Air cargo in Africa has played an important role in enhancing intra-African trade and building up economic success. According to ICAO’s forecast in 2016, planned air traffic in Africa Compound Annual Growth Rate (CAGR) will get to 2.2 percent Freight Tonne Kilometer (FTK) by 2042 while the global air cargo will rise by 4.2 percent each year.
There exists however several barriers to this growth of the air cargo business in Africa. There are also opportunities to improve Africa’s air cargo business, especially with the support of a cargo management and cargo revenue accounting software that can help in improving the movement of air cargo and optimise revenue protection.
Air cargo in Africa takes 1.7 percent of the world’s air cargo. According to International Air Transport Association (IATA), there has been immense growth over the years in Africa’s air cargo. At the 2019 Aviation infrastructure for Africa gap analysis workshop, Dr. Olumuyiwa Benard Aliu, the former ICAO Council President, said, “It is especially urgent for Africa to address its aviation infrastructure gaps, given high levels of awareness of how air connectivity has become such a unique and indispensable catalyst for socio-economic growth on this continent”.
The countries in Africa where air cargo traffic is expected to rise are South Africa, Ethiopia, Kenya, Nigeria, Ghana, and Mauritius.
Air Cargo Challenges In Africa
Cargo Terminal Congestion – During the Covid-19 pandemic, cargo terminals have been overwhelmed with congestion of uncleared goods. Priority has been given to transportation of medical equipment, medicines and vaccines. Customs are overwhelmed and are working round the clock to clear the cargo terminals.
To improve the operations of the cargo terminals, the airlines need to deploy new technologies to increase the operational capacity by managing the shipments clearance.
Financial problem is one of the major challenges faced by air cargo during the Covid-19 outbreak. Many airlines in African countries have been affected financially by the pandemic. For example, in Mauritius the airline has experienced erosion of the revenue base. The airline has financial challenges as it reported a loss of MUR 9.5 billion for the year ending March, 2021. To survive in the crisis, the airline is laying off employees to cut cost and has entered voluntary administration to help meet its financial obligations. The financial challenge can also be addressed by partnering with other airlines.
Inadequate Infrastructure – Many African countries do not have proper infrastructure for freight terminus, runway, types of equipment for handling cargo, and storage facilities for goods such as temperature-controlled depots at airports for perishable goods. The success of the cargo business in Africa will be attained by heavily investing in airport infrastructure.
Currently, Addis Ababa, Cairo, Johannesburg, and Nairobi are some of the hubs in Africa with developed infrastructure. Lagos provides very important connectivity for African countries but the infrastructure is still poor. Therefore, investing in infrastructure is very key in improving the air cargo business in Africa.
High Operating Cost
The high cost associated with operating an airline poses a challenge for many countries in Africa. Costs include insurance, aviation fees and taxes, maintenance, training personnel and fuel. Financial support or a review of the applicable costs from governments and concerned authorities in African countries is crucial to overcome the high costs of operations especially during this particularly tough times of COVID-19 pandemic.
Safety and Security
The aviation industry in Africa is faced with numerous safety challenges. Africa is reported to have a high accident level with an average of accidents being nine times higher than the global average. Full implementation of the IATA standards safety assessment program may help to enhance the safety of air cargo in Africa.
Improving Cargo With Digital Technology
Technology plays an important role in planning routes, researching, data analytics and logistics in general. Having a quality software application to aid in scheduling and planning would be beneficial to air cargo in this continent.
Cargo management software ensures that shipment becomes hassle-free with limited manual intervention, reducing human errors, and it also guarantees efficient management of the shipment. The cargo system achieves this by streamlining cargo operations including air cargo reservations, air waybill issuance and handling and ensuring productivity gain as well as leveraging business opportunities with visibility into cargo capacity and allocation. It also offers real-time information for tracking shipments with no delay.
Adopting a cargo revenue accounting software, either in addition to the cargo management software or as a stand-alone solution, helps the air cargo industry to efficiently manage the accounting process through advanced sales reconciliation, automatic proration and accurate interline billings. It also provides extensive reporting capacities for decision-making which is crucial in guaranteeing the success of an air cargo business.
However, digital technology is prone to hacking. When installed, measures should be put in place to ensure that information security is maintained. Cyber threats are common around the world. Therefore, for these systems to be useful, security and safety measures need to be put in place and contracted from reliable and trusted system providers.
Air cargo in Africa is now experiencing liberalization of air space given the adoption among African States of policies which promote intra-African air trade. Even though air traffic has grown over the years, it has experienced challenges such as cargo terminal congestion, inadequate infrastructure, high operation costs, and safety and security. Some of the options for improving air cargo in Africa must include the development of infrastructure and adoption of technology which will help in cargo management and implementation of IATA standards safety assessment program to enhance safety in the industry.