News / Trade associations urge 'uncontactable' IATA to play fair over CASS

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Industry associations have joined the attack on IATA’s “potentially ruinous” financial security requirements for companies wishing to become CASS associates.

Forwarders that have failed to get satisfactory responses from IATA have turned to TIACA and FIATA to help, as well as national competition authorities.

Glyn Hughes, secretary general of TIACA, said he was concerned that the IATA process was unfair, and could harm industry growth.

“CASS was first launched in the late 1970s as a neutral industry settlement system and has brought significant efficiencies to the carrier-forwarder settlement process.

“However, reading some of the situations that forwarders find are now are being forced upon them, the system needs to be looked at. The success of a neutral platform is based on fair rules applied transparently, and it seems the balance is no longer in place.

“CASS achieves over 99.8% success based on two facts, the quality of airline billings and the financial stability of the forwarding community to settle its bills. The risk profile of CASS participants is completely different from the passenger BSP system, and yet it seems too many new rules are being influenced by the passenger side. I have been made aware of several CASS associates who have even been provided BSP rules saying this is what you must follow.

“I am concerned, looking ahead, as the industry needs efficient fair systems to support sustainable growth.”

FIATA, which over the years has had a fractious relationship with IATA that has improved recently, is possibly best-placed to apply pressure on the airline association.

Turgut Erkeskin, FIATA president, told The Loadstar: “It’s evident that SME freight forwarders are facing challenges due to the new financial security guarantees introduced by IATA.

“The inconsistency, where some agents must provide a guarantee while others don’t, certainly creates an uneven playing field. Freight forwarders are also confronted with the variability between different airline practices, particularly in Africa, where these cumulated guarantees are a clear obstacle to trade facilitation.

“Whilst the operational management of CASS is not within FIATA’s remit, I’d like to emphasise the general need for harmonised standard payment protection/credit procedures across the industry worldwide.

“The working relationship between the forwarders and the air carriers should be defined to reflect today’s realities. One side should not rule the other. Introducing a global air cargo programme, mutually agreed by and between the parties, could help achieve this goal.

“I am pleased to observe that discussions between IATA and FIATA are now much more constructive ever than before.”

However, forwarders affected by the tighter financial rules say they have little to no recourse to IATA, citing a chronic failure to respond to their queries. One told The Loadstar: “In Madrid, [where CASS is based] you cannot call them. It’s like Fort Knox. They remind me of the Mafia, really.

“It’s very difficult to communicate with them; there are sometimes emails with no signature, no phone numbers. It’s very difficult to work with them and to understand where it’s going.”

Another said it had (so far) taken dozens of emails and numerous calls – and still the agent had been unable to retrieve the deposit, leaving the company in dire financial straits.

It’s not only start-ups: some veteran forwarders have had to stump up financial securities simply when changing the name of the company, or opening a new office, despite years of working with IATA, both as agents or associates.

As a result, some forwarders are trying to find ways around the problem – by putting sales through a different office  or in another location. Another option is to apply to be a CASS agent, but some forwarders attempting this said it wasn’t clear whether, as a new agent, they too would be required to provide a financial security, and when, or if, they would get their deposit back.

That requires IATA to answer the phone.

One company applying to be an agent said: “After we apply to IATA and are certified, what will happen to the deposit? IATA is only able to provide this answer after we finish our application.”

In addition, becoming an agent requires someone with DG training, as well as a number of years of air cargo experience, which some start-ups don’t have. And, of course, there is a registration cost payable to IATA, as well as the cost of training.

IATA told The Loadstar: “Should CASS participants or prospective participants have more detailed questions on how CASS operates or concerns of ‘unfair competition and commercial practices by IATA’,  the customer service function is available via phone, live chat and the IATA Customer Portal. The latter operates 24/7, in 15 languages, and we commit to an initial response within eight hours.”