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

https://www.iata.org
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Glyn Hughes

Air cargo predictions are usually peppered with words like “slump," “ailing," “crisis,” and “depressed.” And phrases like “world trade stagnation,” “global economic slowdown,” and “increasing trade protectionist policies” are held over the industry’s head as a harbinger of continuing austerity.

Yet, as we have seen with the surprising results of the Brexit vote and the recent US presidential election, predictions are not always accurate. In keeping with the recent upset trend, I propose a slightly more optimistic outlook for the industry in 2017.

We can’t deny that world trade has flat-lined. But e-commerce is growing rapidly at a rate of more than 23 percent projected for 2016 (excluding travel, restaurant and event sales). The world has become a global cyberstore. Customers are ordering more and more online. They want their purchases as soon as possible, and are willing to pay extra for the privilege of rapid delivery. As the fastest mode of transport for consumable products, this creates significant opportunities for air cargo in the coming year.

The growth in the transport of time- and temperature-sensitive goods such as pharmaceuticals likewise provides grounds for optimism. In 2014, this market was estimated to be worth $8.36 billion, and it is projected to rise to $10.28 billion by 2018.

Global value chain (GVC) trade presents another opening for air cargo. Today half of global trade takes place within a GVC. The trade integration model enables individual countries to specialize in narrowly defined tasks such as component production, then through a complex network of trade links combine them to produce high-value, time-critical finished goods such as computers or mobile phones, which are usually transported by air.

The opportunities for air cargo in 2017 are present, but to exploit them. the industry needs to adapt to the fast-paced, global world of e-commerce and shifting customer demands. That means developing quality-focused, customer-centric supply chain solutions that provide enhanced shipping quality and service, greater visibility through the supply chain and better predictability.