“The priorities are the same,” says Brendan Sullivan, IATA’s Head of Cargo. “Digitalisation, sustainability, and safety and security continue to dominate. But the conversation has changed substantially. The forthcoming World Cargo Symposium (12-14 March 2024, Hong Kong) will showcase the progress being made.”
WCS is considered the largest and most prestigious air cargo annual event.
Previously, the sector’s focus was on what needed to be done to improve its offering. Now, talk has turned into action and discussions centre on best practice in implementation and lessons learned.
Digitalisation
Some key players have already finalised key digitalisation initiatives, for example, and that knowledge is filtering throughout the supply chain.
“We are benefitting from the expertise of the early movers,” says Sullivan. “We have got a platform to build on.”
The big gain is ONE Record, a standard for data exchange. The point of the standard, notes Sullivan, is that it enables data sharing rather than just peer-to-peer messaging.
Opening the data sharing door brings a wealth of opportunities, such as generative artificial intelligence (AI) and automation. But most importantly, it delivers the supreme efficiency needed to achieve the speed required by e-commerce. All ONE Record-connected players will have complete visibility on a shipment at all times. That transparency not only accelerates a product’s journey but makes it possible to manage disruption. Some 80% of cross-border e-commerce is handled by air cargo and the market will be a significant driver demand going forward.
“ONE Record is vital to the integration of the supply chain, and we are beginning to see a cross-fertilisation of ideas,” says Sullivan. “China is making good progress and there is also important work in Latin America. Trade lanes are starting to connect and when you get end-to-end connectivity, the potential is enormous.”
ONE Record will become mandatory on January 1, 2026, and the aim is to conduct all cargo processing digitally post-2030.
Sustainability
Air cargo is also entering the next phase of development in sustainability. Significant progress is being made in reducing single-use plastics, such as the wrapping around products and pallets. Work is also ongoing to minimise the weight of containers, improve recycling potential and eliminate perishable waste, especially food. Meanwhile, cargo facilities are being reimagined to reduce energy consumption.
This greater involvement in sustainability is bringing the sector into full alignment with the industry goal of net zero emissions by 2050. Sullivan notes that a holistic view of the challenge is the only way to find the solutions necessary to achieve that goal.
“We won’t get to net zero without air cargo’s full involvement,” he says. “That means air cargo also needs sustainable aviation fuel (SAF). Partnering with the passenger side of the business will give the industry the biggest voice to call for the right policies to incentivize SAF production. We must ensure air cargo isn’t an afterthought when it comes to obtaining SAF.”
Safety and security
The big-ticket item in safety and security is a change to ICAO Annex 18, which will require state oversight of shippers in the air cargo supply chain. That revision has been called for by the industry for many years and should finally happen in 2024. Getting the correct oversight of players capable of putting dangerous goods into the skies will take a lot of work but is fundamental to safety efforts.
The main problem, of course, is lithium batteries. Two other developments in this sphere will be equally vital. First, also expected in 2024 is a standard for a fire test for lithium batteries. This will provide common ground for risk-mitigation efforts and enable the rollout of fire-resistant containers that meet the standard. Second, there are calls for a regulatory change regarding the state of charge when lithium batteries are packed separately or inside equipment and carried in the cargo hold. Reducing the maximum charge to 25% would reduce the energy density and so curtail the fire risk.
As for security, the rollout of Pre-Loading Advance Cargo Information (PLACI) in the European Union (EU) continues to create confusion with each country coming up with its own interpretation of the protocols. There are also PLACI-styled initiatives coming up in the United Kingdom, the United Arab Emirates and Canada. To be that extra layer of security that air cargo would welcome requires greater harmonisation than is currently the case.
“This could be a milestone year for air cargo,” Sullivan concludes. “The sector is expected to grow, and we will reach a tipping point toward positive developments in key areas. Geopolitical challenges and continuing inflation could threaten the outlook and there will likely be regional variation, but the possibilities are exciting.
“I encourage people to attend the World Cargo Symposium. We will explore these key topics in detail and also host our Future Air Cargo Executive competition. Hong Kong—one of the most exciting places for air cargo and a major economic hub—is the ideal location.”