*Originally published by Air Cargo Magazine*

Impending changes to Australia's National Cargo Security Program (NCSP) relating to US – bound air cargo will require both the Office of Transport Security (OTS) of the Department of Infrastructure and Regional Development and affected industry to effect significant changes.

As a director of the Export Council of Australia (ECA) I have attended recent meetings of the Cargo Working Group (CWG) convened by the OTS.  Clearly, many members of the ECA will be affected by these changes as will others in industry.

As many would be aware, Australia has not been subject to strict compliance with the requirement of the US TSA that all US – bound air cargo be examined at "piece level".  However that situation is shortly to expire after the TSA undertook an audit of our NCSP and recommended that 100% of US – bound air cargo be examined at piece level.  While the OTS continues to negotiate with the TSA to resolve the issue as soon as possible, the TSA has extended recognition until at least 31 July 2015.

At the most recent meeting of the CWG, the OTS revealed its proposed program to meet the requirements of the TSA for such "piece level examination".  This would require a party to either come within a "Known Consignor" (KC) scheme or to ensure that its goods were subject to an off – airport piece level examination of cargo, otherwise such cargo would not be able to be loaded.  The OTS advised the CWG that the proposal was acceptable to the TSA and that it had secured Government approval to proceed with policy design and implementation.  However, that does not  extend to the provision of financial assistance to assist industry in managing the changes.

In the interests of providing "highlights", some preliminary information is set out below:  

  • The new program will apply to air cargo touching on the US, whether unloaded there, being cargo passing over the US or landing there to be on – shipped to third countries.  
  • While the new program will apply to the US, the measures will be aligned with ICAO standards and meet the requirements of other areas such as the EU.  The ideal would be for there to be uniform standards for all air cargo and the OTS would not object to exporters applying the program to exports to other countries.  
  • The aim will be for freight from KCs to be accepted without further screening by airlines as occurs elsewhere in the world.  That is still subject to discussions with CTOs.   
  • In common with Customs "Trusted Trader Programme" (TTP) the new scheme will address cargo security.  However, the TTP does consider security in a wider context to include the entire supply chain.  The OTS is working with Customs and other government agencies so that security measures in the various government "trusted" programs include similar requirements so far as possible.  
  • The "regular customer" requirements will not satisfy the requirements of the TSA and those "regular customers" will need to make other arrangements.  
  • Membership of the KC scheme will be voluntary and subject to OTS validation and ongoing compliance oversight.  OTS has indicated that the scheme will be designed to allow industry flexibility in meeting the security requirements while still satisfying the requirements of the TSA (and other jurisdictions).  
  • Piece level examination for those who are not KCs will be addressed in an Enhanced Air Cargo Examination (EACE) Notice to be issued by the OTS.  That will set out the approved standards and methods of examination (2 of x – ray, explosive trace detection and physical examination).  Businesses providing the examination will be accredited.  The current ACE notice will be amended so that cargo examined under the EACE Notice will not require additional examination at the CTO.
  • Timing has yet to be finalised and subject to negotiation with the TSA.  The EACE will be available to the express freight industry by 1 July 2015 and to off – site freight forwarders by 1 March 2016.  The KC scheme should be open by 1 July 2016.  The date for full adoption of 100% piece level examination through our program has not been set although the TSA will want a firm set date which could be as early as 31 December 2016. 

Clearly, there is much detail to be developed and the OTS has now embarked on an extensive process of engagement with industry including providing information as well as mapping the export process to better understand that process to allow the development of an effective program.

We do live in interesting times in the supply chain as this is taking place at the same time as Australia seeks to implement the WTO Trade Facilitation Agreement and pursue its own de – regulation agenda seeking to reduce the regulatory burden on business.  However the security imperative from the TSA will always trump all those other considerations.  Hopefully, Government can soften the blow by changing its position on support to business by providing financial and non – financial assistance.  All businesses, especially SME exporters would be very grateful!