Air Cargo in the 21st Century

2) Economic Integration - the catalyst for global markets. In the next 30 years global markets 20% world product will grow to 80% i.e. 6 Trillion to Seventy Trillion Dollars. Air Cargo will continue to grow at three times the rate of world economy.

3) Air Cargo is a 200 plus Billion-Dollar Industry, with 80% of the revenues in distribution. Cargo revenues are growing faster than passenger, and in direct contrast at the premium end of the market. Dominates passenger business when economic impact is meaured.

9) Post Offices are entering the industry with their infinitive resources. They should be welcomed subject to no cross -subsidization from their domestic monopolies and there is a level playing field i.e. Integrators / Forwarders enjoy Post Office privileges.

10) Increasing convergence in the industry wit - airlines forming alliances and joint companies with forwarders (Swissair - Panalpina and Post Offices e.g. Deutsche Post), Post Offices buying express operators and forwarders and express operators buying forwarders.

11) Customs will play a pivotal role and must develop a service philosophy to accompany their Police Powers. Over and above simplification and harmonisation of their requirements, must not discriminate and ensure similar regulatory requirements apply to traffic whatever channel it chooses to move in.

13) The outright winners from the Internet will be the end Customers, Integrators, Post Offices and the surviving electronic exchange providers. Airline Cargo Organisations, GSA's and Forwarders will have to show they can add value to the product to survive.

15) To this end there is a requirement for the development globally of Neutral Express Distribution systems Airport to Door, for Express Companies, Forwarders and Post Offices who either do not have or have not had the capability to develop their own.

17) IATA, TIACA and other associations must extend their membership base to include Express Companies, Post Offices & GSA's. They should not compete but work together to identify and remove barriers to growth e.g. regulatory constraints and ensure the industry competes on a level playing field.

Today I will explain why I am very confident about the future, and how lucky we are to be part of this great industry of ours. I will also explain how the economic growth and pace of change is increasing dramatically. In one day in 1999 there was more trade than in the whole of 1949, more scientific research than in the whole of 1960, more telephone calls made in the whole of 1983 and finally more E- mails sent than in the whole of 1996.

The reason for this acceleration in the growth of change within the world economy is the increasing availability of capital, greater willingness to take risks, opening up of new channels of distribution, costs being rung out of processes offering non inflationary growth. Demand is creating supply and DOT.COM is stirring everything up.

The Air Cargo Industry continues to make giant strides and will continue to do so. It has moved from being business in its own right to becoming an integral part of the logistics industry. This paper reviews the industry, identifies major factors influencing the marketplace explains why the traditional industry is concerned and how this situation has come about. I will identify the strengths and weaknesses of the component parts of the industry and outline a way ahead.

This blueprint will explain why the traditional industry must both embrace the Internet and involve itself in express services to build a large express customer base committed to the use of scheduled services. It will also explain why global neutral express networks will have a pivotal role in the development of an express customer base. My definition of express embraces all time definitive products which are both information intensive and guaranteed.

Internationally, Air Cargo is a 200 plus Billion Dollar Industry, which across the board represents 16% of the average passenger airline. Revenue cargo makes a strong contribution to airline profits and is often the difference between profit and loss. Blue chip researchers forecast tripling of revenue within the next twenty years a faster growth than the passenger side of the business. This growth is geared towards premium traffic in contrast to passenger, which is at the leisure or commodity end of the market.

The number of freighters is forecast to double with the ratio of cargo carried on freighter vis-�-vis passenger no bellyholds increasing from 35% to 44%. Presently over half the worlds cargo moves either within, or to/from the United States. The American Forwarders / Integrators expansion has been fuelled by this fact.

Economic integration is the catalyst for global market growth. In the next thirty years global markets now 20% of the world product will grow to 80% i.e. Six to Seventy Trillion Dollars. Air Cargo will benefit dramatically growing three times the rate of global economy.

The Air Cargo Industry is not just a trade 'facilitator' but a trade 'creator'. Air Cargo contributes to economic growth (40% world trade) and creating jobs (direct, indirect and induced). Boosts country competitiveness, expands tax base and dominates passenger business when economic impact is measured.

� Shippers - with continued price competition in their own industries press forwarders for lower rates. Forwarders complain shippers talk service but always lead with price. Shippers in turn say Forwarders always talk price first.

� Forwarders - in turn pressure carriers for discounts and, although in the main regarding integrators as the enemy focus on 'consolidation' purchasing integrators surplus space whilst it is available, and feed their express traffic to integrators.

