FIT: Would you agree that air cargo volumes are now firmly back to pre-pandemic levels? What are the key challenges going forward to ensure air cargo growth is efficient, safe and aligned with net zero carbon emissions by 2050?
GH: Indeed, by looking at the pure data the numbers would indicate that air cargo volumes have returned to pre-Covid levels, but the industry has moved on significantly in these past five years with structural shifts in what cargo is transported, how it is transported, where it is transported from, what technology we use in the transportation process and how we tackle sustainability challenges.
Ecommerce accelerated exponentially during the Covid period as global consumer bases were restricted to shopping from home. This new wave of consumer activity has continued its growth trajectory and today accounts for about 20 per cent of total air cargo volumes. This number is projected to grow to about 30 per cent by the end of the decade. It is estimated that ecommerce accounts for about the equivalent of fifty 747s of capacity each day. This brings a new type of demand for operational processes with speed, transparency, integration with first and last delivery mechanisms playing an increasingly important role.
In addition to ecommerce growth, pharmaceutical shipments are growing steadily as more people around the world embrace modern medicine with personalised healthcare based on individual treatment programmes expected to increase further in coming years. Perishables, including fresh meat, fruits, vegetables and flowers have also shown strong resilience and growth with enhanced focus on eliminating waste and spoilage throughout the supply chain.
Production and manufacturing centres have also seen some shifts since the pre-Covid era. China continues to be the main centre of global manufacturing, but the Covid-induced supply chain obstructions have facilitated policy and strategy changes to diversify production sites. Significant investment has been made into India, Mexico, Vietnam, and other areas in southeast Asia as well as some other instances of near or friend shoring. As production centres fragment the need for air cargo and maritime supply chains increases to smooth out this new complexity.
It’s also worth noting that since the pre-Covid era the global affluent middle-class community has grown by several hundred million people, predominantly in Asia, and they collectively bring additional demand for the consumer goods which are the mainstay of air cargo movements. Another factor that 2024 sees that was different in 2019 is the buoyancy of the Latin American economy. With strong growth in the region attracting significant foreign investment, we are seeing improved demand on both north and south bound routings. Here too, ecommerce is playing its part.
Going forward, the industry must ensure that air cargo in 2024 and beyond continues to evolve as the global economic conditions evolve. Efficient operations require embracing technology at a greater pace than previously, and infrastructure must continue to be invested in to meet the increasingly sophisticated needs of today’s cargo.
Safety and security will always remain top industry priorities with a proliferation of Preloading Advance Cargo Information requirements being implemented by states around the world. These targeting systems require industry adopting digital solutions across supply chain partnerships to ensure border management processes can be complied with seamlessly without holding up efficient cargo flows. An adequately skilled, trained, and tooled workforce is crucial in this regard.
Another difference in the post-Covid era to prior is the focus on environmentally sustainable solutions with the aviation industry having now adopted a net zero 2050 target. That addresses what powers aircraft in the air but there are also significant other environmental situations that are getting addressed. The industry has made big strides in moving away from single use plastics which previously ended up in landfill sites. Bio-based plastic substitutes as well as other alternatives are being embraced by more and more organisations.
Greener ground support vehicles, electric powered and even clean hydrogen powered vehicles are increasingly being seen on ramps around the globe. Freight forwarders and trucking companies are also making investments in green road transport solutions. Airports are making investments to decrease the impact of noise, and many are utilising their real estate and large buildings to house large scale solar energy capture farms.
FIT: What are the key advancements and challenges in the digitalisation of air cargo operations?
GH: Significant strides forward have been made during and post Covid. With the challenges posed of passing paper documents to multiple parties during Covid, we saw many organisations accelerate their digitalisation strategies.
This trend has continued post Covid and is creating a culture of technical and digital innovation. New distribution tools are enhancing market connectivity. New integration tools are enhancing supply chain digital data sharing and therefore benefits transparency, efficiency, and disruption management. Many states are adopting data-based risk management programmes which again helps promote industry digitalisation.
On the challenge front we still face many of the same issues as in the past. First and foremost is inconsistent mindset, with some organisations or individuals failing to embrace change; whilst others continue to play a waiting game to see what tomorrow brings rather than seeking out solutions which address today’s challenges.
