Cargo Unleashing the power of data in cargo processes

Air cargo plays a significant role in ensuring aviation is the “business of freedom”. Enabling global trade stimulates economic growth and promotes a better quality of life for all people in every part of the planet, irrespective of them ever boarding a plane.

Developments in 2018

The operating environment for air cargo, however, is increasingly challenging. Demand for air cargo experienced a notable deceleration in 2018, growing 3.4% compared with its extraordinary 9.7% growth in 2017.This softening of demand has continued into 2019, and IATA predicts 2.0% growth in freight tonne kilometers (FTK) for the year.

The rise of protectionist policies looms large over the sector and, indeed, over the global economy. The prosperity that globalization generates and to which air cargo contributes is dependent on borders that are open to people and trade.

Demand for air cargo, though, is also affected by other elements. These include the end of the business restocking cycle; weak global economic activity; the contraction of the export order books of all major exporting nations, with the exception of the United States; and wavering consumer confidence. And with most if not all of these elements in play, the macroeconomic outlook has deteriorated such that global GDP and trade forecasts have been revised downward.

The greatest opportunities in air cargo are in e-commerce and special needs cargo, such as time- and temperature-sensitive shipments.

To capitalize, however, it is critical that air cargo modernizes its processes significantly.

IATA predicts 2.0% growth in freight tonne kilometers (FTK) for the year.

Global standards

Global standards will ease modernization efforts, guarantee the flow of commerce, and secure the air cargo supply chain. Other cargo initiatives that will benefit from global standards include quality management, trade facilitation, enhanced safety measures, and special cargo handling.

The goal is to make trade simpler, cheaper, and faster. Critical in this regard are the universal ratification and implementation of Montreal Convention 1999 (MC99); the revised Kyoto Convention; and the World Trade Organization (WTO) Trade Facilitation Agreement (TFA).

Meanwhile, the Pre-loading Advance Cargo Information (PLACI) initiative by the Technical Experts Group on Air Cargo Security (TEGACS) will help to secure the supply chain. IATA supports PLACI’s implementation in the United States and welcomes the requirement for it in Europe from 2021. PLACI standards are laid out in the well-established World Customs Organization (WCO) safe Framework of Standards to Secure and Facilitate Global Trade.

Dangerous goods

Global standards are especially vital for the safe transport of dangerous goods, including lithium batteries. ICAO’s technical standards and IATA’s Dangerous Goods Regulations (DGR) provide the necessary guidelines.

Properly labeled and packaged in accordance with those guidelines, dangerous goods can be shipped safely. IATA’s DG AutoCheck product even checks the shipper’s declaration for compliance with the DGR.

Complementing ICAO’s technical standards, the DGR and DG AutoCheck is IATA’s e-Dangerous Goods Declaration (e-DGD). The e-DGD leverages industry initiatives to digitize data and to embrace data-sharing platform principles. It enhances transparency, traceability, and data quality.

Compliance with the DGR is especially important in the case of lithium batteries. Passenger awareness (see Lithium batteries in portable electronic devices) must be matched with shipper adherence to the regulations. But rogue shippers that ignore global standards and products compromise the safety of air transport.Governments must do more to enforce the rules.

2018 air cargo performance

Key points in 2018 air cargo performance

IATA and industry action

Modernization

The needs of today’s shippers can only be met with the sector’s modernization. IATA initiatives underlie air cargo’s innovation, and the industry came to a resolution on the sector’s modernization at the 73rd IATA AGM in 2017.

The e-air waybill (e-AWB) is a cornerstone of the industry’s digital vision. Although progress has been slower than hoped, the e-AWB has reached critical mass, standing at 61% penetration at the end of 2018. Resolutions and recommended practices continue to be amended to make the e-AWB the default on enabled trade lanes.

