At the just concluded Aviation Cargo and Export Conference (CHINET 21) organised by Atqnews, stakeholders took a critical look at how aviation cargo can further be developed to boost export.
The CEO, Mainstream Cargo Limited, Mr. Seyi Adewale, one of the major speakers at the conference x-rayed aviation cargo both in the domestic and international scenes presenting recipes on how to develop and grow the air cargo value chain.
Adewale in his paper, ‘Growing Air Cargo Value Chain,’ said it was necessary to x-ray air freight both from the domestic and international perspectives because both are at different stage(s) of growth and development with the associated needs also slightly different.
Domestic Air Cargo
Starting from the aspect of airport infrastructure, the cargo expert pointed out that since airports are critical for the movement of air cargo, connecting-the-dots in moving mostly agricultural produce is a veritable need.
He noted that as at date, many agricultural products or farm produce are moved via road particularly from the north / middle-belt region of Nigeria to its southern region and vice versa.
In view of this, he said there was the need to encourage and support the state governments to build this infrastructure to grow the affected state economy, generate Internally Generated Revenue (IGR), and create jobs noting that supply creates its own demand.
Adding that to support the needs of the domestic airports, good and effective cargo warehouses within and around these airports were necessary, Adewale averred that the current opportunity within the airport itself can be explored using Lagos domestic airports as an example.
“Does MM2 or GAT have a good/ large storage, sterile, or temperature regulated warehouses to hold perishables, pharmaceutical products, etc within?” he asked.
“Secondly, as a guide the imminent Lagos Airport around Ibeju Axis/ Free Zone axis of Lagos State need to plan for the construction of a good cargo warehouse with temperature regulated modular storage assets in order to support the investments of businesses/ entrepreneurs that have invested in excellent storage centre and warehouses along the Lekki-Epe Axis, Free Trade Zone Axis and Lagos-Ibadan Expressway Axis,” he advised, noting the good access from Sagamu.
Continuing, Adewale pointed at the need for a dedicated cargo airline saying that as at today, “we do not have dedicated Air Cargo Airlines operating within the domestic airports.
“Allied Air appears to be the only cargo airline attempting to bridge this gap albeit not as efficiently as one would like.
“Even the airlines most preferred route (LOS-ABV-LOS) is at the instance of a government parastatal that needs its frequent services in/out of Lagos-Abuja route and only looks for added opportunities for its return flight back to Lagos.”
He regretted that when air freight transport opportunities occur, freight forwarders and businesses seek air (cargo) charter with lots of processes that make it inefficient: sourcing cargo aircraft, signing agreement, getting the Nigerian Civil Aviation Authority’s (NCAA’s) approval, liaising with the Federal Airports Authority of Nigeria (FAAN) or airport operator, handling agreement including equipment rentals, and the likes.
The cargo guru posited that if Nigeria has at least two approved and licensed air cargo airlines operating in the domestic side, they will be busy all year round and this could be embedded with West Africa Regional air cargo flight. “We need to highlight and emphasise these needs to aviation investors,” he said.
He posited that ground handlers in Nigeria can acquire and operate cargo planes for the purpose of air freight and thus provide this domestic air cargo service.
“ This will even largely benefit their quest of enjoying tax, forex and other incentives enjoyed by the airlines (especially international) as they could integrate their handling services with this,” he noted.
Adewale also identified other support needs that have to do with proper packing and packaging of shipments that are air bound.
He stated that having only one up-to-standard product or produce packaging company effectively existing for air cargo within Nigeria and based in Lagos leaves room for unspecialised, untrained artisans who fill in this space and significantly capitalise on the loopholes or gaps within the value chain.
While appreciating their efforts, he said it was not efficient because it lacks the capacity to grow the sector.
“The time is now to get organised and ensure we have good and effective commodity or product packaging companies with accreditation/certification situated around or within the airport area.
“This will be a game changer within the air cargo business and thereby assist cargo airline operators to be more confident to move shipments (especially Perishables and Dangerous Goods by air). Air Cargo has its operating model, and this ought not to be compromised due to local limitations,” he stated.
Adewale also said the sector needs a skilled workforce certified to work in each state operating air cargo, pointing out the limitation usually seen during Hajj Operations across the country when many unskilled hands are co-opted into the air cargo operations across the Hajj operating airports.
