To represent, lead and serve the airline industry

Value of Air Cargo ConnectivitySeminario Transportes & NegociosNovember 09th 2017 Oporto

Francisco Batáglia, IATA GDC Manager Customer Services

Meet the International Air Transport Association

Airlines is the total number of IATA Member Airlines

270

Is the percentage of global traffic represented by IATA

83%

IATA Provides numerous services to its members/customers.

IATA Helps developingStandards

For the Industry“ ”

IATA Advocates on Behalf of the Airline

Industry “ ”

The Trade Association of the World Airlines “ ”

Our mission; to Represent, Lead and Serve the Airline Industry

Aviation in 2016…

18,429 Unique city pairs

3.8 billion Passengers

52 millionFreight tonnes

$6.8 trillionTrade carried

Source: ATAG, IATA Economics www.iata.org/economics

AVIATION: POWERING WORLD TRADE

Lightweight by volume, Heavyweight by value!

$6.8 trillionValue of cargo handled

By air in 2016Almost 340 billion letters and 6.7 billion postal parcels are sent every year

Safety

Speed

Reliability

Connectivity

What are the key Air Cargo drivers ?

1881

1914

2016

Over 95% of the world population and economic activities within wide body range from Portugal!

Source: Turkish Airlines

i.e. : Direct access to landlocked countries

IATA Economics www.iata.org/economics

Study on the Value of Air Cargo: Air Transport and Global Value Chains

Countries with more developed air

cargo connections and smarter

borders are more integrated into

Global Value Chains reaping the

associated benefits.

IATA study on the value of Air Cargo

Essential for integrating into Global Value Chains

Source: Klaus Meinhardt, JETRO2012, ATAG, pinterest.com

IATA study on the value of Air Cargo

“Air cargo processes have not been

modernized over the last twenty years”

“we need more

visibility and

transparency”

“Air cargo is often

a black space”

“We need a Cargo cloud

where everybody is

connected”

Shipper’s voice:

European Shipper Council ‘White Paper’ 2014

World Cargo Symposium Shipper Panel, March 2015

“Other modes are

moving faster”

Some Air Cargo customers feedback!

Why Air Cargo full potential limited?

Cross-border challenges is limiting Air Cargo potential

(source ‘Doing Business’ index, World Bank)

What do we do about it?

Digitized the Air Cargo process alike for the Passenger!

e-Freight is an industry-wide program that aims to build anend-to-end paperless transportation process for air cargo made possible with

regulatory framework, modern electronic messages and high quality of data

e-Freight is part of the StB Cargo program

aiming at making air cargo easier, smarter and

faster. The program portfolio holds 5 projects

with the objective to accelerate change in the

areas of digitization, visibility and safety e-Freight& e-AWB

DigitalCargo

InteractiveCargo

SmartFacility

ACID - Air Cargo Incidents Database

What do we do about it?

+6%+1%

Why digitization is key for Air Cargo connectivity?

To conclude…

Aviation is critical for our modern life. The Air Cargo Customer experience through Portuguese Airports will be critical to connect global markets to power the Portuguese economy!

Urbanization rate 2015

Source : The World Bank, United Nations

e-AWB

Where do we stand now?

Back to Table of Contents

Status as of August 2017

In August 2017, the Air Cargo industry processed more than 2.3 million Air Waybills (AWBs)

The industry is driven by three main regions representing 75% of the AWBs:

Europe, Asia Pacific and North Asia

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2%

24%

29%4%

22%

6%

13%

Africa

Asia Pacific

Europe

Middle East

North Asia

Canada-LATAM

USA

e-AWB penetration: 50.7% as of August 2017

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The global e-AWB penetration reached50.7% on the legally feasible trade lanes(~ 67% of the AWBs)

46.0 %

39.6%

72.0%

67.8 %

62.6%

51.2%

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TOP 10 performers / August 2017

TOP 10 AIRLINES BY e-AWB VOLUME TOP 10 FREIGHT FORWARDERS BY e-AWB VOLUMETOP 10 AIRPORTS BY e-AWB VOLUME

e-AWB

(%)

82.3 %

64.8 %

76.2 %

77.7 %

38.3 %

44.3 %

73.0 %

67.7 %

55.6 %

65.9 %

e-AWB

(%)

67.0 %

53.9 %

71.5 %

55.0 %

70.4 %

38.1 %

44.0 %

36.3 %

54.2 %

89.3 %

SIN - Changi

FRA - Frankfurt International

AMS - Schiphol Airport

DXB - Dubai

LHR - Heathrow

HKG - Hong Kong International

PVG - PuDong

ICN - Incheon International

TPE - Chiang Kai Shek

ORD - O'Hare International

SQ - SIA Cargo

AA – American Airline

KE - Korean Air

CI - China Airlines

DL - Delta Air Lines

CXG - Cathay Pacific Group

QR - Qatar Airways

AKG - Air France - KLM Group

LH - Lufthansa Cargo

EK - Emirates

e-AWB

(%)

58.3 %

63.0 %

67.9 %

39.3 %

60.5 %

56.8 %

55.5 %

48.8 %

45.9 %

57.2 %

KUEHNE + NAGEL

NIPPON EXPRESS

UPS - UNITED PARCEL SERVICE

DSV AIR & SEA

SCHENKER

EXPEDITORS GROUP

PANALPINA

BOLLORE

KINTETSU

DGF - DHL GLOBAL FORWARD.

e-AWB adoption / main challenges

In December 2016, the global e-AWB penetration reached 48.9% on the

feasible trade lanes, a shortfall of 7.1 p.p. against the industry target of 56%.

