Air cargo leaders call for action across supply chain

posted on 27th November 2019 by William Hayes
Air cargo leaders call for action across supply chain

Air cargo industry leaders and shippers have called for closer collaboration in the face of an uncertain global economy. The call to action was made during The International Air Cargo Association (TIACA) Executive Summit in Budapest on 21 November 2019.

Summit participants emphasized that volatility in the global economy would persist even as expectations improve – over 7 in 10 executives anticipate an improvement in global trade in 2020. However, the operating environment remains challenging while at the same time shippers continue to stress the need for better service quality from the air cargo supply chain.

Demand continues to grow for high quality, rapid and reliable logistics services. However, gaps in information sharing, lack of transparency and legacy processes have translated to lost opportunities and more volatility for the air freight business.

“Air cargo is an attractive product. But it is only as strong as its weakest link.” said Vladimir Zubkov, Secretary General of TIACA. Airports, airlines, ground handlers and freight forwarders need to do more to ensure smooth and tailored handling of air cargo. “There is an immediate need to step up collaboration across the air cargo supply chain,” said Zubkov.

Leaders emphasized that governments play a critical role in reducing volatility through creating an enabling environment for the sector, to empower economic development. “Better air cargo connectivity lifts more than just payload, it lifts people out of poverty and helps countries move up the value chain,” said Glyn Hughes, Global Head of Cargo of the International Air Transport Association.

The opportunity to propel progress is highest in Africa. It is encouraging that African airlines have the highest air cargo growth rates and medium-and-long term prospects look promising. The recently agreed African Continental Free Trade Agreement will further accelerate trade growth. “Africa has moved from talk to action, the continent-wide free trade agreement, the protocol on free movement of people, and a shift of focus to implementing intra-African air transport liberalization will be transformative,” said Abderahmane Berthé, Secretary General of the African Airlines Association.

Leaders highlighted that technology can help manage volatility through supporting greater agility. While specific technology solutions may differ, having a common reference across supply chain operations was identified as critical. “Having a common reference point is like being able to speak the same language. It makes it possible to have a conversation about what is good and what is bad,” said Lars Magnusson, Business Architect of Ericsson.

The leaders also stressed that if negative perceptions about the sustainability of air cargo were left unaddressed, it could lead to costly policies being imposed and customers turning away. This could also contribute to volatility.

The leaders recognized that the extraordinary climate agreement on international aviation could serve as a valuable example for the broader air cargo supply chain. However, they also emphasised the need for a comprehensive approach that encompasses social, environmental and financial sustainability.