“They are quickly given two to three days of fast tracked training that in my view are inadequate to ensure a future safe and proper air cargo operations across the country.
“This opportunity could be explored by FAAN since they have a training centre in Lagos. They could choose other strategic airports within the country to do the needed training certifications of airport operations staff.
“This is more instructive because their role may be limited in a post airport concession regime that appears to be in the offing. This could be one of their major value additions in the post concession era,” he posited.
The Mainstream Cargo CEO further adduced that only licensed freight forwarders should operate in the air cargo value chain, considering that freight forwarders are critical facilitators of air cargo.
He said: “There must be a robust and efficient way to ensure only licensed freight forwarders operate within the value chain.
“Indeed, passenger airlines operating air cargo to support their revenue drive attempt to sign off only with known cargo intermediaries and agents, but this is not enough.
“The monopolistic approach must be jettisoned to allow a more transparent, open space for all eligible freight forwarders to participate as direct cargo agents.
“I believe the drive for one-time huge revenue payment is the primary incentive to these domestic passenger airlines.
“The expectation that more cargo airports will be functional will allow freight forwarders to expand operations across the country and grow the business since they will now be expected to source for air cargo to meet their operating cost and profit thereof.”
The CEO noted that with this development, expectedly, major supermarkets will procure their services mostly for fresh produce and product distribution across the country.
This, according to him, could also help in decision making of the major supermarkets to open shops in other locations other than Lagos, Abuja, Port Harcourt, and Kano.
International Air Cargo
Adewale noted that international air cargo operations is a more developed aspect of the Air Cargo business in Nigeria, however, he harped on the need for reduction of carbon emission as contribution to air cargo value chain.
“What is the carbon emission level of air cargo aircraft deployed to Nigeria? What is the carbon emission level of the various aircraft handling equipment operating within our airports?” he asked, stating that this ought to be investigated to enable us to contribute our quota to the carbon emission reduction drives globally.
This in his view will indeed assist Nigeria in benefiting from global incentives to nations supporting this objective.
Also coming from the health angle, he noted that many of our human resources work within and around these equipment and aircraft and non-consideration to reduce carbon emissions could indirectly impact on their wellness in the long run.
The CEO opined that Nigeria ought to even contribute its quota in respect of mitigating global warming, noting that many of the weather and nature challenges experienced in the country could be linked with this global warming challenge.
Noting that this erodes value, capital to the whole polity/ economy in the long run, he therefore called on the government to institute a task force to manage this important aspect of our livelihood as a nation and join the global conversation regarding a safer and more secured air space.
He added that incentives could be given to cargo airlines and handling companies who have a robust plan to reduce their carbon emission, stressing that this is a major value contribution to the whole of society and must not be trivialised.
Another air cargo booster according to the CEO is the need to create, build and develop many export processing zones/ centres (EPZ) across the country and that are proximate to the respective international airport.
“This is very important for the international transportation of fresh farm produce and perishables. The strategy is to process commodity or farm produce at proximate areas to the airport area and ship them directly to the tarmac for effective (air cargo) exportation.
“This also ensures that we are integrated to the global supply chain and also allows for economic diversification as seen as the major policy direction of the Buhari administration,” he explained.
He also urged the state and federal government to develop more export development programmes that encourage investments from multinational companies.
Adewale equally urged the major handling companies to work on their respective Import & Export Infrastructure regarding the storage of temperature sensitive commodities or products.
He warned that the issue where cold rooms become non-functional must not be tolerated, saying that this would be a major value addition to air cargo business in Nigeria and thereby assist importers and exporters to make critical decisions, especially airlines, to accept other categories of cargo in and out of Nigeria on a consistent basis.
The cargo expert further said that ‘desk clearing’ would be vital especially in the air cargo clearing process.
He therefore urged the Nigeria Customs Service (NCS) in its consistent improvement to go a step forward to allow desk customs clearance especially for known shipper.
He regretted that the Nigerian system does not presently allow known shipper, saying it slows down the cargo clearing process and advised that this could be worked upon alongside.
Dignitries at the just concludeed Aviation Cargo & Export Conference (CHINET 21)
Second from left, Seyi Adewale, CEO, Mainstream Cargo Ltd.