Role of the TIACA (The International Air Cargo Association)

TIACA is a global not-for-profit trade association representing all the major segments of the air cargo and air logistics industry – combination and all-cargo airlines, forwarders, airports, ground handlers, road carriers, customs brokers, logistics companies, shippers, IT companies, aircraft and equipment manufacturers, trade press, and educational institutions. TIACA’s objectives include,

• facilitating and monitoring the implementation of e-commerce practices throughout the air cargo supply chain;
• supporting security measures that are effective, workable, and affordable, and that create minimal disruption to the vital flow of air cargo, which essentially relies on speed;
• developing and promoting strategies and principles that address legitimate public concerns for sound environmental policies;
• reforming and modernizing customs practices and raising industry performance standards;
• increasing market access by the elimination or reduction of constraints imposed on air cargo by its current dependence on bilateral traffic rights agreements; and
• Representing the interests of the air cargo industry before relevant regulatory bodies, at the national and multinational levels.

To accomplish its mission, TIACA engages in activities that seek to improve industry cooperation, promote innovation, share knowledge, enhance quality and efficiency, and promote education. TIACA aims to inform both the public and its membership about the role and importance of air cargo, industry developments and technical trends.

TIACA engages with relevant authorities, and publishes position papers on industry issues and the TIACA Times newsletter. The TIACA website is a valuable industry resource which contains a fully searchable database of information on industry issues. TIACA has developed research relationships with several universities through joint projects and student scholarship programs.

Security Issues

In the post-9/11 world, security will be a dominant reality for the air cargo sector. Because of the many different entities in the air cargo supply chain, it is impossible to design a one-size-fits-all approach to air cargo security. Operating realities are different for passenger airlines, all-cargo airlines, express operators, air freight forwarders (or indirect air carriers), ground transportation providers, and shippers. Different airports have distinct footprints, and tend to handle different types of cargo.

Security policies need to take these distinctions into account if they are to offer workable approaches, and must be customized to the specific segment of aviation to which they apply. And, given the reality that many air cargo shipments travel internationally, it is critical that all parties seek to develop global, harmonized approaches.

TIACA actively supports measures that are proven to improve airport and air cargo security. Wherever possible, TIACA seeks to ensure that new initiatives are effective, workable and affordable, and will keep its members informed of key developments that affect their operations. TIACA is committed to ensuring the safety and security of air cargo while maintaining the viability of the air cargo supply chain.

Traffic Rights

TIACA supports liberalization of air cargo and express services for unfettered market access. Bilateral negotiations should be unrestricted as to the ability of air carriers to move air cargo in any international market between two points anywhere in the world.

TIACA believes that air cargo and express transportation are economic development tools. Air cargo and express transportation facilitate the movement of goods between all markets.

Where liberalized all-cargo transportation traffic rights are available, TIACA believes that a separate all-cargo bilateral should be pursued as the first step towards market liberalization and openness.

Often developing countries see the advantages of market openness for the movement of goods before they recognize the same advantages on the passenger side. Such openness should be balanced and should be enhanced strictly for economic reasons.

Where efforts to separate all-cargo operating rights from combination rights, including passenger service, are deemed to be more practical, specifically in developing markets, such all-cargo bilateral should not be held back by restrictions brought about by developing countries in an effort to protect national carriers’ ambitions on the passenger side.

Present bilateral negotiating structures often inhibit the growth of air cargo, due to political and structural resistances. It is TIACA’s intent to make a modest shift in the current bilateral log jam which might lead to a general application of open skies, based on a balance of benefits to both markets, which may encourage wider liberalization. Positive progress towards multi-lateral freedoms for cargo would support the current parallel work on liberalization principles in the OECD and discussed in the Trans-Atlantic Common Area negotiations between the EU and the USA. TIACA believes the initial stage in a long-term strategy could be an agreement between those countries that support the principle of severance of cargo from passenger rights, and have identified the potential economic benefits of a more open and competitive air cargo market.

Under this approach, a new generic agreement for all-cargo flights would grant the same rights and privileges, on a reciprocal basis, to all signatories. Such liberalization for all-cargo rights, however, should in no way restrict the ability of combination carriers to obtain similar bilateral rights for both passenger and cargo service. There are circumstances where, politically, the granting of such all-cargo rights must be undertaken in parallel with combination carrier openness and TIACA understands this reality and the possible need to exclude cabotage from this particular instrument.

Benefits of liberalized agreements would be open to all carriers, irrespective of national ownership. A mutually acceptable supervisory body should be responsible for the transparent and equitable operation of all resulting agreements.

The aim is the establishment of a multi-lateral group of countries permitting fifth, sixth and seventh freedom rights. Support is confidently expected from countries that already operate ‘open skies’ as well as those that have no existing national air carrier to protect. Such countries therefore have a need for openness in their markets with the hope of developing their own liberalized cargo services, either by combination carriers or all-cargo carriers.

Customs Procedures and Practices

The following highlights the best practices identified by TIACA as critical for expedited customs treatment of air cargo shipments. As a general matter, customs authorities should have the capacity for,

• Providing online information about customs practices, including regulations
• Providing binding advance rulings
• Providing independent, administrative reviews/appeals
• Overall transparency
• Overall integrity
• Progressive modernization
• Automation/paperless environment
• Evaluation of data and enforcement actions based on risk assessments
• Formal consultations with the trading community for new rules and procedures
• Permitting post-release reconciliation and post-entry audits
• Penalty mitigation through a transparent, well documented process
• Separation of physical release from fiscal release.

