Freight Forwarders Demand Remuneration on Air Cargo Surcharges

The Belgian, Italian and Swiss freight forwarders have advised the airlines operating in those countries, that they will no longer invoice and remit to the airlines via the CASS system, the various air cargo surcharges applied, unless they receive adequate remuneration for providing this service.

The CASS system assures that an airline receives from the forwarder, full payment of all charges incurred on its air waybill, by a set monthly remittance date. Meanwhile the forwarder must bear all the liability, risk and cost to collect surcharges for fuel, security, air navigation and other costs deemed by the airline, as over an above the basic air cargo rate.

Today the amount of the surcharges on a per kilo bases are almost equal to and in some cases higher than the basic air cargo rates. For the airlines their profits remain the same or are enhanced, however the freight forwarding industry has had to bear this additional cost, at a time when its margins are being squeezed by rising costs.

The Belgian, Italian and Swiss forwarders in their notice to the airlines, made it very clear that the airlines have until July 1, 2005 to consider this proposal. Should no agreement be forthcoming by that date, they will unilaterally commence deducting a remuneration fee for collecting surcharges, on their monthly remittances to the airlines.

FIATA fully supports this action, and has been in close dialogue with all of its members on this issue. The Airfreight Institute of FIATA in the last 2 years has continually warned the world’s airlines that the present situation is inequitable, and of the need to either compensates for the collection of surcharges or integrates the surcharges into the cargo rate. The integration of surcharges has been the preferred option advocated by the Airfreight Institute, however the airlines have declined to consider this integration as a solution, even though it was the norm in air cargo pricing for many years and remains the common practice in most international trade.

8 June 2005

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