Three Priorities for Air Cargo

The International Air Transport Association (IATA) called for further action on three vital aspects of the air cargo business: transitioning to paperless freight processes, a focus on global handling standards for pharmaceutical freight, and tough action to ensure the continued safe transportation of lithium batteries by air.

“Air cargo has had a challenging few years. 2014 saw the first significant boost in volumes since 2010, a trend we expect to continue this year. Revenues, however, are still down from the 2011 peak, and yields are falling for the fourth straight year. I am a cargo optimist. But business improvement will only come by constantly improving the value of cargo. There is a long haul ahead to recapture lost revenues, nevertheless the prospects for the future are bright because the industry is really starting to act strategically and plan for the future,” said Tony Tyler, IATA’s Director General and CEO at the opening of the 9th World Cargo Symposium in Shanghai, China.

The transition to paperless freight finally saw lift-off in 2014, as the industry exceeded 24% global e-Air Waybill (e-AWB) penetration. Key to the improvement was enhancing collaborative work across the air cargo chain and with customs authorities. A growing number of routes around the world now have the necessary regulatory approval, including, from November 2014, Shanghai. “We still have work to do to help businesses transition, but there has been a big change in the mentality of the industry. We can now look ahead and plan for the digitization of other air cargo documents, through a collaborative industry approach,” said Tyler. The industry is aiming to achieve 45% e-AWB penetration in 2015 and 80% in the following year.

Global handling standards for pharmaceutical goods will be an essential step towards air cargo improving its share of the $60 billion a year pharma logistics market. The industry needs to meet customer demands for the integrity of their goods, while complying with increasing amounts of regulation from global authorities. “If these expectations are not met, air cargo risks losing the opportunity presented by this huge market. Modal competitors to air are working hard to win this business,” said Tyler.

To help foster air cargo’s competitiveness in this growing segment, IATA has developed a new initiative, the Centre of Excellence for Independent Validation in Pharmaceutical Logistics (CEIV Pharma). CEIV Pharma assesses and validates cool-chain processes and provides training to guarantee that they comply with all applicable standards and regulatory requirements. “The benefit of CEIV certification for all organizations will be to instill trust and confidence with shippers that the sensitive goods will be handled reliably until they reach the customer,” said Tyler.

The continued safe transportation of lithium batteries remains a key concern for the industry. Robust regulations and guidance exist, but these are not being fully adhered to by all shippers. China is the largest producer of lithium batteries and therefore a key market. IATA has developed the Lithium Battery Shipping Guidelines in Chinese to raise awareness on this vital issue, but the issue is also one for government authorities. “Regulators need to step up. The industry is doing what it can, but without oversight, surveillance and where necessary, enforcement, compliance at the source of the shipment will be limited,” said Tyler.