Executive Briefings

Growth of Air Cargo Relies on Cooperation of All Players in the Industry, IATA Head Says

The International Air Transport Association (IATA) called on airlines and their partners in the air cargo supply chain to work together to make the mode more competitive and address the challenges of safety, security and sustainability.

"Air cargo is vital to the global economy, transporting more than $5tr worth of goods annually, or more than a third of world trade by value. And for airlines, it accounts for about 12 percent of industry revenues. But, like the rest of the airline industry, air cargo is a tough business. The last two years have been particularly difficult. Last year saw a 2-percent decline in both air cargo demand and yields. There are early signs that an upturn is on the way. To seize the opportunity we must strengthen the industry's competitiveness," said Tony Tyler, IATA's director General and CEO.

Speaking at the World Cargo Symposium in Doha, Qatar, Tyler outlined key industry priorities:

Modernize processes: Transitioning to a paperless operating environment is critical to improving air cargo's competitiveness. The Global Air Cargo Advisory Group (GACAG) endorsed an e-freight road map that reflects agreement on roles and responsibilities for pushing this critical project forward. IATA is committed to implementing the e-Air Waybill (e-AWB) "”targeting 20-percent implementation by the end of 2013 and 100 percent by the end of 2015. The International Federation of Freight Forwarders (FIATA) and the Global Shippers Forum have agreed to push forward the digitalization of other freight documents. The e-AWB penetration was 6.8 percent at the end of 2012. "Our e-AWB targets are ambitious. The establishment of the Multilateral e-AWB Agreement will play an important role in boosting implementation. We have the success stories of several airlines which have implemented 100 percent e-AWB policies in their hub markets proving that progress is possible," said Tyler. The industry is also working with governments for the progressive adoption and implementation of the Montreal Convention 1999 which provides the legal framework for electronic documentation.

"¢ Secure the supply chain: IATA called on governments to implement mutually-recognized secure supply chain regimes. The Secure Freight initiative championed by IATA is an example of a supply chain framework which is being piloted in eight locations worldwide. The first was Malaysia where studies have estimated that Secure Freight also brings an economic benefit of $1bn to $2bn over five years. "Air cargo is a global network. We need a risk-based approach with states mutually recognizing their security regimes," said Tyler. He noted progress with the U.S. Air Cargo Advanced Screening program, the EU's Air Cargo or Mail Carrier operating into the European Union from a Third Country Airport security directive and the e-Cargo Security Declaration.

"¢ Ensure that dangerous goods regulations are followed: Safety is the industry's top priority. Recent concerns over lithium batteries transported as air cargo have reinforced the need for greater education and communication over the rules for shipping these items. "We don't need more regulation. But we need to ensure that the regulations we have are followed. With over 50 million tonnes of cargo transported by air annually, it is a big challenge. And this is being made even bigger as the number of shippers proliferates"”particularly with the growth of e-commerce," said Tyler.

"¢ Focus on environmental sustainability: "The ability to manage our carbon emissions is our license to grow. That is why we are committed"”as an industry"”to improving fuel efficiency by 1.5 percent annually to 2020, capping CO2 emissions from 2020 with carbon-neutral growth and cutting net emissions in half by 2050 compared to 2005. No other global industry has made such commitments. And the strategy to achieve these is agreed and clear"”focusing on technology, operations, infrastructure and positive economic measures," said Tyler.

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"Air cargo is vital to the global economy, transporting more than $5tr worth of goods annually, or more than a third of world trade by value. And for airlines, it accounts for about 12 percent of industry revenues. But, like the rest of the airline industry, air cargo is a tough business. The last two years have been particularly difficult. Last year saw a 2-percent decline in both air cargo demand and yields. There are early signs that an upturn is on the way. To seize the opportunity we must strengthen the industry's competitiveness," said Tony Tyler, IATA's director General and CEO.

Speaking at the World Cargo Symposium in Doha, Qatar, Tyler outlined key industry priorities:

Modernize processes: Transitioning to a paperless operating environment is critical to improving air cargo's competitiveness. The Global Air Cargo Advisory Group (GACAG) endorsed an e-freight road map that reflects agreement on roles and responsibilities for pushing this critical project forward. IATA is committed to implementing the e-Air Waybill (e-AWB) "”targeting 20-percent implementation by the end of 2013 and 100 percent by the end of 2015. The International Federation of Freight Forwarders (FIATA) and the Global Shippers Forum have agreed to push forward the digitalization of other freight documents. The e-AWB penetration was 6.8 percent at the end of 2012. "Our e-AWB targets are ambitious. The establishment of the Multilateral e-AWB Agreement will play an important role in boosting implementation. We have the success stories of several airlines which have implemented 100 percent e-AWB policies in their hub markets proving that progress is possible," said Tyler. The industry is also working with governments for the progressive adoption and implementation of the Montreal Convention 1999 which provides the legal framework for electronic documentation.

"¢ Secure the supply chain: IATA called on governments to implement mutually-recognized secure supply chain regimes. The Secure Freight initiative championed by IATA is an example of a supply chain framework which is being piloted in eight locations worldwide. The first was Malaysia where studies have estimated that Secure Freight also brings an economic benefit of $1bn to $2bn over five years. "Air cargo is a global network. We need a risk-based approach with states mutually recognizing their security regimes," said Tyler. He noted progress with the U.S. Air Cargo Advanced Screening program, the EU's Air Cargo or Mail Carrier operating into the European Union from a Third Country Airport security directive and the e-Cargo Security Declaration.

"¢ Ensure that dangerous goods regulations are followed: Safety is the industry's top priority. Recent concerns over lithium batteries transported as air cargo have reinforced the need for greater education and communication over the rules for shipping these items. "We don't need more regulation. But we need to ensure that the regulations we have are followed. With over 50 million tonnes of cargo transported by air annually, it is a big challenge. And this is being made even bigger as the number of shippers proliferates"”particularly with the growth of e-commerce," said Tyler.

"¢ Focus on environmental sustainability: "The ability to manage our carbon emissions is our license to grow. That is why we are committed"”as an industry"”to improving fuel efficiency by 1.5 percent annually to 2020, capping CO2 emissions from 2020 with carbon-neutral growth and cutting net emissions in half by 2050 compared to 2005. No other global industry has made such commitments. And the strategy to achieve these is agreed and clear"”focusing on technology, operations, infrastructure and positive economic measures," said Tyler.

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