Get ready for air carrier security charges

Air Canada has announced that effective October 15, 2001 it will be begin implementing security surcharges.

Specifically, the following security surcharges will be implemented:

Canada: 0.15/kg with a minimum of CAD 15.00
USA: 0.10/kg with a minimum of USD 10.00
Europe: Euro 0.15/kg with no minimum

The surcharge is applied at the point of origin regardless of the destination. In other words, all cargo originating in Canada is subject to the CAD 0.15/kg, Min. CAD 15.00 surcharge.

"Just to add some dimension to this surcharge, we were informed by Air Canada that the carrier is facing a plus 300% increase in their aviation insurance premiums," said George Kuhn, head of Canadian International Freight Forwarders Association (CIFFA) In light of this and the added costs carried by carriers for stricter security measures, changes in market conditions et al, CIFFA considers the proposed surcharge as reasonable."

Kuhn added that the demise last year of the IATA Tariff Conference, means that airlines have to bi-laterally advise and implement respective surcharges.

"We have so far been advised by KLM Cargo that their surcharge will be assessed as well on October 15, 2001 and will be Euro 0.15/kg that is being converted by the carrier to USD 0.13/kg and CAD 0.20/kg. No minimums have been advised.We understand further that American Airlines, Lufthansa and other carriers are presently informing their clientele on their own resolutions regarding security surcharges. It is believed that each airline will implement such surcharges and that they may vary somewhat from carrier to carrier."

Kuhn said that since most implementation dates are October 15, 2001, it is more than likely that a standard surcharge fee will be adopted by that date.

Our industry is today faced with a different set of circumstances than prior to September 11, 2001! As we all know, already prior to September 11, 2001, many an airline has found itself in rather dubious financial circumstances.

Most carriers have adjusted the frequency of their departures and flight schedules to coincide more realistically with the starkly reduced traveling needs of the public at large. In turn, this causes a contracting in cargo space availability and consequently routing choices become more limited.

"This combined with the tighter security measures already experienced brings about an airfreight situation that is becoming more expensive and slower, as opposed to faster and cheaper which our customers have come to expect," Kuhn said. "We strongly advise our members to seek a heightened dialogue with their clientele to ensure a better understanding of the present – and likely long lasting – situation so that members are not blamed for circumstances beyond their control."