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flows in developed and developing countries to create an
“Air Connectivity Index,” which measures the number of
cargo-carrying flights between two countries. According to
the report, a 1-percent rise in the index is associated with a
6.3-percent increase in global trade by value. What’s more,
a 1-percentage-point increase in the index is associated with
a 2.9-percent rise in GVC participation, the report found.
Perhaps most important given the industry’s tardy but
now-vigorous efforts to introduce more digitization into its
operations, the report found that every 1-percentage-point
rise in a separate index that gauges improvements in digital
processes was associated with a 2.3-percent rise in the value
of world trade. In 2006, IATA began an initiative called
“e-freight” to replace paper-document handoffs with the
electronic exchange of data and messages. The following
year, it laid the groundwork for an “e-air waybill,” which
would replace the paper air waybill with an electronic data
interchange (EDI)-based digital agreement between an
airline and freight forwarder. By the end of 2016, e-air waybills were expected to be deployed on 56 percent of what
IATA classifies as “legally feasible” trade lanes.
IATA officials cautioned that the speed of air transport
and continuing IT improvements are not the end games
in expanding the role of GVCs. “Digitization is not a goal
in and of itself. But when done right, it can help achieve
a seamless service,” said George Anjaparidze, an IATA
senior economist who spearheaded the project. Even more
important, IATA officials stressed, is the drive to stream-
line and harmonize customs clearance processes to, in the
report’s words, “allow air transport to capitalize on its key
advantage of speed.”
In a phone interview, Anjaparidze said that “it is critical
that the seamlessness extends to the customs agencies” for
GVCs to work effectively. Some countries—usually devel-
oped ones—have gone beyond the base requirements for
improving their clearance processes, while others continue
to lag, he said.
A big step in harmonization efforts occurred in late
January when the United Nations Conference on Trade
and Development (UNCTAD) integrated IATA’s car-go-messaging standards into the UNCTAD automated system, which is used by 90 countries to support their customs
procedures. The adoption of the IATA standards, known
as “Cargo-XML,” synchronizes the electronic communications between airlines and customs authorities in the 90
countries, the airline group said.
The partnership means that all aircargo stakeholders in
the countries following the UNCTAD system “can now
talk the same digital language,” said Glyn Hughes, IATA’s
global head of cargo.
STAYING APOLITICAL
GVCs don’t have the politically fueled visibility of fin-ished-goods trade, which is a good thing for stakeholders.
The typical trade dispute is fought between two countries
over specific finished products. By contrast, a GVC encom-passes multiple countries and myriad components, each of
which is essential to bringing finished products to market.
Because so many trading partners are involved, introducing trade friction would likely shake global commerce far
more than a high-profile dispute over one or two finished
commodity types, experts warn.
That GVCs have not become political footballs is also
a good thing for the aircargo sector, which has sought a
catalyst to drive sustained growth since the Internet and
telecom buildout of the 1990s crashed at the turn of the
century, taking with it a multitude of businesses that were
frequent users of air. For the past 17 years, the sector has
struggled to overcome various obstacles, chief among them
profound changes in supply chain design and execution
that reduced the demand for the intercontinental fast-cy-cle sourcing, manufacturing, and distribution model that
could be managed only through the skies.
IATA did not create the project to tout air cargo’s value
in supporting GVCs, Anjaparidze said. Instead, it was
an effort to “understand how trade characteristics have
evolved” through the years, he said. If it is assumed that
GVCs cannot work without a well-honed aircargo network,
then there are worse futures the beleaguered industry can
hang its hat on.
