IATA-FIATA Air Cargo Program (IFACP) October 2016

Transcription

1 IATA-FIATA Air Cargo Program (IFACP) October 2016

2 Background Freight forwarding companies operated within the IATA Cargo Agents rules for several decades; their services gradually evolved in time from being selling-agents for the airlines services to becoming their purchasing customers. IATA and FIATA having joined forces to review, refine and re-engineer this Agency Program to reflect these changes, the IATA FIATA Air Cargo Programme was adopted by both organisations in The brand new program moves decision-making on the rules governing the airline-forwarder relationship to a governance body jointly managed by forwarders and airlines, which reflects today s market conditions

3 Agenda Overview of IFACP Implementation Next steps

4 Overview of IFACP

5 Vision To reengineer the IATA Cargo Agency Program and develop a modernized program that meets the needs of today s air cargo community, ensuring mutual benefits for Airlines and Freight Forwarders alike.

6 Benefits Over 80% of IATA Cargo Agents tender cargo to Airlines as a freight forwarder, on a principal basis, and no longer as the true agent of the Airlines. Addressing properly the Principalto-Principal relationship between Freight Forwarders and Airlines will help to reduce liability issues and the risk of legal challenge going forward. Potential to achieve key industry goals including e-cargo priorities by establishing a joint IATA-FIATA Air Cargo Program Simplifying the Governance Structure reduces the administrative requirement to manage the program

7 Proposed Program Modernization CURRENT 8 Agency Programs operating under different and varying Cargo Resolution-Rules Cargo Committee and Cargo Agency Conference advise strategic direction CASS settlement and procedures More than 80 diverse local and regional joint or airline-only governance bodies FUTURE Only 1 Global IATA-FIATA Air Cargo Program under standard rules, jointly managed by the IATA-FIATA Governance Board IATA- FIATA Governance Board advises strategic direction for the IATA FIATA Air Cargo Program IATA Cargo Agency Conference maintains governance over the CASS No change to the existing role, Cargo Committee advises strategic direction to IATA on all Cargo matters Cargo Committee and FIATA Airfreight Institute advise strategic direction to respective IFGB delegates CASS settlement and procedures unchanged (CASS rules consolidated into a single standard Resolution new 851r to be launched with IFACP) Only 10 Regional/National Joint Councils (Canada, LATAM, Europe including Russia, India, China, Africa, Middle East, Asia Pacific, HK & TW, Australia including New Zealand and South Pacific) Conference adopted Resolutions A degree of conflict with forwarding community caused by ambiguous rules and terms Agent based accreditation standards IATA-FIATA Air Cargo Program governed by IATA FIATA Governance Board (e.g. determining financial and operational criteria for membership endorsement) New IFACP Forwarder Agreement CASS governed by IATA Cargo Agency Conference Clearly defined roles and responsibilities and jointly managed Customer based endorsement standards established following joint consultation

8 Local Groups Regional Groups Global Groups Future Governance Structure CASS and CASS Associate (as current) Governed by A) Cargo Agency Conference (CAC) H) Cargo Committee IATA-FIATA Air Cargo Program (IFACP) Governed by E) IATA-FIATA Governance Board (IFGB) B) Cargo Procedures Conferences Management Group (CPCMG) C) IATA/FIATA Consultative Council (IFCC) I) CASS Policy Group (CPG) F) Regional/National Joint Councils D) FLWG and LCAG-Cargo Ad hoc if required (Local joint groups for market input or subject matter specialists)

9 Key Highlight (1 of 3) The current IATA Cargo Agency/Intermediary Programmes will be replaced by the new IATA-FIATA Air Cargo Program (IFACP) under the governance of IATA-FIATA Governance Board (IFGB). Once it is implemented, the IATA Cargo Agency/Intermediary Programme Rules will be rescinded. Future regional or national Joint Councils will be established to provide feedback and to discuss and submit proposals to the IATA-FIATA Governance Board (IFGB). This new streamline governance will replace the current local Assemblies, Councils and ICAPs, established by today s Conference governance structure.

