No, no one had flowers in their hair, as Scot McKenzie recommends all visitors to the Californian metropolis should wear, in his epic song “If you're going to San Francisco”. But even without flower arrangements adorning one’s head, it was a memorable event. Probably because, never before in the history of air freight, has the industry been doing as well as it currently is... were it not for the pandemic that continues to run rampant, most recently again in Hong Kong and China, and Putin's war against Ukraine, which is tearing apart supply chains, posing massive problems for the logistics industry - and - most importantly – targeting so many innocent people. That, too, was an important topic in San Francisco.
After two years of abstinence, the global air freight industry met again for a presence event under the umbrella of TIACA in San Francisco and the title 2+2. The event organization was handled by Messe München.
Best year ever
The 180 attendees were treated to a superlative firework of figures on industry growth at the start of the conference, presented by consulting firm, Accenture. Compared to 2019, 2021 saw a 13% increase. The increase in air freight rates was 230% - mainly due to the transport of hygiene items and vaccines, as a result of the global pandemic. Aside from the extraordinary cargoes of medical equipment, automotive shipments led the way in terms of products flown, with 23% growth, followed by chemical products with a 19% increase.
However, Russia's war against Ukraine has already led to the first signs of a slowdown. Although only 4% of global capacity is affected, the impact on shipments between Europe and Asia plummeted
by 42% compared to the same year in 2019! Since 24FEB22, sanctions have prevented Western airlines from flying over Russia, and Russian airlines are completely banned from operating services to
Europe and North America, which has taken a lot of air cargo capacity out of the market. In addition, although passenger traffic is picking up again, it is still far from pre-pandemic levels. As
a result, there is still a lack of lower deck capacity to transport air freight. 1450 widebody passenger aircraft are still parked on the ground, according to Accenture charts presented in San
Francisco, and are therefore not available to the market.
Meanwhile, intercontinental air routes between Europe and the Far East are passing through narrow corridors south of Russia and Iran. As a result, costs have risen significantly due to the detours, driving up air freight prices. Added to this, is the burden on the environment from increased kerosene emissions due to longer flight times.
Although these statistics were presented and commented on, they were not the thematic focus of the meeting. Rather, the focus was on modernizing processes. For example, some TIACA members complained about the ignorance of many airport companies, which still consider cargo a necessary evil at their airports. Many a delegate wondered if their managers had completely slept through the development of the last 2 years, in which air cargo played a predominant role. “Every airport management is concerned with very precise statistics on the movements of their passengers,” said Steven Polmans, Chairman TIACA “...but they continue to lack understanding of the often very complex cargo chains. Not much happens there,” Polmans added.
Bottom-up initiatives are key
Therefore, the digitalization of the industry is also dependent on standardization along the global supply chains. This is where TIACA wants to intervene, motivate, and network the already existing cargo communities more closely with each other. At the conference, representatives of the communities from Amsterdam, Edmonton, Frankfurt, Nairobi, Tallinn, Munich among others presented their respective portfolios in various panels, which include an impressive spectrum of practical service offerings, processes, all the way through to sustainability projects. The communities see themselves as important players in implementing digitalization at the sites and in the catchment areas.
However, they do not have it easy. “In some cases, communities lack the participation of individual major companies or, as in the case of the London Heathrow community, where the airport does not participate in collaboration with its cargo partners,” Steven Polmans illustrated. This was also felt in San Francisco. Although SFO has a high international cargo component, there was no interest shown by the airport in the TIACA event, nor was an airport tour offered. Quite simply, no airport representative appeared at the TIACA event. This also says a lot.
Regional event series planned
TIACA therefore still has a lot of convincing to do. Yet overall, and this became clear in San Francisco, the organization sees itself well positioned. Representatives announced the immediate launch of a further event level in the respective continents. The starting signal for this will be given before the end of the year in Amsterdam, where the industry association will invite participants to a TIACA Europe. This is because the association sees itself as a driver to achieving progress in digitalization and sustainability, with all stakeholders along the supply chain.
Messe München is planning the next event on the American continent in Miami in November 2022. According to Trade Fair Director, Robert Schönberger, almost all the exhibition space has already been allocated. The industry has had enough of online conferences and wants to meet again. Air freight is a people business.
Prior to that, on 05APR22, the Nordic Air Cargo Symposium will take place in Copenhagen. See CFG’s report: Euroavia is back on stage.
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