CargoConnect ACAAI 2016 special edition

www.surecommedia.in

Technology: The Right Ingredient For Air Cargo

Acaai 20162016 `20 ACAAI CONVENTION ISSUE

A new dawn in airport infrastructure

Air freight feels the new buzz Indian Air Cargo: The Anticipated Colour

Priority Cargo: Right Here, Right Now

India’s neutral cargo airline Your reliable airline partner for air cargo solu�ons, scheduled network and air cargo charters.

Quikjet Air cargo charters- Boeing 737-400 available for charters, with addi�onal capability and experience is carrying DG and Hazmat, urgent shipments, quick take off within 04 hours of request.

Quikjet Scheduled network – Providing overnight premium air connec�vity on a scheduled network.

Aircra� on lease – plan a schedule and operate the aircra� on specific sectors, customized especially for your business.

2

Contact us for charters, dedicated aircra�: Email: commercial@quikjet.co.in Call: 080- 22487172, www.quikjet.co.in

CargoConnect - ACAAI 2016

Sales Agent- North India

NAMASTE INDIA AVIATION PVT. LTD.

Passenger Schedule Ex-DEL Flight No.

Origin Dest

Freighter Schedule Ex-DEL

STD

STA

Days

Aircraft Type

Capacity Per Flight

ET-687

DEL

ADD

0310

0730

Daily

B-737

2 Tons

ET-689

DEL

ADD

0930

1330

Daily

B-737

2 Tons

Flight No. ET-3739

Origin Dest

STD

STA

Days

Aircraft Type

Capacity Per Flight

DEL

0830

1330

3,6

B-777-F

100 Tons

ADD

124 FF, Satya Niketan Market, Opp Venkateshwara Collage, New Delhi-110021 Tel. : +91-112410 9500 / 2470 9700 E-mail: cargosales@namasteindiaaviation.com Ankit Sharma Nisha Mahajan Manpreet Singh +91-9818422663 +91-9818422773 +91-9818443855

Mujeeb Rana Neelam Kumari +91-9818403266 ACAAI 2016 -+91-9818451644 CargoConnect 3

Contents

ACAAI CONVENTION ISSUE 2016

Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent Sana Husain Feature Writer Tariq Ahmed Nicin Varghese

40

10 COVER STORY

Air Freight Feels the New Buzz

FEATURE

SPECIAL FEATURE

Indian Air Cargo: The Ancticipated Colour

INTERVIEW Hemant Bhatia, President, Acaai ..............80 DEEPAK KAPOOR, Executive Director, Air Cargo and Logistics, CONCOR ................82 Huned Gandhi, MD, Air And Sea Logistics, DACHSER India Pvt Ltd ..........................83

Technology: The Right Ingredient For Air Cargo ......................................60

Vinod Anand, Managing Director, Akanksha Global Logistics Pvt Ltd ..........................84 Sunil Arora, Director, Delta Freight and Secretary General, ACAAI .......................85 T A Varghese, Director, Aroscan Cargo Trade Pvt Ltd and Vice President, ACAAI ............86

Priority Cargo: Right Here, Right Now ..........................66

UPFRONT ......................................6 REPORT ...................................8, 87 PHOTO FEATURE ........................88 EVENTS .......................................89 GUEST COLUMN .........................90

A New Dawn In Airport Infrastructure ....................73

TOTAL PAGES: 92 (inclusive of cover)

Director Marketing Ajeet Kumar Manager Marketing Niti Chauhan Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad Mehuli Choudhury Marketing Support Sheetal Singh Administration Vipin Marwah Lavish Thakur Senior Designer & Visualiser Shaique Ahmad Designer & Visualiser Mayank Bhatnagar All material printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same.

CargoConnect is printed, published and owned by Smiti Suri, and is printed at Compudata Services, 42, Dsidc Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014.

Editor–Smiti Suri

SURECOM MEDIA

6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 9711383365, 9810962016 Email: cargoconnect@gmail.com info@surecommedia.in Website: surecommedia.in

Upfront Phee Teik Yeoh, CEO, Vistara (a TATA SIA JV) “India has a prime geographical position on cross roads of North Asia-Africa /SAARC/Middle East and SWP/ East Asia-Europe/East America to rightly become a global hub. It is important to allow Indian carriers to take traffic to and from hubs within India in order to strengthen both Indian aviation and Indian Airlines.”

“The Indian market as of now is booming and the economy is very good.

India is a very lucrative hub of cargo where so many carriers operate and the competition is so high.”

Anwar Mumtaz, Incharge-Cargo Operations, Pakistan International Airlines

“IATA forecasts that India is going to be the third largest aviation market within ten years.

Certainly, having an aviation plan like this is a step in the right direction. Indian aviation will support 19 million jobs and $170 billion in GDP. We see an enormous potential for the airlines and of course, for aviation to play a vital role in connecting the Indian economy to the world.”

Tony Tyler

Director General, International Air Transport Association (IATA)

LALIT SETH,

Director, Eastern Cargo Carriers (I) Pvt Ltd Inspite of all the odds and challenges, air cargo trend has not really been affected to a greater extent, which is significant to the growth in coming year. With the china slowdown in its trade and revenue, opportunity for air cargo in India has increased. Markets like Iran, Iraq and Brazil opening gradually indicate the brighter side for the coming year. As per IATA, the expected CAGR Compound Annual Growth Rate will be 4.1 per cent in the next five years.

RICH CORRADO, President, Airborne Global Solutions “Markets that have been experiencing high growth such as intra-China will see an up-gauge of aircraft as 737s will lead to 757s and 757s will lead to 767s. As these markets mature, hubs may develop with larger aircraft and less point-to-point flying.”

6

CargoConnect - ACAAI 2016

Martin Roos, Managing Director, DSV Air & Sea Pvt Ltd “I will describe the business environment and working culture as:

vibrant, dynamic, ever surprising, ever changing, flexible, chaotic, requiring patience, reliant, adaptable, bureaucratic, exotic and last but certainly not least: absolutely lovely and uniquely Indian!”

“‘Make in India’ is the new national programme to develop the economic growth of the country by enhancing and improving infrastructure, boosting manufacturing, easing business through de-

opening up Foreign Direct Investment (FDI) in construction.”

licensing and deregulation and lastly,

Huseyin Ceyhan Regional Cargo, Director, Asia Pacific, Turkish Airlines

NICK PLATTS, Head Of Cargo, Heathrow Airport “Air cargo will always offer the speed, security and reach that other modes can’t.”

I​ NDIA will displace the United Kingdom to become the WORLD’S THIRD LARGEST AVIATION MARKET BY 2026, the International Air Transport Association (IATA) has said.

IATA, which represents some 265 airlines comprising 83 per cent of global air traffic, expects 7.2 billion passengers to travel in 2035, a near doubling of the 3.8 billion air travelers in 2016. These findings are part of IATA’s 20-year air passenger forecast.​

BERTRAND SCHMOLL, CHAIRMAN AND CEO, ECS GROUP “India is the foremost prospective market for growth. In India you have a young population and plenty of scope for development.”

ACAAI 2016 - CargoConnect

7

REPORT

The Global Cargo Market

C

argo, (the collective term used to refer to freight and the carriage of mail) is a vital activity for the global economy. According to the data from the International Air Transport Association (IATA), goods carried in aircraft represent two per cent of freight tonnages (across all modes of transport) but 35 per cent in value, i.e. $18.6 billion per day on average. High-value goods such as electronics or pharmaceuticals require air transport, which is much faster than land or sea.

This cyclical activity depends on the state of the economy.

Between 2003 and 2013, the volume of tonnages (measured per kilometer) transported worldwide rose at an average rate of 2.6 per cent per year, but there are significant disparities depending on geographical areas: Europe, which accounts for a fifth of the global cargo market, experienced a reduction in its tonnages at the start of the 2010s, following the 2009 financial crisis and is still struggling to regain its pre-crisis level of economic activity.

Ranked ninth in the world according to the Airports Council International (ACI), Paris-Charles de Gaulle Airport represents a little more than two million tones transported.

World air cargo (freight and mail) will grow 4.7 per cent per year through 2033 RTKs in billions 800

History

Forecast

Average value of one tonne of air cargo.

600 400

2.6% growth per year

200 0

2003

2008

2018

2013

2023

2028

2033

Average annual growth, 2013-2033 High 5.5%

Base 4.7%

Source: Boeing World Air Cargo Forecast 2014-2015

The world’s top ďŹ fteen cargo airports in 2015 (in thousands of tonnes) 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

Hong Kong Memphis Shanghai Pudong Anchorage Seoul Incheon Dubai Louisville Tokyo Narita Paris-CDG Frankfurt Taipei Miami Los Angeles Beijing Singapore

Source: ACI Europe Statistics 2015

8

CargoConnect - ACAAI 2016

60 per cent

Low 4.0%

4,460 t 4,290 t 3,275 t 2,630 t 2,595 t 2,506 t 2,350 t 2,122 t 2,090 t 2,076 t 2,021 t 2,005 t 1,938 t 1,889 t 1,887 t

AVERAGE ANNUAL GROWTH in tonnages throughout the world forecast for 2015-2030.

SHARE OF CARGO CARRIED in the holds of passenger aircraft.

Last year, cargo traffic increased by 2.2 per cent worldwide, but forecasts by the American aircraft manufacturer Boeing, suggests that the global cargo market will benefit from more sustained annual growth in the future: 4.7 per cent on average between 2014 and 2030.

This should lead to a two fold increase in global tonnage by 2033.

This growth will be driven primarily by Asia, emerging countries in Africa and Latin America. Asia-Pacific airlines already account for 39 per cent of global air cargo.

For the last decade, there has been a movement fuelled by the quest for greater competitiveness; major airlines are increasingly using the holds of passenger aircraft to replace allcargo flights. Currently, approximately 60 per cent of cargo is already carried by passenger aircraft and this proportion is expected to increase.

TM

World-class logistics that connect the world.

Expan’s network reaches as far as your business wants to grow. Our offices are present in almost every major city of India, Asia-Pacific, Europe and Americas. Offering you world class services at right prices.        

Domestic and International Express Solutions Domestic Surface Distribution National Freight International Air Freight Ocean Freight Project Cargo Warehousing Worldwide Exhibitions and Fairs Creating trust, building values.

Corporate office: A 50/4 Mayapuri Phase I, New Delhi-110064 Tel: +91 11 4899 4899 Email: info@expan.co.in An ISO 14001:2004 company

cover story

Air frei feels the new After the Indian aviation sector underwent liberalisation in the late nineties, there was a phase that witnessed a flurry of private service airlines entering the industry. With it came the revival period of the Indian air cargo industry that had been thriving in cold sweat for quite a long period of time. Once again, things started falling into the right places. And slowly but certainly, the robust policy regime created by the Indian Government started to act as the blood-line of this industry.

Sana Husain and Tariq Ahmed analyse facts and figures after speaking to the industry experts in a quest to understand and evaluate the real status of the air logistics scenario in India

10 CargoConnect - ACAAI 2016

cover story

ght

buzz

“We have to develop from an EGOsystem where every company works only for itself to an ECOsystem where we all join forces – in order to stay competitive.”

Dieter Hulick, Fraport AG

ACAAI 2016 - CargoConnect 11

cover story

I

n the study on the economic impact of Emirates Airlines operations on the Indian economy by the National Council of Applied Economics Research (NCAER), the Director General noted that a well managed civil aviation infrastructure and efficiently-run, competitive airlines are a must in today’s globalised world. The presence of such infrastructure and airlines in India can bring down transport and communication costs, promote commercial and cultural activity, create jobs and ultimately unify people and markets.

Oxford Economics, in Economic Benefits from Air Transport in India, writes that air transport to, from and within India creates three distinct types of economic benefit.

Typically, studies such as this focus on the ‘economic footprint’ of the industry, measured by its contribution to GDP, jobs and tax revenues generated by the sector and its supply chain. But, the economic value created by the industry is more than that. The principal benefits are created for the customer, the passenger or shipper, using the air transport service. In addition, the connections created between cities and markets represent an important infrastructure

asset that generates benefits through enabling foreign direct investment, business clusters, specialisation and other spill-over impacts on an economy’s productive capacity.

Contribution of aviation sector to India’s economy Association of Private Airport Operators noted that the Civil Aviation Sector is of national importance as it contributes significantly to the process of development of the country with as a result of enhanced productivity and efficiency in the movement of goods and services by providing access to safe, secure and affordable air services and world class infrastructure facilities. The most important contribution aviation makes to the economy is through its impact on the performance of other industries by enhancing efficiency and competitiveness by offering most efficient and fast transportation facility.

This sector also contributes substantially to the GDP. Civil Aviation sector epitomises modern, resurgent and fast developing Indian economy which is right on track to be a super power of the world in the near future.

The contribution of Civil Aviation sector in providing employment opportunities directly, indirectly and induced is immense.

This sector gives fascinating opportunities to an array of industries such as airports, airlines, cargo, MRO, ground handling, ANS, retail business, real estate, etc. One of the important induced effects of air transport is on the tourism sector of an economy.

Oxford Economics, in Economic Benefits from Air Transport in India, suggests that the aviation sector contributes INR 330 billion (0.5 per cent) to Indian GDP. The aviation sector supports 1.7 million jobs in India.

The average air transport services employee generates nearly INR 1.3 million in GVA annually, which is around ten times more productive than the average in India. The aviation sector pays over INR 87.5 billion in tax including income tax receipts from employees, social security contributions and corporation tax levied on profits.

Significant air cargo trends Anthony Brennan, Head of Air and Ocean Freight – Indian Sub Continent, CEVA Logistics says, “With customers becoming increasingly aware and conscious of the share of logistics cost to their overall cost, domestic air freight in India is being seen as a luxury, and to be used when absolutely necessity. So, in the coming years growth levels will likely

Developments in the Indian Aviation Industry

1910

1911

1934

1948

1986

1994

2003

2008

India's first commerciaI plane

Enactment of Aircraft Act

Joint stock Co-Air International Ltd set up by Govt. of India and Air India

Permission granted to Private air taxi operators

Enactment of Airports Authority of India Act.

Entry of Low cost carriers

AERA Act

1930

1950

Tata sons Ltd started Tata Airlines

Tata Airlines renamed as Air India

1932

1946

EARLY MARKET DEVELOPMENTS

12 CargoConnect - ACAAI 2016

1970

1990

2000

2010

Nationalisation of Aviation Sector by Enactment of Corporation Act

Enactment of Open Sky Act

Permission granted to Private scheduled Airline Operators

Major Mergers

1953

1990

1995

2007

STATE CONTROL

DEREGULATION AND M&A

• Safe and secure cargo at cargo terminals

• First in paperless transaction for cargo operation through web-based EDI mode

• Automation/Mechanization of cargo handling activities at AAI managed airports.

• Benchmarking parameters for cargo operations vide Citizen Charter of AAI.

• Augmentation of Infrastructure at Chennai & Kolkata Airport with state-of-the-art facilities like Elevated Transfer Vehicle (ETV) for Export Unitized Cargo and Automated Storage & Retrieval System (AS & RS) for import cargo.

• Appointed Ground Handling Agency to improve service levels at airports.

• Implementation of EDI under Customs ICES 1.5 version at Chennai & Kolkata Air Cargo Terminals.

• AAI is in the process of establishing pharma zone at Chennai & Aurangabad Airports.

• AAI is in the process of obtaining Regulated Agent (RA) Status and RA3 status for Chennai & Kolkata Airports.

• Provision of e-warehouse for e-commerce entities and express cargo handling counter are in the pipeline at various airports.

• Commissioned International Air Cargo handling facility at Trichy, Mangalore Airports and proposed at Madurai and Vizag Airports.

• Steps initiated towards e-banking/e-payment facility.

• AAI is also exploring the possibility of creating Free trade zone (FTZ) at its airports.

• Commissioned Common User Domestic Air Cargo Terminal (CUDCT) facility at Port Blair, Coimbatore, Jaipur, Lucknow (outbound), Vizag, Mangalore, Amritsar (interim), Madurai, Chennai airports and already work awarded for commissioning at Raipur, Indore & Ahmedabad Airports.

• Further, during the F.Y. 2015-16, plan to commission CUDCT at Goa, Aurangabad, Bhubaneswar, Kolkata and Trivandrum Airports.

• During F.Y. 2016-17, plan to commission CUDCT at Ranchi, Varanasi, Guwahati, Amritsar, Vijayawada, Pune, Lucknow (inbound), Tirupati, Srinagar, Surat, Bagdogra and Rajamundry Airports.

• Plan to introduce Air Cargo Community System (ACS).

• Plan to commission international courier handling facilities at Trivandrum and Trichy airports apart from the existing facilities at Chennai & Kolkata airports.

• Frequency based incentive for Cargo Freighters introduced w.e.f.

01.01.2015 at Chennai & Kolkata airports apart from the existing 20% discount in export TSP charges for lean hour transaction by exporters.

MAKE IN INDIA

cover story Yashpal Sharma

Director, Skyways Group The domestic air cargo has seen huge growth in the last five years in the country.

Backed by e-commerce and some substantial growth in domestic passenger traffic, there is abundant capacity available in the Indian skies for the movement of goods. The shift to air cargo from other means of transportation certainly means saving time but it does not reduce carbon emission. stay soft unless there are factors which emerge from time to time which necessitate change of mode of transport. I certainly do not see a consistent upward growth in the coming years but there may be modest improvements here and there.”

Yashpal Sharma, Director, Skyways Group, believes that the current market trends are a bit worrisome for almost all modes of transportation.

There is huge over supply of capacity and the same is resulting in fierce competition leading to dropping of yields for carriers almost to the point of closing down. The latest happening in Shipping industry with Hanjin going out showcases what the challenge is all about. The carriers need to re-align their capacities and work on smarter aircrafts and ships. The world tomorrow is moving to smaller cargoes from bigger ones. He adds, “There is also production moving closer to point of consumption. This bigger equipment will be tough to run for the carriers. Although in the near future, we expect the Indian market to remain strong and will see a decent increase in both,

inbound and outbound moves.”

Hemal Shah, Manager for Policy Advocacy, Transportation Logistics at the U.S.-India Business Council in Washington DC explains, “Air freight has seen a consistent rise over the years and there’s more reason to believe that this sector will see rapid growth in the coming years. The CAGR for total domestic freight traffic was recorded at 7.6 per cent (FY 2006-16) and 4.8 per cent in the international sector for the same period. The impending ecommerce boom, passing the GST bill, impetus from ‘Make in India’, India’s rise on the World Bank’s Logistics Performance Index, and ratification of the WTO Trade Facilitation Agreement position this sector favourably. The government also plans to increase the number of operational airports – including unused airstrips and underused airports- to 250 by the year 2020.

“However, some serious gaps remain. Infrastructure bottlenecks pose a massive problem. For example, to function efficiently, air cargo operators still lack access to proper warehousing facilities and storage space in some of India’s largest and busiest airports like Mumbai. Access to 24x7 Customs clearances is available on paper, but shortage of Customs officers in big airports like Chennai negate the availability of round-the-clock clearances. The rollout of the Single Window Initiative is a huge boon to the logistics industry; however a similar system needs to be replicated on the courier side. Also, further clarification is needed on FDI caps for foreign entities in investing and operating cargo airlines.”

GST and the aviation sector

14 CargoConnect - ACAAI 2016

The goods and service tax (GST) once implemented will increase the cost of air tickets and other services such as cargo transportation and aircraft maintenance. The Indian aviation industry believes that the exclusion of petroleum and aviation fuel from its ambit will continue to impact the aviation sector.

The Central government will continue to impose excise duty on five petroleum products— crude oil, diesel, petrol, natural gas and aviation turbine fuel (ATF), while the State governments will continue to impose value-added tax on these petroleum products. Hemal says, “As one knows, aviation turbine fuel (ATF) price has been an issue for a while and the industry is hoping that a flat rate be charged on ATF under the “declared goods” category. While this has been quashed by the government repeatedly, there is some hope again now that the GST is passed and that industry would be able to push to subsume a flat rate for ATF too.”

ATF contributes more than 40 per cent of an airlines’ operating cost. Jet fuel prices in India are among the highest in the world. ATF prices for domestic carriers vary at different

cover story airports across the country due to different rates of sales tax and value-added tax. The various tax components before arriving at the final price include import duty on ATF. While petroleum and petroleum products are technically under GST, the GST council comprising of the Union and state finance ministers will decide upon their induction after the final GST regime is in place. Experts believe that the proposition shall be discussed.