� Airlines -increasingly joining passenger led alliances - with frequent flyer programmes as the adhesive - primary purpose to cut costs. They see integrators as a major threat, but have uncomfortable relationships with forwarders as many feel forwarders are too price conscious and exert too much control.

Against this backdrop there are worrying trends. Future growth is primarily time definitive, with services growing twice as fast as traditional traffic. Mega integrators with DHL, TPG, Fedex, TNT and UPS are comprising 90% of the time definitive market. The fear is that the American domestic market with Fedex, Ups and American Post Office controlling 80% - in revenue terms - could be re-run internationally. Already in Europe DP (Deutsche Post) --TPG (Dutch Post/TNT) - DHL, La Post and English Post Office control over 50% of the overnight market. Predictions are that express, currently 5% of the global market could grow to over 40% by 2015.

Although air cargo is a US$ 200 billion + industry only 20% of this revenue actually accrues to air transportation. The rest stays in distribution. Whilst unit costs remain stagnant yield has fallen 50% in the last few years and is generally predicted to continue to fall albeit at a lower rate (1%). Unit revenues in real terms are half as much today as they were 25 years ago. At the same time the purchase price of new aircraft has risen seven-fold.

Despite falling yields freighter flights are projected to double in size. The only way to reconcile this paradox is to accept that the bulk of the new freighters will belong to the integrators. This will mean the progressive migration of express traffic from scheduled services to integrators own lift or alternatively like DHL obtaining airside access and achieving express standards at basic freight rates.

Airlines, operationally led, panicked at the thought of selling belly hold capacity comparable to previous freighter capacity. Consolidation rates were introduced, with airlines, vis-�-vis the maritime industry, anticipating they would receive fully loaded containers with each container having one master airwaybill.

The reality was competitive pressure invariably meant these new low consolidation rates were used for loose consolidations. There was also resistance as the unions felt work was being taken away from them in a similar manner to what happened at London Docks, consequently handling and marketing costs were not reduced as anticipated.

More importantly control of the distribution system was handed over to a middleman, the forwarder. Forwarders instead of reinvesting the enhanced margins from consolidations into new service options, used their newly found muscle to deepen discounts from airlines.

The 747 and other wide-bodied jets altered the capacity ratio between what was carried in bellyholds and freighters. The 747 offered the capability of carrying 15 tonnes and 90% by size of all cargo offered. Previously, because freighters carried the preponderance of cargo, the cost of carriage by freighters became the yardstick for cargo pricing. In regulated days this was recognised by governments.

After the introduction of the 747, and deregulation, market pricing took over without any 'opportunity costs.' Incremental pricing became the norm particularly from poor quality cargo carriers who dump their cargo. Airlines being predominately passenger oriented schedule flights to meet anticipated passenger needs. Express requirements, particularly overnight, were not considered.

In the United States, airlines burnt their fingers by trying to take on the integrators with a competitive retail product rather than accommodating them, at least in the short term with a wholesale service. Although there is a wide difference between airline service standards ranging from added value carriers to dumpers, there is general acknowledgement that service standards are unsatisfactory and have not improved for over two decades.

The much-quoted 1972 IATA Study reported that on average air cargo spent less than 6% of its time in the air. The journey time being some six days and six hours. This was accepted as unsatisfactory and led to initiatives being proposed to reduce dwell time. Despite action taken, or not, a Unisys survey established only a couple of years ago that an average journey was still over six days with 25% of shipment remaining at destination freight terminals more than five days. A worst case scenario of the 2000 shipments surveyed revealed a door to door delivery time of 22 days.

Airlines usually performing, for understandable reasons, worse at their own hubs only offering an acceptable standard for running through containers. One basic reason for the commoditisation of the product was that carriers particularly in 'recession' cut back staff, often under the euphemism of reengineering' or outsourcing. Their purchasing department having the final say and choosing price over service.

Too often, airlines like forwarders, but unlike integrators with their closed loop philosophies, are primarily interested in despatch rather than delivery. To be fair, this is often shipper led, with some shippers batch processing clearing their factories on a Friday night.

Fedex through the vision of Fred Smith led the way with their overnight services from the Memphis Hub. Mighty UPS, unstoppable like a glacier, already powerful on the ground, then took to the air, Airborne previously a freight forwarder without the giants resources but by constantly innovating and targeting their markets have held there own. Emery and Bax similar freight forwarders have developed profitable markets in the higher weights and blending their strengths with their newly found express expertise have become true logistics companies.