Main challenges are:

48.9%

2016 target

Actual

56%

Regulatory constraints

Lack of harmonization

Technology limitation

Complex process

Maturity threshold

• e-AWB is not possible in all airports and all trade lanes due to regulatory

limitations

• e-AWB procedures are not harmonized between freight forwarders, airlines

and ground handling agents in key airports where e-AWB is live

• Many of the SME forwarders do not have the technical capability/EDI

enabled systems to enable them to transmit shipment data to airlines

• Some large forwarders face the same issue: their local branches are the

result of SME forwarders acquisition and their IT system have not been

aligned with the rest of the company

• Perceived complexity to do e-AWB for forwarders dealing with multiple

airlines

• Some markets reached a certain level of maturity where major actors

(airlines / freight forwarders) already achieved the biggest potential

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e-AWB adoption / supporting initiatives

In order to address the e-AWB adoption challenges and to accelerate the

growth in the penetration rate, the following supporting initiatives have been

identified in 2016 and will be continued and strengthen in 2017

Expand number of trade

lanes where e-freight

and e-AWB are possible

Harmonize e-AWB

procedures in key

airports across

forwarders airlines/GHA

Facilitate adoption by

SME forwarders

Provide implementation

guidance and materials

Coordination efforts of

industry in key e-

airports

• Continue the government supported e-freight initiatives in key locations

• Complement the list of SOPs at e-airports

(especially airports to be included in the 2017 eAWB360 roadmap)

• Launch on November 8th of an e-AWB desktop solution for Small and

Medium sized Freight Forwarders (eAWBLink), low-cost alternative to

existing solutions

• Develop an implementation playbook to support the adoption of e-AWB

• Strengthen the e-AWB penetration rate in the existing eAWB360 airports

• Deploy eAWB360 initiatives at additional airports (in particular in Europe)

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2017 e-AWB industry target: 62%

Based on the historical achievement, the forecasting model shows that an e-AWB penetration rate of 62% can be achieved by

end of 2017

62% by end of 2017

Launch

+0.3 p.p. per

month

Build

+1.2 p.p. per

month

Accelerate

+1.3 p.p. per

month

Mature / Sustain

+0.6 p.p. per month

51% by end of 2017

Mature trend – leading to a global e-AWB

penetration rate of 51% - corresponds to

the natural e-AWB adoption pace,

without any specific supporting

initiative in place. The slow pace is

mainly due to maturity of certain markets

Accelerate trend – leading to a global e-AWB

penetration rate of 62% - corresponds to the e-

AWB adoption pace under the condition of

successful achievement of supporting initiatives

Industry

effort

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eAWB360 – The concept

Back to Table of Contents

SINGLE PROCESS

eAWB360 Airlines commit to implementing Single

Process

AIRPORT SOP

Common e-AWB SOP for GHAs at eAWB360

airports

Sin

gle

Pro

ce

ss

Air

po

rt

SO

P

Co

mm

un

icati

on

COMMUNICATION

Coordinated and synchronized communication

that e-AWB is the preferred means for

shipping cargo from eAWB360 airports

HARMONIZED IMPLEMENTATION + SYNCHRONIZED COMMUNICATION

eAWB360 – Community driven approach

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eAWB360 – Synchronized communication

“We are switching over to e-

AWB as the preferred means

for shipping cargo to all

destinations by using the e-

AWB single process at ABC

airport effective XYZ date.”

eAWB360 airlines need to send the following core message to their Freight Forwarder customers

during the same agreed week

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eAWB360 – Communication activities

eAWB360 communication rely on two key components

LOCAL

ASSOCIATION

IATA

FORWARDERS

FORWARDERS

Participating Airlines send the

same core message to their

customers

AIRLINES

1

INDUSTRY

After Airlines communication, a

joint statement will be issued

by industry associations

2

FORWARDERS

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eAWB360 – Engagement activities

MeA CAMPAIGN e-AWB WORKSHOPS eAWB360 EVENTS

MeA adoption campaign

to increase number of

MeA forwarders

Conduct e-AWB

workshops to help MeA

forwarders implement

e-AWB

Conduct an eAWB360

event @ targeted airports

to prepare forwarders

for eAWB360

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e-AWB

How do we implement it?

Wrap up

Back to Table of Contents

e-AWB implementation - Wrap up

34Back to Table of Contents

1. Join the Multilateral e-AWB Agreement

2. Ensure your technology supports e-AWB

3. Ensure high-quality electronic messages

4. Ensure business processes are set

5. Roll out e-AWB

6. Report e-AWB shipments

Start your journey on www.iata.org/eawb-multilateral to join the Multilateral e-

AWB Agreement

Ensure your organization is capable of sending and receiving Cargo-XML or

Cargo-IMP messages

Consider the use of eAWBLink on www.iata.org/eawblink

Ensure your system produce high quality messages

Validate your Cargo XML message for free on http://www.iata.org/cargo-xml-

autocheck

Join the Message Improvement Program (MIP) on http://www.iata.org/MIP

Engage with your business partners

Agree on a standard business processes and think Single process

Comply with the Standard Operating Procedures (SOP) where applicable. The

list of applicable SOP are available at: http://www.iata.org/e-awb

Define your e-AWB roll out strategy

Airlines to activate Freight Forwarders in Matchmaker

Consider to join an eAWB360 initiative. More info available at

http://www.iata.org/eAWB360

Report your e-AWB shipments through the Message Improvement Program

(MIP)

Details on http://www.iata.org/whatwedo/cargo/e/Documents/e-freight-mip-

strategy.pdf

CASS Settlement Statistics

Portugal

36

37

THANK YOU