For air cargo shipments specifically, customs authorities should,

• Specify a minimal set of data requirements. Such data should include only those elements essential to customs’ legitimate needs, and submission requirements for the data should reflect realistic timelines. Among other elements, data requirements could include port of arrival, carrier code, date of scheduled arrival, final port of lading, and descriptions/weights of cargo at the master air waybill level.
• Provide for immediate release of shipments upon receipt of the data set, supplied in advance of arrival via electronic data interface. TIACA considers the Automated Manifest System (AMS) utilized by U.S. Customs and Border Protection, as well as the processes established for maintaining dialogue with the trading community on operational issues and for periodically upgrading AMS, to be best practices in this regard.
• Develop systems that emphasize preclearance of low-risk cargo and examination of only those shipments identified by advance review as high risk. Other government agencies with border responsibilities should be incorporated into this process.
• Provide a “single window” automation system applicable to all border agencies.
• Reduce or eliminate requirements for paper supporting documents.
• Provide for “de minimis” procedures allowing immediate release and clearance for consignments below a specified value. De minimis procedures should include a mechanism for adjusting the value periodically to reflect inflation and changes in customs’ cost of doing business. Establishing de minimis procedures will allow customs authorities to be more efficient, increasing the throughput of trade and enabling authorities to focus resources on higher risk shipments.
• Establish guidelines to help customs in determining administrative actions, including assessment of penalties. As performance assessment can be subjective, guidelines would create an important standard that would add objectivity to the evaluation process. This could have a significant impact on mitigation and appeals.

Procedures and Performance Standards

A detailed IATA report established that, in 1974, airfreight consignments took an average of 6 days from origin to destination, of which only eight hours were allocated to actual flight-time and twelve hours to useful movement on the ground. The remaining time was due to delays, primarily related to Customs requirements. Recent research shows no improvement in these figures. These delays represent unnecessary handicaps on airfreight markets.

TIACA sees an urgent need to reduce overall origin/destination timings, to capitalize on our core speed-through-the air commercial advantage. To do so, it is critical that customs authorities allow for advance electronic presentation of data, agree to evaluate that data by means of risk assessment within one hour of receipt of all necessary information from the air carrier or its agent, and clear all low-risk airfreight within that one-hour window.

TIACA proposes to meet these criteria by –

• Working with shippers’ councils, standards bodies, trade associations, inter-governmental organizations and others to promote performance standards.
• Consulting with IATA and other relevant interests to consider how the seminal information furnished by the CART Report can be updated and supplemented to guide and assess the implementation of effective airfreight performance standards.
• Analyzing the transportation chain process between major origins and destinations in order to document the time it takes for an air cargo consignment to be processed through the various steps. The analysis will be shared with Industry stakeholders in order to discuss how improvements can be made through introducing improved processes, agreed milestones and timelines. The objective would be to introduce best practices and eventually set new industry standards to which stakeholders would be measured and certified.
• Identify industry performance standards being developed by all other related organizations and feature them on the TIACA website. TIACA will develop a recommendation for Best in Class Industry Standards from which its members can benefit.

Tariff Structure

The pricing of air freight is governed by the International Air Transport Association (IATA) who continues to provide an “Official Rates Policy” which they publish under the title of “The Air Cargo Tariff” (TACT) along with their rules governing transportation.

The air freight rates are generally derived from meetings that are held between IATA Regional Tariff Committees and which are subject to international inter-governmental agreements on rate levels by route or country. Those air freight companies who wish to introduce or apply a new rate require the permission of IATA and these rates can often be subject to the relevant country’s government approval.

But now generally they are used as guide lines and often no attempt is made by either IATA or governments to enforce their use.

Recently IATA tariffs are being increasingly ignored by many air freight companies on the major routes because of intense competition, but they still continue to provide a general guideline for those lesser developed markets around the world. Often where most commodities are concerned an air freight rate of a charge per kilo of cargo is applied (and discounts are provided for volumes over 100 and 500 kilos).

Although there are specific commodity rates available, these are the exceptions and are lower than normal rates as they are designed to encourage certain types of cargo to be air freighted on specific trade routes.

Also in addition to the specific commodity rates there are class rates which are for such commodities as human remains, live animals and perishable cargo (fresh food etc) and there are specific rules that need to be applied for calculating the charges for each type of commodity that is shown under this list. But generally the rules are based on the country of origin, where the goods are destined for and what type of product it is.

There are also air freight handling rates which are based on weight for non-unit load traffic and per unit for unit loads and these rates used to be set by IATA but more often than not are now set between the handling terminals.

Environmental Issues

While the aviation industry confronts numerous environmental issues, two are critically important to the air cargo supply chain: noise and climate change. It is essential to develop environmental policies providing a sensible relationship between individuals’ and societal needs for acceptable noise and emission levels with what may seem conflicting considerations of employment, service supply and access to the workplace.

Environmental concerns are likely to be a dominant global concern for the foreseeable future, and will therefore remain a critical TIACA concern. Where possible, TIACA will urge constructive, long-term measures as credible alternatives. TIACA will also seek to provide members with thorough, up-to-date information on key issues affecting air cargo.

Initiatives

• Represent TIACA members’ interest on environmental issues that impact the air cargo industry.
• Educate, inform, and communicate with TIACA members’ on environmental issues that impact the air cargo industry