IATA-FIATA Air Cargo Program (IFACP) October 2018 Bill Gottlieb FIATA Representative IFACP Governance Board

Background Freight Forwarders have operated within the IATA Cargo Agency Program rules for over sixty years; during this period the forwarder’s role has gradually evolved from being an appointed ‘Sales Agent’ for an airline to becoming their customer. In 2012, IATA and FIATA joined forces to review, refine and re-engineer the IATA Cargo Agency Program, to reflect the change in roles. The IATA FIATA Air Cargo Program was endorsed by both organisations in 2016. The 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.

Overview of IFACP

Vision To re-engineer 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.

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 current Cargo Agency/Intermediary Programme Rules will be suspended. Regional or national Joint Councils will be established to provide local feedback and to discuss and submit proposals to the IATA-FIATA Governance Board (IFGB). This new streamlined governance structure, will replace the current local Assemblies, Councils and ICAPs, established by today’s IATA Conference governance rules and resolutions.

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 or Region. One of the agreed conditions between IATA and FIATA, is that prior to launching the IFACP in a particular country, the current IATA Cargo Agency Program financial criteria applicable will undergo a competition-law review to ensure that each such criteria are objectively justified, fair, transparent and non-discriminatory, so as to be compliant with anti-trust legislation. Once completed those financial criteria will then be transferred to IFACP. Thereafter any future changes will be the reasonability of the Joint Council & IFGB.

Key Highlight (3 of 3) The CASS remains separate ‘as is’ and under the jurisdiction of the IATA Cargo Agency Conference. 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.

IATA-FIATA Governance Board (IFGB) Has the responsibility to govern the IATA-FIATA Air Cargo Program (IFACP). Voting Members: an equal number of 6 airline and 6 freight forwarder representatives. Airline representatives are appointed by the IATA Cargo Agency Conference, with 2 representatives nominated by the IATA Cargo Committee. FIATA appoints the freight forwarder representatives and considers size and region in its nominees. The voting members serve two year terms, renewable for up to four terms. IATA and FIATA also appoint four Non-Voting Members, one must be the IATA Global Head of Cargo and another FIATA’s Airfreight Institute Chairman. Decisions by the IFGB require a majority of representatives of each voting constituency, provided there is a quorum of minimum four members of each side. The IFGB establishes the guidelines for endorsement of IFACP Forwarders related to the operational and financial criteria, and determines relevant industry standards and procedures. As well as developing and maintaining program rules. It considers and when appropriate it adopts, recommendations from the regional and national Joint Councils; It promotes and endorses commonly agreed industry projects and initiatives;

Regional/National Joint Councils (JC) 4-6 voting members from each of the airline and forwarder constituencies. Airline representatives appointed by IATA Cargo Agency Conference for a 2 year term, up to 4 terms. Freight Forwarder representatives appointed by FIATA, drawing from the respective national or regional forwarder associations. The Joint Council, actions are in the form of recommendations made to the IFGB, by a majority of each of the two constituencies, and meetings can be convened either in person or via conference call.   JC members who do not attend two consecutive meetings may be replaced by either IATA or FIATA. The IATA Global Head of Cargo and the Chairman of AFI-FIATA, or appointed representative are a non-voting member of the Joint Council. In addition, the IFACP Program Secretariat (presently performed by IATA) will act as the JC secretariat.   The JC can set up temporary local working groups as appropriate

What is involved during the implementation? (1 of 3) IATA Regional and National campaigns to introduce the new program to airlines and forwarders, in collaboration with National Forwarder Associations. Send IFACP Freight Forwarder Agreement to all current IATA Agents Send IFACP General Concurrence Agreement to participating airlines. Oversee and control the return of the new agreements. Collaborate as necessary with Forwarder Association to follow up on outstanding agreements. No financial assessment will be required of current IATA Agents transitioning to the new program

What is involved during the implementation? (2 of 3) FIATA Brief and coordinate with National and Regional Forwarder Associations explaining the IFACP and its roll out activities. Support the local Forwarder Associations to inform the local forwarder community about the IFACP and the implementation process. The local and regional Forwarder Associations will work together with IATA to host IFACP ‘road shows’ to educate the air cargo community, airlines and forwarders alike, as an integral part of the process to transition to the IFACP.

What is involved during the implementation? (3 of 3) Forwarders accredited as IATA Cargo Agents Encourage their attendance at the information sessions held by IATA and local Forwarder Associations, to explain the new program rules in detail, the implementation timeline and the deadline for the suspension of the current IATA Cargo Agency Programme. Sign & return the IFACP Forwarder Agreement by the defined deadline. If a forwarder is interested in becoming involved as a member of a Joint Council, they should submit their nomination via their local Association. Local Associations will send the nomination to FIATA with its recommendation.

Key milestones IFACP pilot launched in Canada - August 2017 (currently on hold) Approval of final redrafting of IFACP Forwarder Agreement (pending) April 2019 - Tentative date for resuming implementation in Canada 1st phase August 2019 - Europe, Australia, Hong Kong 2nd phase October 2019 - Latin America, Asia Pacific, China, India 3rd phase November 2019 - Middle East, Africa April 2020 – Tentative end date for IFACP implementation

IFACP Global tentative Rollout Plan

Thank You For Further Information Please Contact Joana Nunes Coelho – IFACP Governance Manager governance.manager@ifacp.com