Forwarders slam new volumetric freight formula

Alan Peat THE SOUTH African freight forwarding community has come out in strong opposition to a new move by International Air Transport Association (IATA) airlines Ð which includes all the majors on the international air routes Ð to change the volumetric freight formula, and effectively slap a 20% hike on airfreight rates. Raising the complaint is the SA Association of Freight Forwarders (SAAFF) which has joined a host of international freight bodies in rejecting the airlines' plan. The objection centres on the airlines unilaterally altering the conversion rate in volumetric freight from 6 000 to 5 000 cubic centimetres per kilogram for their cargo tariff. This proposal was approved by IATA's cargo tariff co-ordinating committee last May for implementation in October. It's a decision that would require all exporters and shippers to redesign their packaging to fit the new volume/weight ratio, according to the freight industry. But, they added, the decision also effects a 20% rise in tariff - and this is what raises most ire amongst the freight associations. This higher charge, according to a UK estimate, should net airlines around US$5- billion a year in extra revenue. In a letter to the SA Revenue Services (SARS), SAAFF has condemned the airlines' move Ð something which it sees impacting on all air imports and exports, and pushing up the already tough airfreight rates faced by African air cargoes. The Resolution adopted at the IATA Airlines ÔComposite Cargo Conference' held at The Hague at the end of May this year, said SAAFF, is not acceptable. The effect of change to the low-density cargo conversion, SAAFF protested, will be that forwarders and shippers will - from October 1 - pay 20% more for products which are substantially wrapped in lightweight, but bulky protective packaging. This like the polystyrene boxes which normally accompany hi-tech equipment such as cell phones, lap-tops, games consoles and perishables, the SAAFF letter added. "But," SAAFF executive director Edward Little told FTW, "as I understand it, the consent of government is required before this resolution can be put into effect. "And as transport costs to and from Africa are already very high, we have suggested to SARS that possibly they should consider this to be a matter of sufficient importance to put it before the newly formed African Union." The Freight Transport Association (FTA) in the UK has also registered harsh criticism of the airlines and their governing body, IATA. The FTA said in its statement on the issue that it was taking the decision to the competition authorities both in the UK and Europe because it represented an "unjustified attempt to extort more money from already hard-pressed British exporters". Neil Johnson, the association's global logistics manager, added: "This action by IATA represents cartel action by the world's airlines at its very worst. "A 20% cost increase represents a major blow to UK exporters at a time when international markets are increasingly difficult." There was a similarly caustic statement issued by the French forwarders association, SNAGFA. It stated: "We contest very strongly this decision by IATA and are determined to refuse this application". The SNAGFA demand is that the current volume/weight charge of 6 000 cc per kilo "be kept for everyone's sake". Christian Helms, German m.d. of Hellmann Perishable Logistics, has also come out against the new formula in the international press. Helms cannot believe that IATA can treat its worldwide sales agents in this way, he said.