IATA-FIATA Air Cargo Program

(IFACP)

October 2016

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 2016. 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

Background

Agenda

Overview of IFACP

Implementation

Next steps

Overview of IFACP

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.

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 Principal-

to-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

Proposed Program ModernizationCURRENT FUTURE

8 Agency Programs operating under different and

varying Cargo Resolution-Rules

Only 1 Global IATA-FIATA Air Cargo Program under

standard rules, jointly managed by the IATA-FIATA

Governance Board

Cargo Committee and Cargo Agency Conference

advise strategic direction

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

CASS settlement and procedures – unchanged

(CASS rules consolidated into a single standard

Resolution – new 851r to be launched with IFACP)

More than 80 diverse local and regional joint or

airline-only governance bodies

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

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

A degree of conflict with forwarding community

caused by ambiguous rules and terms

Clearly defined roles and responsibilities and jointly

managed

Agent based accreditation standardsCustomer based endorsement standards established

following joint consultation

Future Governance StructureG

lob

al G

rou

ps

D) FLWG and LCAG-Cargo

F) Regional/National Joint Councils

B) Cargo Procedures

Conferences

Management Group

(CPCMG)

Re

gio

nal

Gro

up

s

Lo

cal

Gro

up

s Ad hoc if required

(Local joint groups for market

input or subject matter specialists)

Governed by

E) IATA-FIATA Governance Board

(IFGB)

Governed by

A) Cargo Agency Conference (CAC)

CASS and CASS Associate (as current)IATA-FIATA Air Cargo Program

(IFACP)

C) IATA/FIATA

Consultative Council

(IFCC)

I) CASS Policy Group

(CPG)

H) Cargo Committee

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.

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.

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.

How will an Airline make the transition from

the current program to the new program?

How can a Freight Forwarder join the new

program?F

reig

ht

Fo

rward

er

Go

vern

ed

by C

arg

o

Ag

en

cy C

on

fere

nce (C

AC

)

Go

vern

ed

by IA

TA

-FIA

TA

Go

vern

an

ce

Bo

ard

(IFG

B)

CA

SS

an

d N

on

-CA

SS

Co

un

trie

s

Sign the Freight

Forwarder Agreement,

and return the signed

copies to IATA

Join IFACP?Current participants in IATA

Cargo Agency/Intermediary Program

Become

member of

IFACP

Join CASS

only?

Sign CASS Associate

Agreement, and return

the signed copy to IATA

Submit the application to

IATA and pass the

assessment with the

defined financial and

operational criteria

Yes

New applications

Become

CASS

Associate

Participate in

CASS

Change on IATA ResolutionsCURRENT 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 competition-

law review to ensure that each such criteria are

objectively justified, fair, transparent and non-

discriminatory

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.

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

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

Implementation Plan

Proposed Implementation Plan

*Tentative timetable is subject to the program development

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

What is involved during

the implementation? (1 of 3)

IATA

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

What is involved during

the implementation? (2 of 3) Airlines

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.

What is involved during

the implementation? (3 of 3)

IATA Cargo Agents

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.

Next Steps

Key Milestones Timeline* Status

1Secure endorsement of IFACP package by CAC, including adoption of

new CASS participation rules Resolution Mar-15 Completed

2FIATA 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

4Set 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

6Set up the IFGB and hold inaugural IFGB meeting to approve the

IFACP Handbook and implementation planJan-17

7 Kick off the implementation of IFACP in the pilot country (Canada) Q2 2017

8Kick off the phased roll out worldwide of the IFACP, replacing the

current IATA Agency-Intermediary Programs. As of Q4 2017

For more information, go to the

FIATA or IATA website

http://fiata.com/fileadmin/user_upload/documents/IFACP_White_paper.pdf

http://www.iata.org/whatwedo/cargo/Pages/iata-fiata-air-cargo-program.aspx

Thank you