Liability the battleground as forwarders and airlines question new DAWB rules
Nearly three months after IATA introduced new rules governing Direct Air Waybills (DAWBs), there remains considerable confusion among airlines and freight forwarders over what has actually changed - and who is now liable when something goes wrong.
Some forwarders appear unaware of the potential implications, while others believe individual airlines must choose whether to adopt the amendments. Even Air France-KLM Cargo told The Loadstar this week it was still "reviewing the revised DAWB framework and its implications for our operations".
It added: "Given our B2B setup and the way our cargo is handled through forwarding partners, we are assessing how the revised provisions would apply in practice."
But IATA has now clarified to The Loadstar that the amendments are already in force across its member airlines and have been since 1 July.
"The revised DAWB provisions are part of the Cargo Agency Conference Resolution, so they apply to all member airlines as of the effective date, in the same way any resolution applies across the industry," it said.
"This is a standing rule, not a phased rollout that individual airlines sign up to over time."
So what exactly has changed - and why has it caused such a bitter dispute between IATA and forwarder association FIATA?
At its simplest, the new framework gives airlines a clearer route to pursue a freight forwarder when problems arise with a DAWB shipment, rather than having to seek recourse from the underlying shipper.
IATA argues that the previous arrangement contained a genuine liability gap, with forwarders able to tender cargo to airlines while acting merely as agents for an underlying shipper.
"Before this change, by classifying cargo as DAWB shipments, forwarders could avoid liability and take no action to verify that the cargo they tendered had been properly prepared for shipment," IATA told The Loadstar.
"This left carriers exposed to the risks posed by improperly prepared cargo, and was increasingly regarded as a threat to flight safety."
Dangerous goods are at the heart of IATA's argument. If the underlying shipper presented the cargo directly, IATA said, the carrier would have the opportunity to vet that company before agreeing to carry its goods. Where the shipment comes through a forwarder under a DAWB, however, the airline may have little or no relationship with that underlying shipper.
IATA, therefore, says its member airlines decided it was necessary "to proactively clarify the allocation of liability".
But FIATA sees things very differently.
Its director general, Dr Stéphane Graber, told The Loadstar the amendments could make a forwarder responsible to the airline as a principal, even where its actual role was solely as agent for the shipper.
That could leave the forwarder exposed to claims arising from incorrect cargo information, undeclared or misdeclared dangerous goods, sanctions, customs requirements, or other regulatory failures - including information and processes controlled by the shipper rather than the forwarder.
"FIATA's position is that this responsibility and liability should be with the party in effective control of the risk, processes, and information involved," Dr Graber said.
"Simply transferring liability to parties that may have limited ability to control the underlying risks is unlikely to provide an adequate solution."
Transport lawyers at HFW say there is substance to both sides' arguments.
Partner Matthew Gore told The Loadstar IATA was right that the previous arrangement could create a contractual gap, but said FIATA was also "substantively accurate" about the effect of the amendments.
Absent a separate bilateral agreement, he explained, a forwarder could now be deemed to accept the same terms, conditions, and convention-related obligations as if it were the shipper. That represents "a real and, in the applicable scenario, potentially significant expansion of the forwarder's liability to the carrier", he said.
However, it does not turn the forwarder into the actual shipper, or override its agency relationship with its customer. Rather, it creates a contractual default governing the relationship between the airline and forwarder.
And there is a way out.
IATA's resolution allows airlines and forwarders to negotiate different bilateral terms. If they do, those arrangements can displace the default provisions.
IATA stressed this point to The Loadstar: "Forwarders and airlines can thus agree different terms between themselves with regard to DAWB treatment."
HFW said this meant airlines now had "a stronger basis to pursue the forwarder with whom they have a commercial relationship, rather than an unknown underlying shipper", unless the parties agreed something different.
That potentially leaves the forwarder to seek recourse further up the chain if the underlying shipper was actually responsible.
And that is where another area of uncertainty arises: insurance.
FIATA said it was "presently unclear whether current insurance arrangements reflect such an allocation of risk and liability", warning that a claim could have significant repercussions, particularly for SME forwarders.