10 Key Highlight (2 of 3) The new Joint Councils may propose to IFGB the minimum criteria of financial standing required for endorsement and retention of Freight Forwarders in their respective country/ies or Region. The financial and operational criteria as applicable today in the Cargo Agency Programme will be reviewed by legal and be transferred to IFACP. After that point, changes will be agreed through the Joint Council & IFGB. One of the agreed conditions between IATA and FIATA, prior to launching the IFACP in a particular country, is that the corresponding LFC will undergo a competition-law review to ensure that each such criteria are objectively justified, fair, transparent and non-discriminatory The CASS remains as is and under the jurisdiction of the IATA Cargo Agency Conference.

11 Key Highlight (3 of 3) Ready for carriage conditions, operational criteria (e.g. Dangerous Goods training requirements) and best business practices (e.g. cargo standards) will be referenced in the IATA-FIATA Air Cargo Program Handbook helping to raise the Airline and Freight Forwarder s awareness of their responsibilities and compliance to agreed industry operational requirements.

12 How will an Airline make the transition from the current program to the new program?

13 CASS and Non-CASS Countries Freight Forwarder How can a Freight Forwarder join the new program? Join IFACP? New applications Current participants in IATA Cargo Agency/Intermediary Program Submit the application to IATA and pass the assessment with the defined financial and operational criteria Sign the Freight Forwarder Agreement, and return the signed copies to IATA Become member of IFACP Governed by IATA-FIATA Governance Board (IFGB) Join CASS only? Yes Sign CASS Associate Agreement, and return the signed copy to IATA Become CASS Associate Participate in CASS Governed by Cargo Agency Conference (CAC)

14 Change on IATA Resolutions CURRENT FUTURE 8 agency programs (incl. 4 Intermediary Programs) i.e. Reso 801, 803, 805, 805zz, 807, 809, 809zz, 813 A single Global Air Cargo Program jointly managed by IATA and FIATA to replace 8 agency programs. The new program rules will include: 1) The financial and operational criteria as applicable today in the Cargo Agency Program will continue and be transferred to the new program, after that point, changes will be agreed through Joint Council (JC) process. Prior to IFACP launch, the corresponding Local Financial Criteria will undergo a competitionlaw review to ensure that each such criteria are objectively justified, fair, transparent and nondiscriminatory 2) New fee structure 3) Terms of reference of JC, etc. Resolution 851 & Appendices CASS related resolutions (i.e. Reso 801r, 801re) 1) Resolution 851 & Appendices 2) Consolidation of 801r/801re in new CASS participation (Resolution 851r,) deals exclusively with CASS participation. Airlines and forwarders are free to make their own bilateral arrangements for reporting, billing and settlement outside of CASS. Thus the entire Section 1 of the current Resolution 801r dealing with non- CASS will disappear. It will replace the current 801r and 801re.

15 IATA-FIATA Governance Board (IFGB) Govern the IATA-FIATA Air Cargo Program Voting Members:4-6 equal number of members from both the airlines and freight forwarders. Appointment of Airline representatives through Cargo Agency Conference, with 2 representatives coming from Cargo Committee. FIATA will appoint the freight forwarder representatives. Non-Voting Members: IATA Global Head of Cargo and Chairman of Airfreight Institute of FIATA. Decisions by the IFGB require the concurrence of a majority of the representatives of each voting constituency, provided that the quorum necessary to take action shall be four or more members of each side. Responsible to establish guidelines for endorsement of IFACP Forwarders related to the operational and financial criteria, and to determine relevant industry standards and procedures. Consider and adopt, where appropriate, recommendations from the regional and national Joint Councils; Engage in commonly agreed industry projects and initiatives; Develop and maintain the IFACP Handbook

