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 | Port of Mumbai Bans Hazmat Shipments |
Chlorine gas spill hospitalizes 100, triggers restriction
August 11, 2010 - Trade moving through India's Port of Mumbai, which remained closed for a fifth day following the collision of two cargo ships at the main harbor, suffered yet another blow when the port authority issued a decree banning shipment of hazardous materials on safety grounds.
The ban, which will take effect Sept. 6, was triggered by a recent chlorine gas spill from one of the cylinders stored in the port docks that left more than 100 people hospitalized.
"It has been decided that dangerous goods listed under the International Maritime Dangerous Goods Code will not be accepted/handled at Mumbai Port," the authority said.
Port officials said the movement of "relatively less" hazardous goods, which include sulphur and calcined petroleum coke, will be permitted on direct delivery basis, subject to a 15-day advance clearance.
"The list of cargo allowed to be shipped will be modified depending upon the degree of hazard and quantum," they said.
The abrupt decision prompted strong protests from port users amid a broad consensus on safety needs.
"We are really concerned and perturbed that a decision is being taken not to permit handling of all hazardous cargo except some on direct delivery basis. With this, vessels in the pipeline carrying such cargo will be greatly affected, leading to serious difficulties and losses to the trade," sad the Mumbai-Nhava Sheva Ship Agents' Association.
The association, which represents the entire ship agents' community at the port, suggested the authority hold an urgent meeting with all stakeholders to find a practical solution.
In a separate trade notice, the port authority announced plans to extend concessions on empty container storage charges for a further period of one year ending Sept. 2011 in a bid to boost its container throughput.
The discounted rates apply to containers handled at designated yards and container freight stations and not to units stored at the regular docks, it said.
Mumbai's container volume for the April-July period surged 30 percent from a year earlier to 24,500 20-foot equivalent units.
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 | BDP International named Top 100 3PL Provider |
August 10, 2010 - Inbound Logistics (IL), a major US trade magazine and online web portal publishes a yearly Top 100 3PL Provider list each year in the publication's July issue. The Top 100 is a both an accolade and a reference directory of leading logistics service providers. It provides a detailed snapshot of companies that the editors of IL have judged as best suited to meet the shipping public's diverse transportation and logistics needs. To develop the Top 100 3PL Provider list, IL solicited nearly 600 third-party logistics service providers to provide detailed information about their services and areas of expertise, as well as contextual insight about business during the past year, relationships with customers and emerging trends. IL editors carefully evaluated the questionnaires submitted by the third-party logistics providers, in addition to communicating with their customers. "The 3PLs we selected are capable of meeting the diverse outsourcing demands of the shipper community," says Joseph O'Reilly of Inbound Logistics. BDP International is proud to have been chosen from this large group of providers as one of the Top 100 3PL Providers. To view the full chart of the Top 100 3PL Providers, please click here.
To read the full corresponding article on the 3PL Perspective, please click here.
Inbound Logistics and BDP International
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| Etihad Crystal Cargo to launch Beijing service |
August 3, 2010 - Etihad Crystal Cargo, a division of Etihad Airways, will launch a twice weekly service from its hub at Abu Dhabi International Airport to Beijing, China.
The service will commence operations on August 11, and deploy the airline's MD11 freighter with a payload of 88 metric tonnes.
Roy Kinnear, senior vice-president of Etihad Crystal Cargo, said: "This is our first dedicated freighter service to Beijing.''
With its fleet of two Airbus A300-600 aircraft and two MD11s, Etihad Crystal Cargo has 22 cargo freighter destinations in the Middle East and Africa and 70 destinations across the globe.
Cargonews Asia
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Taiwan, S'pore to pursue trade pact | |
- Move follows Taiwan-China agreement in June
- S'pore deal may prompt other Asian nations to seek FTAs
- Two sides to talk later in the year: S'pore
August 5, 2010 - TAIPEI - Taiwan and Singapore will pursue a free trade-style deal, the two sides said on Thursday, a key to Taipei's long-term growth strategy and following a trade pact with political foe China.
Taiwan, which has not signed free trade agreements with its major trading partners due to opposition from China, will negotiate with Singapore a deal under the World Trade Organisation (WTO) framework, presidential office spokesman Lo Chih-chiang said.
Singapore, which decided earlier on Thursday to pursue the deal, is seen motivating Asian peers to seek pacts with Taiwan if economic powerhouse China does not protest this one.
