U.S., EU ink deal to align aircargo security regimes

The United States and the European Union (EU) said Friday that, effective immediately, they would recognize each other's aircargo security programs. The joint compact means that businesses operating in the U.S.-EU market, over which more than 2 million tons of cargo fly each year, will only have to comply with one set of security rules rather than two.

The agreement, which covers the 27 EU member states and Switzerland, represents the first time the Transportation Security Administration (TSA), which oversees aviation security in the United States, has recognized a union of nation-states as having what the agency calls "equivalent aircargo security." About 20 percent of all export air cargo from the EU is bound for the United States, according to 2010 data.

"We hope that this agreement is the cornerstone for further alignment, especially for passenger security," said Tony Tyler, director-general and CEO of the International Air Transport Association, a Geneva-based group that represents 240 of the world's airlines, in a statement. "This partnership model should serve as a template for other national regulators moving toward risk-based security regimes."

The agreement also comes just one day after the United States and Canada agreed that transborder belly cargo shipped on passenger planes would only have to be screened at the point of origin and not at any other stop on its journey.

LOOMING DEADLINE
The U.S.-EU pact, which took seven years to hammer out, is likely to make it easier for airlines and freight forwarders to meet a TSA-imposed Dec. 3 deadline for screening 100 percent of international cargo moving in the lower-decks of passenger planes and bound for the United States. The TSA made the announcement on May 16.

A 2007 law had initially set an Aug. 1, 2010, deadline to screen all international cargo entering the United States in the bellies of passenger planes. TSA officials told Congress in July 2010 that it would take about three years to reach that goal.

A key obstacle was the reluctance of foreign governments that have their own individual security programs to share information with trading partners because of the data's sensitive nature. TSA, in turn, has said it could not recognize a foreign government's security program unless it has enough access to data to draw a comparison.

The lack of information-sharing would mean, for example, that air shipments from Germany to the United States would be screened first to meet German security requirements and then a second time to meet U.S. standards. However, the compact announced Friday, in which TSA confirmed that the United States, EU, and Swiss security regimes are all on an equal footing, effectively dismantles the information firewall and takes the double-screening scenario off the table.

AN ADDITIONAL EXPENSE
Brandon Fried, president of the Airforwarders Association, which represents U.S.-based freight forwarders and which has been deeply involved in the security saga, said the move to a single security standard "should take some of the burden away from the airlines and place it into the hands of regulated entities who may be able to perform screening off airport before tendering to the carrier."

At the same time, Fried cautioned that the agreements with the EU, Switzerland, and Canada "comprised the low-hanging fruit, and that significant challenges lie ahead in bringing others to the table."

Art Arway, who ran security in the Americas for Deutsche Post DHL, owner of the world's largest air forwarder, said the reciprocity agreements could pave the way for better information-sharing and a more efficient screening process. However, the supply chain will bear a cost for complying with the TSA's mandate of 100 percent screening of inbound belly cargo by Dec. 3.

"Companies that move large quantities of goods via air will feel the effect for sure," Arway said in an e-mail. "The decision will be ... do they perform their own screening or push it all out to the airlines? Some countries might not allow non-airline screening, so it could burden the movement of air cargo."

Arway, who heads his own supply chain security firm, said all-cargo airlines, which are exempted from the TSA's inbound screening requirements, may see additional business as shippers and forwarders look to avoid the additional screening expense. He added that a few companies may take a closer look at diverting air freight to ocean shipping, which is a slower yet less expensive form of transport.

However, the goods that today move by air often cannot be shipped via a slower transport mode because their high value requires that they quickly reach their destination to avoid inventory obsolescence costs.