Jitender Bhargava, former Executive Director at Air India, said that though the tax component on air services would remain at what fliers pay as service tax, the airlines will continue to pay much higher taxes on aviation fuel. This, in turn, has to be borne by the passengers. The issue assumes importance given the NDA Government’s ambitions around the civil aviation sector. According to IATA, India’s air passenger traffic growth rate is over six times more than that of the US, which with 4.1 per cent is the second-fastest growing market in the world.

“ATF prices are very high and taxes imposed by States are up to 30 per cent and more. This makes operational cost of Indian carriers very high. So what we have to wait is to see if the Central Government can convince states to bring down taxes on ATF to the GST level,” Bhargava added.

The factors normally affecting the aviation fuel demand Indian civil aviation has experienced a greater growth rate since middle of the past decade and the domestic traffic tripled from approximately 15 to 45 million passengers in the period from 2004 to 2010. Global aircrafts fuel consumption is expected to rise by 3 per cent to 3.5 per cent and reach between 461MT and 541MT in 2036. Domestic and international operations accounts for 38 per cent and 62 per cent of global fuel consumption respectively. Due to higher rate of growth in air transportation network in India resulted in increased fuel consumption of ATF and it went up by about 40 per cent from 3.3 MT to 4.6 MT between 2005 and 2010. Fuel consumption is one of the major direct operating cost parameter in the air transport industry.

Airbus predicted that in 2003, fuel represented about 28 per cent of total operating cost for a typical A320 family operator. By 2006, fuel prices had more than doubled, meaning that fuel now represented about 43 per cent of all the operating costs. At

16 CargoConnect - ACAAI 2016

Anthony Brennan Head of Air and Ocean Freight– Indian Sub Continent, CEVA Logistics

With customers becoming increasingly aware and conscious of the share of logistics cost to their overall cost, domestic air freight in India is being seen as a luxury, and to be used when absolutely necessary. So, in the coming years growth levels will likely stay soft unless there are factors which emerge from time to time which necessitate change of mode of transport. one time, fuel extraction cost and availability had little impact on the evolution of aviation industry but today fuel conservation is one of most critical concern to aviation industry.

India in dire need of an Air Cargo Hub Andhra Pradesh is emerging as a potential hub for international trade and the measures taken by the state government are yielding results to budding exporters and importers in the region, said Alok Dwivedi, Deputy DirectorGeneral of Foreign Trade, Union Ministry of Commerce and Industry.

Presiding over a workshop, GITAM Institute of Management Principal, P Sheela said if the government concentrates on air cargo development in the country, it would improve exports. Export Credit Guarantee Corporation of India Limited (ECGC) Assistant Director Sanjeet Kumar said they were giving credit insurance cover to exporters by providing overseas investment insurance to Indian companies investing in joint ventures abroad in the form of equity or loan.

The Air India’s Maintenance Repair

Overhaul (MRO) facility at MIHAN can now cater to Airbus A319, A320 and A321 series of aircraft for maintenance following a recent approval from Directorate General of Civil Aviation (DGCA). “This is a great achievement for Air India which has got the approval for the maintenance of Airbus aircraft,” said Ashwani Lohani, Chairman and Managing Director of Air India.

Lohani added, the Maintenance Repair Overhaul (MRO) facility at MIHAN has an apron area of 60 acres. The hangar bay is ready and engine unit or testing cell is under construction and will be ready by January 2017. With the engine unit GenX and GE90 engines could be serviced. Air India also has an expansion plan to erect a workshop at the MRO facility. The workshop could be used as branded workshop for GE engines by 2018. “Till date 10 Boeing 777 aircraft have been checked and the 11th aircraft has arrived for maintenance at the MRO facility. By next year, 14 A320 aircraft can be serviced,” he added.

Air India has a fleet of 107 aircraft which are being serviced at its MROs in Mumbai, Delhi, Hyderabad and Kolkata. The MRO at MIHAN has additional capacity and Air India will be using this additional capacity to service aircraft of private sector as well. The business of maintenance and overhaul which was going to other countries could be diverted to the MRO at MIHAN. In the MRO business, air frame comprises of 40 per cent and engine maintenance 60 per cent of revenue.

Dieter Hulick, Spokesman Traffic Terminal Management - International Media, Frankfurt Airport Services Worldwide said, “In general, air freight speeds up the delivery process-both, within India and for Indian imports/exports and further opportunities will arise for Indian air carriers (both passenger and cargo airlines) as international cargo flow might be rerouted from non-Indian to Indian cargo airports.

Subsequently, jobs will be created in India and competitiveness of Indian products (‘Made in India’) in the global marketplace will increase (automotive, apparel, pharma, etc.). India is a very interesting market for us, we are observing growth of the Indian market and are seeking close contact with the industry: At this year’s Air Cargo India event, we therefore organised an ‘Air Shippers’ Forum’ with support from the Federation of Indian Export Organisations.

“The digitalisation of processes will shape

Čˆ 0- 2*-' - 1*'1 . -*0) *0- 0./*( -.ȉ

Č? Ć™$ $ )/ 0./*( ' - ) Č? * -) ,0$+( )/. Č? *' /*- " Č? *(+0/ -$. + - /$*). Č? *) -0 &$)" Č? Ć™$ + !*- -1$ -*1$ -. /$1$/4 2$/# ) -) /$*) ' ./$) /$*) Č? *)) /$1$/4 2$/# )/ Č? )& $'$/$ . Č? ..$./ )/ -0" *)/-*'' -ȇ. Ć™$

www.gsecl.co.in |

Č? #$) -$ . ) + - . Č? ' /-*)$ . Č? 3/$' . Č? *' ) $'1 Č? # -( 0/$ '. Č? "-* -* 0 /. Č? (. ) 2 '. Č? ) $ - Ćœ.

info@gsecl.co.in

cover story Hemal Shah

Manager for Policy Advocacy, Transportation Logistics, US-India Business Council The impending e-commerce boom, passing the GST bill, impetus from ‘Make in India’, India’s rise on the World Bank’s Logistics Performance Index, and ratification of the WTO Trade Facilitation Agreement position this sector favourably. The government also plans to increase the number of operational airports – including unused airstrips and underused airports – to 250 by the year 2020.

3.0

Freight Traffic (million tonnes) 25% 20%

2.5

15%

2.0

10%

1.5

5%

1.0

0%

FY06

FY08

FY10

FY12

Freight Traffic (Million tonnes ) - LHS

the industry in the years to come. The air cargo industry has to adapt to the new possibilities in order to stay competitive. Integrators have already been disrupting the market with their integrated logistics concepts for a while. The traditional air cargo process is very fragmented and characterised by many individual players – truckers, forwarders, handlers and airlines. Digital development now provides the opportunity to offer faster processes, as well as greater reliability and transparency and thus an improved service for our customers.

“But, we can only increase the overall process efficiency by putting our forces together. Besides the digitalisation of logistics processes, the need to collaborate will shape the industry in the coming years. Everyone has to be willing to exchange data, has to agree on common standards, and have to push forward digitisation. We have to develop from an EGOsystem where every company works only

18 CargoConnect - ACAAI 2016

FY14

1.35

2.53

2.28

2.19

2.28

2.35

1.96

1.70

1.72

1.55

0.0

1.40

0.5

-5% -10%

FY16 Growth - RHS

for itself to an ECOsystem where we all join forces – in order to stay competitive.

“Another development we witness is the fact that more and more cargo is delivered as built-up pallets (BUPs). The forwarders are taking over a much more dominant role in the supply chain than they used to have in the past. The current consolidation in the market for handling companies is also of great interest.

“Also the airline industry is changing. With new aircraft types like the Boeing B777 and the new Airbus A350 coming up, capacities will further grow. At the same time, we will see an even stronger shift towards belly load, as well as the launch of new routes, which today, are not yet viable. With the new aircraft types, also remote destinations will be accessible.

That will definitely put pressure on the traditional big hubs. Also, the dominance of the Middle East carriers will have an impact on cargo flows.”

The MRO facility at MIHAN comprises two hangars for wide body aircraft and narrow body aircraft. In the wide body hangar 12 ‘C’ checks can be done every year. Every three years an aircraft requires a ‘C’ check to be done. In the narrow body hangar one ‘C’ check can be done every month in a single shift of working. “The ‘4A’ check for Airbus aircraft is under process with the DGCA,” he said.

“DGCA has given approval for ‘D’ check of aircraft on May 20, 2016. With this approval ‘C’ and ‘D’ checks for all types of maintenance can be done on 777 and 320 series of aircraft

by March 2017,” he added.

Air India has signed a Memorandum of Understanding (MoU) with SpiceJet to service its fleet of aircraft. Air India is in talks with various other private carriers for tie-up to utilise additional capacity at the MRO at MIHAN.

Air cargo movement in India to pick up despite odds The Indian aviation sector has recently seen a lot of opportunities opening up for private and foreign players. For the outgoing international air freight, India has implemented an ‘Open Sky’ policy whereby any airline can transport any amount of cargo between India and other countries without any capacity constraints.

Anthony feels that firstly, from an international air freight perspective, there is a particular resurgence, where there is still the overcapacity issue, yet carriers are starting to change aircraft configurations to improve their yields.

However, on the other hand, the scenario for domestic Indian air freight is changing quite a lot and this is due to the growth of e-commerce in the country. Our domestic carriers and some dedicated freighter operators are expanding and using their belly capacity better. Generally, this has a positive impact on domestic air freight demand. The downside is that the growth levels seen in

Global reach with a personal touch

F o r w a r d i n g & S h i p p i n g | W a r e h o u s i n g & D i s t r i b u t i o n | B r e a k b u l k Te r m i n a l s

OFFERING TAILOR MADE LOGISTICS SOLUTIONS OVER ONE PROGRESSIVE DECADE

AIR, OCEAN & MULTIMODAL

ABOUT BROEKMAN LOGISTICS INDIA Broekman Logistics India was originally active in the import airfreight business. Since 2006, in response to our customers’ requirements, the company started to diversify into air exports, sea imports and exports domestic airfreight and door delivery services under the name of BLI Swift, custom clearance services. Today, Broekman Logistics India is a full supply chain logistics service provider with air, sea, road, and rail services, warehousing and distribution. The company is an approved IATA agent, FIATA- member and the exclusive Indian Partner in the global operating NVOCC, Flash Line 2000 Ltd. VISION To be the leading provider of quality, integrated transportation and logistics solutions, which exceed customer’s expectation.

CUSTOMER BENEFITS Our strength lies in our highly dedicated staff, with in-depth knowledge and experience in handling logistics planning, to assemble and manage all the resources necessary for the distribution function.

Our global team handles your consignments with utmost co-ordination and care at the most competitive rates. Presenting all the possible alternatives is second nature to us. Using our vast infrastructure, your requirements, whether by air or sea, are handled with precise concern by our team.

No matter, the shape, size or weight of your cargo, we can provide a door to door or origin to destination service.

Corporate Office Broekman Logistics India Private Limited Jamals Chambers, 3rd Floor, New No. 49, Old No. 26, Mount Road, Saidapet Chennai – 600 015, India

T F E W

+91 44 2220 1591 / 92 / 93 / 94 /95 +91 44 2230 1295 info@broekman.in broekman.in

FULL SUPPLY CHAIN LOGISTICS SERVICE PROVIDER Established in 1988 IATA Member FIATA Member NVOCC / MTO License IFLN Member Having 12 branch offices in India Excellent Network of Agents Worldwide SERVICES Air Freight Import Air Freight Export Ocean Freight Import Ocean Freight Export Customs Clearance Domestic Air Freight (airport to airport) Domestic BLI Swift (door to door airfreight) Intermodal by road and rail Warehousing and Distribution Free Trade Warehouse Zone Operator Project Cargo Cold Chain Logistics

cover story Dieter Hulick Spokesman Traffic Terminal Management - International Media, Frankfurt Airport Services

Besides the digitalisation of logistics processes, the need to collaborate will shape the industry in the coming years. Everyone has to be willing to exchange data, has to agree on common standards, and have to push forward digitisation. We have to develop from an EGOsystem where every company works only for itself to an ECOsystem where we all join forces – in order to stay competitive.

2014 and 2015 are simply not sustainable moving forward because of the cost structure currently existing in the Indian domestic market today, based on the expansion of ground transportation capabilities.

Sunil Kumar, MD, Everfast Freight believes, “The way things are going right now, it’ll remain the same for the next three to four quarters. Then, by the second half of 2017, things would be different. I believe that nothing great is going to happen in the air cargo industry. People need to understand that things are to be more customised, more promotion-oriented and economical. Now,

that’s the only way to survive. In terms of further expansion, nothing of that sort is going to take place in the near future.”

Yashpal is of the opinion that the supply chains of Indian suppliers and buyers have seen a good change. The customers are trying to become smarter by using all modes of transportation - air, ocean and road - for their raw material and finished goods movements.

The domestic air cargo has seen a huge growth in the last five years in the country.

Backed by e-commerce and some substantial growth in domestic passenger traffic, there is abundance of capacity available in the Indian

skies for the movement of goods. He adds, “The customers can afford to either move on cheaper mode of transport on land or keep production closer to time of sale by using air to move their finished goods. In the coming decade we will see a sizable movement of goods happening through coastal shipping and inland waterways hugely reducing the pressure on roads and making movement of heavier goods cheaper and faster.”

Jonas van Stekelenburg, Head of Cargo, Schiphol Cargo describes, “After living in Indonesia for four years, from 2004 to 2008, what I saw was 25 per cent growth of the

Newfangled Logistics Private Limited        

Freight Forwarding Custom Clearance Document Processing Door to Door Transportation Track & Trace Warehousing 3PL & Supply Chain Management

Corporate Office: A-104, First Floor, Road No. 4, Mahipalpur Extn., New Delhi - 110037, India.

Phone No.: +91-11 42198450 - 55, Mobile: +91 - 9910392439, +91 - 9899753387, Fax No: +91 -11 46027788 Email: naeem@newfangledlogistics.com / nitasha@newfangledlogistics.com Website: www.newfangledlogistics.com

AFFILATED BY

LASER SCREED FLOORING FM-2/ SUPERFLAT/ JOINTLESS/ JOINTFREE SFRC FLOOR

SPECIALIST IN INDUSTRIAL, WAREHOUSE AND COLD STORAGE (DEEP FREEZE) FLOORING Including Lythic Nano Silica Densification & Concrete Polishing LAMBA TECHNO FLOORING SOLUTIONS HAS COMPLETED > 1.5 CRORE SQFT OF HIGH END FLOORING PROJECTS WITH > 90 ESTEEMED CLIENTS ACROSS 15 STATES IN LAST 6 YEARS

LTFS PRESENCE

HARYANA DELHI RAJASTHAN

GUJARAT

INDUSTRIAL WAREHOUSE

MAHARASHTRA TELANGANA

CASH & CARRY COLD STORAGE

KARNATAKA

OTHERS TAMIL NADU

DELIVERING FASTER–FLATTER–FLOORS FOR FUTURE! Our floors are occupied by :- Mr. Pradeep Lamba: + 91 9717854400, LTFSPL@gmail.com Mr. Ritesh Jain: +91 8470854405, riteshjain@Ltfsolutions.co.in Visit Us: www.Ltfsolutions.co.in : Delhi, Haryana, Rajasthan, Karnataka, Tamil Nadu, Telangana, Gujarat, Maharashtra

cover story Sunil Kumar

MD, Everfast Freight People need to understand that things are to be more customised, more promotionoriented and economical. Now, that’s the only way to survive. In terms of further expansion, nothing of that sort is going to take place in the near future.

Capacity Vs Demand Capacity (ASK)

Demand (RPK)

Dec

Jan

Fab

-25

Mar

Aug

Sep

Oct

-5.9 -7.3

-7.0 -12.0

-8.8

-0.5 -4.8 Jun

-1.3 -7.7

May

0.1

5.8

Apr

-0.3 Nov’11

-4.8

2.9 9.5

Mar

-5

-15

0.2

3.0 2.0

14.5 10.8

12.2 7.9

11.9 6.9

5

16.8

15

11.0

% Change Over Month

25

Nov12

Year over Year

Fig: The graph shows Capacity vs. Demand chart for Domestic Airlines in India

airport, specific to banking and accounting.

It isn’t that the economy in Indonesia grew by 35 per cent. No! It grew by five per cent or so, where suddenly 100 million people could afford themselves all these things.

He confirms that on the air freight part, as per his expertise, India is getting richer.

“I think there’ll be tremendous growth of logistics and air freight, by not just five to six per cent, but more than 20 per cent. Then, the question remains that when it will grow and for how long, etc. But, there’ll be times with 25 per cent growth. What I think is that India is not behind China or Indonesia. In fact, it’s more ahead, given the huge population figure.

“I believe that in the coming years, there’ll be a lot of growth, especially in these things, that need long-term infrastructure planning, like aviation, mobile industry, for it to be user-friendly.

“How that’ll appear on the logistics side is that one will get a mature market in the airlines segment, while handling companies, during forwarding and then the things you’ll ship

22 CargoConnect - ACAAI 2016

will define India’s strength. In the information infrastructure or ICT (Information and Communication Technology) kind of things; it’s pharma, which is most likely to head the way. At Schiphol Airport, we hope to be a part of that. We work with Jet Airways, KLM France to be really connected with India and maintain close relationships regarding trade, et al,” adds Jonas.

Bharat J Thakkar, Former ACAAI President and Permanent Advisor to Board, Co Founder and JMD, Zeus Air Services Pvt Ltd points out that aviation benefits beyond borders and breaks down the economic and social benefits of air transportation by region and in some national statistics. It also explores the potential for growth in air transport with a forecast global average rate of 4.3 per cent per annum.

“No business or business model survives over the long term without evolving. Air cargo is being buffeted by forces of change.

These include changes in the economics of just-in-time manufacturing, longer delivery

lead times, innovation by alternative modes of transport, and environmental pressures.

In the face of these challenges, air cargo needs to work together as an industry to improve competitiveness and protect its value proposition.

“By working together we have made global air cargo safe, secure and reliable. So reliable, that it is often taken for granted. It is the unsung hero of the global economy— underpinning global supply chains and delivering products to markets. But, if we are to return the business to growth, the industry must collectively embrace an agenda for enhanced quality, efficiency and security.

“We need to see air cargo through the eyes of our customers who have high expectations right across the value chain. Air cargo is a premium product. Customers valuing speed or a 100 per cent cool chain need to be certain that their goods will be delivered on time and be handled appropriately. By working together, I know that we can generate real momentum in the race to drive up quality and reliability.

“Promotion of domestic and international air cargo including express deliveries services is a key objective of the Government of India. Over 160 airports currently fall into this category and following through on this initiative would improve regional connectivity across the nation. It is difficult to say exactly what scale of impact this will have on the logistics sector since most goods are still transported by road or rail. But, we can be assured that it would only be an improvement for the existing state of affairs. The reach of companies operating in the logistics sphere would increase if the logistics sector sees transport by air as a viable option,” Bharat expressed.

Srinivas Sattiraju, CEO, Delex Cargo India Pvt Ltd, believes that air cargo definitely plays a crucial role in today’s world.

cover story Jonas van Stekelenburg

Head of Cargo, Schiphol Cargo I think there’ll be tremendous growth of logistics and air freight, by not just five to six per cent, but more than 20 per cent. Then, the question remains that when it will grow and for how long, etc. But, there’ll be times with 25 per cent growth.

What I think is that India is not behind China or Indonesia. In fact, it’s more ahead, given the huge population figure.

He expressed his views by saying, “Whether it’s through cargo carried in the holds of passenger aircrafts or chartered cargo flights linking together businesses across the landscape, the air cargo industry serves as a key engine of economic growth and development. It is always a trend that is witnessed across major economies of the world that whenever a given economy witnesses a steady growth rate, that country also experiences equally good volume growth in the air cargo industry. The same thing is being reflected in the Indian economy too. With a stable majority government in

power and good growth projections of above six per cent year on year, it is only natural that air cargo industry of India is also poised to experience good growth.

“Air cargo throughput volume forecast, considering the current volumes, is expected to grow by eight to ten times than the present level in the next ten years. A few major factors contributing to such growth in air cargo movements are the rising levels of disposable income in the hands of people, network expansion of domestic air carriers, time sensitive product deliveries of healthcare,

pharmaceuticals, electronic and automobile industries. At Delex, our domestic distribution and delivery model had always set this vision where we will be carrier neutral in building and providing domestic, air cargo-based distribution solutions to our clients. However, we did develop significant capabilities in handling large carrier space selling capabilities, representing them as exclusive GSAs in the market and we did carry out these GSA activities continuously, close to four years from 2012 till 2016 before discontinuing our last arrangement in July 2016. We shall continue to

GLO SEAIR CARGO PVT. LTD. AN ISO 9001 : 2008 CO.