An China-Taiwan economic cooperation framework agreement (ECFA) signed in June to lift trade between the export-led US$390 billion island economy and its No 1 trade destination raised the island's appeal among Asian nations.
'We will pursue this deal. It's basically an FTA, though we may use a different name,' Mr Lo said. 'Singapore is an economic hub in Asia, and trade is Taiwan's lifeblood.'
A statement from Singapore's Taipei trade office said the two sides had 'agreed to explore the feasibility' of an agreement under the WTO and would meet later in the year for discussions.
China, which claims self-ruled Taiwan as its own and seeks to stop it from doing any official business with foreign governments, had long used its diplomatic clout to block free trade deals.
But Beijing signalled last month that it was finally willing to let Taiwan negotiate trade pacts with the outside world, a senior Taipei official said.
REUTERS
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Companies may soon be required to prove chemical safety before use | |
August 6, 2010 - There is a new piece of legislation before Congress that will require chemical manufacturers to prove that an industrial chemical is safe before they can use it in products. The Toxic Chemicals Safety Act of 2010 will grant more power to the U.S. Environmental Protection Agency (EPA) to regulate chemicals and will update the antiquated Toxic Substances Control Act of 1976 to keep up with the times.
According to environmental advocates, the Toxic Substances Control Act of 1976 is inadequate at protecting both people and the environment from toxic chemicals because the thousands of new chemicals that have been created since its passage are excluded from its mandates. The EPA has also failed to ban any chemicals under the old act.
"Over the years, not only has [the Toxic Substances Control Act] fallen behind the industry it is intended to regulate, it has also proven an inadequate tool for providing the protection against chemical risks that the public rightfully expects," explained Steve Owens, assistant administrator of the EPA's office of chemical safety and pollution prevention department.
The Toxic Chemicals Safety Act of 2010 will update current laws to grant the EPA the ability to require more safety information from chemical manufacturers. The EPA will also be given more power to restrict and ban unsafe chemicals from use.
As it currently stands, the burden of proof is on the EPA to prove that a chemical is unsafe after manufacturers begin using it, but the new bill will rightfully shift that burden to chemical manufacturers, requiring them to prove that a chemical is safe before being able to use it.
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China free trade talks likely next year, says S Korea
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August 6, 2010 - (BEIJING) China and South Korea are likely to launch negotiations on a free trade agreement next year, Seoul's ambassador to Beijing said in an interview published yesterday. The South Korean ambassador, Yu Woo-ik, told the China Daily that the two sides 'are expected to initiate official FTA talks in 2011' after the completion of a feasibility study.
Seoul's Yonhap news agency reported last month that the two sides had met in Beijing on July 15, with an eye toward launching the talks.
Earlier this year, the two countries signed a memorandum of understanding, agreeing to hold preliminary talks on sensitive sectors such as agriculture before starting fully-fledged negotiations on a free trade pact.
South Korea's trade minister said last month that the talks on so-called sensitive areas could begin in September, according to Yonhap. China has emerged as South Korea's largest trading partner, absorbing some 24 per cent of its total exports in 2009.
South Korea has been actively pushing for free trade agreements worldwide to bolster its export-dominated economy. It already has such agreements with Chile, Singapore, India, the European Free Trade Association and the Association of Southeast Asian Nations (Asean).
A free trade pact signed with the European Union in October 2009 is awaiting ratification, as is a deal signed with the United States in 2007.
China has reached deals with Asean, Pakistan, Iceland, Chile, Peru, Costa Rica and New Zealand, according to state media. It is currently in talks with Australia and Mongolia on similar pacts.
AFP
Back to the top |
| Restocking retailers see early peak season | |
August 6, 2010 - Import cargo volume at major US retail container ports is expected to top 14 million containers this year, a 15 percent increase over last year's unusually low numbers as the cautious recovery continues, according to the Global Port Tracker report released today.
After releasing the monthly report, jointly compiled by the National Retail Federation (NRF) and Hackett Associates, the NRF's vice-president for Supply Chain and Customs Policy Jonathan Gold said: "We aren't back to where we were two years ago and consumers aren't convinced that the recession is over quite yet, but 2010 is clearly going to finish better than last year.
"In the meantime, retailers are monitoring demand very closely and hoping to see increases in employment and other areas that will boost consumer confidence. Cargo numbers this summer are showing unusually high percentage increases, but that appears to be an indication of shortages in shipping capacity earlier in the year rather than sales expectations."
