For Air Cargo Management, Charlotte Bailey explores that overcoming workforce challenges, adopting a digitised approach and moving forward with sustainable initiatives are areas to be addressed to support the future of the cargo ground handling sector.
As the global airline industry continues to recover post-pandemic, the longer-scale impact of a variety of factors is still being felt across the sector. And it’s not just overall passenger numbers posing challenges for the industry, with the cargo sector also facing additional pressure to – quite literally – ‘deliver’.
Although IATA noted in March 2023 that the global air cargo market demand for January 2023 fell by 14.9 per cent (and -16.2 per cent for international operations) compared to January 2022, the forecast isn’t all bleak. Demand for Latin American carriers grew 4.6 per cent, defying an otherwise downturned global forecast, while IATA’s director general Willie Walsh noted that China’s post-Covid-19 stabilisation “is stabilising production conditions in air cargo’s largest source market”. Indeed, global data company Statista estimates air-freight volume in China to reach nearly 40,000 billion tonne-km in 2023, increasing year-on-year to almost 52,000 by 2028.
Clearly, predicting and preparing for increasing air cargo demand is key to the industry’s overall continued growth. IATA calculates that capacity (measured in available cargo-tonne kilometres, or ACKT) was up 3.9 per cent (1.4 per cent internationally) compared to January 2022. This sentiment was echoed by DHL’s June 2023 Air Freight State of the Industry report, which notes that, despite an overall recent slump in volume, there is “sufficient capacity for current volume levels” and concludes that “belly capacity [has] continued to improve as passenger travel has increased”.
Just as cargo carried spans both the bellies of commercial passenger aircraft and dedicated freighters, so too do the challenges associated with loading, handling, dispatching and generally dealing with huge continued growth in the sector. IATA’s Operations and Safety Update (presented at the June 2023 AGM) highlights that with forward bookings data for May-September 2023 29 per cent above 2022, “all industry players need to deliver” over the coming months – with declared capacities, staffing and scheduling all “critical areas for assessment”. Additionally, IATA notes that “The biggest challenge in 2022 was misalignment on levels of capacity available”.
According to IATA’s 2023 Trends – Ground Handling Operations report, “Overcoming financial losses, labour shortages, ensuring safety with strict adherence to global standards as well as digitisation and modernisation will be critical to achieving a scalable restart.”
Recruitment and retention
Maintaining and attracting skilled staff is of key concern to the ground handling and cargo sector. “In general, working conditions are more challenging compared to competing sectors such as logistics and retail,” noted a spokesperson for the UK Department for Transport (DfT). Having concluded a review of the ground handling market in March 2023 and setting out 10 key areas of focus, “effective recruitment and retention” is of strategic significance, they noted.
June 2023 figures published by the United States Bureau of Transportation Statistics (BTS) note that US cargo airlines employed 274,403 workers in April 2023 (35 per cent of the airline industry total) and increased ‘full-time equivalent’ employees by 19,852 (a rise of 8.79 per cent) since pre-pandemic April 2019. However, IATA’s ground handling report maintains that “the shortages [of skilled ground staff] we are experiencing today are a symptom of the longer-term challenges to achieve a stable talent base in ground handling.”
Guillaume Crozier, senior vice president, UAE cargo and global cargo strategy for dnata emphasises the importance of attracting and retaining skilled personnel: “Our people are a crucial part of our business. During the pandemic, when air traffic was at an all-time low, we continuously looked at ways to safeguard our highly trained employees.” Describing the company’s competitive pay, robust benefits and a strong career development path supported by dnata’s in-house training facilities, Crozier adds: “We are not immune from the staff challenges facing the industry, but, as a result of our ongoing efforts, we are well placed to meet the demand.”
During the financial year 2022-2023, dnata’s customer-oriented teams handled over 710,000 aircraft turns and moved more than 2.7 million tonnes of cargo, equating to over 7,300 tonnes a day. Crozier notes that “although volumes have decreased, reflecting global trends and airline customers’ increased focus on passenger operations, [dnata] continue to see robust demand for [their] reliable and safe cargo services in Dubai.”
Shippers and freight forwarders are “increasingly opting” to transport cargo through the city, “a major global hub with strong infrastructure and global connectivity to ensure their goods reach customers on time,” Crozier explains. “Sea-air solutions are increasingly sought after at Dubai, given its strengths as a logistics gateway to markets in the Middle East, Europe, Asia, Africa and beyond.”
Clearly, evolving strategies by which companies can continue to meet demand for exemplary and efficient cargo solutions – as well as preparing for projected growth – is a key area for consideration. One such area is the increasing adoption of digital integration. In January 2022, the IATA Cargo Advisory Council (CAC) and the IATA Cargo Service Conference (CSC) endorsed an industry target to 100 per cent e-AWB (electronic Air Waybill) adoption by the end of 2022. IATA claims this new industry standard can offer a reduction of end-to-end processing time of up to 24 hours and improved data quality, alongside bringing cost-effective benefits and facilitating regulatory compliance. The system itself is nothing new yet, despite being the default contact of carriage for ‘all air cargo shipments on enabled trade lanes on 1 January 2019’, uptake is not universal. As of May 2023, IATA estimate that only around 85 per cent of air waybills are being processed electronically. The organisation notes “the air cargo industry has been lacking true digital integration for too long”, and “this situation prevents stakeholders from truly efficient collaboration”.
