WCS 2017: De Juniac optimistic about air cargo growth, innovation

ABU DHABI, UAE — Optimism has come to air cargo.

It’s not often that an IATA World Cargo Symposium starts off with a positive message about the industry, but in yesterday’s opening address, IATA director general and CEO Alexandre de Juniac said he wanted to “share an optimistic view, which is far too rare in the air cargo industry.”

In his first-ever “State of the Industry” address as Director General, de Juniac said the industry that had been “flat-lining” for years now has reason to feel confident about its growth prospects.

“After several years of virtually no good, we are starting to see demand pick up,” de Juniac said.

Freight volume, he said, began to grow in the second half of last year, and has accelerated since then, eventually totaling a 7 percent increase over the same period last year.

He also said it was appropriate to be meeting in the United Arab Emirates, as it is part of the crossroads Gulf region, where about 14 percent of the world’s air cargo transits through on its way across the globe.

The two positive forces that support industry growth have been the expansion of e-commerce, “which depends heavily on air cargo,” and the rise of specialized cargo, such as pharmaceuticals. E-commerce is growing at a “double-digit rate,” and that customers are now demanding “almost immediate fulfillment of their orders,” he said. As for pharmaceuticals, he said total global sales for the sector is expected to reach US$1.12 trillion by 2022, “creating a significant opportunity for air cargo.”

Still, de Juniac acknowledged that “we are still in a very tough business” with yields that are constantly under pressure with a growing number of passenger aircraft “with a belly hungry of cargo.”

De Juniac took a defiant stance against the rise in “protectionist rhetoric” from some politicians, declaring that “aviation is the business of freedom.” Free trade, he said, “is at the heart of the role we play in globalization,” and has lifted “literally hundreds of millions of people from poverty.”

By value, a third of the goods shipped internationally are by air cargo, he added. “We can be proud of the role global supply chain has played” in reaping the benefits of globalization.

De Juniac cautioned the industry to listen to its customers, especially when it comes to e-commerce and the shipment of time- and temperature-sensitive goods. He said most customer complaints come in two areas: 1) frustration over “complicated and convoluted” air cargo processes that “belong in the 16^th Century” and 2) the lack of “high-quality, cutting-edge services.” As an example, de Juniac mentioned how long it has taken IATA to move forward on its e-freight initiative, which has been on the agenda for all 11 annual World Cargo Symposiums.

“It’s taking much longer than we thought, but we are making progress,” he said, segueing into the electronic air waybill (e-AWB) situation, which has reached almost 50 percent penetration. The goal for the end of the year is now 62 percent, and de Juniac thanked delegates for working hard to make that happen.

He also called for a greater emphasis on quality of the goods being transported, not just on increasing the speed.

“We must not put all, or most, of our eggs in one basket on speed,” he said.

The e-commerce market has demonstrated how the industry must constantly innovate in areas such as real-time alerts, sensors and digital analysis of data “that allows us to respond dynamically to market changes.”

Those interested in learning more about airfreight in 2017, should join us at Cargo Facts Asia in Shanghai, 25 – 26 April.  To register, or for more information, go to CargoFactsAsia.com