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To represent, lead and serve the airline industry
Value of Air Cargo ConnectivitySeminario Transportes & NegociosNovember 09th 2017 Oporto
Francisco Batáglia, IATA GDC Manager Customer Services
Meet the International Air Transport Association
Airlines is the total number of IATA Member Airlines
270
Is the percentage of global traffic represented by IATA
83%
IATA Provides numerous services to its members/customers.
IATA Helps developingStandards
For the Industry“ ”
IATA Advocates on Behalf of the Airline
Industry “ ”
The Trade Association of the World Airlines “ ”
Our mission; to Represent, Lead and Serve the Airline Industry
Aviation in 2016…
18,429 Unique city pairs
3.8 billion Passengers
52 millionFreight tonnes
$6.8 trillionTrade carried
Source: ATAG, IATA Economics www.iata.org/economics
AVIATION: POWERING WORLD TRADE
Lightweight by volume, Heavyweight by value!
$6.8 trillionValue of cargo handled
By air in 2016Almost 340 billion letters and 6.7 billion postal parcels are sent every year
Safety
Speed
Reliability
Connectivity
What are the key Air Cargo drivers ?
1881
1914
2016
Over 95% of the world population and economic activities within wide body range from Portugal!
Source: Turkish Airlines
i.e. : Direct access to landlocked countries
IATA Economics www.iata.org/economics
Study on the Value of Air Cargo: Air Transport and Global Value Chains
Countries with more developed air
cargo connections and smarter
borders are more integrated into
Global Value Chains reaping the
associated benefits.
IATA study on the value of Air Cargo
Essential for integrating into Global Value Chains
Source: Klaus Meinhardt, JETRO2012, ATAG, pinterest.com
IATA study on the value of Air Cargo
“Air cargo processes have not been
modernized over the last twenty years”
“we need more
visibility and
transparency”
“Air cargo is often
a black space”
“We need a Cargo cloud
where everybody is
connected”
Shipper’s voice:
European Shipper Council ‘White Paper’ 2014
World Cargo Symposium Shipper Panel, March 2015
“Other modes are
moving faster”
Some Air Cargo customers feedback!
Why Air Cargo full potential limited?
Cross-border challenges is limiting Air Cargo potential
(source ‘Doing Business’ index, World Bank)
What do we do about it?
Digitized the Air Cargo process alike for the Passenger!
e-Freight is an industry-wide program that aims to build anend-to-end paperless transportation process for air cargo made possible with
regulatory framework, modern electronic messages and high quality of data
e-Freight is part of the StB Cargo program
aiming at making air cargo easier, smarter and
faster. The program portfolio holds 5 projects
with the objective to accelerate change in the
areas of digitization, visibility and safety e-Freight& e-AWB
DigitalCargo
InteractiveCargo
SmartFacility
ACID - Air Cargo Incidents Database
What do we do about it?
+6%+1%
Why digitization is key for Air Cargo connectivity?
To conclude…
Aviation is critical for our modern life. The Air Cargo Customer experience through Portuguese Airports will be critical to connect global markets to power the Portuguese economy!
Urbanization rate 2015
Source : The World Bank, United Nations
e-AWB
Where do we stand now?
Back to Table of Contents
Status as of August 2017
In August 2017, the Air Cargo industry processed more than 2.3 million Air Waybills (AWBs)
The industry is driven by three main regions representing 75% of the AWBs:
Europe, Asia Pacific and North Asia
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2%
24%
29%4%
22%
6%
13%
Africa
Asia Pacific
Europe
Middle East
North Asia
Canada-LATAM
USA
e-AWB penetration: 50.7% as of August 2017
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The global e-AWB penetration reached50.7% on the legally feasible trade lanes(~ 67% of the AWBs)
46.0 %
39.6%
72.0%
67.8 %
62.6%
51.2%
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TOP 10 performers / August 2017
TOP 10 AIRLINES BY e-AWB VOLUME TOP 10 FREIGHT FORWARDERS BY e-AWB VOLUMETOP 10 AIRPORTS BY e-AWB VOLUME
e-AWB
(%)
82.3 %
64.8 %
76.2 %
77.7 %
38.3 %
44.3 %
73.0 %
67.7 %
55.6 %
65.9 %
e-AWB
(%)
67.0 %
53.9 %
71.5 %
55.0 %
70.4 %
38.1 %
44.0 %
36.3 %
54.2 %
89.3 %
SIN - Changi
FRA - Frankfurt International
AMS - Schiphol Airport
DXB - Dubai
LHR - Heathrow
HKG - Hong Kong International
PVG - PuDong
ICN - Incheon International
TPE - Chiang Kai Shek
ORD - O'Hare International
SQ - SIA Cargo
AA – American Airline
KE - Korean Air
CI - China Airlines
DL - Delta Air Lines
CXG - Cathay Pacific Group
QR - Qatar Airways
AKG - Air France - KLM Group
LH - Lufthansa Cargo
EK - Emirates
e-AWB
(%)
58.3 %
63.0 %
67.9 %
39.3 %
60.5 %
56.8 %
55.5 %
48.8 %
45.9 %
57.2 %
KUEHNE + NAGEL
NIPPON EXPRESS
UPS - UNITED PARCEL SERVICE
DSV AIR & SEA
SCHENKER
EXPEDITORS GROUP
PANALPINA
BOLLORE
KINTETSU
DGF - DHL GLOBAL FORWARD.
e-AWB adoption / main challenges
In December 2016, the global e-AWB penetration reached 48.9% on the
feasible trade lanes, a shortfall of 7.1 p.p. against the industry target of 56%.
