Glyn Hughes, Global Head of Cargo, IATA
Boosting Standards, Striking Common Ground
AFL had the opportunity of interviewing Mr. Glyn Hughes, Global Head of Cargo, at the International Air Transport Association or IATA. Mr. Hughes took on this role on June 2014. He discussed IATA’s role in the aviation industry, and its dedication to support efficiency initiatives for all of the industry’s players. He also touched upon IATA’s mission to support the increase in electronic air waybills for all carriers, and the obstacles facing its widespread adoption.
Mr. Hughes gave a brief introduction of his professional background, “I was originally with British Caledonian. Then I moved to British Airways and from there, I moved to Air Europe. I have an air cargo background from the moment I joined the aviation industry. I first joined IATA to help run the Cargo Accounts Settlement Service (CASS) program, which is a settlement system that we run between airlines, freight forwarders, ground handlers, and customs clearance agents,” he said.
We get involved in activities such as advocacy, lobbying, and campaigning – but that’s just one side of the coin. The other side of the business we’re involved in, deals with the development of standards for the aviation industry
As a trade association that represents and serves the airline industry, IATA’s role is sometimes misunderstood by those not familiar with it. Mr. Hughes defined the organization’s core functions and responsibilities in the aviation industry, “We have three distinct components to our organization,” he began, “We are an airline trade association, a non-governmental agency, and a non-profit organization. IATA is 1500 staff strong with around 50 offices around the world. We represent 260 airlines which accounts for about 83 percent of global air traffic. To give you an overall view, we get involved in activities such as advocacy, lobbying, and campaigning – but that’s just one side of the coin. The other side of the business we’re involved in, deals with the development of standards for the aviation industry.”
“Basically, we bring the key players of the industry together to develop standards. On the cargo side, we deal with many aspects including dangerous goods such as the shipping of lithium batteries. We play a neutral role in the affairs of the industry, seeking to create consistent global standards where applicable, and support overall industry efficiency.”
Setting Standards: Achieving Common Ground
One of IATA’s chief priorities is to support industry transparency and efficiency by implementing standards across the board in a consistent and neutral way. “We bring together all the key industry stakeholders under one objective: to create a seamless system, and making it more transparent for the end consumer, shipper, and passenger –anyone who benefits from this arrangement,” Mr. Hughes said.
Setting uniform standards for a large group of carriers can pose difficulties, as some airlines are more vocal than others, and have different approaches and policies. However, IATA has leverage, in its neutrality, to mediate between multiple carriers and handlers, to find areas of common ground, particularly when involving the setting of security standards. “The more diverse the standards, the more likely errors can happen. For instance, in the area of ground handling, there could be many different versions of Service Level Agreements (SLAs).” Mr. Hughes said.
Because of our neutral stance, we will look for areas of commonality in the different documents, and create standards based on the areas which have common ground. After all, the entire goal is to give consistency to the system.
Another aspect of the organization is to constantly help assist airlines in the implementation of standards and create a common understanding between different entities in the aviation industry. “As an airline trade association, we have to be aware of our responsibilities to the whole industry. We recognize that we need to support everybody from the starting grid and throughout the race, there may be some who are still on the first lap whilst others are further on and we want to be with them as well. We are in the business of simplifying procedures, through the careful calculation and measuring of performance – in any area that efficiency can be derived. Shippers and passengers can then get good cost-efficient service, while operators get a safer and consistent service standard. Ground handlers can also benefit by investing in common training standards. This is a win-win situation for all,” Mr. Hughes said.
“We aim to become a multi-speed trade association. We don’t manufacture and invest in aircraft, nor do we procure customers. We don’t generate the business and we don’t fly the business. Our role is chiefly to facilitate efficiency.”
The Case with e-AWB: Benefits and Limitations
The air waybill is an important document that serves as a contract between shippers and carriers. The aviation industry has used paper airway bills to process cargo for a long time. Currently, IATA is actively campaigning for the implementation of electronic air waybills, aka e-AWBs. The adoption of this electronic document will greatly reduce the dependence on human labor, which decreases the likelihood of errors and delays caused by the processing of paper documents. “We are actively campaigning for the implementation of e-AWBs between the freight forwarder and the carrier. A complex cargo shipment may require as many as 30 documents to be completed. So e-AWBs and the broader vision of e-Freight will improve the quality of information. This in turn will speed up cargo processing from origin to destination. This would be a win-win scenario for carriers, freight forwarders, ground handlers, and customs clearance agents, as it lowers the cost needed to print process and manage dozens of paper documents. The accurate information contained in e-AWBs can support efficiency through the reduction of waiting times and improves the level of customer service in the air cargo industry.”
There are some obstacles that hinder the industry’s aim in increasing the adoption of e-AWBs across the board. “About 80 percent of the worldwide cargo volume occurs on routes underlying an international treaty compatible with e-AWB. These international treaty conventions provide the regulatory framework under which the international cargo shipments take place. The treaties outline the liability limit supported by a carrier when transporting cargo.”
There are typically three conventions in force which cover aviation and each has components related to cargo and affect the outline use of AWBs
“There is the 1929 Warsaw Convention (WC), which demands the use of only paper air waybills; The Montreal Protocol 4, which amended the paper AWB clause in the WC treaty to support its electronic version; and the 1999 Montreal Convention, which grants the use of e-AWB. Since the Warsaw Convention requires the use of paper AWB only, paper documents must accompany the cargo from origin to destination, and carriers who fly on routes subject to the WC must present paper documents only. On the other hand, MP4 and MC99 allow the use of e-AWBs.” Mr. Hughes said.
“Both origin and destination country must have ratified the same treaty for it to apply for shipments between those countries and thus it governs all aspects of the regulatory regime applicable including liability limits. For countries such as Thailand, who are not party to any treaty, in order to adopt e-AWB, its domestic laws have to accept electronic contracts. Airlines, too, must be able to support the technology required for producing high quality and accurate electronic messages. Also, not all customs clearance agencies take electronic documents; therefore IATA is still facing a challenge in some countries to help them understand the advantages that e-AWBs bring to the table.”
Mr. Hughes reiterated the benefits of adopting e-AWB. “We want to reach out to shippers, assure them, and provide them with the best possible product. We believe that shippers are best served by having all the information flow in advance of the cargo. It just spells efficiency, when the shipment is at origin, but has already been pre-cleared and processed in advanced at destination. We want cargo to be able to flow through quickly. Plus, it’s cost-effective, customer friendly, reliable, and above all, efficient.”
Making its Presence Known
Air cargo’s achievements do not go unnoticed as its influence stretches far as 35% of global trade by value is transported by air. Still, Mr. Hughes believes that air cargo should make its successes more visible. “As an industry, we tend to keep quiet when things go well rather than promoting or publishing our achievements. After all, air cargo of which we’re part of is a wonderful industry. In addition to supporting the global economy, air cargo transports valued drugs and vaccines which save lives. Air cargo is absolutely critical to every national economy and we should be more vocal about what we do, how important our roles are, and how much progress we have achieved so far in the aviation industry,” said Mr. Hughes.
Mr. Hughes rounded off the interview by saying, “IATA’s role in this great industry is almost like the lubrication that helps the industry run and operate smoothly with less friction. This responsibility means that we have to be good listeners and excellent facilitators. We have to find ways to bring various parties together, listen to them, and find as much common ground as possible,”
He couldn’t have been more clear when he said, “In an industry that is as complicated as aviation, with efficiency – everybody wins.”