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On 17 July, the Loadstar reported that IATA's recent changes to its Cargo Account Settlement Systems (CASS) rules have placed significant financial burdens on small and medium-sized enterprise (SME) forwarders. These changes, introduced in October 2022, require CASS associates to provide substantial financial guarantees to access the payment system, impacting forwarders' cash flow and operational capabilities.

New CASS associates and cargo-accredited agents joining after 2019 must provide a deposit equivalent to 70 to 90 days of their quarterly average monthly airline cargo sales, which leads to significant financial strain for smaller companies. For example, if a forwarder has quarterly average monthly sales of $350,000, they may be required to provide up to $1 million as a deposit. Even if sales drop in subsequent quarters, the initial deposit remains with IATA, reducing liquidity and the ability to invest in business development.

Forwarders interviewed by the Loadstar indicated that this requirement creates an uneven playing field, noting that those who joined before the rule change are exempt and have a competitive advantage. The financial burden on newer and smaller forwarders means they have less capital available for expansion or other business investments. This disparity has led many affected companies to seek legal recourse, arguing that the rules constitute unfair competition.

IATA defends its rules as essential for effective risk management, ensuring that participants in the CASS system receive payments accurately and minimising unrecovered debt. However, the high compliance rate of forwarders, with a payment success rate of 99.99%, suggests that the stringent requirements might be disproportionate to the actual risk.

For this reason, the forwarding industry is calling for a reassessment of these rules to create a more equitable and sustainable environment for all players involved.

Source: The Loadstar, The Loadstar