On October 17th 2016 Transport Canada is “expanding the air cargo Secure Supply Chain” to include shippers or “originators” of cargo by way of the new “Known Consignor” category. Innocuous as this sounds, the implications could be significant.
What will this mean in terms of the actual flow of cargo? What can forwarders and carriers expect in terms of screening volumes as of October 17th? Will this impact exporters in terms of transit times? Will there be screening bottlenecks? Cargo security may be coming in October 2016 but unanswered questions are creating cargo security insecurity today.
These are questions for which we currently have no answers. There are also no answers as to how we mitigate the growing level of insecurity within the Canadian air cargo industry as it relates to cargo screening volumes. While there is a heightened awareness of the need for investment in both labor and infrastructure to manage the increase in cargo screening the proverbial “fence sitting” appears to be the most common response in the industry.
Uncertainty Drives Insecurity
So why is there not an air cargo industry call to arms on this?
It is simple. Our industry is not unlike any other industry. Investments require money and money requires business cases and business cases require information and data. If I go to a bank today and ask for a million dollars the bank will want to know how I’m going to make money to pay this investment back. To determine this I need to provide them a revenue stream projection based on facts and figures. Economics 101 right? In the case of air cargo screening, we need to know the volumes of cargo that will require screening to have this revenue stream projection to give to our banks to get the money. Screening equipment, the space to house the screening facility, staff hiring and training to conduct screening – these investments take hundreds of thousands of dollars. The input data such as projected screening volumes is definitely a missing link in the investment chain and is a major cause of our cargo security insecurity.
At this point, there is no expectation that the new ACS Regulations implementation date will be delayed so we need to prepare for a significant change in the way we manage our customers’ business and a significant change in our costs for doing business. Air shippers should be preparing now to become Known Consignors and if not, should be preparing to pay additional screening costs. Forwarders and third party service providers should be completing requirements to become Regulated Agents – to make the investment and get ready for screening. This is a call to action for the entire community to help address our cargo security insecurity.
CIFFA offers cost effective, on-line, on-demand training for all participants in the program through its Authorized Cargo Representative (ACR) and Cargo Security Coordinator (CSC) training. Known Consignors must get on board quickly if we are to be ready for October 17th.
Guest blogger Gary Vince is the new President of the National Board of Directors of the Canadian International Freight Forwarders Association (CIFFA). He is a thirty year veteran of the industry with special interest in air cargo. Gary can be reached via email@example.com.