After the unprecedented shut down of Europe air traffic due to an ash plume in Iceland, flights are finally resuming.  Eurocontrol estimates that by Wednesday April 21, 75% of normally scheduled flights will be operational again.  However it will take weeks for the enormous backlog of air freight to clear up.  Some airlines are still placing restrictions on the type of cargo they are moving. IATA estimates that the flight bans have cost the airlines more that $1.7 billion as of April 20.

This form may be used pursuant to 19 CFR 103.31, which allows importers, consignees, and shippers to file certifications for confidential treatment for certain inward and outward vessel manifest information, such as importer and/or shipper names and addresses. In addition to electronically filing certifications, certifications can be mailed to: Disclosure Law Officer, Headquarters, U.S. Customs Service, 1300 Pennsylvania Avenue N.W., Washington, DC 20229.

According to 19 CFR 103.31, there is no prescribed format for a certification; however, the certification shall include the importer's/consignee's/shipper's Internal Revenue Service (IRS) Employer Number, if available.

Confidential Treatment May be Requested for Inward and/or Outward Manifests

With respect to inward vessel manifests, 19 CFR 103.31 provides that an importer or consignee (or their authorized employee, attorney, or official) may submit a certification for confidential treatment of:

· the importer or consignee names and addresses (including marks and numbers which reveal these names and addresses); and

· the names and addresses of all of the shippers to such importer or consignee.

For information appearing on the outward manifest, 19 CFR 103.31 allows a shipper (or their authorized employee or official) to submit a certification for confidential treatment of the shipper's name and address.

Fields That Need to be Completed on CBP’s New Web Form

CBP’s web form can be used for inward and/or outward vessel manifest confidentiality requests. The web form requires the following fields to be completed:

· requestor’s name, address, phone number, email address, and role

· relationship of party making request: first party, on behalf of self or company, or third party representative or agent

· date of submission

· the type of confidentiality requested (inward, outward, or both)

· whether the requestor is an individual importing personal effects or household goods, or other

· the tax ID number

· variations of names to be protected

Certifications Valid for Two Years Only

Both initial and renewal certifications are valid for a period of two years only. Renewal certifications should be submitted at least 60 days prior to the expiration of the current certification.

Info Covered by Certification May Not Be Published by the Press/Included on CDs Sold to the Public

Although 19 CFR 103.31 allows accredited representatives of the press, including newspapers, commercial magazines, trade journals, and similar publications, to examine, copy, and publish certain vessel manifest and summary statistical information on imports and exports, any information covered by a confidential certification may only be examined and copied by the press; it cannot be published. In addition, information covered by a confidential certification will not be included on the CD-ROMS of Automated Manifest System (AMS) data that are sold to the public.

Confidentiality web form:

http://www.cbp.gov/xp/cgov/trade/automated/automated_systems/ams/vessel_manifest_confid_form.xml

For additional information and guidance, please feel free to contact  your local NNR representative.

On March 25, 2010 Japan Airlines announced that it will discontinue all freighter service by October 2010.  JAL will move toward a new cargo business model which solely utilizes cargo belly space on JAL’s passenger flights.  JAL currently operates 10 747-100 freighters and plans to remove these aircraft from it’s fleet.

JAL is the sixth-largest air freight carrier in Asia, and this move will undoubtedly further impact air freight capacity in the Asia Pacific region.  JAL had been seeking to merge it’s cargo operations with Nippon Yusen, but merger talks ended early in March.

Green strategies can add to the corporate bottom line. It is a perfect “win win situation” by improving the environment and generating profits at the same time by reducing costs and enhancing your brand image. The opportunities are being accelerated as governments around the world create incentives to stimulate green technology advances. In the United States, the American Recovery and Reinvestment Act of 2009 allocated approximately $75 billion toward clean energy initiatives. Local and state governments are starting to create the same incentives on a smaller scale. Companies are scrambling to take advantage of these opportunities through the development of new technologies that will allow businesses to reduce their energy consumption, decrease the costs of fuels, reduce waste and become a more sustainable, carbon-neutral organization.

The possibility of having CO2 emission limits or penalties pushed down to companies is getting closer to reality. The Copenhagen Accord created in December 2009 both acknowledged the problem of climate change and states that “deep cuts in global emissions are required according to science”. Developed countries committed to emissions reduction targets by 2020. Developing countries committed to implementing mitigation actions to slow their growth in emissions. There are still many obstacles to be overcome before specific legislation is implemented, but the commitments could conceivably create a bonanza of opportunity for green technology companies. At the same time it could result in an explicit cost on every corporation’s income statement for CO emissions also known as a “Carbon Tax”.

