INTERNATIONAL SHIPPERS’ ORGANIZATIONS UNITE AGAINST IATA AIRFREIGHT PRICING PROPOSAL

INTERNATIONAL SHIPPERS’ ORGANIZATIONS UNITE AGAINST IATA AIRFREIGHT PRICING PROPOSAL    Shipper organizations of the three major trading areas of the world have united to tell the International Air Transport Association that they strongly oppose IATA’s proposal to change the way that international air cargo shipments are priced.
   In a joint letter to Giovanni Bisignani, director general of IATA, the U.S. National Industrial Transportation League, Canadian Shippers’ Council, European Shippers’ Council, Japan Shippers’ Council, Hong Kong Shippers’ Council and Thai National Shippers’ Council asked the airlines’ organization to withdraw its proposed “low density cargo” proposal.
   The letter signed by six shipper organizations emphasized that while the rationale for the proposed change is that density of air shipments has dropped steadily in recent years, and the space threshold has remained unchanged, “this is a decision that should be left to individual airlines.”
   “The IATA members that have agreed with this change are simply acting collectively to protect each other — a practice which is prohibited in every other industry where monopolies are not permitted,” the shippers organizations said.
   At the recent Tripartite Shippers’ Meeting between shipper groups from Asia, Europe and North America, their representatives said that IATA resolution 502 on cargo density is “directly contrary to competitive business practices.”
   Recently IATA announced that it would postpone the implementation date of the proposal to at least October, 2003. However, the shipper groups said that this measure “only perpetuates the uncertainty that shippers face and will still not permit the time necessary for redesigning packaging and other standards that will be necessitated by this collective action.”
   The shippers’ organizations urged the IATA cargo tariff conference to reconsider its proposal and withdraw consideration of resolution 502. “In its place we would encourage individual airlines to work with their customers in fashioning changes to the way air freight is carried and to work as equal partners to ensure that reliable, competitive, and efficient service is made possible for today and into tomorrow,” they said.
   They argued that the methodology used to restructure the basis on which pricing is calculated “should only be determined by individual airlines based on a determination of costs and return on investment — rather than a one size fits all approach’ to doing business.”