However, Angus Galbraith, chief underwriter officer for the WCA's insurer, World Insurance, told The Loadstar most freight forwarder liability policies already covered companies acting both as agents and principals.
He nevertheless advised forwarders to ensure their policies adequately covered the expanded liability.
The insurer also rejected the suggestion that forwarders had no responsibility for checking cargo simply because information originated from the shipper. Forwarders already had obligations to check bookings against cargo descriptions, HS codes, and dangerous goods declarations, he said.
Where a shipper deliberately concealed dangerous goods - undeclared lithium batteries, for example - the situation would be different. If an airline pursued the forwarder, its insurer would defend the claim and seek recourse against the actual shipper or beneficial cargo owner, where appropriate.
The legal position is similarly nuanced. Article 10 of the Montreal Convention makes the consignor responsible for the correctness of cargo particulars and statements entered in the air waybill by it or on its behalf.
Mr Gore said the new DAWB provisions did not directly contradict the convention, but created what he described as a "policy and coherence tension" between a forwarder's real-world role as an agent - potentially without control over the relevant information - and its contractual exposure to the airline as if it were the shipper.
Nor, he said, did existing law necessarily support FIATA's proposition that liability must always follow "effective control".
The practical protection for forwarders was therefore contractual: negotiate different terms with airlines, and obtain appropriate warranties and indemnities from their shipper customers.
All this helps explain why, almost three months after implementation of the new rules, the industry is still trying to work out exactly where it stands.
IATA says "all relevant stakeholders were consulted" before the changes, and insists the new arrangement provides "an equitable way to close a safety-related liability gap".
FIATA disputes the adequacy of that process. It says the amendments were adopted under an expedited procedure, and that it formally invoked its right to seek a review, and also sought to postpone implementation from 1 July until 1 October to allow that review to take place.
The amendments, nevertheless, became effective on 1 July.
FIATA says there have so far been no known cases in which an airline has relied on the new provisions to recover damages from a forwarder. But, with the framework less than three months old, it argues that absence of claims provides little reassurance.
Meanwhile, anecdotal evidence suggests some forwarders have yet to appreciate the significance of the change. Some forwarders appear unaware of the potential implications, while even published industry guidance has differed over whether application depended on individual airline implementation.
One forwarder told The Loadstar that the initial industry "buzz" surrounding the amendments had largely subsided, despite continuing uncertainty over their implications.
"Maybe people don't understand the risk," he said, adding that another forwarder he had spoken to had been unaware of the changes and had gone back to its legal department to establish its position.
The confusion may eventually be resolved through bilateral agreements, insurance practice, and, ultimately, the first serious claim under the revised rules.
But behind the technical arguments lies a much older dispute.
For more than a decade, IATA and FIATA have attempted - and repeatedly failed - to redefine the balance of power between airlines and freight forwarders. The DAWB fight is simply the latest round.
Timeline
2012-14: CAMP promises a reset
IATA and FIATA work on the Cargo Agency Modernisation Programme, intended to replace the traditional airline-agent relationship with a principal-to-principal model and shared governance. One forwarding source describes the previous arrangement to The Loadstar as a "master-slave relationship".
2015: CASS causes a rupture
FIATA objects to mandatory participation in IATA's Cargo Accounts Settlement System and argues forwarders are subject to financial rules they have little role in determining.
2017-20: The grand compromise falters
Pilot programmes fail to deliver the promised global framework, as disagreements over governance and CASS persist.
2021: IFACP is abandoned
IATA confirms formal efforts to establish the joint IATA-FIATA Air Cargo Programme have ceased after the parties failed to resolve a liability issue - subsequently identified as the treatment of liability under DAWBs. A new consultation system gives forwarders a greater voice, but the airline-only Cargo Agency Conference retains decision-making authority.
2024: Another CASS row
Forwarders attack IATA's financial security requirements for CASS associates. FIATA president Turgut Erkeskin tells The Loadstar: "One side should not rule the other."
2026: Liability becomes the battleground
The revised DAWB provisions take effect on 1 July, despite FIATA seeking a formal review and postponement. IATA says the changes close a safety and liability gap. FIATA says they expose forwarders to shipper-level liabilities for risks they may not control.