US ports handled 1.32 million TEUs in June, the latest month for which actual numbers are available. That was up four percent from May and 30 percent from June 2009. It was the seventh month in a row to show a year-over-year improvement after December broke a 28-month streak of year-over-year declines.
July was estimated at 1.38 million TEU, a 25 percent increase over last year. August is forecast at 1.32 million TEU, up 14 percent from last year; September also at 1.32 million TEU, up 16 percent; October at 1.31 million TEU, up 10 percent; November at 1.19 million TEU, up nine percent; and December at 1.12 million TEU, up two percent.
The first half of 2010 was estimated at 6.9 million TEU, up 17 percent from the same period last year. The 14.5 million TEU total forecast for 2010 would be up from 12.7 million TEU in 2009, which was the lowest since the 12.5 million TEU reported in 2003. The 2010 number remains below the 15.2 million TEU seen in 2008.
The large double-digit increases in June and July appear to be the result of backlogs built up due to the lack of shipping capacity earlier in the year after ship owners took vessels out of service during the recession and were slow to return them as the economy began to pick up.
With many retailers appearing to bring merchandise in early to avoid any further bottlenecks, July is likely to be the peak shipping month for 2010 rather than the traditional rush of holiday season merchandise in October.
"There are indications that the shipping season may have peaked earlier than normal as the rush to re-stock inventories earlier in the year intersects with a combination of increased shipping capacity, consumer confidence levels not seen since August 2009 and the slowing growth of consumer spending," Hackett Associates founder Ben Hackett said.
"The traditional peak season may be melting away."
Cargoenews Asia |
| Shipping lines switch ports to avoid Marseilles congestion |
Five-day delays at Fos terminal are also prompting congestion surcharges
August 6, 2010 - Hapag-Lloyd has suspended calls to Marseilles' Fos container terminal, while another deepsea carrier is considering diverting services because of congestion-related delays.
The Hamburg-based shipping line said: "Due to the ongoing port congestion in Fos caused by strike actions and terminal repairs we are no longer able to maintain a reliable service schedule.
"We are experiencing an average schedule delay of five days as a result of the congestion.
"To improve the service schedule integrity all Fos port calls will be suspended until further notice."
It recommended that customers transfer bookings to ports in northern Europe and said import containers destined for Fos would be discharged at Genoa or Barcelona and feedered to Fos.
A contact at another deepsea carrier told IFW it was considering moving cargo through another port in the Western Mediterranean and had heard other carriers were considering doing the same.
But a port boss insisted the problem has eased over the last few days, although he acknowledged delays are likely to continue through August and into early September.
Dirk Becquart, Chief Commercial Officer and Director of Development, told IFW the delays were the reult of a combination of four factors: strikes were taking place in response to French port and pension reforms; there had been a surge in traffic; the port had to carry out essential maintenance work on quays weakened by the strong movements of the larger ships' propellers; and workers tended to go on holiday in August and September.
However, he added, the situation had eased, as the industrial action that had brought work to a halt for two hours per eight hour shift, had reduced to one hour.
Also, the work on the quay wall was scheduled to be finished by the end of September and workers would be returning from summer breaks over the next few weeks.
In the longer term, a new terminal, FOS 2XL, scheduled to open mid-2011, would double the ports operational and storage capacity.
In response to the current delays, Maersk Line has announced a congestion surcharge of US$150 per teu for cargo at the Fos Sur Mer terminal. It will be applied to all bookings from today for cargo to and from all origins and destinations, except West Africa.
International Freight Weekly |
| Despite challenges, logistics in India is positioned to grow | |
August 9, 2010 - Excerpted from an interview with Mukesh Shah, Country Manager, BDP International in India
Project Monitor - India: Only 8 per cent of India's current 1,800 million sq. ft of warehousing space is owned and operated by organised players. Do you foresee the share of organised players increasing in next 10 years?
Mukesh Shah: Yes, we project the private sector will be increasing its investment in warehousing space over the next decade, a trend that has been underway since last year. The private sector had been disinclined to enter this capital-intensive business, and banks were wary of financing its high funding requirements. This scenario changed about 10 years ago when the Indian government began creating more favourable conditions for private investment. The 2009-10 budget has extended the capital interest subsidy to investors in agri-warehouses, and similar incentives are likely to be extended to the cold chain logistics segment in the near term. We're hoping the government will provide fiscal concessions to other segments of the logistics industry as well.
