IATA’s Glyn Hughes gives a unique perspective on cargo
IATA's Global Head of Cargo, Glyn Hughes gives us his view on Air Cargo market for 2018 and beyond.
At the start of 2017 we saw some positive green shoots of growth and expected improvements in volumes derived from e-commerce but little could we foresee the month after month of growth, culminating in a record year for air cargo with nearly 60 million freight tonnes transported.
This represented an overall 9% growth vs 2016 which was twice that of the growth in international trade which was 4.3%.
That growth translated into the equivalent of US $5.6 trillion worth of goods being transported, or US$15.3 billion worth of goods every day. There can be no arguing with the economic and social benefits that the air cargo industry brings to the global economy.
The dramatic pace of growth this past year did come with some challenges and we saw towards the year-end some backlogs and sadly some capacity constraints on high demand trade lanes.
Throughout 2017, air cargo reinforced its commitment to modernization, positioning itself as the preferred mode of transport for the global economy’s high value-to-weight manufactured products such as microelectronics, pharmaceuticals, aerospace components and medical devices.
And slowly we are beginning to see transformational progress. Supply chains are becoming more customer-centric and solutions are being developed that provide enhanced shipping quality and service, and better predictability.
IATA's Cargo IQ measurement statistics show that on average it took 1.41 days for cargo to be cleared through customs in 2017, with significant regional variations. In these days of ever-increasing demands for accelerated delivery times, fueled by e-commerce, we need governments to embrace the need for fast and effective border controls to facilitate trade not stifle it.
Turning now to digitalization of the air cargo industry the past months have shown some mixed results.
eAWB penetration currently stands at 53% which means over 800,000 shipments moved without a paper AWB in December 2017 alone. So clearly things are still moving in the right direction but more needs to be done.
Industry efficiency and quality are critical moving forward so the industry has come together to develop a number of programs which aim to efficiently address the need for industry verified operational capacity at cargo facilities.
Work now turns to interactive cargo to finally give air cargo shipments a voice.
Finally, I want to conclude on a topic which is I believe one of the most crucial for this industry, people.
The global workplace provides many opportunities for the next generation to find their place and make a difference. In order to attract and retain the best, air cargo needs to up its promotional efforts. Few industries on this planet can have the impact of air cargo which saves lives, enhances global living standards, allows developing countries to produce goods and sell to global markets and this is performed with passion 365 days a year by thousands of dedicated individuals. We need to capture these inspirational actions and expose to the next generation workforce.
So what can we expect from the rest of 2018, export orders are strong and e-commerce is growing. The growth prospects are very well received by the industry, but with growth comes additional challenges, and we anticipate a number to grow in significance as we move forward together as an industry.
We need to address congested airports, slot restrictions, capacity constraints, complex regulations, ever more demanding customer expectations, facility congestion, increasing needs for digitalized data, rapid technology advancements and fight against trade protectionism whilst embracing the need to attract, retain and develop quality people.