I interviewed Jeff Schumacher who discussed Increased Security in the Supply Chain Regarding the Federal Implementation of 100 Percent Screening of Air Freight and Some ISF Requirements on Sea Freight.
It’s nice to speak with you today, Jeff, and today I look forward to hearing your views on the topic of increased security in the supply chain regarding the federal implementation of 100 percent screening of air freight and some ISF requirements on sea freight. Can you start by providing a brief background of yourself?
I sure can. Thanks, Dustin. My name is Jeff Schumacher; I’m the vice president of American Worldwide Agencies. Our parent company is Intelligent SCM. We are an international freight forwarder and an agency handling shipments throughout six continents. We are touched by every regulation that comes across the board for both air and ocean freight, import and export. I have an M.B.A. from Georgia State University, I’m a Lean Six Sigma black belt, and 20 years’ industry experience. I’ve also taught at the collegiate level at Georgia State University for six years, since retired.
Thank you. Can you talk about what’s happening in terms of increased security in the supply chain?
Sure, I’d love to. Since 9/11, which was the watershed moment for most of the security initiatives that have gone into play, there has been an increased influence of security regulations in order to protect our borders, so to speak. That’s had two major impacts. One is on the air-freight side; the other on the sea-freight side. The sea-freight side began with the automated manifesting system, which then tied in to the ISF, which is the importer security-filing program. Also, the container security initiative was in play, as well, about five years ago, maybe a little bit longer. The air-cargo screening is something that’s been a little bit more recent. Indirect air-carrier security programs were put into place actually prior to 9/11 but have really ramped up and increased in the amount of regulation and responsibility that the forwarders and shippers take in order to maintain the integrity of the security of the supply chain. Recently, that has gone to 100 percent screening of all air freight on passenger aircraft, and soon, within the next year to 18 months, there will be another, they will also require 100 percent security screening of all air freight on every airplane, including freights.
And how do you think things can be improved?
Tough question. The toughest thing about security—and this is something I’ve mentioned before—is that success is measured by a failure; a failure to be attacked, a failure for there to be bombs or planes dropping out of the sky, or boats being blown out of the water. Your success is measured by, well, did it work? Well, okay, we haven’t had a terrorist attack, so, therefore, the theory is that it worked, although there’s not necessarily a causal relationship. The difficult aspect of it, although there was the incidence with the imports from UPS with the ink cartridges that came out of Yemen, and that led to further additional screening and also the requirement of goods coming in to the U.S. requiring screening as well. There’s a little bit of justification; there are still bad people out there that want to do bad things to us. As much as the regulation may impede the flow of goods—it may slow things down a little bit—once the regulations are in place and you learn how to navigate through them, it just becomes another part of the business. The screening aspects, the airlines handle much of it; I think it’s called certified cargo-screening facilities that handle a great deal as well. Basically, it’s just kind of a hodgepodge between whether or not you want to outsource it, have the airline handle it, or invest a million dollars into an X-ray machine to do your own. I’m not sure if that answered the question.
You were mentioning about navigating all these, how to deal with this. Would you have any recommendations for shippers on how to navigate these complexities and the new requirements?
I do. One of the things that is really critically important is making sure that the shippers understand their role. Educating the shippers is really key, and it goes the same for the importers on the containers on the ISF regulations on the inbound. Really, educating your customers to understand what their role is and how they can participate actively in addition to cargo security. Shippers can actually screen their own freight. There’s a long process they have to go through with the TSA. Some of these things I can’t get too deeply into because it’s sensitive security information, but it is possible for them to do so and also for them to work closely with their freight forwarder or their transportation-service provider in order to make sure they understand what the needs are from them in order to ensure the integrity of the supply chain. The onus of it tends to fall on to the forwarder and on to the airlines. We’re the ones who are inspected regularly and are required to have impeccable record-keeping and make sure that we’re using the appropriate carriers in order to maintain that integrity. The larger shippers—the Fortune 100, maybe even to Fortune 500—some of them have chosen to participate and perform their own screening and handle things from their own end, which is, kudos to them. There are some shippers that have chosen to participate by becoming direct air carriers themselves, which requires an additional level of security for them, but it makes it slightly easier for them when they’re tendering cargo to freight forwarders and what have you because they’ve taken on a certain amount of the responsibility, and our responsibility is just to make sure that they are valid as far as their certifications.
And thank you, Jeff, for sharing your views today on security and dealing with the new regulations. Did we cover everything you wanted to discuss?
For the most part. I think the established shippers and the established importers are aware of this. C-TPAT is another aspect that comes in, the Customs-Trade Partnership Against Terrorism. It also plays a role particularly on the air-freight side of things, and that’s just a matter of vetting your carriers and making sure that the transportation providers that you’re working with do have a security program and are aware of and sensitive to the security needs of both air and ocean freight. It’s not going to get easier; if anything, the expectation’s probably going to be for more and tighter regulation, although I believe 100 percent screen is probably going to be, you’re not going to be able to get a whole lot more than that. But the thing I would ask from the forwarder standpoint is for shippers and importers to be understanding that we’re not asking them to do things because we’re trying to make their lives difficult; we’re asking them to do things because it’s a legal requirement. Failure to comply can close down a company. It’s one of those “We’re just doing our jobs” situations, and if they’re not being educated by their forwarder, then they probably need to get some consulting, have some people explain to them what’s going on, how it’s going on, and what they need to do to navigate properly. That’s about it.
Thank you, Jeff.
About Jeff Schumacher
Vice President at American Worldwide Agencies