IATA, optimistic about Air Cargo growth
IATA Director General and CEO Alexandre de Juniac said that he wanted to share a positive view, which is far too rare in the air cargo industry.
April 25, 2017
By Kelsea Koh
ABU DHABI, UAE – At the IATA’s 11th Annual World Cargo Symposium, the largest and most prestigious annual event of its kind and the only one to bring together key stakeholders from the entire air cargo supply chain, optimism was in the air from the very start with a positive message about the industry. At the opening address, IATA Director General and CEO Alexandre de Juniac said that he wanted to share a positive view, which is far too rare in the air cargo industry.
In his first-ever ‘state of the industry’ address as Director General, De Juniac said the industry that had been ‘flat-lining’ for years now has reason to feel confident about its growth prospects. “After several years of virtually no good, we are starting to see demand pick up,” De Juniac said.
Freight volume, he commented, began to grow in the second half of last year, and has accelerated since then, eventually totaling a seven percent increase over the same period last year.
He also said it was appropriate to be meeting in the United Arab Emirates, as it is part of the crossroads Gulf region, where about 14 percent of the world’s air cargo transits through on its way across the globe.
E-commerce and Pharmaceutical take centre stage
The two positive forces that support industry growth have been the expansion of e-commerce, which depends heavily on air cargo, and the rise of specialised cargo, such as pharmaceuticals. E-commerce is growing at a double-digit rate, and that customers are now demanding almost immediate fulfilment of their orders, he said. As for pharmaceuticals, he said the total global sales for the sector is expected to reach US$1.12 trillion by 2022, creating a significant opportunity for air cargo.
Joining over 1,000 air cargo leaders and more than 40 exhibitors in Abu Dhabi for this action-packed World Cargo Symposium, De Juniac acknowledged saying, “We are still in a very tough business with yields that are constantly under pressure with a growing number of passenger aircraft with a belly hungry of cargo.”
De Juniac took a bold stance against the rise in protectionist rhetoric from some politicians, declaring that aviation is the business of freedom. He said, “Free trade is at the heart of the role we play in globalisation, and has lifted literally hundreds of millions of people from poverty.” By value, a third of the goods shipped internationally are by air cargo. He continued, “We can be proud of the role global supply chain has played in reaping the benefits of globalisation.”
De Juniac cautioned the industry to listen to its customers, especially when it comes to e-commerce and the shipment of time and temperature-sensitive goods. He said most customer complaints come in two areas: frustration over complicated and convoluted air cargo processes that belong in the 16th Century, and the lack of high-quality, cutting-edge services. As an example, De Juniac mentioned how long it has taken IATA to move forward on its e-freight initiative, which has been on the agenda for all the 11 Annual World Cargo Symposiums.
During the Chairman’s opening remark, Glyn Hughes, Global Head of Cargo, IATA said, “The industry bucked the trend of fl at-lining world trade and increasing protectionist rhetoric to outperform fore-casts. After a weak start, global freight volumes recovered in the second half of 2016 to grow by 3.8 percent, year-over-years. This was nearly double the industry’s average growth rate of 2.0 percent seen over the last five years.
“Over the same period, air cargo carried 53.9 million tonnes of goods, representing about 35 percent of global trade, by value. That is equivalent to US$5.6 trillion worth of goods annually, or US$15.3 billion worth of goods per day. There can be no arguing with the economic and social benefits that air cargo brings to the global economy,” he added.
Looking forward to 2017, Hughes said, “Export orders are strong and e-commerce is growing. The opportunities for air cargo are significant. But the industry needs to continue to adapt to this fast paced world. It must also continue to improve its competitiveness. The way forward is defined by digital processes, which will drive efficiency and improve customer satisfaction. We must use the momentum of renewed demand growth to drive important innovations. Many of the tracks at this year’s event have been developed to harness the extensive industry knowledge of those participating to identify ways to transform the business through simplifying processes and enhancing digitalisation.”