The European freight forwarders’ organisation Clecat has published a position paper urging the European Commission to take into account the impact of its new aviation policy on the air cargo market.
In an initial reaction Clecat had already applauded the EC’s strategy (see CargoForwarder Global14 December). The organisation supports the EC’s strategy which seeks to “[tap] into growth
markets by improving services, market access and investment opportunities with third countries, whilst guaranteeing a level playing field.”
Clecat points out that air cargo is an integral part of linking Europe with these markets, and a global industry, operating in a global marketplace, which requires a global policy strategy. “We therefore applaud the Commission’s intentions in seeking to ensure that Europe is properly connected to this market. Future proposals must take into account the impact on the air cargo market as well as the needs of passengers.”
Beware of protectionist measures
Market developments such as the shift in the global market’s centre of gravity to the East, and increasingly to the South East, over the past decades, have brought about a booming aviation market in the Middle East and Asia. In this market, the European airlines should be able to compete on a level playing field across the world. The Regulation 868/2004 concerning protection against subsidisation and unfair pricing practices causing injury to Community air carriers in the supply of air services from countries not members of the European Community is one of the EC’s instruments to protect the interests of the Community carriers.
Clecat also welcomes the negotiation of comprehensive EU-level air transport agreements with a range of international partners, including the United Arab Emirates, Qatar, China, Turkey and ASEAN. “These can be used to liberalize the aviation market whilst ensuring the respect of fair and sustainable competition.”
On the other hand, Clecat thinks it is also vital that the EU and its Member States do not respond to any unfair practices, whether proven or perceived, with protectionist measures of their own.
The organization refers to “instances to date of EU countries seeking to protect their national carriers from exposure to international competition by limiting traffic rights and pursuing other
measures against third country carriers.” Among these is Lufthansa’s bid to stop Emirates Airlines serving more German airports.
“Competition from third countries must certainly not be used as cover for failures by EU airlines to take internal measures to maintain their own competitiveness. A modernized air transport market requires carriers to be competitive, and external factors are not the only determinant of competitiveness,” says the position paper.
Clecat proposes that the EC should examine using the EU’s air service agreements to open up fifth freedom traffic rights for all-cargo operations. “Cargo supply chains are complex and national, and opening up this market freedom would provide greater choice and efficiency in the air cargo market. The negotiations for air service agreements should contain specific cargo chapters, as the factors influencing liberalization of cargo services may be different from those for passenger transport, allowing liberalization to follow separate cargo and passenger tracks and better taking the needs of the cargo market into account.”
Bilateral agreements are outdated
Within the EU’s internal market tool, there are still some remaining barriers that need to be removed. Even if there are no traffic rights restrictions when a Community carrier operates a flight between two Community airports, liberalization may stop as soon as an intra-EU flight continues to a destination outside the EU. In that case the intermediate Member State may raise objections, even in cases where the third country does not!
The underlying justification is the ancient bilateral air service agreements between Member States which do not contain fifth freedoms and unfortunately these agreements have not been abolished by Regulation 1008/2008 (on common rules for the operation of air services in the Community). “If the objective is to make Europe’s carriers more competitive, remaining internal market barriers should be removed. It should be noted that fifth freedoms are in particular important for cargo as trade flows are often imbalanced.”
Digitalisation is a must
Apart from fair and free competition in a global market, the European freight forwarders urge for an efficient European air transport system. Clecat has welcomed the 2011 proposal on ground handling services as a welcome step forward and therefore finds the lack of agreement within the Council regrettable, and also between the Council and the European Parliament which led to the proposal’s withdrawal in 2015.
The forwarders also call on the Commission to maintain its focus on the functioning of the Airport Charges Directive, along with the Thessaloniki Forum of Airport Charges Regulators. “Transparency in the setting of airport charges is an essential part of the market, as is proper information and consultation of all airport users in the charge-setting process.”
Clecat also insists that the move away from paper-based documentation and processes for transport, customs and other purposes is an essential part of modernization. The recent creation of the Digital Transport and Logistics Forum is a step in the right direction. The European Commission should focus on removing the barriers hampering further advances in digitalization. Only then can a greater uptake be spurred with solutions such as the e-Air Waybill, as well as efforts to digitize commercial invoices, House Air Waybills, packing lists, dangerous goods declarations, and cargo security declarations.
The use of digital technology also creates new opportunities for using data-based innovation, says Clecat. “The Commission’s proposed Aviation Big Data Project to enhance safety is a welcome step, but safety is not the only aspect which can be enhanced by big data. Big data provides visibility over the supply chain, allowing smart logistics planning and more efficient use of resources. This creates new business opportunities, which the EU should support in order to build Europe’s position as a hub of innovative logistics solutions.”
Marcel Schoeters in Brussels