American carriers, in contrast to the Canadians, took the integrators on, burnt their fingers, and retired from the scene, the Canadian's in contrast wholesaled overnight to the integrators and developed their own products particularly on the key evening flights.

Larry Hillblom, the founder of DHL, discovered it was both faster and more effective to use passenger channels rather than freight, particularly for non- dutiable shipments up to 30kgs. This necessitated the employment of onboard couriers who were in the main introduced by the integrators. They brought seats from airlines and then sold discounted tickets to members of the public who were willing to travel as couriers. The inevitable happened and a new breed of wholesalers grew up introducing neutral on - board couriers. This allowed the express companies to consolidate their traffic with these wholesalers and collapse their expensive systems.

As the volume grew, to avoid grid locking passenger terminals, many airports developed discrete express facilities. Further evolvement came about when progressive customs authorities identifying the value of this business and the 30% year on year growth, removed the anachronisment of a requirement for an on board courier. In parallel with this move, subject to critical 'mass' integrators progressively introduced their own intercontinental aircraft e.g. Fedex Memphis, Newark, Paris, Dubai, Subic.This traffic was of course lost to schedule aircraft for all time with each year a larger percentage of express traffic travelling on the integrators own aircraft.

As volume increased, so did competition with inevitable yield decline. In 1989 courier express rates averaged discounted express baggage rates. They now average general freight rates plus a premium. Having said that, volumes have grown enormously and the cost of handling is low, particularly when travelling on baggage tags. Express traffic when travelling on scheduled aircraft will depend on custom regulations, travel on an

The Post Offices after standing on the sidelines complaining about Courier / Express Companies have been kick started into action by a combination of privatisation and de-regulation. They will become dominant players in the 21st Century. The Dutch have brought TNT now TPG, Canadian Post Office owns 90% of Purulator, the English Post Office despite being constrained by political indecision has spent �600 Million on 11 Distribution Companies.

A deal has now been cemented with the Singapore Post Office and TPG, for the distribution of business mail to over 200 countries. The German Post Office Deutsche Post (DP) have been on a buying spree of over 4 Billion US$ either owning or part owning distribution companies in 22 countries. In addition they have purchased 25% of DHL and the freight forwarders Danzas and AEI. The United States Post Office has concentrated on fighting the American integrators in the US domestic market. It must be remembered, although no doubt constrained by political and union considerations, they do have the resources to purchase both UPS and Federal Express.

Over and above the acquisitions made by the Post Offices further convergence can be anticipated. Forwarders share prices are low and companies like UPS have war chests. It has been forecast the number of forwarders will halve in the next decade. Swissair have purchased the capacity of many carriers including Sabena. They own a third of Cargolux and have a joint operation with Panalpina. Panalpina buy the full capacity of many Cargolux operations e.g. Huntsville.

� Perception; forwarders often their own worst enemy in not projecting themselves positively, do not often control their networks i.e. use Agents or Joint Ventures. This, on one hand, re-enforces local contacts, but on the other makes it harder to change direction and introduce new products.

The problem for the traditional industry is that Express will continue to grow both in its own right and at the expense of general cargo. Express will become the prime source of cargo revenues. Equally integrators will continue to grow both their revenues and their own discreet aircraft fleets. As the Express traffic migrates, the traditional industry Airlines, Airports, Handling Agents and Forwarders will be left with the remaining lower yielding traffic.

The opportunity lies in the huge potential market that express offers the traditional industry, which does have many cards to play including the Internet. These cards can be played both in their own right and in partnerships including the integrators who have pointed the way

This is a wake up call for the industry. It has the choice between being rendered irrelevant by not embracing technology or utilising the Internet to create solutions that will lead to lasting and profitable relations, 'E' business is the new strategic battleground for all air transport industry.

This is a defining moment for the industry. The biggest change in our lifetime is in fact the biggest change since the industrial revolution. The Internet has already proved an asset to many agents. Previously there had been no significant changes in 50 years, providing a low cost entry to IT. Besides enhancing standards at lower cost it will also optimise use of capacity.

The potential is enormous with business to business (B2B) forecast to grow from 145 Billion US$ in 1999 to 72.9 Trillion US$ in 2004. Business to consumer (B2C) is also forecast to grow but at only one tenth of this rate i.e. 1999 9 Billion US$ to 145 Billion in 2004. In 1994 there were no users of the Internet now in 2000 there are over 250 Million on-line.

