AIR CARGO FORUM INDIA

Issue - 5 Newsletter Vol.2 No.3 | December, 2013

Regd. No.: S /RS/SW/0806/2012

Maiden interactive conference of ACFI on “Air Cargo Supply Chain Security” to

enhance security standards by collaborative efforts of all stakeholders in the

Logistics Industry

On 27th November, 2013, Air Cargo Forum India (ACFI) organized a half day conference on ‘’Air Cargo Supply Chain Security – Future Outlook” at Hotel Radisson, Blu Plaza, New Delhi to give focus on the overall security scenario in the aviation industry particularly on security related issues and challenges in Air Cargo Supply Chain for the benefit of entire Air Cargo Logistics trade & Industry stakeholders.

The key objective was to bring together all the stakeholders of air cargo supply chain and create awareness of Security related challenges, risks and mitigation and compliance to global regulations to facilitate global model, and application of technology in securing air cargo supply chain.

Left to Right: Mr. Pradeep Panicker, President, Air Cargo Forum India (ACFI), Mr. Blasé D’ Souza, Director Materials, Ingram Micro India Ltd., Mr. Rajinder Chana, First Secretary, Aviation, Department of Transport, British High Commission, New Delhi, Mr. SIS Ahmed, Director, GMR Group, Mr. RN Dhoke, Addl. Commissioner of Security, Bureau of Civil Aviation Security (BCAS), Mr. Vipan Jain, Head BAR (I) Cargo Committee (Northern Region) and Regional Manager Logistics, South Asia & Middle East - Lufthansa Cargo AG & Mr. Daniel Bircher, Director Operations, Bangalore International Airport Ltd. (BAIL)

Participants The event had an overwhelming participation of more than 100 participants which included Govt. Officials from various ministries, Customs, BCAS, CISF, Members of Trade Associations like Air Cargo Agents Association (ACAAI) its national President and Chairman Northern Region, Chairman Bar India Cargo NR, EICI & DACAAI, major Exporters & Importers, members of air cargo supply chain stakeholders Airlines, IATA accredited Freight Forwarders, Cargo Terminal Operators, Integrators, Courier & Express Operators, Technology and Equipment Suppliers, Airport Operators, General Sales Agents, Customs House Agents (CHAs).

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Address by President ACFI –

Mr. Pradeep Panicker, President ACFI while welcoming the distinguished speakers on the dais and the august guests from various Government Departments, trade body members and the representatives of entire air cargo logistics trade & industry for their presence, introduced ACFI & about the essence of the subject conference. Mr Pradeep informed that ACFI is a non profit organization giving common platform for the entire air cargo logistics trade & industry working jointly for the development & improvement of the air logistics trade & industry in India.

Key Speakers

ACFI invited key speakers of global experts from British High Commission giving international (EU) perspective, Authorities from Government (BCAS) stressing on the government policies regarding aviation security, Supply Chain Management Professional, especially in International Logistics (Ingram Micro India Ltd to give users perspective, Airport Operator (BIAL) as service provider and Board of Air Line Representative (BAR Cargo) on airline perspective had covered wide range of topics on the Aviation Security concerning the entire air cargo Supply Chain;-

The session was moderated by Mr. SIS Ahmed. The highlight of the issues presented by each speakers in its presentation were as under;-

He said that in the past there was an absence of a common platform for the entire air cargo logistics trade & industry to understand the common issues of entire logistics trade and then taking up jointly for its improvements at world class level. By establishing ACFI the entire air cargo logistics trade & industry has a common platform with which all the trade could work jointly for achieving its various aims & objectives for taking the industry at par with international standard. About the conference he said that the importance of security in aviation industry at international level precipitated after the 9/11 incident in US & then the Yemen incident which had compelled the aviation industry to look for various strong security measures for the safety & security of passengers & aircraft. However he also emphasised that around 85% of air cargo moves by passenger flights which emphasis the greater need of adopting strict security measures & new techniques for an ultimate aim to enforce a secured air cargo supply chain. And therefore ACFI’s this conference aims to deliberate & focus various facets of air cargo security & understand the air cargo supply chain security & its importance which is every one’s responsibility.

