Clipper cargo horizons, Vol. 2, No. 12, December 1962

              IATA Agreement Reached
New Rates Will Broaden Cargo Potential
The new cargo rate structure agreed upon by International Air Transport Association members at their traffic conference last month is expected to provide reductions to shippers of many commodities, more incentive for agents and consolidators, and to open up new business for the airlines in goods not now traveling in volume by air.
Major changes in the structure included modified and expanded specific commodity rates, revision of the scale of weight breaks, and standardization of the weight break scale in the Atlantic, Western Hemisphere and Pacific areas.
Here are some highlights of the IATA cargo resolutions:
•	Atlantic—New specific commodity rates were set at generally reduced levels, in many cases lower by 10 to 30 per cent. High general cargo weight breaks were eliminated in a new scale which provides consolidators with an increased spread and encourages more consolidations to and from more points. Better service to shippers will result since the consolidator, under the new scale, gets his maximum spread at less weight and therefore need not delay shipments in order to make up the higher weight as at present. Another development was the establishment of flat rates for shipment of any of 33 various commodities at weights of 7,000 kilos or above. These commodities, in smaller volumes, make up the largest precentage of traffic now moving and these rates will be important if the commodities are attracted in large volume.
•	Western Hemisphere—Southbound general cargo rates to Latin America remain about the same. New northbound rates from South American points to the U. S. and Canada will be lower by as much as 50-70 per cent, with a rate of about 10^ per ton-mile for 500 kilos in some cases . Scale of weight breaks has been made uniform with that of Atlantic.
•	Pacific—Six new specific commodity rates established, at lowered rates, including radios, electrical household appliances, cigarette and cigar lighters, toys and games and sporting goods, in the eastbound direction only. General cargo rates to the West Coast for shipments in the under 45 kilos or over 45 kilos category reduced by 10^ per kilo in each case.
’Trade Mark Reg.
• Middle East—A number of specific commodity rates presently in effect from the U. S. to Europe were extended so the goods can travel on from Europe at comparable rates. The substantially lower rates cover automobile parts, pharmaceuticals, many other products.
The IATA Cargo conference was in session for five weeks of hard negotiation at Chandler, Ariz. Unanimous agreement by the carriers must be reached before adoption of resolutions, which are then subject to government approvals.
Among the other actions of the conference was establishment of a Containers Board to register descriptions of the containers of carriers and shippers. Ultimate aim of the board will be container standardization. As an incentive to shippers to provide their own containers, a 10 per cent discount on transatlantic and transpacific shipments was established covering the weight of the container and shipment, or of the net weight of the container, whichever is less.
Also, IATA’s Commodity Rates Board procedures were revised to provide frequent review of rates and commodity classifications. A new series of quarterly meetings was scheduled beginning this month.
The revised Atlantic weight break scale provides a basic reduction from 7,500 kilos to 500 kilos in the maximum break. Only one or two per cent
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of shipments fall in the 1,000 and 7,500 kilo categories, while most shipments range from 200 to 400 kilos.
To operate at his maximum spread, the consolidator under the present scale seeks consolidations at 1,000 kilos, or preferably 7,500 kilos. This decreases his flexibility in speed of consolidations and in the number of points at which they can be made. The new scale, therefore, increases his opportunity for both service and profit.
The new Atlantic specific commodity rates are expected to attract goods now moving by sea to air cargo on a regular basis, opening up new markets for the airlines.
In its efforts to further the broadening of air cargo potential, Pan American undertook an intensive study preceding the IATA conference. The purpose: to identify and analyze commodities presently moving for the most part by surface, but which might have significant potential as air cargo if rates could be brought closer to surface rates.
Criteria were set up to select these candidate commodities. Among the major considerations were present surface rates—commodities with relatively high surface rates would require less reduction of air rates. Value of goods per pound was another standard; highervalued goods offer more savings in inventory and capital tie-up if shipped by air. Also, the commodities should be moving in sustained high volume; and (Continued on Page 8)
NORTH	ATLANTIC GENERAL	CARGO
WEIGHTBREAK	PRESENT RATE	NEW RATE
under 45 kilos	$2.20	$2.50
45 kilos	1.52	1.90
100 kilos	1.10	1.30
200 kilos	none	1.10
250 kilos	.90	eliminated
300 kilos	none	1.00
400 kilos	none	.92
500 kilos	.80	.85
1000 kilos	.72	—
7500 kilos (eastbound only) .68		—