IATA: What’s the value of air freight?

George Anjaparidze, senior economist, IATA, shows how a small increase in air cargo connectivity reaps big rewards

A recent study commissioned by IATA has revealed that a mere one per cent increase in air cargo connectivity is associated with a 6.3 per cent increase in trade. The report, Value of Air Cargo: Air Transport and Global Value Chains, looks at what air freight means to the global economy and the factors that allow countries to join Global Value Chains (GVCs). These are broadly defined as the people and processes involved in the manufacture and delivery of a product, regardless of location. The WTO has estimated that GVC trade increased its share from 36 per cent in 1995 to 49 per cent in 2011.

The study, produced by Developing Trade Consultants, employs two main indexes: the Air Trade Facilitation Index (ATFI) and the e-Freight Facilitation Index (EFFI), and shows that countries that perform better on these indices were more integrated into GVCs. Hong Kong scores well on the EFFI rating, coming third behind the United Arab Emirates and Denmark.

The report also highlights the fact that more cooperation is needed regarding the processing of documentation, especially when it comes to communication between border agencies.

For more information, go to  www.iata.org/publications.