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   Vol. 17 No. 13
Monday March 5, 2018

Signing the historic IATA FIATA accord at the FIATA World Congress in Dublin on October 7, 2016, from left to right—Jean-Claude Delen, FIATA; Aleks Popovich, IATA; Zhao Huxiang, FIATA and Rodolfo Sagel, FIATA.

     The anticipated cooperative IATA/FIATA Air Cargo Program (IFACP) announced amidst hope and glamour at FIATA’s World Congress in Dublin 2016 has apparently hit some turbulence in its takeoff pilot program in Canada.

What Happened?

     Despite all hope and promise, the pilot program seems stuck in a holding pattern.
     Sometimes the expected and unexpected thwart the best laid plans of mice and men.
     In Canada, IATA and FIATA imagined that a small sample market made up of roughly 250 members of the Canadian International Freight Forwarders Association (CIFFA) would provide some traction to the new partnership, both by being large enough to provide a working template and also small enough to skip the downside push-pull associated with bigger markets elsewhere.
     In mid-September the 100+ IATA Agents in Canada were notified in a joint letter from IATA and CIFFA of the implementation of the IFACP, and the requirement to sign the new IFACP Forwarders Agreement.
     Well, guess what? The pilot implementation actually produced the kind of positive results hoped for, with 80+ forwarders signed up, and more importantly industry feedback! Both IATA and FIATA were impressed with the comments emanating from forwarders, constructive criticism so vital to ensuring the IFACP’s design was ready for global roll out. Forwarders given the opportunity, let it be known that while they had great hope for the new paradigm, some tweaks were needed. Issues were highlighted of a technical nature and a forwarder’s legal working group established to suggest amendments to the program’s Forwarder Agreement and Handbook, all to better reflect the nature of today’s carrier-forwarder relationship.

Ironing Out Issues

     It is now in the hands of the program’s governing board to iron these issues out, and next week the IATA FIATA Governance Board (IFGB) will meet in Dallas to consider the various revisions.
     So stay tuned for upcoming issues, as FlyingTypers tracks whether IFGB has smoothed out the bumps in the runway, to allow the IFACP to take off.

Some Background

     When the groundbreaking IFACP agreement was announced nearly two years ago, IATA FIATA said that the objective was “to review, refine, and re-engineer the airline forwarder relationship into one which would be managed jointly by airlines and forwarders.
     “Major steps have been made and this collaboration has resulted in a joint IATA-FIATA Air Cargo Program, and significant strides in redefining airline and forwarder responsibilities,” the happy couple proclaimed in 2016.

Can IATA FIATA Move The Marble?

     During the last few months, issues emanating from the Canadian pilot have been reviewed, discussed and refined to a submission now on the agenda of the aforementioned IATA-FIATA Governance Board meetings in Dallas March 8, ahead of IATA’s World Cargo Symposium, which debuts March 12.
     As mentioned the IFACP objective is “to review, refine, and re-engineer the airline forwarder relationship.” Neither the program’s Agreement nor its Handbook are chiseled in stone; the IFGB has been delegated the authority and responsibility to amend these documents as required, so that they remain relevant to a very dynamic and evolving air cargo industry. Thus, there are positive expectations that under the umbrella of the IFBG, forwarders and airline delegates will demonstrate their commitment to the IFACP and its objectives, and bring a better future to the air cargo partnership, and a higher level of professionalism and service to the international traders served.


The Promise of Dublin

     After all, the freight forwarder is the airline’s natural and biggest single customer.
     Time to break the mold, make some changes including positions, fulfill the promise of Dublin, and get to business we say.

IATA FIATA Accord At Start Up

     “We are working with a common vision for industry collaboration and that is a break from the past,” said Aleks Popovich, IATA’s Senior VP Financial & Distribution Services, on October 7, 2016.
     “This new agreement,” said FIATA President Zhao Huxiang, “gives the air cargo industry the opportunity to continue to be progressive and successful.”
     Just like everything else, the launch of a landmark cooperation between IATA and FIATA has included no small measure of great expectations.

Delivered Keynote

     When I spoke in Dublin in 2016 to accept my FIATA Fellowship, it was to a packed room of about 400 people. Sitting just below the stage were FIATA President Zhao Huxiang, FIATA’s Jean-Claude Delen, who is credited as the architect of the IATA FIATA agreement, Glyn Hughes, IATA and some others including the aforementioned Aleks Popovich.
     I had wondered then what a media guy could say to these people that might help the process along.
     As it turned out, memories of delivering my newspapers around U.S. cargo areas in USA in the 1970s, first as The Cargo Paper and then starting in 1975 as Air Cargo News, formed the foundation for what I had to say.
     I learned about air cargo by spending one week a month in New York, Philadelphia, Atlanta, Miami, Los Angeles, San Francisco, and Chicago between 1970 and 1995.
     In addition to our mailing list, I would hand deliver our paper, college campus-style, to the airline and forwarder groups.

