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Air cargo concerns

At the International Air Transport Association (IATA) cargo conference held in Miami recently, three major concerns were aired by IATA regarding air cargo: the transportation of lithium batteries; the loss of market share to sea cargo; and the need to eliminate paper documentation by introducing e-freight.

As from January 1, 2015, lithium metal batteries cannot be carried as cargo on passengers’ aircraft – only on cargo aircraft. Many airlines in the world are refusing to transport lithium-ion batteries; Cargolux is the latest to join the growing list.

The IATA is concerned by the number of supply chain players who do not adhere to the strict regulations and guidelines on the manufacturing, packaging, labelling and shipping of these batteries, “in particular in China”.

Lithium-battery production in China is very high and many are sold via e-commerce channels.

“Several e-tailers in China have been providing high-powered lithium batteries, for example for use in model aircraft. They have actually put on their website that they will re-label 300 watt-hour batteries as 100 watt-hour so they can be shipped by air. This to us is absolutely unacceptable,” notes Glyn Hughes, IATA’s global head of cargo.

All lithium batteries are classified as dangerous goods; they are considered as a stored energy and a flammability hazard and they potentially pose a risk when transported in cargo, mail and passenger baggage.

IATA is of the opinion that based on incident data available from FAA, airlines and postal authorities, many shippers of lithium batteries are unaware of the regulatory requirements. This increases the likelihood of fires from untested (including counterfeit) lithium batteries or from improperly prepared consignments.

All lithium batteries are classified as dangerous goods

The second concern for the air-cargo industry is the need to recapture market share lost to maritime.

“While the growth in volume is welcome, it is not matched by an improvement in yield and revenue” says Hughes.

“Doing more work for less money is not a sustainable business model for the long term. So the industry has a major challenge on its hands to find a way to make air cargo pay.”

This is a great hurdle if one takes into consideration the effects of the recession of the last seven years.

Hughes believes that moving from paper to electronic processes may bring countless efficiencies and opportunities for improved service delivery. This can make shippers and consignees realise that air cargo should be faster on the ground at origin, in transit and at destination.

Experience has taught us that delays in goods transported by air are due to lack of proper documentation at the destination – often because it goes missing en-route. This could be improved by the application of e-freight – namely e-airwaybills (e-awb) and e-documentation.

IATA today admits that the implementation of e-freight has been weak in some countries due to local customs authorities’ resistance, the lack of updated regulation and the lack of funds to invest in technology. IATA targets to achieve 45 per cent e-awb penetration in 2015.

Here one has to praise the local authorities in Malta, namely Malta Customs and the Malta Communication Authority, who with the support of government agency MITA assisted the local air-cargo industry back in 2011.

They were very proactive and were successful in providing the adequate legal and technological support to the industry to ensure a smooth use of e-awb and e-documentation for exports and imports.

The question remains whether players in the industry are using this technology to make air-cargo shipments faster on the ground.

Tony Mifsud is aviation and air cargo consultant.

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