Common Crisis: Agents seek friendly policy
agents seek friendly policy
The writing on the wall is clear and loud. The future of thousands of cargo agents in India is at a stake. Cargo agents, especially the small and medium ones are worried about their survival because of several adversities. Apart from a long pending issue related to CASS (Cargo Account Settlement System), the agents are facing several other issues. In this first part of the article Cargotalk spoke to SL Sharma, Vice President, ACAAI, to know more about present challenges.
Industry insiders say, for thousands of Indian cargo agents it would be a difficult task to meet CASS requirements in particular. Making payment for all airlines, to be credited by the agents at a time and by a single cheque, would prove to be a death nail for many of them. Is the CASS crisis inviting a chaos in the air cargo export import sector?
Sharma, however, put the matter from a different perspective. “The Air Cargo Agents Association of India (ACAAI) is not against CASS as long as it is under the umbrella of Indian Air Cargo Programme (IACP),” clarified Sharma.
IATA’s Cargo Account Settlement Systems (CASS) is designed to simplify the billing and settling of accounts between airlines and freight forwarders. It operates through CASSlink, an advanced global web-enabled e-billing solution.
At the end of 2012, CASS was utilised in 82 export operations, 10 import operations, 3 domestic operations, and one courier operation, collectively serving over 500 airlines, GSSAs and Ground Handling Companies and settling a combined US$33 billion. CASS is aimed to provide two major advantages: it yields a two-fold solution as it replaces airlines’ traditional paper based invoicing and agents’ manual controlling of those invoices. In addition, all will benefit from streamlined invoicing and collection of sales revenue processes, with a neutral settlement office. It will also enhance financial control and improved cash flow as the CASS rate of success in collecting funds is virtually 100 per cent.
different scenario in India
Indian air cargo industry is hitherto challenged by a multiple factors, and hence completely unpredictable. The country’s present air cargo infrastructure is not at per international standard. As a result the air cargo agents in India have to depend on a number of other factors beyond their control, to get payment on time.
As a result, they seek adequate time to get the industry streamlined, for a successful implementation of CASS. It may be recalled that to implement CASS by addressing the agents’ concern, a Joint Council including 6 airlines and 6 agents with IATA acting as the secretariat was formed in the recent past.
Sharma stressed on development of physical infrastructure for air cargo industry in India, which according to him is the crucial issue. Sharma also pointed out EDI hassles at the execution level which hampers cargo traffic to and from India. “Still there are a number of papers required to clear a shipment. Our airports have also become very expensive now. As a result, we have huge transaction costs and dwell time as compared to other countries,” he highlighted. He also emphasised on fixed commission (5 per cent) for the freight forwarders. Other burning issues include commission on surcharges and service tax, for what ACAAI would continue the fight.