Apr – May 2019

Issue date 12 April 2019
issue number 25

At WCS in Singapore, IATA’s Glyn Hughes said air freight has become more innovative than at any time in its history, with everyone talking about new initiatives they are working on, often reflecting new possibilities that technology opens up.

And a shift towards ‘solution-led standards’ from ‘standard-led solutions’ means companies and individuals are now trying new things that can then lead to the basis for new standards. That is faster and much more dynamic, encouraging greater innovation, Hughes notes, enabled by dramatic advances in digital technology.

Indeed, almost all of the tracks at WCS featured a strong vein of digitalisation, along with information-sharing and collaboration. And those three themes are common for most areas air freight needs to address, Hughes believes.

Importantly, there also now seems to be unprecedented support for pursuing initiatives to meet these challenges, with heads of cargo ‘bullish’ about embracing technology, and in a hurry to do so, he notes.

As well as being themes within this magazine’s coverage of WCS, they are common themes within the other articles: from the interview with Lufthansa Cargo CEO (and IATA Cargo Committee chairman) Peter Gerber on page 4, to the discussions about investments in cargo handling infrastructure on page 14; the dynamic changes within Asia highlighted on page 18; to the articles on data-sharing and new quality standards within pharma and perishables handling on pages 24 and 44, respectively.
Hughes noted how optimistic people seemed at WCS, despite the year starting relatively poorly – in terms of air cargo demand and uncertainty in the wider global economy. He suggests the sector has become more resilient than in the past, perhaps also buoyed by continuing strong demand from certain special cargo verticals, particularly e-commerce, in the last few years.

He believes this is one of the most significant ‘structural’ changes the sector has seen since the global financial crisis and growing protectionism slowed ‘the multiplier between international trade growth and GDP growth’ from around 2:1 to just 1:1. The ‘modal windfall’ from those special verticals means air freight is now ‘somewhat cushioned’ from the full depth of any slowdown in international trade.

IATA’s conclusion is this: while there has been a slowdown in recent months, once the uncertainty – e.g. from the US-China trade war and Brexit – is resolved, the industry can go back to a higher growth trajectory.

And in the meantime, there is a lot of innovation – notably involving digitalisation, data-sharing and collaboration – to be getting on with. And that all seems to make sense. In theory, at least!