The challenge of attracting, retaining and developing an inclusive and diverse workforce will continue, requiring innovation in recruitment and training – and presenting the industry’s value proposition, says TIACA’s director general Glyn Hughes
What a difference a year makes… We ended 2021 with record industry volumes, load factors, yields, and entered 2022 with a huge degree of optimism that was dashed in February with the Russian invasion of Ukraine. The subsequent impact on the global economy, initially with rocketing energy costs then record levels of inflation and consequential central bank actions to curb the rise. These conspired to slow the global economy and with a slowing outlook we saw job contractions and defensive consumer behaviour. The impact on air cargo was evident and we entered into 2023 with lower volumes, lower PMI – indicating continued lower volumes and reduced yields, although still much higher than pre-covid levels. We are seeing some modal shift as maritime rates have dropped – in some cases by 80% during 2022.
However, there is some optimism that the second half of 2023 may offer some green shoots of recovery. Over the past two years, global auto sales are down dramatically, smart phones are dramatically down, and the chip sector has been hit with numerous production challenges. So, consumer demand may finally get unleashed when inflation shows signs of reducing. This may be enhanced as wage levels have increased in response to the high inflation numbers.
Challenges and opportunities
The challenges will revolve around investment and positioning during this period of reduced demand in order to effectively capitalise as an industry when the recovery arrives. Technology and innovation investment must continue as the world we serve continues to evolve. E-commerce solutions demand further innovation as does the need for enhanced airport infrastructure.
Embracing new technology is a critical component of future industry success, particularly solutions in the areas of distribution, customer interaction, process and shipment monitoring and regulatory compliance. As shipper demands become more sophisticated, we must collectively be ahead of that evolution.
Working more effectively together in 2023
As a trade association we feel we have an important role to play in bringing parties together, sharing ideas and best practices, challenging traditional norms and showcasing excellence to motivate and inspire even greater success.
TIACA introduced a number of new programmes in 2022 designed to support the industry further. We launched the TIACA BlueSky programme, which is the industry’s first independent assessment programme designed to provide organisations with a complete assessment of their sustainability credentials across a number of critical areas. We also launched our regional events programme, which is designed to focus on the unique and specific opportunities and challenges at a regional level. This valuable input will feature into our overall work programme. And, consistent with the TIACA Boards’ desire to strengthen our focus on regional challenges, we have employed our first Regional Representative to enhance local support and member engagement.
Other observations
In March, the EU ICS2 programme will get extended to general cargo and thus additional compliance complexity will need to be incorporated into airline and forwarder processes.
The challenge of attracting, retaining and developing an inclusive and diverse workforce will continue and we will need to be innovative in all areas of recruitment and training and how we present the industry value proposition to ensure we can meet staffing needs.
Additionally, the area of sustainability will continue to grow in prominence as regulators, financial institutions, customers, partners and employees will increase their expectations for improvement. Aviation has adopted a net-zero target for 2050, much of which will be based on the use of Sustainable Aviation Fuel (SAF); but with current production levels only accounting for about 1-2%, it means considerable government investment and incentives will be required, and the time to start is now.
