COMMENT
02/01/2014 - 00:00

Transforming Lives Worldwide

Look around any household and you will see the influence of air cargo. Most kitchens are replete with exotic foods and other ingredients. Work areas and living spaces host computers; mobile phones and other technology produces assembled though global supply chains.

Medicine chests in the bathrooms contain pharmaceuticals manufactured using globally sourced ingredients. The car in the garage contains parts that were assembled from far flung makers. And the bedroom may contain flowers or jewels transported from places near and far.

The front-end of the story is the value that air cargo literally delivers to make our daily lives richer. In total, about $6.4 trillion of goods traded internationally get to their destination by plane. The back-end of the story is equally impressive. The global marketplace facilitated by air cargo has created enormous opportunities for jobs, innovation, collaboration and the improvement of people’s lives. It is not as easy to measure. But it would be no overstatement to say that air transport has transformed the way that the world lives and works.

Despite all the good that air cargo creates, it is no secret that the industry has been going through a rough patch since the strong rebound of 2010. Growth has flat-lined. Yields have been under pressure. And our competitors are making a solid case to value-conscious customers.

There is good reason to be optimistic about the future of air cargo. Some are postulating that there has been a “modal shift” in the way that goods are transported. There are clearly challenges. But the solution is to drive change as the economic cycle picks up.

Much is in the hands of the industry itself. Technology investments are powering efficiencies from the terminals that we use to the aircraft that we fly. But, with a very few exceptions, the processes driving the industry remain largely paper-based even after years of efforts spent elaborating a vision for e-cargo.

The industry has rallied around the call for a supply chain effort to modernize air cargo’s archaic processes. The Global Air Cargo Advisory Group is leading the charge by uniting forwarders, shippers and the airlines. But even the e-air waybill—a document mostly in the control of the airlines themselves—has only achieved limited market penetration. In Singapore, Dubai and Hong Kong, utilization is virtually 100%.  This tells us that, with some degree of determination, change is possible. But globally, it will be a struggle to achieve the 22% target set by the IATA Board of Governors for this year.

The benefits of the e-air waybill are worth the effort. The growth of the express part of the business demonstrates what happens when you meet a fundamental shipper expectation such as knowing exactly where their goods are and when they will reach destination.

This year we are commemorating the 100th year of commercial aviation. What better way for air cargo to celebrate than retire its 1950 vintage processes? That would spearhead a revolution in quality and efficiency that will set air cargo on the path to continued success in the second century of commercial aviation revolution in quality and efficiency that will set air cargo on the path to continued success in the second century of commercial aviation.

THOUGHT LEADERSHIP

Airlines must match the speed of innovation in the retail world, writes Ornagh Hoban, VP Marketing & Strategy, Datalex.

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