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Issue 7 2020 - FBJNA From the Editor Anxiety Ahead


CONTACTS 2020 SALES


By Karen E. Thuermer


Fall has arrived with it, many changes and anxieties in the wind. First is the outcome of the November US Presidential Election, which is less than one month away. Will global markets see restored confidence in America’s ability to lead? Or will the election result in disarray and uncertainly? Follows is the increasing impact of COVID-19 and its impact on global economies


and shipping. Will the pandemic lead to more economic slowdowns and lockdowns? Locations within Europe are already hinting of such. When will a vaccine be ready for distribution? Will the freight and logistics industry suddenly be in a rush to move millions of vaccines to a wanting public? How will it impact the supply chain? Are we ready?


Our friends in the Netherlands and the Amsterdam Schiphol Pharma Cargo


Community are collaborating to ensure the temperature-controlled supply chain is ready for the safe and efficient transportation of COVID-19 vaccines. A taskforce led by Air Cargo Netherlands (ACN), Schiphol Cargo and Air France KLM Martinair Cargo (including shippers, pharma producers, forwarders, airlines, ground handlers and trucking companies) have met to kick start work on up to four possible ‘vaccine scenarios’, based on different temperature ranges. They have held roundtables to discuss methods of mapping capacity, from ground handlers to airlines, as well as back- up solutions. I’m anxious to hear what others are doing as well. In the meantime, I believe it’s safe to say everyone worldwide looks forward to 2021,


although we still have many challenges and some tough months to go. This year still holds many questions, fears, and doubts. What are the prospects for the holiday season? Its impact on sales? Warehousing? Distribution? Air freight? Ocean freight? Intermodal? Trucking? This year has already ushered in mammoth changes with e-commerce, an increasingly fleet of aircraſt operated by the likes of Amazon Air. Permanent changes to retail have occurred and possibly how we choose to purchase our food and pharmaceuticals. Home delivery is becoming more the norm. COVID-19 has resulted in increasing numbers of consumers turning to their computers


to order goods and services online, especially groceries and everyday household items. In fact, e-commerce retailing is seeing its most robust expansion since its beginning. The US Census Bureau reports adjusted retail e-commerce sales in the second quarter of 2020 at $211.5 billion. That’s 31.8% more than in the first quarter (pre-COVID) of 2020, and a whopping 44.5% increase from the second quarter of 2019. In short, e-commerce retail now represents 16.1% of retail sales in the United States.


The segment grew at a 14.6% Compound Annual Growth Rate (CAGR) from 2015 through 2019 and shows no sign of slowing. There are other changes in the wind as concerns for cargo security heighten. Brandon


Fried, Executive Director of the AirForwarders Association reports to TIACA that there will be significant changes in air cargo security in 2021. He says that starting in June of 2021, shipments transported on international all-cargo flights must receive the same scrutiny of those transported on passenger planes or received from a TSA regulated entity that has applied appropriate security controls. “No specific plan is in place yet,” he writes in an article published by TIACA. TSA is currently seeking public feedback on ways to meet the mandate. At the same


time, a divided industry decides the best, most safe path to take. He points out how air cargo is an essential component of the distribution process “to


satisfy demand and to provide fast and efficient delivery amid spiking orders.” “Understandably, online retailers, especially those utilizing their aircraſt, are looking


for fast, efficient, and inexpensive ways to meet the new international cargo security mandate,” he writes. He suggest one idea to create a fortified program within the warehouse or distribution center environment that increases facility and personnel security protocols. This would count on doors and windows being locked and enhancing employee identification procedures. “Improving security in these areas is always a good idea, especially for theſt and pilferage prevention, but not necessarily to meet the upcoming air cargo security requirement,” he says. “Boxes transiting through online retailer distribution centers and warehouses are


generally assumed to include the products indicated outside each container. However, rarely are these contents verified, which creates a vulnerability in the process and allows malicious actors to substitute the contents of a box of goods with an improvised


explosive device. The bomb could bring harm to a freighter aircraſt in flight, its crew, and the people on the ground under its path,” he adds. Fried reminds us how several years ago, in anticipation of mandated cargo screening


requirements, TSA initiated a highly successful supply-driven solution known as the Certified Cargo Screening Program (CCSP). The CCSP allows manufacturers, retailers, freight forwarders, and other certified entities to perform cargo screening before tendering shipments to transport carriers. He points out that CCSP now has over 1,000 certified entities and serves as an ideal


example of industry and government to make sure that our skies are safe. “This new mandate is the perfect opportunity to expand the initiative in assuring an equal level of safety and security for freighter flights,” he says. He emphasizes how the use of trained canine teams supplied by TSA certified


private companies remains an essential tool in meeting the passenger-cargo screening law. “While technology remains a necessary aspect of the process, these dog teams not only screen freight quickly and efficiently but also at a low cost,” he adds. “The all-cargo flights will undoubtedly reap the same safety benefit as their passenger counterparts by using this inexpensive and efficient method of assuring the same security on their planes.” But he also alludes to confusion ahead, particularly since imposing a new security


program will likely not attract a significant number of online retailers and all- cargo flight shippers as participants. “Instead, another regime will confuse existing regulated carriers as they struggle to adhere to specific training, marking, and handling process requirements of similar, yet very different existing programs,” he warns. “The confusion will create delays, incur additional costs for the government, and might result in other vulnerabilities to our safety and security” His point: “Air cargo security requirements should focus on keeping goods moving


quickly, regardless of how items are sold or warehoused or the type of airplane used to deliver them to the customer. The only way to assure the utmost in safety is to know what is inside the box will harm planes and those flying them. Now is the time to leverage an already proven success by using the CCSP to fulfill this upcoming international all-cargo security mandate without delay.”


///NEWS


Freight Business Journal North America - FBJNA reaches out to the decision makers and influencers involved in international freight transport and logistics. FBJNA boasts the most informative and authoritative source of information with unrivalled in depth knowledge of the rapidly changing freight business environment. Our complimentary website www.fbjna. com provides the most up to date news and analysis from within the international shipping industry.


If you have any stories or letters which should be of interest or any feedback on FBJNA, please contact our editor Karen Thuermer - karen.thuermer@fbj-online.com


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Our next issue will include features on RO/RO, Stevedore & Terminal Operations, Middle America and Logistics.


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