Project Monitor - India: With the growth in the logistics sector, India needs around 25-30 million sq. ft of additional warehousing space annually.
Mukesh Shah: Partnerships between the private and public sectors can provide more incentives for warehouse construction. Increased foreign trade and upcoming government incentives are accelerating demand for warehouses and logistics services. To help meet this demand, four logistics parks are planned for a 400-acre site in eastern India, and five more are being established on a 220-acre site in south India (Hyderabad). The latter complex, with its concentration of textile, engineering and pharmaceutical firms and excellent connections to large markets in southern and western India, will provide approximately 10 million sq. ft of warehouse space by 2012. To read the full article, please click on http://symphony.bdpap.com/news/project_monitor.pdf
By Sandeep Francisco Menezes
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| Brazil's Port of Itajai reopened for large container vessels |
August 11, 2010 - The port of Itajai in Brazil is once again open to large container vessels after its sudden silting two years ago by flash floods. The port authority was forced to reduce the size and draught of vessels that could enter the port, which hit the port's revenue severely , especially at a time when the world's shipping economy was experiencing a severe downturn in trade. Following one of the largest surveying and dredging operations in Brazil, the port is looking to recapture demand.
However, problems had impacted not just the physical environment but also the 'human factors' within the port, so in order to refresh the pilots' ship handling knowledge and experience of large containerships the port authority commissioned a marine simulator workshop at the port's offices in Brazil.
The workshop provided the pilots with a simulated model of a 290m container vessel which had been fully validated against previous ship trials data. The Port of Itajai was recreated in BMT Argoss' PC Rembrandt simulator using the standard British Admiralty chart and the port's latest bathymetry and hydrodynamic data, incorporated from information gained through the Coastal Planning and Engineering of Brazil (CPE Brasil) recent surveying work.
Port Strategy
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| India GST poised to miss deadline again | |
Government still does not have the numbers needed to push bill through
August 11, 2010 - (NEW DELHI) India's most ambitious indirect tax reform is at serious risk of missing another deadline following failure so far to win opposition support for a bill crucial for business and public finances.
The Congress party-led coalition government had placed much of its political capital over the past year seeking to pass in the current parliament session a nationwide goods and services tax (GST) bill that would on April 1, 2011 replace existing levies such as excise duty, service tax and value-added tax.
Finance Minister Pranab Mukherjee is reaching out to opposition parties in New Delhi to narrow differences and will then meet state ministers to find a compromise, a finance ministry official, who declined to be named, told Reuters.
Business executives and investors have high expectations for GST, hoping that it would reduce their average tax burden by eliminating the multiple taxes that pile up, and cut down on corruption and red tape.
By creating a common market across Asia's third largest economy, GST would also eliminate tax variations between states that cause massive bottlenecks for the movement of goods.
Improved tax collection would help trim the fiscal deficit to 4.1 per cent of GDP by 2012/13 from 5.5 per cent projected this year.
While few see major economic losses from the delay for now, the episode is emblematic of the slow progress on key reforms and adds to the crumbling of high hopes many had of Prime Minister Manmohan Singh's coalition government.
The Congress party returned to power stronger in 2009 elections, but has since lurched from one crisis to another.
While it has taken some bold steps such as freeing fuel prices, other reforms such as opening up retail remain on the backburner.
'The government doesn't seem to show a lot of evidence on that count.
It does raise concerns about their ambitious fiscal targets,' said Brian Jackson, a Hong Kong-based senior emerging market economist with the Royal Bank of Canada. 'It is important that they make progress on improving public finances. If there is hindrance, then it is a concern.'
The GST proposal must be approved by two-thirds of both houses of parliament in New Delhi and by half of India's states, numbers that the government does not have, making it necessary to bring in rivals on board.
But opposition parties and several states are against a provision that gives the federal finance minister veto powers over decisions on tax rates and on granting exemptions from the tax. States also fret about possible revenue loss, despite the federal government's assurances to make good any shortfall.
Many feel that the resistance stems from main opposition Bharatiya Janata Party's (BJP) desire to keep up the pressure on Congress.
