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Cargo TRACKER - Summer 2008

Turbulent times

Our industry faces turbulent times.

In six years the airlines’ fuel bill has shifted from 13% to 34% of costs and is still rising. For pure freighter operators the proportion is much higher. This year airlines could face a fuel bill of US$190 billion, representing a major change in the cost structure of the industry, and coming at a time of economic uncertainty.

The industry is being redefined and already this year 25 airlines in the IATA financial system have gone bust. That’s more than in the six months since 9/11. Airlines are forecast to lose at least US$6.1 billion this year in an industry already US$190 billion in debt.

There are a number of areas where IATA is acting on behalf of the industry:

Protecting the Money

Ensuring the continued integrity of IATA billing and settlement systems, which handle US$ 243 billion of airline money.

Industry costs

Continuing to simplify the business of air cargo through e-freight, Cargo 2000, Safety, Security, Environment, and CASS.
Challenging airport, infrastructure and supply chain efficiency.
Implementing more efficient processes enabling fuel conservation.

Lobbying governments

Championing the move from “flags and politics” to “brands and business” with modern commercial freedoms.

But are we doing enough for the air cargo industry from your perspective?
I welcome your feedback. Please contact me by email: popovicha@iata.org

e-freight - back to top

IATA e-freight completes Detailed Level Assessments, moves toward implementation

This marks a major step forward towards the project target of eight additional e-freight locations by the end of this year. Over 400 people – including airlines, freight forwarders, government customs offices and IATA staff – were involved in the Detailed Level Assessment (DLA) exercise. This is a fantastic example of a collaborative industry effort and we would like to express our appreciation and thanks to everyone involved!

How does the IATA e-freight assessment phase work?

The first step towards becoming an IATA e-freight location is completing an assessment phase. This phase consists of two parts: the High Level Assessment (HLA) and the Detailed Level Assessment (DLA).

The High Level Assessment, completed earlier this year for over 200 countries, investigates a location’s regulatory and customs environment for air freight.

The objective of the DLA is to review the readiness of a location and its stakeholders to participate in IATA e-freight from technical, process and regulatory points of view.

If a location fails to meet the DLA criteria, an agreed action plan – depending upon the issue(s) – will be developed to close the identified gaps. These action plans are called Local Action Plans (LAPs). The Lead Airline and local stakeholders will implement these plans with the support of IATA.

More information on e-freight – and the assessment process, including the methodology of both the HLA and the DLA, is available here.

The Results

As previously announced at the recently concluded IATA Annual General Meeting, Germany, South Korea and Mauritius have passed the DLA and have kicked off e-freight implementation.

IATA is pleased to report that 11 additional locations have passed the DLA and are now ready for IATA e-freight implementation:

Australia New Zealand
Denmark   Norway
Dubai   Spain
France   Switzerland
Iceland   USA
Luxembourg      

Additional locations have either yet to finalise the DLA or have plans in place to meet DLA requirements. For the full DLA results, please go to the final DLA report and to the complete DLA questionnaire data.

Map the progress of e-freight around the world

IATA has now developed an e-freight interactive map. The map shows countries’ progress toward becoming IATA e-freight locations, from the assessment phase through to implementation.

What’s driving the IATA e-freight project?

Read about the benefits of the project in the latest IATA e-freight vision and mandate.

Keep up to date with project developments

At the IATA e-freight site, project news, events, and helpful materials – for example detailed assessment questionnaires – are updated regularly.

Establishing a Quality Foundation, Building Quality Collaboration

The IATA cargo team and the Cargo 2000 Association will collaborate to drive Cargo 2000 initiatives and delivery in Asia. This was the key message from the recent joint meeting held on 8th July in Kuala Lumpur, Malaysia. For the first time, members of the Cargo 2000 Association (Asia) participated in a one-day conference with IATA cargo managers from Asia Pacific and North Asia.

The conference witnessed valuable exchanges of information, and key updates of e-freight and Cargo 2000/QCargo initiatives. There were fruitful group discussions involving the inter-dependence of e-freight and Cargo 2000, the birth and/or growth of local Cargo 2000 associations, and the ongoing communication strategies related to the programme. The aim of the meeting was to achieve common goals through common ground for engagement.

"The joint meeting between Cargo 2000 members and IATA cargo managers demonstrated the ambition of the air cargo industry in Asia to jointly drive quality and efficiency across the entire supply chain for the benefit of our shippers." said Nicklas Schlingensiepen, of DHL Global Forwarding, also former Chairman of Cargo 2000 Association (Asia). Matt Preiss, of British Airways, had been elected as the new Chairman of Cargo 2000 Association (Asia) for the next term.

The event witnessed the key note speech by Datuk Ong Tee Keat, Malaysian Minister for Transport, on the country’s ability to compete globally and the continuous drive for excellence from the government’s perspective. Other highlights included a well-moderated panel discussion (with representatives from MAS Kargo, Kuehne & Nagel, Global Logistics System, Swissport and IATA), and a networking dinner at JW Marriott Hotel, sponsored by MAS Kargo and DHL Global Forwarding.

For more information please contact Kennard Ser at serk@iata.org or Tom Presnail at tom.presnail@cargo2k.com

Secure freight - back to top

The Secure Freight Programme is now official! On 24 June the business case for phase one of Secure Freight development (i.e. set-up) was approved.

