Friday 21st Oct 2016 - Logistics Manager

Air cargo can outpace other modes, says TIACA chief

Air cargo can emerge from the recession in a stronger position than other transport modes, according to Ulrich Ogiermann, chairman of The International Air Cargo Association (TIACA).

Ulrich Ogiermann

In a statement, he argued that manufacturers and other businesses would be more reluctant than ever to tie up investment in stock – instead going over to just-in-time production.

This, he said, “subsequently, demands the speed, security and reliability of transport that only air cargo can provide”.

Ogiermann rejected suggestions that companies in the manufacturing sector will look for near-sourcing – buying materials and products closer to their final production points in Europe and North America and eliminating the logistics costs of imports from Asia – arguing that the business case for such a strategy will not be sustainable in the majority of cases.

“Recent studies prove the reduction in logistics costs are outweighed by the increased cost of local production, where infrastructure and employment investment in greater. I do not expect this to have the negative impact on air cargo others have predicted.”

There are early signs of improvement in cargo volumes, but he Ogiermann  warned that air cargo industry’s first goal in 2010 must be to “stop the bleeding from the wounds incurred in 2009”.

“It will clearly take a lot of time for the entire air cargo industry to recover properly and it has to decide what it is going to do to make airfreight more attractive to customers. I expect to see more volatility over the next 12 months because there are still many unknown factors and bubbles waiting to burst at any moment. The banking sector remains exposed while the fragile real estate market and level of credit card borrowing could once again tip the balance for the already substantially challenged financial world. Many national economies will still need international support.”