Immediately following the September 11th attacks, the Federal Aviation Administration prohibited air cargo on all passenger flights. This ban was lifted shortly thereafter, however, new air shipping rules soon followed in its place. It seems the days of carefree air shipping are over.

As the FAA rethinks its regulations to deal with the threat of terrorism, shippers can expect more paperwork, increased scrutiny of their documents, and possible site visits from their forwarders who have to assure the FAA that their shipments are secure from the very beginning of the shipping process. This new batch of rules might make changing forwarders a daunting task. Under new regulations, moving to a new forwarder could get even a long-time shipper designated as "unknown." Anticipating trouble, some carriers have already added new fees to cover the cost of enhanced security. This cost is likely to get tagged onto airfreight rates.

Because of the sensitive nature of the new shipping regulations, the FAA is not openly discussing them beforehand. The only given is that any new regulations will strengthen the existing "known shipper" requirement. Under this requirement, a "known shipper" is a shipper that has conducted business with a carrier or forwarder from before Sept. 1, 1999. A shipper that hasn't dealt with the forwarder before that is considered "unknown" and is subject to any regulations that would apply.

For many potential airfreight shippers, "unknown shipper" regulations present a sizable obstacle. As Ken Hughes, corporate manager of export compliance for Danzas AEI Intercontinental, explains, these regulations reduce "the ability to get your freight out of town if you're unknown. There's very limited lift potential. The FAA [has] added a second layer that amounts to what I call the ‘golden oldie' rule – it's based on how long you've done business and the amount of business you do." Therefore, for most businesses who just want to get their shipments from point A to B, the most immediate worry is that they will be deemed an "unknown shipper" and have all kinds of hoops to jump through before being accepted. One such regulatory hoop is that their first three shipments with a new carrier must be on non-consecutive days and move by surface carrier or on a cargo-only airline.

Compliance with the rules has been additionally complicated by the fact that the requirements themselves keep shifting. According to Doug Foster, vice president of marketing for Emery Worldwide, "There are more rules and continual changes to the rules. Every day, the FAA continues to assess what changes it wants to make." Threatening to heighten the chaos is the inconsistency of policies from carrier to carrier, although this has yet to prove itself a serious problem.

What can air shippers do in this time of air-cargo tightening regulations to make sure their shipping continues to run smoothly? For starters, they can put themselves through a self-administered operational review, with the goal of making certain that they have no holes in their systems and that they have good people working for them. In particular, shippers should pay particular attention to their documentation. In other words, if they should ever get "pulled over," their papers should be in order.

Source: Freight Keeps Flying but under Tighter Rules
Logistics Management, Nov. 2001
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