Think

Transportation for Factory Stuffing | Cargo Warehousing | Shipping Consultancy | Allied Services | Custom Clearance | Freight Forwarding 276, Rajouri Apartments , Rajouri Garden New Delhi-110064 Tel : 0091-11-25136262 | Mobile : 9899436262 | Email : sckumar@gloseaircargo.com Website : www.gloseaircargo.com

Aargus Global Logistics Pvt. Ltd., India (An ISO 9000:2008 certified company)

Aargus Global Logistics Wins “India Cargo Award 2015” as a ‘Best Freight ForwarderPharmaceuticals’ for West & South of India.

Aargus Global Logistics Wins “India Cargo Award 2015”as a ‘Best 3PLPharma For North & East of India.

Mahesh P. Trikha (Managing Director) Wins “India Cargo Award 2015” as a ‘Mentor Cargo Industry for North & East of India.

Saurabh Trikha (Director) Wins “India Cargo Award 2016” as a “Face of the Future” for West & South of India.

Aargus Global Logistics Wins “India Cargo Awards 2016” as a “Best 3PLPharma” for West & South of India.

Our Services PHARMA (Temp. Controlled) DG Cargo Exhibi�on-Project Cargo Car Rally Fashion

Warehousing 3rd Country Shipments Interna�onal Freight Forwarders Door to Door Service Interna�onal Trading

“Networks Domestic 13 office in India” “Network International Approx 5000 cities in 188 countries” www.aargusglobal.com

AGL Chambers, 150, Kapashera, New Delhi 110037 India Tel: +91-11-46006500, 25069631, 32, Fax: +91-11-25069630 Email: info@aargusglobal.com Saurabh Trikha, M.: +91-9810036508, E-mail: saurabh.trikha@aargusglobal.com Branches: New Delhi | Mumbai | Chennai | Kolkata | Bangalore | Ludhiana | Jaipur |Amritsar | Ahmedabad | Hyderabad | Indore | Manesar | Mundra

cover story Bharat J Thakkar Former ACAAI President and Permanent Advisor to Board, Co Founder and JMD, Zeus Air Services

By working together we have made global air cargo safe, secure and reliable.

So reliable, that it is often taken for granted. It is the unsung hero of the global economy—underpinning global supply chains and delivering products to markets.

But, if we are to return the business to growth, the industry must collectively embrace an agenda for enhanced quality, efficiency and security.

40% 35% 30% Passenger

25%

Freight

20% 15% 10% 5% 0%

2005

2006

2007

2008

2009

pursue such opportunities in future too, but that shall be an independent business model, that is not interlinked with other ongoing business lines of Delex.”

Hemal avows, “Overall, the resurgence of air freight logistics can be credited to two things: the e-commerce boom in India and the current government’s sharp interest in improving logistics infrastructure. If anything, this resurgence will improve the supply chain by encouraging private investors and relevant Ministries in the Government (Road Transport, Highways, Shipping, Railways, Aviation) to work together in a coordinated fashion. Air freight logistics – particularly express operators – are already advocating with the Government to remove bottlenecks to door-to-door delivery in the interest of moving goods just-in-time.

“With consumer demand set to rise, the “express” factor, – including the competitive growth of ecommerce companies like Amazon, Flipkart, eBay – will also need some dependence on other modes of transport (in addition to air freight) to provide last-mile connectivity. This will force the entire gamut

26 CargoConnect - ACAAI 2016

2010

2011

2012

2013

of logistics transportation infrastructure to move from fragmented connectivity to smooth last-mile connectivity and bring down costs eventually. Policy reforms like the Goods and Services Tax (GST) will only help to bring these goals closer.

“Last month, we met with the Ministry of Road Transport and Highways as part of a US industry delegation led by the U.S.-

India Business Council, and were pleased to note that the Ministry has a working group set up to coordinate and supplement logistics infrastructure in congruence with

the Ministry of Railways, Shipping and Civil Aviation.”

Tariq Hasan, Assets Accounting Supervisor at Government of Dubai, Department of Civil Aviation - Engineering Projects Division opines, “With resurgence of air logistics in India, it’ll lead to growth in business and the companies shall flourish.

Many industries will have new transport services, with establishment of new airlines.

Dubai is immensely benefitted by air logistics.

As Boeing is doing double work by catering to passengers as well as cargo, hence earning more in cargo.”

He adds, “Another crucial point to consider here is that the sea route has become risky for transportation as compared to the earlier times, like here in the Arabian Ocean, one witnesses sea wars. Also, sea route is more time consuming, which can be used for heavy lift cargo. But, generally air freight is optimised. With reduction in air prices, cargo has become cheaper. The demand has increased as well with new concepts like e-purchasing and rise in e-business, air cargo segment has grown multifold. So, there’s a lot of scope in it, which will prevail in the years to come. With airport expansion in Dubai and Jabal Aleet, I can predict tremendous growth in the same. Huge investments have taken place at the new airport at Al Maktoum, where large cargo hubs have been established.

The place is already buzzing with excessive cargo shipment activities.”

Surendra Jeet Singh, Managing Director, Pink City Logistics Limited said, “The IATA’s forecast is a clear indicator of the expected surge in international freight volumes in the next few years, and we are equipped to handle this growth through both our in-house fleet and partner associations.

In transportation, our fleet has grown by 200 per cent in the last two years and our commitment on certain trade lines like NorthWest corridor will see maximum growth to

Korean Air is pleased to announce the commencement of 5 weekly flights from New Delhi starting from 01 Dec 2016 Korean Air New Delhi-Seoul-New Delhi Schedule (Passenger) FROM

TO

A/C

FLIGHT

DEP

ARR

DAYS OF OPERATION

NEW DELHI

SEOUL A330-200 KE 482

19:40

05:50(+1)

TUE/THU/FRI/ SAT/SUN

SEOUL

NEW DELHI

12:45

18:20

TUE/THU/FRI/ SAT/SUN

A330-200 KE 481

Korean Air Mumbai-Seoul-Mumbai Schedule (Passenger) FROM

TO

MUMBAI

SEOUL

SEOUL

A/C

FLIGHT

DEP

A330-200 KE 656 02:30

ARR

DAYS OF OPERATION

13:15

TUE/THU/ SAT

MUMBAI A330-200 KE 655 18:45 00:40(+1)

MON/WED/ FRI

Korean Air New Delhi-Navoi-New Delhi Schedule (Freighter) Connecting Europe FROM

TO

A/C

FLIGHT

NEW DELHI

NAVOI

B767-3F

HY-124

NAVOI

NEW DELHI

B767-3F

HY-123

Acumen Oversears Pvt Ltd. (GSA for Korean Air, India) Plot Number: 142, Udyog Vihar Phase – IV, Gurgaon Haryana, India

DEP 4:30 16:30 2:05 21:30 11:20 23:30

ARR 7:20 19:00 5:20 0:50 14:40 2:50

DAYS OF OPERATION WED THU SUN TUE THU SAT

Our Contact Details Phone: +91-9873352695 Email: honey@acumenovs.com Fax: +91-124-7125075

. World-class level of care and safety . Unparalleled global network . Expert load master team . Advanced transportation system

cover story Srinivas Sattiraju

Chief Executive Officer at Delex Cargo India Pvt Ltd Air cargo throughput volume forecast, considering the current volumes, is expected to grow by eight to ten times than the present level in the next ten years. A few major factors contributing to such growth in air cargo movements are network expansion of domestic air carriers, time sensitive product deliveries of healthcare, pharmaceuticals, electronic and automobile industries.

increase incrementally in the next few years. Our order book with customers is pretty strong and we have some more contracts which are lined up to be serviced in transportation for the next five years.”

Air cargo traffic is likely to grow by nearly 14 per cent year-on-year to reach nine million mt by 2020. The air cargo industry is currently in a growth phase with few domestic and foreign players dominating the market.

Some of the industries driving the growth of the industry include retail, automotive goods, telecom equipment, textile and pharma. With trade activities of the nation about to increase manifold, cargo to be handled in India is set to skyrocket. The air cargo industry will handle a huge chunk of this cargo volume. International air cargo volumes are expected to grow at a CAGR of ten percent from 2010 to 2021, while the same for Indian air cargo volumes is pegged at 12 per cent, according to Frost & Sullivan (South Asia and Middle East).

EASTERN CARGO CARRIERS (INDIA) PVT. LTD.

www.easterncargo.co.in

Make the Smart Move!

Move your business with Eastern Cargo Carrier

Our Integrated solutions Air Freight | Ocean Freight | NVOCC | Warehousing | Palletizing | Storage | Packing | Labelling | Fumigation | Distribution | Transportation | Projects – Liasoning & Supervising Branch Offices : Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Indore, Kolkata, Pune

EASTERN CARGO CARRIERS (INDIA) PVT. LTD. Unit # 25/26/27, Adarsh Industrial Estate, Sahar Road, Chakala, Andheri (East),Mumbai 400099, Maharashtra.

Tel: + 91 (022) 6753 9999 | Fax: + 91 (022) 2821 4473 / 6753 9954 Email: Iseth@easterncargo.co.in, aseth@easterncargo.co.in

Investment According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in air transport (including air freight) between April 2000 and March 2016 stood at US $931.05 million.

Key investments and developments in India’s aviation industry include: • Airbus SAS has signed an agreement with Karnataka based Aequs Aerospace, an aircraft component maker, for the supply of over 100,000 titanium machined parts for its A320 new engine option (NEO) aircraft.

• Boeing Company, an American plane maker, and Tata Advanced Systems Ltd (TASL), a fully owned subsidiary of Tata Sons, have entered into a joint venture to set up a new facility in Hyderabad to manufacture Boeing AH-64 Apache helicopter fuselages.

• GoAir, India’s fifth biggest passenger carrier has signed a memorandum of understanding (MoU) with Airbus to buy 72 A320neo aircrafts, valued at US $7.7 billion, as part of an expansion drive.

• Lockheed Martin Corporation has been planning to make India a manufacturing base for its F-16V fighter jets, C-130J Super Hercules military transport planes and helicopters.

• Auto components maker Bharat Forge Ltd (BFL), the flagship company of the US $3 billion Kalyani Group, has formalised an agreement with Rolls-Royce Plc, under which BFL will supply critical and high integrity forged and machined components for a range of aero engines.

• The Ministry of Civil Aviation has signed a Memorandum of Understanding (MoU) with Finland, Kazakhstan, Kenya, Sweden, Norway, Denmark, Oman and Ethiopia for increased co-operation between the countries in terms of additional seats, sharing of airlines codes, increased frequencies and additional

A handbook on Rail Freight packed with information, data, trends, projections, views/ articles by senior industry professionals, columns by leading research companies in an easy format. Hand bound, aesthetically designed with superior publishing quality.

Powered by

India

Rail Freight

Handbook 2017 Power Packed Content on Rail Freight in Smart Packaging: Hardbound Year Book 2017

Distribution: Railways Important Association of Logistics Industry in India Relevant Government Departments and Ministry Logistics Service Providers Enterprise Companies (Users) ICDs Logistics Parks Ports

5% 25% 5% 25% 15% 10% 10% 5%

Release your advertising message in the India Rail Freight Yearbook 2017, and be seen as a leading brand in the field to the audiences that matter in a very relevant and superior content environment.

For more details please contact: Niti Chauhan: +91-9711395751, niti.surecommedia@gmail.com Rajesh: +91-9874971551, rajesh@surecommedia.in SURECOM MEDIA 4/23B, First Floor, Jangpura-B, Mathura Road, New Delhi-110014

cover story Tariq Hasan Assets Accounting Supervisor at Govt of Dubai, Dept of Civil Aviation - Engereeing Projects Division

With resurgence of air logistics in India, it’ll lead to growth in business and the companies shall flourish. Many industries will have new transport services, with establishment of new airlines. Dubai is immensely benefitted by air logistics. As Boeing is doing double work by catering to passengers as well as cargo, hence it is earning more in cargo.

• Airbus also expects India’s aviation industry to grow at over ten per cent annually in the next decade, almost double the average growth rate of the global aviation industry.

Government Initiatives

points of call, during the International Civil Aviation Negotiations (ICAN), 2015 held in Antalya, Turkey.

• Tata Advanced Systems (TASL) has signed a joint venture with American aircraft manufacturing major, Boeing, to establish a centre of excellence for manufacturing aerostructures for Apache helicopter initially and collaborate on integrated systems development opportunities in India in the long term.

• US-based aircraft manufacturer Boeing plans to assemble one of its two helicopters namely, Chinook (heavy-lift) or Apache (attack type) in India, thus becoming yet another global company to invest in India encouraged by the ‘Make in India’ campaign.

• A i r b u s , l e a d i n g E u r o p e a n a i r c r a f t manufacturer, has been planning to invest US $40 million to set up a pilot and maintenance training center in New Delhi, which will be operational by the end of 2017.

SAFE

PALLETS FOR CARGO

1000 x 1000 x 120 mm COST

Government agencies project that around 500 brownfield and greenfield airports would be required by 2020. The private sector is being encouraged to become actively involved in the construction of airports through different Public Private Partnership models, with substantial state support in terms of financing, concessional land allotment, tax holidays and other incentives.

In the Union Budget 2016-17, the government introduced various proposals for Maintenance, Repair and Overhaul (MRO) operations for airplanes. It includes customs and excise duty exemption for tools and tool-kits used in MRO works. The government has also scrapped the one-year restriction for utilisation of duty free parts apart from allowing import of unserviceable parts by MROs for providing exchange.

As per the revised norms, the foreign aircraft brought in to India for MRO work would now be permitted to stay up to six months or as extended by aviation regulator Directorate General of Civil Aviation (DGCA). Such foreign aircraft would also be henceforth permitted to carry passengers in the flights at the start and end of its period of stay in India.

Some major initiatives undertaken by the government are:

SAVE

AS PER ISPM 15 & INTERNATIONAL STANDARD

1040 x 1040 x 120 mm ENVIRONMENT

• The Ministry of Civil Aviation has finalised and put forward for approval to the Union Cabinet, the new aviation policy, which includes proposals such as allowing new airlines to fly abroad, introduction of more regional flights and a new formula for granting bilateral flying rights.

• The Indian Space Research Organisation (ISRO) has signed a memorandum of understanding (MoU) with the Airports Authority of India (AAI), aimed at providing space technology for construction of airports.

• The Government of India is planning to boost regional connectivity by setting up 50 new airports over the next three years, out of which at least 10 would be operational by 2017.

• Airports Authority of India (AAI) plans to develop city-side infrastructure at 13 regional airports across India, with help from private players for building of hotels, carparks and other facilities, and thereby boost its nonaeronautical revenues.

• Directorate General of Civil Aviation (DGCA), India’s aviation regulator, has signed an agreement with United States Technical Development Agency (USTDA) for India Aviation Safety Technical Assistance Phase II, aimed at bringing in systemic improvements in the area of operation, airworthiness and licensing.

• The Government of India has given site clearance to Delhi Mumbai Industrial Corridor

1100 X 1100 X 120 mm

1200 X 1000 X 120 mm

Mob: +91-9176188222 | Email: safeplasticsgm@gmail.com | Website: www.safeplastics.in

cover story Surendra Jeet Singh

Managing Director, Pink City Logistics Limited The IATA’s forecast is a clear indicator of the expected surge in international freight volumes in the next few years, and we are equipped to handle this growth through both our in-house fleet and partner associations. Our commitment on certain trade lines like North-West corridor will see maximum growth to increase incrementally in the next few years.

•

•

• •

and Development Corporation (DMICDC) for setting up of a Greenfield Airport for public use near Bhiwadi in Alwar district of Rajasthan and has granted ‘in-principle’ approval to 13 other greenfield airport projects.

The Airports Authority of India (AAI) plans to revive and operationalise around 50 airports in India over the next 10 years to improve regional and remote air connectivity.

Gujarat is expected to get a second international airport at Dholera. The state government has formed Dholera International Airport Co. Ltd. and is obtaining approvals from the union government.

The Directorate General of Civil Aviation (DGCA) has given its approval to Air India’s maintenance, repair and overhaul (MRO) unit.

The Government of India has decided to award airports in Kolkata, Chennai, Jaipur and Ahmedabad on management contract. AAI has issued the ‘Request for Qualification’ document for these four airports.

Ampersand Logistics Pvt Ltd. (Global Freight Forwarders) ( An ISO 9001 : 2015 Certified Co.)

Services: Air Freight Import & Export | Sea Freight Import & Export | Break Bulk Cargoes | Project Cargoes | Buyers Consolidation | Diplomatic Cargoes | Pre and Post Shipment Consultany | Letter of Credit Documentation G-67/B, Ground Floor, Back Portion Kalkaji New Delhi – 110019 (India) Ph: 011-41003540/41629495 | Fax: 011-41003541 Mob: 9212051466 | Email: amperlog@hotmail.com / amperlog@gmail.com www.amperlog.com

Challenges faced by the aviation industry in India Beside this growth, the Indian airline industry is also facing some of the major challenges like high aviation turbine fuel prices, overcapacity, huge debt, poor infrastructure, employees’ shortage, reserved routes and intense competition. After the liberalisation in Indian civil aviation industry, there was an increase in the choice of airlines, reduced fares and increased routes were the major advantages. But, the most restricted industry faced the some serious problem after liberalisation, such as infrastructure bottleneck, traffic jam, taxation policy, and productivity.

Bharat reveals that air cargo amounts to above ten per cent of airline revenues. Air cargo is suffering from a prolonged slump that has seen falls in yields, revenues and market share.

Since 2010, world trade has grown by 12 per cent whereas air cargo demand growth has been basically flat with only a two per cent increase. A divergent trend in the passenger demand, with growth continuing in the historical five to six per cent range, has complicated the situation. As airlines grow fleet capacity to meet rising passenger demand, capacity has been introduced into weak cargo markets, putting considerable downward pressure on yields.

Association of Private Airport Operators viewed that air transport is the fastest and safest mode of transport for relatively long distance. Total air passenger traffic in India has increased from 109 million in 2008-09 to 143 million in 2010-11.

Available forecasts suggest that by 2020, air passenger traffic will be around 290-300 million. To meet this huge air traffic demand, the country will require approx. 350-400 operational airports across the country. This implies that huge private investments will have to be attracted as AAI alone will not be able to raise the fund which ranges from `60-70,000 crores.

Similarly, India is likely to have a 1,000 plus fleet strength of aircraft requiring huge investment of approx. US $90 billion.

The effort to be taken by Ministry of Civil Aviation to notify a National Civil Aviation Policy is highly commendable as it will provide a blueprint and a road map/clear vision to all the stakeholders including the government in understanding their respective roles for ensuring the growth and development of the sector in next decade.

Environmental impact management The aviation industry is united in its commitment to manage and reduce its environmental impact. Its highest-profile environmental issue is carbon (CO2) emissions. But the industry also addresses more general issues, such as waste

cover story Michael Gill

Director - Aviation Environment Resolution, International Air Transport Association The aviation industry has adopted a four pillar strategy to dress its climate impact and it’s through the use of operational measures, better use of infrastructure and new technology that we are already achieving significant reductions in CO2 emissions. But, to understand the need for carbon offsetting scheme is the fourth pillar of the strategy. management, environmental management systems, and noise.

Michael Gill, Director-Aviation Environment Resolution, International Air Transport Association says, “Well, the aviation industry has adopted a four pillar strategy to dress its climate impact and it’s through the use of operational measures, better use of infrastructure and new technology that we are already achieving significant reductions in CO2 emissions. But, to understand the need for carbon offsetting scheme is the fourth pillar of the strategy. It’s an economic measure that’ll allow us to achieve this carbon-neutralgrowth target of 2020, where the other three pillars have not quite got us to that target.”

Yashpal adds that the shift to air cargo from other means of transportation certainly means saving time but it does not reduce carbon emission. The effects of carbon dioxide (CO2) emission of airplanes are two to ten times higher compared to the emission on the ground and water. Therefore, it will not reduce the carbon footprints. However, aviation is the only industry

DRV SHIPPING & LOGISTICS FREIGHT FORWARDING: SEA & AIR

Services

FREIGHT FORWARDING: SEA & AIR Transportation by Land, Air and Sea | Custom House Agent | Export Services/FCL, LCL, CONSOL | Import Services/Customs Broker | Secured Warehousing & Distribution | Experts in Perishable Freight Handling

DRV Shipping & Logistics A-68B First Floor Vishwakarma Colony, M.B. Road Badarpur, New Delhi-44 Tel.: +91-11-26363753, Skype Id: dheeraj.shrivastava1 Dheeraj Shrivastava, H.P. No. +91-9999941572 MSN Messenger: shrivastava.dheeraj1@hotmail.com Email: cs@drvsl.com / dheeraj@drvsl.com, www.drvsl.com BRANCHES: Bangalore, Chennai, Delhi, Haryana, Hyderabad & Mumbai

Air cargo is suffering from a prolonged slump that has seen falls in yields, revenues and market share. Since 2010, world trade has grown by 12 per cent whereas air cargo demand growth has been basically flat with only a two per cent increase. that has globally committed to specific actions to neutralise carbon emission growth by 2020 and reducing emissions by 50 per cent by 2050.