FIT: In what ways is safety being emphasised within the air cargo industry, particularly concerning the transport of lithium batteries, and what measures are being taken to mitigate associated risks?
GH: When it comes to the transport of lithium batteries there are clearly two aspects to this question. Firstly, there is the focus on compliantly manufactured and declared lithium battery (LB) shipments. These are covered by very clear International Civil Aviation Organization (ICAO) and state based legislated requirements supplemented by carrier specific requirements. The declaration, packaging, storage, and handling procedures are very much focused on quality processes and facilitate safe transport.
The second part of the questions is how do we combat counterfeit, non-compliant, smuggled lithium battery shipments? This is where the challenge really exists as detection of smuggled LB shipments is very difficult. These shipments have also been the cause of several high-profile incidents sometimes resulting in fires breaking out.
To combat the ongoing threat to consumers who purchase these items, often unknowingly through ecommerce platforms, it is critical that customs and border agencies across the globe unite to share information about know offenders. They then need to act against these offenders who often go unpunished as production occurs in different countries from where incidents ultimately occur.
From an industry perspective, carriers and ground handlers are focusing as much as they can on detection and often have resorted to investing in fire suppression and containment covers and containers to protect against inflight incidents.
FIT: How are airlines and shippers showing their support for Sustainable Aviation Fuels (SAF), and what actions are being taken to address the shortage of supply?
GH: There are clear pathways being developed that will lead to the achievement of the 2050 Net Zero target but one thing that is very evident is the reliance on Sustainable Aviation Fuel (SAF) which will probably account for about 65 per cent of the target achievement.
Current levels of SAF that have been produced in just a limited number of locations have been fully consumed, via direct consumption or book and pledge systems. Air cargo is very much leading in this area with freight forwarders and shippers stepping up and agreeing to purchase whatever volumes of SAF that are being made available.
An ICAO meeting, CAAF/3, held prior to COP29 in Dubai at the end of 2023, had the objective to review the progress of the 2050 Vision for Sustainable Fuel, including Lower Carbon Aviation Fuel and other cleaner energy sources for aviation. The discussions also helped define an ICAO global framework in line with the No Country Left Behind initiative.
After much discussion the meeting agreed an interim target to achieve a 5% reduction in carbon emissions by 2030. But even attaining this target will require significant investment in SAF research and refinery capabilities. Governments and the fuelling industry, together with the investment and research communities, will need to make significant strides forward in order to provide what the aviation industry collectively needs.
FIT: How is TIACA contributing to the sustainability transformation of the air cargo industry, and what specific projects and initiatives are they implementing to address climate action?
GH: Sustainability is a crucial topic that touches every sector of the supply chain and as such it is one of the top priority areas that the TIACA Board has focused on. As an association we have developed several solutions and initiatives aimed at supporting the industry’s sustainability transformation.
Firstly, there is our annual survey and Insights reports which charts the collective progress being made across the industry in eight key areas of sustainability. This report then gave rise to us developing and publishing the air cargo industry sustainability roadmap which details key actions that organisations can take to accelerate their sustainability credentials. The report also maps the industry to the United Nations’ 17 Sustainable Development Goals.
We were then asked by the industry to provide additional tools to support organisations along the journey of transformation, so we launched the TIACA BlueSky programme, which is an independent assessment programme that provides an organisation with personalised dashboard, highlighting areas where they are performing well against industry sustainability criteria as well as highlighting areas where they might need to focus on more.
And recently we launched two new tools to support industry objectives. The first was the TIACA Training Library, a free-to-access repository listing training courses provided by organisations across the world linking those with training needs to those with training solutions. We also launched a platform supporting investment in climate action projects. Working with professionals in sustainability projects that support carbon credit programmes, we have now selected six projects, from solar farms and hydroelectric plants to water treatment programmes and reforestation initiatives. Companies then invest in a project they are drawn to, and each investment attracts a certified carbon credit, helping organisations achieve their overall ESG goals.
For more information about TIACA’s work, please visit: www.tiaca.org