A particular product’s environmental impact consists of a complex web of manufacturing processes, power consumption, and transportation of components and finished goods. By incorporating carbon reduction into their overall SCM strategy, companies can help reduce their environmental emissions footprint, strengthen their brand image, reduce costs and develop competitive advantages. Therefore, companies are looking for new approaches to managing carbon effectively — from sourcing and production, to distribution and product afterlife.

When assessing your firm’s carbon footprint, you must start from the upstream purchase of production materials to the delivery of the finished product to the customer and the packaging waste that is left.  However, the actual transportation of goods most likely creates the highest carbon impact in your supply chain.  NNR is now offering a free white paper to get you started on analyzing your organizations logistics emissions.  You can obtain a copy of the report here:  Managing Logistics Emissions Whitepaper. 

On Tuesday, January 19, 2010, Asia’s largest airline by revenues JAL, filed for chapter 11 bankruptcy protection. It is a prepackaged bankruptcy during which a restructuring and reorganization will be led by the Enterprise Turnaround Initiative Corp of Japan (ETIC).

While JAL is undergoing a sweeping change and reorganization process, it is not expected to affect airline’s day to day operations. According to the statement released by JAL, the company expects to continue operations as usual and keep their group’s business as it has been previously conducted. JAL apologized to all the parties that might be affected by the process and promised to come back as a new company, strengthening once more its long standing reputation as a leader in a passenger transportation and logistics industry worldwide.

JAL has secured a 1 trillion ($11 billion) state guarantee in order to keep planes in the skies. But it is expected that air carrier will shift its main focus from a larger international to a smaller, more efficient planes designed for regional flights.

The new management team will be led by a Kazuo Inamori, a 77 old business veteran, who has long earned his reputation as a strong leader and global thinker that has an ability to bring change when and where it is needed the most. He is a founder of an electronics maker, Kyocera.

One of the major challenges facing Inamori is global economic slowdown, uncertain fuel prices that might expose 40 billion yen in hedging contracts and formidable rivals like All Nippon Airways (ANA).

For some the situation may not look very attractive, but from the prospective of a tomorrow’s opportunities, management and regulators are upbeat about JAL’s future. Management is convinced that in 2010 global demand for goods and services will have a gradual but strong rebound which will contribute greatly to air cargo traffic increase. They expect to be able to be a leader in the market and repeat past successes. JAL used to own two thirds of Japanese air cargo traffic market. As far as the fuel price challenges are concerned, JAL has banks’, creditors’ and investor’s support to alter the contracts and come out of bankruptcy as a better adjusted and financially planned company.

When it comes to competition, JAL’s management sees an opportunity. As it is the case in numerous post bankruptcy performances, JAL will be a debt free, newly restructured and optimized organization. It will have the support of a government and leniency of creditors as far as the costs of the new capital is concerned, that might be needed to fund new investment opportunities. In addition to organizational and financial restructuring, JAL is planning to replace its fleet of 747s and MD90is by 33 smaller jets and 17 regional aircraft, which will allow the company to be more fuel efficient, cost effective and achieve greater capacity utilization and lower operational cost, especially fixed costs that have gone out of control in recent years.

In a summary, it has to be mentioned, that JAL has been a leader in Asian markets for years and it has all the potential needed to continue this long, hard earned legacy. It has been an ambassador of Japan around the world and will continue to be one for more years to come.

2008 and 2009 will go down into history books as one of the most devastating years in the world’s economic activity. The logistics industry was among the one hardest hit by the recession. Global air freight traffic saw decline not seen since the World War II.

According to the International Air Transportation Association’s recent statement, the situation is improving and it expects the trend to continue for several months to come. Despite this IATA has issued a warning not to be overly optimistic about the growth factor of 24.4% observed in December of 2009 over the previous year. Even given the increase, December 2008 has still been one of the weakest in history. Furthermore, if adjusted seasonally, in December shipments declined by 0.2% resulting in a capacity utilization of only 54.1%. Overall 2009 performance has been summarized as 10.1% decline in cargo volume compared to the previous year with an average load factor of 49.1%. Asia-Pacific carriers have contributed 60% of an increase in cargo traffic, but they still remained 8% behind their peak performance. Even though cargo capacity has been cut, an average cargo load factor was still at 66.1%.

