Freight forwarder associations were celebrating this week after helping force through changes to the International Air Transport Association’s (IATA) Cargo Accounts Settlement System (CASS) in Europe, which could save forwarders having to provide bank guarantees of up to £400,000 (US$655,440). On the other side of the globe, in the US, two US Congressmen have introduced a bill aimed at clamping down on fraudulent brokers and freight forwarders.
The British International Freight Association (BIFA) said that until the recent global financial crisis, the requirement for forwarders, when appropriate, to undergo a financial assessment by IATA had largely been dormant. However, the crisis had sparked a u-turn by IATA, with European forwarders having to undergo financial assessment, and as a consequence, provide CASS with a bank guarantee.
One member, it said, had been faced with having to provide a £400,000 guarantee. However, BIFA along with international freight forwarder association FIATA managed to get this requirement overturned after a small working group – of BIFA, FIATA and IATA – was established through a meeting of the European Air Cargo Programme (EACP) joint council.
In the US, Congressmen Russ Carnahan and Frank Guinta’s bill has won the backing of the US-based Owner-Operator Independent Drivers Association (OOIDA), the Transportation Intermediaries Association (TIA) and the powerful American Trucking Association (ATA). The Fighting Fraud in Transportation Act 2011 would put a stop to a system that allows ruthless brokers and scam artists to continue to operate unchecked. Moreover it would require brokers and freight forwarders to carry a US$100,000 bond rather than the current requirement of $10,000. It would also improve transparency of those seeking to become brokers and establish “significant” penalties, including unlimited liability for freight charges, for those operating without authority. The TIA believes brokers, forwarders, owner-operators and carriers need each other, and the speed of today’s logistics marketplace means that companies must be able to reasonably rely on representations made in the terms of their agreement.
Just goes to show the power of lobbying!
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