Air cargo industry need to continue cooperating as during Covid: IATA

October 12, 2021: The International Air Transport Association (IATA) urged the air cargo industry to continue working together at the same pace, with the same levels of cooperation as during the Covid-19 pandemic to overcome future challenges and build industry resilience.

Sustainability, modernization, and safety were highlighted as key priorities for the industry post-pandemic. The call was made at the 14th World Cargo Symposium (WCS), which opened in Dublin today.

Brendan Sullivan, IATA’s global head of cargo, said, “Air cargo is a critically important industry. This pandemic reminded us of that. During the crisis, it has been a lifeline for society, delivering critical medical supplies and vaccines across the globe and keeping international supply chains open. And for many airlines, cargo became a vital source of revenue when passenger flights were grounded. In 2020, the air cargo industry generated $129 billion, which represented approximately a third of airlines’ overall revenues, an increase of 10–15 percent compared to pre-crisis levels. Looking towards the future, the outlook is strong. We need to maintain the momentum established during the crisis and continue building resilience post pandemic.”

Air cargo outlook for 2022
The outlook for air cargo in the short and long term is strong. Indicators such as inventory levels and manufacturing output are favourable, world trade is forecast to grow at 9.5 percent this year and 5.6 percent in 2022, e-commerce continues to grow at a double-digit rate, and demand for high-value specialized cargo – such as temperature-sensitive healthcare goods and vaccines - is rising.

This year cargo demand is expected to exceed pre-crisis (2019) levels by 8 percent and revenues are expected to rise to a record $175 billion, with yields expected to grow by 15 percent. In 2022 demand is expected to exceed pre-crisis (2019) levels by 13 percent with revenues expected to rise to $169 billion although there will be an 8 percent decline in yields.

Aviation commits to net zero carbon emission
At IATA’s Annual General Meeting last week, airlines committed to achieve net-zero carbon emissions by 2050. This commitment will align with the Paris Agreement goal for global warming not to exceed 1.5°C. The strategy is to abate as much CO2 as possible from in-sector solutions such as sustainable aviation fuels, new aircraft technology, more efficient operations and infrastructure, and the development of new zero-emissions energy sources such as electric and hydrogen power. Any emissions that cannot be eliminated at source will be eliminated through out-of-sector options such as carbon capture and storage and credible offsetting schemes.

Modernizing the air cargo industry
IATA highlighted three major projects moving the industry towards digitalization and the progress being made in each:

• E-air waybill is at 75 percent now and is expected to achieve 100 percent by the end of 2022.
• IATA’s ONE Record vision, enabling the whole supply chain to work together off one standardized and exchangeable set of data has 17 pilots in progress involving 145 companies and 3 customs authorities.
• IATA’s Cargo XML messaging standards are being accepted by an increasing number of customs authorities.

“E-air waybill, ONE Record and Cargo XML are big industry projects. And they are moving us in the right direction. So that is good. But we need to continue working at the same pace as we did during the COVID-19 crisis,” said Sullivan.

Safely moving lithium batteries
Safety was highlighted as a priority for the industry, specifically the transport of lithium batteries.

“Demand for lithium batteries continues to rise as does the risk from lithium battery related fires. Our main concern has been around accidents from rogue shippers who – miss-declare shipments. But the incident on the ramp at Hong Kong International Airport earlier this year reminded us just how big the challenge is. The investigation indicated that loading and handling was as per regulation and the consignment was declared correctly,” said Sullivan.

IATA called for:
• Regulatory authorities (EASA and FAA) to accelerate development of a test standard that can be used to demonstrate that fire containment pallet covers and fire-resistant containers are capable of withstanding a fire involving lithium batteries.
• Government authorities to step up and take responsibility for stopping rogue producers and exporters of lithium batteries.
• Industry to step up and expand the collection of incident data and develop methods for the data to be shared to support the airlines’ safety risk assessment processes.

Ratifying with trade facilitation agreement
As of today, 154 countries have ratified the agreement – 94 percent of WTO membership. Governments yet to ratify the TFA are urged to do so, and signatory countries should implement it as soon as possible. The cost of inaction is high. Full implementation could boost global trade by $1 trillion per year, reducing global trade costs by an average of 14 percent.