Mr. SIS Ahmed, Director GMR Group (Former Director General CISF and CRPF) ( View full profile… ) Mr. Ahmed ccongratulated ACFI for organizing such conference on this important subject and arranging valued speakers of multiple disciplines from across India and emphasized upon the need of giving importance on air cargo security at par with passenger security as more than 85% cargo worldwide moves by passenger flights. He also said that a paradigm shift in the standards in the aviation security worldwide was realized mainly after 9/11 using aircraft as bomb, followed by Shoe Bomber case in December 2001, Liquid Explosive Plot against Transatlantic flights in 2006, Glasgow

Airport attack in 2007, Suicide Bomber at Moscow Airport etc. Therefore there is a great need of a Standardized Security Protocol and integration of Technology solutions into Air Cargo Supply Chain Management System to prevent unlawful interference in Civil Aviation Operations. National Security through uniform standards ensures compliance of multiple programs Reduction in Cargo thefts, pilferages. Improve Air Cargo Safety – by detection of undeclared hazardous material.

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Shri Rajendra N. Dhoke, IPS Addl. Commissioner of Security (CA) ( View full profile… ) Mr. Dhoke presented his paper on the topic “Securing without Slowing – Government Perspective”. He expressed his concerns by saying that the air cargo security is a week link in the overall aviation security and therefore Cargo Security should be given equal importance at par with passenger security as most of the air cargo moves by passenger flights. He advised that main thrust should be given on the security training and awareness program to all stakeholders of supply chain, all cargo & mail are subject to appropriate security control system including screening

Mr. Blasé D’Souza, Director Materials, Ingram Micro India Ltd. ( View full profile… ) Spoke on the “Customer Perspective on Future Security Requirements and Preparedness.” Mr. D’Souza highlighted main thrust areas of improvements required from a user perspective that all players in the supply chain including government agencies should play as partners for speedy processing & safe handling of EXIM trade and should show special attention on pilferages & misplacement of cargo at various stages of cargo supply chain. He said that while the trade/ users are willing to Work Together with security agencies to further secure the Air Cargo Supply Chain however

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international competitiveness must be kept in mind by all. He further said that adoption of different procedures at different airport for the same government regulation is a matter of concern & confusing the trade. Mr. D’ Souza made strong recommendations to government agencies to recognize Accredited Clients and promote processes integration of different agencies. He stressed the need of 24x7 basis clearance of EXIM trade by Customs to maintain speed & eradicate mishandling/pilferage at the airport and recommended for introduction of modern technology but not at the cost of the users without a significant improvements/benefits.

and should be protected against unauthorized interference from the point security controls are applied until departure of the aircraft. Mr. Dhoke informed that 100% screening of cargo was introduced in India in 2001 based on the threat perception in the country and UK & US are the next countries adopted this practice only after 9/11 incident later on. He emphasized upon the relevance of Regulated Agent system for supply chain industry promulgated by BCAS way back in 2008, due to multiple users in the logistics industry and the complexity of the supply chain but is hardly very demanding due to costs, requirement of secure premises, necessary technical gadgets, training and background check of Staff and procurement of equipment. He also touched upon the duties & responsibilities of Every actor of the chain like the known consignor to give Written declaration on security program observed and for various approvals, the regulated agent has to perform Security program & screening, the air carrier are to undertake Screening and protection and the appropriate authorities for Inspections and approval

Conclusion – He stressed about the need of Consultation with the industry, Development of new technologies, Harmonized regulations and mutual recognition, Promoting research and development of new security equipment, processes and procedures and Targeted technical assistance and capacity development efforts should be undertaken in a coordinated way with States that strive to meet new standards but struggle to do so.

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Mr. Daniel Bircher, Director Operations, Bangalore International Airport Ltd. ( View full profile… ) Mr. Daniel spoke on the topic - “Airport Perspective on Air Cargo Security Challenges” About Aviation Security he said that the Aviation is an important mode of international transport and valuable contribution to global development. However in regard to safety & security point of view International Civil aviation is the soft target for terrorists. Therefore he said that a continuous development is required to strategize collaborative approach for secured air transportation. He also said that the Air-Cargo security is a prominent regulatory subject since the incident of 9/11 and

