Annual Review & Outlook 2013: Airforwarders Association

As it was in 2011, the adverse global economy was the prevailing issue for the air cargo industry in 2012. In the U.S., the economy limped along, creating a relatively flat performance for the air cargo sector. On the commercial side, the economy again will be the wild card. Although there are some positive signs, there appears to be no radical improvement on the horizon.

But, after a rather static year on the security and regulatory front, the seeds are sown for more dramatic change. The attempted bombing of cargo flights out of Yemen in October 2010 spurred the creation of the Air Cargo Advanced Screening initiative, under which the Transportation Security Administration reviews and analyzes the names of shippers, consignees and other important bill-of-lading elements before a cargo-bearing plane leaves the gate.

The requirement, which transitioned from a voluntary pilot phase to full requirement on Dec. 3, represents the latest in a maze of security protocols — in the U.S. and abroad — that the air cargo industry must navigate.

Other nations are awaiting the lessons from the U.S. experience. If, as expected, they follow the ACAS example, forwarders and shippers likely will face challenges in tendering time and increased costs.

Although there is much discussion about global harmonization of air cargo security regulations, the industry is skeptical it will become reality. The one certainty is that constant vigilance is essential, because the industry understands it could be one event away from a significant game-changer.

Every airfreight shipment involves a trucking component, and a new round of regulation is bound to have dramatic impact on air forwarders. Newly passed U.S. legislation increases bonding requirements for customs brokers and forwarders managing trucking freight with no prior or subsequent air service.

Trucking hours-of-service regulation will reduce the amount of time drivers will be able to operate. Safety proponents are at odds with the trucking industry over the CSA 2010 driver-rating program that poses collateral issues in state courts under potential "negligent selection" and "vicarious liability" claims. This is a classic "rock and a hard place" with the Federal Motor Carrier Safety Administration being the "rock" and the courts being the "hard place."

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