Has IATA's Direct Air Waybill overhaul gone too far?

On July 1, 2026, the International Air Transport Association (IATA)'s amended Cargo Agency Conference (CAC) resolutions governing the Direct Air Waybill (DAWB) framework came into effect, revising the contractual relationship between airlines and freight forwarders by clarifying the scope of the agent's authority and obligations when tendering shipments under a Direct Air Waybill.

The traditional model involved two documents: a Master Air Waybill (MAWB) issued by the airline to the freight forwarder and a House Air Waybill (HAWB) issued by the freight forwarder to the shipper. This reflected the contractual relationship in which the airline dealt directly with the forwarder.

As supply chains evolved, many forwarders began using a Direct Air Waybill (DAWB), whereby the airline issued a single AWB showing the actual shipper instead of the freight forwarder. The forwarder still booked the shipment, negotiated rates, and managed the transport, but the documentation became simpler because there was no separate HAWB.

According to IATA, this commercial practice gradually exposed a legal inconsistency. The AWB identified the shipper as the contracting party, yet the airline's commercial relationship remained with the freight forwarder, whose name also appeared in the "Issuing Carrier's Agent" box even though forwarders maintained they were not agents of the airline.

The issue was discussed extensively for more than a decade, including under the IATA-FIATA Air Cargo Program (IFACP), a joint working programme established by two associations to review and modernise the commercial and contractual relationship between airlines and freight forwarders. But those discussions ended in 2020 without consensus, prompting IATA to bring the matter to the 53rd Cargo Agency Conference (CAC53) in March 2026 through a proposal titled "Scope of Agent/Intermediary Authority Adjustment."

The Cargo Agency Conference (CAC) is IATA's decision-making body responsible for establishing and amending the rules, resolutions, and agreements that govern the relationship between IATA member airlines and accredited cargo agents and intermediaries.

IATA argued that the traditional air waybill no longer reflected modern commercial practice and sought to clarify the contractual relationship between airlines, freight forwarders, and shippers under a DAWB.

The CAC subsequently adopted amendments to several Cargo Agency Conference resolutions, with an effective date of 1 July 2026. On 28 May 2026, however, the International Federation of Freight Forwarders Associations (FIATA) formally invoked the review mechanism under CAC Resolution 801c, Article 4.2, arguing that the amendments had been adopted following insufficient consultation and could shift contractual responsibilities, liabilities and indemnities onto freight forwarders without corresponding operational control, while creating legal, operational and insurance uncertainty.

CAC Resolution 801c is an IATA resolution that provides stakeholders, including FIATA, with a formal mechanism to request a review of certain CAC decisions.

Ahead of implementation, IATA published revised Cargo Agency Programme documents and an Additional FAQs paper in late June 2026, explaining that the changes were intended to align contractual documentation with commercial reality rather than expand forwarder liability.

“Despite multiple attempts, IATA has refused to engage in meaningful discussions with the trade on this issue and has simply implemented this as a resolution, which agents/intermediaries are required to follow.”
Keshav Tanna, FIATA

Was there enough industry consultation?
With the amendments still scheduled to take effect on 1 July, FIATA issued a second statement on 30 June, saying the review process had not been completed, requesting a postponement to 1 October, and writing to airlines worldwide to clarify whether and how they intended to implement the revised DAWB framework, amid indications that implementation could vary between carriers.

The statement reads, “FIATA's repeated requests that the IATA-FIATA Consultative Council (IFCC) be convened as a matter of urgency, the IFCC has not been convened in sufficient time to formulate its recommendation to the Cargo Agency Conference before the amendments are due to take effect.”

The amendment came into effect anyway. Keshav Tanna, Secretary General of FIATA, also noted that despite multiple attempts, IATA has refused to engage in meaningful discussions with the trade on this issue and has simply implemented this as a resolution that agents/intermediaries are required to follow. “The forceful assumption of unlimited liability for matters over which the cargo agent has no operational control (such as the accuracy of cargo particulars provided by the consignor, or compliance with customs and regulatory requirements that are the consignor's responsibility) is a matter of extreme concern for the cargo agents,” he said.

Samir Shah, President of The Air Cargo Agents Association of India (ACAAI), also points out the same fact: there was no consultation. “IATA simply issued a notice stating that the change would become effective after a certain period. Consultation means seeking opinions before making a decision, discussing those views, and explaining why certain suggestions may or may not be accepted. None of that happened,” he said.

The Air Cargo Agents Association of India (ACAAI), established in 1970, is India's leading representative body for air cargo agents and freight forwarders, with nearly 600 members and eight regional offices across the country.

Glyn Hughes, Immediate Past Director General of The International Air Cargo Association (TIACA), notes that the IATA Cargo Agency Program was established over five decades ago when relationships were vastly different from today. “Cargo agents were agents of the carrier when executing an AWB and also acted as agents of the shipper when completing the AWB; however, when consolidations were introduced, roles started to evolve, and the freight forwarder no longer acted as an agent but rather as a contracting principal with the carrier,” he said.

