BY GENiVI FACTAO

The International Air Transport Association (IATA), citing reports that sea-based cargo transport business is creating market niche, is urging the air cargo industry to synchronize efforts to improve competitiveness.

IATA director general and CEO Giovanni Bisignani has called on the air cargo supply chain to coordinate efforts to drive an industry agenda as it is losing its competitiveness.

"Our sea competitors are gaining market share with faster ships, lower prices and innovative solutions. And new capacity coming into the market - 200 to 300 wide bodies entering the market each year to 2011 - will put even greater pressure on yields. This is a tough business that is only getting tougher. The only way to succeed is to please the customer," he told the 900 air cargo industry leaders who attended the 2nd World Annual Cargo Symposium in Rome, Italy.

The air cargo, he claimed is a $50 billion business but it’s losing competitiveness. World trade grew 7.5 percent last year and this year’s growth forecast is 4 percent," Bisignani said.

IATA is in a unique position to lead change in the cargo industry. With operations in 72 countries, the IATA Cargo Accounts Settlement System (CASS) now handles $21 billion annually. "IATA is serious about air cargo. Our network grew by 60 percent in the last 4 years and we have aggressive plans to expand coverage and diversify services in 2008," said Bisignani.

Bisignani identified an air cargo supply chain agenda pleased the customer based on safety, security, quality, efficiency and the environment.

"Air cargo is a tough business. The entire value chain must be united to deliver critical solutions against aggressive targets," he said.

Security he claimed is still a $5.9 billion uncoordinated mess for the air transport industry.

"Our risk management capabilities are excellent but our stakeholders still want to treat air freight like baggage. It is not. Effective security must involve the entire logistics chain," said Bisignani. "To clean up this mess we need a coordinated effort across the supply chain.

The shippers demand quality and efficiency. IATA has simplified the supply chain process from 40 to 19 steps and developed common parameters for quality measurement.

The group said E-freight is the answer to customers’ call for lower costs, improved reliability and more speed.