The global air cargo industry is one of the clearest indicators of the world economy as it so quickly reflects changes and trends in manufacturing, export and import orders and consumer spending.
Global air cargo traffic in 2012 decreased 1.5% compared to 2011 in terms of freight tonne kilometres (FTKs), the second consecutive year of cargo traffic decline, and the fourth time in five years, that air cargo traffic has decreased on an annual basis.
The outlook for 2013 indicates a small, but at least positive and welcome growth, with a 1.4% rise in FTKs, and ACI is prediciting a near 3% rise in cargo volumes.
Nations and international businesses need the air cargo industry to prosper because it plays such a vital role in world trade.
In value terms, 35% of world trade worth over $5 trillion a year moves by air cargo, so whether you are a Fortune 100 company or a farmer growing fresh berries in Africa for the European consumer market, air cargo will play an important part in your prosperity somewhere down the line.
Speaking at TIACA’s Air Cargo Forum & Exposition in Atlanta, Georgia, last October, Ray LaHood, US Secretary of Transportation, acknowledged the importance of our industry in his keynote address.
He told the air cargo leaders present: “We are committed to your industry – because what’s good for air cargo is good for the US economy. A strong air cargo industry expands international trade and contributes to job creation and prosperity at home.”
A healthy air cargo industry, he added, is essential in helping the US government achieve its goal of doubling the nation’s exports by 2015. Air cargo now accounts for 31% of the total value of US exports.
It is very difficult in these unprecedented economic times to look beyond the impact of what’s happening in the financial markets and how this is affecting businesses and consumers, but we have to do so because this is not the only challenge we face.
Aviation and air cargo security is a daily focus right across our industry. We also face potentially costly and significant changes as a result of carbon emissions ‘taxes’, and we also have some ‘housekeeping’ of our own in terms of the full adoption of e-cargo processes.
We probably have the biggest ‘to do’ list our industry has even seen – but something very positive has come out of it. For many years, there has been a big ‘them and us’ void between the industry and the bodies that regulate it. When changes are mandatory, we are naturally obliged to adopt them, but we have continually pushed for a proper level of engagement with the regulators to find the most viable ways of achieving their goals without impairing the speed of air cargo, its prime competitive advantage.
Today, we have finally reached a point where all major parties recognise the advantages of collaboration and TIACA, which has taken a leading role in bringing this about, is extremely positive about what this can achieve.
In 2010, TIACA joined forces with the International Federation of Freight Forwarders Associations (FIATA), the International Air Transport Association (IATA), and the Global Shippers’ Forum (GSF) to form the Global Air Cargo Advisory Group (GACAG) – an industry advisory group that ensures the air cargo industry has a strong, unified voice in its dealings with worldwide regulatory authorities and other bodies whose decisions directly impact on air cargo.
It is already clear that the people in power, whose decisions shape the way we do business, are listening and increasingly demonstrating a commitment to work with us.
We have been working proactively to achieve this, building closer ties with US Customs and Border Protection (CBP) and the US Transportation Security Administration (TSA), as well as key bodies such as the World Customs Organization (WCO), the International Civil Aviation Organization (ICAO), and the European Commission.
We are particularly pleased to be building closer ties with ICAO because it is going to play such a key role in major areas I mentioned earlier, such as security and global emissions.
TIACA and ICAO have committed to enhanced co-operation in the field of air cargo transportation. This covers the areas of air cargo and mail security and facilitation; environmental practices; market access; capacity building; and air cargo safety.
We also hope to gain further benefit and opportunities for co-operation from ICAO’s institutional relationships with the United Nations and its specialised agencies, regional civil aviation bodies and regional civil aviation and economic integration organizations, as well as industry stakeholders.
Having campaigned strongly against the EU’s inclusion of aviation in its Emissions Trading Scheme – which has since been suspended – we support ICAO’s commitment to press ahead with creating a global solution for managing aviation’s carbon emissions.
The Kyoto Protocol designated ICAO as the body with authority to set international aviation’s greenhouse gas policy and it is now working towards delivering this.
These are issues that we can influence but not directly control. E-cargo, however, is well within our own capability – and its adoption is long overdue. At the end of 2012, GACAG produced a ‘roadmap for paperless air cargo’ to accelerate the industry’s adoption of e-Cargo in 2013.
For the first time, the roadmap outlines a shared end-to-end industry approach, with clear leadership roles centred around three core components, or Pillars:
Pillar I: Engaging regulators and governments worldwide to create an ‘e-freight route network’ with fully electronic customs procedures and where regulations support paperless shipments
Pillar II: Working collaboratively within the cargo supply chain to digitise the core industry transport documents, starting with the air waybill
Pillar III: Developing a plan to digitise the commercial and special cargo documents typically accompanying airfreight today, in or outside of the ‘Cargo pouch’
Using the roadmap, we aim to create an environment, by the end of 2015, where the core transportation documents are paperless on at least 80% of the world’s trade lanes, and where the traditional cargo pouch accompanying the shipments would be removed for a large set of shipments. As part of this, a key goal will be to achieve 100% e-AWB by the same timeframe.
There are clear signs of the value of e-freight. Amsterdam Schiphol, for example, says e-freight shipments have jumped from only 1,665 to 21,176 in two years following the launch of a state-backed drive to encourage paperless transactions.
Pilot projects between shippers and forwarders as a part of this initiative have resulted in substantial time savings, the airport has reported.
Amsterdam Schiphol’s cargo development director, Saskia van Pelt, a founder member of e-Freight@NL, is reported as saying: “We will continue to drive the use of e-freight at Schiphol because it reduces costs, improves efficiency and speed, is environmentally-friendly and will help to differentiate air cargo from other transport modes. We consider paperless transport as one of the top priorities to improve efficiency in the supply chain.”
To support such initiatives globally, we have called on Members of the World Customs Organization (WCO) to embrace and implement the principles of the Revised Kyoto Convention and shift from a dependency on paper documents to a full e-Customs environment.
We believe harmonisation of global customs procedures will play a pivotal role in establishing e-Customs platforms and have pledged the support of the entire air cargo industry in this effort.
At a minimum, we have highlighted processes that should be accomplished through electronic means: export and import goods declarations to Customs provided by exporters, importers and/or their forwarders or customs brokers; export, import and transit cargo declarations sent to Customs by airlines; release of shipments into free circulation following completion of Customs formalities; and recordkeeping and archiving for all participating parties.
All of these changes promise benefits and growth opportunities for airports around the world, including those across the globe that are members of TIACA.
There is no question that fast and secure freight movements through airports will lead to enhanced optimisation of their air cargo infrastructure and new potential to grow alongside their customers.