Glyn Hughes, Global Head of Cargo, International Air Transport Association

https://www.iata.org
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Glyn Hughes

What a year. 2017 will enter the history books as the best year for growth since the 2010 bounce back after the global financial crisis. Consistent months of double-digit growth vs 2016 have been well received by the industry. However, business growth and an evolving global environment come with certain challenges. Cross-border e-commerce, a major driver of volume increases during 2017 yet accounting for less than 8 percent of total retail activity demands much greater supply chain transparency and must be supported by digitalized logistics, i.e., the movement of data ahead or the movement of the actual freight.

The increased volumes exposed some areas of infrastructure limitations with capacity constrained airports, whether through slot restrictions, noise, or night bans capturing headlines this past year. These situations will hamper growth going forward unless collaborative solutions are found involving regulators, infrastructure providers, and supply chain partners.

Evolving regulations also loomed large over the industry during 2017 and will continue to do so this year. Portable Electronic Devices (PEDs) were subject to certain in-cabin restrictions earlier in 2017 flying to certain countries, which resulted in additional measures being implemented to ensure safety compliance. The development of enhanced lithium battery packaging standards have been the subject of a Society of Automotive Engineers (SAE) task force, which should be concluded in 2018.

On the positive side, the World Trade Organization Trade Facilitation Agreement (WTO TFA) entered into force during February 2017. When fully implemented, it will result in simplified border controls and therefore less cost associated with cross-border cargo transportation.

Equitability in air cargo supply/demand improved significantly throughout 2017, although a number of markets reported backlogs in getting cargo on planes, particularly during the end of year high-demand period.

Growth is expected to continue as we move into 2018 although perhaps not at the pace experienced throughout 2017. It is therefore imperative that the industry address the challenges that lay ahead to ensure the full potential of the anticipated growth can be realized.