Air Cargo Africa Rising

Air Cargo Africa’s third edition in Johannesburg pushed further African continent’s ambition to be a leader in global economy and how the air freight industry is becoming a key enabler of achieving that ambition.

The third biennial international air logistics conference and exhibition, AIR CARGO AFRICA 2015, held in Johannesburg, South Africa from 25 to 27 February, saw a record number of international and local visitors, attracting 527 delegates and 2,915 trade visitors over the three-day event. The exhibition also featured 80 exhibitors, with 29 from across Africa and 32 from further afield internationally.
In line with the theme of “Air Cargo – Africa’s path to sustainable growth”, this year’s event was officially opened by the executive mayor of the City of Ekurhuleni, Mondli Gungubele, who said in his opening address that the City of Ekurhuleni region had become the aviation-, logistics-, and manufacturing hub of Africa, and that OR Tambo International Airport was strategically positioned as a gateway to Africa.
He reiterated the goals and vision of the City of Ekurhuleni becoming Africa’s first aerotropolis, and in this way also turn the tide of poverty and underdevelopment for the majority of the region’s people.
Recurring topics raised during panel discussions and lively debate between delegates included the fact that trade within Africa itself must be addressed to harness great growth opportunities; that an open trade environment within Africa would allow air cargo to be a catalyst for growth throughout the continent; and that there is a dire need for greater transparency and cohesion across the entire air cargo supply chain.
“With an expected six percent increase in GDP growth by 2020, there is a lot of potential for growth in the continent,” said Fitsum Abady, Managing Director, Ethiopian Cargo Services on a confident note. On the other hand, Abady pointed out to a number of hurdles which come in the way of Africa’s rise. Directional imbalance in the African market, very low intra-Africa trade, lack of integrated multi modal system, political turbulence remain bottlenecks for its growth, he said.
Making a strong point on the continent’s growth, Nico Bezuidenhout, acting CEO, South African Airways said, “As for Africa, growth is imminent and opportunities are inevitable. Intra-Africa trade is a huge opportunity. There is ample scope to increase trade.”
While there is light at the end of the tunnel as far as the road to progress in the continent, the approach road may be bumpy. “Is it going to grow? Yes. Is it going to be easy? Absolutely no,” said Oliver Evans, chairman of The International Air Cargo Association (TIACA). Evans was of the opinion that we need to start a dialogue to help ease trade in this region. “Being a diverse continent with a lot of opportunity, we need to pick and choose the right opportunity to increase growth,” he added.
Being critical on the political situation, Markus Mueke, head of airfreight, Panalpina strongly affirmed that “red tape has to go from Africa.” Dealing with red tape within African countries presents a large issue, which strangles growth.
Moderating the first panel discussion on the inaugural day Glyn Hughes, global head of cargo, IATA observed China and India are betting big on the continent. Seconding his observation, Barry Nassberg, Group COO, Worldwide Flight Services said, “We see growth in Asia-Africa trade and investments are dominated by countries like China and India.” While Africa is a somewhat closed continent as far as investment is concerned, Nassberg believes there is a desire for growth and the opportunity exists there. “We are at the early stages of that thing happening,” he said.
The second day of the event saw some lively debates featuring panel members representing Emirates, South African Airways (SAA), the National Air Cargo Group, DHL Global Forwarding, OR Tambo International Airport and the United Nations, focused on beating infrastructure challenges within air cargo and strengthening the supply chain. The intra-African cargo market is one of the fastest growing markets currently, with increasing demand for perishables and consumer goods like smart phones in particular, said Sanjeev Gadhia, CEO of Astral Aviation. “The need for ‘just-in-time’ shipments of under five days into Africa, as opposed to the current seven to eight days, is becoming critical.”
Tleli Makhetha, general manager, cargo, SAA, maintained that despite regulations around customs and security requirements making this an increasingly complex industry, the air cargo sector must not lose sight of its main driver; serving the customer. “We’re drifting away from focusing on the customer and confusing sophistication with complexity. What is needed is a shift in the industry to a more efficient, transparent process.”
Ivin George, VP of airfreight at DHL Global Forwarding concurred. “There must be a collaboration of all stakeholders within the supply chain for growth.”
All parties agreed that the first step to this collective vision is the integration of information systems, as well as business processes and organisational structures. This would create greater visibility and harmonisation at each level of the supply chain, shifting from a “me” economy to a “we” economy.
In order to do this, air cargo players must step outside the boundaries of their individual businesses and exchange knowledge with other areas of the supply chain, said Evans. “Although air cargo has a complex supply chain, the definition of a shared common goal is critical – to create a safe, secure and efficient supply chain that will then service the customer faster. This is why a consistent message by all parties within the supply chain is important, one that can be then conveyed to regulatory agencies with greater impact.”
Moderating the last panel discussion of the three-day event Boeing Commercial Airplanes’ regional director for market analysis, Tom Crabtree, explained that the rapidly expanding shares of these markets are presently gauged at 14.4 percent for the Middle East and 12.9 percent market share for Asia.
“There is massive growth potential within African air trade,” he stated. “In fact, African air trade with Europe, Asia and North America is set to grow 4.3 percent, 6.6 percent and 5.2 percent respectively per year through to 2033.”
A Boeing estimate, according to Crabtree, suggests that African airlines will acquire over 100 freighters up to the year 2033, mostly standard-body-sized freighters (of 45 tonnes capacity), to tap into these fast-growing intra-regional markets.
Steven Verhasselt, business development manager for Liege Airport in Belgium, believes that the logical next step for African air cargo is to expand these airport hubs, particularly within the eastern coastal cities, to ease cargo flow from Asia across Africa.
Panelists agreed that Asian imports to the continent will be the principle driver for growth of African trade with Asia, and that e-commerce and the rising demand for consumer goods, particularly in India and China, will boost air trade growth in the Asia-to-Africa direction.
In the recent years, Africa has seen major interests from India in terms of investments and also air cargo growth. “There is growth for specialised products such as pharmaceuticals into Africa. But the challenge lies in carriers with less direct connections into Africa,” said Manoj Singh, vice president and head-cargo at Mumbai International Airport.
Meanwhile, home carriers like Ethiopian Airlines and Kenya Airways are seeing aggressive growth volumes from India, particularly from Mumbai, into the east African market. Whereas, West Africa is turning out to be a key region for air cargo volumes out of Mumbai to as much as 200 tonnes a week only into Lagos. “We see 2000 tonnes annually coming into Africa from India and it will be growing,” remarked Martin Drew, vice president, cargo, Jet Airways.
Another major highlight of the event was the award night on the second day. The awards were given away to industry players for their excellence in various sectors of the air cargo industry in style amidst an evening of fun, entertainment and African culture.
The STAT Times Lifetime Achievement Award went to Desmond Vertannes, the much-liked and well-respected previous global head of cargo at IATA. “A life time achievement award is given to someone because the person has made an impact in the industry that he or she represents and the person has a substantial number of years of experience. And in this case Des has both these,” said Hughes, who joined R K Patra, editor-in-chief, STAT Media Group, on stage to honour Vertannes.
Accepting the award Vertannes said: “I am speechless and emotional.” ”The award is recognition of excellence not about me; but it is about us,” he added making reference to the group of people with whom he worked at different organizations in his four-decade long career.
The tone of the event was best summed up by Patra, in his welcome note when he said, “African economies have a great potential to build on their demographic dynamism, rapid urbanisation and natural-resource assets.” And this sentiment was same across every conversation in the event. However, the challenge for African economies is to ensure that greater insertion into global value chains is achieved and has a positive impact on people’s lives.