Mr. Rajinder Chana, First Secretary, Aviation, Department for Transport, British High Commission, New Delhi ( View full profile… ) Mr. Chana spoke on the Topic - “International Security Practices and Adaptability in India”. He was impressed by ACFI for choosing this important topic for deliberation and reiterated that Civil Aviation always have been a soft target for the terrorists. However he said that the world recognises the Socio Economic Impact of Air Cargo Supply Chain on the overall Aviation Business. While the 9/11 incident has forced the governments to relook drastically on the sensitivity of the aviation security, he emphasised upon the need of collaborative approach among all stakeholders in the air cargo supply chain. Regarding EU Regulations of 31 countries including UK, Mr Chana touched upon ACC-3. He said that the EU

regulation was formulated during 2011 but now will be implemented w.e.f. July’2014 with a declaration from each airlines operating from to & via any EU countries, duly signed by its No. 1 Senior Representative certifying that the airline has carried out certain security procedures as laid down under ACC-3, before operating flights through EU. He said that the countries shall be categorised in three categories depending upon their compliance performance;-

Green Countries White Countries Red Countries

He requested all the stakeholders to fulfil the conditions of ACC3 well in time before the ‘D’ date to avoid any inconvenience at the last moment.

Yemen (2010) incident. He also highlighted the Role of Airports in Cargo Supply Chain Security is to maintain proper coordination with all stakeholders, Understand the principals of the air cargo supply chain to identify potential security risks. However there are lots of big Challenges in front of airport operators like 100% screening in timely manner, X-ray machines unable to detect small objects in large shipments, profiling of Cargo without human interference, origins and nature of different shipments, training needs are not fulfilled in timely manner, stringent security measures & huge capital investment - a challenge to RA/known shipper concept in India, Fragmented industrial business & geographical location and finally the Implementation of ACC3 which means;-

Additional Audits at airports Recruit and train validators Build up expertise to understand and monitor EU regulations From 1 July 2014, the ACC3’s must be in possession of security verifications of their cargo and mail

operations at the relevant non-EU airports. This verification activity must be undertaken by an independent validator, certified by an EU regulator

As way forward – Mr. Daniel suggested following measures for a speedy processing to maintain reasonable growth;-

The key factor is to identify trusted shippers – and then focus on screening suspicious packages. Thus, pulling it out of the mass of an otherwise legitimate container. The airport industry should support a system of electronic documentation that assures that nobody tampers with cargo as it moves through the supply chain.

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Mr. Vipan Jain, Chairman Bar India Cargo NR, Regional Manager – Logistics, South Asia & Middle East – Lufthansa ( View full profile... ) He spoke on Air Cargo Supply Chain Security- Airlines perspective on changing security requirements and secure freight. Mr. Jain highlighted the impact of Security on the Supply Chain in the coming years due to various factors apart from policy changes;- decreasing number of Known Consignors in the EU due to complexity of certification, 100% screening inbound to USA effective 03Dec2012, Shipper Built Unit concept at risk for USA traffic, EU introduced mandatory airline approval as “Air Carrier’’ through 3rd Country“ and Validation of “3rd Country Handling Facilities” and carrier driven 3rd country Regulated Agent and Known Consignor regime to be implemented by July 1st, 2014.

Mr. Jain also highlighted following key Global issues of Security;

Requirements imposed by regulators 100% screening on piece level the (Indian scenario). EU Regulation ACC3 w.e.f. 1st Jul’2014 – Latest EU Commission drafts policy which is Export of own

security regime to 3rd countries instead of bilateral or multilateral recognition. Consequently will be Interruption of logistics processes I.S.O. one stop security! Implementation of 3rd country RA/KC through EU air carriers is not a feasible solution.

Validation of 3rd country handling sites is an additional requirement. The target may be 3rd country air carriers but EU carriers will be also affected although they already safeguard security through their Aviation Security Programmes.

In regard to new challenges due to implementation of ACC3 Mr Jain brought specific issues for consideration of all stakeholders including the government. Some of the major issues highlighted by him was like the new technologies recommended by TSA and followed by EU for air cargo screening is a challenge., Cargo coming in loose condition – rarely on skids or in ULDs, Cargo coming to airport during a short duration due to traffic restrictions, Consolidation at agent premises, 24X7 customs clearance not in full use, Packages required for examination are identified after entry in examination area which itself is a threat (DEL exception), Multiple agencies performing the X-ray and therefore causing delay. Insufficient well qualified security staff with cat.12 qualification. Old warehouses not designed according to 100% X-ray requirement. Transportation chain is not linked with certification (open entry for Truckers)., Various agencies involved in truck dock, examination & bonded area and the Validation by EU commission by 30th Jun2014 itself is a challenge. (MOCA/ BCAS).

