EP 13
Air Freight Trends & Opps Amidst Supply Chain Disruption
Available On
Guests:
-
Glyn Hughes
Director General, TIACA; Former Global Head of Cargo, IATA
Company:
TIACA
We discuss the air freight landscape, trends, challenges and opportunities amidst the pandemic.
Behind the Mic: This Month’s Supply Chain Tech Recap
In this episode, we speak with Glyn Hughes, Director General of TIACA and Former Global Head of Cargo at IATA. Glyn brings 37+ years of expertise in air cargo and walks us through how the air freight industry responded to unprecedented disruption during COVID 19 while laying the foundation for greater digitization, collaboration, and vaccine distribution at scale.
He offers rare insight into how international associations like TIACA, IATA, and FIATA work together to orchestrate global cargo movements, and what lies ahead for air cargo as it transforms into a post-pandemic world.
Key Takeaways
Air Cargo Is the Hidden Backbone of Global Trade
Air cargo only moves 1% of goods by volume but accounts for 35% of total trade by value. It’s mission critical for high value, high sensitivity products from vaccines and electronics to perishables and diamonds. It powers e-commerce and global integration.
COVID 19 Was a Turning Point for Air Cargo
The pandemic grounded over 60% of passenger flights, slashing global cargo capacity. Yet air cargo became more essential than ever delivering PPE, medical supplies, and eventually, COVID 19 vaccines under extreme urgency and temperature control.
Technology Is the Voice of the Cargo
IoT sensors, smart data sharing, milestone tracking platforms like Cargo iQ, and passive/active devices are revolutionizing how cargo tells its story. Preclearance, real time condition monitoring, and exception alerts are becoming table stakes.
Collaborative Standards Enable Seamless Movement
Organizations like TIACA, IATA, and FIATA ensure that airlines, forwarders, truckers, and customs work efficiently. Shared standards and platforms enable cargo to flow smoothly despite the industry’s many moving parts.
The Future Is Smart, Predictive, and Connected
With the rise of artificial intelligence, milestone tracking, and predictive analytics, the future of air cargo isn’t just about reacting faster it’s about anticipating risks, automating responses, and delighting customers with on time, in spec delivery every time.
Premsai Sainathan 00:08
Welcome to the Supply Chain Tech Podcast with Decklar. In this episode, we speak with Glyn Hughes, the Global Head of Cargo at IATA. Glyn walks us through the air freight landscape, trends, challenges and technology enabled opportunities amidst the pandemic. Welcome to the Supply Chain Tech Podcast with Decklar. Today, we’re going to talk about a very critical topic amidst the pandemic, which is air cargo. Now why is air cargo so critical at this time, when you talk about aviation, most of the times, you’re always talking about air transport, which is the passenger side of transport in aviation, which is what you actually experience and see at the airports, but air cargo is the behind the scenes stuff that actually goes on at every airport, which most people who visit the airport are not privy to, but this air cargo topic has actually been in the forefront post the COVID 19 pandemic, and the reason for that is largely two things. One is that air cargo is a premium mode of shipment. You don’t always use air cargo when you have 90 to 120 days to ship something from one point to another. You use air cargo when there is an urgency to ship and you are worried about your products condition, like with, say, vaccines and when there is a disruption in air cargo and you’re actually paying that premium, you are actually very concerned about it, which is exactly what happened during the pandemic, when there was a shortage of free capacity, and there was also the disruption of various flight plans, due to which the consignments could not reach their intended destination on time or intact. We have with us, Glyn, like I had introduced who is a veteran in the air cargo industry, who will be able to talk to us and educate us about lot of the challenges that we are seeing today and what companies are doing to overcome this as we start going back On the road to the normal but also touch upon the COVID 19 vaccine distribution challenge, one which the world has never seen at such a scale where air cargo plays a very critical role. Glyn welcome to the podcast.
Glyn Hughes 02:56
Thank you, Prem, it’s a pleasure to be speaking with you today.
Premsai Sainathan 03:01
Thank you, Glyn. Glyn, you have an impressive amount of experience in the air cargo space. So can you talk a little bit about the work you’ve done through your career and what really motivates you being in this space and doing the things that you’re doing great?
