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| If you have trouble viewing this e-mail, please click here | April 2008 |
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 This edition of Cargo Tracker will focus on the outcomes of WCS 2008 Dear Air Cargo Colleague, Welcome to this special edition of Cargo Tracker, focusing on the outcome of the second IATA World Cargo Symposium, held in Rome on 3 - 6 March 2008. The theme of the Symposium was “Focus on the Customer: Dialogue to Deliver Simplicity”. It represented the second chapter in our work for the air cargo industry, building on the theme of the first Symposium in March 2007 in Mexico City which was themed “Focus on Simplicity”. The IATA World Cargo Symposium 2008 featured:
Most importantly the Symposium translated the voice of the end customer (i.e. the shipper) into e-freight, Cargo 2000, Secure freight, and the environmental action needed for a more competitive air cargo supply chain. Delivery of commitments made at the first Symposium in Mexico City were reported, and the 2008 event concluded with a series of commitments for delivery by the next Symposium. Enjoy this special edition of Tracker, and I look forward to seeing you at the next IATA World Cargo Symposium, March 2009 in Bangkok!
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Cargo Executive Summit The forum for top decision makers in the air cargo supply chain The Cargo Executive Summit held during the IATA World Cargo Symposium brought together, by special invitation, over 60 heads of cargo from airlines, forwarder organisations. The objectives of the Summit:
The Summit had a highly interactive style with subject matter experts on hand to support a facilitated debate and agreement on action. Actions arising from the Cargo Executive Summit included the following: e-freight
Airport Action
Economic Information
Security
Environment See separate section in cargo tracker on the environment.
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Cargo Committee The sponsors of the IATA cargo industry agenda The Cargo Committee meeting was held during the IATA World Cargo Symposium, bringing together airline heads of cargo from Air Canada, British Airways, Cathay Pacific, Emirates, KLM, Lufthansa Cargo, Nippon Cargo Airlines, Singapore Airlines Cargo, United Airlines, and UPS. In this session the Cargo Committee focused on the following key issues and actions: e-freight
Cargo 2000
CASS
Security
Environment
Cargo Executive Summit
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Voice of the Customer Listening and taking action The second IATA World Cargo Symposium in Rome took seriously its theme: “Focus on the Customer: Dialogue to Deliver Simplicity”. The customer perspective was provided via keynote speakers and panelists during the opening and closing plenary, and various tracks of the Symposium. This perspective was used throughout the forum to formulate a series of industry actions for delivery in 2008. (See the section on 2008 commitments.) An illustration of customer straight-talking during the Symposium was provided by the keynote address of Gene Tyndall (EVP Global Supply Chain Services, Tompkins International). Gene challenged the group with a number of trends, key points and questions, including the following:
Prior to the Symposium, IATA completed a set of interviews with 36 decision makers from the shipper community to gain the following insights: Main shipper needs:
Top three criteria that determine choice of mode:
Air Freight:
IATA e-freight:
For more details on the IATA survey of shippers please email: businessinsight@iata.org
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e-freight e-freight is now a reality in six locations worldwide! Giovanni Bisignani, IATA Director General and CEO, set the stage on e-freight at the Symposium when he declared in the opening plenary that e-freight is now a reality in six locations. Building on this initial success, and with the active participation of all the e-freight stakeholders, the project in 2008 targets the implementation of eight new locations. In parallel, the work will continue on key process and standards items that are required to secure the 'e-freight product' and will allow IATA to publish the first e-freight handbook. In particular, the standards for the e-AWB are well under development and the first e-freight shipment without any paper air waybill was successfully announced during the Symposium (from AMS to SIN on a KLM/Schenker shipment). Progress is also being made to include transit and transhipment freight. In 2008, it will be critical to work with shippers to determine the electronic standards for three key documents: commercial invoices, packing lists and certificates of origin. This is another illustration of the need to involve customers in the IATA cargo agenda, as reflected in the theme of the Symposium: “Focus on the Customer”. During the symposium, achievements and targets for 2008 were discussed during the Cargo Committee, Cargo Executive Summit and the e-freight track, and gave rise to valuable discussions.
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Cargo Security Practical steps toward building a Secure Freight programme There was standing room only for the Cargo Security Track. Keynote speakers Mr. David McGowan, VP Worldwide Security Services, Tiffany and Mr. Robert C. Bonner, Senior Principle, Sentinel HS Group (formerly Commissioner US Customs and Border Protection), spoke about air cargo security from the customers' perspective and customers' security responsibilities, respectively. Throughout the Symposium, customers were invited to talk about how cargo security should develop. Departing commitments were to take practical steps toward building a secure freight programme in which secure operators handle secure cargo in secure trade lanes. Also, there is a commitment to define the basics of supply chain integrity and develop and conduct pilot audits.
