14 March 2017 (Abu Dhabi): The International Air Transport Association (IATA) called on the air cargo industry to accelerate modernization and focus on delivering high quality service.
The call was made at the 11th World Cargo Symposium, which opened in Abu Dhabi today against a backdrop of cautious optimism for the global air cargo sector. After several years of virtually no growth, air cargo demand began to rise in the second half of 2016. January cargo performance showed a 7% growth in demand compared to the previous year.
“Listening to the customer has never been more important. The positive forces currently supporting growth are good news. But our customers are telling us that they expect more. Complicated and convoluted paper-based processes that are basically unchanged from the 16th century are still being used in air cargo today. Our customers pay a premium to ship by air and they rightly expect modern processes and high quality services,” said Alexandre de Juniac, IATA's Director General and CEO.
De Juniac focused on two key areas for industry transformation:
Simple modern electronic processes: The industry has been pursuing a digital process transformation known as e-freight for over a decade. A key element of e-freight is the market adoption of the e-air waybill. Global penetration has nearly reached 50% and the industry is targeting 62% by year-end on enabled trade lanes.
High Quality Services: “Two of the fastest growing and most profitable parts of the business are focused on meeting specific customer needs. These are e-commerce as well as time- and temperature-sensitive cargo such as pharmaceuticals. It's a great example to illustrate that we are most successful when we understand and meet customer expectations with value-added solutions,” said de Juniac.
“Shippers today want responsive services based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation. Technologically speaking, this is totally possible. The key to this and other innovations is using data efficiently and effectively. Finding solutions to unfulfilled (or even unrealized) expectations creates value for customers. And that propels a business forward,” said de Juniac.
The work of Cargo iQ and the StB Cargo initiative is helping to improve quality standards and to support data-driven innovations to add value to the customer experience.
Partnerships are critical in driving industry transformation. “Driving change—whether it is to modernize processes or unlock value through innovation—is challenging for a business where global standards are so vital. Air cargo is highly regulated--so governments must be on-board with change. We are a complex value chain, so building industry consensus is critical. To be successful we must work in strong partnerships,” said de Juniac.
De Juniac noted the need to address safety concerns with the shipment of lithium batteries as an example of where partnerships are critical. Industry and government have worked together to put in place regulations based on global standards so that lithium batteries can be shipped safely. “The problem is that the regulations are not being enforced. We still see too many examples of abuse including mislabeling of batteries. We ask governments to step up enforcement and take a tougher stance against rogue shippers. They have the power to impose significant fines and custodial sentences on those violating the regulations. We ask that they put these in place to stop the violations,” said de Juniac.
De Juniac further identified three key areas where the industry needs the support of governments to implement global standards:
- The adoption of the Montreal Convention 1999 (MC99) governing the regulation of acceptance of digital documentation by governments is a critical perquisite for the e-AWB. To date, 124 countries have implemented MC99. But some key countries where air cargo has an important role still need to come on board. These include Thailand and Vietnam.
- The adoption of revisions to the Kyoto Convention of the World Customs Organization, which facilitates smart border solutions that reduce complexity and cost.
- The quick implementation of the World Trade Organization's Trade Facilitation Agreement, which will make trade cheaper, faster and easier.