It offers total transparency and widely accessible information. Barriers of time and space disappear offering greater access to world markets. The world becomes a buyers market with customer expectations rising expotentially. Data moves at lightening speed. Speed, flexibility and adaptability not size become the criteria for success. Each stage of the process can be measured against accomplishment. Accomplishment then used to promote better practice, any failure is then analysed to improve process. The Internet facilitates the introduction of electronic exchange providers (EEP's) who act as a trading exchange similar to other exchanges e.g. Stock Exchange. There are over 100 of these exchanges and the number grows every day. They fall into two basic types, those offering a subscription service to a select number of Airlines and Forwarders e.g. GLX and those dealing with the total market i.e. Airlines, Forwarders and Shippers charging a transactional fee e.g. Right Freight.COM.

Equal attention will have to be paid to the back end, i.e. e-fulfilment, as the front website. Toy's R Us as well as other Dot.Com companies were under fire last Christmas for not delivering in time. The fulfilment operations will have to satisfy and delight the customers. Failure to fulfil could break your business.

Forwarders under similar pressure as middlemen in other industries will be embracing the Internet, e.g. passenger agents. They will only survive if they are perceived to add genuine value to the product. GSA's previously benefited from airlines outsourcing to become virtual airlines. But already under pressure from alliances, convergence and the growth time definitive products they will have to prove to airlines that they add value. Airlines will initially suffer yield decline, as the Internets transparency will remove imperfect knowledge of the market. Hopefully this will be offset by improved use of capacity with yield per aircraft offsetting decline of unit yields. Longer-term airlines should also benefit from more sophisticated pricing. Internet knowing no barriers will increase airlines geographical reach. Cargo management in these days of cutting staff numbers will have to justify their continued existence and the value they add to the airline. Finally for the first time the industry is faced with the entry of entrepreneurs who may not be in it for the long haul and when they have achieved a measure of success, engineer an IPO.

There is no way the Post Offices can be stopping entering the industry and they enter with infinite resources. I sense this is the calm before the storm, in terms of more acquisitions. We have not seen the last of the aggressive expansion of postal authorities and it is reasonable to expect a more dynamic reaction from integrators as they link to protect and grow their B2B and B2C services.

In the short term so much attention will have to be placed on integrating people, networks, operations and system focus will be taken away from the daily business of customer service. We have to give a qualified welcome as long as it is on a level playing field and there is no cross subsidisation from domestic monopolies. Where there is a domestic monopoly it should be run as a separate business with full transparency. A tremendous opportunity presents itself in the disparity of regulation Post Office vis- a -viz the rest of the industry. Custom rules should be eased so everybody enjoys Post Office privileges, not tightened so Post Offices are restrained in a similar manner to freight forwarders e.g. United Kingdom does not have to make an entry if shipment is valued at less than �2000, for freight forwarder it is �18.00.

With convergence, Customs play a pivotal role in ensuring industry players compete on a level playing field. With global sourcing competing supply chains and commercial borders replacing national borders, it is vital Custom Regulations are simplified and harmonised. Customs Regulations should be the same whether the traffic is carried personally or dispatched express. Post Office or traditional cargo e.g. same Demininus Threshold. Like other government departments Customs must develop a service philosophy to accompany their Police Powers.

With the ratification of the Montreal Protocol, electronic waybill, maximum pressure must be put on the ratification of the Kyoto Convention. This convention being obligatory and enforceable would provide the tools necessary to enforce the reasonable application of common procedures.

Much work has already been carried out, The European Express Carriers Conference (EECC) has produced guidelines and IATA an industry position paper. I am particularly pleased about this as in the past the integrators have made the running and forwarders have been left behind. With the Australian governments new general sales tax, the Post Office has been granted a waiver, and after protest the integrators have received similar treatment but the forwarders will have to pay. Both the United Kingdom (period entry) and American Customs are working on initiatives to improve their service to the industry.

With only four governments of the required 52 ratifying the Kyoto Convention the problem seems to be government, not so much the Customs. The World Customs Organisation (WCO) is a positive force for beneficial change and must be supported. In a similar vein Airport Handling Agents should not be discriminated against, but allowed to develop their own express channels with Custom requirement harmonised with Express Handling Units.

An all-important first step has been taken by Cargo 2000, an IATA interest group of major Airlines and Forwarders and endorsed by TIACA, to enhance industry standards. The objective must be to bring the industry up to the best industry practice and minimise the number of carriers who dump the cargo. The prime justification for enhancing standards is that cargo 'is not a zero sum game' not that it is going to provide direct competition for the integrators.

