Good Morning. I’m very pleased to get the opportunity to speak to you and to reinforce the importance that IATA attaches to the global cargo agenda and to cargo security in particular. Some of you may have previously heard my views at the World Cargo Symposium in Kuala Lumpur last March and the Cargo Security and Mail Forum held here last November. And I hope to see many of you again on 12 March at the World Cargo Symposium in Doha, Qatar.
Value of Air Cargo Security
I have a strong interest in cargo from my days at Cathay Pacific. For an airline like Cathay, cargo was not just a useful incremental revenue stream in the belly of the plane – it was an essential, fully integrated part of our business. Moreover, $5.3 trillion of goods travel by air – that’s 35% of all world trade by value. Much of the modern world relies on the contribution air cargo makes to support global supply chains.
We must also recognize that aviation faces security threats. The 2010 printer cartridge plot, which has been called air cargo’s 9.11 in terms of its impact on security processes, was a clear reminder of that. Governments and industry reacted prudently. And the industry adapted to the new challenges. But we cannot be complacent. The supply chains that we support will quickly disintegrate if we cannot keep shipments secure and safe from terrorist threats. That is no small task for an industry that delivers nearly 50 million tonnes of cargo annually. Efficiently knowing what is being shipped by whom, to whom is a critical ingredient.
Governments and industry have a common interest. We both need and want to keep global trade growing.
But it is also clear to me that if regulators and governments do not have confidence in the security of air freight, then bureaucracy will increase and shipping times will lengthen. This will make our business less efficient, less competitive, dampen innovation, and ultimately raise costs to consumers. Under these conditions, some items, like perishable goods, may not even be viable to be air freighted. Commerce as we know it would look very different and decades of efficiency progress would be lost.
The stakes are high. We must get air cargo security right. And that is why you are all here today…to increase the momentum for harmonized, consistent and effective cargo security regimes worldwide.
Secure Freight offers a solution
In this context, security becomes a core promise of our industry. Reflecting that, it is at the heart of IATA’s vision which is to be the force for value creation and innovation driving a safe, secure and profitable air transport industry that sustainably connects and enriches our world.
As with safety, environment, and a host of other issues facing aviation, success in security comes through developing and applying global standards, and this will require a team effort from across the whole industry and with government. As I have already mentioned, it is a common goal. But we can only achieve it if we are aligned in our understanding of the issues and our approach to mitigating them.
That is why this forum is such a significant gathering in the development of the Secure Freight program.
As you know, Secure Freight is an air cargo security solution that aims to promote global air cargo supply chain security standards around the world in order to facilitate safe, secure and efficient operations of air cargo.
Secure Freight is not a cookie-cutter approach – it is tailored to each country, based on tried and tested standards. IATA helps to develop these solutions and assists with change management to enable implementation. We have demonstrated this through pilot schemes – eight so far - in a variety of different locations around the world.
Secure Freight is aligned with the global development of best practice and responds to the call from the International Civil Aviation Organization (ICAO) High Level Conference on Aviation Security for a strategy to build capacity for stronger air cargo security. To move this forward, IATA is fully engaged with the ICAO sub group that will develop this strategy and lessons learned from Secure Freight were shared as part of a capacity-building initiative during the most recent Working Group on Air Cargo Security.
Secure Freight has a substantial impact. It creates value for governments. And it does the same for airlines—our members. Today you will hear a presentation from our Chief Economist, Brian Pearce, as he shares the first findings of a study we commissioned from L.E.K. Consulting to measure and assess the value proposition that Secure Freight has to offer to any particular given country. The report takes Malaysia as its test case, as this was the first country to finalize its pilot program. The results are startling: benefits anticipated from full national implementation of Secure Freight are estimated to be an annual profit increase of between $350-600 million to companies in Malaysia. Over five years that means a benefit of $1-2 billion. And thank you to the Malaysian Department of Civil Aviation, Malaysia Airlines and MASKargo for coming here to share your experiences of Secure Freight with this audience.
