The backroom whispers have always been there,
even as legendary Tony Calabrese founded Cargo Network Services (CNS)
thirty years ago as a landmark U.S. organization with the mission to create
a middle ground between airlines and forwarders and shelter the partnership
from anti-trust legislation in the U.S.
“IATA doesn’t really like CNS.”
Well, what goes around comes around in 2021,
as the industry learned Thursday that Cargo Network Services (CNS) financial
roadmap to tomorrow took an unexpected detour as new management at CNS
dusted out PayCargo in a slash and cut job just days after a web-based
CNS Advisory Board meeting made no recorded mention to that assemblage
that the impending action was anticipated.
In other words, IATA fired PayCargo without
consulting the CNS Advisory Board, which apparently was given notice of
the action after the fact.
Catch Me If You Can
In the last few weeks, we have seen IATA,
the parent company of Cargo Network Services Corporation (CNS), take over
the organization completely.
With the departure of the last three employees
of CNS at the end of 2020, there has not been one employee of this shell
company added to the roster.
Top CNS Boss Now A Part Time Job
Recently it was announced that the CNS President
job would be held by the Geneva, Switzerland-based Frederic Leger.
It was announced as well that the bottomline
on the Leger is that he will also serve as acting SVP of Commercial for
IATA, reporting to Director General Willie Walsh. It seems that the CNS
President’s role, which for the past 30 years has been a position
of respect and honor in air cargo leadership has been downgraded by IATA
into a part-time job.
Outsourcing The Old CASS System
We learned the CNS antiquated CASS settlement
operation has now been outsourced to IATA.
The CNS CASS operations is handled by the
IATA financial offices in their shining tower in Madrid, Spain.
Only one junior IATA person in Miami seems
to oversee the daily operation.
Whose Got Your Number?
To contact CNS is not easy. The phone numbers
forward you to a recorded number that operates only for minimal hours
during the week. Forget trying to reach anyone in the U.S., if you are
lucky to talk to someone, they are usually on the other side of the Atlantic.
Has CNS Shot Itself Through The
Frederic Leger was the point man for issuance
of the letter this week to all the CNS CASS customers advising them that
CNS had decided to terminate the deal with PayCargo, which has been in
place for over 3 years. PayCargo had worked closely with previous management
of CNS and for the most of those three years Michael White as President
of CNS helped to promote PayCargo, which benefitted both airlines and
forwarders alike, reducing acceptance time, improving accounting processes
and expediting money transfer much faster than before.
Break With The Past
The IATA action thwarts efforts by previous
CNS Boards and management to offer some choice for cargo customers other
than the aforementioned outdated, limited CASS settlement system.
No doubt as you read this, many people in
transportation have been left scratching their heads.
One can only wonder what if anything, did
Willie Walsh, the new IATA DG know about this action?
One thing is very clear.
PayCargo offered choice and a window to
forwarders and other industry stakeholders to access a truly neutral convenient,
reliable excellent way to pay.
For their part, while certainly taken aback
by all of this, PayCargo took the high road:
“PayCargo is a strong supporter of
IATA and its important role in the air cargo industry.
“We are the main sponsor of the upcoming
IATA Digital Cargo Conference and Hackathon, where we will be actively
participating in the OneRecord payment focused track and will also serve
as a member on the Hackathon judging panel,” the company said in
“Lionel van der Walt, Global Chief
Commercial Officer, PayCargo, will also be a keynote speaker at the event.”
CNS 2021 Is Mini Me
As you read this story, CNS’ executive
board has been reduced to two IATA staff.
IATA SVP Nick Careen is now the new chairman
of the board and Alicia Lines who oversees finance for IATA’s Americas
region is the only other board member.
Leger who is from France and resides in
IATA’s Geneva Executive office, as mentioned, is part-timing as
These moves send a clear message that IATA
views CNS to really be a European-based company, and no longer needs managing
by any CNS-employed staff in the U.S.
What Might U.S. DOJ Think?
Some may wonder if the U.S. Department of
Justice might question if CNS is still a U.S. corporation, or if it is
just being used as a shell company by IATA to bypass regulations.
CNS was originally established as a result
of U.S. airline deregulation in the 80’s and anti-trust concerns.
You’ve Got Mail
As mentioned above we learned that the notification
of the PayCargo agreement termination came in an e-mail from Frederic
Many were surprised by Leger’s actions.
In his letter he advised that a new CASS system will be ready in the second
quarter of 2022.
Will this be too little too late?
Will it be a full upgrade of the system
or just a new user interface with little to no functionality improvement?
The CNS CASS system moved over to the IATA
system a few years ago and IATA got rid of the highly touted customer
service team of CNS employees and incorporated it into the overall IATA
The White Paper
Many were concerned at that time, but it
seemed to work quite well under the watchful eye of Michael White and
his small team in Miami.
White, during his term, also worked hard
representing the airline interest of air cargo with many of the government
officials in Washington, D.C.
Since Mike White’s departure, it seems
there is no one representing the IATA member airlines in the corridors
of the U.S. Government.
It is difficult to understand the rationale
of appointing someone as CNS President who is not acclimated to the U.S.
market and its needs.
What kind of message does this send to top
air cargo executives?
Here Are Some Questions
With the CNS conference coming up in August,
will this be the time when IATA presents the U.S. market with a preview
of their new One Record 2022 plan?
Is someone considering PayCargo to become
an alternative to IATA finance, starting from the ashes of a CNS kept
on life support by the U.S. industry?
Was the PayCargo agreement with FIATA the
ignition point for a much faster repositioning on the air cargo moneys?
How will CNS exist in future, perhaps by
spearheading the decisions taken in Cornwall by the G7 regarding the new
Has IATA a real interest in air cargo in
the U.S. or do they think of it an alternative monopoly, disconnected
form airlines in the long run?
Has IATA lost its way or is it coming to
the fruition point of plans that have been in the making for a very long
Is IATA shooting itself in the foot with
regard to the dimension of the U.S. market?
Right now as June 2021 marches on there
are a lot of people wondering whether IATA really cares about cargo in
the U.S. anymore, or whether the U.S. cargo market has become a smaller
part of their empire, no longer so important.
That IATA has hubris is an open question,
but in our view their strategy is quite clear, and apparently winning.