Wednesday, March 10, 2010

IATA See Air Freight Improvements But Press For Modernisation

CEO Still Aspires to Paperless Environment
Shipping News Feature

CANADA – At the IATA World Cargo Symposium yesterday Director General and CEO Giovanni Bisignani summarised the current air freight situation and told the assembled selection of 750 delegates representing carriers, shipping groups, freight forwarders and other industry interests, as to his ideas regarding the best solutions.

Simply put 2009 was a disaster for the world of air cargo. Possibly even more than other stricken sectors the industry was decimated as cargo levels slumped 25% against the 2008 figures. Although levels were still below those of early that year the industry has recovered considerably during the closing months of the past year and in the start of 2010. Mr Bisignani referred to the release of that day’s new IATA Cargo E-Chartbook and said there are new signs of yield increases on specific routes and regions, with Asian markets bouncing back the strongest. In 2009, the wide-body fleet saw utilization fall by 7% and the freighter fleet specifically is down by 160 aircraft. The industry is expected to take delivery of 50 freighters in 2010 and the wide-body fleet overall looks to expand by 4-5%.

The CEO was particularly keen to put forward his vision of what he terms the “e-freight agenda” as a way to accelerate the recovery and improve prospects for future profitability.

“E-freight has the potential to eliminate US$4.9 billion in costs across the air cargo supply chain. In 12 months, e-freight volumes increased five fold. We have come a long way but we need to spread the capability of e-freight even wider,” he commented.

“This year will be critical for e-freight. We will convert a further four documents to electronic format and add 20 countries to program. This will give us the capability to remove 64% of the paper from the system and cover 80% of international shipments. With this capability, now is the time for customers, customs and governments to insist on e-freight as the standard way to do business.”

E-freight now operates in 24 countries or territories and at over 100 airports. So far, 16 of a planned 20 air cargo documents have been converted to electronic format. The electronic airway bill (e-AWB) is one of the 20 documents planned for conversion with e-freight. An industry standard e-AWB that will eliminate the need to print, handle and archive paper airway bills is being trialled by three airlines and 11 freight forwarders. The e-AWB standard has been filed with governments around the world for approval. Importantly, earlier this month the US Department of Transportation endorsed the new standard. Operators and officials alike appreciate the fact that the electronic documents cannot be lost or misplaced.

Mr Bisignani went on to extol the virtues of Cargo 2000, a group of over 70 major airlines, freight forwarders, ground handlers, trucking companies and IT providers whose remit is to streamline cargo processes and publish global quality standards.

“IATA e-freight can only be successful in the quality-controlled environment that Cargo 2000 is building. We need the whole supply chain to embrace Cargo 2000 as the quality standard for the entire industry,” said Bisignani.

“Besides removing paper from the shipping process to improve efficiency, 2010 will also be a critical year for security. Our Secure Freight strategy focuses on a data-driven, risk-based approach with shared responsibility throughout the supply chain.”

Secure Freight aims to secure the supply chain by defining, auditing and registering secure operators that act in compliance with a quality assurance system. IATA’s target is US$468 million in cost savings with enhanced security through consistent standards and procedures. The first pilot is in Malaysia and there are three more planned for this year.

The IATA World Cargo Symposium is currently taking place in Vancouver and due to close tomorrow (the 11th March) when the organisation, which represents 230 airlines handling 93% of scheduled air traffic, will release an updated industry financial forecast.

Photo: Mr Giovanni Bisignani CEO  Director General of IATA