You all know about the shots and bombshells
being fired in the Middle East; this is about a shot across the bows
of a different nature. At the FIATA HQ Session 2011 meeting in Zurich,
Switzerland March 17-20, the forwarders decided the time has come to
formalize their position, which they stated at the March 10-12 held
IATA World Cargo Symposium in Istanbul.
The press release dated March 19, 2011 echoes
what has been communicated to IATA, namely that the forwarders want
a voice and equal footing to reflect the evolution the business has
undergone since the Agency program was developed some 50 years ago.
It says on the document that in 80 percent of the shipments forwarders
act as principals “and less than 20 percent as Agent.“ In
other words, they are—and expect to be—treated as customers
by the airlines.
In earlier reporting, we sketched the
background for these rumblings; the forwarders are not IATA members
and as such cannot vote. The agency agreement and its flagship CASS
(CNS in the U.S.) system is governed by the IATA Cargo Agency Conference
and the result—as the forwarders see it—has been that they
are told how it works, and they are expected to toe the line. Forwarders
have voiced their concerns for some time, in particular about what they
perceive is the rigid application of credit rules under which leading
forwarders with unblemished payment history are still required to provide
bank guarantees.
Rather than having a targeted, case-by-case
approach, all are painted with the same brush. This is perhaps the one
area where some progress might be achieved over time. As a result of
the 2010 FIATA Congress in Bangkok, a joint IATA/AFI working group has
been established to look at financial criteria. The way in which IATA
applies the CASS rules is seen as both restrictive and detrimental to
forwarders. Changing the financial mechanisms by taking out ambiguity
and making the rules more equitable is the initial goal that the group
seeks.
This IATA/AFI group will meet again in
May to consider, review and hopefully adopt proposed changes, which
apparently don’t require Cargo Agency Conference approval. Don’t
light up that cigar just yet!
While this working group has a specific
and limited scope, it is clear the forwarders are committed to pursuing
a total review of how forwarders are treated by CASS in totum.
Prior to the recent IATA Cargo Agency
Conference, the IATA/FIATA Consultative Council put forward a unanimous
recommendation “to amend training accreditation to place FIATA
and IATA on an equal footing.” This
is fairly benign stuff, but it turns out that the recommendation was
ignored and the Conference didn’t adopt any changes. While IATA
seems to signal it is open to change, in practice they did exactly the
opposite. What contributed to raised eyebrows and made matters worse,
was the newest IATA brainchild for IATA certification, specifically
its Air Cargo Professional certification which states:
“The ACP recognizes the demonstrated
competence in cargo customer service and handling for:
•
Cargo Personnel of airlines
•
Cargo Personnel of freight forwarders”
The forwarders have no issue with the
certification of cargo personnel for airlines, but the fact that IATA
announces a certification program for forwarders without any prior consultation
or discussions with FIATA left the latter understandably unhappy.
Picture this: An airline association sets
out to certify another profession—freight forwarders! When IATA
Cargo management was confronted in Istanbul on this topic, our sources
reported that IATA wasn’t aware of this development! It can be
assumed that this may have caused some embarrassment, however this is
how things work at IATA – decisions are made and passed on without
any regard as to whether or how it affects cargo in the big scheme of
things. Get with the program!
Just as an analogy, the forwarders work
in road, ocean and air transport; there are forwarders of various sizes
and composition of each mode of transport, however, they are dealing
with and managing them in equal attention. It’s not that air freight,
which is relatively small – less than 3% of the total cargo volume
worldwide – is given less importance.
At IATA the passenger business reigns
supreme, well, not quite – the money machine comes first. This
cute IATA certification program is yet another way to skin the cat,
or milk the cow or whichever metaphor best conjures up the right image.
These are the facts: an application fee
of $100 per person, a certification fee of $300 and it is renewable
every two years for $250. What a deal! The U.S. Airforwarders Association
has about 3,000 forwarders as members; assuming an average of 20 air
freight “certifiable” professionals per company, that’s
a cool USD$24 million to get started, with another USD$15 million in
renewals every two years. Who wouldn’t want a piece of that action?
Oh, and you get points for IATA courses you attend, for attending an
industry (IATA) event or for “purchasing a relevant publication”.
According to those who are familiar with
the program, the certification criteria seems to be less stringent than
FIATA’s and/or its national associations’ own programs.
FIATA and its member national forwarding associations have developed
a whole host of structured training and certification programs which
are obviously geared to the multimodal nature of their business.
Executives at IATA approved this certification
program. So is this about professionalism in the industry or just another
base, self-serving, ‘rake in the money’ racket from the
non-profit champion?
This unilateral approach from the organization,
which claims to be at the center of the air supply chain is troublesome.
Sadly this seems to be all IATA really is and cares about these days.
This is by no means a reflection on the few cargo professionals who
work there – Des Vertannes and his team – but they have
no say in this.
And if you ask the forwarders who were
in Istanbul, the Cargo Agency Conference barely had a quorum; about
25 airlines participated in its proceedings, a small percentage of the
member airlines.
Apparently enough was enough and FIATA
drew a line in the sand with a deadline of 24 of months to achieve needed
organized change. They don’t want to be regulated by IATA and
believe IATA accreditation for forwarders is no longer required. The
IATA/FIATA training agreement was terminated. The forwarders are marching
on.
Forwarders seek and hope for cooperation
and the pursuit of mutual interest, and they want a voice.
It is difficult to foresee how FIATA and
IATA will cooperate successfully under the GACAG umbrella when the relationship
is as tenuous as it is.
IATA governance is an arcane and complicated
matter handled with hordes of lawyers. Whether the organization can
reform and provide a more inclusive tent, or remain the ossified body
on display, is yet to be determined.
Ted Braun/Flossie |
German
air freight agent leisure Cargo has landed a mega coup by signing
a contract with the world’s largest tour operator, TUI, to manage
the entire air freight business of the enterprise. Hanover-based TUIfly
and its national subsidiaries in the UK, the Benelux countries and
Scandinavia currently operate a fleet of 126 passenger aircraft serving
120 destinations in Europe and on intercontinental routes, mainly
tourist strongholds like the Dominican Republic, Florida, Thailand,
Kenya and Sri Lanka.
Never
at a loss for words, here is Oliver Evans, Chief Cargo Officer at Swiss
World Cargo, in an exclusive one on one, tackling some hot button issues
at play in the air freight industry today.
Paul
Breburda, 38 (left) is now Commercial Manager of the ATC Aviation Services
Group.
RE:
RE:
