Spring 2023

Building resilience in air freight forwarding

Dawit Woubishet is chair of the Air Freight Institute at FIATA – International Federation of Freight Forwarders Associations

Key issues in 2023 will include capacity and infrastructure to handle growing demand for e-commerce, keeping professionals’ skills up to date, and conformity with new safety and security regulations, says Dawit Woubishet, chair of FIATA’s Air Freight Institute

Key trends for the global air freight community in 2023 will include an increasing focus on capacity and infrastructure to handle the growing demand for e-commerce, keeping handling and transportation professionals’ skills up to date, fair and open competition, as well as conformity with the new safety and security regulations.

E-commerce is expected to reach $5.7 trillion this year and $7.3 trillion in 2025, and the air freight industry needs to focus on increasing capacity and infrastructure to handle the continued growing demand for e-commerce and express delivery services, as e-commerce demand will continue to present a source of growth for air cargo providers in 2023.

Fostering safety and security
2023 will bring new Pre-Loading Advanced Cargo (PLACI) Information Requirements for aviation security purposes, which are set to come into force in various countries shortly. This year, we will face the “go live” of the European Union’s new customs advance cargo information system (ICS-2 Release2), which will impact the air freight industry around the world in respect of goods entering or transiting the European Union. FIATA welcomes the multiple filing option in the ICS-2 Release 2 and other PLACI programmes, which allow freight forwarders as the bearer of first important information, to file data directly with the authorities. This requires guidance and capacity building, and FIATA is working to support freight forwarders and the industry at large in the implementation of these new requirements.

Last year, FIATA established a taskforce to focus on the implementation of Advanced Cargo Information requirements, which under the lead of FIATA’s Customs Affairs Institute (CAI) and Advisory Body on Safety and Security (ABSS) has contributed to capacity building, raising awareness among the freight forwarding industry, and ensuring a continuous dialogue with the Airfreight Institute to better understand the needs and challenges of the industry.

Addressing ULD challenges
ULD (Unit Load Device) packaging is a crucial topic in the air freight industry. ULDs are containers used to consolidate and secure air cargo for transport. They come in various sizes and designs, and are essential for handling, loading and unloading air cargo efficiently. In 2023, the air freight industry needs to focus on addressing ULD challenges to ensure smooth and efficient operations. This can include investing in modern and durable ULDs, improving the maintenance and repair processes, and ensuring compliance with industry standards and regulations. By addressing ULD challenges, air freight companies can ensure the safety and security of the cargo, reduce operational costs, and enhance the overall air cargo experience for customers.

Developing a global programme
FIATA represents over 40,000 freight forwarders operating across all transport modes in over 110 countries. In the past, freight forwarders often operated as agents of the airlines. Today, however, freight forwarders are no longer agents, but rather, customers of airlines, as buyers of air cargo services. Despite this, the IATA Cargo Agency Programme continues to be the main framework governing air cargo, which was established at a time when agency relationships were the norm. There is therefore an urgent need to modernise the air cargo framework to develop a global programme that is fit-for-purpose to respond to the needs of the global industry and reflect commercial realities, homogeneously around the world. This is important to ensure a balanced commercial relationship and improve service levels to accommodate new markets and overcome new challenges.

FIATA continues to work towards the development of a global programme that can benefit all regions around the world. This has included collaboration with IATA and relevant industry stakeholders, and seeking the feedback and expertise of its members from all regions to ensure a relevant and fit-for-purpose programme. The further development and roll-out of the future Global Programme will be discussed during the upcoming FIATA HQ Meeting in March 2023 in Geneva.

New talents for the industry
For many years, the air freight industry has been facing difficulty in recruiting staff which is becoming an increasingly serious and widespread issue that could exacerbate issues in the supply chain. At the same time, the airfreight industry is changing and becoming more complex, requiring new skills and adaptation from the new and existing workforce. Some good solutions could include designing and setting up fresh new apprenticeship programmes, and promoting digital learning and training, to modernise and elevate the new generation of leadership with the necessary competencies.

FIATA is well-placed to promote logistics careers and support its members to equip the industry with the skills for the future. FIATA acts as the bridge between successful and recognised freight forwarders and young promising talents, and in 2023 it will stay as one of the top priorities on FIATA’s agenda. Through the FIATA Young Logistics Professionals (YLP) Award and in collaboration with the IATA Future Air Cargo Executives (Faces) programme, we are giving more visibility to young people – the next generation of workers – as well as showing that this industry can be attractive and innovative. The annual FIATA World Congress is a good example of this. In 2022, FIATA dedicated a day to the YLP during FIATA World Congress in Busan to attract and promote young people in the freight forwarding industry, and we can look forward to the same at the FIATA World Congress in Brussels in 2023.

Air cargo is a crucial component of multimodal logistics. As such, it is key that we ensure it functions well, and that it is able to fulfil its vital role in the supply chain – as if issues arise in air cargo, it will endanger the entire supply chain.