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Question Answer Session;- Following questions were raised by the members and

replied by the speakers on the dais ;- Why not single window synergy between Customs &

BCAS to avoid delay & multiple handling? BCAS to make efforts for implementation of Regulated

Agents (RA) concept outside airport. EU to inform governments for implementation of its ACC

3 regulation so that it comes under a single umbrella of BCAS for implementation by all stakeholders in India.

How DIAL is performing in terms of implementation of Air Cargo security norms of BCAS?

Serious concerns of theft & pilferages of import & export cargo at airports which amounts also to security lapses/threat.

How to control safety & security in the movement of domestic cargo where undeclared DG consignments are mixed with other normal cargo?

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Published by ACFI Secretariat Room No. 25, Ground Floor, Project Office, New Udaan Bhawan, Opposite Terminal – 3, IGI Airport, New Delhi – 110037. Telephone: +91 11 46084108, Email: acfisecretariat@acfi.in , Website: www.acfi.in, Feedback: Send Feedback

DISCLAIMER: All content provided in this newsletter is for informational purposes only. Air Cargo Forum India (ACFI) makes no representations as to the accuracy or completeness of any information printed although due care and diligence has been maintained to ensure accuracy. Air Cargo Forum India (ACFI) will not be liable for any errors or omissions in this information nor for the availability of this information. The company will not be liable for any losses, injuries, or damages from the display or use of this information.

13 internal issues pertaining to members of the logistics industry have already been resolved internally with the assistance of ACFI members in the supply chain.

ACFI had also forwarded 44 specific recommendations related to the air logistics industry to Chairman CBEC on the policy changes required in the existing Customs Act-1962.

ACFI has been invited to be a part of the deliberations at the Air Cargo Logistic Promotion Board (ACLPB) constituted by Ministry of Civil Aviation under the Chairmanship of Secy. Civil Aviation. 15 major points taken up by ACFI has already been addressed in its 2nd & 3rd Board meetings.

ACFI among others takes claim in the successful implementation of 24x7 clearances of all export goods by Customs at major airports implemented w.e.f. 1st July’2013.

Standardization of Export clearance procedure for Pharmaceutical Goods uniformly at all the airports in India has been accepted by DGHS based on ACFI representation to DGHS & at ACLPB, & implemented at IGIA w.e.f. Apr’2013.

On the initiative & support of Cargo Terminal Operator (CTO), first time in the country a Paperless Export Cargo Acceptance System (PECAS) has been introduced for acceptance of Export Cargo which has been successfully implemented at IGIA through online transmission of LEO and Location Slip (Acceptance) messages to airlines & freight forwarders w.e.f. 22.07.2013.

ACFI was invited by Member (Customs) to discuss various Customs related issues on 1st October, 2013. Member Customs and her team of senior officers took keen interest in the Customs related issues taken up by ACFI at various forums and assured timely follow up action at their end.

ACFI has established following 11 industry specific Sub Committees headed by the industry specialists, for undertaking deep study in to the major issues specific to the particular Air Cargo Logistics Industry for improvement;-

1. Apparel & Textile 2. Pharma Export 3. Auto Industry 4. Electronics Industry 5. Domestic & Transhipment Cargo 6. Express Cargo Industry 7. Process Simplification 8. Innovation 9. Perishable Export/Import Cargo 10. Service Standard in the Air Logistic 11. Non Scheduled Flight Operation

Vote of thanks was given by Mr. Yashpal Sharma, Treasurer, ACFI.

ACFI Update – For the information of the guests Mr. Cyrus Katgara Secretary ACFI highlighted the following major achievements of ACFI within a period of last one year from its inception.;-

28 major specific issues pertaining to Air logistics Industry have been taken up and being continuously pursued with the various Govt. agencies at the level of Chief Commissioner Customs, DG System, DGHS, Secy. Civil Aviation, Secy. Ministry of Commerce, Member Customs, Chairman CBEC, Revenue Secretary, Finance Minister, for consideration.