'There is no economic reason for any state to oppose the GST, political compulsions are the reason,' Sachin Menon, head of indirect tax at consultancy KPMG, said. 'If it is not presented in the (current parliament) session, implementation could be delayed. It may go up to Oct 1.'
The Congress has 207 members in the 544-strong lower house of parliament, with allies taking it a little ahead of the half-way mark. In the upper house, it has 71 of the 244 members. The party or its allies control 13 out of 28 states.
Mr Mukherjee has said that he would not be a 'super finance minister', and the personal push of the man seen as the government's top negotiator is what would probably tip the balance.
'He is able to rally people, he'll bend over backwards to make the states comfortable,' Sujit Ghosh, a partner at tax advisory firm BMR Advisors, said. 'He will make sure it happens.'
Reuters
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| APHIS clarifies Lacey Act plant exemptions | |
August 9, 2010 - The U.S. Agriculture Department's Animal and Plant Health Inspection Service last week issued proposed definitions for two categories of plants and plant products intended to make it easier for companies and individuals to comply with recent amendments to the Lacey Act.
The amendments passed by Congress in 2008 require importers to file declarations specifying the scientific name and species of any wood or plant material contained in a product, the quantity and the country of harvest to stem trade of products made from illegally harvested wood.
The law made it illegal to engage in transactions involving products with plants taken in violation of any federal, state or foreign law that protects plants. The department began to phase-in enforcement of product categories in the spring of 2009.
Two areas that have created uncertainty within the trade community involve "common cultivars" and "common food crops," both of which are exempted under the Lacey Act revisions.
APHIS has now clarified which plants and plant products will be subject to enforcement.
It defined a "common cultivar" as a plant developed through selective breeding that is cultivated on a commercial scale. "Common food crops" are those that have been cultivated for human or animal consumption on a commercial scale. Any plants that meet these definitions but are included on any national or international list of endangered or threatened species would not be exempted.
The exemptions apply to roots, seeds and parts of such plants as well as any products made from them.
APHIS said it would post guidance on its Web site giving examples of plants and commodities that qualify for exemptions..
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| Collision shuts down JNPT, Mumbai ports |
August 10, 2010 - Mumbai and JNPT port terminals are likely to be shut for traffic for at least a week, as containers fell off a ship after it collided with another vessel on Saturday, blocking the ports' main channel, reported The Hindu.
A senior Mumbai Port official said it would take at least five-six days to clear nearly 250 containers sunk in the main navigation channel. It will be the first time ever that the ports will be shut for such a long time following an accident.
A JNPT official said there had been no movement of ships from or to the port on Monday.
Mumbai harbour has been closed for traffic after the collision of the container vessel MSC Chitra and the break-bulk vessel Khalizia-III.
The container vessel was on its way to Mundra port in Gujarat from JNPT, when it was hit by the break bulk carrier which was coming to berth at Mumbai port.
Most of the 20 ft and 40 ft containers that fell off are lying underwater, making movement of large ships through the common channel for Mumbai and JNPT terminals difficult, said the official. The ship is not in the main channel, but is grounded a little distance from it.
As on Monday, there were about 80 vessels waiting at sea for berths at the three port terminals at JN Port. These vessels are likely to be diverted to Pipavav, Mundra or Kandla ports in Gujarat, said a port official.
JNPT has three container terminals - two run by private parties and one run by the government-owned JN Port. The port handles nearly 65 per cent of the country's container traffic.
A statement by the Directorate-General of Shipping, which is overseeing the salvage operations, said yesterday that the channel was closed during the night for any shipping traffic.
The vessel is dangerously tilted to port side which has resulted in falling off of about 120 containers from its deck and heavy oil spillage is sighted from her fuel tanks," the statement said.
Salvage operations will take time as the sunken containers have to be first located and marked before they are retrieved.
S. B. Agnihotri, director-general of shipping, said the collision might have taken place due to navigation or radio communication failure. "We have ordered a probe into the incident," he said.
There were more than 2,400 containers on board, of which 31 are loaded with toxic and inflammable materials. The cargo also consisted of textiles and pesticides.
Agnihotri said the vessel has about 1,200 tonnes of fuel oil in the ruptured tanks on the port side and remaining (fuel) in her starboard side, which is out of water. A total of 2,700 tonnes of fuel oil and 300 tonnes of diesel oil are on board.
"Two to three tonnes of oil/ hour are leaking from the ship," he said.