The situation does not look better in the passenger transportation market either. AAPA reports 132.9 million passengers transported in 2009, which is 5.7% lower than 2008. According to Andrew Herdman the director general of AAPA, it has been the worst year for the association’s member airlines. He stated that investors should expect Asia-Pacific airlines to report a significant loss for the fiscal year of 2009.

Since Asian economic activity has weathered the global financial crisis much better than European and American economies, the outlook for Asian-Pacific looks significantly better. Due to the fact that Chinese economy continued to grow and Indian economic activity managed to remain relatively stable, AAPA expects 2010 to be fragile year but remains hopeful that emerging markets will be able to sustain economic growth, which will help airlines strengthen their balance sheets. European airline performance is much more disappointing compared to the Asian carriers. According to IATA, it is 20% lower than the previous year’s peak activity. Middle East and Latin American carriers showed more promise than EU, with volumes up by 7% and 21% compared to 2008 levels. Global passenger traffic was down 3.5% as expected. It represents the biggest decline since the World War II.

In his statement, Giovanni Bisignani, the director general of IATA, summarized the 2009 as one of the worst years in the industry’s history. He assessed the impact of the global recession as 2.5 years of growth lost in the passenger segment, that will never be recovered and 3.5 years growth lost in the freight segment. Even though the situation is difficult, it is somewhat improving. The global economy is on the road to recovery. Economic stimulus packages in China, Russia, EU and US have played a decisive role in sustaining the growth. Members of G20 have pledged to fight protectionism and implement measures to eliminate market barriers to encourage economic activity and create demand.

Above mentioned measures will most definitely have an enormous impact on the global economic activity and as the global economy will continue to improve so will the freight traffic around the globe.

According to a public notice issued by U.S. Customs and Border Protection’s office in Dallas/Fort Worth, starting from Tuesday, January 26, 2010 it will start enforcing a new Importer Security Filing (ISF, 10+2) rule, which will require importers and carriers to file with CBP 12 data elements not normally included on the cargo manifest. The new rule has been in works for more than 2 years and is designed to help CBP step up security and improve anti-terror monitoring. The new rule, referred to as ISF (Importer Security Filing), requires importers and carriers to file 12 data elements 24 hours before a vessel departs a foreign port. As of January 26, 2010, there are 115,000 importers that are already complying with the regulation, but the major concern is small and infrequent importers that are not aware of the rule change.

According to Richard DiNucci, who is a Customs director of the Security Initiative, companies have been having problems in meeting the filing deadlines. As of January 26, 2010 some 70 to 80 % of filings are late or do not meet filing guidelines in some other ways; but he added that situation is stabilizing and they expect to be able to normalize process by the end of the 3 quarter of 2010. Until then, CBP has announced a plan to deal with the problem in a manner that will avoid back logs and give importers and carriers some time to adjust to the new rules. The process will be implemented in 3 stages:

In the 1st quarter of 2010, CBP will concentrate its attention on importers who are not filing ISFs. Measures of enforcement will be used in the form of warning letters. According to CBP, Do Not Load (DNL) holds and Liquidated damages are not expected to be enforced at this time.

In the 2nd quarter of 2010, violators can expect increases in manifest holds and shipment examinations. Additionally, companies who are members of the Customs-Trade Partnership Against Terrorism, and violate ISF requirements, can expect warnings which might affect their status as a C-TPAT participant as well. CBP does not expect DNL holds and Liquidated damages to be enforced in 2nd quarter.

In 3rd and 4th quarters, violators can expect major increases in the manifest holds and shipment examinations with no ISFs. Additionally, status as a member of C-TPAT can be terminated, temporarily suspended or reduced for the companies who will continue to fail to comply with the new rules. DNL and Liquidated damages will be strictly enforced and all relevant procedures followed through by the CBP.

At all times CBP reserves the right to take any measures deemed appropriate for the national security purposes.

According to the U.S. Customs and Border Protection’ office, every case that violates ISF 10+2 will be reviewed on an individual basis before any enforcement action is taken. Penalties for each case will be determined by the local ports and approved by CHQ. If you need more information regarding ISF 10+2, you can contact U.S. Customs and Border Protection’s Office or log on to the web site: http://www.cbp.gov/xp/cgov/home.xml