Part of the bigger picture: Air cargo and its role in airport economic recovery

Air cargo is a vital component of the aviation ecosystem that supports trade and economic development.

From an economic perspective, according to the Air Transport Action Group (ATAG), while air transport carries around 0.5% of the volume of world trade shipments, it is over 35% by value – meaning that goods shipped by air are very high value commodities, often times perishable or time-sensitive.  One example is fresh products including fruits, vegetables, sea food, and flowers. Every year, hundreds of thousands of tonnes of cut flowers are flown around the world in the weeks before Valentine and Mothers’ Day. Most of them originating from Africa and Latin America and destinated to North America, Europe and Asia.

Cargo during the COVID-19 pandemic

The value of air cargo to airlines, governments, shippers, and consignees has become more evident in the response to the COVID-19 crisis. Not only did the demand for cargo increase due to changes in the retail environment, but now as we move into the recovery phase, it is critical for the pharmaceutical industry, that relies on air transport for delivery of time-sensitive medical supplies, particularly vaccines. The airline business model changed overnight in response to COVID-19 with the closure of borders for passenger traffic but high demand for cargo operations with airlines also converting their passenger aircraft into all cargo aircraft.

Airport operations

As airports seek to generate revenue from cargo opportunities, it will be critical to understand the potential market, the regulatory environment, and the operational needs for new or increased cargo operations. The need for a clear cargo strategy will help further the airport’s understanding of the current landscape and opportunities as well as build a robust business plan for the future. The diversification of revenue streams is also particularly welcome in the current environment.   

Increases in cargo operations can also create new challenges for the airport, in particular if larger aircraft will be operated or normal operating hours extended, with the introduction of night flights for example. These changes in the operating environment have to be considered and analyzed so as to mitigate any risks or impacts.  

Future innovation post COVID

During the COVID-19 crisis, passenger flight schedules could no longer be a reliable indicator of cargo capacity. Frequency of operations for a particular route was driven by the cargo rather than passenger volumes.  Network visibility was vital.  The industry was compelled to swiftly deploy digital platforms which enabled ad-hoc and regular users to understand capacity availability and make bookings. 

As flights return to pre-COVID levels, the effort is to scale these digital practices and reduce the need for manual inputs such that cargo schedules and capacity availability are accurately known and visible to customers. Physical document exchange between cargo facilities, and digitalized operational decisions and information exchanges will not only advance efficiency but encourage safe and secure exchange between stakeholders.

It is expected that many aspects of the cargo journey, including customs, will shift to a digital process.  Widespread acceptance of a single standard will provide common approach and swiftly adopted paperless solutions.  As we look to the future, efficient, sustainable, touchless digital solutions shall be embedded within cargo operations.  It is essential that digital infrastructure is also put in place for customs and facilitation processes with widespread international adoption such that the cargo network functions effectively.