So Hughes notes that whilst the current agency programme, together with the associated programme Cargo Accounts Settlement Systems (CASS), has been adapted over the years, the roles have become blurred, and it's difficult to administer and operate under ambiguity.

"The airline has shifted the shipper's liabilities onto the IATA agent while also shifting its own liabilities towards the shipper onto the IATA agent."
Samir Shah, ACAAI

What are the biggest concerns and risks for forwarders?
An industry expert in India points out that IATA says the change is needed because of the sharp rise in e-commerce parcels carrying undeclared dangerous goods, such as lithium batteries, and because airlines want someone they actually deal with to be held responsible. “Nobody can object to ensuring safety in airfreight, and IATA's safety objectives are correct. Undeclared batteries in e-commerce parcels are a real danger to aircraft.” However, he adds, “The objection is to the method, putting the liability on the middleman instead of tightening it on the party (shipper) that actually creates the risk.”

His main worry is that the new rules split the blame away from the party (shipper) that actually controls the cargo. “If a shipper improperly packs cargo, misdeclares dangerous goods (DG), or conceals lithium batteries, the carrier can now seek direct indemnification from the forwarder. In an extreme event, such as an in-flight cargo fire or aircraft damage caused by misdeclared dangerous goods, the financial exposure could easily destroy a freight forwarding firm,” he said.

Tanna of FIATA notes that this allocation of risk reflects the cargo agent's limited operational involvement and absence of control over the goods or the accuracy of the consignor's particulars pertaining to the shipment(s). “There is a potential difficulty of passing on these extended liabilities to consignors, many of whom are themselves SME businesses with limited capacity to respond to potential liabilities.”

Shah of ACCAI argues that the IATA-accredited agent is effectively being made responsible for everything. "The airline has shifted the shipper's liabilities onto the IATA agent while also shifting its own liabilities towards the shipper onto the IATA agent." He says this means the agent could be held responsible for shipper errors such as misdeclaration, incorrect packing or labeling, while also having to resolve disputes over delayed, damaged or lost cargo.

Richard Theknath, Chairman and Managing Director of Jet Freight Logistics, also supports the same idea and notes that the primary concern is the transfer of operational and legal responsibility from airlines to freight forwarders without a corresponding increase in control over the shipment.

“Traditionally, when a freight forwarder acts as a consolidator, responsibilities are clearly divided between the airline (carrier), the freight forwarder and the shipper. Under a Direct Air Waybill model, the freight forwarder may become more directly involved in the contractual relationship between the shipper and the airline. This raises concerns that forwarders could be held responsible for matters that ultimately remain under the airline's operational control, such as flight delays, cargo handling after acceptance, routing changes, carrier compliance issues, and delivery failures.”

“Forwarders worry that they could become the "first point of liability" whenever something goes wrong, even when they did not cause the issue,” he added.

Matthew Phillips, Chief Commercial Officer, Breeze, believes freight forwarders also face practical risks, including cargo condition disputes, security screening failures, and dangerous goods misdeclarations. “Cargo condition disputes are always a tricky topic. Damage claims that would once have been argued between shipper, packer, and carrier can now potentially land on the forwarder by default, simply because of their contractual position on the airway bill,” he said. He also warns that security screening failures and concealed hazardous cargo could leave the forwarder named on the DAWB exposed despite having no practical way to verify what is inside a shipment.

Breeze is a fully automated and digital insurance solution, specifically tailored for freight forwarders and logistics companies.

"Forwarders worry that they could become the 'first point of liability' whenever something goes wrong, even when they did not cause the issue."
Richard Theknath, Jet Freight Logistics

What happens when airlines adopt different rules?
The industry expert’s other worry is that the rules are not being applied in the same way everywhere. “Instead of one clear set of terms, IATA has told forwarders to align terms airline by airline. So we now face a mix of different terms depending on the carrier and the route, which is confusing and hard to plan around,” he said.

Phillips says this is perhaps the single most underappreciated operational consequence of how this has been rolled out. “There is no single rulebook forwarders can rely on. It has already been flagged that some airlines are not implementing the revised framework on the same timeframe as others. Therefore, the market guidance is to get forwarders to check and agree specific terms with each carrier, as a shipment with one airline could sit under materially different liability terms than a similar shipment booked with another.”

Here lies the real operational burden, especially for smaller forwarders who may not have dedicated legal resources to run carrier-specific assessments on each booking. “However,” he added, “this does push for the case of controlling what you can control at a shipment level and by offering shipment-by-shipment cargo insurance. This can be a genuine practical step while the industry strives to have a consistent position.”

How will DAWB reshape day-to-day operations?
The shift to the Direct Air Waybill framework is expected to reshape day-to-day relationships across the air cargo supply chain, making interactions between freight forwarders, airlines, and shippers more contractual and risk-driven rather than being guided primarily by standardised industry procedures. "Relations with airline partners will become noticeably more transactional and legalistic," the industry expert says. "Instead of relying on standardised IATA procedures, forwarders must execute bilaterally negotiated terms, indemnification caps, or bilateral side letters with each airline before tendering DAWB cargo.”

