Air cargo showed how valuable it was during the pandemic, keeping supply chains moving, handling ever-rising volumes of e-commerce and getting medical shipments and vaccines to those who needed them.
It also showed its value by being a financial lifeline, totalling $204bn of revenue in 2021, 40% of aviation’s total, compared to pre-crisis levels of 12-15%.
Those days are over, it was clear from IATA Global Head of Cargo, Brendan Sullivan’s welcome during the opening plenary, who said people did not need to be told that the challenges are mounting.
The war in Ukraine has grounded key players and disrupted supply chains, jet fuel prices are high, there is economic volatility causing inflation, currency issues and slower GDP growth.
There are positive developments, he told delegates, such as the growth of e-commerce, Covid restrictions are easing, returning passenger traffic means belly capacity is returning, and specialist cargo such as pharmaceuticals remain resistant to economic ups and downs.
Sullivan said, “The air cargo industry is in a better place than it was in 2019; it’s financially stronger, more efficient with advances in digitalisation, and better appreciated for the heroic efforts that you all made to keep air cargo moving through a very difficult crisis. The challenges and opportunities that we face are ones that we are used to dealing with.”
The question of the 2022 WCS was what needed to be tackled together. The four priorities, Sullivan said, were achieving commitments of net zero by 2050, modernising processes, finding better solutions to safely carry lithium batteries, and making air cargo attractive to new talent.
Extensive use of sustainable aviation fuel (SAF) will be key to achieving net zero by 2050, with Sullivan highlighting bp and Neste committing to DHL Express with more than 800 million litres until 2026, Lufthansa Cargo buying 1.8 million metric tons from Shell, Air France KLM Cargo using SAF on flights from Kenya to Amsterdam carrying agricultural and horticultural products, and FedEx and DHL Express powering 30% of operations with SAF by 2030.
“Airlines have used every drop of SAF that was available in 2021, and it will be the same in this year. The challenge is SAF production and capacity, and to increase it, we need government support,” Sullivan said.
With the right incentives, there could be 30 billion litres available by 2030, a clear tipping point towards achieving aviation’s net zero ambition by having ample SAF at affordable prices, he told the audience.
“Every industry is being asked to report on their carbon footprint and that includes our customers, so it is critical that we are able to measure our carbon output and report on it accurately by shipment,” said Sullivan.
Safe and efficient
Customers expect efficiency; as consumers we live in a world where we can track personal shipments in real time.
They are frustrated that air cargo is not modernising faster but good things are happening like ONE Record is being integrated into CASS 2.0, making shipment information available to everyone across the value chain.
Scaling up is the challenge, IT providers need to spread the benefits of digital cargo to all supply chain stakeholders.
Sullivan had a message, “We should not forget the lessons we learned during Covid; the challenges of the Covid crisis gave us confidence that we can change and adapt fast. We need to use that confidence to get us even closer to the expectations for modernisation that our customers have. We need to be true to air cargo’s USP and move even faster.”
Safety is more important than ever, and progress has been made for safely handling lithium batteries but several high-profile incidents over the last year have reminded people of the risks.
Dangerous Goods Regulations are the starting point, and DG AutoCheck is making verification of compliance easier and more accurate.
CEIV Lithium Batteries is expanding with LATAM Cargo receiving its certificate at the show, the first airline to be certified, and SATS was the first handler to receive the honour.
To better handle incidents in-flight, IATA is working with EASA and the FAA to develop a test standard to demonstrate the capabilities of fire-resistant containers and container covers.
Even the regulatory structure means nothing if rules are not followed, warned Sullivan. Compliance is an issue, which was highlighted in the 2022 IATA Dangerous Goods Confidence Outlook Survey.
He said the industry needs to work with regulators to crack down on rogue shippers and companies need to note their strengths and work on weaknesses. Training is an accessible and affordable solution to many issues, he said.
People, who are at the core of improvement, was the last point, with Sullivan calling the pandemic brutal, and very challenging for those who worked through it, especially crew who had to deal with extraordinary measures when operating across borders.
Thousands of jobs, particularly in operations and handling, left the industry.
Short term, competition is high and gaining security clearance is slow; speeding up clearance is a short-term solution but longer term, the industry needs to be attractive to retain talent.
Sullivan spoke of challenges but said there was reason for optimism, knowing that air cargo supports global supply chains, supports hundreds of millions of jobs, and has saved countless lives through the transportation of vaccines and other medical supplies.
He concluded by saying, “There is no greater motivation than knowing that with every shipment we deliver, we help people to live better lives and secure better futures.”
Historic times
Welcoming the show to London, Sullivan said the air cargo accounts for 40% of the UK’s imports and exports by value. He invited David Shepherd, Managing Director of IAG Cargo to give a welcome address.