Main challenges are:
48.9%
2016 target
Actual
56%
Regulatory constraints
Lack of harmonization
Technology limitation
Complex process
Maturity threshold
• e-AWB is not possible in all airports and all trade lanes due to regulatory
limitations
• e-AWB procedures are not harmonized between freight forwarders, airlines
and ground handling agents in key airports where e-AWB is live
• Many of the SME forwarders do not have the technical capability/EDI
enabled systems to enable them to transmit shipment data to airlines
• Some large forwarders face the same issue: their local branches are the
result of SME forwarders acquisition and their IT system have not been
aligned with the rest of the company
• Perceived complexity to do e-AWB for forwarders dealing with multiple
airlines
• Some markets reached a certain level of maturity where major actors
(airlines / freight forwarders) already achieved the biggest potential
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e-AWB adoption / supporting initiatives
In order to address the e-AWB adoption challenges and to accelerate the
growth in the penetration rate, the following supporting initiatives have been
identified in 2016 and will be continued and strengthen in 2017
Expand number of trade
lanes where e-freight
and e-AWB are possible
Harmonize e-AWB
procedures in key
airports across
forwarders airlines/GHA
Facilitate adoption by
SME forwarders
Provide implementation
guidance and materials
Coordination efforts of
industry in key e-
airports
• Continue the government supported e-freight initiatives in key locations
• Complement the list of SOPs at e-airports
(especially airports to be included in the 2017 eAWB360 roadmap)
• Launch on November 8th of an e-AWB desktop solution for Small and
Medium sized Freight Forwarders (eAWBLink), low-cost alternative to
existing solutions
• Develop an implementation playbook to support the adoption of e-AWB
• Strengthen the e-AWB penetration rate in the existing eAWB360 airports
• Deploy eAWB360 initiatives at additional airports (in particular in Europe)
26Back to Table of Contents
2017 e-AWB industry target: 62%
Based on the historical achievement, the forecasting model shows that an e-AWB penetration rate of 62% can be achieved by
end of 2017
62% by end of 2017
Launch
+0.3 p.p. per
month
Build
+1.2 p.p. per
month
Accelerate
+1.3 p.p. per
month
Mature / Sustain
+0.6 p.p. per month
51% by end of 2017
Mature trend – leading to a global e-AWB
penetration rate of 51% - corresponds to
the natural e-AWB adoption pace,
without any specific supporting
initiative in place. The slow pace is
mainly due to maturity of certain markets
Accelerate trend – leading to a global e-AWB
penetration rate of 62% - corresponds to the e-
AWB adoption pace under the condition of
successful achievement of supporting initiatives
Industry
effort
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eAWB360 – The concept
Back to Table of Contents
SINGLE PROCESS
eAWB360 Airlines commit to implementing Single
Process
AIRPORT SOP
Common e-AWB SOP for GHAs at eAWB360
airports
Sin
gle
Pro
ce
ss
Air
po
rt
SO
P
Co
mm
un
icati
on
COMMUNICATION
Coordinated and synchronized communication
that e-AWB is the preferred means for
shipping cargo from eAWB360 airports
HARMONIZED IMPLEMENTATION + SYNCHRONIZED COMMUNICATION
eAWB360 – Community driven approach
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eAWB360 – Synchronized communication
“We are switching over to e-
AWB as the preferred means
for shipping cargo to all
destinations by using the e-
AWB single process at ABC
airport effective XYZ date.”
eAWB360 airlines need to send the following core message to their Freight Forwarder customers
during the same agreed week
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eAWB360 – Communication activities
eAWB360 communication rely on two key components
LOCAL
ASSOCIATION
IATA
FORWARDERS
FORWARDERS
Participating Airlines send the
same core message to their
customers
AIRLINES
1
INDUSTRY
After Airlines communication, a
joint statement will be issued
by industry associations
2
FORWARDERS
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eAWB360 – Engagement activities
MeA CAMPAIGN e-AWB WORKSHOPS eAWB360 EVENTS
MeA adoption campaign
to increase number of
MeA forwarders
Conduct e-AWB
workshops to help MeA
forwarders implement
e-AWB
Conduct an eAWB360
event @ targeted airports
to prepare forwarders
for eAWB360
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e-AWB
How do we implement it?
Wrap up
Back to Table of Contents
e-AWB implementation - Wrap up
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1. Join the Multilateral e-AWB Agreement
2. Ensure your technology supports e-AWB
3. Ensure high-quality electronic messages
4. Ensure business processes are set
5. Roll out e-AWB
6. Report e-AWB shipments
Start your journey on www.iata.org/eawb-multilateral to join the Multilateral e-
AWB Agreement
Ensure your organization is capable of sending and receiving Cargo-XML or
Cargo-IMP messages
Consider the use of eAWBLink on www.iata.org/eawblink
Ensure your system produce high quality messages
Validate your Cargo XML message for free on http://www.iata.org/cargo-xml-
autocheck
Join the Message Improvement Program (MIP) on http://www.iata.org/MIP
Engage with your business partners
Agree on a standard business processes and think Single process
Comply with the Standard Operating Procedures (SOP) where applicable. The
list of applicable SOP are available at: http://www.iata.org/e-awb
Define your e-AWB roll out strategy
Airlines to activate Freight Forwarders in Matchmaker
Consider to join an eAWB360 initiative. More info available at
http://www.iata.org/eAWB360
Report your e-AWB shipments through the Message Improvement Program
(MIP)
Details on http://www.iata.org/whatwedo/cargo/e/Documents/e-freight-mip-
strategy.pdf
CASS Settlement Statistics
Portugal
36
37
THANK YOU