GENEVA: December 09, 2016. IATA says there's now quantitative evidence between a country's air cargo connectivity and its level of participation in global trade.
In a new report, the organization has examined the links between air cargo connectivity and Global Value Chain (GVC) trade and concluded that a country with a one percent increase in the former produces a 6.3 percent rise in the latter.
GVCs enable countries to each specialize in narrowly defined tasks such as component production, R&D or assembly that are subsequently combined for final production and delivery.
The World Trade Organization estimates that almost half of global trade now takes place within GVCs – which have been growing more rapidly than other types of trade since the 1990s.
"Air cargo is key in supporting the current global trading system. In 2015, airlines transported 52.2 million metric tons of goods, representing about 35 percent of global trade by value," explained IATA chief economist Brian Pearce. "That is equivalent to US$5.6 trillion worth of goods annually, or US$15.3 billion worth of goods every day.
"We now have quantitative evidence of the important link between air cargo connectivity and trade competitiveness. It is in the economic interest for governments to promote and implement policies for the efficient facilitation of air cargo," Pearce declared.
The study suggests air cargo connectivity and subsequent trade growth will be improved if countries ratify and implement the 1999 Montreal Convention to adopt e-freight; and the adoption of the WTO/World Customs Organisation revised Kyoto Convention to implement smart border solutions to reduce process complexity and costs.
Not for the first time IATA is also calling on the air cargo industry to only use e-AWBs and e-Freight so that governments can ultimately implement a single access window for trade processing.
The report coincides with the release of IATA's October cargo data that showed an 8.2 percent year-on-year rise, the fastest increase in 18 months. "The drivers of stronger growth are sending a major signal for change to the air cargo industry," commented IATA director general and CEO Alexandre de Juniac. "Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. [So] the shift to e-freight is more critical than ever," he added.