Starting his speech, Shepherd said it had been a historic month for the UK with the death of Queen Elizabeth II, the crown passing to King Charles III, a new Prime Minister in Liz Truss, and the Pound’s value falling against the Dollar.
In his short time away from cargo, Shepherd said major changes had taken place, highlighting digital disruption gaining traction, sustainability becoming a serious subject, along with diversity and inclusion.
The previous week, Shepherd had been at a cargo tech conference in Barcelona, where he was impressed at the speed of digital disruption in some parts of the industry, especially in distribution and pricing, but less so in areas where air cargo is lagging.
“For too long we have heard the refrain in this industry that it’s too volatile, too asset heavy, too low margin for sustainable investment. These past three years have given us an opportunity to innovate, and we must not fail to use it,” he told the audience.
A very welcome change in the UK is Heathrow Airport finally developing a cargo strategy fit for the future. For too long, it has lagged behind the main European hubs without a clear airfreight plan.
Shepherd senses a renewed understanding of the importance of air cargo, and that it sits higher up the priority list for investment.
Ross Baker, Chief Commercial Officer of Heathrow Airport also had a few welcome remarks, saying that the airport connects the UK to global growth.
Over 20% of the UK’s trade by value passes through Heathrow including £250 million of salmon exports, so much that the airport employs seagull protection measures despite being about 50 miles from the nearest coastline.
Cargo throughput at Heathrow is an area of focus; Baker says at least cargo does not use Twitter otherwise it would be making its frustrations known due to waiting times.
The airport is making the most of on-site and off-site facilities to make processing smoother.
It can take up to four hours to process cargo at Heathrow, Baker told the audience, but leading operators have brought that down to 40 minutes, and the Border 2025 agenda has the potential to make a difference.
The landscape is different to 2019, with Baker commenting, “We’ve shown how agile and collaborative we can be as an industry over Covid and now we need to deploy that agility and collaboration on the big issues the industry faces.”
Back to normal
Over the three days, much was discussed about where the industry is, what has been done since the pandemic and where it needs to go next.
It was a record-breaking show, with over 1,300 participants from 73 countries.
To discuss the key outcomes, Sullivan was joined by Michael Steen, EVP and Chief Commercial Officer at Atlas Air, and Andres Bianchi, CEO of LATAM Cargo at the closing plenary.
They discussed their views on the streams, which covered sustainability, digitalisation, and safety and security.
When talking about sustainability, Bianchi said it is more than CO2, saying, “We are massive users of plastic, how do we address that we use too much plastic and don’t address that it can be recycled? It is an agenda that needs to be more concrete, for example, we have goals on using plastics beyond a certain date such as no waste to landfill by 2027.”
Digitalisation was a major talking point, and it was agreed that the industry is not at the tipping point but it is going the right way.
Steen linked it to attracting new talent, saying, “They are not going to be satisfied with the antiquated processes that we are dealing with; they want it faster, more transparently, they ask the right questions as well. I think that is going to help us drive digitalisation across the board.”
Bianchi added it is not a digital future, it is a digital present, saying, “It is already happening; I think to some extent the industry has never been better prepared. When you look at the availability of systems, we are there but we need to push it to the next level, which is cooperating and integrating.”
On safety and security, Bianchi heard good discussions but not enough answers. On lithium batteries, which need to be addressed as a matter of urgency, he said, “We are as strong as our weakest link.”
Steen agreed, saying manufacturing and shipping of counterfeit batteries must be criminalised as a fire would be catastrophic.
Regulation means regulators have to be involved but getting everyone aligned in a short space of time is not feasible so there needs to be a rethink about how matters are approached.
Asked to sum up what the industry needs to see when it meets again in 2023, Steen said progress, praising how proactive and passionate people in the industry are, and how boardrooms appreciate the value of air cargo.
He said, “That has given us a lot of time, if we capture that moment as an industry, we are really going to make progress going forward.”
Bianchi agreed, saying, “We need to take advantages of the opportunities; we have never been in a better place with access to resources and having visibility in order to make the changes that the industry needs to make it better and more sustainable.”
Merhaba Istanbul
WCS’s time in London came to an end and it was time to announce where it is heading. Next year, WCS will go to Istanbul, its planned location for March 2020 before the pandemic had other ideas.
Turhan Ozen, Chief Cargo Officer of Turkish Airlines was proud that the 17th WCS will be in Istanbul, saying that 2023 is the 100th anniversary of the Turkish Republic’s foundation, saying, “We welcome you all to our beautiful city of Istanbul and for many of you, it will provide the first chance to visit the new Istanbul airport and our mega hub.”
The 17th WCS will be held from 25-27 April 2023, bringing it nearer to the show’s traditional springtime date. Seni istanbul’da görmek için sabırsızlanıyoruz.
This article was published in the October issue of Air Logistics International, click here to read the digital edition and click here to subscribe.