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Pending Air Cargo Restrictions Concerning Lithium Batteries Cause Widespread Concerns

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A recent Wall Street Journal article (paid subscription may be required) notes that U.S. and international regulatory officials are seeking to add stricter controls on air cargo shipments that contain electronic devices with installed lithium-ion batteries.  The timing is expected to be later this year, and the implications to shippers and high tech companies will be significant.

The debate relative to whether lithium-ion batteries pose a safety concern to air cargo is not new.  The concern, however, has been escalated by recent alarming increases in safety incidents and crashes occurring on air cargo aircraft, and more notably, the recent crash of a UPS Boeing 747 cargo plane in Dubai on September 3 involving the death of both pilots. This plane was transporting a considerable amount of electronic goods in its cargo bay when an uncontrollable fire broke out in the cargo bay.   The pilots were alerted to the fire 30 minutes after takeoff and one of the two pilots left the cockpit to try to fight the flames, but never returned. Smoke caused by the fire was so intense that it obscured instrument readings

Aviation groups now believe there is growing evidence that lithium-ion batteries are posing serious fire hazards when they are in the bellies of cargo aircraft flying at high altitudes. Officials point to five directly related safety incidents related to batteries since August.

These pending directives are facing opposition from a broad group of globally based companies and industry lobbyists.  Air cargo carriers shipped over two-thirds of all lithium-ion batteries imported into the U.S. last year according to government statistics.  Restrictions or certain outright bans on lithium batteries will cause stricter requirements in cargo declaration, notification to carriers, as well as training of cargo handlers.  There could possibly be outright restrictions on the amount of batteries that can shipped on any one aircraft. We could further speculate that electronic devices may be forced to be air shipped without batteries, while the batteries themselves are shipped by alternative surface transportation.  In any case, the WSJ article notes that the regulations could cause havoc for just-in-time or demand-driven electronics supply chains, and we certainly concur.

At this point, the U.S. Transportation Department and the Federal Aviation Administration (FAA)  are awaiting a green light from the Obama Administration before announcing further steps.  No doubt, the current pre-election political climate in Washington adds more speculation as to how restrictive these new directives will be.  In the meantime, electronics, mobile phone and computer related manufacturers are preparing shipment plans for the upcoming holiday buying season, with Black Friday being a mere seven weeks away.

If another tragedy or major incident involving lithium-ion batteries were to occur in the coming weeks, than who knows what will happen.  It is a rather difficult situation, balancing safety and human life with the needs of free commerce.  We trust that reasonable directives will prevail in the end.

Bob Ferrari

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