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Air Mail Management 2008 will see the emergence of the postal air waybill number as a key ingredient in the future of airmail “Better planning, better tracking and better settlement will result in better service,” said moderator Paul Vogel, Senior Vice-President of the United States Postal Service. Sixty participants, representing a cross-section of postal administrations, airlines, system providers and international organisations heard the message loud and clear from well-recognised industry leaders: the airmail business is alive and growing. Riding on the achievements of 2007, 2008 will see the emergence of the postal air waybill number as a key ingredient in the future for airmail. It is understood that associating this number with mail delivery bills can bridge the gap between mail and cargo. Postal administrations are looking forward to obtaining capacity and booking their mail consignments against their allotments. Scanning technology and nesting methodology will enable consignment or container status to be provided to the postal services through the cargo window. Associating the postal air waybill numbers, container numbers and receptacle numbers will allow postal organisations to determine the whereabouts of their individual receptacles. The door is now open for airlines to use their established and proven industry settlement systems to improve payment procedures. The players in the airmail business are excited and the movement of airmail without the need of a paper delivery bill is fast approaching.
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CASS The CASS success story continues CASS discussions figured in numerous meetings during the World Cargo Symposium, from the CASS policy group to the Cargo Committee, and to the cargo conferences themselves. The successes of 2007 were celebrated, including records set in volumes processed – 17 million AWBs, settled funds – USD 23 billion, and the highest ever collection success – 99.94 %. Additional successes were also highlighted, such as the launch of 11 new CASS operations in 2007 and the reduction of unit costs by 47% since 2003. Attention then focused on 2008 targets, which will see the continuance of the CASS expansion and diversification programme as well as further driving down unit costs. Over the next 12 months IATA has committed to dedicate attention to introducing CASS to the following key markets:
Additionally IATA has committed to implement the Forwarder Billing eXchange in 2008, which will be the first dedicated freight forwarding community billing and settlement system. Airlines and IATA made a further commitment to address an issue which has been raised by the forwarding community: namely, the speed that carriers take to adjust incorrect billings.
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Dangerous Goods by Air Moving toward e-freight capability The World Cargo Symposium incorporated both the meeting of the IATA Dangerous Goods Board (DGB) as well as the commercial DG track. Attendees at the DG Track included representatives and experts from all segments of the transport chain. The initial portion of the programme addressed updates about the activities of the ICAO Dangerous Goods Panel and on the United Nations Subcommittee of Experts on the Transport of Dangerous Goods, provided by the Chairman and Vice-Chairman respectively. Moving from the immediate to the future, the programme then considered the issue of multi-modal harmonisation in the transport of dangerous goods and how that impacts on the ability of the customer to move their goods from origin to destination without delay or impediment. A panel of experts representing the air, road and sea modes considered some of the modal differences and the barriers that those differences create for the customer.
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Perishable Goods Our Members consistently express support toward delivering quality services Putting the customer first was the common theme; transforming words into action, the common approach across the tracks. Well over 100 attendees participated and shared their views on issues of concern in their daily operations. From representatives of the pharmaceutical industry, via growers, distributors, airport representatives, regulatory authorities, third party service providers, and pet industry representatives, all of the supply chain segments were present to stress the need for participative collaboration. Increased time and temperature management were some of the buzzwords launched during the event, so moving forward, expect plenty of action for 2008. From WCS in Mexico to WCS in Rome, the results and achievements are there. A great testimony to the credibility and industry relevance of IATA and its partners!
World Cargo Symposium 2008: Focus on the Customer
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ULD and Asset Management The number ONE concern for ULD owners is the cost of ULD damage. Of course, this statement was meant to create and generate awareness. Standards of compliance must be defined for ground handlers to change the operating environment. A position paper will be distributed to the participants of the IGHC and IATA Ground Symposium 2008 and a course will be offered by IATA on the matter.