The expert adds that freight forwarders will also need to tighten their engagement with customers as greater accountability shifts onto them. "Acceptance timelines for direct air shipments will increase," he says. "Forwarders will need to enforce stricter controls, mandatory physical inspections where feasible, and detailed indemnity agreements with shippers. High-risk commodities, such as e-commerce, consumer electronics, and chemicals, will face more stringent audits."

Theknath expects freight forwarders to face greater scrutiny during shipment acceptance, with more document verification, stricter procedures, better customer onboarding, and increased administrative work. He also believes forwarders will spend more time educating shippers about their responsibilities under the new framework before accepting cargo.

He also expects relationships with airlines to become more contractual, with forwarders seeking clearer service level agreements, liability allocations, and communication protocols, while adopting a more cautious approach to accepting cargo. 

What should freight forwarders do now?
The industry expert says freight forwarders will need to strengthen their risk management framework under the Direct Air Waybill regime, with insurance, contracts and compliance emerging as the three immediate priorities. The expert warns that existing insurance arrangements may not provide adequate protection if freight forwarders are treated as the contractual shipper, potentially exposing them to liabilities that traditional policies were never intended to cover.

"Traditional Freight Forwarder Liability (FFL) and Errors & Omissions (E&O) policies are designed around negligence in performing forwarding services, not assuming primary shipper obligations," he says. "Forwarders must immediately consult their underwriters to confirm whether existing policies provide coverage if the forwarder is deemed the contractual shipper. Policy riders or expanded coverage limits may be required, driving up operational cost and overhead."

The expert also believes contractual arrangements with customers must be strengthened to ensure liabilities are appropriately passed back to the shipper. "Standard Terms and Conditions (STCs) and shipper service contracts must be rewritten to include explicit, back-to-back indemnification clauses," the expert says. "If an airline holds the forwarder liable for a shipper's misdeclaration, the shipper contract must legally obligate the origin shipper to fully indemnify the forwarder for all losses, legal costs, and carrier claims."

Internally, the expert says freight forwarders will need tighter compliance procedures. "KYC (Know Your Customer) vetting procedures for new shippers, especially in e-commerce, must be tightened to prevent fraudulent cargo declarations," the expert says. "Shippers unwilling to sign indemnification agreements or undergo dangerous goods verification may need to be shifted off Direct Air Waybills onto Consolidated (Master/House AWB) arrangements where standard agency frameworks still apply. Warehouse personnel and operational desks must also be trained on enhanced screening protocols for dangerous goods and packaging standards."

Theknath says companies should reinforce governance by reviewing contracts, strengthening compliance through better document verification and automated validation systems, investing in staff training, and improving technology such as electronic records, audit trails, and shipment visibility.

Phillips says freight forwarders should focus on practical measures that reduce exposure on individual shipments, including confirming which framework applies before booking, maintaining a detailed paper trail with shippers, refusing uncertain shipments until the goods and airline terms are fully understood, and offering per-shipment cargo insurance as a real-time risk mitigation measure.

"For forwarder liability insurance, underwriters are likely to dive into more detail, asking pointed questions such as how you are managing shipper-level exposure, or what contractual protections you have in place.”
Matthew Phillips, Breeze

How are insurers likely to respond?
The Direct Air Waybill framework is also expected to reshape the insurance market, prompting insurers to reassess how they underwrite freight forwarders and increasing the importance of cargo insurance.

Phillips believes the insurance market will also adapt to the Direct Air Waybill framework, with insurers taking a closer look at how freight forwarders manage risk and cargo insurance becoming a more routine part of the shipment process. "For forwarder liability insurance, underwriters are likely to dive into more detail, asking pointed questions such as how you are managing shipper-level exposure, or what contractual protections you have in place," Phillips says. "The level of proactivity each forwarder takes will have an impact on how their underwriters see them and price their policies accordingly."

He also expects demand for cargo insurance to rise as liability shifts towards the party named on the shipping documentation. "On the cargo insurance side, we feel there will be significantly more demand," he says. "With liability shifting more toward whoever's name is on the paperwork, versus who controls the goods, the market's natural response is to make sure the cargo itself is insured at the point of shipment. Given that the market is still figuring these changes out, and based on current circumstances, this could still take some time. Ensuring each specific shipment is insured is a strong way to manage the risk.

"TIACA calls for unity so we can jointly create a better-connected, more integrated industry."
Glyn Hughes, TIACA

Call for unity
While much of the debate has centred on liability, resolving the dispute through dialogue is essential to avoid further fragmentation across the air cargo supply chain.

Hughes says it is disappointing that IATA and FIATA remain in dispute over the Direct AWB framework, which has been part of the industry since its inception. He informed that TIACA has spoken with both sides and said, “I honestly feel there are other issues that currently weigh heavier on air cargo’s success.”

Hughes points out that IATA and FIATA are both incredibly important bodies that represent two of the most important stakeholders in the air cargo supply chain. Thus, he notes that TIACA calls for unity so we can jointly create a better-connected, more integrated industry based on a shared objective: to provide high-quality solutions for the global air cargo community and to turn 1% of trade into 2% and increase everyone’s prosperity.

The article was originally published in the August 2026 issue of The STAT Trade Times.