How will ICS2 regulation impact the Air Freight industry?

Knowledge Centre

Home: How will ICS2 regulation impact the Air Freight industry?

Air Cargo is among the fastest-growing industries worldwide due to its disruptive nature. Movement of critical cargo can be well facilitated with air freighters in less than a few hours from one country to the other. With this dynamic nature, air cargo facilitates 7.4 billion parcels and saves 2.5 million lives annually by transporting immunisation vaccines worldwide. However, not everything is positive about air cargo. It is noted that illegal cartels are exploiting the dynamic nature of air cargo and seamlessly trafficking exotic wild animals and abusive substances. Shockingly, this industry is worth at least US$19 billion and is growing rapidly every year.

Regulatory authorities are keen on early threat identification and thwarting these illegal cartels from exploiting the mode of transport. European Union is all set to address these issues with a risk management framework to enable 100 per cent safety and security of air cargo. It is believed that advance declaration of cargo information will be the first step in preventing the inflow of illegal commodities inside the European Union.

What is ICS2?

Import Control System 2 (ICS2) is a unique IT framework to reinforce the need for stricter screening of cargo before it arrives at the destination. According to this framework, economic operators are expected to declare the cargo content to the customs authority at the destination Airport before departure. EU considers this to be the first line of defence in their fight to thwart illegal trade as it enables them to identify threats effectively.

Value additions of ICS2

While the primary goal of ICS2 is to thwart illegitimate trade, it also emphasizes on certain aspects of trade such as simplifying exchange of information between stakeholders, facilitating faster cross-border trade for legitimate cargo movement and building a comprehensive data-driven procedure that offers valuable insights into the overall betterment of cross border trade.

What updates were done in ICS1?

ICS2 is a major initiative because it is not just an update made to the existing ICS1. The updated framework looks into general, express as well as postal cargo. While ICS1 focused on the pre-loading of express and postal cargo alone, the comprehensive nature of ICS2 will ensure all blind spots are addressed effectively so that illegal trade is gradually thwarted.

The roadmap for ICS2

Going forward, ICS3 is expected to come into force in 2024, focusing on interconnecting different modes of cargo movement such as rail, Maritime, and road transport. By doing so, illegitimate trade thriving through all modes can be eliminated. Also, the industry will build a robust mechanism to seamlessly facilitate trade in terms of faster cargo movement in the future.

What is the impact on stakeholders?

Every upcoming regulation means a complete process transformation for all stakeholders. On that note, here is how each stakeholder will get impacted by ICS2.

Freight Forwarders

Freight Forwarder needs to evaluate with his customer if the information provided is authentic and if it can be further given to the carrier. Traditionally, the Freight Forwarder or the airline is responsible for submitting FWB/FHL and receiving the assessment response from Customs.

Air Cargo carriers

Air Cargo carriers will be accountable for illegally carrying undeclared cargo quite strictly than before. If carriers follow these regulations, the primary loophole in the system can be thwarted and legitimate trade can be facilitated seamlessly.

Cargo handlers

Cargo handlers or terminal operators are always accountable for the inflow of cargo within the airport ecosystem. If a handler declares a particular set of cargo as illegitimate, the overall cartel can be broken in a shorter span of time.

Consignee

An importer will have to declare the type of cargo that is being imported into the country. If in case the consignee is seen dealing with illegitimate trade parties, there is a possibility of revoking the export-import license within and outside the country.

How to be Prepared?

Now, all stakeholders involved in the trade will be held accountable for illegitimate cargo movement. Therefore, the demand for an IT system is somehow becoming mandatory. If an Airport ecosystem is already equipped with a smart Cargo Community System, then adhering to the mandate is seamless. A Cargo Community System enables the interchange of advance shipment notifications so that stakeholders can plan their activities well.

Truck slot management or terminal slot booking is a default module in some of the leading Cargo Community Systems that assist in overcoming critical challenges such as cargo dwell time, truck congestion, and visibility. Most importantly, Cargo Community systems comply with global regulatory standards such as PLACI, GDPR, and other IATA-recommended frameworks.

In a nutshell, having a Cargo Community System in place will ensure that global regulatory standards are met.

How will ICS2 regulation impact the Air Freight industry?