WAS it naïve to think airlines, shippers and forwarders could come together in the spirit of co-operation and right the industry in one jolly fellowship?
Over a year on from the birth of GACAG and at the World Cargo Symposium in March, held in Kuala Lumpur (Malaysia), the delegates – voting in an instant digital poll – overwhelmingly said ‘GACAG who?’
Cue much laughter and muffled coughs from all.
“I actually think that was the best answer we could have got for that question,” says Glyn Hughes (right), director of cargo distribution at IATA. “It stops us being complacent.
“We could pat ourselves on the back for all the things we’ve achieved, but we need to hear whatever people want to tell us.
“The lesson we’ve taken from that, and which will feed into our strategy for the next 12 months, is if we don’t communicate it, it doesn’t exist. We have to engage at the grassroots levels and explain what we’re doing and hearing whether it really is what people want us to do.
“You have to remember though that GACAG has no employees and no money. Everything that group does is because of the resources donated by its individual associations.”
Unlocking the door
So GACAG wants to ‘engage the grassroots’ but an often-voiced complaint is a lack of transparency, with the committee sitting in closed sessions for much of the symposium.
Hughes admits that can be frustrating for the other delegates, but says meetings will now be far more open. Not totally, but there will be parts accessible to all.
“IATA can’t do this alone. We want to extend the groups that we are collaborating with – the forwarders, shippers, airports, handlers, WCO – as strategic partners.”
Note ‘strategic partners’ not actual partners.
As well as GACAG, Hughes’ current passion is wanting to promote air cargo more, not only to governments and regulators but also to the wider public.
“Air cargo transports 34 per cent of global cargo by value,” he says “but only 0.5 per cent by volume. If governments pick up on the 0.5 per cent figure they will just say that we’re meaningless as a transport mode because it’s such a small size in terms of volume.
“We need them to focus on the value, that one third of global economic trade is transported in the bellies of aircraft. If we carry that message through, governments will be much more responsive to cargo. We want regulators to embrace the supply chain rather than strangle it.”
But even aviation itself needs to be reminded of what cargo already offers the industry, with airline chief executive officers (CEOs) frequently not giving it the attention it deserves.
“Too often cargo is sidelined. Last year it made US$65bn for the sector, which represented 12 per cent of airline revenues. First-class revenue represents only four per cent. Cargo generates three times as much revenue as the first-class product! Look at how much effort is invested in both time and resources to that compared to cargo.
“Business class is 14 per cent. The minute we eclipse both first-class and business- we’re in the race. Then if we overtake first- and business- class revenues combined, at about 18 per cent, then airline CEOs will really sit up and take notice of us.”
Just a few per cent. Sounds achievable. Sounds easy. Easier said than done. How though?
IATA is firmly on the e-freight campaign trail at the moment, but Hughes stresses it is only part of a much wider drive to greater efficiency.
“It typically takes six days door-to-door to move cargo, so maybe we should introduce an industry target to take 48 hours out of that. That’s not just to do it for the sake of it, but because the efficiencies needed to derive that time saving will then translate into a further reduction in cost and therefore increased competitiveness as a supply mode.”
With a new cargo-friendly captain at the IATA joystick and hopefully more freedom for its head of cargo, Des Vertannes, the organisation is certainly going out of its way to show it is now a very different beast to the one it was a couple of years ago. Let’s see whether it backs its promises.
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