SMIT, Dutch salvage experts, have arranged for equipment, which is likely to arrive from Singapore in the next two days.
"Effective salvage operations can begin only by the end of the month when the weather subsides," said the statement.
The Panama-registered container vessel was built in 1980 and has a gross tonnage of 33,113. The break bulk ship with which it collided has been brought to and berthed at Mumbai Port.
An official with Mediterranean Shipping Company, owners of the ill-fated container ship, said that the ship was coming from Dubai to pick up cargo from JN Port and Mundra, and was scheduled to sail to Africa next week.
The break bulk ship Khalija-III, had in June been involved in another accident at Mumbai Port last month, said the official.
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Explosive Growth in China's Pharmaceutical Market Is Hindered by Inefficient Supply Chain | |
August 11, 2010 - China is becoming one of the largest pharmaceutical markets in the world, but the supply chains that serve the industry remain complex and inefficient, according to a study released by CAPS Research. Problems include lack of nationwide, large-scale distribution networks; industry fragmentation and too many small pharmaceutical manufacturers; lack of supply chain integration; poor IT systems; and irregular activities. It is expected that the new healthcare reform plan announced last year will offer both opportunities and challenges, and will have a tremendous impact throughout China's pharmaceutical supply chain.
The study is based on visits and interviews with 18 Chinese pharmaceutical companies. The interviews focused on production, quality control, research and development, outsourcing, exportation, the foreign investment environment, and the new healthcare reform plan in China.
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Rotterdam Breakbulk Tonnage Surges 21 Percent |
First half volume growth outpaces rival northern European ports, says Rotterdam
August 11, 2010 - The tonnage of breakbulk cargo handled by the Port of Rotterdam in the first half of 2010 increased by 21 percent, even stronger than the 18 percent increase reported earlier, the Port of Rotterdam Authority said Wednesday.
According to the most recent throughput figures for the first six months of 2010, the port handled a total of 3.3 million metric tons.
Incoming volume rose 23 percent to 2.3 million metric tons, and outgoing volume was up 17 percent to 1 million metric tons.
The port authority said growth of throughput in Rotterdam was stronger than elsewhere in northern Europe.
Rotterdam ranked third in breakbulk and project cargo among ports from Hamburg to Le Havre, with 6 million metric tons. Antwerp at 10.4 million metric tons and Bremen with 6.5 million metric tons ranked first and second.
The Port of Rotterdam Authority aims to improve its ranking, with steel, project cargo and refrigerated products as the leading commodities.
Rotterdam has 21 terminals in the port area handling breakbulk exclusively or in considerable amounts. Together, they occupy 618 acres and almost 7.5 million square feet of warehouse space.
Journal of Commerce
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| India-E.U. trade pact likely this year |
July 29, 2010 - The India-European Union Free Trade Agreement, under negotiations for the last three years, is expected to be finalised by the end of this year, Commerce and Industry Minister Anand Sharma said on Thursday.
"In the last India-E.U. summit, a mandate was given that we should conclude it (FTA) this year. I am very optimistic that we - both me and the E.U. Trade Commissioner - will be able to report positively in the next summit," he said here.
Mr. Sharma said this while participating in a panel discussion, which included British Prime Minister David Cameron.
Negotiators from the two sides have held several rounds of talks and are trying to resolve certain issues, including the insistence of some E.U. members to include non-trade issues such as environmental concerns and child labour, in the pact. However, India has been opposed to this.
India has been negotiating the market-opening pact with the E.U., its largest trading partner, since June 2007. The India-E.U. bilateral trade was valued at $82 billion in the last fiscal.
The two sides want to remove trade barriers in goods and services and investments across all sectors of the economy.
According to a Ficci-Grant Thornton report, bilateral trade is expected to exceed Euro 70.7 billion ($91.4 billion) by 2010 and Euro 160.6 billion ($207.6 billion) by 2015.
The Hindu
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| Air cargo industry clears screening hurdle | |
August 11, 2010 - Early indications are the airline industry and its shipping customers have adapted so well to the U.S. government's new mandate to screen all cargo on passenger planes against potential terrorist bombs.
There have been few, if any, noticeable operational complications at airports since the rule took effect 10 days ago.
"By and large we're hearing that things are going very smoothly, with some minor hiccups. Nothing major," said Douglas Brittin, general manager of air cargo for the Transportation Security Administration.
