What does the future hold for the air cargo business?

The air cargo business has certainly come a long way in the last 40 years. But where might it go in the next 40? At present, times are tough for air freight. In terms of tonnes carried, air cargo has been flat-lining. Since 2010 total freight tonnes carried have grown by just 1.4 million. Yields were negative last year and will probably fall again in 2013, while the freight load factor for the year is running at just 45%. Yet in 2012 air cargo transported goods worth $6.4 trillion. That’s 35% of the world’s traded goods by value. It shows how essential air freight is to the modern world. And looking to the future, I believe that air cargo will continue to be a crucial sparkplug in the global economic engine, but that a revolution in global manufacturing is coming which will have significant implications for our business. It is impossible to be sure how the global economy will develop in the next 40 years, but in particular there are two trends that could have a major impact on air cargo: repatriation of manufacturing, and 3D printing. The shale oil/ gas revolution has brought energy costs down so much that it has made the US competitive again. Manufacturing is coming home, and the same could happen in Europe. What could be the consequences? Less air freight from East to West would be a concern. But on the other hand, exports back to the Far East could increase, ensuring some of the empty bellies that return to China, Japan and elsewhere are filled. With regard to 3D printing, at present it is a niche. But already a machine can be bought for a few hundred dollars that can print anything from shoes to jewellery. Only simple, low-tech items can be printed at the moment, but as this technology develops there is no doubt that it is going to impact every aspect of manufacturing. So we face a future of great change and uncertainty. To compete, air cargo needs a complete transformation. E-freight is the key. The cynical may wonder if we will be doing an FTW retrospective in another 40 years’ time and still be talking about e-freight! There is no doubt that it has been a long time coming. But I am firmly of the belief that we are close to the critical momentum that is going to deliver this essential transformation to our business. The creation of the multilateral e-AWB in May has started to drive e-AWB implementation. And the e-AWB is the cornerstone of e-Freight. If air cargo is to have a prosperous future, it needs to re-invigorate itself and commit to speeding up shipment times and raising reliability levels even higher. We have the tools in place to achieve this – we just need the vision and the leaders to implement it. INSERT & CAPTION To compete, air cargo needs a complete transformation. That means improving speed and reliability while reducing costs. – Des Vertannes