Tariq agrees that with the shift to air cargo, it’ll definitely reduce carbon emissions and will prove as the vantage point, thus by effectively saving time and cost. If we want something from Germany, via sea, it’ll mean a month’s transit time, whereas air route won’t take more than two days to arrive at the desired destination.

Huned Gandhi, MD, Air and Sea logistics, DACHSER India Pvt Ltd clarifies that it is important to do both. Reducing the carbon footprint is pivotal for a healthy environment and the aviation industry has been constantly striving for reducing this with new generation air planes and these measures have been quite successful.

Air transport is responsible for only two per cent of manmade carbon emissions annually. But the industry recognises that it must work even harder on behalf of the environment

TWO LEADERS. JOINT FLEET. TWICE THE EXPERIENCE

Deal with the Heavy Weight Specialists

Specialists in Ad-hoc Charters for: Outsized Cargo, Oil & Gas Equipment, AOG, Hazardous Cargo, Automotive, Humanitarian Relief

Recognised by Department of Tourism

An ISO 9001:2000 Certified Company

AIR SHAGOON (NETWORK) PVT. LTD. DELHI: 705, DLF South Court Mall, Saket, New Delhi - 110017 C-37, Hauz Khas, New Delhi - 110016 Tel: 91 11 49081111 M: 9810592525 Fax: 91 11 49081199 Email: airshagoon@airtelmail.in, anuragbirla5@gmail.com, birla.rishabh1@gmail.com MUMBAI: Tel: 022-28227706, 28207708 Email: airshagoonbom@gmail.com

www.airshagoon.com

cover story Huned Gandhi

MD, Air and Sea logistics, Dachser India Pvt Ltd Reducing the carbon footprint is pivotal for a healthy environment and the aviation industry has been constantly striving for reducing this with new generation air planes and these measures have been quite successful.

to achieve long-term sustainability. Its license to grow depends on it. The aviation industry comprises airlines and such other Aviation related businesses as airports, airplane manufacturers, and air navigation service providers.

To achieve its three carbon-emission goals, the industry has adopted a four-pillar strategy comprising improvements in technology, operations and infrastructure, and marketbased economic measures.

Continued investment in new aircraft and

on climate in a fair and balanced manner through constructive dialogue with ICAO. At the same time, IATA is calling on its members to preserve industry unity to support the ICAO negotiations. The nations represented at the 38th ICAO Assembly in 2013 agreed to develop

The aim is a 48-hour reduction in average shipping times by 2020. This can be achieved through innovation in technology and processes In 2009, those businesses committed to a united approach in reducing emissions that encompasses three goals: 1. Improving fuel efficiency an average of 1.5 per cent annually to 2020 2. Capping net emissions through carbonneutral growth from 2020 (CNG2020) 3. Cutting net emissions in half by 2050, compared with 2005.

Such ambitious goals place aviation in the forefront of industries globally managing its impact on climate change. Through ICAO, moreover, governments worldwide are aligned with especially the industry’s CNG2020 vision.

36 CargoConnect - ACAAI 2016

innovative efficiency improvements is helping the industry meet its yearly 1.5 per cent fuelefficiency goal. The challenges of achieving the second and third goals, however, are so significant that they cannot be overcome by the industry alone. The support of governments is required, particularly in agreeing on and deploying a global market based measure (GMBM) for addressing carbon emissions.

ICAO negotiations for global agreement on climate change Airlines are urging governments around the world to continue addressing aviation’s impact

a GMBM by the time of the 39th Assembly in 2016.

That GMBM, intended for implementation in 2020, is regarded as a cornerstone of aviation’s broader strategy to stabilise its net CO2 emissions from 2020 onward through carbon-neutral growth. Negotiating the details of that GMBM began at ICAO in 2014.

Designing a GMBM of this nature is challenging, technically and politically. IATA is working with governments and other stakeholders to build consensus on key elements of a GMBM that must be transparent, non-discriminatory, and cost-effective.

---

----------

---

+91-11-42690000/(100 H. Lines) rates@herculesaviation.com w www.herculesaviation.com SINGAPORE

---

--------- ----------- --- --------- ------------- ---------------------

-

DHAKA

HONG KONG

-----

- --

----

SHANGHAI

-

--- -------------- ---- -------- ------------------- -------- - ---------- ------------ - - - ------------- ---- - -BASRA - -- ------ -- - - - ASHGABAT ------- -------DUBAI -- ----- -----------------------

---

------

--

------

-------

-- ------ ---- --- ---- ----- ---------

-----

KUALA LUMPUR

BAGHDAD AL MAKTOUM

TEL-AVIV ANTALYA

KOMATSU -

--

----------- ----- ------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------- ------------ ----------- -------- -------- ------------- - ---- ------ -------- - ------------------------------------------------------------------------------------------ ------------ ------ ---- ----- ----------------------- --- ---------- ------------- --------- ---------------------------------------- --- ----------- -------------------------------------------------------------------------------------------- ---------------------------------------------- ----- ------------ ------------ ----------- ------------------ --------------------------------- ---------------------------------- ------ --- ----------- - ---------------------------------- ------- --------------------------------- ------------------------------------------ - --- -- ------------- ---------------------------------------------------------------------------- ------------------ ------------------------- -------------------------------- -----------------------------------------------------------------------

- ----------------- -- ----- ------------- ----- ------- -- -- --------------- ----- ------- ------------------------------------------------------------------------------------------------------------------------------------------------- ---------------------- -------------------------- ---

ST. PETERSBURG (LED) KAZAN MINSK HAMBURG DOMODEDOVO KIEV LONDON-LHR HANNOVER URAISK LVIV NEW YORK NETHERLANDS STANSTED AMSTERDAM ATYRAU FRANKFURT HAHN PRAGUE STUTTGART CHARLES DE GAULLE BUDAPEST AKTAU -ALMATY LUXEMBOURG ----------------VIENNA -------MILAN ----CHICAGO TBILISI -------------------------------------- ------------------------------SABIHA ANKARA ------------------------------------ ------- ------ ---- ------------------------------------------------------------- ----------- SEOUL ---- --------------------------------------------------------BISHKEK -------------------------------------------------------------------------------- URUMQI ISTANBUL ERBIL - -------------------------------------------------------------

-----

---

-

---

-

-----------

--

-

--

--- --

-

MOSCOW (SVO)

cover story Critical questions include how emission reduction obligations will be distributed between countries and operators and what adjustments and exemptions might apply. Other important issues relate to what the monitoring, reporting, and verification requirements will be for participants; what types of carbon market instruments can be used for compliance purposes; and how the GMBM will interact with other measures.

A groundbreaking step in aviation’s efforts to address its impact on climate will be the adoption of proposals for an ICAO standard for aircraft CO2 emissions. In this respect, 2014 was a crucial year, as experts from governments, industry, and nongovernmental organisations jointly undertook an analysis of the technological feasibility and cost-effectiveness of different stringency

fact box

levels for a standard. In 2015, governments and ICAO will aim for agreement on the standard’s levels and on the types of aircraft to which the standard will apply.

Partnering with India-based Ascent Air, CAL is scheduled to relaunch the cargo service in the Indian market, starting from August 28, after the Taiwanese carrier suspended its cargo flights to India four years ago.

In an initial phase, the two partners will operate one round-trip flight a week, carrying cargo from East Asia to India and then to Europe, and in turn, delivering cargo from Europe to India and then back to Taipei, CAL said.

Lin Hsiao-feng, a manager with CAL’s cargo operations division, who is currently in India to supervise the resumption of the cargo service, said that the first flight on August 28 is full.

Lin said that CAL is upbeat about the economic outlook of India so the carrier is seeking more partnerships in the Indian market in a bid to expand the number of cargo flights in the second half of this year and serve more customers. The CAL executive said that the Indian government’s ‘Make in India’ initiative has boosted the country’s transportation industry as demand for delivery of equipment and resources to India and merchandise out of the country has been on the rise.

In addition to the optimism toward India’s economic fundamentals, Lin said that CAL is following the Taiwan government’s new southbound policy, which encourages Taiwanese investors to look toward Southeast Asia and India to reduce dependence on China.

According to a report released by the International Air Transport Association (IATA), the compound annual growth rate (CAGR) of the global cargo business is expected to hit 4.1 percent during the period of 20142018. India is expected to enjoy a 6.8 percent CAGR rate, making itself the second-fastest growing market in the world, the IATA report said. Therefore, Lin said that it is good timing for CAL to return to the Indian market now.

38 CargoConnect - ACAAI 2016

Addressing cargo competitiveness Air cargo is a crucial enabler of the global economy. In 2014, airlines transported 51.3 million metric tons of goods valued at $6.8 trillion. To improve its competitiveness, the air cargo industry is undergoing a comprehensive transformation from point of manufacture to point of consumption. The aim is a 48-hour reduction in average shipping times by 2020. This can be achieved through innovation in technology and processes, investment in new facilities, and a renewed commitment to enhancing quality and value for the customer.

Yashpal elaborates that IATA and Bengaluru airport collaboration will improve various areas of airport operations including security, passenger experience, cargo, airport development, consulting and training. The collaboration is going to benefit more on the passenger side then cargo but for sure some there are various benefits that cargo movements in and out of Bengaluru airport will benefit from this collaboration.

Tariq also talked about Dubai’s trade relations are with India. Coming to fluctuation in fuel prices, yes, they act as a deterrent. As per the current situation, the rate is less, which offers scope for an increase from here itself, which is good for transportation. If the fuel price increases, then the transport cost shoots up. It is ultimately passed on to the consumer, in the form of prices. If the sales are down, only then the LSPs are affected. So, airlines should be explored further to make things more economical. If more airlines invest in air cargo, it’ll boost competition and keep costs balanced.

To assist the industry in this period of change, IATA has launched a forensic study of supply chain bottlenecks that will be completed within 2015. This will help target actions to achieve the 48-hour reduction in end to end transit times. Achieving industry change is a collaborative process requiring that all partners in the air cargo value chain work together. During 2014, the Global Air Cargo Advisory Group (GACAG), which comprises the principal global representative organisations of airlines, freight forwarders and shippers, continued its work emphasising security, e-commerce, facilitation, and sustainability. These priorities are shared across the industry and are a focus of activities.

We offer

Peace of Mind

We value your trust by delivering just in time. Everfast provides personalised solutions designed to give customers a competitive edge. We specialize in air and ocean freight import and export, customs clearance, warehousing and distribution.

OUR SERVICES Freight Brokering & Negotiation | Documentation | Air Freight (Direct and Consolidations) | Ocean Freight (Containerized and LCL) | Project & ODC Cargo | Warehousing- Distribution - Door Delivery - Pickups | Information Management | Custom Clearance-Air/ Sea | Exim Consultancy & Letter of Credit referrals

ADVANTAGES WITH EVERFAST Cost Effective Air & Ocean Freight Services | Highly Sales Driven | Multi Location Presence | Global Operator with Local Knowledge | Young, Energetic and Dynamic Team | Consumer Focused Work Ethos | Multiple Product Range | Software Driven | Track and Trace Capability



CORPORATE OFFICE : Everfast Freight Forwarders Pvt. Limited, FF CS-02, Ansal Plaza, Vaishali, Opp-Dabur, Ghaziabad 201010 UP. Tel: + 91-120 4184500, Fax: +91-120 4184555, Mail: info@everfastfreight.com BRANCHES : Delhi , Mumbai , Chennai , Kochi , Calicut , Lucknow , Coimbatore

SPECIAL feature

Indian Air cargo:

The Anticipated Colour The Indian air cargo industry is growing by leaps and bounds. In accordance with various initiatives taken by the Central Government , India’s ranking in ease of doing business is likely to rise up to 50th rank from existing 130th rank among 189 countries in the next five years. Industry experts have great expectations about the growth of the industry especially in terms of infrastructure, e-commerce and security. Nicin Varghese discusses the major changes and challenges anticipated

40 CargoConnect - ACAAI 2016

SPECIAL feature

I

ndia has emerged as the second fastest growing air cargo market after the Middle East and is expected to grow at a compound annual growth rate of about seven per cent over the next five years. India would also be among the ten largest international freight markets by 2018 led by the United States supplying 10,054,000 tons and China with 5,639,000 tons, the International Air Transport Association’s (IATA) Industry Forecast 2014-2018 shows.

The Civil Aviation industry has ushered in a new era of expansion, driven by factors such as low-cost carriers (LCCs), modern airports, Foreign Direct Investment (FDI) in domestic airlines, advanced information technology (IT) interventions and growing emphasis on regional connectivity. India is the ninth-largest civil aviation market in the world, with a market size of around US $16 billion. India is expected to become the third largest aviation market by 2020 and the largest by 2030. “The world is focused on Indian aviation – from manufacturers, tourism boards, airlines and global businesses to individual travellers, shippers and businessmen. If we can find common purpose among all stakeholders in Indian aviation, a bright future is at hand,” said Tony Tyler, Director General and CEO, International Air Transport Association (IATA).

On similar lines SGK Kishore, CEO, GMR Hyderabad International Airport Ltd said, “Boosted by government initiatives such as “Make in India”, “Digital India” and “Skill India”, we foresee investments and industrial development in the near future. These investments and build up of industrial base will have a cascading effect on movement of goods which also augurs well for air cargo industry. However, this will also need investment in the logistics infrastructure space to meet the growth. With the focus to reduce dwell time as envisioned in National Civil Aviation Policy, we foresee government thrust to have smarter regulation, seamless 24X7 discharge of regulatory requirement by having all the regulators under one roof within airport logistics/cargo Park.”

Domestic air cargo is expected to increase at a faster pace than international air cargo over the next five years, which helps the industry to be less susceptible to global factors.

Expert’s Prognosis The Indian air cargo market has grown rapidly over the past decade, parallel with the development of the Indian economy.

According to one of the reports by Frost & Sullivan, at its present compound annual growth rate of 5.5 per cent, cargo demand in India is expected to boost the air freight market to 2.8 million tonnes by 2018. Also with various government initiatives in place, such as the review of Foreign Direct Investment (FDI)

ACAAI 2016 - CargoConnect 41

SPECIAL feature “I expect very positive changes in the air cargo industry.The New Civil Aviation Policy is very forward looking and we can expect the airport infrastructure to improve significantly as heavy investments are being planned on the same.”

phasis is being placed on infrastructural constraints along with processes, whereas, simplification of processes is essentially in government domain and is being addressed. Infrastructural issues need broader involvement of stakeholders like agents, custodians, airport owners, airlines, etc. We are likely to see a change in infrastructure for air cargo in the next five years far exceeding what we have witnessed in the last decade. With new airports and upgradation of existing airports, the cargo handling capacity will grow in tune with the increase in demand. There Huned Gandhi, MD, Air and Sea Logistics, DACHSER India Pvt Ltd is hardly any airport handling international cargo which is not undergoing expansion and modernisation today.” Agreeing to policies, GST bill, emphasis on public-private partnerships to improve this, Vipan Jain, Regional Manager Logistics, South Asia airport infrastructure, export tax rebates, etc., India has all the ingredients and Middle East, Lufthansa Cargo feels that, “International to become one of the world’s leading air cargo hubs. Although in recent times infrastructure is changing according to their own needs at small the sector has witnessed increased investment, evolving to large size airports in respect of the exregulatory policies, mega infrastructure projects and pansion at the same location or creating several other initiatives, there is still a need to significantly a new facility at a different new location.

Digitalisation accelerate the pace of such developments. The key areas to Security perception is changing at a fast plays an important be developed are infrastructure, security and e commerce. pace considering new challenges nearly role in modernising air Infrastructure is the enabler which will act as a driver for every day. We do expect mandatory growth in air cargo. The development in infrastructure, cargo. Initiatives such as x-ray on cargo side world over or other planning and distribution can prevent many bottlenecks e-freight and e-airway bill aim security measures soon.” On a positive faced by the air cargo industry, especially domestic air note, Huned Gandhi, MD, Air and Sea to take paper out of air cargo cargo. Cargo theft and other security issues are another Logistics, DACHSER India Pvt Ltd and to replace it with the major concerns of the industry, which affect the overall says, “I expect very positive changes exchange of electronic growth of the industry. E-commerce has become a major in the air cargo industry. The New data and messages. factor in changing the shape of the global air logistics Civil Aviation Policy is very forward industry. looking and we can expect the airport The industry experts strongly believe that changes will infrastructure to improve significantly happen to the industry in the coming years. Rakesh Shah, as heavy investments are being planned Chairman and MD, GSEC Limited feels, “There has been great awareness on the same. The government is also ramping up highways and about the constraints faced by the air cargo industry and of late, great embuilding freight corridors, which would help in easing congestion. Overall, the next five years should be very productive in terms of improvements in the infrastructure and security.”

Digitalisation plays an important role in modernising air cargo. Initiatives such as e-freight and e-airway bill aim to

42 CargoConnect - ACAAI 2016

About us

Our Strength

Shreeji Transport is a strong and well networked company, at the forefront of the transport industry for over three decades.Head-quatered at Mumbai and with offices spread across the country Shreeji makes swift and prompt deliveries and have been approved by the IBA-Indian Bank Association for our work across the country

Our special closed container trucks to import/export goods at major ports.

A fleet of 240 trucks, with a network of 1250 trucks outsourced from various other transport concern across the country.

SHREEJI TRANSPORT SERVICES PVT. LTD.

M 23, 3rd Floor, Menzies Avia�on Bobba Cargo Terminal, Bangalore Interna�onal Airport Limited, Devanahlly, Bangalore-560 300.

Tel: + 91 80 2768 8331/ 32 Fax: + 91 80 2768 8334 Email: shreejibt@airtelmail.in Web.: www.shreejitransport.com

Contact : Mr. Rupesh M. Shah Mobile: + 91 9845041533 Mr. Dileepa B.M. Mobile: + 91 9845270110

Branches

Ahmedabad Chennai Cochin Coimbatore Calicut Delhi Kolkata Hyderabad Mumbai Indore Trivandrum Goa Jaipur Lucknow

CUSTOMS ‘BONDED’ CARGO CARRIERS

SPECIAL feature “Freight fuel prices have serious effect on air craft operations. Policies have to be made in such a way that export growth can be achieved.”

Sujeen Paulose, Director Commercial, Hercules Aviation

Global Benchmarks of Dwell Time vis-à-vis Indian Airports Airport

Dwell Time-Exports (Hours)

Dwell Time-Imports (Hours)

Sharjah

4

8-4

Singapore

6

3 to 6

Frankfurt

6

NA

Incheon

2 to 3

2 to 7.5

Dubai

2 to 3

2 to 6

Hong Kong

3 to 6

4 to 8

Delhi

36

119

Mumbai

48

96

Chennai

48

72

Hyderabad

12

36

Kolkata

48

72

Bengaluru

36

48

Source: Airport websites, industry research, KPMG analysis

take paper out of air cargo and to replace it with the exchange of electronic data and messages. It will not only impact the logistics processes but also the airport and warehouse infrastructure that has to be adapted to the new possibilities. Observing the same, Kishore affirms, “The IT infrastructure of all the stakeholders including airport

operators, regulatory agencies, airlines and end users will need to be modernised and integrated to an extent to make paperless transactions, including automatic payment of duties and clearances a possibility in true sense.” Security being a critical element of the air cargo supply chain, Kishore continued, “Increasing perceived threat from terrorist

action will shift the focus to having secure cargo. The security infrastructure has to be ramped up to meet the increasing threat perception.” Meanwhile, Shah says, “The security will continue to be a challenge since balancing facilitation of a growing cargo market with addressing growing security challenges would call for sharing responsibilities by all involved. We are likely to see some more responsibilities being placed with cargo agents, custodian and airlines as a means of negating the impact of stricter security measures.”

Zhou Zengrong, General Manager-India ,China Eastern Airlines points out three important initiatives which ensure improved and world class services to the customers, especially in India.

1. Improvement in the infrastructure is still on a bit slow pace. The government is already on the job and is expected to accelerate the processes to overcome the infrastructure problem.

2. Connectivity between metros and states will have to be improved for the fast delivery of cargo. The government has already launched several projects all over India to address this problem and it is expected to be fixed in the soonest possible time.

3. Dwell time of exports and imports shipments, which was earlier 48 hours, has now been changed to 18 hours and in the coming time the government has set the benchmark of taking it down till 12 hours.