Let me explain the airline passenger business. British Airways the World's Leader in airline branding progressively, upgrades its products each year One year it is first class, next year business and so on. British Airways understands that to retain world leadership it has to do this even though each time round, there is a built in additional cost and they are back to square one when the competition raises its game and matches.

Cargo should not have that problem in that the cost of transportation is a small element of the total distribution cost. Markets should be able to bear higher yields, and airlines need them to fund future investment. What it cannot afford is the industry at large forced to dump rates because of poor standards.

The traditional industry is strenuosly endevouring to achieve enhanced standards by developing an industry process map utilising Internet as a communications platform. Information Technology has become a means of competive advantage rather than oporantional efficiency. The result should be improved productivity and lower unit costs. Hopefully it will produce the seamless service the market is waiting for.

Whilst a very positive step forward, I do have some caveats. It is not the whole answer, and it should not stop us exploring marketing and distribution initiatives at the same time. At some point in time the standards between airlines and forwarders will have to be agreed with shippers. It has also to be remembered that for a large section of the market price is the sole determinant. Despite the critics, there is no doubt, that many standards in the industry have risen but have not arrested yield erosion. Hopefully the proponents of a future growth gap will be right, but we should not bank on it when investing in the future, i.e. it should not be on the premise that yields will rise. To quote Michael Porter, " operational efficiency will at best put you on a level playing field with the rest of the industry, only marketing and distribution initiatives will offer you comparative advantage." There is no doubt service qualifies, and price determines. At each level of service, price becomes the dominant factor.

Finally Cargo 2000 initiatives will only at the margin win back traffic from the integrators, the gap is too great. Express customer's demand the highest standards with lodgement up to one hour before departure and retrieval within one hour after arrival and 100% shippers as booked. All shipments are to be monitored by small quality index, measuring results against benchmarks and enabling instant remedial action. Fastest potential routings are used whenever possible with direct services eliminating transhipments and offering timesaving and enhanced integrity. Where daily services, and volumes justify, twice daily i.e. morning and evening.

In contrast, the traditional industry is working hard to introduce globally general cargo standards of 95% shipped as booked containers lodged 2 hours before departure, loose 4 hours and import retrieval within 4 hours of arrival. The express operator aims to deliver anywhere in the world within 48 hours against traditional cargo's target of 4 days. The gap between the standards is too great, and it would be both physically very difficult, and certainly not cost effective to offer the total market a product to which a major portion of the market presently does not require and certainly is not willing to pay any more for. Remember that the only constraints are change, relationships and customer intimacy. So running in parallel with achieving operational efficiency is the requirement for product service leadership and customer intimacy. Example of product service leadership is introduction by many carriers of time definitive products. Although unless they are Airport to Door they are more likely to be used by integrators than forwarders. One caveat is not being to far ahead of the market, for many players shipped as booked is still their yardstick.

They embrace the Internet, which for the smaller agent not only gives him a low cost entry to Information Technology, but also protects him in that the Internet rewards sped- flexibility and adaptability over sheer size. Forwarders must ensure customers are fully aware of the value they add to the freight product.

A total logistic approach should be adopted whenever possible if for no other reason, that it is easier to leverage yields up on a Door to Door service than an Airport to Airport product. Forwarders should endeavour to work in partnership with Airlines and Integrators to win key accounts.

At the same time forwarders should build their own brand of time definitive products to retain their sovereignty. Either in house if they have the expertise and resources, or buy in or utilise Neutral Distribution Systems. Currently many forwarders hand over their express traffic to the integrators which in effect is handing over their customer list. However honourable and decent the integrators are, the fact of the matter is that their delivery people are the front line of the Sales Team out to win reciprocal business. With convergence in the industry, it is only a matter of time before the integrators are involved in the forwarding industry.

With the Dutch Post Office, German Post Office and United Kingdom acquisitions there is little choice for the remaining Post Offices. They can either be absorbed by larger Post Offices, acquire a multiplicity of distribution companies to grow their own express products or use Neutral Wholesalers.

Airports are and will increasingly have to treat cargo as a competitive tool. Ideally a Senior Executive, not a part time property person should manage the cargo business. Express or time definitive products must be given similar consideration as traditional cargo. Equally cago flows should be treated in a similar manner to passenger flows i.e. create framework to optimise performance.