"We've been in close communication with all the major widebody carriers. They've all indicated that operations are moving very smoothly. People are adhering to the earlier cutoff times for unscreened cargo, so that eliminated potential delays."
Ground-handling agents that manage outsourced cargo loading for multiple airlines also report normal shipment flow, he added.
"So far, so good," said Brandon Fried, executive director of the Airforwarders Association, who has been taking the pulse of his members.
Government and industry officials attribute the lack of problems to the fact that they had three years to prepare for the Aug. 1 deadline, as TSA phased in higher screening levels starting with all cargo on narrow-body planes and then ramping up to 50 percent, and then 75 percent of all cargo earlier this year.
TSA also created a program to certify shippers and forwarders to self-screen bulk shipments before delivery to the airlines so they could be loaded without being disassembled and examined at the point of uplift. As of Aug. 1, there were 962 Certified Cargo Screening Facilities across the country, including several dozen independent, dedicated screening facilities.
Many observers believed that large volumes of unscreened cargo would show up at airline cargo terminals and miss flights waiting to be screened. That has not materialized so far because the airlines have recently invested in large-scale X-ray machines that can screen some types of pallets and prepared their customers well for the new regulatory environment.
Carriers moved up cutoff times for delivery of unscreened cargo and communicated those requirements well in advance so shippers knew well when they had to get their trucks to the airport. Most airlines also established fast lanes for screened cargo. And CCSP facilities are contributing 45 percent to 50 percent of the screened volume, taking pressure off the airlines, Brittin said.
Parties throughout the supply chain can meet the mandate with X-ray and explosive trace detection machines, and manual inspections. TSA is providing some surge capacity and random checks with canine teams. Approved facilities must establish secure screening areas and security protocols to ensure no tampering takes place in house or during the handoff to ground transportation providers and train employees.
"We did not have delays of any sort. It went extremely well," said Peter Sturtevant, vice president supply chain solutions and transportation for Covidien. The maker of medical devices and supplies ships products out of airports in Chicago, Atlanta and Los Angeles. The company is relying on its three primary freight forwarders to screen its shipments at their facilities, upstream from the airport, but is in the process of getting three distribution centers enrolled in the Certified Cargo Screening Program.
Sturtevant said the company expects its Joliet, Ill., facility to be approved by early October, followed by its Atlanta and Ontario, Calif., facilities. Covidien is taking a graduated approach so that it understands TSA's requirements and can learn from the initial vetting process.
Two Covidien facilities that produce pharmaceuticals are also scheduled to go through the security certification process, he added.
Brittin said there are several hundred shipper and forwarder applications in the pipeline. TSA is waiting for those companies to make the necessary security preparations before conducting an onsite assessment. As time goes on, more companies are expected to apply even if there aren't delays in the system as they realize that some cargo is opened by logistics providers or airlines and doesn't reach the customer in the same way it was packed.
Pfizer has not had any major problems shipping air freight on passenger planes since Aug. 1, reported Brad Elrod, director of global conveyance security and global logistics risk management for Pfizer. The drug maker has 13 approved CCSP facilities, with five more applications in the pipeline and another four facilities being considered for the program.
"We did an awful lot of prep ahead of time, so it's been pretty smooth during the first week or so," he said.
Operations are going well at Delta Air Lines, American Airlines and Lufthansa Cargo, spokespersons at all three companies said.
"Our elite customers are tendering freight 100 percent screened and we haven't seen any significant delay in getting unscreened freight processed. We expect this trend to continue," Delta spokesman Anthony Black said.
Lufthansa Cargo implemented 100 percent screening on July 1, one month ahead of the official deadline.
TSA and industry officials caution that the real test for the new security program will come in September and October, which typically are much heavier shipping months than August.
"If we're going to see some cracks it'll be toward the end of September," as the holiday shipping season swings into gear, Europeans have returned from summer vacation, and companies accelerate shipments at the end of their fiscal year, said Richard Fisher, president of Falcon Global Edge, a Boston-based freight forwarder with several facilities across the country. "And by that point we'll have had almost two months to practice."
Brittin said airlines have an "ace card" because they can push back cutoff times even further if the volume increases faster than they can handle without delays -- a situation most shippers hope to avoid.
Meanwhile, TSA is urging inbound international shippers not to get complacent because TSA will continue to ratchet up the screening requirements to meet the 100 percent requirement as other countries increase their outbound inspection capability.
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