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Air cargo business is a big business and it is a very important arm of aviation business. Little wonder, the International Air Transport Association (IATA) has been so much concerned about air cargo business in all parts of the world.
However, air cargo business cannot thrive if there are no airlines. The air cargo business thrives because the airlines are there to transport cargo from one point to the other. Apart from the cargo itself and airlines, there are also stakeholders such as clearing agents, the Federal Airports Authority of Nigeria (FAAN) and customs in the air cargo chain, who must play their part for the air cargo business to thrive.
IATA’s air cargo data
Only recently, IATA released full-year air cargo data for 2014 showing 4.5 per cent demand growth compared to 2013 measured by Freight Tonne Kilometers (FTKs). The growth, the international body said, is a significant acceleration from the 1.4 per cent recorded in 2013 over 2012.
According to the airline international body, air cargo market expansion gathered momentum as 2014 progressed and that the year ended on a positive note, with growth in December accelerating to 4.9 per cent compared to December 2013.
According to Tony Tyler, Director General of IATA the vast majority of the growth in 2014, however, was in the Asia-Pacific and Middle East regions, which respectively contributed 46 per cent and 29 per cent of the expansion in FTKs.
He noted that though growth was recorded in all other regions, it was particularly weak in Latin America.
“After several years of stagnation, the air cargo business is growing again. This is largely being driven by the uptick in world trade over the second half of 2014. Recent concerns over the health of the global economy and a corresponding fall in business confidence have not yet impacted air cargo. But it is a downside risk that will need to be watched carefully as we move through 2015.”
IATA stated that performance varied widely by region with the most significant growth being recorded by airlines in Asia-Pacific and the Middle East.
ICAO’s verdict on Nigeria
In 2014,IATA disclosed that despite the growth recorded by African airlines in air cargo, Nigeria and South Africa economies underperformed.
According to IATA, “African carriers expanded FTKs by 12.2 per cent in December and 6.7 per cent for the year as a whole. Although, major economies such as Nigeria and South Africa underperformed during parts of 2014, regional trade activity held-up, supporting demand for air transport of goods. Capacity rose just 0.9 per cent for the year as a whole, helping to strengthen the load factor”
Why air cargo dwindled in January
However, the growth recorded in 2014 started dwindling in 2015.
According to IATA data released for global air freight markets, there was 3.2 per cent expansion in FTKs in January 2015 compared to the same month last year which is slower than the average of 4.5 per cent recorded for 2014.
IATA said that there was much regional variation in the January performance and that Asia-Pacific, African and Middle Eastern airlines expanded strongly, but that airlines in Europe and North and Latin America all reported demand contractions.
IATA added that although, it is too early to be certain of a trend towards weaker air freight, there are at least two emerging factors, which could negatively impact demand for air cargo in the coming months which include the fact that business confidence has been declining since mid-2014 and export orders tailed-off towards the end of the year.
IATA said that there could be a reversal of the positive trade-to-domestic production ratio which boosted cargo volumes last year
“January was a disappointing start to the year for air cargo. And it is difficult to be too optimistic about the rest of the year, given the economic headwinds in Europe and growing concerns over the Chinese economy. Add to that, the continuing trends of on-shoring production and trade protectionism and 2015 is shaping up to be another tough year for air cargo,” Tyler said.
Nigeria air cargo summit
To ensure that air cargo business in Nigeria does not continue with the slow start witnessed in global air cargo in January this year and to ensure that the business continues to boom with all the parties in the air cargo business smiling to the banks, the Nigerian Aviation Handling Company (NAHCo) Aviance organised a gathering of stakeholders in the cargo business to discuss how to move the business forward in Nigeria.
The one day event titled, “Nigeria Air Cargo Summit” was attended by stakeholders such as the Nigeria Customs Service, National Association of Government Approved Freight Forwarders (NAGAFF), Association of Nigeria Licenced Customs Agents (ANLCA) airline operators and the Federal Airports Authority of Nigeria (FAAN) and others.
