2017 – Edition 8 – September 5

Table of Contents

Note: The order of material varies in hotline emails, but is always presented the same on this landing page. Readers scrolling through content on or printing this page will find it organized consistent with the table of contents.

SLC 2017
ARSA Works
Legal Briefs
ARSA on the Hill
Quality Time
Training
Membership
Resources
Industry Calendar

SLC 2017

Keynote Update: ARSA Confirms FAA’s Huerta

The Hon. Michael A. Huerta, Administrator, FAA. Click the image to read Mr. Huerta’s official bio.

Maintenance industry leaders attending the 2017 ARSA Strategic Leadership Conference in Washington, D.C. this fall have something else to look forward to: FAA Administrator Michael Huerta is now confirmed as the meeting’s keynote speaker.  Huerta will discuss current FAA priorities while reflecting on his tenure as the agency’s head.

The annual ARSA SLC provides a forum for maintenance industry C-level executives and their air carrier customers to come together to discuss and confront challenges and opportunities facing our sector.  Topics for this year’s meeting include FAA reauthorization, strategies for engaging in the new political environment, developing independent manufacturing and repair sources, and protecting intellectual property rights.

The 2017 SLC is taking place in Washington, D.C. on Oct. 18 and 19.  Following a reception on the evening of 18^th, attendees will spend the morning of the 19^th hearing from top level speakers and discussing priority issues.  The second half of the day will be spent in delegation meetings coordinated by ARSA on Capitol Hill and with executive branch officials.

To see more about what will happen at the SLC, check out the rest of this edition of the hotline, stay tuned to ARSA for updates and visit the event page. Registration is open to any interested maintenance industry leader, but space is limited.

To learn more about Administrator Huerta, click here to read his official bio.

Click here to visit the SLC event page for more information.

Sponsor Update: Salute Those Leading the Way

ARSA’s team is working feverishly to finalize plans for October’s Strategic Leadership Conference (SLC). That work is made possible by the committed support of this year’s sponsors. The association is going to make good use not only of the resources provided by these companies, but also their names, logos and stories; we are grateful to them* and will let it show:

Gold Sponsors

Silver Sponsors

Supporters

*To learn more about any of these organizations that stepped up to support ARSA, click the appropriate logo. To learn how to join them, visit the event page and click “Sponsorship Opportunities.”

Click here to visit the SLC event page for more information.

Attendee Update: Who Will Be There?

With just less than two months to go, ARSA’s 2017 Strategic Leadership Conference (SLC) is shaping up to be one of the most significant gatherings of maintenance industry leaders in the nation’s capital ever.

The meeting, which is taking place in Washington, D.C. on October 18 and 19 just blocks from the Capitol building, is an annual opportunity for repair station executives and their airline customers from around the world to gather, discuss challenges facing the maintenance industry, and design strategies to create a better business environment for MROs.

The theme of this year’s SLC is “Engaging for Effect” in the new political environment in Washington, D.C. Confirmed speakers include:

• Al Givray, Partner, Davis Graham & Stubbs & General Counsel, The Nordam Group
• Aaron Hollander, President & CEO, First Aviation Services, Inc
• Eric Mendelson, Co-President, HEICO
• Jim Sokol, President of MRO Services, HAECO Americas
• David Storch, Chairman & CEO, AAR Corp.
• Mark Swearingen, Vice President of Technical Operations, Atlas Air

Panels will focus how and why leading maintenance companies are getting involved in the policy process (both on Capitol Hill and “back home”), as well as on supporting the development of independent manufacturing and repair sources in the international regulatory arena and protecting intellectual property rights. ARSA has extended speaking invitations to FAA Administrator Michael P. Huerta and Sen. Bill Nelson (D-Fla.), the senior Democrat on the Senate committee with jurisdiction over aviation policy.

But attendees won’t just listen to great speakers, they’ll also break up into smaller delegations (organized by ARSA) and visiting with senior administration official and congressional leaders involved in aviation, workforce, defense and regulatory policy. 

More than two dozen industry leaders are already registered to attend.  For a list of current registrants, click here.  Then go to arsa.org/news-media/events/slc (or complete the form below) to register yourself.

If you have questions about SLC, please contact ARSA Executive Vice President Christian A. Klein at christian.klein@arsa.org or 703.739.9543. 

See you in October.

Event registration is extremely limited in order to maintain the high-level focus of the SLC. If you haven’t already, register today to ensure you have a place at the table:

Click here to visit the SLC event page for more information.

Why should YOU be at ARSA’s 2017 SLC?

No matter what your role in the aviation maintenance sector, attending ARSA’s SLC is a great investment of your time.  Here’s why:

• Maintenance and airline execs will benefit from top-level peer-to-peer networking, best practices sharing, information about regulatory and legislative issues that affect maintenance costs, government relationship building and advancing the industry’s policy agenda.
• Industry suppliers will build visibility and gain access to senior decisionmakers (to learn more about sponsorship opportunities contact ARSA Vice President of Communications Brett Levanto at brett.levanto@arsa.org or 703.739.9543).
• Aviation consultants will hear directly from industry leaders about maintenance sector challenges and opportunities.
• Regulators will gain insights into the intersection between regulation and business realities that will help them improve oversight efficiency.

