SubscribeTIACA President calls on US Government to lead the drive for improved cargo security with measures that are 'Well thought out, well explained and well implemented'
The US Government must learn the lessons of September 11, 2001, and play a leadership role in cargo transportation security to match its superpower status and leadership of the international community, according to Larry Coyne, President of The International Air Cargo Association (TIACA). He added, "We must avoid killing trade by bureaucracy".
His comments came after moderating the 'Outlook for New Regulations in the Cargo Industry' discussion at the 'Securing the Supply Chain: Cargo, Logistics and the American Economy' conference in Washington. The event, which attracted more than 300 high level delegates, was jointly hosted by TIACA and the US Chamber of Commerce and attended by Norman Mineta, US Secretary of Transportation.
Coyne said: "While the reaction to September 11 was understandable, some of the measures introduced around the world to deal with the threat were not."
He continued: "Air cargo is now a vital tool in the prosperity of all nations. With nearly 40% of world trade by value moving by air - and air being the preferred means of moving cargo like electronics, perishables, pharmaceuticals, automotive parts and textiles - it's easy to see why it has been such a locomotive of economic development around the world.
Air Cargo is a wealth creator because it provides employment either at the beginning or end of its journey, sometimes both. Security is vital to its success.
Security is not just an airline issue, or a domestic US issue, but a global issue. There is no point securing the supply chain only inside the US because many supply chains by their very nature are international. The US economy is not the only beneficiary of globalization. It is unlikely that any developed nation would be prepared to live with the consequences of having borders so tightly managed that it would damage trade. Excessive delays and costs would destroy jobs and reduce income and wealth creation.
If a country believes that the source of all terrorism lies outside its borders, it will put its efforts into border management and control to prevent evil from getting through. With a few exceptions, all terrorist acts against the US have been by foreigners on foreign soil.
But to put up the barricades at the borders will simply not benefit the American people, even if it affords a false view of increased security. Having tightly controlled borders would not prevent a repeat of September 11th and would not secure the supply chain.
Shocking and destructive as the events on September 11th may have been, the supply chain was not interrupted by the loss of aircraft, people or property but by the restrictions placed on transport after the attack. This demonstrates that ill-considered reaction to a terrorist attack can do as much damage as the act itself.
Terrorism is about creating terror, inconvenience and fear amongst people. Reaction to a terrorist act can add unnecessary fear that can magnify the act of terror or prolong the fear of future attacks.
The measures introduced around the world to deal with the threat, were not. In the US, already hard-pressed airlines struggled not only with a closedown for 3 days and a huge drop in business, but also the introduction of a barrage of Security Directives that posed additional problems of complexity and cost.
Some were tougher on the airlines than any potential terrorist. Others were quickly dropped or amended as being impractical or unworkable. There seemed to be a belief that you could achieve 100% security by regulation without stopping air movements altogether.
Worst of all, there seemed to be an unwillingness to understand that every new regulation, however essential, was yet another barrier to trade and development and could cause the global economy to decline.
For every new regulation emanating from the US, there were similar ones from other countries, all a little different, all requiring immediate compliance. There was a reluctance to accept another country's standards which meant cargo often had to be examined and even x-rayed several times. There seemed to be little co-operation among regulatory bodies.
At the end of the process, we do have better security but is it strong enough to prevent a repeat of September 11th or something similar? I fear not.
To prevent the industry from being subjected to too many unnecessary and ineffective security regulations, I called for the setting up of an international regulatory body to vet security regulations from different countries with the aim of (a) ensuring that new regulations made sense (b) were harmonized with other countries and (c) were of a standard that would be recognised internationally.
Such a body could develop further the 'known shipper' regulations thus making it easier and cheaper for shippers to move goods if they complied with the correct set of safeguards.
There can be no doubt that the new security measures add cost and delays to the air cargo business, which relies on speed. The additional cost of x-raying cargo and building pallets at airports adds up to 20% cost to some shippers. Even a 10% cost increase will add US$25 billion to shippers' costs.
But what are the delays doing to shippers inventories? Air cargo accounts for 40% of world trade by value or US$2 Trillion. A delay of only 5% will add at least $100 billion to shippers' inventories and may actually be double that figure. This does not include the huge additional costs to airlines for insurance. Premiums have been raised to a level where it is necessary for governments to step in.
Cargo flights may be perceived as less attractive targets for terrorists than passenger flights but increased insurance costs must be borne by operators of both.
We must therefore ask if all this money is being used to buy effective security? Unfortunately, since many of the measures have been rushed through without due consideration, we are not getting the best value for our money.
I think we all have to accept that there is no such thing as 100% security in any country or in any industry. In my view the employment of risk management techniques and covert intelligence operations are the only effective method of combating terrorism.
While x-ray machines, sniffing devices and other technology may be useful at weeding out contraband or drugs, they are largely ineffective against determined terrorists. Searching every truck or container at the US border is just not practical. So how can we achieve a higher level of security with the minimum disruption to trade?
US Customs and many other agencies around the world rely on risk management techniques to identify and intercept contraband and weapons of mass destruction. Such measures, when used in co-operation with the intelligence services, need to be expanded.
In order to discourage terrorist acts and also to stop drugs and weapons of mass destruction from getting through the net we require:
- Predetermined responses to perceived terrorist acts so that the response can be measured and appropriate
- More consultation among domestic and foreign agencies prior to introducing new measures
- Better co-ordination among the intelligence services of the world, especially those of trading partners overseas
- More consultation/co-operation between appropriate government agencies and commercial cargo transportation operators
- More harmonization of security measures around the world in order to simplify the process and avoid killing trade by bureaucracy
- Expansion of initiatives like the 'known shipper' rule to squeeze cost out of the system.
The US can now play a leadership role in cargo transportation security to match its superpower status and leadership of the international community. However, if new security measures are perceived as unfair, or bite too deeply into trade expansion and free competition, rifts will appear and the type of co-operation seen in both the political and economic scene will disappear.
To conclude, the US will continue to receive support from abroad for its security policies but that could evaporate quickly if future measures are too costly, ineffectual or work against the interests of trade expansion and free competition. Resentment abroad could develop if measures are seen as discriminatory against foreign trade interests.
The US has a chance to lead the world in developing new levels of security for both passengers and cargo. The global trading community looks for measures that are well thought out, well explained, and well implemented. All measures should be clearly proportional and appropriate to probable or perceived dangers.
If the US can accomplish this, it will not only fortify its own security, it will reinforce and sustain both public and international support for its actions."