Help From Rodney Dangerfield

     So as keynote at an historic accord, I thought I would channel the great comedian Rodney Dangerfield, who had a comedy gag line after every incident in his routine when he said:
     “I tell you, I get no respect.”
     I learned immediately from my first-hand experience in and out of a thousand brokers and forwarder offices all over the U.S. every month for 25 years that forwarders, unlike their more glamorous airline brothers, get no respect.
     So I went with that theme to set my remarks in motion.
     You can read the speech below.
     The hope is that IATA and FIATA will get beyond the talking stage and with mutual respect for each other and the good of air cargo, forge real change.
     All of us need some good news out of Dallas this coming week.

     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.

     Pictured is the beautiful National Exhibition Center (NEC) at Marston Green in Birmingham, England, where the 11th National Apprenticeship Week (NAW 2018) takes place from March 5-9, 2018.
      The theme for NAW 2018 is ‘Apprenticeships Work.’
      National Apprenticeship Week is met with enthusiastic support and involvement from BIFA, the British International Forwarders Association.
      BIFA is working to get the word out as the 2018 National Apprenticeship Week coincides with the launch of the industry’s new International Freight Forwarding apprenticeship.
      Tasked with helping to promote the new apprenticeship to both employers and young people, BIFA is creating a range of downloadable marketing materials for their members.
      The new assets include two information sheets entitled ‘Tips For hiring an Apprentice’ and ‘Tips for Attending Careers Days’ plus a ‘Careers in Freight Forwarding’ booklet which can be downloaded from the BIFA website.
More info:

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Geoffrey’s Keynote
FIATA World Cargo Symposium
October 7, 2016
Dublin, Ireland

     FIATA and IATA are here—together again, but for the first time, and all of us saw that.
     What do you think?
     I want to share a thought from the writings of Kurt Vonnegut:
     “Please notice when you are happy, and exclaim or murmur or think at some point, 'If this isn't nice, I don't know what is.’”
     I would like to take this opportunity to offer my thanks to FIATA for my designation as a FIATA Fellow.
     The title is something I take very seriously and I only hope to continue to earn your trust.
     I think for anything to really work between airlines and forwarders, both entities need to never forget to respect each other.
     American stand-up comedian Rodney Dangerfield always began and ended his jokes with: “I get no respect.”
     “I told my wife the truth. I told her I was seeing a psychiatrist. Then she told me the truth: that she was seeing a psychiatrist, two plumbers, and a bartender.
     “I tell you I get no respect.
     “I told my psychiatrist that everyone hates me. He said I was being ridiculous - everyone hasn't met me yet.”

     It is my firm belief that mutual respect can drive cooperation in air cargo to untold heights.
     It is an integral part of a new working model that should be based on elevating dialogue between the factions of the air cargo industry.
     Respect should be a driver to IATA/FIATA when exploring future possibilities.
     How does one define success? Profits? Trust? Reliability? Innovation?
     One of the ways to measure these values is by the respect they command. It's About The Customer
     The central tenet of our collective endeavors must be the much-mentioned customer.
     That is the person for whom we all should have respect.
     For more than a decade in the B-to-C world, a few clicks on a computer, tablet, or smart phone brought a product to one’s doorstep with very little fuss. It's About Each Other
     We need to keep that in mind when we cling to “our” way of doing things.
     In order to achieve seamless service we should all have respect for one another’s needs and desires.
     The forwarder-carrier partnership must continue to mature and improve at a much faster pace than in the past in order to provide a truly streamlined service to the customer.
     Too many years of wasted debates and shadowboxing have been allowed to continue so that one side or the other could feel “in control.”
     The customer can only get what it needs and wants when a functionally integrated team of forwarders and carriers provide the service and stand together to fix problems or develop a new product.
     This has been done, can be done, and must be done.
     It takes understanding of the challenge and respect for roles and responsibilities.

Change At Warp Speed

     The visionary Tesla CEO Elon Musk is investing 6 billion U.S. dollars in a state-of-the-art battery factory.
     As leading edge as that is today, it will be obsolete in 15 to 20 years.
     When I think of air cargo, I believe that a new business model should be developed: a stagnating global economy combined with a seriously outdated system must eventually force fundamental change.
     Today we have an opportunity to rise above the existing norms and jointly work as an industry on developing a new paradigm of collaboration.
     The clarion calls of do or die have been sounded before and many have already paid the price for not heeding them.
     It is not easy, simple, or without enormous risk, but the “business as usual” approach carries even greater risks today.
     The best way we can move ahead and not stumble is by having respect for the past, but working for the future.
     It’s the old adage about history being doomed to repeat itself.
     It’s the famous James Baldwin line: “If you know whence you came, there are no limitations to where you can go.”


Learn From History

      Let’s learn from our history so we don’t make the same mistakes—let’s make new mistakes!      Learning from our history and each other will seed innovation and growth in our industries, and will prove fruitful and beneficial for both forwarders and airlines.
     In my mind, bringing the forwarder and airline people closer together is critical to the success of both.
     So let me congratulate FIATA and IATA for flying us into the future of air cargo through respectful and efficient collaboration.
     So with the memory of some younger days that included Pat Phelan and John Hartnett, who both served as General Manager Cargo for Aer Lingus, and my great, great grandmother Mary Doyle, we fly into the future with IATA and FIATA as the wings of our flying machine.
     And if you will allow, because growing up in New York City I heard these words often:
     “Get on your knees and thank God you’re still on your feet.”
     Thank you.

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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