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The Biggest Challenge Facing the Air Cargo Industry
| Date: |
3/30/2004 |
| Author: |
Larry Coyne, President, TIACA |
| Source: |
TIACA Times |
Even before the horrible events of 11th of September, world trade, on which the industry depends, was in a downturn. What has happened since is much more severe than we could expect from economic cycles.
The dramatic drop in passenger and cargo airline activity which was kick started by the terrorists, has been compounded by jittery regulators around the world as they seek to impose new rules for air transport security. The paradox is that most of them agree that only perceived security is being improved. Long queues for passengers and delays for cargo are the recognised methods of improving customer confidence in airport security. Ironically, this is what’s driving customers away and is the cause of so much red ink on airlines results.
In the space of a just few weeks, nearly 50 years of trade facilitation has been undone making air cargo slower, more complicated and costly. Temporary suspension of the “known shipper” rule alone is increasing security costs by up to 20% on some routes, which effectively puts prices back to where they were 10 years ago.
We need to recognise this problem and establish measures to encourage business. An ideal first step would be to stop the constant stream of new regulations arriving daily on airline executive’s desks from different groups of regulators all around the world. Much of it achieves little and is often revoked in days as its deficiencies become evident. TIACA has proposed setting up an International Review Body to harmonise and co-ordinate regulations. As a leading representative of all elements of the air cargo industry, we are ready to drive this initiative forward and take an active role in ensuring the regulators listen to, and understand, the requirements of our industry. We are confident this would lead to more practical regulations in the future that satisfy everyone’s requirements.
The next priority is to seek measures aimed at tangibly improving security. An industry that has invested over $50 billion on lowering aircraft noise levels should be more than capable of devising security procedures and measures using technology currently available. The precedent of reliance on the human being has proven to be ineffective and has undermined consumer confidence.
Finally, there is a recognised need for the industry to rebuild confidence in itself. The low cost operators appear to have achieved this, so perhaps others should copy their example? Governments could help by creating better conditions for airlines for example, by removing airport taxes. Most important of all, they could stop burdening the industry with quick fix regulations that are doing more harm than good.
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