Three main challenges for air cargo in Africa

Cancun – The air cargo industry in Africa suffer from infrastructure challenges, especially on ground base, according to Glyn Hughes, head of cargo at the International Air Transport Association (Iata).

“We think the air cargo industry in Africa needs to be improved. There is more than a billion people in Africa of which many are young and becoming more affluent and this offers lots of opportunities in the air cargo industry,” Hughes told Fin24 at the 73^rd annual Iata AGM.

“There are a number of tech companies indicating they are interested in looking at how they can use smart phones as a delivery destination in Africa – a mobile delivery unit.”

According to Hughes, the second main challenge for air cargo in Africa is the lack of open skies among countries on the continent.

“It is often cheaper to fly something from one African country via the Middle East to another African country than directly between two Africa countries,” said Hughes.

“And the third main challenge lies in the transfer of goods cross border for final deliveries, especially to land locked countries. Iata is looking at how this can be improved and is working with a number of organisations in this regard.”

Value of air cargo

It is estimated that globally $5.9trn worth of goods are flown by air cargo annually. This is about 35% of global trade by value and generates annual revenues of more than $50bn for airlines.

About 62 500 tonnes of humanitarian aid is also delivered by air per year.

Yet, according to Hughes, the air cargo industry has seen little growth since 2011, mainly due to weak gross domestic product (GDP) growth in the world and excess capacity keeping yields under pressure.

At the same time he sees a number of opportunities in the air cargo industry. These include growing e-commerce goods needing to be delivered; growth in the global pharma market, which requires specialised delivery; strong export orders; improvement in global trade; and modern widebody aircraft being cargo friendly.

Safety and security

At its AGM Iata adopted a resolution to accelerate the modernisation and transformation of the air cargo industry with the aim of making trade faster, cheaper and more efficient.

“Air cargo processes are stuck in another century. To ensure that air cargo is ready to benefit from the expected $1trn boost in trade growth arising from the World Trade Organisation Trade Facilitation Agreement (TFA) and the improving global economic environment, we need a major overhaul of industry processes,” according to Iata CEO Alexandre de Juniac.

The Iata resolution calls on the air cargo industry to take a customer-centric approach to transformation to meet the evolving needs of shippers.

The resolution suggests digitisation of the supply chain; adopting harmonised standards; using enhanced technology; and harnessing the power of data to drive effiency.

*Fin24 is a guest of Iata at its AGM