IATA’s new cargo face, familiar challenges
Air cargo still faces significant challenges, and in many cases these issues are similar to problems the industry confronted years ago.
In the International Air Transport Association’s 2014 Annual Review, released during the organization’s annual General Meeting in June, it highlighted the financial struggles of airlines, safety and security as some of the key concerns still facing the aviation industry.
Sustainability remains a challenge, and it’s one that’s been taken up by IATA, the International Civil Aviation Organization and governments worldwide. During the general meeting, IATA Director General and Chief Executive Officer Tony Tyler said his agency needs to stay the course, pushing for the global market measure that has slowly developed as an alternative to the European Union’s implementation of its emissions-trading scheme on worldwide aviation.
“Turning the assembly’s laudable intention into a more specific agreement on an actual mechanism will be a challenge. We need to support that effort. It will be as difficult for airlines — who will foot the bill — as it will be for governments,” he said. “A global mandatory carbon-offset scheme is just one transitional element of our strategy. Our ultimate goal is to achieve sustainability by reducing carbon emissions through improvements in technology, operations and infrastructure.”
A theme at the IATA meeting was how these challenges fit the evolving airline industry over the next decade and a half. Olumuyiwa Benard Aliu, ICAO’s president, told meeting attendees every action must be taken with the knowledge that global airline capacity will double by 2030.
“All of our shared future goals, whether tactical or strategic, political or economic,” he said, “will be magnified significantly by this expansion, and the actions we take to address near- and longer-term connectivity challenges in terms of increased airspace and airport congestion and the risk to the safety and efficiency of air transport operations in general; the need to balance stringent security measures with facilitation; and growing environmental pressures relating to greenhouse gas emissions, local air quality and noise around airports.”
Many of these are perennial concerns for airlines, but on the cargo side combating modal shift, regulations barring the shipment of specific cargoes, and the trend toward near-shoring were outlined in IATA’s report as present and pressing concerns that hurt air cargo’s bottom line and ability to compete in an evolving transportation industry.
In its report, IATA outlined its quest to reduce shipping times by 48 hours in the next six years, which can only be accomplished through full e-freight implementation (the organization has reported that it fell far short of its goal for the e-air waybill, only one aspect of e-freight, in 2013), enhanced supply-chain security, improved infrastructure, and increased safety. This is a very tall order and requires partnerships among many different stakeholders. But the group now has a new cargo leader to help unite these sometimes disparate members of the supply chain and confront the cargo-specific challenges that arise in the future.
It was announced after the general meeting that Glyn Hughes, who has worked for IATA more than 20 years and is a trusted and well-liked cargo crusader, would replace Des Vertannes. Vertannes announced at the end of March that he would retire in June after four years in the role. (He told Tyler of his decision to retire at the beginning of 2014, but delayed the announcement for a few months.)
During his time with the agency, Vertannes helped build IATA’s cargo division into a significant force within the industry, and championed e-freight, and other meaningful developments. He helped develop the Global Air Cargo Advisory Group, which united the top organizations in cargo together under a common approach. More importantly, he made cargo a bigger part of IATA. Before accepting the high-level IATA role, Vertannes worked as executive vice president for cargo at Etihad Airlines. He started his career at British Airways, where he worked in various cargo management and sales positions.
Cargo has been losing long-time proponents to retirement the last few years, and Vertannes is the latest to ease out of the industry. The cultivation of a new generation of cargo leaders has been debated for some time, with industry organizations creating programs to ensure there are enough visionaries to take up the mantle.
Industry speculation at the CNS Partnership Conference in May pegged Hughes, IATA’s director of cargo distribution, as Vertannes’ successor, and the way I see it, this presents a smooth transition at a time when air cargo is still very much limping along. Hughes, who joined IATA in 1991, has been involved with the organization’s most important cargo programs. He’s well-known and appreciated throughout the industry. From the Airforwarders Association, Executive Director Brandon Fried wrote, “I have come to know Glyn over the past few years and am looking forward to working with him in pursuing our agenda within IATA. He is a knowledgeable, competent and kind individual who understands forwarders and the Airforwarders Association.”
Closing its annual General Meeting on June 3, IATA’s Tyler talked of partnership, an idea he called one of the most important aspects of the organization’s path forward.
“By working together we can achieve amazing things. Look at our success on environment,” he said. “We are united and forging ahead because we are working together with a common purpose and agenda.”
Tyler, of course, was talking about partnerships with other agencies — like the agreement signed with Airports Council International in October that will see the two organizations cooperate on security and other issues. But in Hughes, the cargo community has found a new partner, one who seems dedicated and ready to push the air cargo industry forward.
This column was published in the July 2014 issue of American Shipper.