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IATA head discusses foibles, future of air cargo

By Adina Solomon on May 7, 2014

Ocean ships have more capacity and newer technology than before.

“The ships have got their act together,” said Tony Tyler, director general and CEO of the International Air Transport Association, at the CNS Partnership Conference in San Antonio, Texas. “We’ve got to get our act together.”

Brandon Fried, executive director of the U.S. Airforwarders Association, interviewed Tyler as part of a session on Tuesday.

Airfreight still takes seven to eight days to reach its destination, Tyler said. In order to shorten that time, going electronic must be part of the equation.

“If we were in an e-cargo world, there would be much better opportunities to be competitive against other forms of transportation,” Tyler said.

Cost is part of the delay of E-freight, as are customs authorities, which will “have to get on board on how to join the 21st century,” he said.

Tyler suggested the air cargo industry was naïve to think it would accomplish E-freight overnight. But the integrators, who control the freight information end to end, are forcing the air cargo industry to step up their customer service quality.

But at the same time, Tyler said airlines aren’t providing enough incentive to get freight forwarders on board with E-freight.

“You’ve got to have the patience, commitment and fortitude to get this done,” he said.

Tyler also spoke about cargo alliances. So far, he said these alliances haven’t had the same effect on the industry as passenger alliances have had on passenger airlines. These alliances were driven by rationale on the passenger side, but they haven’t been strong for the cargo side.

“It’s often the case that the vendors of the alliance compete furiously on cargo, and they’re not sort of comfortable partners,” he said.

Tyler said he doesn’t see cargo alliances ever having the same effect as passenger alliances.

Des Vertannes, IATA’s global head of cargo, will retire from his position after the association’s Annual General Meeting in June. When asked if IATA has found a replacement for Vertannes, Tyler declined to reveal any candidates, saying an announcement will be made soon.

“Certainly I recognize the importance of airfreight to the aviation industry,” he said. “Cargo matters to IATA.”

Tyler said the airfreight industry is doing better than before. He believes that freighters are here to stay, though their total share of air cargo traffic may decrease.

“In a massive market where you’ve got a lot freight moving, there will be no more efficient way,” Tyler said. “There will always be a place for freighters.”

He also said the industry is getting closer to open skies, though that term has different definitions for different people.

“We’re only moving in one direction, and that’s toward liberalization,” he said.

Tyler questioned why airlines and their rules of ownership are handled differently by governments than other industries, such as telecommunications and banking.

“It’s a pretty crazy industry where ownership rules are so restrictive,” Tyler said. “Airlines should be treated like any other industry.”

Carbon emissions was another topic of discussion for Tyler. He said the aviation industry thought no one would notice that air transport accounts for 2 percent of global manmade carbon emissions. But people see the big plane engines, not the coal production, Tyler said.

International standards are the answer to global problems such as CO2. He said the aviation industry got its act together and focused on carbon-neutral growth and reducing carbon emissions.

Tyler said aviation now has aggressive targets and a realistic plan to reach them.

“There isn’t another industry in the world that’s done this,” he said.