In our ever changing environment the most dramatic changes are occurring now in the field of information and communications and the associated electronic commerce and while some economies are more advanced than others, we will all need the knowledge and business tools to understand and prosper within a new trading environment,” said FAPAA chairman Willie van Heusden. “In many ways forwarders have been leaders in the past and it is in the field of e-commerce that we must work hand-in-hand with our customers in this environment to ensure our profitability and the survival of our businesses.”
Van Heusden made the comments at the opening of the association’s 42nd Executive Council Meeting (ECM), hosted by the Taipei Airfreight Forwarders & Logistics Association of Taiwan (TAFLA) on 5-7 September in Taipei.
He went on to note that the strength of the four-decade-old regional association lies in the “sharing of information and the application of that understanding and knowledge within our own businesses.”
“This enables our respective memberships and their customers to interact and transact business under a more unified and standardised approach within the region. The strength and sharing and learning from the experience of others has been particularly evident with issues such as the ongoing discussion regarding air cargo security and the eff orts to introduce some more modern equitable global cargo agency modernisation programme with IATA.
Van Heusden – who is also the FAPAA representative from the Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF) – noted that the future will continue to see closer economic relations between trading partners in the region, growing e-commerce, new global initiatives on security and trade and further harmonisation of trade practices.
Key issues
Among the key issues discussed, security and customs issues, newly developing areas like e-commerce and the International Air Cargo Association’s (IATA) Cargo Accounts Settlement System (CASS) also took centre stage in discussions, as it typically has over the years. With the FAPAA membership there is widespread unhappiness with the system and how it is applied by IATA representatives throughout the region.
Unrealistic and unnecessary financial guarantees as part of IATA’s Default Insurance Programme (DIP), in the eyes of the forwarders – often duplicated due to both individual airlines and IATA demanding such financial sureties – were another burning issue for a number of countries.
In particular Thailand has been struggling with IATA’s imposition of additional financial criteria, no matter how good a company’s financial health and credit rating, noted the delegation from the Thai Airfreight Forwarders Association (TAFA). Particularly incensed, the Thai delegation noted that the requirement of additional bank guarantees were being enforced without any dialogue with the forwarders.
Paul Golland from the Australian Federation of International Forwarders (AFIF) highlighted that under IATA regulations, the airline association is obligated to talk to the various country associations before they make any changes. “They are supposed to be discussed, that’s in their own regulations.
Th ey [IATA] are very good at coming back at us with their regulations and we should be using those same regulations to defend ourselves as well Golland said.
Malaysia also noted had issues with the bank guarantees because IATA has opted to use global banking facilities but domestic regulations in the country specify that local banks must be used. Federation of Malaysian Freight Forwarders (FMFF) representative, Krishnan Chelliah observed that in his view IATA appears to prefer to work with MNCs over local companies.
Golland observed: “Th e problem we have as associations, is that IATA doesn’t accept us as customers – our members are the customers.”
Sri Lanka Logistics & Freight Forwarders Association (SLFFA) representative Niral Kadawatharatchie noted that Sri Lanka doesn’t have this problem because they rejected the CASS system when IATA first tried to establish it there. He said the relationship based on a reasonable bank guarantee and trust between airlines and the forwarders has produced a much better relationship and environment for doing business.
Commenting on many of the longrunning problems forwarders have with IATA, Kadawatharatchie said: “The problem with IATA is that they never address the issue, if IATA has a headache, they change the pillow.”
At this point Alec Koh from the Singapore Aircargo Agents Association (SAAA) noted that FAPAA has made significant progress in establishing better communication and dialogue with IATA. “It’s been three years and we’re moving quite well, the relationship is becoming much better.”
Koh also asked members to be patient, saying he believes “at the end of the day we’re really going to see something much better.” Indeed, IATA’s global head of cargo, Glyn Hughes attended the FAPAA meeting and addressed the concerns of the member countries, committing his colleagues to follow up on the relevant issues and pledging to further the dialogue and communication between FAPAA, its members and IATA.
Next year’s annual meet will take place in Manila, Philippines, hosted by the Aircargo Forwarders Association of the Philippines, Inc. (AFPI).
