The air cargo industry is at a tipping point. It has a choice to make. It can either carry on as before, a forgotten and only partially relevant subset of its more glamorous and profitable passenger parent. Or it can become its own industry, with its own lobbying power, investment, trained staff and strengthened relations across the supply chain.
This has, of course, been debated endlessly – but thankfully, the debate now seems to have stopped, and action has started.
Don’t believe it? Why now, you may well ask?
Well, in part, because one airline, some time ago, thought it wise to train its cargo staff, and they are now in a position to pass on the benefits of that knowledge to the industry. While some may see the new and increasingly important TIACA as a kind of ex-KLM mafia, you could also see it as KLM’s gift to the industry. Michael Steen (Atlas), Oliver Evans (Swiss), Stan Wraight (SASI), Enno Osinga (Schiphol), Robert van der Weg (Cargolux)… all began their careers at the Dutch carrier. Sadly, KLM has perhaps had less success than its staff, but right there is proof that a proper training programme has benefited the industry as a whole. Concerns that when this KLM generation has hung up its working boots there will be few to replace it are well-founded.
That, in a sense, is simply a happy coincidence, that at a time the industry needs direction, there is someone who can drive it.
Because there is another reason for this timing. Right now, the air cargo industry has got nothing to lose. Years of neglect – by investors, by passenger airlines, by regulatory authorities, by IATA – combined with the drive and focus of the integrators, and now the ever-improving sea freight sector, have made it frail. Throw into that mix a period of chronic economic weakness, and you’ve got an industry on its knees; an industry that needs to find its voice and show that it plays an essential part in global GDP.
The relationship between air freight and GDP is complex, and one that IATA is studying, but in 2011 the University of Nottingham published a paper, ‘Estimating the effects of containerisation on world trade’, which found that containerisation led to an increase in bilateral trade flows of between 75% and 100% between 1962 and 1990. It’s clear, if you talk to flower growers in Africa, vegetable exporters in South America, high-tech manufacturers in Asia, that air cargo enables world trade, it enables otherwise isolated countries to sell their produce in world markets.
It is also a good time for other, non-industry reasons – slowly but surely, governments are beginning to understand that behind strong national economies lies globalisation. And behind globalisation lies logistics. For some reason that no one seems to be able properly to identify, logistics has been concealed as the powerhouse of globalisation – a cover-up that hasn’t benefited the wider industry at all.
Irregular Customs procedures, lack of financial investment, uncomprehending governments, poor infrastructure, to name but a few, are factors that have conspired to make life more difficult than it should be for forwarders, shipping lines and airlines, but that is beginning to change. Logistics and freight is beginning to get the recognition that it deserves; never has the opportunity been better for bodies such as TIACA to capitalise on that.
Additionally, as governments the world over struggle to kickstart their economies – and in many cases with not a clue as to how to do it – they are starting to turn to the more innovative private sector which, along with its workforce, knows a thing or two about streamlining processes, introducing efficiencies, in a bid to turn a profit. And as governments – and in air freight’s case the UN body ICAO – start to listen, now is certainly the time to speak to them.
So what needs to be done? Well, TIACA has identified several points. Customs procedures are critical. Border delays are particularly harmful for air freight, whose USP is speed. Customs processes need to be modernised, automated and quick.
Equally important, traffic rights for all-cargo carriers should not be determined by the passenger business, but by the economic argument for shippers and countries. Likewise sustainability - CO2 emissions would fall by 12% if countries made proper air traffic management improvements, while noise pollution at airports could be better managed - and would allow for cargo night flights - if there was, for example, better land-planning and noise abatement procedures.
There are many things which could help make air freight a viable industry, and it is up to its members to start acting locally to make it happen.
For some companies, it will all be too late. This isn’t going to be a quick process. A handful of people can’t change everything, globally, now. But as all-cargo carriers struggle beyond the odds to keep flying, there is more reason than ever for the industry to speak with one voice and make changes. The list of once-strong all-freighter operators, who are now distressed in some way, gets longer by the day. We owe it to those who battled to set up an airline - not a job for the faint-hearted - to ensure that freighters are still relevant, and could be profitable again if they had better traffic rights, an understanding from authorities that they have a role to play - they simply need to be allowed to play it.
And, on the week before the CNS partnership conference (IATA’s US arm) begins in Phoenix, let’s hope that the industry turns talk into action. Now is the time.