Don't need more information? Register or sponsor right here...

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ARSA Works

Unified Regulatory Agenda Provides Clues About Agency Priorities

In August, the Trump administration rolled out its first Unified Agenda of Regulatory and Deregulatory Actions (“Unified Agenda”), which provides an overview of regulatory priorities for all parts of the federal government, including the FAA, for the coming year.  

The agenda categorizes actions in one of three ways. “Active” actions are expected to be issued as proposed or final rules in the next 12 months; “completed” actions are proposed rules that have been finalized or withdrawn since the last edition of the Unified Agenda; and “long-term” actions are under development and will take longer than 12 months to complete. (A general explanation of the unified agenda from the Congressional Research Service is available at fas.org/sgp/crs/misc/IN10745.pdf.)

The current Unified Agenda lists 35 “active” FAA actions (see table 1), many of which of have consequences for the aviation maintenance industry. The agenda also lists nine long-term FAA actions (see table 2).  

As these issues continue to move through the process, ARSA will zealously advocate for the maintenance industry’s interests and to keep members informed about important developments.

For more information or to search the Unified Agenda for other agencies, go to: www.reginfo.gov/public/do/eAgendaMain.

Industry Gives FAA a Commercial Parts Solution

On Aug. 8, ARSA and its allies provided the FAA a method to address international issues created by the regulatory definition of “commercial parts.” Led by the association, a coalition of 13 aviation stakeholders – both industry associations and private businesses – submitted a draft notice dealing with commercial and commercial-off-the-shelf (COTS) parts in the context of change 6 to the U.S.-EU Maintenance Annex Guidance (MAG).

Under the United States’ regulatory framework, parts defined as “commercial” by 14 CFR § 21.1(b)(3) do not normally receive FAA Form 8130-3 from a production approval holder (PAH). The same is true for so-called COTS parts, which are not included in the § 21.1(b)(3) definition. This causes problems for manufacturers, distributors and maintenance providers.

Industry representatives raised the issue with the agency in a Feb. 7 letter to the heads of both the Aircraft Certification and Flight Standards Services. In that original request as well as an April follow up, signatories urged the American regulators to sort out the issue with their European counterparts. Absent such action, the group submitted its draft notice based on subsequent discussion with the FAA.

Similar to Notice 8900.380 (which was recently extended by Notice 8900.429, see “Critical Alternative” below), the draft notice on commercial and COTS parts would allow U.S. repair stations to perform a part 43 inspection and issue Form 8130-3 with a right-side signature for new commercial and COTS parts received without an Authorized Release Document (ARD). However, instead of establishing traceability to a PAH (as required by Notice 8900.429), the repair station would be required to establish traceability to an approved design and suitability for installation. This would only apply to commercial and COTS parts.

To read the full submission, which includes the draft notice and the Feb. 7 and April 18 industry letters, click here.

In addition to ARSA, the submission was supported by:

Aerospace Industries Association
Aircraft Electronics Association
Airlines for America
Aviation Suppliers Association
Cargo Airline Association
General Aviation Manufacturers Association
Helicopter Association International
National Air Carrier Association
National Air Transportation Association
The Boeing Company
Gulfstream Aerospace Corporation
MOOG Aircraft Group

ARSA Joins Effort to Extend ‘Critical Alternative’ to MAG Mess

On Aug. 2, ARSA joined 12 other industry groups on a petition to the FAA seeking extension or reissue of FAA Notice 8900.380. The agency almost immediately took action on the request by releasing Notice 8900.429.

The original notice, which became effective in August 2016, addressed a key issue involving Change 6 to the FAA-EASA Maintenance Annex Guidance (MAG Change 6). It confirmed that a repair station may inspect and approve for return to service any new part within its ratings that does not meet the MAG Change 6 documentation provisions. (ARSA then released its Form E100 to provide an acceptable method of compliance for inspecting said parts.)

The notice was scheduled to be cancelled on Aug. 26 since the agency planned to incorporate this guidance into MAG Change 7, which has not been issued and appears unlikely in the immediate future. The group’s petition requested an extension to prevent costly interruptions in the business of repair stations performing work under the MAG, noting that the notice provides a “critical alternative path to compliance.”

To read the full petition, click here.

To access FAA Notice 8900.429, click here.

