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When is an IATA agent not an IATA agent?

When is an IATA agent not an IATA agent?

When is an IATA agent not an IATA agent?

SOME forwarders who are becoming IATA accredited aircargo agents / intermediaries in Australia are now finding that going through the procedures that IATA require are now not delivering the expectations and outcomes of the program, in that some air carriers (airlines) may still not wish to conduct a business relationship or at least require additional financial requirements.

ACA World, Aussie Cargo Alliance, AFIF, Paul Golland,

To become an IATA accredited aircargo agent/intermediary a forwarder has to meet the financial criteria laid down in IATA’s ‘Resolutions’. These include the requirements of producing three years of certified accounts as well as having two staff that are Dangerous Goods (DG) trained, plus warehouse staff who are qualified in aircargo specific Load Distribution and Restraint courses and additional staff trained in DG procedures in each branch office they also accredit.

In addition, under Australian Government regulations, they also have to have an Air Cargo Transport Security Programme in place if they operate their own warehouse where they handle and store cargo destined for international air export.

All of these stringent safety and security requirements both protect IATA airline members and naturally costs the forwarder a great deal of money and time but they are now finding that even meeting all of these requirements is now not enough for some air carriers.

Certain air carriers are requiring the same three years of financial statements before they consider issuing airway bills, whilst others require almost exactly what has already been sent to the IATA accreditation office.

When asked why these additional requirements are needed, forwarders are being told it’s at the request of the airline head office and not a local decision. They are also adding what is perceived as an overly burdensome layer of financial security requirement to safeguard their funds, without the evidence of any increased risk. The air carriers in question will not, it seems, ask IATA for the information already provided.

This perceived risk element is hard to understand as in the last three years there has not been one default payment by an Australian forwarder. This on total payments of over $500 million per annum.

Some air carriers are actually refusing Airway bills from accredited forwarders as they say they have too many customers and claim their head offices do not want any more new cargo agents. Turning away business is certainly a strange strategy in this current business climate.

This is a disturbing chain of events and puts new forwarder entrants into the export air cargo market at a distinct disadvantage over those agents who already hold Airway bill numbers of those carriers who now either refuse to issue new numbers or require information already provided to IATA.

It is difficult to understand these decisions from carriers as it means business they could handle is being given to their opposition.

AFIF has approached both the local IATA office in Sydney and has now escalated the issue to IATA Head office in Geneva – who say their hands are tied as they cannot make any of their airline members work with any forwarder in any market. Also each airline is able to set whatever financial criteria they choose over and above those set by IATA themselves.

This would then beg the issue as to why any forwarder would go to the expense of paying IATA in order to become an accredited agent, when that does not guarantee them the ability to work with all airlines.

An option might be to become a CASS associate, of which there are very few in Australia, and deal with an airline on a one to one basis but without the costs associated of being an accredited IATA agent, which defeats the purpose of having an accreditation process in the first place!

 

Paul Golland* –

February 11 2016 – * Paul Golland is the Chairman of Australian Federation of International Forwarders (AFIF)

From the print edition February 11, 2016

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