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   Vol. 17 No. 13
Monday March 5, 2018

IATA CASS Associate Forwarders Watch

     One thing to look for in Dallas this week is consideration by the Cargo Agency Conference (CAC) of Policy Item P-2 & Voting Item V-2, which is a new Global Model for the CASS Associate Program that could have a monumental impact on thousands of forwarders worldwide.

Background Of CASS

      When the airlines first thought to establish a billing and settlement platform for accredited forwarders (similar to the BSP already operating on the passenger side), they negotiated country by country with the recognized national forwarding association, to set the terms for the CASS implementation.
     Those terms included in part local financial criteria, financial reviews and security guarantees.
     There was also an understanding that the forwarder association would be informed by IATA of any change to how the CASS was administered that may effect the forwarder, and such changes would not be implemented without the association's agreement.

Moving Forward In Another Time

     These were the times when accredited forwarders enjoyed AD75 reduced travel privileges and received commissions on airfreight turnover, and therefore the vast majority of the cargo volumes were handled by accredited forwarders who assumed the responsibility to pay the carrier any monies due.
     Once CASS was implemented, the airlines realized how significantly their billing and settlement costs had been reduced.
     Through IATA they decided to offer the CASS billing and settlement platform to those forwarders/intermediaries, who for whatever reason did not participate in IATA's accreditation program.
     This was the CASS Associate program, which did not require setting any local financial criteria, financial reviews, or guarantees for applicants.
     That because the application was on a bi-lateral basis, requiring an airline to sponsor a forwarder, that sponsorship allowed the forwarder credit from its sponsor, and the billing and settlement process of the CASS. If the forwarder did not pay on time, the sponsoring airline had to take collection action, not the CASS.
     However, once in the program, and once provided with a CASS account number, other airlines desiring to do business with that CASS Associate, did not seek to establish a bi-lateral sponsorship, but simply offered the CASS Associate forwarders air waybill stock, and happily billed non-sponsored CASS Associates through the CASS system.

Fast Forward to 2018

     With less than 7,000 Accredited forwarders, versus over 4,000 CASS Associates, the growth and popularity of the CASS Associate program is evident.
     As their numbers grow, so does IATA's interest in applying stricter financial risk requirements on CASS Associates.
     The IATA CASS Policy Group is recommending adoption in Dallas, of a proposal which will effect all 4000+ CASS Associates, and in some countries could mean the imposition of 100% Industry Guarantee for all CASS Associates at all times, with minimum guarantee amounts generally ranging from US$ 5,000 to US$ 25,000.
     The actual amount of guarantee could be much higher, as it would need to cover up to 70 days, of a CASS Associate's average turnover.
     Also, there remain some significant countries such as China, Korea and Japan, where the minimum amount has yet to be determined, however IATA airlines in those countries have suggested that the minimum guarantee amount be equivalent to USD$ 189,000-USD$ 227,000 and USD$ 442,000 respectively.
     With the Cargo Agency Conference meeting only days away, perhaps the best CASS Associates can hope for is that those IATA member airlines participating in the vote, will take time to reflect on the nature of today's air cargo industry.
     One solution might be to remove this item from the agenda.
     The reality is that this is 2018 when often perception is everything.
     Perhaps IATA might consider that no association should allow its members to meet behind closed doors.
     It is certainly time for change, but we need forward thinking change.
     Being inclusionary needs to be the first rule here, we think.

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend •
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend • Advertising Sales-Judy Miller

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