In addition to ARSA, the petition was signed by:

Aerospace Industries Association
Airlines for America
Aviation Suppliers Association
Cargo Airline Association
General Aviation Manufacturers Association
Helicopter Association International
Modification and Replacement Parts Association
National Air Carrier Association
National Air Transportation Association
The Boeing Company
Gulfstream Aerospace Corporation
MOOG Aircraft Group

FAA Extends DAR-F Program

As it did with Notice 8900.380 (see Notice 8900.429 above, which extends a repair station’s authority to inspect and issue Form 8130-3 with a right-side signature for new articles received without required documentation), the FAA has extended Policy Memorandum (PM) AIR-100-16-160-PM13, which authorized a new class of temporary Designated Airworthiness Representatives (DAR) for Manufacturing (DAR-F).

Both the notices and PMs are important safety valves for industry in light of the mandatory parts’ documentation requirements of the FAA-EASA Maintenance Annex Guidance, Change 6. The original PM, issued on Oct. 14, 2016, authorizes those holding DAR-F designations to issue Form 8130-3 at an accredited distributor’s (see AC 00-56) location for parts that were in its inventory prior to Nov. 1, 2016. Although the PM was scheduled to expire on Sept. 30, 2017, it will now be valid through Sept. 30, 2018 unless the FAA determines it should be cancelled sooner.

To access the PM, click here.

Final Documents/Your Two Cents

This list includes Federal Register publications, such as final rules, Advisory Circulars and policy statements, as well as proposed rules and policies of interest to ARSA members.

To view the list, click here.

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Legal Briefs

Editor’s note: This material is provided as a service to association members for educational and informational purposes only. It does not constitute legal or professional advice and is not privileged or confidential.

Importing Aircraft Parts into the United States Duty-Free

By Christian A. Klein, Executive Vice President

Under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft (“the Civil Aircraft Agreement” or “CAA”), many civil aviation products and parts are exempt from import duties. Unfortunately, inconsistent application of Customs rules has resulted in the opposite effect.

In addition to having to pay duties, maintenance providers have devoted considerable resources for navigating Customs rules and dealing with conflicting views from exporters, importers and government agents. One major question has been whether the imported part must be airworthy to qualify for duty-free treatment. 

(I) The Global Perspective

The CAA is part of the Tokyo Round of international trade negotiations; it entered into force on Jan. 1, 1980. The signatory countries (including the United States) agreed to eliminate customs duties on articles used in civil aircraft and aircraft manufacture, repair, maintenance, rebuilding, modification or conversion. The agreement also eliminated duties on civil aircraft maintenance activities.

As a “plurilateral” agreement, the CAA is binding only on the World Trade Organization (WTO) members that have signed it. The CAA does not create obligations or rights for WTO members that are not signatories. Fortunately, the United States allows duty-free entry of CAA-covered products and articles regardless of country of origin. So, for example, U.S. imports of Embraer aircraft or parts may be claimed duty-free under the CAA even though Brazil is not a signatory (and is not bound by the CAA to provide duty-free entry into Brazil of U.S. aircraft and aircraft parts).

The CAA covers only civil aviation products and articles. The term “civil aircraft” is defined in the agreement by negation, that is, to mean all aircraft other than military aircraft. In practical terms, aircraft operated by armed forces and national police forces are not covered by the agreement.

The CAA’s Annex provides a detailed list of the products and articles exempt from duties under the agreement. The annex specifies 248 items at the six-digit Harmonized System (HS) level. With the exception of a handful (such as helicopters and “ignition wiring sets and other wiring sets of a kind used in aircraft”), most of the listings on the CAA product coverage list are not aviation specific, e.g., pumps, oil filters, tires, generators, tubing, gaskets, hinges, etc. That fact has important implications for how exporters and importers must satisfy Customs Service entry requirements.

(II) S. Implementation of the CAA

The Harmonized Tariff Schedule of the United States (HTSUS) is maintained by the U.S. International Trade Commission (ITC). It is the primary resource for determining the proper tariff (customs duty) classification for imported goods. General Note 6 of the HTSUS prescribes what must be done to enter products duty-free under the CAA; it defines the term “civil aircraft” for purposes of the tariff schedule.

Chapter 88 deals with aircraft and aircraft parts, which fall under heading 8803. The general code for rotors, propellers and related items is 8803.10.00; the general code for undercarriages and related articles is 8803.20.00; the general code for other civil aviation articles is 8803.30.00. Civil aviation items may also be in other HTSUS chapters; according to the notes for HTSUS, articles exempt from duty under the CAA will have a “C” in the “Special” sub-column of the “Rates of Duty” column. ITC provides statistical data for imports in all the various civil aviation related categories. For more information, click here.

(III) What Qualifies for Duty-Free Treatment?

The primary section under Title 19 of the Code of Federal Regulations applicable to the importation of civil aircraft and related articles is 19 CFR § 10.183 (“Duty-free entry of civil aircraft, aircraft engines, ground flight simulators, parts, components, and subassemblies”).It explains, among other things, what qualifies for the exemption, how to claim duty-free treatment, and the required certifications and documentation that must be maintained.