Glyn Hughes 03:18
Well thank you, Prem. And it’s always interesting to be introduced as a veteran. I just hear the word old. But you know, my my time in air cargo is actually now about 37 years, and it also, effectively, it was a bug I got in my in my bloodstream from being born and growing up near Gabor. And I used to spend every opportunity going at the airport and watching the planes taking off, so the moment I could join the industry in any in any capacity, that was what I wanted to do. And once you get into the air cargo world, and you just realize the impact that air cargo has in the global society. Now, of course, you mentioned quite importantly, that during the pandemic, air cargo has had an increasingly important role in terms of moving all of the PPE, the face masks, the other protective equipment that was required and so necessary during the lockdown and during the first few months of the pandemic. And of course, now the industry is preparing to support what is an unprecedented challenge that lay ahead in terms of moving vaccines around the world in some quite stringent conditions, but during the 110 year history of air cargo, it’s played a vital role in in supporting the global economy. Air Cargo transports about 35% of international trade by value every year. Now it’s only about 1% by volume. So it reiterates exactly what you were saying at the beginning, which is air cargo is there to support highly sensitive and highly valuable cargo to move. And of course, with things like ecommerce really expanding, it’s it’s a create, an absolute, critical enabler of the ecommerce economy, and it will certainly help economies integrate as the global economy continues to expand.
Premsai Sainathan 05:04
Glyn, that’s that’s a great introduction to the air cargo space. You are looking, I think you are all set to lead as the Director General of the PIACA, which is the International Air Cargo Association, and you are part of the IATA. So there are a lot of these organizations, like the PIACA, the IATA, the International Freight Forwarders Association, if I got it right, and also the pharma dot aero. How are long these industry associations really coming together to address some of the critical problems that the air cargo industry saw or is seeing in 2020 and also, what are these problems, largely that they are seeing, or what is causing these problems?
Glyn Hughes 05:54
A great question, and I think again, to answer that, it’s good to look at the comparative differences between the passenger and cargo supply chain when we’re moving as passengers, and we like to refer to passengers as self loading cargo. The self loading cargo basically books its own trip. It gets itself or we get ourselves from our house or our point of origin through to the airport. We move through the airport, we get ourselves on the plane, we get off the plane, we present ourselves to immigration authorities, and then we take ourselves out of the airport into the hotel. Now, if you think about a box of vaccine or a box of iPhones or a carton of whatever it is from fresh milk, some diamonds, it could be animals in the cargo space, the cargo doesn’t have the ability to effectively move itself through the supply chain. So it’s critical that all of the supply chain parties work collaboratively together, and that then really comes into the nub of your question, which is, what is the role of the international organizations and IATA, TIACA, FIATA, all of the others, and there are many of them out there. Our role is to ensure that we can make these respective parties within supply chain work seamlessly together. So we all act as facilitators. We have a slightly different role. TIACA represents the entire supply chain so it brings its members in, and that’s starting from the shipper all the way through to the forward of the truck of the airport, etc, the ground handler, the airline. IATA focuses mostly on the airline and the forwarder relationship, and we look at industry standards to make sure that those entities can work seamlessly together, together with their subcontracted partners like ground handlers. And then FIATA, for example, works mostly representing the freight forwarding community, which is critically important because they’re the ones that are in frontline contact with the shippers. So they’re the ones that really understand the needs of the industry, and effectively, then need to make sure that there are solutions in place to move the cargo from wherever to wherever. And that’s really what air cargo is about. It’s about connecting things to people.
Premsai Sainathan 08:06
Lynn, when you talk about air cargo, you gave this example of going from the home to the airport, and you’re talking about a self loading cargo, which is us. Similarly, the air cargo spends a very little amount of time in flight of legs which are actually not on the flight, which is the first mile the airport, at the loading dock, at the customs and so on. What is, what are the challenges that you see in each of these legs of the air cargo moment when you look at the ecosystem as a whole?