Secure Freight aims to secure air cargo supply chains against terrorism and other crimes. It will be built on the concept of secure operators, in secure supply chains, implementing and conforming to a purpose designed quality assurance system.

This programme will be developed in two phases:

1) Finalise the vision and strategy, while developing a detailed action plan for the quality assurance system, standards and procedures, and an audit framework, while starting recruitment of project resources.

2) Testing and refining: this phase, beginning in October, will cover the planning of pilot audits and the development of an IT support system.

Secure Freight is a challenging longer-term initiative. We will start small and prove the concept before planning medium and then large-scale implementation.

More on Cargo Security

Air cargo & environment - back to top

IATA Green Supply Footprint Project… a milestone in our industry

The environment spotlight is currently on the movement of perishable goods (e.g. “food miles” – labelling freight on the basis of total distance moved), which could adversely impact the economic livelihood of businesses in developing nations, which are highly reliant on airfreight (e.g. farmers, flower growers).

The focus on environment is expected to extend to other freight types in the trend towards “green supply chains”. In line with our long-term vision of “carbon neutral air cargo supply chains” (IATA Green Freight), we have identified a unique opportunity for IATA to lead best practice environmental action for the cargo supply chain. Such action will also support the economic livelihood of businesses in developing nations dependent on air cargo. We initiated a study based on measurement of emissions that will determine:

current practice and priorities to achieve best practice emissions, for the movement of perishable goods along typical freight supply chains involving airfreight.

The selected trade routes are:

cut fruit from Ghana to the UK
flowers from Ecuador to the Netherlands

Our project team comprises IATA, and selected consultants: Green Logistics Consulting Group, composed of LCP Consulting, Conlogic AB and Altimedes Consulting. Work has already begun to gather all the needed information from the different participants, including producers, supply chain, and retailers based on a total supply chain analysis.

The project will be completed in September of this year, with the following outputs:

Measuring of emission levels and their root cause, and comparison with other modes
Proposed actions and best practices to reduce these emission levels.
Methodology for emissions calculation
High level socio-economic impact on sustainable livelihood for local business

More on Cargo & the Environment

World Cargo Symposium 2009 - back to top

Following an extremely successful World Cargo Symposium 2008 in Rome, the 3rd annual, "must participate" global air cargo event for 2009 will take place in the City of Angels - Krungthep: Bangkok, Thailand, 02-05 March.

The IATA World Cargo Symposium is about talk to action. It is also designed for information, interactivity, and effective industry networking.

The theme carries on from the Rome event - Focus on the Customer!, taking the dialogue to the next level in providing impetus to propel the Air Cargo industry forward in these turbulent times.

We anticipate this global mega-event will bring together 200 air cargo supply-chain decision makers and 800 cargo professionals from around the world. This event will give you the opportunity to conduct business on-site with key industry players while you discover (and influence) the latest air cargo industry developments.

The IATA World Cargo Symposium makes a difference. It is the only air cargo event which moves from industry talk to industry action, delivering on promises, and investing any profits made into Air Cargo's Simplifying the Business programme.

Details and registration

CASS - back to top

FBX - a new supply chain solution

The traditional CASS operation provides a one-way billing system aligned to carrier requirements. IATA’s new service FBX aims to extend the boundaries of today’s activity by introducing the cargo communities’ first online billing and settlement service.

A significant amount of time and resources are currently dedicated throughout the entire cargo supply chain focusing on raising invoices, pursuing payments, making payments and reconciling accounting transactions. This adds up to huge industry costs.

In the current economic climate many companies are seeking to introduce simplified and efficient support systems and processes. FBX is designed to provide a simple solution for a complex problem.

Operating as an industry clearing house, FBX participants will be able to invoice all other FBX participants and settle on bilaterally agreed terms. FBX participants needn’t necessarily be airlines or forwarders as the system will be available to all supply chain members.

Technology will be leveraged to provide a 24/7 online platform with sophisticated reporting and dispute resolution mechanisms.

Once implemented in a number of countries, FBX participants will be able to invoice and settle with FBX participants in other overseas operations, leveraging IATA’s expertise in international currency and funds management.

Development of the IATA Forwarder Billing Xchange (FBX) is progressing extremely rapidly and everything is on target for a Q4 2008 launch in pilot locations - the UK and Hong Kong.

For more information please contact Glyn Hughes at hughesg@iata.org

Cargo Claims Conference 2008 - back to top

The 4th IATA Cargo Claims and Loss Prevention Conference will take place at the Royal Orchid Sheraton Hotel & Towers in Bangkok 17-19 September 2008.

This popular annual event has now become the single most important occasion for claims management professionals throughout the industry for exchange of expertise and networking.

In the current extremely trying business climate it has become even more important to process claims correctly and learn from every claim in order to prevent unwanted revenue leakage and future loss. This year's conference will especially focus on these aspects by bringing together all stakeholders in the claims settlement process, getting them to concentrate on the current challenges facing the industry, and encouraging them to share knowledge and best practices.

Mr. Vorapravat, MD, Thai Airways International Cargo, will inaugurate this year's conference and deliver the Keynote address. In addition, Mr. Kasem Jaliyawatwong, Chairman, Thai Air Freight Forwarders’ Association, as well as experienced airline claims managers, eminent lawyers, well known shippers of perishable goods, etc. will be the other speakers.

Register now!

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Table of content
Turbulent times
e-freight
Secure freight
Air Cargo & Environment
World Cargo Symposium 2009
CASS
Cargo Claims Conference 2008
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