The rule applies to aircraft, aircraft engines, and ground flight simulators, including related parts, components, and subassemblies, that qualify as civil aircraft under General Note 6(b) of the HTSUS. To qualify for duty-free treatment the item must be used as original or replacement equipment in the design, development, testing, evaluation, manufacture, repair, maintenance, rebuilding, modification or conversion of aircraft. The article must also be:

(1) Manufactured or operated pursuant to a certificate issued by the FAA under 49 U.S.C. 44704 or pursuant to the approval of the airworthiness authority in the country of exportation if that approval is recognized by the FAA as an acceptable substitute for the FAA certificate; or
(2) Covered by an application for such a certificate, submitted to and accepted by the FAA, filed by an existing type and production certificate holder pursuant to 49 U.S.C. 44702 and FAA regulations; or
(3) Covered by an application for such approval or certificate which will be submitted in the future by an existing type and production certificate holder, pending the completion of design or other technical requirements stipulated by the FAA (applicable only to the quantities of parts, components, and subassemblies as are required to meet the stipulation).

(IV) Does It Matter Whether the Imported Article is Airworthy?

There is no requirement in the regulation or HTSUS that the part be airworthy and Customs rulings support that position.

For example, in HQ 116505 (Sept. 21, 2005), Customs examined the tariff exemption for parts removed from a foreign aircraft sent to the United States for repair. The government concluded: “if the parts at issue are either FAA certified or approved for use on a civil aircraft and are imported for repair to be used in the same manner, then the importation of the parts would qualify for duty-free entry under the Civil Aircraft Agreement.” The Service ultimately held that, “[a] civil aircraft part, removed from a foreign aircraft…and imported for repair, is eligible for duty-free treatment under the Civil Aircraft Agreement if the part is either FAA certified or approved for use on a civil aircraft and will be used in the same manner subsequent to repair.”

In another case (HQ 224266 (March 3, 1993)), Customs found that aircraft parts imported for repair from Mexico were not exempt under the Air Transport Agreement between that country and the United States. However, Customs said that the subject parts could enter the United States duty-free under the CAA, HTSUS and related regulations which, “allow for the free of duty importation of civil aircraft parts, whether broken or unbroken, if they are certified by the importer for use in civil aircraft.”

(V) Documentation and Paperwork Issues

19 C.F.R. § 10.183 provides details on how to claim, certify, and document duty-free admissions under the CAA. Section 10.183(c) directs the importer to make a claim by identifying the item as qualifying merchandise based upon its status as an article for which the duty rate of “Free (C)” appears on the HTSUS and placing the special indicator “C” on the entry summary or Customs & Border Protection (CBP) Form 7501.

Under § 10.183(d) the importer is then deemed to have certified that the merchandise does in fact qualify under paragraphs (a) or (b) of the regulation. It is vital that the importer have a sound basis for making that certification. Customs ruled in HQ223604 (May 28, 1992) that an importer must be able to certify in good faith that: “the imported article has been imported for use in civil aircraft; it will be so used; and, the article has been approved for such use by the [FAA] or an airworthiness authority in the country of exportation, if such approval is recognized by the FAA as an acceptable substitute for FAA certification.”

Sec. 10.183(e) deals with documentation. It requires that each entry summary (CBP Form 7501) be supported by documentation that verifies the claim of duty-free admission. Documentation includes the written order or contract and other evidence that the merchandise qualifies under HTSUS General Note 6. According to the regulation, other documentation that serves as evidence that the merchandise qualifies includes, as appropriate:

• an FAA certification;
• an application for a certification submitted to and accepted by the FAA;
• a type and production certificate issued by the FAA;
• Evidence that a type and production certificate holder will submit an application for certification or approval in the future pending the completion of design or other technical requirements stipulated by the FAA and of estimates of quantities of parts, components, and subassemblies as are required to meet design and technical requirements stipulated by the FAA.

The list was not created by someone familiar with civil aviation safety regulations and is not exhaustive. Generally speaking, the goal of the documentation requirements is to provide evidence that the parts qualify under § 10.183(a).

The documentation does not need to be filed along with the entry summary, but it must be maintained in accordance with the HTSUS and Customs recordkeeping requirements (found at 19 C.F.R. part 163). Customs may request the documents at any time and failure to produce sufficient records will result in the denial of duty-free treatment.

Finally, § 10.183(f) allows an importer to file a claim for duty-free treatment after filing an entry that made no such claim. In other words, if you determine after the fact that you are not required to pay a duty on an imported article, you can file for the exemption and receive a refund of a tariff previously paid. However, the time for doing so is not unlimited. According to the regulation, to do so, you should file a written statement with Customs any time prior to liquidation of the entry or prior to the liquidation becoming final. Liquidation, defined at 19 C.F.R. § 159.1, effectively means the final acceptance by Customs of the duty calculation.

Recognizing the costs associated with inconsistent application of the rules, ARSA is developing guidance to help members navigate this area. Keep checking www.arsa.org/regulatory/customs for more information.

