Transformation that lasts?
At last we can meet up again personally! At its WCS in Dublin Iata sketched a focused agenda to help the sector capitalise on its new appreciation after its efforts during the pandemic and on what it believes will be a bright future. Michael Mackey attended for the ITJ.
These are splendid days for the airfreight industry. “Cargo demand this year is expected to exceed the pre-crisis levels of 2019 by approximately 8%,” Iata director general Willie Walsh told the media that had converged on Dublin for the World Cargo Symposium – instead of on Istanbul, as was originally planned. “In 2022 demand will grow by 12 – 13%. This demonstrates the current strength of the markets,” he continued.
In his key-note address Brendan Sullivan, Iata’s global head of cargo, added the prediction that “revenues are expected to rise to a record of around USD 175 billion this year, with yields expected to grow by about 15%. The expectation for 2022 is for revenues to come to around USD 169 billion, even though there’ll be an 8% decline in yields.”
Walsh and Sullivan were both only appointed recently, which goes some of the way to explaining the ‘new broom’ approach. On top of this there’s a fresh appreciation, both in governments as well as in the airline industry itself, of the importance of cargo – some believe this new appreciation to be permanent.
Initiatives for digitalisation
Walsh believes “there’ll be a structural shift that Iata can seize on” to focus on three of the industry’s core issues – digitalisation, lithium batteries and sustainability. Sullivan added that “we should capitalise on a few key priorities, rather than taking an overly-broad approach.”
There has been some progress to report on digitalisation. The use of the e-AWB – something the industry has been hearing about for years – is now at 75%, because the pandemic saw a faster rate of adoption. Iata hopes it will reach 100% next year. The ‘One Record’ initiative still has substantial work to do, however. It envisages the entire supply chain using one standardised and exchangeable set of data. So far, there are 17 pilot projects involving 145 firms and three customs authorities underway.
Transport batteries safely
Another important point is not to lose an emphasis on lithium battery safety, and to accelerate work with the regulators Easa and FAA to develop a test standard that can be used to demonstrate the capabilities of fire-containment covers.
A second part of the lithium battery strategy will be to take the debate to governments and encourage them to target rogue shippers. Iata plans to make the best of the fact that governments are now more aware of the supply chain, and to engage with state bodies, including customs and security authorities, and bring pressure to bear.
This represents a policy change – towards more driven dialogue, with goals declared and more direct language used. There’s room for improvement, as Sullivan knows. “We see more effort going into stopping the production of counterfeit Chanel bags than into the transport of lithium batteries.”
The climate is a key
Climate change hung over the meeting in Ireland. Iata’s AGM, held in Boston the week before, saw airlines commit to achieving net-zero carbon emissions by 2050. As much as cargo is in favour at the moment, it isn’t exempt from what will be a stringent strategy to meet those goals.
“Industry solutions, including sustainable aviation fuel (SAF), new aircraft technology, efficient operations and infrastructure, and developing new zero-emissions energy sources will be used to cut emissions in the sector,” according to Sullivan. He cited examples such as UPS planning to purchase 150 electric cargo aircraft (they’re now in development), DHL Express ordering its first all-electric cargo planes, and the use of SAF and electric ramp vehicles.
Sullivan knows that all this comes with a hefty price tag. Walsh estimated that the cost of fleet replacement and SAF will come to around USD 2 trillion – which is a lot, particularly for an industry that has lost USD 200 billion in the last three years. Iata knows its needs are extensive and is thus looking to a collaborative approach. “Airlines can’t afford that, so we need everybody to play their part,” Walsh closed.
