Glyn Hughes, Head of IATA Cargo: “Predicting the future of Air cargo, where will the growth come from?”

cargomagazine

Glyn Hughes, Head of IATA Cargo: “Predicting the future of Air cargo, where will the growth come from?”

Forecasting is an unpredictable affair these days, for validation we need look no further than the recent Brexit vote and US election. So, with protectionist rhetoric increasing, world trade flat lining and the global economic outlook remaining uncertain one could be forgiven
for predicting a tough year for air cargo in 2017. However, in keeping with the recent upset trend, I propose a slightly more optimistic outlook for the industry next year.

 

 

 

 

While there can be no denying that world trade is flat and the pace of economic growth is subdued, it would be amiss to disregard the growing trend towards e-Commerce. This rapidly expanding industry is on-track to expand by 23.7% this year alone, with sales reaching $1.915 trillion, accounting for 8.7% of total retail spending worldwide. The world has become a global cyber-store. Customers are
ordering more and more online. They want their purchases as soon as possible and are willing to pay extra for the privilege of rapid delivery. As the fastest mode of transport  for consumable products, this creates significant opportunities for air cargo in the coming year.

We are starting to see the industry evolve and adapt to the fast-paced, global world of e-commerce and shifting customer demands. Airlines are reviewing their fleet and network development plans in line with evolving market trends. And they’re starting to develop quality-focused, customer-centric, on-demand supply chain solutions that provide enhanced shipping quality and service, greater visibility
through the supply chain and better predictability. Another growth area for air cargo is the transport of time and temperature-sensitive goods such as pharmaceuticals.  In 2014 this market was estimated to be worth $8.36 billion and it is projected to rise to $10.28 billion by 2018. But in order for the industry to fully capitalize on the available opportunities, programs such e-freight and e-AWB that promote the development and implementation of end-to end paperless transportation processes must be accelerated. And real-time interaction needs to be implemented through the next generation of air cargo technology interfaces such as smart data sharing and piece-level tracking.

In parallel, to benefit from the full social and economic potential that air cargo can provide, governments need to support the development of the industry through reducing restrictive border tariffs, ratifying international enabling treaties and effective trade policies such as MC99, the revised Kyoto Convention and the WTO Trade Facilitation Agreement (TFA).

While forecasting remains unpredictable it is certain that if air cargo can seize upon the opportunities presented the future is bright.

by Glyn Hughes, Head of IATA Cargo

cover editie winter 2016 - 2017

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