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ARSA on the Hill

FAA Reauth is Just One Must-Do Item on Congress’ Long List

By Christian A. Klein, Executive Vice President

Whatever you found waiting for you when you got back to the office from vacation pales in comparison to what’s on Congress’ September to-do list. Lawmakers returning to Washington, D.C. on Sept. 5 after a month-long August recess face a daunting array of issues, many “must do” and each its own political maelstrom.

FAA Reauthorization

ARSA’s top priority at the moment is reauthorizing the FAA. Both the House Transportation & Infrastructure and Senate Commerce, Science & Transportation Committees have passed multi-year FAA budget blueprints with important aviation policy changes. However, neither chamber of Congress has voted on an FAA bill.

The hold-up in the House is language privatizing air traffic control (ATC). Doing so is a priority for T&I Chairman Bill Shuster (R-Penn.) and the airlines, but the general and business aviation communities are balking. The Senate bill doesn’t deal with ATC privatization, but contains a controversial provision opposed by families of the Colgan crash victims and Senate Minority Leader Chuck Schumer (D-N.Y.) that would provide more flexibility for pilot training.

FAA reauthorization is a priority for ARSA not only because we want to restore long-term certainty to FAA’s budget, but also because the bill contains a number of important policy provisions and several amendments proposed by ARSA aimed at reducing regulatory burdens for repair stations and improving the availability of technicians. The status of each key amendment is tracked in our “box score”:

FAA Bill Maintenance Amendments Box Score

With the current one-year FAA authorization set to expire on Sept. 30, you’d think reauthorizing the agency would be a focus for Congress. Unfortunately, the FAA is just one of many issues lawmakers will be dealing with in September and it’s likely that there will be at least one more short-term extension.

What are those other issues?

FY 2018 Appropriations

First on the list of other priorities is simply keeping the federal government’s doors open and lights on. The federal fiscal year ends on Sept. 30. In theory, every year Congress is supposed to send the president 12 individual appropriations bills for the next fiscal year, each of which provides money for government activities in specific areas (transportation, defense, etc.). Although it’s a been a long time since Congress has actually gotten all 12 bills done (omnibus continuing resolutions have become the norm in recent years), even by the standards of the modern Congress, lawmakers are well behind. To date, the House has passed just one appropriations bill; the Senate has passed none.

The uncertainty has real-world consequences. For ARSA members, a government shut-down would halt many of the FAA’s “non-essential” operations, leading to approval delays and general chaos for our heavily-regulated sector.

It’s hard to imagine that Republicans would let the government shut down, given that they control Congress and the White House and would take all the blame. However, at a recent political rally President Trump threatened to do just that if Congress didn’t provide funding for a border wall. Political rhetoric aside, the most likely scenario is another series of short-term continuing resolutions to provide money for months, weeks, or days at a time as negotiations continue for a long-term CR covering all FY 2018.

Raising the Debt Ceiling

Then there’s the issue of the debt ceiling. According to the Congressional Budget Office, the Federal government may run out of money and start missing payments as early as October if Congress doesn’t increase the government’s borrowing authority. Treasury Secretary Steven Mnuchin has called on Congress to do so by Sept. 27. In an effort to allay concerns, Senate Majority Leader Mitch McConnell (R-Ky.) said this summer that there’s a “zero percent” chance that Congress won’t raise the debt ceiling, but until Congress sends the bill to the president’s desk and Trump signs it, uncertainty will loom about whether or not the U.S. government will be able to meet its fiscal obligations.

Hurricane Harvey Relief

Those two housekeeping issues alone would be enough to absorb all of Congress’ bandwidth for the next month, but the devastation wrought by Hurricane Harvey has added a whole new level of urgency and complexity. Although the federal government already has many programs in place to provide assistance to victims of natural disasters, given the scale of damage from the recent storm, it’s likely Congress will create a special multi-billion-dollar package of measures to help Texas recover, as it did for the northeast after Superstorm Sandy. But given that the federal government is already low on cash, it’s likely the debt ceiling will need to be raised first. In fact, it’s likely the desire to quickly help victims of Harvey will be a catalyst to faster action on the debt ceiling bill.

Tax Reform

After the failure of efforts to repeal/replace/fix Obamacare, the Trump administration is anxious to chalk up a win and mindful of the need to fulfil campaign promises. With that in mind, tax reform is at the top of the administration’s agenda.

In a statement issued last month, the “Big Six” tax negotiators (McConnell, Mnuchin, House Speaker Paul Ryan (R-Wis.), National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Kevin Brady (R-Texas)) said their goal was to enact a bill that “reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence and creates a system that encourages American companies to bring back jobs and profits trapped overseas.” In that same statement, they indicated they had abandoned the much-maligned idea of transitioning to a new border adjustment tax system that would have effectively posed a 20 percent tax on imports.

A lingering question is how aggressive tax “reform” will actually be. Ryan and other congressional leaders have long talked in terms of comprehensive, structural changes to dramatically simplify the code. However, given the press of other business and limited time left to legislated in 2017, it looks more and more likely that this year’s “reform” may just wind up being a package of tax cuts.

