MAY 2003 UPDATE
CARGO UPDATE: Resolution 502
WEBLINKS
IATA CARGO NET
CARGO OPERATIONS
CARGO DISTRIBUTION
DANGEROUS GOODS
AIR CARGO TARIFF
- Decision by Canadian Transportation Agency (CTA)
Background:
The Composite Cargo Tariff Coordinating Conference held 27-31 May 2002 in The Hague amended
Resolution 502, Low Density Cargo for intended effect 1 October 2002. At present, the figures used to
calculate the volume weight of a consignment are 6,000 cubic cen timeters (366 cubic inches) equals one
kilogram or 166 cubic inches equals one pound. It was agreed to change the figures to 5,000 cubic
centimeters (305 cubic inches) equals one kilogram or 138 cubic inches equals one pound. Only when
the necessary Government approvals are received will the changes to this Resolution be implemented.
Resolutions are, of course, subject to any conditions imposed by Governments resulting from their
review. Due to the time required by Governments to review this change and to accommodate the needs
of industry partners, IATA advised that implementation is not ex pected prior to 1 October 2003. The need
for a revision was driven by the changing nature of the cargo being shipped by air. Over the past twenty
years individual pieces of air cargo have become, on average, less dense than they used to be. The
density rule has changed only occasionally over time to keep pace with the change in the nature of the
goods being shipped and developments in aircraft technology. The last time it was amended was
October 1981 prior to which the conversion factor was 7,000 cubic centimeters per kilogram; since then it
has been 6,000 centimeters per kilogram.
8In this Issue
Market Reaction in Canada
By letters dated September 11 and 18,
2002, respectively, Canadian Association
of Importers and Exporters Inc, which
represents over 680 corporations in
promoting Canada’s international trade and
Lethbridge Dairy Mart Ltd. complained to
the Canadian Transportation Agency (CTA)
regarding
the
substantive
changes
contemplated by the proposed revision to
Resolution 502.
The Canadian Transportation Agency
(CTA) served these complaints on IATA, as
well as the carriers that had filed tariff
revisions with the CTA relating to
Resolution 502.
CTA Position
IATA Position
In addition to various carriers’ statements to this CTA
investigation, IATA stated that the competitive nature
of the Canadian market permits air carriers and their
customers to reach individual agreements on
charges for the carriage of cargo.
IATA also supported that by encouraging shippers to
use more compact packaging materials, the change
in charges for the carriage of low density cargo will
enable air carriers to accommodate more freight in
aircraft. As such, IATA foresaw shippers being
provided with more alternatives, and any increase
associated with the IATA revision being offset
because of this development.
Conclusion
In light of the foregoing, the Canadian Transportation Agency has dismissed the complaints
filed by CAIE and Lethbridge Dairy respecting the proposed revis ion to IATA Resolution 502
and has invited carriers to submit revised tariffs for an intended effect not prior to 1 October
2003.
Note: The definitive implementation date will be advised once all necessary Government
approvals have been received and IATA declares the revised Resol ution effective
The Canadian Transportation Agency
has considered all of the evidence
submitted by the Airlines and IATA
and is of the opinion that the cargo
industry is highly competitive and
mature. Given the competitive nature
of the industry, many viable options
for the carriage of goods are
available to shippers.
In light of the maturity of the cargo
market, and the alternatives available
to shippers, there is a great deal of
flexibility in establishing reasonable
rates for the carriage of goods. The
CTA also noted that a notice of over
one year has been provided
regarding the amendment to IATA
Resolution 502, which should be
sufficient time to permit shippers to
react in an appropriate manner to the
proposed change in the volumetric
ratio from 6,000 cubic centimetres to
5,000 cubic centimetres as equalling
1 kilogram.
Click here for complete details at the Canadian Transportation Agency website.
Contacts:
[email protected]
[email protected]
[email protected]
For further information, please contact:
Enrico Bertoldo
IIT – IATA Interline Tariffs
Tel. +41 22 7702840
Email: [email protected]