TIACA sees cargo prospects brighten as global recovery begins

AIR cargo can emerge stronger from the global economic crisis than other transport modes as manufacturers rethink production and supply chain strategies, says Ulrich Ogiermann, chairman of The International Air Cargo Association (TIACA).

Manufacturers and other businesses will be more reluctant than ever to tie up vast investment in stock, taking them back to the principle of "just-in-time" production, which "demands the speed, security and reliability that only air cargo can provide", said Mr Ogiermann.

Despite suggestions that cost conscious 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 - he said the business case for such a strategy will not be sustainable in most 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," said Mr Ogiermann.

"One of the few positives to come from the recession is that companies everywhere are now ready to consider and discuss any changes within their business if it benefits their bottom line. Previously there were too many taboos that left no room to manoeuvre. These have disappeared.

"There are no more 'kingdoms' in companies that are protected at all costs. This is a positive shift in change management because companies will leave anything behind that does not add value," he said.

With early signs of improvement in cargo volumes, he said the air cargo industry's first goal in 2010 must be to "stop the bleeding from the wounds incurred in 2009", Mr Ogiermann said.

Companies, he added, will want to see several months of increasing business to truly believe the economic recovery is properly under way and it will be 2011 before the industry sees a sustainable improvement.
 
(Source: www.schednet.com)