IATA reveals agenda to boost air cargo competitiveness
The International Air Transport Association (IATA) has laid out an agenda for the air cargo value chain to improve its competitiveness. "An efficient air cargo industry is in everybody’s interest," said IATA’s director general & CEO Giovanni Bisignani. "Transporting 35% by value of goods traded internationally, it is critical to the global economy. Improving competitiveness to more effectively connect the world requires a team effort across the air cargo value chain. Airlines, forwarders and shippers must work with governments on common goals to solve air cargo’s key issues." IATA specifically addressed the following issues: Security: Bisignani noted significant progress in collaboration with the US Department of Homeland Security in 2010, but also warned that many governments and politicians are working on change to air cargo security that dramatically impacts the business. "We must resist the knee-jerk call for 100% cargo screening. The industry must be secure with effective measures that facilitate the speed needed to support global commerce. Air cargo security must be based on a combination of three measures – supply chain security, scanning technology and better use of e-freight data." IATA’s vision for air cargo security includes a supply chain approach that keeps shipments secure from the time of packing to loading. IATA’s Secure Freight initiative helps industry and governments to work together on investment, processes, technology and risk assessment to implement a supply chain approach. Secure Freight is being piloted successfully in Malaysia and the target is for two other countries to implement in 2011, including the UAE. New certified screening equipment is needed to supplement the supply chain security process and handle oversize items and pallets if required, and better use must be made of electronic information to facilitate effective risk assessments. e-freight: IATA’s board of governors has targeted 10% e-freight volumes on capable trade lanes by end-2011, and 100% by 2015. "The e-freight network covers 80% of cargo volumes. But e-freight penetration stands at just 2.8%," said Bisignani. "Most governments have legislation that recognises electronic documentation. The exceptions include Thailand, Indonesia, Russia and Vietnam, which much catch-up fast or risk being left behind in this important business." IATA’s e-freight program was started in 2004 with the aim of saving the industry $4.9 billion by converting 20+ shipping documents and the processes behind them to electronic format. "It’s a no-brainer," said Bisignani. "If we can be faster, cheaper, more accurate and secure we need to get it done." Quality: Cargo is a competitive business, with 98% of the volume being transported by sea and 2% by air. "Customers who pay a premium to ship by air demand premium quality," said Bisignani, adding that Cargo 2000 has developed cargo standards which should not be the property of a club of a few committed airlines and freight forwarders. Customers want to know that their shipments are on time, failing which they need to know when to expect them to plan around the delay. "This is an example of basic good business practice that air cargo needs to adopt if it is to maintain or improve its competitiveness. My vision is to evolve these to global quality standards by the end of this year," said Bisignani. Safety: With one accident for every 1.6 million flights in 2010, safety as measured by Western-built jet hull losses achieved a historical low. Benefitting from the IATA Operational Safety Audit (IOSA) as a condition of membership, IATA airlines outperformed the industry with one accident for every four million flights. "Safety is our number one priority," said Bisignani. "The positive numbers from 2010 show the strength of our commitment. This commitment includes constant improvement and there is an emerging risk with internet based commerce that we must address. Individual sellers through websites are not professional shippers. They don’t know their responsibilities to label, pack and declare dangerous goods. All air cargo stakeholders must find a way to bring these websites to action to inform their customers of their responsibility. And we must do this fast, before we have a catastrophe." A fragile industry Last week IATA revised its 2011 financial outlook. Air cargo is expected to generate $68 billion to the industry’s $594 billion revenues. Volumes are expected to grow by 6.1% for a total of 46.2 million tonnes of air cargo in 2011. Stronger demand indicated by upwardly revised GDP forecasts of 3.1% and careful capacity management are expected to see cargo yields grow by 1.9% in 2011. However, the air cargo industry is expected to be hit hard by rising fuel costs. IATA raised its assumption on the oil price to $96 per barrel from the previously forecast $84. Taking into account hedging levels of about 50% of anticipated consumption, this added $10 billion to the industry’s fuel bill, driving a 46% cut in global profits to $8.6 billion from the $16 billion that airlines made in 2010. "Aviation remains fragile. With an expected 2011 profit margin of just 1.4%, any crisis or shock could knock us off balance," said Bisignani. "We must protect and strengthen the 11% of airline revenues derived from air cargo. Working together as an entire value chain to improve competitiveness has never been more important." Quelle: eyefortransport |