“Air cargo is vital to the global economy, transporting more than $5 trillion worth of goods annually, or more than a third of world trade by value. And for airlines, it accounts for about 12% of industry revenues. But, like the rest of the airline industry, air cargo is a tough business. The last two years have been particularly difficult. Last year saw a 2% decline in both air cargo demand and yields. There are early signs that an upturn is on the way. To seize the opportunity we must strengthen the industry’s competitiveness,” said Tony Tyler, IATA’s Director General and CEO.
Speaking at the World Cargo Symposium in Doha, Qatar, Tyler outlined key industry priorities:
- Modernize processes: Transitioning to a paperless operating environment is critical to improving air cargo’s competitiveness. The Global Air Cargo Advisory Group (GACAG) endorsed an e-Freight roadmap that reflects agreement on roles and responsibilities for pushing this critical project forward. IATA is committed to implementing the e-Air Waybill (e-AWB)—targeting 20% implementation by the end of 2013 and 100% by the end of 2015. The International Federation of Freight Forwarders (FIATA) and the Global Shippers Forum have agreed to push forward the digitalization of other freight documents.
The e-AWB penetration was 6.8% at the end of 2012. “Our e-AWB targets are ambitious. The establishment of the Multilateral e-AWB Agreement will play an important role in boosting implementation. And we have the success stories of several airlines which have implemented 100% e-AWB policies in their hub markets proving that progress is possible,” said Tyler. The industry is also working with governments for the progressive adoption and implementation of the Montreal Convention 1999 (MC99) which provides the legal framework for electronic documentation.
- Secure the supply chain: IATA called on governments to implement mutually-recognized secure supply chain regimes. The Secure Freight initiative championed by IATA is an example of a supply chain framework which is being piloted in eight locations worldwide. The first was Malaysia where studies have estimated that Secure Freight also brings an economic benefit of $1-$2 billion over five years. “Air cargo is a global network. We need a risk-based approach with states mutually recognizing their security regimes,” said Tyler. He noted progress with the US Air Cargo Advanced Screening (ACAS) program, the EU’s Air Cargo or Mail Carrier operating into the European Union from a Third Country Airport ( ACC3) security directive and the e-Cargo Security Declaration (e-CSD).
- Ensure that dangerous goods regulations are followed: Safety is the industry’s top priority. Recent concerns over lithium batteries transported as air cargo have reinforced the need for greater education and communication over the rules for shipping these items. “We don’t need more regulation. But we need to ensure that the regulations we have are followed. With over 50 million tonnes of cargo transported by air annually, it is a big challenge. And this is being made even bigger as the number of shippers proliferates—particularly with the growth of e-commerce,” said Tyler.
- Focus on environmental sustainability: “The ability to manage our carbon emissions is our license to grow. That is why we are committed—as an industry—to improving fuel efficiency by 1.5% annually to 2020, capping CO2 emissions from 2020 with carbon-neutral growth (CNG2020) and cutting net emissions in half by 2050 compared to 2005. No other global industry has made such commitments. And the strategy to achieve these is agreed and clear—focusing on technology, operations, infrastructure and positive economic measures,” said Tyler.
2013 is a crucial year for aviation. The International Civil Aviation Organization is leading efforts to develop a global solution for the market-based measures (MBMs) needed to help aviation reach its CNG2020 goal. “Finding agreement among governments on a global approach will not be easy. The industry is united and doing all that it can to help. At the direction of our Board of Governors we are working through our governance processes to achieve an industry agreement on how to share the burden of CNG2020. And the efforts of the cargo community to develop a common carbon calculator will assist in the dialogue and further the transparency that is a cornerstone of our approach to sustainability. And we continue to remind governments that their role extends beyond MBMs. Their role in supporting initiatives such as implementing the Single European Sky and the commercialization of sustainable biofuels for aviation is critical to the industry’s long-term sustainability,” said Tyler.
“Air cargo plays a critical role in driving economic growth and development. This is not always fully appreciated by governments. That is why it is essential that the supply chain speaks with a single voice to articulate policies that support its success. I hope that GACAG will facilitate a joint action plan to focus on persuading key governments of the need to put cargo at the heart of their economic strategies,” said Tyler.
Tyler also announced that work with FIATA to modernize the Cargo Agency Program, which will put the airline-freight forwarder relationship on a stronger footing, was making good progress. A series of proposals will be submitted to the Cargo Agency Conference later in the year. “These will help the program to reflect the reality of the principal-to-principal relationship that exists in over 70% of transactions performed between airlines and their forwarding partners. And it reflects the changing rules and obligations linked to liabilities between the partners,” said Tyler.