Air cargo makes it happen sustainably
From safety and security to efficiency and environment, the global air cargo industry is reinventing itself to be the crucial conduit for global trade and commerce with sustainability as the primary focus.
Two catastrophic aviation events of 2014 involving Malaysia’s flag carrier MH370 and MH17 and collectively resulting in the loss of 537 human lives have completely caught the global aviation industry off guard and searching for solutions to fly people and goods around the world more safely amidst many other challenges the industry is already dealing with. A few days after Malaysia Airlines Flight 17 was downed, allegedly by a surface-to-air-missile (the exact cause of the downing is still unclear and the investigation is underway) in a conflict zone held by Pro-Russian rebels in eastern Ukraine, Tim Clark, president of Dubai's Emirates, called for a global meeting of carriers to agree on a response to an event like this and rethink of the security threats posed by regional threats. “The international airline community needs to respond as an entity, saying this is absolutely not acceptable and outrageous, and that it won’t tolerate being targeted in internecine regional conflicts that have nothing to do with airlines,” Clark was quoted in a Reuters report. There is a growing demand on the International Air Transport Association (IATA), which represents about 200 global airlines, to initiate the process and see what changes need to be made in the way the industry tackles regional instability. “This has changed everything. We will no longer rest on the protocols we had in place that we honestly thought were safe. There will have to be new protocols and it will be up to the International Civil Aviation Organization (ICAO) and IATA and the aviation community to sort out what the protocols have to be,” Clark was quoted in the same report. Lufthansa was quick to join Emirates saying international security protocols should be reviewed. The above security threats and challenges equally worry the air cargo industry as well. Any such incidents leave an impact on global trade and commerce directly or indirectly. According to IATA estimates, $6.4trillion worth of goods get transported by air, which accounts for 35 percent of the total value of goods traded. However, it represents only less than one percent of the total volume of goods traded. Industry estimates suggest that the volume of goods carried in the belly hold of passenger aircrafts is same as those carried by freighters. But there is no doubt that air transportation is, and will continue to be hugely important to world trade. While safety and security continue to pose the biggest threats to the air cargo industry, for its sustainability, the industry has to quickly adapt itself to the ever changing technology innovation, the evolving consumer demand and the pressures of such consumer demand on global trade and commerce. While the industry is slowly rescuing itself from the financial crisis of 2008, air freight remains key in the supply chain even during periods of crisis. Speed, reliability and security have real value for businesses and therefore it is imperative for businesses to depend on air cargo to achieve their goals. However, there has been a serious effort from IATA’s cargo division to significantly improve the value of air cargo. As part of this, the industry organization is calling upon different stakeholders to quickly adopt the latest technology innovations and alight itself with other industries which are way ahead in technology adoption. Glyn Hughes, who was appointed recently as IATA’s global head of cargo, says the focus will continue to be on safety, security and obviously the transformation through the e-initiative. He is confident that the industry can achieve its latest goal of 22 percent e-AWB (Electronic Airway Bill) penetration by the end of 2014. The rate was 14.3 percent through April this year. “We have missed the industry targets that have been set, and the whole industry underestimated the magnitude required to achieve this. It doesn’t just involve one component; it’s the entire supply chain. When you put in all the various supply chain components, it was a much more sizeable task than we initially anticipated,” said Hughes. For the air cargo industry, another important challenge is reduction in transit time. “Accelerating the end to end transit time to 48 hours has tremendous value proposition for air cargo. We enhance the value; identify what that value is and promote the benefits of that value,” said Hughes. Another aspect that the air cargo industry should continuously strive for is preparing the future talent. “There is an urgent need to bring in the future talent; the next generation of entrepreneurs. We got to promote the value of air cargo, to keep the industry safeguarded for the future,” Hughes emphasised. These are critical elements to keep the air cargo industry sustainable especially because since 2010 passenger revenue has increased by over 25 percent but cargo revenue in the same period decreased by five percent. When it comes to adoption of technology Oliver Evans, who is the chairman of the board of directors at the International Air Cargo Association (TIACA), said that the industry is slow in technology adoption. “Our past actions and decisions determine the future of air cargo industry in the world,” said Evans. According to him, for every stake holder in the air cargo industry they must look for “futures” instead of just “future”. “Because there are many futures for our industry and not just one future,” he said. While the aviation industry is committed to achieving carbon-neutral growth by 2020 and a key strategy to reach this goal will be the use of sustainable biofuel. Aviation biofuel presents an effective solution to reducing the growth of CO2 emissions. While going paperless is environmental friendly measure IATA’s green cargo agenda involves specific plans like harmonizing measurement of air cargo carbon footprint, promoting lightweight ULDs, challenging nightflight bans, which has left a huge impact on the air freight industry around the world with major European airports imposing close to a six-hour night flight ban. The development of long-term strategies and investments to achieve a sustainable industry is a key to guarantee the future of air cargo. IATA understands that the industry needs to work not only to address environmental issues, but also to promote the vital role it plays in our day-to-day life, and to attract new blood to the business. On the economic impact side IATA had rolled out the “Air Cargo Makes It Happen” campaign to tell the importance of air cargo for global trade and local communities. The global economy depends on the ability to deliver high quality products at competitive prices to consumers worldwide. And to that extent air cargo is and will remain a critical part for global businesses.