“I hope – I’m praying – that it in fact will speed up the movement of the cargo and not delay it because if we know early in the process if there’s a problem, we can take care of it earlier in the process and not have it delay later in the supply chain,” Alterman says.

Fried says the government must work out some elements, such as when parties can submit the data and how quick the analysis is done.

“This is a classic scenario of the devil’s in the details,” he says. “But overall, once this gets accomplished, this will really beef up an already effective, multi-layered security process.”

The EU source says the government is trying to make PRECISE work with as little disturbance as possible. Park has a similar sentiment about ACAS.

“The pilot was designed to ensure that the requirements are not burdensome to their existing business practices and that it works around the organic processes,” she says. “We’ve made it our priority to understand what the different business practices are today and what they will be tomorrow to ensure that our regulations are forward-thinking.”

Brittin emphasizes that the industry endorses the general idea of ACAS, but implementation must be done carefully.

“Industry supports the concept of advanced data analysis and risk-based cargo – absolutely supports that,” he says. “We just want to make sure it’s done cautiously and properly.”