More far-reaching air cargo security rules become effective in October. Are you and your air forwarder ready? Do you deal with an IAC? Does it have an IACSSP? What about an IACSC? Do its employees have an STA? Perhaps more importantly, are you a KS?
What in the world does all this mean? Is it more government gobbledygook?
For anyone who ships anything by air these terms will soon become important. Yes, it is more government gobbledygook. These terms and others are all part of the comprehensive Air Cargo Security Rules issued by the Transportation Security Administration (TSA) on May 26, 2006. These rules, mandated by the Aviation Transportation Security Act, apply to the transportation of cargo by air. They replace the existing standards and are more comprehensive and far reaching than the standards existing before. These new regulations become effective on October 23, 2006, although some compliance dates do not kick in until later.
The volume of freight moving by air is growing. Some estimate that 50,000 tons of freight or more are transported each day by air. Often, air freight cargo is of greater value than cargo moving by other modes.
Some shippers are heavy users of air freight; others use it occasionally or infrequently, but practically every shipper at some point dispatches cargo by air. Consequently, the impact of these rules is broad.
Most shippers use air forwarders (legally termed "indirect air carriers" or IACs) to arrange for their air transportation shipments. Under the new regulations every IAC will be required to establish a "known shipper program." Each shipper will want to make sure the IAC that it deals with recognizes the shipper as a known shipper (KS).
The principal reason is because of the nature of the air cargo industry. Cargo can be shipped by air either in the belly of a passenger aircraft or on an all cargo aircraft (known as "air freighters"). If the shipper is not a known shipper then its cargo can only be placed in an air freighter, it cannot go into the belly of a passenger aircraft. This greatly reduces operational flexibility.
TSA intends to expand the known shipper program by consolidating approximately 4,000 lists of known shippers into a central computer database that TSA will manage. TSA will require each IAC to submit certain information pertaining to each known shipper the IAC serves. TSA can then let an IAC or aircraft operator know if a particular entity is a known shipper.
One problem for shippers in trying to qualify as a known shipper is that TSA has stated that the standards it will use for designating known shippers will not be publicly disclosed because TSA considers it "sensitive security information." It is the IAC or the aircraft operators who will obtain the information needed about the shipper, make an assessment and report it to TSA.
Each IAC will be required to have a designated IAC Security Coordinator (IACSC). This will be the primary contact for security related activities of the IAC and the person at the IAC with whom TSA will deal. The IAC will have to have alternate IACSCs because the coordinator or his or her alternates will have to be available 24/7. TSA will be issuing various security directives and information circulars to the IACSCs.
The new regulations further provide that each IAC will have to have a Security Threat Assessment (STA) for the IACs principals meaning owners, officers, directors and others. In addition, an STA will be needed for all employees and agents of the IAC that will have unescorted access to cargo. Basically, the IAC will have to make sure that whoever physically handles cargo has gone through the STA process.
An STA will essentially consist of a search by TSA of various domestic and international databases for the individual to see if any potential terrorist threats may exist. This means that the IAC will have to gather information concerning these individuals and submit it to TSA. Under the new regulations an IAC may not operate without a TSA approved security program. Essentially, this will be a program that covers the cargo from the time an IAC first receives it until it leaves the IACs control. TSA will issue each IAC an Indirect Air Carrier Standard Security Program (IACSSP) designed for that IAC. These IACSSPs are considered by TSA to be sensitive security information and they will not be made public. Presumably this means that shippers utilizing a particular IAC will not be aware of the IACs IACSSP.
The new air cargo security rules cover a host of activities including requirements for airports and air carriers in addition to IACs. It is a layered approached to security meaning that each segment will be implementing security procedures and checking to see if those with whom it deals are doing the same. Shippers may want to verify that the IACs they use have a TSA-approved Indirect Air Carrier Standard Security Program, a designated IAC Security Coordinator (name, telephone number and email address) and that the IACs employees who need a Security Threat Assessment have been through the process of obtaining one. If not, the shipper's cargo may not move because air carriers could refuse it or it could be held up for extensive inspections.
James Calderwood is a partner with the law firm of Zuckert, Scoutt & Rasenberger, L.L.P., in Washington, D.C., where he concentrates on transportation matters. He can be reached at [email protected]. This column is designed to provide information of general interest. It cannot substitute for in-depth legal analysis of particular problems. Readers are urged to seek counsel concerning individual situations.