Glyn Hughes 08:42
Again, a great question. And another way of looking at this in comparison is because a passenger, one passenger, is very similar to another passenger. We need oxygen, we need warmth, we need cooling. In some cases, we need food to keep us alive, but we’re all very similar. Air Cargo is completely different. You have to move diamonds differently from you, move vaccines differently from you move live animals, differently from you move fresh vegetables, differently from you move iPhones, differently from you move organs for transplants, etc. So every type of air cargo commodity needs to have a very unique and specific handling procedure. And that’s really where the challenge comes in, is, how can an industry have different solutions for the different type of commodity to make sure that the quality is maintained, to make sure that the integrity is maintained, and to make sure that the cargo is treated as it needs to be treated. For example, vaccines, they will have very specific transport and handling requirements. So it’s critical that they are stored in the right conditions in the cool units at the airports. Animals obviously need to be treated in the most humane and comfortable fashion to make sure they get the right conditions, pre flight, during flight, post flight, they need to have their health checked all the time. Food. Wastage is incredibly important. The food wastage scenario today the entire supply chain, not just air, but from point of growing to point of effectively, consumption. There’s about 25 to 30% food wastage now that includes things like shelf time in grocery stores, how much we consume and how much we over consume or throw away of wastage, also how much is lost in the supply chain. So every product has to be looked at specifically, or every commodity has to be looked at specifically to make sure the border processes, handling processes, technological processes, and the equipment is all there, and the training to move every commodity as it should be moved, and technology is a hugely important part of that integration process.
Premsai Sainathan 10:45
Lynn, you talked about the various types of cargo. And one of the things that obviously caught my attention, and it’s on everybody’s mind at this moment, is the COVID 19 vaccine distribution. It’s vaccine distribution at a scale the world has never seen before, and a lot of it is actually going to be going into parts of the developing world or the underdeveloped world, which has never typically been the case when it’s come to vaccines, or it’s typically been only vaccines which cater to A small part of the population, maybe, you know, newborns, or maybe the elderly, but today, people like you and me are actually looking forward to get get inoculated by this COVID 19 vaccines. And vaccines has always been a very closely associated commodity when it comes to the air transport space. So what are the challenges you see when it comes to shipping the COVID, 19 vaccines? Do you think the air cargo industry is prepared? Where are the places that there is lot of progress being made, and where are the gaps?
Glyn Hughes 12:00
Again, a very topical and very relevant and pertinent question. The air cargo industry has been preparing for the vaccine distribution specifically for the last four or five months. It was inevitable that, when the pandemic became as widespread as it was, that eventually a vaccine would be developed, and eventually that vaccine would need to be effectively shipped to more than 200 countries and territories around the planet. So the industry has been preparing for several months. It has been moving for the last several decades vaccines, as you quite rightly said, for planned vaccination programs, UNICEF is the world’s largest purchaser of vaccines each year, so they’ve built up a tremendous expertise in the area of vaccine movement. So we’ve been working closely with UNICEF and other World Health Organization related bodies, un related bodies, to ensure that the industry can be as prepared as possible. Now we’ve seen a number of aspects which will impact the in fact, in heart and enhance or heighten the challenges that actually the industry will face. The first is the sheer scale of the grounding of the passenger networks, with about 60 to 70% of the passenger fleet grounded, that removed a significant portion of cargo capacity. About half of all air cargo is transported in bellies of passenger aircraft in traditional times. So when it comes to such a sheer grounding of the passenger fleet, the ability to move a vaccine to many countries which don’t have dedicated freighter services will incur an additional obstacle which didn’t previously exist. So that’s one challenge the industry will have to face the second one, which comes to the handling and transport handling conditions. The first three vaccines that seem to be approaching the point of getting authorization for use. There’s the Pfizer vaccine, which needs to be shipped at ultra cold temperatures of minus 74, minus 80. Then there is the Moderna, which is transported and stored around minus 20, and we have the AstraZeneca, which is more of a traditional, conventional supply chain of plus two to plus eight degrees celsius. Now each of those do bring with it different challenges. The Pfizer one, the actual technology within the packaging is what’s actually going to keep the vaccine at that temperature range. They’ll be using dry ice. They’ll be using thermal insulation, so the actual technology is within the box. So the actual box needs to be moved at a 15 to 25 ambient temperature, even though the technology is within the box. But of course, the dry ice will need to be replenished at certain points during its journey. So there becomes additional challenges that the destination the final mile that you mentioned previously. So the countries with the least developed infrastructure probably will have to rely on more of the vaccines that are more traditionally And conventionally shipped, such as the AstraZeneca or others that will come later on, because it makes it much easier to maintain the integrity once it leaves the airport. So the air cargo industry has been working very closely with the pharma manufacturers to get an early indication of the product specifics in terms of the transport conditions, as well as the various UN agencies, the covax facility, which UNICEF, the GAVI Institute, Cepi, and PAHO, as the Pan American Health Organization, are certainly leading in terms of the procurement and distribution of vaccines for 92 of the lower middle income countries. We’re obviously working very closely with them, because, of course, they will then need to have a an effective global distribution plan in place. Their plan is to allocate the first 3% of vaccines to the frontline medical workers. So it’ll require multiple supply chains, both in country and then later on, when they come to vaccinate the broader population of the high risk individuals, for example. So there are many challenges, but collaboration, communication and preparation are the absolute three critical aspects to make sure that the vaccines are moved with 100% integrity, because each violent vaccine, of course, is earmarked for an individual, and that individual we want to protect on the planet. So air cargo is very much looking forward to playing its role in helping eradicate this this virus from from the planet.
