Tempers have flared up within the cargo industry doing business at Rhine-Main Airport. A reaction to newly imposed charges demanded by ground handler Frankfurt Cargo Services (FCS) for
unloading shipments from trucks arriving at their cargo terminal at FRA’s CargoCity South. This service was provided free of charge up to now.
A fee that was supposed to be levied from February 1 but was withdrawn and postponed until August following massive protests by parties affected.
Frankfurt Cargo Services (FCS) which was formerly known as Fraport Cargo Services is a joint venture founded in 2015 by Worldwide Flight Services - WFS (51%), owned by capital investor Cerberus,
and airport operator Fraport AG (49%) with the State as its major shareholder.
FCS’s dependency on Paris-based WFS plays an important role in the fee conflict that has caught the industry by surprise. According to people close to the case, it was the top management at WFS that demanded from their Frankfurt subsidiary to start collecting unloading fees. An initiative presumably enforced by the company’s owner (100%) Cerberus Capital Management, voices hold.
Incurred costs need to be covered, FCS
Following the Paris directive, FCS told customers that as of February 1, they would start charging 3.3 eurocents per kilogram for moving export shipments from the truck’s loading beds into the freight terminal provided FCS personnel were needed to accomplish the task. This financial claim, the ground handler told customers, covers the costs of services rendered by their staff including the provision of technical equipment like forklifts if needed.
Favoring the big logistics players?
In their announcement they stressed, however, that the new scheme would only apply to lose packages delivered to the ramp. In contrast, transferring built up pallets (BUPs) or other large consignments from truck to warehouse will continue to be exempt from any charges. This caused an outcry amongst small and medium sized forwarding agents complaining about unequal treatment. Their point: The new scheme favours the big boys in logistics who run own warehouses enabling them to build pallets ready for carriage. In contrast, smaller agents have little or no ground facilities, but ensure the constant flow of goods day after day from the shipper’s production plants to the airport although at limited volumes. After their protest became louder and louder, FCS finally gave in. Now the issue is supposed to be tabled anew next August.
Who places an order should pay the bill
When viewing the Frankfurt quarrel from a neutral angle it should be emphasized that paying for services rendered is common standard everywhere in the world. In this particular case the question is however, who puts the money on the table at the end of the day to settle the unloading bill. A highly controversial issue, so far unsolved.
Least of all it’s the forwarder whose contractual partner is the airline that uplifts the goods brought to the airport by their agents. Conversely, the carrier tells the forwarder at which ground handling agent he must drop his shipments off. A classic triangular relationship, well suited for playing buck passing games when charges become an issue.
A reasonable demand
Fact is that up to now the unloading of trucks was based on goodwill practices and not on binding contractual ties. Therefore, FCS’s advance to change this situation and clarify responsibilities including the cost issue could be understood if there weren’t some peculiarities. In this case FCS’s decision to exempt their client Qatar Cargo from the new fees. QR runs a dedicated warehouse within FCS’s terminal. The carrier argues: costs associated with truck unloading are integrated into the rent paid to FCS.
Favoring QR Cargo?
Here again, CargoForwarder Global was told by insiders, that the WFS headquarters intervened in favor of the Gulf carrier. Their argument: QR Cargo is a major global WFS customer, which deserves privileged treatment.
No surprise that the initial protests against the FCS fees grew into a storm, when the preferential treatment offered to QR came to light.
The outcome of this conflict over unloading charges is completely open. But no matter what the result will be, the reputation of FRA as main gateway for air freight has been damaged already. This was admitted to CargoForwarder Global by a spokesperson of operator Fraport AG.
Fraport top deck keeps tight-lipped
Interestingly enough, the airport’s top management haven’t raised their voice and intervened to get the conflict off the table. Instead, they seem to concentrate their entire efforts on building a new terminal (T3) for low cost traffic, not paying much attention to cargo matters.
It’s hard to fathom out what really stands behind the WFS/FCS decision to levy charges for truck offloading. Surely, they must realize that by doing so they would anger the freight agents as up until now there has never been a charge levied.
Could it be that FCS is not making money in FRA and that the main shareholder has put the thumbscrews on them? So, seems they came up with an easy solution (for them), but one which is backfiring big time and may well ensure that they lose clients because of it.
ACCF steps in
Now, the Air Cargo Community Frankfurt (ACCF) has slipped into a moderating role for tabling a solution that satisfies all parties involved. “We stick our heads together and try very hard to reach an amicable solution all actors can live with,” stated ACCF’s Executive Director Joachim von Winning when approached by CargoForwarder Global. The ACCF is an association of airlines, ground handling agents, freight forwarders, the airport operator and representatives of the local government agencies. In cooperation with other associations and logistics organizations involved in cargo matters, their aim is to design a draft contract that clearly defines who is physically and financially responsible for discharging air freight shipments from trucks arriving at freight terminals located in Frankfurt’s CargoCity South. Once presented it will be interesting to see if the upcoming scheme will become a platform not only for FCS’s affairs but for all ground handling agents doing business at Rhine-Main.