Modal shift reinforces need to boost air cargo competitiveness

Sea shipping is becoming a stronger competitor to air cargo, contends the International Air Transport Association (IATA).

As reported earlier this week, IATA said that international economic indicators are suggesting that the global economy bottomed out in the third quarter of 2012. Industrial production and business confidence measures have been improving since then.

“Demand for sea shipments already reflects the recovery in some parts of the world. But we are not yet seeing the positive impact of this in air cargo markets,” said Tony Tyler, IATA’s Director General and CEO.

While IATA said that there’s been a tepid “uptick” in demand, the industry needs to do more to sustain it.

“The air cargo value chain is embracing the technological change needed to make e-Freight a reality,” said Tyler. “For example, we are targeting 100% e-Air Waybill (e-AWB) utilization by 2015, a major stepping stone to going paperless. This would boost to the competiveness of air cargo with more efficient processing and faster deliveries. More efficient connectivity in turn will foster economic growth. The industry is united in its efforts to modernize business practices.”

IATA said that shippers need governments, regulators and customs authorities on board too, adding that the e-Freight system cannot happen while regulators insist on seeing paper copies of documents.

A major step towards implementation of e-Freight was achieved in March with the endorsement by the Cargo Services Conference of the Multilateral e-AWB, which avoids the need for bilateral e-AWB agreements between airlines and freight forwarders.

It is important to note that this new agreement will play a major role in increasing take-up of the e-AWB to reach the industry target of 100% utilization by 2015.