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Oct 15,2021

Prospects of the global air cargo industry

On October 13, the International Air Transport Association (IATA) issued an appeal urging the global Air freight services industry to work together to maintain the level of cooperation during the new crown pneumonia epidemic, overcome future challenges and achieve industry recovery. The organization emphasized that sustainability, modernization and safety will be key priorities for the recovery of the air transport industry in the post-epidemic era.


Brandon Sullivan, Global Air Cargo Director of IATA, said: “Air cargo is an extremely important industry, and the epidemic has highlighted this. During the epidemic, air cargo has always been the lifeline of human society, transporting critical medical supplies. And vaccines, and maintain the smooth flow of the international supply chain. When passenger flights were grounded, cargo became an important source of revenue for many airlines. In 2020, air cargo generated $129 billion in revenue, accounting for approximately one-third of airlines’ total revenue. One is an increase of 10% to 15% compared to the level before the epidemic. Looking ahead, the prospects are good. We need to maintain the momentum during the epidemic and continue to improve our recovery capabilities in the post-epidemic era."


IATA pointed out that the short-term and long-term prospects of air cargo are promising. Indicators such as inventory levels and manufacturing output are good. World trade is expected to grow by 9.5% this year and 5.6% in 2022. E-commerce will continue to grow at a double-digit rate. The demand for high-value professional goods is rising. Temperature-sensitive medical products and vaccines.


The International Air Transport Association predicts that this year's cargo demand is expected to exceed 8% of the pre-epidemic (2019) level, and revenue is expected to rise to 175 billion U.S. dollars. In 2022, demand is expected to exceed 13% of pre-epidemic (2019) levels, and revenue is expected to increase to US$169 billion.


Air freight services


At the IATA annual meeting last week, airlines pledged to achieve net zero carbon emissions by 2050. This commitment is consistent with the "Paris Agreement" goal of global warming not exceeding 1.5 degrees Celsius. The commitment aims to reduce the carbon dioxide produced by air transportation as much as possible and to develop new zero-emission energy sources such as electricity and hydrogen energy.


The epidemic has accelerated the digitalization process in many fields, and the air cargo industry needs to take advantage of the situation to improve operational efficiency while meeting the digital needs of customers. The International Air Transport Association proposed that the biggest growth area of ​​the air cargo industry is cross-border e-commerce, and it is necessary to accelerate the digitization of time- and temperature-sensitive cargo.


IATA introduced the progress made in promoting the digitalization of the industry. Avionics air waybills currently account for 75% of air waybills and are expected to reach 100% by the end of 2022. The International Air Transport Association is promoting the entire supply chain to work together under a set of standardized and exchangeable data. It is currently conducting 17 pilot projects involving 145 companies and 3 customs authorities. More and more customs authorities are accepting IATA cargo messaging standards.


Air freight services


Safety is regarded as the priority of the Air freight services industry, and the transportation safety of lithium batteries is particularly prominent. The use of lithium batteries continues to grow, and the related fire risks are also rising. To this end, IATA calls on relevant regulatory agencies to speed up the development of testing standards, relevant government departments should strengthen supervision, and the industry should strengthen the collection and sharing of accident data and safety risk assessment.


IATA calls on all countries to support trade facilitation. So far, 154 countries have ratified the World Trade Organization’s Trade Facilitation Agreement (TFA), accounting for 94% of WTO members. IATA urges governments that have not yet ratified the agreement to sign and implement the agreement as soon as possible. The full implementation of the agreement is expected to increase global trade by US$1 trillion per year and reduce global trade costs by an average of 14%.