Freight forwarders and consolidators are questioning whether they will still have a role to play once the International Air Transport Association (Iata)/ International Federation of Freight Forwarders Associations (Fiata) Air Cargo Programme (IFACP) is implemented globally.
The programme – set to replace the current Iata/Fiata Cargo Agency Programme – was developed to meet the evolving needs of the air cargo industry and paves the way for air cargo carriers to deal directly with shippers rather than through agents.
It was piloted in Canada last year and is expected to roll out globally this year, according to Juan Antonio Rodriguez, Iata director of Flight Dispatch Services (FDS) operations. He explained that previously cargo agents were “selling agents” for, and on behalf of, airlines, whereas today the clear majority of forwarders are “purchasing customers” from those airlines, and their business relationship was often as buyer and seller.
“Given that more than 80% of transactions are performed by freight forwarders acting as principals, the proposed IFACP better clarifies and validates the business through a buyer-seller relationship,” said Rodriguez.
According to him, IFACP properly addresses the principal-to-principal relationship between freight forwarders and airlines, helping to clarify liability issues on cargo claims, as well as supporting members to work towards key industry goals such as e-freight adoption.
But where does that leave agents who negotiate with carriers on behalf of their shipping clients?
Many cargo airlines are insisting that agents will always remain their valued customers, with Lufthansa Cargo CEO Peter Gerber pointing out in a statement recently that the carrier had a department of industry development that was “always talking with the end customer about their needs”.
“But the business is always with the freight forwarder or together with the freight forwarder,” he said. Air Cargo News however cited the head of one cargo carrier commenting that his company was “taking steps” to prepare for direct engagement with shippers. He said that this was due to a number of factors, including a need for importers/ exporters to cut costs as well as the fact that several online platforms that provided tools to facilitate direct connections with shippers had been launched.
Former head of cargo at Emirates, Ram Menen, pointed out recently that if a shipper had the infrastructure and was prepared to comply with the rules of engagement, there was no reason for them not to deal with the airlines directly. “Large multinationals could very easily gear up and create an in-house set up,” he said. It means agents will have to seriously up their service game to stay relevant, according to Matt Castle, vice president of global forwarding: products & services at global 3PL company, CH Robinson.
If a shipper has the infrastructure, there is no reason for them not to deal with the airlines directly. – Ram Menen