Manpreet Singh Dahri, Manager Cargo Sales, Namaste India Aviation Pvt Ltd points out another important change that should be focussed. He says, “The future will depend upon the demand, infrastructure and supply. Developing infrastructure along with addressing the needs of the air cargo industry has

Swastik Freight System Our Services

Website: www.swastikfreight system.com

( International freight forwarding Company )

All Cargo Clearance EDI Mode | Air Cargo Custom Clearance | Freight Forwarding | Sea Cargo Customs Clearance | Full Container Load (FCL) Cargo | Booking of Space | Loose Container Load ( LCL ) Cargo | Transportation Goods Further Details Please Contact At : Delhi office : 847/1 , Main Vasant Kunj Road, Mata Chowk, Mahipalpur, New Delhi 110037 | Telefax: 011-46150929 | Email: Swastiksss0@gmail.com, Mr. S. S. Singh: 9313557487 Mumbai Office: 23/9 Bhupat Bhavan,Ground Floor Vaju Kotak Marg Fort Mumbai-400001 | Tel: 022-66277900 (99 lines ) | Fax: 022-22665588 | E-Mail: Enquiry@jbsinghsons.com

SPECIAL feature “We need to work on a big “Product and Connectivity” project that will provide our clients with better options for their shipments.”

Manpreet Singh Dahri, Manager Cargo Sales, Namaste India Aviation Pvt Ltd

been the top priority for the aviation ministry. The implementation plan should be mainly in the areas of process simplification, reducing dwell-time, green measures and hitech advancement into e-systems for bringing in efficiencies in the air cargo activity. The logistics industry has always been confronted with multitude of problems on account of inordinate dwell times, damaged or missing cargo, long processing times and queues at the cargo terminals, etc. This has led to huge transaction cost and operating

India is expected to become the third largest aviation market by 2020 and the largest by 2030. expense for the industry players.

Therefore, the main focus initially

is to reduce dwell time.” Regarding security of air cargo, he identified three major initiatives by the government. He continued to say, “Security is a critical element of the air cargo supply chain.

Therefore, the industry is working on the following main initiatives: • The standard Advance Cargo Information ahead of the arrival of goods, aiding processing and clearance of cargo.

• The Consignment Security Declaration (CSD) provides an audit trail of how, when and by whom cargo has been secured along the supply chain.

• Through the Cargo Security Capacity Building Program, IATA works with regulators and industry to ensure air cargo is protected from unlawful interference across the whole supply chain.”

Focusing on the changes, Henrik Ambak, Senior Vice President, Cargo Operations Worldwide, Emirates said, “Globally we see that the air cargo industry is moving away from general cargo and moving towards more specialised offerings for various business verticals including pharma and retail and this has an impact on the kind of infrastructure and security arrangements that need to be in place for shipments but also require more complex processes and system support.”

Success Lies in Overcoming Challenges It is no secret that the air cargo industry faces many challenges.

The industry has to reposition itself and get the structure and processes in place and support the changes. Industry experts believe that the success of the industry lies in overcoming the challenges.

Customs Clearance, International Freight Forwarding & Consolidation by Air and Sea Leading customs brokers in india Providing complete range of services in imports and exports Result oriented fast services in clearance of consignments from customs Expertise in clearance of medical and surgical goods Authorised exclusive agents for top hospitals and importers in India Excellent rapport with airlines, customs, AAI, Celebi, DIAL, CWC, & ADC Dedicated workforce Own fleet of delivery vans for speedy transportation of your valuable cargo from airport and ICD’s in Delhi & Mumbai

Delhi Office: A-260, Road No. 6, (Near Hotel Landing View) NH-8, Mahipalpur Extn., New Delhi-110037 (India) Phones: +91-11-26789452, 26789453 Mobile: 09810026226, Fax: +91-11-26789750 Email: akankshaglobal.pl@gmail.com

Mumbai Office: 5th Floor, Sucheta Niwas, 256, Shahid Bhagat Singh Road Ballard Estate, Mumbai - 400037 Telefax: +91-22-66317519

ess sin s Bu es ly sin Onto Bu

N Gu eu ar tra an lit te y ed

Co ns

ol

id

at or s

Perfect Express Movers (P) Ltd

Air Freight Forwarders & Consolidaters HEAD OFFICE 2 E & U, DCM Building, 16, Bharakhamba Road, Connaught Place, New Delhi-110001 T: + 91.11.47343502-16 F: +91.11.47343501 E: info@perfectexpress.in W: www.perfectexpress.in

OUR BRANCHES: MUMBAI, CHENNAI, BENGALURU, HYDERABAD, KOLKATA, AHMEDABAD

SPECIAL feature “The air cargo industry is moving away from general cargo and moving towards more specialised offerings for various business verticals including pharma and retail.”

Henrik Ambak, Senior Vice President, Cargo Operations Worldwide, Emirates

Indian Airports Cargo Traffic (In Million Tonnes) International

Domestic

Total

3.00

2.70 2.53 2.35

Cargo Traffic

2.50

2.00 1.50

2.28

2.19

2.28

1.96 1.71

1.70

0.99

0.85

0.81

0.78

0.84

1.50

1.47

1.41

1.44

1.05

0.69 0.57

0.55

1.15

1.15

1.00

0.50

1.27

1.54

1.66

0.00 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Year Source: Airports Authority of India, Traffic News

The first challenge/opportunity comes from the incredible growth of e-commerce. Though the sales volume continues to be excellent, the logistics industry is not capable of delivering the purchased goods in a timely way, and many a times,

cannot support the rapid growth in demand for package delivery driven by the e-commerce boom.

Observing the impact of e-commerce in domestic air cargo Kishore says, “The biggest driver of domestic air cargo growth has been investor-

48 CargoConnect - ACAAI 2016

fuelled growth of e-commerce. Over the last few years there has been a big boom in online shopping of designer fashions and accessories, high-end electronics and parts, which make up a substantial percentage of domestic air cargo. However, this segment of domestic air cargo movement is plateauing with e-commerce companies focusing on cost optimisation and converting to road movement. Air cargo industry needs to play from its strengths of providing fast, safe and secure logistics to its customers and add on the value added services wherever possible to provide a differentiated service to retain its client base against stiff competition from other modes of transport.”

Kishore also tries to figure out another major challenge which is the lack of enough aircrafts to transport cargo. He said, “Air Cargo capacity, especially the belly cargo capacity, is expected to increase with airlines inducting multiple aircrafts over the next few years which is expected to drive down the air freight rates with increased competition. If the same happens, there will be tremendous growth of cargo movement through air. Other than airports, the support infrastructure from logistics companies, trucking, warehousing, etc. also need to be enhanced.”

The air freight rate is costlier than any other type of freights because of its accessibility, speed and safety. Skyrocketing fuel prices is one of the major challenge identified by industry experts. “The price hike of flight fuel is driven by a number of factors; increased demand, insufficient refining capacity in the western hemisphere (which means fuel must be shipped from great distances), political instability in the Middle East and lack of competition among fuel providers. We must also offer better alternatives that include different routes and transit times as well as competitive prices. We need to work on a big “Product and Connectivity” project that will provide our clients with better options for their shipments. Escalated security concerns, revised inventory management policies, competition from other transport modes, and industry consolidation also pose significant challenges for the air cargo sector,” Manpreet emphasised. It has been predicted that the cost of the air freight will drop in the coming years and it will open up new economic opportunities in India’s tier II and tier III cities.

“The principal challenge is to keep the dwell time of cargo shipments as short as possible,” Manoj Singh, Senior Vice President and Head-Cargo, Mumbai International Airport Ltd identifies one of the most important challenges faced by the air cargo industry. He continued to say, “At present, enhanced ease of doing business with air cargo security procedures is the need of an hour. This can be addressed through the assimilation of efficient processes and the latest technology. Air cargo security measures in both critical and non-critical operational activities are being reviewed by the Ministry of Civil Aviation with a view of improving the dwell time without compromising on the security standards to be maintained. Digitisation of security processes, viz. e-CSD, cutting down on multiple checks and the establishment of a faster and more innovative approach will help in reducing the dwell time of shipments during the security processes.”

Singh seems confident and optimistic about the infrastructure facilities available at Mumbai International Airport. Mumbai International Airport Private Limited (MIAL) has been actively

SPECIAL feature “With the focus to reduce dwell time as envisioned in National Civil Aviation Policy, we foresee government thrust to have smarter regulation, seamless 24X7 discharge of regulatory requirement by having all the regulators under one roof within airport logistics/cargo Park.”

SGK Kishore, CEO, GMR Hyderabad International Airport Ltd

constructing infrastructure and developing IT and security standards at the Mumbai Air Cargo Terminal since its inception. Most recently, MIAL has commissioned India’s largest state-of-the-art Domestic Common User Terminal in July 2016. The new Export Heavy and Bonded Cargo Terminal has also been completed and is set for commissioning this year. In addition to these new facilities, MIAL has successfully commissioned various projects in the past like the Export Unitization Zone (2014), India’s largest Import Cold Zone (2013)

and the Export Perishable Cargo Terminal (2011).

The automation and augmentation of the pharmaceutical and agro-handling capacities are planned for the coming year. In order to meet compliance measures in terms of security at the Mumbai Air Cargo Terminal, MIAL employs a wide network of CCTV surveillance, and has in place a highly effective security system with strict access control, ensuring

RDA GLOBAL LOGISTICS INDIA PVT. LTD. R SQUARE INTERNATIONAL SOLUTIONS( RDA GLOBAL GROUP COMPANY ) Rakesh Dhatwalia

(Govt. Approved Custom Clearing & Forwarding Agents) M: +91-9810411706

Services:

Import-Export Customs Clearance Warehousing-In Bond customs Clearance Transportation All Custom Matter All Central Excise Matter DGFT Issues Ex-Bond Customs Clearance Bond to Bond Transfer Industrial Packaging

complete adherence to all Bureau of Civil Aviation Security of India (BCAS) requirements.

According to him, e-commerce has seen remarkable growth, especially within the domestic segment. “We eagerly anticipate and welcome the growth of such businesses, both within India and on a global level. Despite heavy competition from the other modes of shipping, we are confident of the growth of the air cargo share. It is important for this particular industry, being complex and handled by multiple players, to be innovative and equipped with latest trends, even at the individual level.

Air cargo has enormous demand, and the primary responsibility of the industry as a whole should Domestic be to retain this demand air cargo is by offering ease of doing expected to increase business at all levels of operation,” he elaborated. at a faster pace than Sujeen Paulose, Direcinternational air cargo over tor Commercial, Hercuthe next five years, which les Aviation points out helps the industry to be five important changes that should take place in less susceptible to order to elevate the air global factors. cargo industry. They are: • C T O s h o u l d b e equipped immediately to handle freighters.

• Transit hubs should be improved.

• Acceptance time should be reduced.

• Landing/Parking charges have to be competitive.

• Attractive policies to encourage freighter companies should be made.

Businesses usually find a way to succeed in good and in demanding times. An industry player can ride out the difficult economic conditions and plan to leverage profitable times in a way that will sustain the business in less robust cycles. Thankfully, for every challenge, there is a solution that will help the air cargo industry to better position itself for growth while mitigating risk. The right technology, developed specifically for the air cargo industry’s needs, enables the cargo department to access historical, near and real-time information for confident long-term planning and provides the agility needed to respond correctly to emerging conditions. IT solution that extends its benefits across the entire organisation, streamlining compliance with regulatory demands and industry standards, staunching revenue leakage, enabling supply chain efficiency can position the industry for sustainable growth.

Will e-commerce determine the future?

Corp. Of ce: B-52, Flat no 201, 1st Floor, MB Road, Vishwakarma Colony New Delhi-110 044 Working Of ce: B-72-73, 3rd Floor, Office No. 303, Rohit House, MB Road, Vishwakarma Colony, New Delhi - 110044

M: +91-9810411706, 8285989000, Tel: +91-11-26361706, 26361707 E-mail: rakesh@rdlogistic.co.in Web: www.rdlogistic.co.in , www.rdagloballogistics.com

Branches: Mumbai, Ludhiana

With ever-increasing e-commerce demand, the demand for express cargo has increased rapidly. This requires adequate infrastructure to process the cargo swiftly and cost-efficiently.

Express cargo is integral to many facets of modern life and the distinction between express and general air cargo continues to blur. There is an urgent need for robust infrastructure and policy support to drive efficiency to keep up with the growing need of express cargo. In this context, the development of

Thinking for the future..

Thinking for the future Well-Knitted organization with full commitment and consistency in providing services of wide range including:

Air Freight | Custom Clearance | Sea-Air Services | Ocean Freight Warehousing | Logistics & Distribution Consolidation | Export/Import Air & Ocean

Viksun Carriers Pvt. Ltd Head Office: A-11 & 18, DDA Commercial Complex, Ring Road, Naraina, New Delhi-110028 Tel: +91-11-45554333 (100 Lines) | E-mail: sushant@viksuncarriers.com | Web: www.viksuncarriers.com BRANCHES: MUMBAI / DADRI / TUTICORIN / LUDHIANA

SPECIAL feature “We expect changes in infrastructure in next five years, far exceeding what we have witnessed in last decade. With new airports and upgradation of existing airports, the cargo handling capacity will grow in tune with the demand increase” Rakesh Shah, Chairman and MD, GSEC Limited

9. Easy surface connectivity to the air-ports, 10. World-class cargo transit hubs.”

As global retail is undergoing significant changes as more and more people are moving away from the traditional retail to e-commerce, Ambak believes that this will open new opportunities for the air cargo industry. Having said this, he reminds, “We should not forget the fact that majority of e-commerce is based on a “within border or region” approach, utilising regional distribution centres and therefore global supply chains of more mass volume from production sites will continue to exist.”

With e–commerce, transparency has become the key and end customers expectations have increased manifold.

For example, the success of Ola and Uber is because of their transparency, which is possible with only modern and digitalised technology. On a positive note, Zengrong says, “Industry is fully prepared to take care of express cargo or super speed cargo. More frequencies or capacities will be increased and dwell time will be reduced to cater the needs of e-commerce market.”

Air Cargo: The Sensitive Game

dedicated express cargo zones and the adoption of modern technology within the air freight terminal can lead to increased delivery capacity and shorter delivery windows. Ministry of Civil Aviation aims to develop cargo villages near airports, which will enable the industry to have efficient transfers with faster processing.

Besides, NCAP highlighted that airport operators will be encouraged to provide space for at least ten years lease to express cargo freighters who may then develop dedicated infrastructure to improve their operational efficiency.

Regarding the same, Manpreet said, “With the burgeoning e-commerce sector, the air express cargo industry is turning out to be a pivotal segment for enhancing exports, especially in the SME segment. The air cargo industry is already farsighted and it exhibits signs of huge opportunity here and it is only going to be bigger in the coming years.

Further down are the new initiatives that needs to be taken by air express cargo machinists to prepare itself to cater the needs of e-commerce market – 1. Parcel lockers, 2. On-the-Move (OTMs), 3. Handheld devices, 4. Mobile point of sales (MPOS) solution, 5. Cash on Delivery (COD), 6. Reverse logistics with various value-adds such as ‘open’ and ‘cash return’, 7. Preferred time of delivery, 8. Provision of track and trace,

52 CargoConnect - ACAAI 2016

The air cargo market can be described by high average growth rates, but it is also very sensitive to fluctuations in the global economy. In order to prepare the industry to handle the changes that might come up in the next few years, it is important to move along with the needs and requirements of the market. The process must be simple and easy to access.

“Industry must move along with the needs and requirements of the market. The process must be simple and easily accessible. The customers need transparency from the time of hand over of the goods to the time of delivery, as far as the transportation is concerned.

Industry has to come up with innovative ideas to deal with such scenario. Efforts are put to learn and understand the market trends via survey and feedback. The social media contributes to reach out to the market and industry must keep the IT system updated, with the fast

SPECIAL feature “At present, enhanced ease of doing busines s w ith air car go secur it y procedures is the need of the hour. This can be addressed through the assimilation of efficient processes and the latest technology.”

Manoj Singh, Senior Vice President and Head- Cargo, Mumbai International Airport Ltd

moving changes. Digitalisation and environmental friendly products are the need of today”, Jain focuses on the future.

There is a noticeable shift in the consumption patterns of the developed world from things to experiences. E-commerce is moderating the impact. As consumers demand overnight and even one-hour delivery, air cargo can do what ocean transport cannot. The digital component of the bimodal supply chain becomes a significant factor for all members of the air cargo industry

to avoid a severe imbalance between demand and supply. Collaboration involves sharing information, managing expectations, determining demand allocations, and jointly monitoring performance goals, all in an environment of trust and transparency. The mobile technology is the requirement for growth of industry and need of the in-house structured training program. Some of our challenges like our high logistics cost in comparison to other developed and developing economies of the world could be addressed very seriously.

AYUSHI AIR EXPRESS PVT LTD Domestic Cargo Agents

“Passion Delivered" Where Logistic Challenges Meet Strategic Solutions

Delhi Patna Ahmedabad Bhopal Indore Bombay

Ranchi

Pune

Guwahati Kolkata

Domestic cargo Agents

Bangalore Coimbatore

Chennai

Cochin

Services Door to Door | By Air | By Train | By Road | Port to Port | Warehousing Solution 847/2, First Floor, Main Vasant Kunj Road, Mahipalpur ,New Delhi-110037 E-mail: sujeet@ayushiairexpress.com Telefax : 011-41610182 | Cell: 9312490182 / 9582890182

Ambak says how Emirates Skycargo prepare itself to handle the changes, “For Emirates SkyCargo, the key to success is to having our customers at the centre of all that we do. We work closely with our customers, understanding their needs and adapting our services and offerings. It is imperative that we demonstrate the value that we are adding to our customers. By doing this well, we enable our customers to further add value to their stakeholders. Businesses are constantly challenging themselves and business processes are evolving at a pace that has not been witnessed before. Working with our customers helps us to anticipate and take advantage of the next major trend in the market.”

“The air cargo industry works consistently on developing comprehensive strategies for pricing, effective revenue management and control on operating expenses, in order to sustain itself in the face of fluctuations in market trends. To be able to keep pace with business fluctuations and modal shifts that may arise due to global economic instability, we must collectively build our capabilities as an industry and adjust accordingly. The industry needs to retain continuous focus on growing e-freight penetration, ease of doing business, strict compliance to Service Level Standards and infrastructure development that will help enhance capacity, revamp processes, shorten the dwell time and add more value to cargo shipping via air. Fast, reliable and transparent processing is vital for the air cargo industry to maintain its current position of high growth,” says Singh.

Freight is a direct reflection of the health of the nation’s economy and despite air freight being a smaller portion of the entire trade, it represents significant amount of countries total import and exports by value. Need of speedy deliveries has made air cargo services an essential link between the economies. Any fluctuation in global economy leads to shift in demand of air cargo across borders which definitely poses a challenge to air cargo transporters to utilise their capacity and finding alternative markets for consumption is the way forward to efficiently use the capacities developed. Paulose talks about an important factor which fluctuates the growth of the air cargo industry. “Freighter industry are consolidating deliveries to save cost. Fluctuation of oil price affects economies and are critical factor for growth of freight industry. A large component of freight cost is fuel, especially for air. Freight fuel prices have serious effect on aircraft operations. Policies have to be made in such a way that export growth can be achieved.”

Zengrong comes up with more specific figures regard-

“Continually Innovative”

SPECIAL feature “Industry is fully prepared to take care of express cargo or super speed cargo. More frequencies or capacities will be increased and dwell time will be reduced to carter the needs of e-commerce market.”

Zhou Zengrong, General Manager-India ,China Eastern Airlines

ing the growth and fluctuation of air cargo industry in relationship with the economy. He says, “Since the beginning of our financial year, the growth rate is negative but it is expected that by the end of FY2016, the growth rate will be somewhere between three to four per cent.

This is due to slump in the global economy. India is expecting high growth rate of seven to eight per

cent in the next five years and due to this, initiatives/foreign investments are already coming on board.

However, it is always subjected to global economic conditions/fluctuations. All the operators/stakeholders are already aware about the possible situations and ready with necessary plans, e.g. in case of high growth in the industry more frequencies/ capacities will be added, services to

Comparison of air cargo infrastructure operations in India with global best practices Global best practices

Cargo operations in India

Segregated facilities for different types of cargo

Most terminals don’t offer separate facilities, except cold rooms

Dedicated and specialised perishable handling facilities that cater to end-to-end supply chain needs

Inadequate investments in cold chain infrastructure (temp-controlled warehouses, trucks) to handle agricultural, pharma and other perishable commodities

Proper waiting area for trucks

Agents use the cargo terminal landside as a truck parking/ holding area, leading to congestion

Agent warehouses, office spaces and other processing facilities close to cargo terminal

Agent warehouse are often located within the city

Promotes transshipment handling/ hub operations

Cargo terminal operators need to have separate license handling area for transshipment handling

Dedicated facilities for Air Express Operations with air side and city side access, multiple freighter parking bays

No fixed model and dependent on decision of individual airport operators. Very few dedicated freighter parking bays.