Premsai Sainathan 16:27
It’s definitely playing a very critical role, like you said, Lynn, in ensuring that we all are able to come out of this virus. Now is technology playing a role in helping the air cargo industry through this, and if so, do you have any examples that you’re seeing on the ground?
Glyn Hughes 16:48
Absolutely. I mean, technology is going to play a part in the future of air cargo, as it has done in recent years, anyway. I mean, for community, for cargo that doesn’t talk or walk, as we said earlier, technology has to be the voice of the cargo. So you’re looking at data centers. You’re looking at active devices, or passive devices that can actually record the conditions of which the cargo has been transported. In the passive devices then are opened and read at destination to see and to ensure that the cargo throughout its journey hasn’t perhaps, gone beyond its safe temperature range. So therefore you know that the cargo is safe and effective to be distributed. In the case of vaccine, other cargo that is high valuable, highly valuable. Then, of course, tracking devices are important to maintain monitor the location of that cargo, but technology plays a role up front as well, about the booking process, the optimization process, you know, the way that the aircraft are actually booked and planned and loaded and calculated, the communication with the shipper, the pre communication with the customs and border agencies. You know, you don’t want any cargo, not least of which vaccine or something as sensitive as that being held up at borders. So the industry is looking at what they call pre loading information and pre arrival information so that communications can occur with border agencies to make sure that the cargo can be pre cleared if possible, and then, of course, using that technology to communicate if there are service failures throughout the journey. So technology is critical, but not just for vaccines. Technology is critical for the industry’s long term sustainable growth.
Premsai Sainathan 18:28
Absolutely and when it comes to technology, what do you see is the future of this industry? So there are initiatives like cargo IQ, which have actually been able to define the various milestones and bring in a platform where everybody can collaborate. But what I see is there’s a lot of manual processes that are still there in place. So where do you see this industry in terms of its digital transformation journey? Is it 25% there? 50% there, 75% what’s kind of your experience?
Glyn Hughes 19:06
I mean, that’s a great question, and I would say we’re probably somewhere in that range. It’s difficult, excuse me, it’s difficult to put an exact percentage on it, because that that journey is constantly evolving. The destination is constantly moving. What the industry needs to be able to do is get in a position where it can agilely adopt the prevailing technology that exists to enable it to enhance the services that it provides the ultimate user, i.e. the shipper, for example, if we look at the evolution of air cargo, it started with everything being put on a piece of paper, the airway bill. And it’s only when had all the information could you send the airway bill with the cargo to the next party who would receive the airway bill and then realize they had to do something with the cargo. That meant the information flow was the same speed as the cargo flow. So the industry evolved into cargo, wimp, and then XML, which was then sending messages related to, again, that whole picture. So that’s been already a step forward, but it’s still nowhere near the level we need to be as an industry to enable the full benefits of technological opportunities. So the industry is moving to smart data sharing. If I have the first page, the first chapter, the first line, and it could be of value to somebody elsewhere in the supply chain, it’s about sharing that information as it becomes available. This will enable then people to actually prepare, plan and execute in a much greater and more effective fashion. You mentioned cargo IQ. Cargo. IQ is a great initiative. It’s a great scenario where the supply chain partners actually share milestones, so they establish for each shipment series of milestones, as you mentioned in a route map, and it’s tracked. And that will then enable dynamic adjustments if they notice, for example, a flight is canceled, or if there is weather that requires some, some other solution to be implemented, rather than the cargo just sitting there, it can actually then be dynamically amended, so that the ultimate target, which is to deliver on time, can be maintained. So technology has a huge role to play going forward, even greater than today. I would today, say today, I probably around halfway there. I think the mindset is there, but people are adopting technology at a different pace, and it’s really where it needs to become into integral in terms of how people put their strategies together.
