Issue 325, October 5, 2001
As you well know, the tragic events on September 11th, and the subsequent precautionary actions taken by U.S., Canada and foreign air transportation officials, have caused dramatic changes in the air cargo operating environment. Today, the FAA and Transport Canada are indeed allowing movement of cargo on all-cargo, combi and passenger aircraft, but with significant and growing focus on security. This, along with the airlines' financial crisis, has created a highly scrutinized environment under critical financial pressure.

As the air freight industry adapts to these new circumstances, it is certain that surcharges will be imposed on air cargo. Given today's environment, security-related expenses are dramatically increasing for air carriers and forwarders, due to the following factors:

1. The hiring and training of additional, qualified personnel for tighter inspection of cargo and documentation as required.
2. The acquisition of additional equipment for tighter screening procedures required for cargo and personnel.
3. The upgrade of airline and forwarder computer systems as necessary.
4. Increased trucking times/delays due to greater inspections of cargo and documentation.

Along with this, the air carriers have additional expenses related to personnel, equipment and process improvements required by the FAA and Transport Canada that cannot be disclosed to the public due to security risks. All in all, surcharges and rate increases on air cargo will be inevitable.

Beginning on October 8, 2001, the following security surcharges will be implemented on all international air export cargo. Note that due to the volatility of the market, these rates are subject to change:

US $0.13/kilo (CA $0.20/kilo) based on chargeable weight
US $10.00 (CA $16.00) minimum per House Airway Bill

Danzas AEI Intercontinental is fully committed to providing you with the service you need at the most fair rates possible. We are actively working with our airline partners to receive proper substantiation for any and all rate increases to be imposed. However, please understand that this fluid situation might not allow for normal notification periods on the application of these surcharges. We will continue to keep you as informed as possible during this time of significant change within our industry.

With Sincere Regards,

Brian Lindholm
Executive Vice President and COO, North America
Danzas AEI Intercontinental.

Please note that due to the complex nature of the subject matter, Danzas AEI Please note that due to the complex nature of the subject matter, Danzas AEI Intercontinental cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI Intercontinental.