Will We Win The Security Battle, Yet Lose The War? Ever since 9/11 the international air freight industry has been wrestling with increasing constraints, devised and implemented by the U.S. in the name of security. These constraints are expected to grow tighter and more numerous in 2004 as the year progresses. The Customs & Border Protection Department is finalizing procedures that would make it mandatory for the Department to screen one out of every ten import shipments into the U.S. Such a program, if implemented, could cause havoc in our industry. We in the air freight business pride ourselves on moving cargo swiftly, precisely and in the time promised. These are the standards which justify air cargo's high rates vis a vis the far less expensive tariffs of ocean transportation. The new suggested rules would make a mockery out of many of our delivery schedules. The Just-In-Time delivery system, whose advantages are so endlessly repeated by forwarders and consultants alike, would become severely crippled. With a jam up in smooth, efficient delivery schedules, with inordinate delays in consignees receiving cargo from abroad, customers may well become convinced that moving freight by air simply isn't worth the cost. International air cargo now is in no position to lose business for any reason. Despite all the glowing predictions by the big forwarders and the airlines that traffic by air is on a continual upward glide path, the sad fact is that international air freight volume has gone nowhere in the past two years. As a matter of fact, gross volume actually has declined except for the China-U.S. route. Ironically, transportation's youngest member; air, is giving ground to transport's oldest method; sea. While air freight has been floundering during the past 24 months except for an occasional hiccup like the West Coast longshoreman's strike, ocean-going commerce has been advancing from strength to strength. Air freight rates are stagnating, yet shipping conferences are raising rates across the board. The last thing forwarders need is new, bureaucratic rules with the inevitable red tape that could shrink even further our existing tiny fraction of international commerce. Let's not forget that air cargo generates less than 4 per cent of all international transportation! It's time for everyone concerned about air freight's future viability and health to make himself heard. If the well meaning but mistaken Homeland Security people insist on implementing these drastic constraints in the name of security, a good many air cargo customers may simply throw up the their hands and transfer their merchandise to container ships. Let's write, e-mail, fax and call our Congressmen, our Senators and the Homeland Security people telling them to put some sense into our security rules and regulations. It would be a bitter pill, indeed, if we won the security war while going out of business. Back to Top

United Air Lines; A Case Study in Cargo Schizophrenia On what side of the mouth is United talking? On one hand, the airline boasts of all the money it is saving by outsourcing its ground cargo activities, closing warehouses, shuttering sales and operational offices and either reducing flights to important cargo destinations or replacing wide bodied aircraft with narrow bodied airplanes. Yet, talking out of the other side of United's mouth, soon to be retired Cargo Vice President Roger Gibson, brags about his airline's grandiose plans to expand UAL's cargo business later this year. Ambitious talk for a carrier that's been in Chapter 11 since a year ago December. If you can believe Gibson, United will be starting all freighter service across the Pacific in 2004 with its most advanced 747-400s. It hopes to begin first ever all cargo service to Latin America and also put wide bodied aircraft on renewed freighter service to Europe. To top off this vaulting goal, Gibson also is actually laying out plans for domestic all freighter service; something United hasn't done since the days of CAB regulation. While Gibson is creating castles in Spain, forwarders are deserting United in droves. Its outsourcing policy is proving a costly failure with service levels plummeting below even United's paltry cargo standards. My advice to this once arrogant airline; put your cargo house in order before launching any pie in the sky schemes Back to Top

C-TPAT; How Effective Is It? Post 9/11, the U.S. Government has valiantly attempted to impose new security standards for the $1 trillion worth of merchandise entering and leaving our nation each year. Its flagship program involving shippers, forwarders, airlines and steamship companies is the Customs-Trade Partnership Against Terrorism (C-TPAT) to secure international supply chains. On paper, C-TPAT is a success. No less than 5,357 firms have signed up for the C-TPAT program. Like so many government programs involving security, however, there is more shadow than substance in C-TPAT. A basic flaw is that it is simply too easy to enroll in the program. Joining involves merely filling out a questionnaire that provides internal information about a company's security efforts and procedures. No real investment is required and no real investigation by Customs people occurs. Because it is so painless to enroll and secure green light treatment from Customs, C-TPAT has a wishy washy quality unlike Customs declarations which are tangible and definite. Also, the Customs people are telling the transportation community that more stringent requirements are on the way. Eventually, participating firms will have to employ "smart" containers to remain in the program. Utilizing "smart: containers will not come cheap. It will require new and expensive technology. And that's only a start! New security measures such as container seals for in-transit security, radio frequency identification, secure loading facilities, next generation information--the list is long and will cost hundreds of millions of dollars to implement. Who will pay for these security measures? We forwarders? Our yields already are microscopically thin. Under these new proposals, we well may be securitizing ourselves right out of business! There is no doubt that security is vital to the well being of our nation. The government must realize, however, that in its patriotic zeal it cannot ignore the economic realities that have made the U.S. the greatest trading nation in the world. Genuine cooperation, with candid dialogue between Customs officials and representatives of the entire transport community is absolutely essential. Back to Top

Ian Loader Joins CII Team As East Coast VP The Loader family has a long and distinguished history in air freight. Ian is the newest Loader to join the air freight business, following in his father's and uncles' footsteps. A graduate in International Business from the University of Chicago, Ian first tried his hand at a banking career with Wells Fargo. However, the siren song of air freight was too loud and Ian spoke to his uncle, Keith of CGI Chicago fame about a career in air cargo. Keith knew about CII's expansion into the New York Metropolitan market and believed the young man would be perfect for the "cut throat" business at JFK where he could truly test his "international" marketing skills. The GCI team gave Ian a crash course on what air freight was all about. He was put on the computer, honed his traffic skills in the warehouse and even made sales calls with more experienced company sales personnel. Ian demonstrated real proficiency in every aspect of our business and Keith reports that he passed his air freight "exams" with flying colors. Ian has completed learning about CII's methods at Los Angeles headquarters and now taking up the reins at our JFK facility. Welcome aboard, Ian. We know that the initial success of our JFK office will be multiplied many times over with your stewardship there. Back to Top