What About Infrastructure?

As with tax reform, we’ve heard a lot of talk about infrastructure in recent weeks but have seen little detail from the administration. The major theme being sounded by White House officials is using federal money to attract more private investment. There’s a possibility that tax and infrastructure legislation could move together in an effort to attract support from infrastructure-friendly Democrats.

And What About All the Other Stuff?

Aside from all the foregoing, there are other hot issues on congressional agenda. For example, improving career technical education is still a high priority and an important opportunity. The House unanimously passed a workforce development bill earlier this year, but the Senate hasn’t done anything with it.

It’s going to be a busy fall for everyone in Washington, D.C. Stay tuned as ARSA continues to navigate the halls of power on the industry’s behalf. To get involved in ARSA’s legislative efforts contact me at christian.klein@arsa.org.

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Quality Time

Editor’s note: The views and opinions expressed by contributing authors do not necessarily state or reflect those of ARSA and shall not be used for endorsement purposes.

LTL vs. Truckload Freight. What’s the Difference?

Click to learn more about the ARSA Shipping Program.

ARSA members may utilize the ARSA Shipping Program to save on standard and guaranteed less-than-truckload shipping. In addition to managing the program, the association’s support team from PartnerShip provide shipping-related guidance and insight for the repair station community. After reading this month’s piece, get more information at PartnerShip.com/ARSA or call 800-599-2902.

Less-than-truckload (LTL) and truckload freight shipping may appear to be similar but they are two very different shipping services. Many shippers exclusively use one or the other, but they can be used together. To help you ship smarter, here are the four main differences between LTL and truckload shipping.

Transit Time and Handling

LTL: LTL shipping combines shipments from multiple customers so your freight isn’t the only freight on the truck; it shares space (and cost) with other company’s freight and will make multiple stops at terminals between the shipper and consignee. For example, the freight you are shipping from Cleveland to Houston may make stops in Indianapolis, Nashville and Dallas before reaching its final destination. At each stop, your freight is unloaded and reloaded and must wait for the next truck, increasing transit time and handling as well as the possibility of damage.

Truckload: When you ship full truckload, your freight is the only thing on the truck. The carrier will make a pickup at the origin and drive straight to the destination. Aside from driver rest breaks, fuel and equipment issues, the truck doesn’t stop, resulting in much faster transit times. In addition, your freight never leaves the truck, resulting in much less handling and fewer opportunities to be damaged.

Weight and Shipment Size

LTL: Less-than-truckload shipments are typically between one and six pallets and weigh from 200 to 5,000 pounds. LTL freight usually takes up less than 12 linear feet of the trailer, and since the typical pallet measures 40” x 48”, 6 pallets arranged side-by-side would take up exactly 12 feet of linear space on each side of the trailer.

Truckload: A full truckload shipment can range from 24 to 30 pallets and up. With truckload freight, the space your shipment takes up in the trailer has more of an impact than weight, so truckload shipments commonly range from 5,000 pounds to 45,000 pounds and up.

Pricing

LTL: The most significant difference between LTL and truckload shipping is pricing. LTL freight pricing is regulated by the National Motor Freight Traffic Association (NMFTA) which is a nonprofit membership organization made up primarily of interstate motor carriers. It classifies all freight based on its commodity, density and ease of transport. LTL carriers each have standard LTL rates which are determined by your origin and destination, your freight’s NMFC class, the amount of space it occupies on the truck, and any accessorials you require. All of these variables are factored into the LTL rate you pay.

Truckload: Truckload freight pricing is completely dependent upon the market. With no pre-established rates, truckload freight negotiations happen as needed over the phone or through email. Truckload rates fluctuate, sometimes by the week, day or even by the hour. Factors that drive pricing include the origin and destination, weight of the shipment, seasons (such as harvest season or even back-to-school season), truck capacity and location, the shipping lane or route, and fuel and operating costs. Typically, there are no contracts with truckload carriers, which can vary from an owner/operator with one truck to huge truckload shipping companies with thousands of trucks in their fleet. 

Reefer availability

LTL: Refrigerated LTL shipments are a bit more difficult to find and secure than dry van LTL shipments. Most reefer LTL carriers have schedules that are determined by lanes and temperatures. As an example, an LTL reefer carrier might pick up in southern California on Wednesday and may run at 45 degrees with a set delivery route and schedule. This can make finding an available reefer LTL carrier difficult, especially for one-off shipments or on short notice. 

Truckload: Reefer trailers are common and readily available. Reefer trailers can range from below zero to seventy degrees, and since only your freight is on the trailer, the shipment can move on whatever schedule and temperature you need it to. Aside from the temperature control and being a bit more expensive, refrigerated truckload shipments aren’t much different from dry truckload shipments.