Work is also ongoing to ensure that IATA’s Cargo-XML messaging standard—which expedites business between airlines and cargo stakeholders—achieves universal adoption. The standard has already been integrated in two important customs systems: the WCO’s Cargo Targeting System (WCO CTS) and the Automated System for Customs Data (ASYCUDA) World, a system used by 90 countries.

The common data language of Cargo-XML will enable the IATA ONE Record program, which grants supply chain stakeholders direct access to shipment data using modern web standards. The first standards for end-to-end supply chain data connectivity were agreed to in March 2019.

Digital data will, moreover, assist the efforts of IATA’s Cargo iQ quality management group. Cargo iQ helps airlines and freight forwarders monitor and benchmark delivery performance against their service promise, define common processes and procedures, and promote best practices. Its Smart Data portal provides analytics on shipment performance and allows members to compare their performance with the performance of others in the air cargo community. Such capabilities will be increasingly relevant as e-commerce grows and as shippers demand ever-higher service standards.

Special cargo

IATA initiatives in special cargo operations continue to ensure airlines’ compliance with the latest regulatory requirements and with shippers’ growing demands.

IATA’s Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) addresses issues related to pharmaceutical transport, and IATA’s Center of Excellence for Independent Validators for Live Animals Logistics (CEIV Live Animals) improves the safety and welfare of animals transported by air. And as of 2018, they are joined by IATA’s Center for Excellence for Independent Validators for Perishable Logistics (CEIV Fresh).

CEIV Fresh advances the handling and transporting by air of perishable products. The specific time and temperature requirements for food and plant products makes them a challenge for air cargo. The CEIV Fresh program meets their exacting requirements based on IATA’s Perishable Cargo Regulations (PCR).

In early 2019, the Airport Authority Hong Kong (AAHK); Cathay Pacific; Cathay Pacific Services Limited (CPSL); and Hong Kong Air Cargo Terminals Limited (HACTL) took a community approach to being the first organizations to put the CEIV Fresh program to the test and to become CEIV Fresh certified.

The needs of today’s shippers can only be met with the sector’s modernization.

Solutions for cargo

CargoIS

CargoIS is the leading source for air cargo business intelligence.
Its information spans the entire supply chain: airlines, general sales agents (GSA), freight forwarders, ground handlers, airports, and many others.
CargoIS gets its data from two sources:
- CASS, the Cargo Accounts Settlement Systems operated by IATA and used by airlines to settle with freight forwarders and once the sole data source for CargoIS, and
- contributing airlines, through a new data source, CargoIS Direct Data (CDD), that complements CASS data.
CargoIS is the only air cargo intelligence solution combining the advantages of actual transactional data with voluntarily contributed data, resulting in the best data quality on the market. And now, with the CDD source, subscribing airlines can access commodities transported and benefit from unrivaled market coverage.

IATA Net Rates

IATA Net Rates connects airlines and freight forwarders to securely manage and distribute cargo rates. Airlines can automate the creation, management and distribution of their rates, while forwarders are able to access all airlines’ rates in one system.
The platform supports the distribution of a variety of rate types, including market rates, contract rates and spot/ad-hoc rates. It is accessible via the web or can be integrated into customer’s rates management systems using web services.

Dangerous Goods Regulations

The DGR are the global reference for shipping dangerous goods by air.
The DGR has been the only standard recognized by the global airline industry for almost 60 years.
It is the most complete, up-to-date, and user-friendly reference for dangerous goods handling in the industry.

Center of Excellence for Independent Validators in Pharmaceutical Logistics

IATA’s in Pharmaceutical Logistics CEIV Pharma aims to improve the handling of pharmaceutical products by introducing a standardized pharmaceutical-handling process at airports globally that complies with pharmaceutical manufacturers’ requirements.

DG AutoCheck

DG AutoCheck is an acceptance validation tool.
It automates the checking of dangerous goods against the DGR without slowing the check-in process.
It provides the acceptance checker with an image of the shipment for physical inspection.
DG AutoCheck makes significant process, cost, and safety improvements to the acceptance process for dangerous goods.

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