Objectives of the Summit
The summit was designed by promoters to allow the Federal Government to see areas of opportunities, ensure better engagements amongst stakeholders, highlight areas of concern within the air cargo business and lastly, discuss the way forward for better safety and air cargo security.
Speaking at the forum ,the Managing Director of NAHCo Aviance, Mr Norbert Bielderman, said that NAHCo Plc considers this period a veritable time in our national history for industry stakeholders to come together to discuss, negotiate, energize and develop a formidable channel or course of direction for the sustainability of our sub-sector and air cargo in particular.
He added that the summit is a good platform to bring this objective to pass.
NAHCo, he said, in the last 35 years has been providing qualitative professional and specialised services for all major airlines including; British Airways, Lufthansa German Airline, Air France, KLM, Emirates, Ethiopian Airlines, and Delta Airlines. Others are; Qatar Airways, Cargolux, Turkish Airlines, Egypt Air, Royal Air Maroc, Saudi Arabian Airlines and Kenya Airlines among others.
The ground handling company, he said has sustained this business partnership and relationship over the years without any major incident and that the company believes this is commendable.
He posited that airlines over the years trust the company to deliver on contracted services in a safe and secure manner.
The NAHCo boss stated that the company has received a Free Trade Zone (FTZ) license and after which it established a subsidiary now known as NFZ, adding that this subsidiary has commenced business in-part whilst working on a robust five year business investment plan of approximately $500 million.
Bielderman stated that NAHCo has created other businesses and subsidiaries including licenses to operate ground handling services in Senegal, Liberia, Cote D’ivoire and that for the benefit of the airlines and in order to add more value to its current services, NAHCo has introduced NAHCo Road Feeder Service (RFS).
This, he said is in partnership with a leading logistics company, Creseda International Limited.
“We believe many freighters, cargo agents and consignees will benefit tremendously from this service. Nigerian Customs would also benefit from this redistribution of economic revenue across its base nationwide,” he said
He said that as a strategic growth initiatives, NAHCo has upgraded its cargo department into a division for improved efficiency and better service delivery this year, adding that the ground handling company has grown its cargo staff strength from 250 in 2012 to 450 in 2015 to improve turnaround time and be more responsive to its client airline and customers’ needs.
Importantly, he said NAHCo has upgraded and designated the breakdown area to include Bulk-Break and ULD Department.
The NAHCo boss added that the air cargo section will need the Federal Airport Authority of Nigeria (FAAN) to ensure all access gate restrictions around the tarmac and airport cargo terminal is full proof of unlawful or unauthorised persons.
Stakeholders, he said must sit down and together agree on the best model and way to sustain our business balancing all interest concerns. We have both worked together in even more trying periods and this time will not be different.
On his part, the Managing Director of FAAN, Engr. Saleh Dunoma, said that the FAAN will support any effort aimed at maximising the potentials in the country’s air cargo sector.
Dunoma, who was represented by FAAN’s Director of Cargo Development, Dr Uche Ofulue, explained that the quest to maximise these potentials has led to the remodeling of designated perishable cargo airports across the country.
According to him, “A recent IATA report suggested that cargo volumes are expected to grow by 4.5 per cent in 2015, as compared to the time when air cargo business faced weak markets and increasing competition since 2011”.
Ofulue tasked the private investors and stakeholders in the aviation industry to reach out and showcase the rich potentials of Nigeria to the world by keying into the opportunities available in the country’s air cargo industry.
“Some strategic airports in Nigeria such as; Akure, Makurdi, Minna, Abuja, Owerri, Calabar, Ilorin, Jalingo, Jos, Uyo, Kano, Lagos and Port Harcourt have been designated fresh and dry cargo airports, for the direct exportation of fresh agricultural produce from surrounding local communities to markets in Europe, the United States and other countries across the world,” he said.
He added that work has already started on some of these cargo terminals at some airports across the country.
Some of the participants especially agents, who spoke at the forum, stressed the need for other stakeholders in the air cargo chain to henceforth regard clearing agents as partners in progress and not as businessmen.
They also called for separate warehouse for cargo processing and provision of cargo centre.
MACRO GLOBAL LOGISTICS 