Source: Presentation to WG by AI-SATS

56 CargoConnect - ACAAI 2016

more destination will be announced or vice-versa.”

GST: The New Game Changer The passing of the GST has been proclaimed as a historic day for India. For one, India Inc. seems to be happy on the whole, with the clearance of the GST. The main reason is obviously that it brings the entire country under one single, uniform tax policy. GST is expected to be a game changer for the Indian economy and for all Indian corporates across the industries.

Kishore feels positive about the industry with the advent of GST and says, “The Government of India successfully cleared the GST bill. As per the broad contours of the bill, it will have positive impact on the logistics industry as a whole. It will also entail consolidation in the field with large format warehouses and delivery centers gaining currency. However, the targeted time frame to make the GST applicable will need the players to invest in adopting the mandated changes to be future ready.”

But, the air cargo industry is perplexed about the impact of GST. Under the new system, GST would replace many of the levies, ensuring that companies are taxed only on the value they add at each stage of production. But in the current proposed form, several items-including alcohol, petroleum products and electricity-would be exempted from GST, meaning some degree of double taxation will continue. The Indian aviation industry believes that the exclusion of petroleum and aviation fuel from its ambit will continue to impact the aviation sector.

The Central Government will continue to impose excise duty on five petroleum products—crude oil, diesel, petrol, natural gas and aviation turbine fuel (ATF), while the state governments will continue to impose value-added tax on these petroleum products. Jitender Bhargava, Former Executive Director, Air India, says, “Though the tax component on air services would remain at what fliers pay as service tax, the airlines will continue to pay much higher taxes on aviation fuel. This, in turn, has to be borne by the passengers.”

However, for India to be truly a common market, the industry is hopeful that the government will ensure that all the border check-posts between states would be removed. The international import and export shipments should be zero rated under GST regime. For international shipments to ensure seamless movements within the country, it is vital that the Customs Clearance System (ICEGATE) is linked to GSTN.

Let’s Make The Future Glorious

Sun Aviation is a Aviation Company operating cargo and passenger flights. Sun Aviation is as an innovative, aggressive and attentive player in the aviation world.

Services of Sun Aviation Ÿ Air Cargo & Heavy Lift Operations Ÿ Passenger Charter Operations Ÿ Long Term Aircraft Operations Ÿ Flight Operation & Support Services Ÿ Multimodal Transport Ÿ Speciality Air Services Ÿ Warehousing Ÿ Ground Handling

SUN AVIATION PVT. LTD.

Sun House, H.No – 19, Pocket IV, Bindapur, 40 Feet Road, Chankya Place New Delhi - 110059 Tel

: +91-11-25635803, 25635598, 25631011, 25632011, 25631069 Fax : +91- 11-25635637 Email : info@sunaviation.in Website : www.sunaviation.in

Website:www.sunaviation.in

SPECIAL feature “ We must recognise the progress we made in terms of infrastructure, e-commerce and security. We have seen major initiatives from the government and other authorities to improve things under ‘ease to do business’.”

Vipan Jain, Regional Manager Logistics, South Asia and Middle East, Lufthansa Cargo

Logistics ya

d t. Lt Pv

Chaita n

The domestic air cargo industry is expected to grow at six to eight per cent over the next five years on account of expected growth in domestic economy and most importantly increasing penetration of ecommerce. In value terms, gems and jewelry, pharmaceutical products, organic chemicals, and apparel and clothing accessories account for over half of the air cargo exports from the country. The demand for these commodities are highly sensitive to the global economic growth, thereby leading to huge fluctuations in air cargo movement.

Since 1992

On a positive note, Zengrong says, “We can foresee lot of improvements in operational excellence along with restructuring of ports and airports. A new concept developed by the Government of India like Public/Private partnership ventures to improve infrastructure which has already started taking place. In current world security scenario, all terminal operators/ stakeholders are very serious about security aspect and are upgrading security equipment like dual X-ray machines, ETD machines, sniffer dogs, auditing, better trained secu-

CHAITANYA LOGISTICS PVT. LTD.

Services: Custom Clearance | Logistics Solution | Integrated Logistics Solution | Global Freight Forwarding | Shipping Services | Transportation Services | Ocean Freight CHAITANYA LOGISTICS PVT. LTD. B-109, DDA Shed, Okhla Phase-1, New Delhi-110020, India Mr. Hemant Sharma: Mobile: 9717199337 Phone:+91 11 41661470, 41771470 Email: hemantsharma073@gmail.com,clpldelhi44@gmail.com

rity staff, etc.”

Jain also reminds about the positive changes we made together in the industry and he strongly believes that we should be proud about what we have today. “First of all we must recognise the progress we made in terms of infrastructure, e-commerce and security. In the recent past we have seen a major initiative from the government and even from other authorities to improve things under ‘ease to do business’ and that it has left the users behind. In case, we deal with all three points separately,

India is expected to become the third largest aviation market by 2020 and the largest by 2030.

it will be simple to understand. In terms of infrastructure, we are able to cater to the existing demand at most of the airports.

However, certain changes in processes can help to improve the entire supply chain. E-commerce wise, all the airports have their own systems using with all the stakeholders. However, Common Cargo Community system is also initiated by the Ministry of Civil Aviation. Regarding security, MOCA has also initialed the first meeting under ‘National Civil Aviation Policy’ to simplify security procedures in the light of changing business dynamics and we do expect changes without compromising security. Overall, we are using various platforms initiated by the government and others to improve things according to our requirements as individually it is very difficult to convince all the stakeholders.”

With time-definite international transactions, production flexibility and speed characterising much of the new economy, it is nearly certain that air cargo will play an increasingly vital role in the nations’ economy. No other means of transportation is better equipped to meet the economic realities of the new era where global sourcing and selling, and just-in-time logistics, require that producers receive and ship smaller quantities more frequently, quickly and reliably over long distances. But, air cargo must modernise its processes, improve quality and reliability and widen the range of services offered.

We anticipate huge changes in infrastructure and security domains, which will defenitely strengthen the air cargo industry. As e-commerce sales are expected to grow higher in the future, it will also have an impact on the air freight. With great enthusiasm, CARGOCONNECT waits to hear noble ideas and great initiatives from Athens, which can solve all the current bottlenecks faced by the industry.

FEATURE

Technology: The Right Ingredient for Air Cargo

60 CargoConnect - ACAAI 2016

feature

T Of late, the air cargo industry has seen a major drift towards implication of technological advancements such as expanding from heavy use of legacy mainframe systems to more customised interfaces used for networking, planning, flight operations,

revenue

accounting

and other processes. By embracing technology and leveraging the latest advances, air cargo carriers will be able to streamline their operations,

echnology is an essential part of any business today and air cargo industry is no exception. As technology enables the players of the air cargo sector to stay connected with its customers, this sector needs to capitalise and implement the right technology to make information available real time and create a seamless interaction with its customers. As technology has, till date, been implemented without taking into consideration a well-planned strategy to provide the right kinds of solutions to the much- needed services, the air cargo sector has been bedeviled by lack of transparency. It should be understood that the mere use of technology is not enough for the air cargo industry to sustain itself in the current dynamic global scenario. The air cargo industry has to maintain pace with the technological evolution and implement a strategy that has innovation at its core to sustain itself and expand.

The importance of information technology in air cargo cannot be undermined nor it can be sidelined and any attempt to do so will seriously impact the ability to carry out operations. The information management streamlines the goods management and that is where IT comes in.

Technology, predominantly, can bring three visible changes to the air cargo sector. They are: 1. Technology can bring in the shipment visibility across the supply chain, thereby reducing inventory, follow-up and administration costs, 2. Technology can reduce the duplication of data entry work significantly, thereby reducing the overall transaction costs, 3. Technology can significantly enhance the customer satisfaction by keeping them informed about the status of their shipments in real time.

Thus, technology has a key role to play in the future of air cargo industry which is supposed to be paperless , transparent and is expected to facilitate faster movement of goods.

The Megatrends

ciency. Tariq Ahmed talks to experts

The air cargo industry has been a prime witness for several key technological trends that has been introduced in the last few years with the motive of building a network that can overcome all the challenges faced by this industry. Some of these measures have exceeded our expectations by simplifying trade facilitation across geographies way beyond our imagination.

in search of answers about how to

e-freight:

reduce costs and optimise their effi-

capitalise these technological advancements for the greater good of air cargo industry

A major trend seen in the air freight market is towards implementing e-freight programs. Such programs are aimed at freeing the air cargo process of paper documents. IATA introduced e-freight in 2014 with the idea of replacing paper with digital documents throughout the supply chain, at all levels from shippers, forwarders and export customs to carriers, import customs, forwarders and receivers. Documents are sent in a ‘digital pouch’ (which includes all documents normally sent in a pre-alert message). Each party receives only those documents it needs.

In the words of Amit Maheshwari, MD and CEO, SoftLink Global, “The aim is to eliminate the paperwork and go the digital way with electronic data interchange (EDI). With the introduction of e-freight Air waybill (AWB) can be issued electronically after the stakeholders furnish the necessary information through the same mode. E-freight can be a key factor in increasing the operational efficiency of the sector.

In fact the Mumbai airport has drawn up an expansion program for implementation of web-based EDI (electronic data interchange).

ACAAI 2016 - CargoConnect 61

FEATURE

“The air cargo industry has to continuously keep pace with the technological evolution and implement a strategy that has innovation at its core to sustain itself and expand.

The importance of IT cannot be discounted easily neither can it be sidelined.”

Amit Maheshwari, MD and CEO, SoftLink Global pvt ltd

What does e-freight mean?

For a shipper: • Use standards for letter of instruction, commercial invoice, certificates • Send electronic data to forwarder • Often supported by ERP (SAP)

For a forwarder: • Use standard for house and master AWB • Send message for master (FWB) to carrier • Create e-pouches with shipper documents and standards for the house AWB and send this to forwarder at destination

For a carrier: • Use the FWB in warehouse management process • Create correct manifest (FFM; summary of cargo on board)

For customs: • Worldwide customs is moving towards using electronic documents • Messages are sent to customs by forwarders and by carriers

62 CargoConnect - ACAAI 2016

SWIFT: Indian Customs has put together its SWIFT (Single Window Interface for Trade Facilitation) quite swiftly. As part of the “Ease of Doing Business” initiatives, the Central Board of Excise and Customs, Government of India has taken up implementation of the Single Window Project to facilitate the Trading Aross Borders in India. Agreeing to this, Amar More, CEO, Kale Logistics said, “This is fundamentally changing the way trade interacts with regulators. This has and is going to reduce the dwell time quite significantly.” SWIFT would allow importers and exporters, the facility to lodge their clearance documents online at a single point only. Required permissions, if any, from other regulatory agencies would be obtained online without the trader having to approach these agencies.

The Single Window Interface for Trade (SWIFT), would reduce interface with Governmental agencies, dwell time and the cost of doing business. The objectives of SWIFT are in line with key programs of Government namely ‘Make in India’

and ‘Digital India’. It will also enable the Customs IT system to automatically identify import goods on the basis of risk criteria that require clearance by the Participating Government Agency (PGAs).

The system would also automatically direct the taking of samples, inspection, delegation to Customs etc. whenever required thereby dispensing with manual directions. The Single Window system is a crucial implementation of trade facilitation measure for goods clearance at the country’s points of entry and exit.

Efficiency in the import and export procedures would save large sums of money for the importers and exporters and reduce trade-related costs and delays as well.

Sensor Technology: Shipment monitoring technology is advancing at a dizzying pace, resulting in an array of futuristic tracking devices that do everything from store solar power for five years to communicate with each other without human intervention. These advances allow manufacturers and shippers to track shipments, manage inventory, and

A premium product for the warehousing industry, containing the most relevant articles , information, data, trends, projections and figures for the entire year, packed in a hardbound and jacketed coffee-table format, designed in a purely aesthetic and superior quality. by Powered

s e Logistic h t r o f t n at nte elevant cnoeasy to read form r t s o m e g th in a Presentinstry professionals u ind

India Warehousing Handbook 2016

has been a grand success and is considered an asset for the entire warehousing industry.

The next edition is only going to get bigger and better.

We invite you to be a part of this excellent media product, highly appreciated by the industry by booking your spot to place your advertisement message in the

INDIA WAREHOUSING HANDBOOK 2017 Hurry now, as premium spots are limited For more details please contact: Niti Chauhan: +91-7065066695, niti.surecommedia@gmail.com Rajesh: +91-9874971551, rajesh@surecommedia.in SURECOM MEDIA 4/23B, First Floor, Jangpura-B, Mathura Road, New Delhi-110014

FEATURE “We have what they call as late mover advantage whereby we have leapfrogged a few generations of technology evolution and have moved to cloud-based, mobile-based logistics applications.”

Amar More, CEO, Kale Logistics

prevent theft in previously impossible ways.

Low cost sensor technology are finding newer application in the air freight market, making the task of monitoring freight easier and less costly. On similar lines, Maheshwari said, “Digital identifiers and disposable smart labels are the next big thing in tracking and tracing of cargo. Internet of things (IoT) is set to have a deep impact on the working of air cargo logistics with automated, event driven logistics processes.”

While technologies like radio frequency

ing is near-real-time, although some areas experience lags or latency in data reporting.

Latency lasts anywhere from a few seconds to several minutes, depending on how many satellites cover the asset’s location. In areas where there are fewer satellites—at the poles, for instance—data reporting is slower.

Cloud based solutions: Operators/trade members are moving to highly scalable cloud based solutions thus eliminating the need of large capital

A key benefit of cloud computing is that it makes setup, implementation, configuration and customisation faster, easier and more affordable than on dedicated hardware-based systems. identification (RFID) and bar codes remain relevant, innovations and dropping prices in cellular and satellite technology make it easier to secure near-real-time coverage for almost the entire globe. Companies selecting shipment tracking technologies must balance budget constraints with a realistic view of the coverage needed. In situations calling for the highest levels of security, the options have never been more sophisticated. Emerging capabilities in satellite and cellular technology have resulted in increased coverage, reduced costs, and expanded product offerings. Track-

64 CargoConnect - ACAAI 2016

investments in system migrations. Talking about one of his brain-child, Maheshwari reiterates, “Softlink has developed an innovative, Next Gen Cloud ERP for logistics service providers that covers the entire aspect of their operations including air freight. Softlink’s Logi-Sys simplifies the operations of air logistics operators to give them complete control over their operations.

Unlike any standalone legacy system, it is a fully integrated one that covers the entire aspects of logistics operations. Being a web based system, it can be used from anywhere,

anytime and does not require much infrastructure investment.”

IT solution provider to the cargo industry, SmartKargo has partnered with Microsoft Azure, the leading cloud computing platform. It facilitates the building of scalable solutions very quickly and reliably.

“A key benefit of cloud computing is that it makes setup, implementation, configuration and customisation faster, easier and more affordable than on dedicated hardware-based systems. Simply stated, cloud computing enables advanced solutions that wouldn’t be practical on other platforms. Advanced solutions integrating big data, mobile, SaaS and web apps can be implemented in a fraction of the time, while also minimising disruption to the operation during deployment,” says Jay Shelat, EVP Sales and Marketing, SmartKargo. Amongst all services, cloud computing is much in demand by carriers. Unisys, another leading technology solution provider recently partnered with MASKargo to provide it with cloud based Unisys Logistics Management System.

“The key demand is for cloud services. Our Logistics Management System (enterprise cargo system) is our most used service. In the last year we have won three contracts, most recently with Aloha Air Cargo and Northern Air Cargo which we announced in March. Good numbers of carriers also buy our Cargo Portal Services multi-carrier booking system, and our Cargo iQ platform,” says Christopher Shawdon, VP, Logistics Solutions, Unisys.

In the last few years, the air freight industry has seen initiatives such as e-freight and Cargo iQ make progress, but now is the time when air cargo needs to process implementation of technologies faster. IATA aims to help the transformation via a number of ways, which include awareness, information, campaigns and through the adoption of standards to accelerate the use of new technologies, such as standards for piece level tracking, RFID or wireless technology.

feature

Major Challenges “Domestic air cargo business is little different than the traditional international air cargo.

Moreover the surge in e-commerce has put significant demands on the terminal operators.

There are predominantly two issues here: The industry outside the terminals tracks the domestic cargo on a different reference number than the air waybill number which makes it difficult to establish mapping or visibility between the statuses on and off the airports thus leading to black spots in the supply chain. In order to eliminate these black spots the terminals have to upgrade their systems and interface with that of logistics service providers. Secondly, the way terminals interact with the trade is changing fundamentally in India. More and more processes are now moving to the online mode from the traditional manual operations. This is posing as a major challenge as implementation of new technologies is not a cakewalk for any industry,” More said, while stressing about the impediments the air freight industry is currently facing.

The aviation logistics in India is cluttered with a zillion bottlenecks. And to stay on the same page with the recent technological advancements, the aviation sectors needs to improve a lot in the infrastructure sector.

Inadequate infrastructure is one of the major problems faced by the sector. India’s air traffic is highly concentrated at few airports with most of the second tier cities being ignored or having negligible facilities. Other issues like constrictions in inter-state movement of goods, the impeded movement of air cargo between second tier cities and gateway airports and scale of operations add to the woes further, leading to lower cost efficiencies. Meanwhile Maheshwari has another point to make. He

opines, “There was a time when the air cargo industry was known to be a pioneer in the use of advanced technology. Of late it has become notorious for its slow uptake of technology.

There has been very little modernisation in its processes and technology in the last few decades within the industry and among the stakeholders. The air cargo industry now has a long way to catch up before it can capitalise on the advantages offered by technology.”

There are still several inhibiting factors that are impediments to total digitalisation of the air cargo industry which need to be attended first before any concrete changes can be seen.

An Era of Change India is one of the fastest digitising air cargo industries globally. The number of e-AWB in India has reached its pinnacle and it has reduced the paperwork to a great extent. Today, more than 50 per cent volume of AWBs filed is through e-AWB and India ranks seventh in the use of e-AWB. More than paperwork, it has also brought in significant benefits of air waybill to the industry. Prior to e-freight, at least ten copies of an air waybill were needed for tendering cargo at the airport which has been brought to zero now. The required information is available in digital format on the systems and authorised access is given to the relevant party for the same.

EDI is electronic movement of information across stakeholder systems. This has eliminated the re-entry of shipment data across multiple systems and has also eliminated unnecessary documentation. The Customs EDI has greatly facilitated the Customs Clearance processes. Customs Single Window initiative of having a common system for multiple regulatory authorities has also reduced the dwell time significantly. This should also be kept in mind that for EDI to be truly successful, all stakeholders should be equipped with technology that can facilitate its use and spread.

But there are still several inhibiting factors that are impediments to total digitalisation of the air cargo industry which need to be attended first before any concrete changes can be seen. But discounting these factors, EDI and e-Airway bill have had the most positive impact on the Indian air cargo industry.

Final Words Technology has moved a great deal in the last couple of years in India. We have what they call as late mover advantage, whereby we have leapfrogged a few generations of technology evolution and have moved to cloud based, mobile based logistics applications.

The most critical systems that have helped India in leading the digitisation of air freight industry are Cargo Community Systems – digital platforms that facilitate transactions between stakeholders. India’s first multimodal community system UPLIFT has set several benchmarks including being featured as a case study in Supply Chain Management book co-authored by Kellogg Business School professors. The system is now being widely adopted across Far-East, Africa, Middle East and Europe. India’s first airport community platform GMAX has also catapulted Indian airports into the league of world’s leading digitised cargo airports. These systems have proven that unnecessary paperwork can be eliminated and end-to-end supply chain visibility can be established in the air freight industry. Similarly cloud based solutions for forwarders, customs brokers, transporters and terminal operators have given these entities access to affordable modern technology.

India itself houses many companies that are pioneers in providing both new age cargo community systems and cloud based ERP systems coupled with business intelligence and mobile apps. We see these technologies transforming the logistics industry not just in India but across the globe.

ACAAI 2016 - CargoConnect 65

FEATURE

66 CargoConnect - ACAAI 2016

feature

Priority Cargo: Right Here, Right Now Priority cargo, which is also known as ‘time-bound’ cargo includes products like newspapers, perishables, flowers, frozen food and human remains to name a few.

