IATA urges air cargo modernization

The International Air Transport Association (IATA) called on the air cargo industry to accelerate modernization and focus on delivering high quality service.

The call was made at the 11th World Cargo Symposium, which opened in Abu Dhabi recenty against a backdrop of cautious optimism for the global air cargo sector. After several years of virtually no growth, air cargo demand began to rise in the second half of 2016. January cargo performance showed a 7% growth in demand compared to the previous year.

“Listening to the customer has never been more important. The positive forces currently supporting growth are good news. But our customers are telling us that they expect more. Complicated and convoluted paper-based processes that are basically unchanged from the 16th century are still being used in air cargo today. Our customers pay a premium to ship by air and they rightly expect modern processes and high quality services,” said Alexandre de Juniac, IATA’s Director General and CEO.

Dr. Michael Hanke, founder and managing director of SkaiBlu, an e-commerce consultancy assisting clients in the aviation industry, tells Logistics Management that ecommerce has transformed the air cargo business from being supply chain focused to be much more “customer centric.”

He says that from a customer’s perspective, with e-commerce, “convenience”, “control”, and “cost” (the so-called three “Cs”) assume a crucial role: Today, customers determine the hours of operation (they log on whenever they want, thus a company always has to be “on”), customers increasingly want to serve themselves (think of a retailer checking the status of their shipments via e-tracking or reserving shipping space through an air cargo business website ), and companies’ e-commerce services need to be delivered at the customer’s location (be it an office desktop, a mobile device, or wearable computing).

De Juniac focused on two key areas for industry transformation:

Simple modern electronic processes: The industry has been pursuing a digital process transformation known as e-freight for over a decade. A key element of e-freight is the market adoption of the e-air waybill. Global penetration has nearly reached 50% and the industry is targeting 62% by year-end on enabled trade lanes.

High Quality Services: “Two of the fastest growing and most profitable parts of the business are focused on meeting specific customer needs. These are e-commerce as well as time- and temperature-sensitive cargo such as pharmaceuticals. It’s a great example to illustrate that we are most successful when we understand and meet customer expectations with value-added solutions,” said de Juniac.

“Shippers today want responsive services based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation. Technologically speaking, this is totally possible. The key to this and other innovations is using data efficiently and effectively. Finding solutions to unfulfilled (or even unrealized) expectations creates value for customers. And that propels a business forward,” said de Juniac.

The work of Cargo iQ and the StB Cargo initiative is helping to improve quality standards and to support data-driven innovations to add value to the customer experience, maintain IATA spokesmen. 

Partnerships are critical in driving industry transformation. “Driving change—whether it is to modernize processes or unlock value through innovation—is challenging for a business where global standards are so vital. Air cargo is highly regulated—so governments must be on-board with change. We are a complex value chain, so building industry consensus is critical. To be successful we must work in strong partnerships,” said de Juniac.