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dnata’s Crozier explains how the need to embrace digitisation represents the single largest area for focus, highlighting its importance: “We continue to invest in our digital transformation journey to handle each shipment even more efficiently, with greater visibility and fewer touchpoints. We’re also actively working on a diversification programme to enhance our range of services, bringing innovative end-to-end solutions to customers on the ground.”
At the May 2023 IATA Ground Handling Conference, Maher Abu-Arja, SITA’s senior business development manager, echoed the need for digital transformation stating that it “isn’t a choice, it’s a necessity.”
Another unique way dnata is embracing digital is via its OneCargo system, initially implemented in Erbil, Iraq in 2022. Crozier said: “We already use AI across our business, including our state-of-the-art ‘OneCargo’ terminal operator solution developed by IBS. OneCargo automates key business and operational functions, including safety and quality monitoring, reporting and ULD management, with an integrated, cloud-based platform.
“AI-driven tools and analytics provide enhanced visibility on sales and business performance, allowing customers to match real-time demand with available capacity for maximum profitability. In addition, OneCargo eliminates all redundancies and manual check sheets, substantially improving operational efficiency.”
It’s welcome news for Air Dispatch – part of dnata, and the world’s leading supplier of centralised load control (CLC) services – who, alongside producing more than 60,000 loadsheets for 19 airlines operating from 392 airports every month, celebrated the production of its seventh million loadsheet in April.
Increasing adoption of digitised cargo management solutions is also a key step towards increased sustainability.
IATA estimate its e-AWB system saves more than 7,800 tonnes of paper documents a year – but that’s just the start. At the 16th World Cargo Symposium, held in Istanbul in April, IATA outlined three areas where it was working to “support the energy transition of the industry”, including support for effective carbon calculations and offsetting. The ‘CO² Connect for Cargo’ initiative set to be launched later this year is a ‘precise tool for calculating emission from operations’, building on the success of the passenger flight IATA CO2 Connect model available since June 2022.
Although the increasing use of biofuels such as sustainable aviation fuel (SAF) will doubtless also play a key role in the airline industry achieving net zero emissions by 2050, concerns remain as to the ultimate scalability of supply. At present, it is expected that 85 per cent of future SAF volume over the next five years will be derived from just one of nine certified production pathways, which is dependent on limited availability of feedstocks such as waste fat and oil, explains IATA. Crozier notes that although dnata “continue to invest in the use of biofuels where feasible,” sustainability is a multi-faceted approach; focusing as much on ground support equipment as the aircraft freight is flown on.
Worldwide Flight Services (WFS) in Spain exemplifies sustainable ground handling through initiatives such as its ‘Our Sustainable Flight Path’ programme (launched in May 2022). WFS’s Spanish ground support equipment fleet is now 89 per cent electric for all its cargo handling operations, aiming to reduce emissions at its seven airport bases in Spain. The group’s ‘Going Green Team’ is also testing new equipment and evaluating other potential solutions, including hydrogen-powered ground vehicles.
David Clark, global head of HSSE at WFS, said: “We have been implementing environmental, social and governance initiatives into our operations for many years, but now we have a more integrated programme to take us forward. Our new strategy represents our responsibility to our stakeholders to steer our business towards more sustainable operations.”
dnata’s Crozier echoes the importance of exploring sustainable alternatives to traditionally powered ground support vehicles: “As aircraft and engine manufacturers continue to reduce emissions, we continue to invest in the electrification of our ground handling fleet. However, we understand that electrification is not the only solution to our ground handling fleet strategy. We carefully consider airports’ climatic conditions and available infrastructure, and invest in a mix of equipment types, including biodiesel, hydrogen and hybrid to maximise environmental and operational efficiency globally.”
Crozier continued: “Alongside our increased investment in green ground support equipment throughout our operations, we are building more sustainable pallets, re-using and repairing parts where required. We are also upcycling discarded materials within the ground handling process, including cargo netting and transfer belts.”
Clearly, the global importance of a sector that transports over $6 trillion worth of goods a year (accounting for approximately 35 per cent of world trade by value, according to IATA) is undisputed. And as conditions continue to stabilise and demand continues to rise, the sector is predicted to go from strength to strength over the coming years.
dnata’s Crozier concludes: “The pandemic accelerated digital transformation in the industry, leaving a legacy of improved efficiencies and productivity. Challenges led to unique, innovative solutions that our operations continue to benefit from.”
This feature was first published in Air Cargo Management – August/September 2023. To read the magazine in full, click here.