There’s no room for delay when it comes to delivering such products to its pre-decided destinations. Since priority cargo demands on-time delivery, air freighters and ground handling staff ensure adequate storage, handling and transportation of such products. Ritika Arora Bhola talks to experts to know more about its services, freight rate, demand and supply

ACAAI 2016 - CargoConnect 67

FEATURE

O

f late, priority cargo, which is also considered as ‘time-bound’ cargo, has become an integral part of the Indian air cargo industry. The need to move priority cargo to its pre-requisite destination and on-time delivery assurance to the customers has become the need of the hour. Priority cargo includes products like newspapers, perishables, frozen food, flowers, live animals, pharmaceuticals, human remains and dangerous goods to name a few. Such cargo leaves no scope for delay or impediment. Airlines make sure the cargo is delivered on-time with adequate care and safety. It is important to note that airlines all

Anand Yedery, Regional Cargo Manager–South Asia, Middle East & Africa, Cathay Pacific Airways

“Cathay Pacific’s Priority LIFT helps to provide instant space confirmation to meet the level of urgency. We allow latest possible acceptance time and also earliest possible delivery time under Priority LIFT. We offer higher level of space access even for large shipments. And we guarantee shipments are flown as booked. If not, we offer 100 per cent money back guarantee.” over the world have special freight centers to store such products efficiently.

Airlines fix specific routes and schedules for delivering priority cargo. Freighters even have highly trained and experienced staff and expertise to keep the cargo shipments moving at top speed, whether it be seafood, newspapers, live animals, flowers, critical supplies,

With years of operating experience, airlines have developed effective handling techniques for chilled and frozen products, providing shippers with optimum, cost-efficient packaging methods. Also, pharmaceutical is a critical industry that moves one trillion dollars per year.

68 CargoConnect - ACAAI 2016

or perishable items. The agents are experts in handling these products and guarantee minimum wastage or loss. Such products are also packed and loaded and off-loaded with utmost care.

Priority air freight includes time-sensitive shipments that need next day or overnight flight service and are heavier. Priority service offers customers peace of mind that their shipments will reach its destination by a specific time. Priority air freight shipments usually arrive at its destination within 12 to 48 hours depending on the origin and destination.

Freighters offer a variety of priority services depending on the goods shipped.

For instance, international airline Alaska Air Cargo provides reserved priority service for seafood shipments. Another service, Priority Perishable is available for shipments of perishables including cut flowers, tropical fish, aquatic plants, fishing bait and foodstuffs, including dairy products, meat, poultry, fruits and vegetables.

Shippers should also note that priority goods must be accepted at the cargo facility at least two hours prior to scheduled aircraft

www.surecommedia.in Postal Registration No.: DL (S)-01/3372/2016-18 Postal at IPMBC on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

240/- + 600/- = 840/480/- + 1200/- =1680/-

720/- + 1800/- =2520/50/- courier charges per issue.

Company Name

SURECOM MEDIA 6/31-B, Jangpura–B, New Delhi-110014 Tel: + 91 11 24373365/24373465 Mob: 9711383365/9810962016 Email: info@surecomedia.in / cargoconnect@gmail.com

VOL VII ISSUE XI OCTOBER 2016 `20

FEATURE

departure. Dangerous goods and shipments travelling on freighter aircraft must be accepted at least four hours prior to scheduled aircraft departure.

Usually shipments labeled under priority cargo reach their destination within four hours of original flight scheduled arrival time.

If the cargo is not available for pick up within six hours of the original scheduled arrival

sensible products. Transporting healthcare products by air needs the establishment of complex logistical methods to maintain shipment’s integrity. It requires specific equipment, storage facilities, harmonised handling procedures and above all, strong cooperation among the cold chain partners.

Observing the same, Anand Yedery, Regional Cargo Manager – South Asia, Middle

the business.”

Stressing on the freight rates for priority cargo as compared to the other cargo, Yedery shares, “We definitely charge a premium over our general cargo rates as our Priority LIFT product is time bound with a commitment of shipments being flown as booked, with possible late cargo acceptance and early delivery at destination.”

Amar Abrol, CEO, AirAsia India

“We categorise the perishable commodities under priority cargo. Absolute diligence is paid to all parameters right from acceptance till delivery to minimise the time consumption. The best use of the airport infrastructure and facilities always play a vital role to ensure faster delivery and this is one of the success keys for building up the business.”

time, the service charge can be reduced to the standard general shipment rate. Dangerous goods shipments do not apply this rule.

Other products like perishable goods (such as fruits, flowers and vegetables) were among the first commodities carried by air. These items deteriorate with time or exposition to adverse temperature and humidity. With years of operating experience, airlines have developed effective handling techniques for chilled and frozen products, providing shippers with optimum, cost-efficient packaging methods. Also, pharmaceutical is a critical industry that moves one trillion dollars per year.

Temperature changes during transportation can be a serious threat to the integrity of these

70 CargoConnect - ACAAI 2016

East and Africa, Cathay Pacific Airways states that, Cathay Pacific Cargo’s Priority LIFT offers the speed that customers’ need for sending urgent shipments to their final destination. “We do carry all types of cargo including large shipments under this product keeping in mind that it’s time bound”. He adds and comments on time-constraint for such cargo saying, “Cathay Pacific’s Priority LIFT helps to provide instant space confirmation to meet the level of urgency. We allow latest possible acceptance time and also earliest possible delivery time under Priority Lift. We offer higher level of space access even for large shipments. And we guarantee that shipments are flown as booked. If not, we offer 100 per cent money back guarantee.”

Agreeing with Yedery, Amar Abrol, CEO, AirAsia India reiterates, “We categorise the perishable commodities under priority cargo.

Absolute diligence is paid to all parameters right from acceptance till delivery to minimise the time consumption. The best use of the airport infrastructure and facilities always play a vital role to ensure faster delivery and this is one of the success keys for building up

He also asserts, “Shippers in India must contact the forwarder or agent who in turn can contact Cathay Pacific Cargo Sales and Reservations Office to create a booking for our Priority LIFT product. Our teams across India guide them through the basic formalities. Our teams at each port work closely with local authorities to ensure our Priority LIFT Cargo get priority handling and the right kind of attention to clear shipments at the earliest.”

India’s most comprehensive handbooks on Warehousing and Air Cargo, packed with information, data, trends, projections, views and articles by senior industry professionals, alongwith columns by leading research companies in an easy to read, hardbound and aesthetically designed format.

6

Avail 15% discount on bulk order of 5 or more copies

To order your copy or advertising options, please contact

Ajeet Kumar +91-9810962016 cargoconnect@gmail.com / ajeet@surecommedia.in

Rajesh +91-9874971551 rajesh@surecommedia.in

FEATURE

A new dawn in airport infrastructure Civil aviation is the fastest growing arm of India’s transport infrastructure and it plays an increasingly important role in providing connectivity. The projections for both passenger and cargo traffic growth calls for an urgent need to build and augment India’s aviation infrastructure. In this article, Tariq Ahmed talks about government initiatives for revival of existing airports, new models, future prospects and more

72 CargoConnect - ACAAI 2016

feature he Indian civil aviation sector has been indicating an extraordinary growth rate in the last few years. However, such a pace of growth in air traffic has also had a direct strain on the aviation infrastructure, which is already stretched – resulting in traffic congestions and delays at majority of the airports. Hence, if a high growth in civil aviation sector is to be sustained, it would call for improvement of infrastructure facilities on several fronts. As per certain projections, by 2020, Indian airports are estimated to handle 100 million passengers (which will include 60 million domestic passengers) and a cargo capacity in the range of 3.4 million tonnes per annum.

As a precursor to all these predictions and to facilitate the growing demand, the Indian aviation industry is all ready for an unprecedented growth in terms of infrastructure developments and connectivity. In the next ten years, at least 50 additional airports will be functionalised.

Presently, there are 450 airports and airstrips, which are spread across the length and breadth of the country. However, merely around 125 of these are operational, while the rest of them remain unused for one or the other reason. Meanwhile, the government is preparing an action plan to revive 160 airports and airstrips, each of them costing about `50-100 crore.

T

Presenting the budget for 2016-17, Finance Minister Arun Jaitley said that the government is drawing up an action plan for revival of unserved and underserved airports. “There are about 160 airports and air strips with state governments which can be revived at an indicative cost of

the Airports Authority of India will also be developed,” he added.

The draft policy has mooted various measures to boost regional connectivity including setting up of no-frills airports and providing viability gap funding for airlines. Among others, the draft policy has proposed that

“In our country, development of airports will be a mixture. Everything to be privatised will be a wrong thing and everything to be nationalised will also be a wrong thing.”

Civil Aviation Ministry Official `50 crore to `100 crore each,” Jaitley said. “We will partner with the state governments to develop some of these airports for regional connectivity. Similarly, ten of the 25 non-functional air strips with

there would be no service tax on tickets under the Regional Connectivity Scheme (RCS) apart from service tax exemption for scheduled commuter airlines taking jet fuel from RCS airports.

New model for development of airports: The government is considering a new model for development of airports wherein Airports Authority of India retains the complete ownership of an airport but privatises most of the services, a senior civil aviation ministry official said. AAI currently owns and runs majority of the airports in the country. But the state-

owned entity is a minority equity partner with private companies in Delhi and Mumbai international airports.

“In our country, development of airports will be a mixture.

Everything to be privatised will be a wrong thing and everything to be nationalised will also be a wrong thing. Public sector has a place and so does the private sector. Now, there are other variations also which the government is thinking. Is it not possible for the Airports Authority of India to own a place and privatise services, and have a revenue share? We are working on such a model,” the official said.

The National Civil Aviation Policy, 2016 had mentioned the possibility of the AAI giving out operations and maintenance for a cluster of existing or new airports. Out of 125 airports of AAI, about 95 are operational of which 71 have scheduled commercial operations. Delhi and Mumbai airports, which are majorly owned by private companies GMR and GVK, respectively, and in which AAI is an equity partner, are currently a major source of revenues for the state-owned entity. AAI owns 26 per cent stake each in Delhi International Airport Ltd and Mumbai International Airport Ltd. The new development model being considered will ensure that the AAI remains the sole or majority owner of the airport to be modernised with most services being outsourced to private firms.

The aviation ministry is planning to revive 50 non-operational airports of AAI in the next three years at an indicative cost of Rs 50-100 crore each. Sources said that the new model may be tried at some of these 50 airports which are being revived.

The government expects this approach to boost AAI’s revenues as well. AAI expects its total revenue of `9,545 crore in 201617 (Budget Estimates or BE) as

ACAAI 2016 - CargoConnect 73

FEATURE

against `9,701 crore of revised estimates or RE in 2015-16, according to ministry sources. Its profit after tax is projected at `1,128 crore BE 201617, sharply down from 1,746 crore RE in 2015-16, the sources added.

The authority’s expenditure is set to rise to `7,987 crore BE in 2016-17 from `7,195 crore RE in 2015-16.

The much debated airstrip expansion: The AAI has recently confirmed that the proposed extension of the Juhu airstrip on Juhu beach will

be undertaken. This came amidst several protests that has delayed the project for a considerable period of time. The extension of the runway is aimed at better services for private operators at the Juhu aerodrome.

The phase-I of the project also includes night landing facilities for aircraft, augmentation of dispersal area, making a terminal building and development of an aviation museum.

Among these, the airport has already received a green signal for allowing night landing for aircraft on the Juhu aerodrome premises.

However, activists have contended that the Juhu aerodrome’s expansion on the beach would be difficult owing to ownership of the land. “In the copy of the draft Development Plan, it is clearly mentioned that the beach is not a property owned by the AAI. We have also filed an RTI to confirm the same.

The beach is the only open space left for residents around Juhu, and we fear the extension of runway will endanger the same,” said Godfrey Pimenta, an activist.

Presently, there are 450 airports and airstrips, which are spread across the length and breadth of the country.

However, merely around 125 of these are operational, while the rest of them remain unused for one or the other reason.

74 CargoConnect - ACAAI 2016

feature

Tapping the Middle East: The government is planning to build a new international airport in the western state of Gujarat, as Asia’s third-largest economy seeks to tap a share of the booming air traffic in the Middle Eastern hubs. Amit Chavda, the general manager for Dholera International Airport Co had mentioned that the new airport in Dholera, about 100 kilometers (62 miles) from Ahmedabad, will be capable of handling Airbus Group NV A380 superjumbos.

“The new airport will lure foreign airlines by offering them an alternative hub to Dubai, Abu Dhabi and other Middle Eastern airports,” Chavda added. A flight from London to Sydney can save fuel for more than 300 kilometers by using Dholera as a hub instead of Dubai, he said. “In five years, Dubai airport will be so busy and so difficult to get into, that airlines would like to rather route their flights via Dholera,” Chavda said.

Chavda informed that the Dholera airport, for which the Japan International Cooperation Agency is preparing a project survey, has initial approval from the Ministry of Civil Aviation and expects to get other approvals by 2016. Bids will be invited from private companies to develop the airport.

The Dholera airport, to be built in about 1,426 hectares of land at an initial investment of

`10 billion will have two runways, hotels and convention centres, according to Chavda.

Skepticism: Many aviation industry watchers are sceptical about the civil aviation ministry’s plans to build 200-odd more airports across the country in the coming two decades. Aviation experts point to the fact that most of the existing airports are loss-making and thus are financially non-viable.

They question the wisdom behind adding to this roster of non-performing airports. While certain elements in the airline

in the Western Indian region (except for Goa, Mumbai, and Pune) are loss-making ones.

These include airports at Akola, Kandla, Aurangabad, Bhavnagar, Bhopal, Bhuj, Diu, Gondia, Indore, Jabalpur, Jamnagar, Keshod, Kolhapur, Porbandar, Rajkot, Songarh, Soplapur, Surat, Vadodara, Ahmedabad and Juhu.

Commenting on the issue, Amber Dubey, Partner and India Head of Aerospace and Defense at global consultancy KPMG, said, “It’s difficult to predict the (optimum) number of new airports since the projected increase in traffic may be concentrated

“The new (Dholera International) airport will lure foreign airlines by offering them an alternative hub to Dubai, Abu Dhabi and other Middle Eastern airports” Amit Chavda, GM, Dholera International Airport Co industry blame the government’s poor planning and execution for the plight of the existing airports, others are hopeful that the government will first try to turn around its loss-making airports before building new ones. A cursory look at the latest balance sheet released by AAI reveals that most of the airports are in the red. For example, airports

around the top 12-15 old airports – and they may go for airport capacity expansion. New airports will require significant government funding for survival. A rough estimate would be around 20-30 new greenfield airports by 2025.” He also said, “We need new airports in places of economic, tourist and strategic interest. These could be places close to mines, ports, spe-

cial economic zones, industrial clusters or the country’s borders, etc. They need to be chosen carefully since they may be non-viable for several years, before their hinterland economy grows and traffic picks up. These airports should be no-frills or low-frills airports in the public-private partnership mode. Their revenue shortfall should be compensated for, by way of the Essential Air Services Fund (EASF). The fund should be created through a one to two per cent cess on all air tickets sold in India.”

Explaining the reason for the poor performance of Indian airports, Devesh Agarwal, an aviation blogger and analyst, said, “In India, most of the civil aviation related decisions and polices are taken on an ad-hoc basis in absence of a comprehensive civil aviation policy.” He added that he had no doubt that more airports are needed, but that the government’s present plan of having 200-odd airports is imprudent. Agarwal further blamed the wrong policies adopted by the government for poor financial health of airports in India. He was referring to the policy in which the Central Government is the major funder of an airport project, with the state or city concerned, having negligible or no investment in the project. “In the US, the reverse is true, because of which the local citizens of the city have a stake in deciding the fate of the proposed airport,” he added.

ACAAI 2016 - CargoConnect 75

focus

Connecting Local Strengths with International Standards of Logistics The Indian logistics industry has been witnessing buoyant growth and shall continue with the same momentum in the years to come, majorly fuelled by FDI. Many international logistics companies explored the Indian market but only few could adapt to the global standards in terms of infrastructure, technology and expertise

Albert Hoek

a

Managing Director, Broekman Logistics

n international freight forwarder and logistics service provider, Rotterdam based Broekman Logistics, over the last decade, has managed to create a strong foothold in its core sectors in India along with making their presence felt across the globe. Established in 1960s in Rotterdam (Netherlands), Broekman Logistics with three major divisions Forwarding & Shipping (Air, Ocean and Multimodal Logistics Services and Shipping Agencies), Warehousing & Distribution (Parts Logistics, Special Chemicals Logistics, Assembly and Automotive) and Breakbulk Terminals (Steel Logistics, Offshore & Heavy Lift and Project Cargo), excels in providing super logistics solutions worldwide.

With a pan India coverage, performancedriven culture and proven track record of success, the Indian division, Broekman Logistics India (BLI) built a strong reputation as an industry leader with an annual turnover of 25 million euros. Being a fully grown

78 CargoConnect - ACAAI 2016

Rajiv Nathan

Director of Broekman Logistics India (BLI)

Forwarding, logistics, warehousing and distribution including value added services has always been the core of Broekman Logistics in India. I’ll admit that it wasn’t easy to understand the differences about various echelons of business and culture between the Dutch head office and the Indian organisation, but once those were worked out, it was a win-win situation. Our Strategic Plan - 2020 - is in place and we are deeply committed to the long term growth we see for BLI in India.”

Albert Hoek Managing Director, Broekman Logistics supply chain management logistics company, the company’s strength lies in processing, storing and transporting complex, heavy or dangerous products through smart solutions.

By providing ocean/air freight, Custom Clearance, Warehousing and Distribution, Transportation and even domestic cargo services under one roof, BLI has become a ‘One Stop’ solution for all your logistics needs. BLI is also a unit holder in Free Trade Warehousing Zone and a member

Sandeep Tyagi

VP, Marketing & Sales, Broekman Logistics India (BLI)

of many prestigious associations including IATA, FIATA, MTO, NVOCC and Flashline network. BLI presently handles 1,700 and 3,200 tons of air freight respectively for domestic and international sector. It is one of the few multinational companies which has its feet firmly entrenched in international as well as domestic market. Rajiv Nathan, Director of BLI says, “Our mission is to endeavor to be a full-fledged logistics partner with a global reach by creating sustainable value in the supply chain network. Our year on year double-digit growth shows that we have successfully implemented this.”

Over the years, Broekman Logistics has always believed in connecting local strengths with international standards of logistics.

Broekman’s slogan – ‘Global reach with a personal touch’ – very aptly describes the ideals and visions of the company. Sandeep Tyagi, Vice President, Marketing and Sales, says, “Our local strength and strong base accompanied with the international network of our worldwide offices has resulted in a widespread global coverage, with active and enthusiastic partners in over 115 countries of the world.” Presently, Broekman Logistics India has a strong focus on engineering, apparels, pharmaceutical, agricultural, automotive, chemicals and plastics industries. Apart from this, the company is also directing its attention on Cold Chain Logistics as well as energy centric businesses.

Interview With its aim to promote the growth, development and professionalism of the air cargo industry in India, ACAAI hosts its annual convention every year since 42 years. The 43rd ACAAI convention in Athens is different in many respects in comparison to the earlier ones. Hemant Bhatia, President, ACAAI in an interview with Nicin Varghese talks about ACAAI’s journey, plans and modernisation of air cargo

Moving Beyond the Traditional Locales 80 CargoConnect - ACAAI 2016

Please tell us about the journey with ACAAI so far?

According to you, what developments should we bring to convert Indian air cargo industry into a global one?

ACAAI has been in existence for over 46 years now. It has been a privilege for me to be closely involved in the management of our association for over 20 years in various capacities at the regional and national level.

In this process, I have also been exposed to many issues of great significance to the industry, which has greatly enriched my knowledge and experience.

The Union Government has declared “Ease of Doing Business” as one of its major initiatives.

In order to facilitate the rapid growth of the logistics and freight forwarding industry, a comprehensive review and overhaul of the entire gamut of the current rules, regulations and procedures pertaining to customs, taxation, transaction costs, movement of goods domestically and internationally is essential. It is heartening that the Union Government has been taking several steps to achieve this objective, which will ultimately result in aligning these industries with the global standards prevalent in the developed economies. Simultaneously, skill development to groom professionals on a large scale should also be undertaken, as these industries are expected to show major growth during the next few years. Last but not the least, best in class infrastructure is a vital component to make India a global air cargo hub.

What are the advantages you foresee in selecting Athens as the venue for ACAAI convention this time?

For over 40 years, the annual ACAAI conventions have been held at venues in India and Asia. This has enabled our members to gain insights about these cities, and forge new business and personal relationships.

It was therefore necessary to move beyond the traditional locales to a new venue for holding our convention in 2016. Athens has been chosen as the venue of the first ACAAI convention in Europe as it is different in many respects in comparison to the earlier venues. In addition, India and Greece have recently signed an open skies agreement.