This tells us that Secure Freight is not a theoretical success—it is a tried, tested and proven success. The question now is how to move from pilot schemes to making it a critical component in securing the global cargo network.
Four messages to take Secure Freight forward
My message to you today, as you start your deliberations, is four-fold.
Firstly, for a Secure Freight program to be successful, regulators and industry need to work even more closely together. Secure Freight engages the full range of stakeholders along the supply chain to find solutions: civil aviation authorities, customs, police, health and agriculture regulators, airlines, airports, ground handlers, forwarders and shippers all need to participate when a Secure Freight Pilot is introduced.
From the industry perspective, Secure Freight has helped put a spotlight on cargo security and its supply chain to our members in the Cargo Committee, the Security Group and to the rest of the industry, via the active participation of the Secure Freight Advisory Group members, most of whom are with us today. Thanks to Qatar Civil Aviation Authority, the International Federation of Freight Forwarders Associations (FIATA), the International Air Cargo Association (TIACA), Airports Council International (ACI), British Airways, UPS and Inditex, for the work you have all undertaken in supporting the endorsement of all Secure Freight Standards since 2008 and in promoting its value within our industry and the supply chain.
Secondly, we need to turn cooperation and alignment between industry and government into further progress on harmonization and convergence. ICAO must remain the focal point for these discussions and there is no doubt that things have moved forward. We welcome the work that ICAO and the World Customs Organization has done towards harmonizing the Regulated Agent and Authorized Economic Operator programs, and we look forward to that being finalized.
We also need to agree to common definitions on important items such as what constitutes high risk cargo. And we need to see this forum paving the way for cargo security regimes to be recognized by states. Perhaps we need to consider an ICAO roadmap to make it clear what states need to do to get their security regimes accepted.
Your contributions on these issues are very welcome. In particular I am looking to the Open Dialogue session moderated by Jim Marriot from ICAO to deliver important conclusions that IATA can then present to the next ICAO AVSEC Panel in April.
Thirdly, we must think and act globally—recognizing that supporting each other makes us all stronger and more secure. Air cargo is a network business, so building capacity in regions where resources are scarce should be a concern for everybody - and a concern that is acted on. A good example is the work of Secure Freight in facilitating Transport Canada’s assistance to the Mexican DGCA with aviation security initiatives for both cargo and passenger. And of course ICAO can do a great deal to help better coordinate global resources via its Donor Program, among others.
Finally, we need to be prepared for the long-haul. This is no overnight fix. And the challenges are dynamic. That makes aviation security a long-term commitment that requires continued close cooperation between regulators and industry. Our challenge is to build momentum for the development of harmonized and effective cargo security regimes. Secure Freight can play an important part in this with the development of its network and the implementation and sharing of best practices with common standards for both industry and regulators.
IATA’s commitment to Secure Freight has been sustained over four years, and will continue as we face even greater challenges in the regulatory environment in the immediate future. Thanks to the experiences gained in Malaysia and elsewhere, we can see clearly that the benefits for states implementing Secure Freight outweigh the costs of strengthening the security of their air cargo supply chains. I am confident that these examples will inspire us to work even more closely together towards a safer, more secure and more efficient air cargo system for the world.
I began by referencing that the air cargo industry is vital to almost every aspect of modern life. It’s been almost a year since we kicked off the ‘Air Cargo Makes It Happen’ campaign at the World Cargo Symposium in Kuala Lumpur. And since then we have been rolling it out across the globe. I am passionate about aviation. Go to any arrivals lobby in any airport around the world and it is easy to see how connected we have made our planet…and what a wonderful achievement that is. Air cargo’s contribution may be less immediately visible—but it is probably even more profound.
We have an important mission to keep the world connected…and to keep flying people and cargo both safely and securely. I hope that these comments will stimulate successful discussions and meaningful results and commitments.
With that, I would like now to invite to the podium Des Vertannes, our Global Head of Cargo, to give an overview of our 2013 Cargo Security Agenda. Thank you.