16 Regional/National Joint Council (JC) 4-6 equal number of members from the airlines and freight forwarders. Airlines representatives appointed by Cargo Agency Conference for two-year term. Freight Forwarder representatives appointed by FIATA, drawing from the respective national or regional cargo or forwarder associations. The Joint Council, actions are in the form of recommendations made by a majority present of each of the two constituencies, and meetings as necessary either in person or via conference call. Any JC members who miss two consecutive meetings will be subject to removal from membership, and replaced by other airlines or freight forwarders. The IATA Global Head of Cargo and the Chairman of AFI-FIATA, or their appointed representatives to be non-voting members of the Joint Council. In addition, the Program Secretariat (IATA) to act as the secretary. The Program Secretariat (IATA) provides secretariat support for meetings, and ensure that agenda documentation and reports are circulated to all Joint Council members according to IATA-FIATA Governance Board and Joint Council agreed procedure. Set up temporary local working groups as appropriate

17 Implementation Plan

18 Proposed Implementation Plan Each Region/Country will have around 4-6 months to complete the implementation. It is subject to the size and the business environment of market. Region/Country Estimated Launch* Estimated End Date CA Apr-17 Aug-17 Europe (including EACP, Russia and other countries in Europe) Sep-17 Feb-18 LATAM Sep-17 Feb-18 HK& TW Sep-17 Feb-18 AU and NZ Sep-17 Feb-18 Asia Pacific Jan-18 Jun-18 CN Jan-18 Jun-18 Middle East Jan-18 Jun-18 Africa Jan-18 Jun-18 IN Jun-18 Dec-18 *Tentative timetable is subject to the program development

19 IATA What is involved during the implementation? (1 of 3) Regional/National campaigns to introduce the new program Set up and manage the IATA FIATA Governance Board and Regional/National Joint Councils Send IFACP Freight Forwarder Agreement all current IATA Agents Control of return of new agreement Follow up action if not signed / returned No financial assessment is required for current IATA Agents transferring to the new program

20 Airlines What is involved during the implementation? (2 of 3) Attend the information session held by IATA and local Freight Forwarders Association to explain the new program rule in details, the implementation timeline and the deadline of rescinding current Cargo Agency Program If the airlines would like to part of Regional Joint Council, submit the nomination form to IATA for the selection process (mail vote via Cargo Agency Conference) Understand the new General Concurrence requirements to notify IATA any opt-out, due to the Airline imposing additional bilateral (financial) criteria, in respect of: the whole market, or any Individual Forwarder(s) For non-iata members, sign and return the new General Concurrence to IATA.

21 IATA Cargo Agents What is involved during the implementation? (3 of 3) Attend the information session held by IATA and local Freight Forwarders Association to explain the new program rule in details, the implementation timeline and the deadline of rescinding current Cargo Agency Program If the freight forwarder would like to part of Regional Joint Council, submit the nomination to FIATA for the selection process Sign and return the Freight Forwarder Agreement by the defined deadline.

22 Next Steps Key Milestones Timeline* Status 1 Secure endorsement of IFACP package by CAC, including adoption of new CASS participation rules Resolution Mar-15 Completed 2 FIATA to complete its legal and due diligence reviews of IATA-FIATA Cooperation Agreement and IFACP Feb-16 Completed 3 IATA and FIATA signed the IATA-FIATA Cooperation Agreement Oct-16 Completed 4 Set up the IFACP Working Group to continue the drafting of IFACP Handbook and review the timelines of implementation Nov-16 Work in progress 5 Complete the drafting of IFACP handbook (with Program Rules) Nov-16 6 Set up the IFGB and hold inaugural IFGB meeting to approve the IFACP Handbook and implementation plan Jan-17 7 Kick off the implementation of IFACP in the pilot country (Canada) Q Kick off the phased roll out worldwide of the IFACP, replacing the current IATA Agency-Intermediary Programs. As of Q4 2017

23 For more information, go to the FIATA or IATA website /IFACP_White_paper.pdf

24 Thank you