The traditional Airline Operating Committee Cargo (AOCC) representing only airlines and subservient to the passenger committee should be re-vamped. The committee should be re-titled Airline Management Committee, with membership opened up to all members of the Airport Cargo Community and ranked 'Primus Inter Pares' with the passenger counter parts. Many forward thinking airports e.g; Washington have their cargo executive heading up Airport Cargo Management Committees and taking the lead in discussions with Customs etc.

Now increasingly the preserve of specialist handling companies as airlines sell off or form joint handling companies. These handling companies are converging on other parts of the industry by buying into trucking distribution and forming GSA's. As well as handling traditional, cargo. Handling Agents should be allowed to develop express channels in their facilities. Otherwise they will be increasingly discriminated against, in not being allowed to participate in what will be increasingly the major share of the market.

There is a basic need for the traditional industry to develop an express customer base, committed to airline scheduled passenger services. To this end there is a requirement for the development of Global Neutral Express Networks for the integrators (thin markets) Express Companies - Airlines -Forwarders and Post Offices who either do not have or have not got the capability to develop their own. This will, I believe evolve from the old wholesale courier companies who offered an Airport to Airport co -loaded product to in the main three integrators.

As the express industry matured, progressive Customs recognised this fact and removed the requirement for couriers, and also developed express facilities away from congested passenger terminals. The only difference, and it is a big one, is that traffic is carried on a passenger baggage tag rather than an airwaybill and the wholesale courier became an express consolidator. Still Airport to Airport with integrators progressively migrating to their own aircraft and the market moving to time definitive products. There is a requirement for the express consolidators to undergo a metamorphosis.

To do this they must develop Neutral Global Airport to Door products thus meeting a need for airlines to fill bellyholds at the same time allowing integrators more cost effectively to serve small markets and Express Companies, Forwarders and Post Offices without their own express distribution systems to 'piggy back' and develop their own branded global time definitive services. So in just over a decade the surviving wholesale courier companies will have moved from providing regional Airport to Airport services to providing globally Neutral Airport to Door Networks. Over and above the Airport to Airport products, which will still survive but progressively lose their pre-eminence there will be two basic products both Airport to Door.

They must utilise strengths of frequencie, airside access capacity when scarce and maximise use of joint production capacity to optimise synergies between passenger and cargo divisions. Develop partnerships with forwarders including triangular relationships - Airline, Forwarders, End Customer, equally focus on express services by growing, purchasing or buying-in own brand products primarily geared to scheduled services. To offer inducements to encourage integrators to continue to use their scheduled services as long as possible. When traffic outgrows scheduled services, airlines should evaluate operating their own express freighter services. They could either achieve this in house, or by developing partnerships with neutral express wholesalers (Sales) and wet lease freighter companies (Operations).

Airlines must embrace the Internet to offer enhanced standards at a lower cost thus obtaining a more effective use of capacity and global reach. At the same time cargo management must ensure that executive management of the airline is fully cognitive of the added value a cargo organisation brings to an airline to ensure their own survival against the attractions of using a dot.com organisation.

I believe associations like IATA, TIACA must embrace other members of the cargo community including GSA' Express and Post Offices otherwise they may find they represent members handling - certainly in revenue terms - less than half the international traffic. With the projected growth of the express market associations should encourage their members to develop express products. Similarly they should encourage their members to embrace the Internet but at the same time identifying and advising members how to protect themselves against certain inherent risks.

With the immediate transparency of the Internet, IATA, despite regulator problems to retain credibility, must make cargo tariffs similarly transparent reflecting as closely as possible market rates. With increasing convergence of Forwarders, Express and Postal Companies representational associations must pressure to ensure that they compete on a level playing field. Whether shipments travel as Post Office Parcels, Express or traditional freight, the regulatory treatment should be harmonised. It is of primary importance that the association's work together to identify and resolve hurdles to growth, e.g. regulatory constraints and ensure the industry competes on a level playing field.

The 21st Century is truly the century for Air Cargo. Great strides have been made over the years but to fully exploit this potential and ensure it is equitably shared, key initiatives must be taken in order that all industry participants large and small compete on a level playing field.

The traditional industry must learn from the success of the integrators, and use their strengths to develop their own capabilities thus ensuring they do not sell their birthright. Over and above the integrators own fleets, which will span the world, it is essential that express customer bases, committed to schedules services be developed. It is equally important with convergence that there is no discrimination particularly by Customs.