Digitisation, trade facilitation, safety tops agenda at WCS

March 14, 2018: The International Air Transport Association (IATA) underscored four priorities for success of the air cargo industry in the future, which includes accelerating the digitisation of the supply chain, enforcing regulations for lithium batteries, efficient trade facilitation, and development of the next generation of air cargo leaders.

“Air cargo industry witnessed an exceptional year in 2017, clocking a growth of nine percent. We expect a healthy 4.5 percent growth in 2018. There are great opportunities in the e-commerce, and the movement of time-and-temperature sensitive goods, such as pharmaceuticals. But we must accelerate the modernisation processes, enforce regulations for safer transportation of lithium batteries, and improve efficiency of trade facilitation. In the long run, we also need to inspire the next-generation of talent. The air cargo industry has agreed to focus on these key areas, and we must follow through,” said Glyn Hughes, global head of cargo, IATA.

Speaking at the three-day World Cargo Symposium held in Dallas, US, Hughes also called for a strong collective voice against the building headwinds of protectionist measures.

ACCELERATING DIGITIZATION IN SUPPLY CHAIN

The industry has been pursuing a digital process transformation known as ‘e-freight’ for over a decade. Key element of e-freight is the market adoption of the e-air waybill (eAWB). Global penetration has nearly reached 53 percent, and the industry is targeting 68 percent by year-end on enabled trade lanes.

IATA is facilitating and supporting the modernisation and transformation process through its industry transformation program — Simplifying the Business (StB) Cargo.

“The penetration of eAWB currently stands at 53 percent. The implementation of e-AWB is quite sluggish. But we are over the half-way mark. And the industry has agreed to amend a number of resolutions and recommended practices to make the eAWB the default standard to enabled trade lanes. We are optimistic that it should spur eAWB efforts forward in 2018,” said Hughes.

IMPROVING SAFETY REGULATIONS FOR LITHIUM BATTERIES

Safety is the industry’s main priority. Global standards and regulations are in place to ensure safe transportation of dangerous goods, including lithium batteries. However, mis-declared or non-compliant dangerous good shipments, especially involving lithium battery consignments, continue.

“We see too many examples of abuse, including mislabeling of lithium batteries. Governments must step up enforcement of dangerous goods regulations, and take a tougher stance against rogue shippers. It includes using their power to impose significant fines and custodial sentences on those violating the regulations,” said Hughes.

SMARTER AND EFFICIENT BORDERS

It took an average of 1.41 days to clear goods through customs controls in 2017 (with significant regional variation), according to IATA’s Cargo IQ statistics.

“This is too slow for businesses that compete on speed to meet their customer needs. We need to work together with governments to cut the red tape and facilitate faster, cheaper and easier trade,” said Hughes.

IATA has urged governments to implement three key global standards. The Montreal Convention 1999 (MC99) enables digital documentation in customs documentation, which is a key enabler of the e-AWB. Till date, 131 countries have implemented MC99. But some key countries where air cargo has an important role still need to come on board. It includes Algeria, Angola, Bangladesh, Ghana, Iran, Nepal, Sri Lanka, Tunisia, Uzbekistan and Vietnam.

Revisions to the Kyoto Convention of the World Customs Organization will facilitate smart border solutions that reduce complexity and cost. The WTO’s trade facilitation agreement will make trade cheaper, faster and easier.

ATTRACT, RETAIN AND DEVELOP TALENT

Air cargo industry is expected to grow at 4.9 percent over the next five years. The ability of air cargo to reach its full potential hinges on the creation of a professional, skilled and sustainable workforce.

IATA’s Future Air Cargo Executives (FACE) program aims at attracting, retaining and developing a diverse pool of young professionals, to prepare them to become the next-generation of leaders in the cargo Industry.

“To achieve the scale and sustainability required to meet the skills need for future growth of the air cargo industry, a more collaborative and concerted effort towards developing a sustainable workforce is required across out industry,” said Hughes.