United

E-freight has potential to save US$1.2b, but we still face security and green issues globally

Friday, 09 February 2007

THE FREIGHT industry and governments have been given three challenges for change — to implement e-freight by 2010; to harmonise risk-based security measures globally; and to take a balanced and realistic approach to the issue of the environment.

The challenges were laid down by IATA director-general, Giovanni Bisignani, while addressing 800 industry leaders attending the organisation’s World Cargo Symposium in Mexico City.

E-freight is one of IATA’s five ‘Simplifying the Business’ projects. It has the potential to save up to US$1.2 billion by eliminating as many as 38 documents that accompany air cargo shipments.

“Cargo processes have not changed in three decades. It is time for the industry to crawl out of the technology dark ages,” argued Bisignani.

“We will be up and running by the end of this year in five key locations — Canada, Singapore, Hong Kong, the Netherlands and the United Kingdom. This is IATA’s biggest challenge ever. The benefits are clear, the plan is in place, the industry is committed and we are on target to deliver, where viable, by 2010,” he said.

In each of the locations, pilot projects will see the implementation of e-freight locally with the commitment of the major local carrier(s), freight forwarders and governments (primarily Customs).

To date, 17 airlines and five freight forwarders have joined IATA’s e-freight Message Improvement Program (MIP), launched last January. The MIP will focus on improving the quality of data in the airway bills and house manifests, while moving them to electronic formats.

On security, Bisignani said the challenge was to embed it throughout the supply chain — rather than just focusing on screening at the end. “The US is proposing 100 per cent screening of cargo on passenger flights in three years. This is not smart, but it is expensive — US$3.6 billion over 10 years. The solution is a risk-based approach that involves the entire supply chain and cost efficient technologies such as advanced canine techniques. Then we can target screening to achieve the best results,” said the IATA chief.

isignani also cleared the air about the industry’s commitment to limiting emissions, citing fuel efficiency gains that eliminated US1.8 billion in industry costs and up to 15 million tonnes of CO2 last year alone.

“The industry has a clear strategy to address the role of aviation in climate change. First, get the best out of new aircraft and engine technology. Second, eliminate the 12 per cent inefficiency in global air traffic management that wastes 73 million tonnes of CO2 a year and adds US$13.5 billion to the fuel bill. Third, convince politicians that, when economic measures are considered, emissions, trading is a better option than taxes or charges, provided any such schemes are harmonised globally,” he said.

Looking to the future, IATA estimates that air cargo will grow at an average 5.3 per cent between 2006 and 2010. Bisignani said the majority of growth would be in Asia, with intra-Asia routes accounting for 8.3 million tonnes of cargo (26 per cent of the global total) by 2010. “That is good news, but it also presents challenges. China alone will account for 30 per cent of the industry’s growth and we must work particularly hard to overcome potential infrastructure bottlenecks and IATA’s role in promoting global business standards will be critical. So much growth in one area will result in a unique challenge - how to add capacity to meet outbound peak demand from Asia, while effectively utilising the equal inbound capacity.”

Bisignani said the industry as a whole would return to profit this year — US$2.5 billion globally. “This is good news, but a long way from the seven to eight per cent return that the industry must generate to cover its cost of capital. Cargo shares the industry imperative to focus on efficiency,” he added.

HACTL
Cathay Cargo
United

E-freight has potential to save US$1.2b, but we still face security and green issues globally

Friday, 09 February 2007

THE FREIGHT industry and governments have been given three challenges for change — to implement e-freight by 2010; to harmonise risk-based security measures globally; and to take a balanced and realistic approach to the issue of the environment.

The challenges were laid down by IATA director-general, Giovanni Bisignani, while addressing 800 industry leaders attending the organisation’s World Cargo Symposium in Mexico City.

E-freight is one of IATA’s five ‘Simplifying the Business’ projects. It has the potential to save up to US$1.2 billion by eliminating as many as 38 documents that accompany air cargo shipments.

“Cargo processes have not changed in three decades. It is time for the industry to crawl out of the technology dark ages,” argued Bisignani.

“We will be up and running by the end of this year in five key locations — Canada, Singapore, Hong Kong, the Netherlands and the United Kingdom. This is IATA’s biggest challenge ever. The benefits are clear, the plan is in place, the industry is committed and we are on target to deliver, where viable, by 2010,” he said.

In each of the locations, pilot projects will see the implementation of e-freight locally with the commitment of the major local carrier(s), freight forwarders and governments (primarily Customs).

To date, 17 airlines and five freight forwarders have joined IATA’s e-freight Message Improvement Program (MIP), launched last January. The MIP will focus on improving the quality of data in the airway bills and house manifests, while moving them to electronic formats.

On security, Bisignani said the challenge was to embed it throughout the supply chain — rather than just focusing on screening at the end. “The US is proposing 100 per cent screening of cargo on passenger flights in three years. This is not smart, but it is expensive — US$3.6 billion over 10 years. The solution is a risk-based approach that involves the entire supply chain and cost efficient technologies such as advanced canine techniques. Then we can target screening to achieve the best results,” said the IATA chief.

isignani also cleared the air about the industry’s commitment to limiting emissions, citing fuel efficiency gains that eliminated US1.8 billion in industry costs and up to 15 million tonnes of CO2 last year alone.

“The industry has a clear strategy to address the role of aviation in climate change. First, get the best out of new aircraft and engine technology. Second, eliminate the 12 per cent inefficiency in global air traffic management that wastes 73 million tonnes of CO2 a year and adds US$13.5 billion to the fuel bill. Third, convince politicians that, when economic measures are considered, emissions, trading is a better option than taxes or charges, provided any such schemes are harmonised globally,” he said.

Looking to the future, IATA estimates that air cargo will grow at an average 5.3 per cent between 2006 and 2010. Bisignani said the majority of growth would be in Asia, with intra-Asia routes accounting for 8.3 million tonnes of cargo (26 per cent of the global total) by 2010. “That is good news, but it also presents challenges. China alone will account for 30 per cent of the industry’s growth and we must work particularly hard to overcome potential infrastructure bottlenecks and IATA’s role in promoting global business standards will be critical. So much growth in one area will result in a unique challenge - how to add capacity to meet outbound peak demand from Asia, while effectively utilising the equal inbound capacity.”

Bisignani said the industry as a whole would return to profit this year — US$2.5 billion globally. “This is good news, but a long way from the seven to eight per cent return that the industry must generate to cover its cost of capital. Cargo shares the industry imperative to focus on efficiency,” he added.

HACTL
Cathay Cargo
HACTL
Cathay Cargo