Tuesday, June 15, 2021

Investment Group and Logistics Lobbyists Call for Action on Air Freight Expansion

Partners Turn to Government for Aid to Growth of Sector
Shipping News Feature
UK – What is being termed a 'Call for Action' to facilitate the growth of the air cargo sector has been submitted to the government by Aberdeen Standard Investment’s AIPUT fund (Airport Industrial Property Unit Trust) and Logistics UK.

The partners stress the importance of expanding the sustainable and economically-vital air freight industry following the policy roundtable discussion they jointly hosted in February. That forum discussed steps that need to be taken by both government and the industry to secure a prosperous future for UK air freight, which currently accounts for 40% of UK imports and exports by value.

The talks involved representatives from across the aviation industry including the warehousing sector, airlines, ground handlers, shippers and airports. Logistics UK has sought to harness the views of its members, working with AIPUT to set out the steps the industry believes are necessary to assure the future strength of UK airfreight and best position for the industry to help Britain reinforce its position as a leading global trading nation in a post-Brexit world.

Aviation they say, which has been devastated by the effects of the virus, will play a vital role in securing new opportunities and growth post-Brexit and also in the UK’s recovery from the pandemic. Air connects Britain with the world, linking British products and expertise with billions of potential buyers overseas. Pre-pandemic, some 49% of the total value of UK exports outside of the EU travelled by air, through a combination of dedicated freighter flights and belly hold passenger services.

The pair say that throughout the pandemic, and since the end of the Brexit transition period, the air freight industry has stepped up to the challenge, providing invaluable support to both the economy and the lives of everyone across the UK, through the rapid expansion of e-commerce and the movement of vital pharmaceuticals and medical equipment. In 2018, air freight services contributed £7.2 billion to the UK economy, supporting 150,000 jobs. Nick Smith, Fund Manager at AIPUT commented:

“We are delighted to partner with Logistics UK in presenting this detailed ‘Call for Action’, which if acted upon will ensure that the vital UK air freight sector can fulfil its maximum potential in helping UK plc to enhance its position as a major global trading force in the context of our emergence from both Brexit and Covid. Now is an opportune time for the government to evidence its commitment to the industry and support its long-term sustainable growth.

“Air freight services contribute £7.2 billon to the UK economy and support 151,000 jobs. There is a clear and pressing need for further recognition of the strategic importance of this sector, which plays such a pivotal role in facilitating trade, investment and job creation.”

The eleven key priorities identified for both government and industry as detailed in the Call for Action are:

  • Positive perception of aviation: For the government to give a clear signal of its support, valuing it as a sector of national strategic importance and a crucial component of a Global Britain
  • Joined-up approach - passenger and freight: government support needs to be targeted at aviation in general, avoiding prioritising one sector above another
  • Infrastructure: The UK needs to deliver the highest quality transport and real estate infrastructure serving its airports in order to fully support a vibrant, sustainable and globally competitive industry
  • Funding: government to give concessions for Air Passenger Duty (APD) and business rates to provide respite
  • EU Exit: Negotiations need to be accelerated on traffic rights to open up key markets and routes, in addition to a long-term sustainable plan for freedom rights so that cargo can continue to move efficiently
  • Consumer behaviour: Digitisation in air freight is to be supported as it is essential to the growth of the new economy - the UK is currently one of the top three online shopping nations
  • Innovation: The industry and government must continue to drive innovation (e.g. automation) so that the UK airline industry can remain efficient and competitive
  • Freeports: These must be structured in a way that they become a catalyst for new inward investment, jobs and skills growth, rather than diverting activity from elsewhere
  • Regulatory relaxations: Appropriate planning flexibility at ports for warehousing and connectivity infrastructure is needed to support continued investment and flexible supply chains in air freight, facilitated by the sustainable expansion of airport capacity
  • Decarbonisation: A commitment from government to support research and development in aviation will help the industry decarbonise as quickly as possible through a combination of Sustainable Aviation Fuel and new technologies for electric and hydrogen aircraft that are fit for the future and cargo handling
  • Air freight growth: Industry should be brave and more progressive, putting its vision into practice; leveraging its creative ideas, energy and innovation. Industry needs to know now more than ever that the government is fully behind the sustainable growth of UK air freight

Elizabeth de Jong, Director of Policy at Logistics UK observed that support for UK air freight, as it enters a new era outside the European Union and recovers from the global pandemic is crucial, and it was essential to prioritise the steps needed to enhance the role of air freight in a post-Brexit world. She concluded by saying how vital air freight is to the UK economy and was looking to the government to work with the industry to realise its full potential as a cornerstone of global Britain.