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Environment The environment was a key theme during the IATA World Cargo Symposium with industry action to be taken highlighted in the opening plenary, the Cargo Executive Summit, and the Cargo Committee. During the opening plenary, Professor Paul Forster of the University of Hong Kong made a number of critical points including the flawed logic of food miles in misleading the consumer about the supply chain carbon footprint. He recommended that carbon labeling for the whole supply chain was the way to go. Professor Forster also recommended that IATA should take the lead in creating a climate change action group consisting of representation from the supply chain and academic institutions. The function of the group would be to support key research studies, promote best practices and methods, and to assist companies in base-lining their emissions. A number of speakers at the Symposium, including Knud Pontopiddan (SVP Moller-Maersk) and Gene Tyndall (EVP Global Supply Chain Services, Tompkins International) stressed the importance of a cooperative multi-mode supply chain approach for the environment. The environmental theme was further explored by the Cargo Executive Summit and the Cargo Committee. The result was the following agreed actions for 2008:
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Cargo Airport and Terminal Development The opportunity for cooperation Among airport operators it is relatively rare to have staff specifically dedicated to air cargo. Outside of North America where Airports Council International has a strong regional cargo committee, it was agreed that IATA could be a uniquely useful resource. Moreover, it was voiced by airline, forwarder and ground-handler participants on panels, that a more cooperative relationship with airport operators would be to the benefit of all. Track participant Robert Ryan states “carriers work globally, in a global industry, while airports work locally in a global industry.” Airports must answer to local governments and citizens for the activities of tenants whose operations extend well beyond their fence-lines. Airports have local grass-roots contacts that neither IATA nor its Members usually possess, but often lack the ability to communicate effectively on behalf of their tenants. Track participants acknowledged that IATA has had an occasionally contentious relationship with particular airport operators but held that beyond the unavoidable tensions of ‘rates and charges’, a tremendously important common ground exists in a variety of areas, not least being: 1) Security 2) Customs 3) Environment and 4) Facilities Planning. Items # 1, 2 and 3 are relatively ‘low-hanging fruit’ in terms of potential cooperation. On security in particular, there is a relatively recent history of collaboration between IATA and the airports and for customs. There is equally indisputable evidence that both airports and their tenants have the same interest in optimising cargo operations while ensuring that external regulatory requirements are met. Both for private tenants and for airport operators, the potential of hamstrung cargo operations are ultimately detrimental. Environmental concerns are increasingly prominent at the local level – a realm where, typically, airport operators have far more influence. For many airport operators - as well versed in noise complaints as environmental concerns - being held to account for the environmental impact of operations that may have originated thousands of kilometres away is a relatively new challenge. Airports have much to gain from being effective champions of air transportation. Through the master-planning process, airport operators engage in the bricks-and-mortar of cargo development using 20-30 year planning horizons for tenants and prospects with more transitory investments. For airports with legacy cargo facilities, space-utilisation has changed greatly due to higher throughput of the dominant integrated carriers, as well as the prominence of 3rd party ground-handlers who often use space more efficiently than a variety of carrier-clients had previously done (belly carriers in particular). IATA and its Members could help airports reassess common planning metrics. Airports do not oppose the industry’s operational evolution but as caretakers of what is often public land, and the responsible parties for long-term development, they need more applicable planning tools for cargo. Moving to action, a briefing paper will be prepared for the Cargo Executive Summit documenting action items, as well as the cargo-related airport action IATA is already taking. Feedback will be sought from the Cargo Executive Summit regarding what more can be done by IATA. IATA will also make itself available to explore common-ground agenda items with other trade associations and directly with airports.
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Cargo Technology Does IT matter? The technology track hosted 15 presentations and one panel discussion, involving a total of 18 experts, ranging from customers to most of the key players in the transportation chain, including technology providers. There was lots of interesting content relating to the supply chain and revenue management themes, where speakers enjoyed sharing their insight and vision for the future. Still, the industry has a long way to go as more than 50% of airlines do not have systems to process electronic messages instead of paper. Revenue management is out; contribution management is in. Speakers stressed that one of the keys to better management is to know shipment dimensions, which is still pretty much neglected today. Also, based on weight calculations alone, statistics show that airlines would be better off transporting cargo rather than passengers. But as Sir Winston Churchill once said “I trust only those statistics, which I have manipulated myself”. Today, investing in technology is key to secure business. Those airlines who do not have adequate systems in place are likely to be confined to niche markets. Investing wisely in technology is key to secure future business success and outperform the competition. As a conclusion, IT will surely will never matter for followers. For leaders, IT makes a big difference.
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Open Skies 31 March 2008 marked a historic day in Transatlantic aviation as the EU/US Open Skies agreement came into effect In recognition of this event IATA designated a specific track within the World Cargo Symposium to explore what the agreement was about and how it would impact air cargo. The focus was on education about the agreement and learning how different sectors of the industry are preparing for the changing environment. A senior member of the EU negotiating team provided insight into the negotiation process. This was followed by speakers from the legal profession and a panel comprised of shippers and other industry members examining the impact. The session closed with numerous case studies provided by individual carriers. According to feedback from delegates in attendance, the objective to educate and stimulate debate on the benefits of this move towards greater liberalisation was very successfully achieved.
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Cargo Outlook It’s official: opportunity abounds for everyone in cargo The Outlook Track examined three basic areas. Firstly, it examined the potential of the major emerging markets (Brazil, Russia, India and China) – the so-called BRIC economies. There was a consensus that success in each of these markets is assured, but each will be facing different challenges. Everyone saw infrastructure development as being a key area. The second theme of the track was an examination of trends in developed economies. Special focus was given to the potential for a business shift from air cargo to ocean, on airport facilities and the increasingly important issue of food-miles. Finally, the track heard back-to-back contributions from Airbus and Boeing, who both have quite similar, and optimistic, views on the future growth of air cargo. The stage was set for each of the three themes through introductions by IATA’s Chief Economist, Brian Pearce, who balanced a description of expected growth rates against macro-economic realities. All in all, the outlook track revealed a consensus that air cargo will rise to any challenge in the short and long term.
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2008 Commitments During the concluding plenary, Aleks Popovich outlined a series of commitments for 2008 arising from the work of the World Cargo Symposium. Click here to see the presentation with full list of commitments, featured Key commitments for 2008 included the following: Customer Continue customer dialogue and engagement via:
e-freight
Cargo 2000
Secure Freight
Environment
Cass
Distribution
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