Shipping smart can make a big difference to an organization’s bottom line, and it begins with understanding how various shipping systems work. In order to learn more about various shipping options, visit PartnerShip.com/ARSA or call 800-599-2902.

To see more content from PartnerShip, visit blog.partnership.com.

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Training

Defining “Safety Sensitive” for D&A Testing

Marshall S. Filler returns for another installment of his popular series on drug & alcohol testing requirements. Follow Filler through his exploration of “safety sensitive functions” and learn how to properly define who is “performing” them. In Filler’s words, remember: This is not a logic exercise…it’s a regulatory exercise.”

D&A Testing – Safety Sensitive Functions
This session covers “performance” of “safety-sensitive functions” in a repair station that is subject to 14 CFR part 120, Drug and Alcohol Testing Program. It focuses on the regulatory definitions of those activities and how they should be integrated into the repair station’s quality system and business practices. It also provides guidance on when tested employees should be removed or remain in the random testing pool.

Click here to register and get access for 90 days.

Interested in all five D&A sessions (you can see the rest below)? Click here to purchase them together and save.

The Rest of the Series...

Registration for an ARSA-provided training session includes:

• Unlimited access for 90 days to the recording.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A certificate upon completion of the class, as well as any test material.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

The Mechanic’s Bible – Part 43

This session provides an overview of 14 CFR part 43, Maintenance, Preventive Maintenance, Rebuilding and Alteration. It places the work performed on U.S. civil aircraft in the context of the “aviation safety regulatory chain,” explains general definitions and requirements and reviews the standards that impact these activities.

Instructor: Sarah MacLeod

Click here to register and get access for 90 days.

Other Sessions on Part 43

Registration for an ARSA-provided training session includes:

• Unlimited access for 90 days to the recording.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A certificate upon completion of the class, as well as any test material.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

Part 65 Mechanic Certificates

This session reviews the requirements of 14 CFR part 65 subpart D, which concerns aviation mechanics. It walks through the requirements for an individual to apply for a mechanic’s certificate, then defines the privileges and limitations bestowed on that individual by his or her certificate. Finally, it covers the enhancements to a mechanic’s privileges produced by obtaining Inspection Authorization.

Instructor: Sarah MacLeod

Click here to register and get access for 90 days.

Other Sessions on Part 65

Registration for an ARSA-provided training session includes:

• Unlimited access for 90 days to the recording.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A certificate upon completion of the class, as well as any test material.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

From the FAA – Soothe Your Stress

The FAA’s “Maintenance Hangar” on faasafety.gov contains information and resources the agency has produced or compiled to support safety in maintenance operations. The “toolbox” section includes alerts, guidance, tips, training information, posters and handout materials. Members of the maintenance community working on U.S.-registered aircraft should become familiar with these resources; at the very least they help highlight the areas considered most important by the agency.

To provide a taste of the content available in the “maintenance hangar,” this edition of the hotline is taking a look at the agency’s poster on coping with stress. In the high-pressure world of aircraft maintenance, perspective is key:

Click the image to access the poster.

The “Maintenance Hanger” can be found at: www.faasafety.gov/content/TabLanding.aspx?tab=mechanics. 

Regulatory Compliance Training

By ARSA Training and Regulatory Teams

Test your knowledge of 14 CFR § 65.11 – Application and issue of part 65 certificates.

Click here to download the training sheet.

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Membership

Help the Texas Repair Station Community

On Aug. 29, ARSA Executive Director Sarah MacLeod sent the following message to all of the association’s member contacts:

The storm isn’t even over as I’m writing this, but the devastation of Hurricane Harvey seems beyond imagination. Emergency service agencies are overwhelmed by distress calls and private citizens have begun taking action to help their fellow Texans.

For the repair station community, the situation along the Gulf Coast is serious. Aviation businesses will face technical and economic obstacles as they try to recover and get back to work.

Most of us can’t float down the floodwaters to rescue stranded neighbors, but we can help. ARSA is calling on its members – no matter where they are located – to reach out to repair stations affected by the storm. Below is a list taken from the FAA Repair Station Directory of companies in Texas with coastal area codes. Review the names, in addition to any other Texas-based organizations you may know personally, and look for suppliers, competitors or partners. Find those performing similar work or supporting the same portion of the industry as you. Determine which might benefit from a simple check-in call and then pick up the phone. Remember that we’re all in this together and must support each other in a trying time.

As you do this, keep ARSA in the loop and ask us first if you find regulatory issues or need help dealing with the government. Also, let us know if the association should support any specific policy from Washington as lawmakers consider relief options.

Every day, ARSA reminds the world that it can’t fly without your work…today we remember that we can’t fly without each other.

Your Servant,
Sarah

Sarah MacLeod
Executive Director
Aeronautical Repair Station Association
sarah.macleod@arsa.org

 Coastal Texas Repair Stations

*The links below will take you to the company’s page on the FAA Repair Station Directory, which contains location and contact information.

