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Cargo

And now we are ten...

In such a volatile industry, much has changed in the past 10 years. Airline Cargo Management discovers the critical issues facing today's market and asks how companies across the air cargo chain should cope with future challenges
 

The carrier

David Shepherd, global head of sales, IAG Cargo

 

What have been the most significant changes in the past 10 years?

The increased price of fuel, heightened levels of air cargo security, and the introduction of next-generation aircraft, which have allowed for significantly lower emissions, noise and fuel consumption.

What effect has that had on the business – and what should the industry have done better?

Global increases in the price of fuel have inevitably proved to be taxing. These increases have resulted in higher costs and lower profit margins across the sector. The knock-on effect of this is an increased cost to the customer, which is pushing some cargo to other modes, such as land and sea. Unfortunately, there is very little the industry can do to offset this risk.

 

Meanwhile, the heightened level of air cargo security has, in part, increased infrastructure costs. With changes to regulations and processes, there was a general sense of confusion for shippers, agents, airlines and the industry as a whole around the implementation and implication of these changes – needless to say, more red tape leads to longer supply chains. In my opinion, the industry should have galvanised earlier. It would have been beneficial for us to influence and educate governments around the world to standardise air cargo security measures. It is imperative that Gacag is ploughing this integral furrow now.

 

Finally, the introduction of improved aircraft has had a profound effect not only on the industry, but also on the environment. These aircraft boast more efficient operations through a lower carbon footprint and better economies of scale.

What changes do you expect to see happen in the next 10 years?

We expect to see real modernisation of the industry and liberalisation of global trade as we are able to engage and exploit new technologies. In particular, we anticipate a total penetration of e-freight across the industry that will result in the elimination of transported documentation. We also expect to see the standardisation across the industry of performance metrics and, importantly, security measures.

What do you think will be the greatest challenge over the next 10 years?

We are well placed to meet the challenges posed over the next 10 years. In particular, we have identified quality and costs of competing modes, and growth of capacity versus demand as areas to monitor. Fuel costs will continue to pose a challenge, but perhaps most importantly, we need to ensure that security standards continue to be upheld in order to protect against and negate threats to our aircraft, staff, passengers and cargo.


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