Premsai Sainathan 21:38
Then following up with that point you mentioned about the fact that you know the technology is is not yet completely collaborative. Which of the actors in the space do you think are giving the highest push for digitization today? Is it the manufacturer or the shipper? In other words, is it the freight forwarder? Is the airline, or is the consumer
Glyn Hughes 22:03
Actually, I mean, it’s a it’s a great question, because the answer is, everybody. The biggest challenge when it comes to embracing technology is the fact that there is no one answer to that question. For example, in ecommerce, obviously, we as consumers are demanding greater transparency of the cargo that we’ve ordered. When it comes to things like pharma manufacturing and the shipment of pharma products, the pharma manufacturer is looking for enhanced visibility and transparency of the conditions that its cargo is being shipped in. So you start with the demands of the actual ultimate user of the system. But then throughout the supply chain, you’ve got the different actors who are making different demands on its partners, and that’s the biggest challenge. In some cases, you’ve got the freight forwarders who are by far leading the way in terms of adopting the technology. But then in different areas, you’ve got the airlines that are by far leading the way. Then you have ground handlers, then you have the customs organizations, then you have the trucking companies. You’ve then got various different regulatory authorities. So it’s really about the alignment of the planets, and this is where you then have the other challenges, which is, if I’m talking to you in one particular message language and you only receive another type of message language, we’re not able to communicate. So we have to find that common ground, which is there when you have message translation systems, or as we mentioned earlier, smart data sharing, which then enables people the same as we do in our private lives. You know whether or not you use WhatsApp, fiber, Skype, Link, Zoom, whatever other communication tool you have. It’s about the system connecting the parties together. And that’s really what we need to fester that culture of connectivity.
Premsai Sainathan 23:50
Wonderfully, said Glyn. So if you were to basically leave us with one message or tell all of the people in the air cargo community what they should be doing in the next three to six months. What would that message be?
Glyn Hughes 24:10
I mean, it’s a great question, but I have to say, I think the rather than me tell the industry what they should be doing, they know what they should do, and they’re the experts. You know, I think one of the things I’ve been most fortunate in my career is to be basically enabling myself to look and see how these experts are working on a day to day basis. So what I would actually encourage people is continue that great collaborative spirit, continue to work with partners, to challenge themselves, to listen to what the ultimate users of the system are actually requiring, because it’s that enhanced transparency and communication and predictability and basically just continue playing such a vital role they are in terms of supporting society, the global economy, and ultimately all of us as members of that global community.
Premsai Sainathan 25:00
Yeah. I totally agree with you, Glyn. I think air cargo today is not only just an industry, but it’s actually influencing the global economy. It’s influencing the society, and it’s also influencing sustainability today. So thank you. So thank you so much for being with us on this podcast. We look forward to talking to you sometime again. Thank you for your time.
Glyn Hughes 25:24
Thank you, Prem, and thank you for some wonderful questions. I really appreciate that and enjoyed talking with you. Thank you.
Premsai Sainathan 25:31
You’re welcome. Thank you for joining, Glyn.
Glyn Hughes 25:33
Hi, my name is Scott Mears, and I’m one of the hosts of the Supply Chain Tech Podcast with Decklar. On this podcast we talk to supply chain heroes from around the world about everything, ranging from the disruptions related to supply chains, their personal experiences with tracking technologies, strategies to build resilience, and much, much more. We already have some recommended videos for you to the side of me, and if any of this sounds interesting to you, do subscribe to our Youtube channel and hit the bell icon so you don’t miss another Decklar video. I’ll see you next time.
Don't Miss Out!
Get the latest episodes delivered to your inbox