Quick Question Answered: Technician Workforce by Certification

Certification requirements are a key part of technical workforce development issues. As ARSA works to help close the skills gap and get aircraft technicians/mechanics/engineers to work, it asked the repair station community for insights into the certifications held in their shops.

ARSA asked and 28 respondents – representing employment of more than 1,000 technicians – answered:

The numbers vary depending on the organization, its work and customers. In general, the “typical” repair station has roughly as many non-certificated technicians as it does part 65-certificated mechanics. There were three responding organizations who employed only individuals with mechanic’s certificates, each commenting that their technician makeup supports work for part 121 or part 135 operators.

While repairmen make up a small portion of the overall workforce, they are particularly important for smaller facilities. These shops typically perform specialized work that is limited in scope, and the use of repairmen provides them with the flexibility to comply with personnel requirements in an economic manner. There were seven respondents who indicated they had more repairmen than mechanics.

Click the image to enlarge, then download.

If you have questions or want to provide additional information, contact Brett Levanto (brett.levanto@arsa.org). 

Click here to see what questions have been asked and answered…and keep a lookout for more.

Quick Question: Independent Processes

When ARSA convenes its 2017 Strategic Leadership Conference, Marshall S. Filler will lead a panel on the “Importance of Independence”:

Panelists will focus on the importance of manufacturers and repair stations that are independent of type and production certificate holders. Discussion will revolve around supporting development of independent manufacturing and repair sources in the international regulatory arena and protecting intellectual property rights.

Al Givray, Partner, Davis Graham & Stubbs & General Counsel, The Nordam Group
Mark Swearingen, Vice President of Technical Operations, Atlas Air
Eric Mendelson, Co-President, HEICO
Marshall Filler, Managing Director and General Counsel, ARSA (moderator)

If you’d like to be there for the discussion, go to the event page to register. In the meantime, help the association prepare for that discussion by providing some insight into your own “independence”:

Note: Complete the survey directly on this page. You may have to scroll down in the embedded window in order to click the “Done” button.

If you have questions or want to provide additional information, contact Brett Levanto (brett.levanto@arsa.org). 

Click here to see what questions have been asked and answered…and keep a lookout for more.

A Member Asked…

Q: I read with interest the amicus brief the association filed in U.S. v. Wygandt (see Being Held “Accountable” in the July hotline). However, I believe a sentence in that document contradicts what Sarah MacLeod has been telling us for years. The sentence states, “Importantly, however, and consistent with the regulatory obligations of an accountable manager, Mr. Weygandt relied on annual surveillance audits conducted by the FAA and numerous external audits from the certificate holder’s customers to ensure that WECO was complying with aviation regulations.”  ARSA has always maintained that we should never rely on the FAA or outside auditors to insure our regulatory compliance. Has ARSA changed its position?

A: First, thank you for being such a careful reader.

To answer your question: No, ARSA has not changed its position with respect to REGULATORY compliance—the certificate holder is always responsible for establishing and maintaining compliance with the regulations when questioned by the REGULATORY agency. However, the amicus was filed in a CRIMINAL matter; in that case unless the individual had or has ACTUAL knowledge of a non-compliance, we do not believe that the government should be allowed to hold her or him criminally liable. Additionally, the case seemed to involved an automatic belief that the title of “accountable manager” made the individual responsible for acts of others, a position that was specifically rejected by the aviation safety agency during its rulemaking process.

So, no, as technicians, quality managers, auditors and other individuals that are faced with regulatory compliance issues on a hour-by-hour basis, reliance on the government or any other company or individual is a bad idea. ARSA believes and will continue to preach prophylactic measures to ensure and assure compliance. That is reading the actual rule and guidance material and apply them to the facts you are facing instead of relying on another person’s opinion or belief. However, once you get in trouble, use every arrow in your quiver to avoid overzealous enforcement!

Have a question for ARSA? Click here to let us hear it.

Make ARSA’s Voice Your Own: Advertise

ARSA has a menu of advertising opportunities for arsa.org, the hotline and the ARSA Dispatch.

Take advantage of these great opportunities today to showcase your company, a new product or event. For more information go to arsa.org/advertise.

Stand Up for ARSA by Sponsoring in 2017

In order to provide world-class resources for its members, the association depends on the commitment of the aviation community. By sponsoring events and activities, supporters can help ARSA’s work on behalf of repair stations to endure.

Need a place to start? For information about opportunities, including sponsorship of the Strategic Leadership Conference in October (click here for info), contact Vice President of Communications Brett Levanto (brett.levanto@arsa.org).

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Resources

ARSA strives to provide resources to educate the general public about the work of the association’s member organizations; should you need to provide a quick reference or introductory overview to the global MRO industry, please utilize AVMRO.ARSA.org.

AVMRO Industry Roundup

ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations play globally by providing jobs and economic opportunities and in civic engagement. These are some of this month’s top stories highlighting the industry’s contributions.

You can explore these stories through ARSA’s Dispatch news portal.

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Industry Calendar

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