Under this agreement, airlines from India can operate unlimited number of flights

to promote the growth of the air cargo industry. Towards this objective, our association regularly interacts with Ministry of Civil Aviation, Ministry of Commerce and

Greece is the first country to have an open sky agreement with India under the New Civil Aviation Policy. Under this agreement, airlines from India can operate an unlimited number of flights to Greece, while Greek carriers have been granted unlimited traffic rights to six Indian metro cities. Athens is, therefore, an appropriate choice for our event this year. to Greece, while Greek carriers have been granted unlimited traffic rights to six Indian metro cities, viz. Delhi, Mumbai, Hyderabad, Bengaluru, Kolkata and Chennai.

Greece is the first country to have an open sky agreement with India under the New Civil Aviation Policy. Athens is, therefore, an appropriate choice for our event this year.

Please tell us about the new initiatives taken by ACAAI for the development of air cargo industry?

Since its inception, ACAAI has endeavoured

Industry, Ministry of Finance, government departments such as CBEC, CBDT, Customs, BCAS, AERA, etc., as well as IATA, FIATA and airlines to facilitate the smooth functioning of the air cargo industry. Some of our recent initiatives in this regard include the service tax issue, bank guarantees demanded by airlines, single window clearance for import and export goods, simplification of tax laws for the industry, suggestions regarding GST, reduction of dwell time for import and export cargo at Indian airports, comments regarding the New Civil Aviation Policy etc.

The security of air cargo is one of the chief concerns of the industry.

According to you, why does the system fail to provide effective security?

Effective security regulations, procedures and systems have already been put in place by the authorities. Awareness and compliance with these procedures are essential to ensure overall safety and security. For the success of the system, security consciousness and adherence should be ingrained in the mindset and become a way of life for each and every person who is involved directly or indirectly in the logistics and freight forwarding supply chain.

Modernisation of infrastructure is the need of the hour. How do you think the government projects such as ‘Make in India’ and similar initiatives could contribute?

“Make In India” is a major initiative of the government to boost manufacturing in India to promote a directional shift in the economy from services to manufacturing as well. In the context of the logistics and freight forwarding industries, the modernisation and upgradation of airports, sea ports, expressways as well as the systems which are related to them are of utmost urgency and importance. In this context, “Make In India” has the potential to be a major contributor through replacement and substitution of imports with domestic materials, technology, skills, etc. to develop infrastructure of global standards.

ACAAI 2016 - CargoConnect 81

Interview

Air Freight Stations: The Impetus for the Growth of Air Cargo Industry The Container Corporation of India Ltd, with its objective to provide improved logistics solution to the Indian air cargo industry, has launched many innovative projects. Deepak Kapoor, Executive Director, Air Cargo and Logistics, CONCOR in a candid interview with Nicin Varghese, speaks about the various initiatives and the need for implementation of AFS in India have changed over the period of time and destination countries are emphasising on pest free products with established backward linkages and traceability system.

In order to match the changing scenario and for optimum utilisation of infrastructure at Goa Airport, CONCOR is working towards creating pack houses as mandatory for the farmers. We are also planning to set up a state-of-art integrated pack house with various treatment facilities at its Multi Modal Logistics Park being set up at Balli, Goa.

Please speak about the new MoU signed by HAL and CONCOR on domestic and import-export trade.

Can you tell us about the Centre for Perishable Cargo at the Goa Airport?

India, the world’s second largest producer of fruits and vegetables, is throwing away 18 per cent of its fruit and vegetable production – valued at INR 133 billion worth every year, because of the lack of adequate cold storage infrastructure in the country. CONCOR, being a major player in the Indian logistics industry has recognised the issue and conceptualised this project in 2006. The idea was to provide international market accessibility to the fresh produce farmers and exporters from Goa and adjoining districts of Karnataka and Maharashtra. The Centre for Perishable Cargo at Goa Airport, with the assistance from APEDA and AAI is operational since 2009 with Customs and plant quarantine inspection and certification facilities.

What are the specialised services provided by CONCOR for perishable cargo?

The protocols of the major importing countries

The HALCON Cargo Complex facility is unique and one of its kind in India and is located at HAL Ozar Airport. It spreads over 11 acres of land and comprises of Air Cargo Complex (ACC), Inland Container Depot (ICD), bonded warehouse, Centre for Perishable Cargo (CPC), APEDA recognised integrated packing house (IPH) for perishables like fruits and vegetables, and cold storage facility, screening with customs EDI connectivity for ACC and ICD. HALCON handles average 7500 TEUs of exports per annum from ICD, 700 MT of air cargo from ACC and 2000 MT of fresh fruits and vegetables are packed at the integrated pack house for export to EU, US, ME and other countries.

In addition, HALCON also handles live animals and provides ground handling services at HAL Ozar Airport. HALCON will also operate the common user domestic cargo terminal on commencement of schedule operations of passenger flights from this airport. The whole infrastructure has been created to provide single window service for air and sea cargo trade.

Please tell us about the new initiatives taken by CONCOR for the development of Indian air cargo industry.

CONCOR, through its subsidiary “CONCOR Air Ltd”, has entered into an agreement with GVK (MIAL) for operations and management of both domestic and international cargo facilities at Mumbai Airport. CONCOR Air Ltd has also set up a state-of-the-art domestic air cargo Common User Terminal at Santacruz, Mumbai and has deployed latest cargo handling equipment. CONCOR has also signed an MoU on September 29, 2016 with Airports Authority of India to jointly develop, manage and operate air cargo terminals at various airports of AAI. Under the said MoU, CONCOR has already taken over management and operations of courier terminal at Chennai Airport. Talks are also on with AAI to start cargo operations at other AAI airports.

Why has India not been able to replicate the success of Container Freight Stations in air cargo?

AFS refers to Customs notified places where all Customs and other related formalities are completed. For the destination airlines, AFS is where the “ready for carriage” palletised/ containerised export cargo is carted to the gateway airport and vice versa. Now, this is not happening as it is very difficult to get that much volume of cargo for a single airline destination. Secondly, the airport operators are not willing to act as gateway airport operators and are not ready to reduce the airport charges for cargo originating from such facilities. They insist on collecting their full handling charges despite getting the ‘ready to carriage’ cargo. This results in payment of double handling charges by the users of AFS facilities, thus making it unviable for them.

Interview

“Modernisation of infrastructure is going to be the backbone of the industry” “Being a globally operating logistics services provider, we continually invest in the future and stability of our company,” says Huned Gandhi, MD, Air and Sea Logistics, DACHSER India Pvt Ltd in a candid interview with Nicin Varghese. He talks about the growth and development of the industry.

Please elaborate on the current percentage of growth observed by DACHSER in the last few years. Where do you see the graph moving in the coming years?

DACHSER in India is growing double digit and we expect a steady growth rate of 12-15 per cent in the future. Our focus is on providing high quality services and sustainability.

We are very positive of our consistent growth YOY in the Indian market.

The security of air cargo is one of the chief concerns of the industry. According to you, why does the system fail to provide effective security?

It is important that all stakeholders of the industry place “security in the transport chain” on high priority and take stringent steps to ensure the same. Profile checks on drivers, GPS tracking of vehicles, seals, etc are very important and should not be compromised with. Yes, there would be a small increase in costs but this is absolutely the need of the hour. Also industry certifications are very important for beefing up the security in the entire transport chain.

What is DACHSER’s mantra for sustainable corporate management?

As a globally operating logistics services provider, we continually invest in the future and stability of our company. The corporate sustainability of the family-owned business has always rested on Intelligent Logistics, a strategy of organic growth and smart financing concepts. Highly qualified management teams, continual learning and development programs, fostering entrepreneurship are our mantra’s for sustainable corporate management.

According to you, what developments should we bring to convert Indian air cargo industry into a global one?

Benchmarking of our processes with the developed world, easing of transit bottlenecks, significant improvement of road infrastructure (highways) are all very important factors.

Modernisation of infrastructure is the need of the hour. How do you think the government projects such as ‘Make in India’ and similar initiatives could contribute?

“Make in India” initiative is indeed very effective and other initiatives like “Ease of doing business” will also help in attracting manufacturing to India. Modernisation of infrastructure is going to be the backbone for the success of “Make in India” and a lot of attention would be needed to improve our highways for seamless connections from the manufacturing units to the air and sea ports.

ACAAI 2016 - CargoConnect 83

Interview

“We have to rededicate for a zero-complaint business” Managing a healthy clientele year after year, by providing dedicated services in the field of custom clearance, warehousing and international freight, Akanksha Global Logistics Pvt Ltd has reached the pinnacle of success in the recent years. Tariq Ahmed, in a candid interview with Vinod Anand, Managing Director, Akanksha Global Logistics Pvt Ltd talks about the journey and a lot more

Please tell us about the genesis of your operations.

How has the journey been so far?

The genesis of operations of Akanksha Enterprises came into existence in 1987 when I was working as a senior manager in a nationalised bank. I had an opportunity to look at the intricacies of freight forwarding and customs brokerage industry very closely while assisting one of my friends for a short period, who was already in this trade for a long time. With my business management and law background, I could anticipate some radical changes in the growth of business with high quality services to the clients. Incidentally at that time, CHA entrance exams were being conducted and I got myself enrolled in it. Surprisingly, I cleared the entrance exam and more surprisingly stood second in the region. This encouraged me to enter this profession and choose it as a career.

Could you please elaborate to us about your warehouse management services and storage solutions?

Customs clearance and forwarding was a difficult profession in the eighties. The clearance process was lengthy, cumbersome and highly complicated. The peak rate of customs duties was as high as 350 per cent and all the systems of operations were manual. My core area of clearance was medical goods. This was much more ambiguous than other items because of the scores of notifications and hundreds of classifications. We evolved a strategy of interpretation of classification vis a vis import items by physically studying the usage at the

84 CargoConnect - ACAAI 2016

hospitals and medical centres and understanding the actual usage. This way, we could remove many unwarranted objections raised by customs and paved way for a speedy and smooth clearance with accurate classification.

Now that GST has been passed, how do you plan to make the most of it in order to provide even better services and logistics solutions to your customers?

The current combined centre and state statutory rate for most of the goods works out to be 26.5 per cent (CENVET of 14 per cent and VAT of 12.5 per cent). But, post GST implementation of the same, it is expected to reduce up to the standard rate of about 18-21 per cent, which will be levied on most goods and services. This will lead to a lower tax burden for consumers, thereby facilitating a consumption led growth.

Implementation of GST in the logistics industry will diminish logistics costs up to 30 per cent over a period of three to four years due to savings in logistics and removal of check posts. It is also expected that GST implementation will result in consolidation of warehousing complied with facilitating seamless inter-state flow of goods.

We plan to appraise our clients the net GST applicable on their goods and services post implementation of the act so that they can reevaluate their pricing for a competitive costing in their segment of market well in time.

The lack of modern transport infrastructure in the country has hampered the overall growth of

logistics. What has been its impact on pharma logistics?

The lack of modern transport infrastructure in the country has definitely created bottlenecks for the growth of the logistics industry to a large extent. Especially, transportation of industrial and agricultural produce from rural and semi -urban areas have been a problem for the producers. Dependence on public transportation including railways has been a reason for stagnant growth of the industry. However, it is expected that after the completion of the Golden Quadrilateral, the growth of logistics industry will gain a big momentum and will benefit all the stakeholders. Alternative economical modes of transportation by air and water will have to be explored as per the locally available resources. Establishment of industrial hubs en route Golden Quadrilateral highways network will give a big boost especially to the pharma industry where timely delivery is essential due to various factors.

You have been the recipient of the “Best CHA India 2016” this year. How do such accolades motivate you in the pursuit of your goals?

Receiving the “Best CHA in India” award has given us a great feeling of satisfaction and joy.

But, it has also added more responsibility for maintaining the high quality services while serving our esteemed clients. We have to rededicate for a zero complaint business and evolve new strategies to meet the ever growing challenges faced by the industry.

Interview

“Domestic Air Cargo Would Grow Rapidly�

Sunil Arora, Director, Delta Freight is the present Secretary General of ACAAI and is one of the renowned faces in the air cargo industry. In a candid conversation with Nicin Varghese, he speaks about the new GST bill, Open Skies Agreement and much more Can you please tell us about the customised services offered by Delta Air Freight?

Delta Air Freight is in the business of air freight and sea freight since 28 years. We specialise in handling carpets and odd size shipments. Our major markets are Bhadohi, Agra and Jaipur.

How do you think the GST bill will help the Indian logistics industry?

Direct benefit of GST to the logistics industry would be seamless cargo movement across the country owing to expected hasslefree interstate cargo vehicle movements.

In addition, there would be tremendous development as far as emergence of larger warehouses at major stocking and distribution points are concerned. On the other hand, less transaction costs as a result of proper implementation of GST through GSTN would have very positive effects on the manufacturing, EXIM and logistics industry.

Presently, we are witnessing cascading effects of multiple taxes and complex mechanism to realise the same, resulting in huge burden on manufacturing, export and logistics industry.

What is your take on the new Open Skies Agreement signed between India and Greece? How do you think this will affect the Indian air freight industry?

In India, there is an Open Sky Policy already existing for freighter operations for a long time.

Accordingly, all-cargo carriers can start their services at any point of time, when and where demand persists. However, we welcome the reported bilateral ASA between India and Greece. It would increase people-to-people bilateral relationship as well as bilateral trade between the two countries. Significantly, it would be the first such ASA with Greece, which is predominantly a tourist destination.

According to IATA, India is expected to become the largest aviation market in the world by 2030. What major steps should be taken to make this happen and what could be the major challenges ahead?

The obvious challenge is to create a good balance between demand and supply of capacity. Accordingly, there is a need to create adequate physical and IT infrastructure to match the projected demand and supply, well

in advance and in a time-bound manner.

Domestic air cargo industry is growing faster than the international air cargo industry. Where do you see the graph moving in the coming years?

It is true that domestic cargo market (including domestic air cargo) is ruling the cargo business in India. This market, which is mainly driven by e-commerce at present, would grow rapidly in the days to come. However, there is a trend of domestic cargo shifting towards surface mode. With regards to the international air cargo market, we are quite confident that it would see a spurt as soon as the world economy crawls back to normalcy, maybe by early 2017. We should recall the fact that international air cargo is the first beneficiary of revival of the world economy.

Five years from now, where do you want to see Delta Air Freight Pvt Ltd? We are maintaining high standard of service deliverance. We are optimistic and look forward to grow with the industry. High demand and necessity to adopt technology is the need of the hour. We hope that with the changing EXIM policies the SMEs will be benefitted.

ACAAI 2016 - CargoConnect 85

Interview

ACAAI is pro-active on issues regarding air cargo “ACAAI has always taken up issues related to the air freight industry with the concerned authorities to facilitate the growth and development of our industry,” says TA Varghese, Director, Aroscan Cargo Trade Pvt Ltd, who is the present Vice President of ACAAI. In an interview with Nicin Varghese, he speaks about his company, ACAAIs’ new initiatives and much more According to you, what developments are needed to convert Indian air cargo industry into a global one?

The growth rate of the Indian economy is currently the highest in the world. The “Make In India” programme is expected to give a major boost to manufacturing sector in our country. Consequently, import and export of goods will also increase substantially. In this scenario, the air cargo industry plays a vital role to provide speedy transportation of raw materials and finished goods within and between different countries. In order to make our industry globally competitive, it is necessary to have simplified Custom regulations and procedures, lower transaction costs, upgradation of cargo handling infrastructure at airports, automation of the documentation requirements of all related authorities to bring about a paperless system for cargo clearance and reduction of dwell time of cargo at airports in India by streamlining the handling procedures.

to numerous authorities and agencies considerably delay the clearance of cargo.

Consequently, dwell time of the cargo at airports in India is much higher than at major global airports such as Dubai, Hong Kong, Singapore etc. It is heartening that Customs Department is in the process of implementing the “Single Window Clearance” programme, whereby the clearance of documents will be done electronically. Once this programme gets fully implemented, the vision of paperless environment would become reality. However, airlines also need to adhere to the e Air Waybill (e AWB) programme, without demanding additional Air Waybill copies and physical copies of documents which have been cleared electronically.

Please elaborate on the current percentage of growth observed by AROSCAN in the last few years. Where do you see the graph moving in the Please tell us about the new initiatives taken by coming years.

During the last few years, the growth has been ACAAI for the development of air cargo industry. approximately between five to seven per cent.

We expect the growth graph to grow upward in the coming years.

Please share with us your vision of modernising air cargo, especially on making the industry a paperless one and offering transparency along As a leading air cargo professional, what are the with full visibility to the air cargo customers.

The air cargo industry does not have any choice limitations or challenges you face in the areas of or option with regard to the documentation infrastructure, e commerce and security? Also requirements. Our industry is required tell your plans to overcome the limitations? to comply with the requirements that are stipulated by the related players, viz.

Airlines, Airport Operators and Custodians, Customs, Drug Controller, Plant and Animal Quarantine, Wildlife Authority, FSSAI, etc. The submission of physical documents

86 CargoConnect - ACAAI 2016

upgraded urgently. Increased automation and mechanization of cargo handling at airports is also essential for speedy clearance of the goods.

The security regulations and procedures pertaining to air cargo need to be reviewed and revamped to cater the needs of 21st century business environment and evolving technology without compromising security considerations.

Currently, there are certain regulatory restrictions whereby the carriage of e-commerce goods by air freight is not permitted. Such restrictions should be abolished, and the e-commerce business segment should be opened up for air freight.

All of the above aspects are beyond the control of the air freight industry. ACAAI takes up all such issues with the concerned authorities for corrective action.

In general, the infrastructure for cargo handling at airports in India is inadequate to meet the current and future volumes of cargo.

The facilities for truck docks, unloading and unitization of cargo, approach roads to the cargo complex etc. need to be increased/

Since its inception, ACAAI has always taken up issues related to the air freight industry with the concerned authorities for their attention and redressed to facilitate the growth and development of our industry. Of late, ACAAI has taken up the issue of service tax, simplification of tax laws for the industry, suggestions regarding GST , demand for bank guarantee by airlines, single window clearance for import and export goods, reduction of dwell time for import and export cargo at Indian airports, standardisation of procedures by Customs Department, Air Cargo Community System, standardisation of regulations pertaining to transshipment cargo at airports in India, etc.

report

Air freight registers stronger growth in September The International Air Transport Association (IATA) released data for global air freight markets in September 2016 which showed that demand, measured in freight tonne kilometers (FTKs), rose 6.1 per cent year-on-year. This was the fastest pace of growth since the disruption caused by the US West Coast seaports strike in February 2015.

September’s positive performance coincided with an apparent turnaround in new export orders in recent months.

Some unique factors also may have contributed, such as the rush replacement of Samsung Galaxy Note seven devices during the month, as well as the early impacts of the collapse of the Hanjin marine shipping line at the end of August.

Alexandre de Juniac, Director General and CEO, IATA, said, “Demand for air cargo strengthened in September.

Although with growth in world trade virtually at a standstill, the air cargo sector still faces some major hurdles. We did have some encouraging news. The conclusion of the EU-Canada Free Trade Agreement is good news for the economies involved and for air cargo. Growth is the way to overcome the world’s current economic challenges. The EU-Canada agreement is a welcome respite from the current protectionist rhetoric and positive results should soon be evident.

Governments everywhere should take note and move in the same direction.”

Regional Performance Airlines in all regions except Latin America reported an increase in year-on-year demand in September. However results continued to vary considerably.

Asia-Pacific airlines saw freight volumes increase by 5.5 per cent in September 2016 compared to the same period last year. Capacity in the region expanded 3.4 per cent. The positive Asia-Pacific performance corresponds with signs of an increase in export orders in China and Japan over the last few months. Seasonally-adjusted freight results for Asia-Pacific carriers are now trending upwards.

European airlines experienced a 12.6 per cent increase in freight volumes in September 2016. Capacity increased 6.4 per cent. The strong European performance corresponds with an increase in reported new export orders in Germany over the last few months.

North American carriers saw freight volumes expand 4.5 per cent in September 2016 year-on-year, as capacity increased 2.6 per cent. International freight volumes grew by 6.2 per cent – their fastest pace since the US seaports disruption boosted demand in February 2015. However, in seasonally-adjusted terms volumes are still just below the level seen in January 2015. The strength of the US dollar continues to keep the US export market under pressure.

Middle Eastern carriers saw demand growth slow for the third consecutive month to 1.2 per cent year-on-year in September 2016- the slowest pace since July 2009. Capacity increased by 6.2 per cent. Seasonally-adjusted freight growth, which had been trending upwards until the past year, has now halted. This turnaround in performance is partly due to weaker conditions in the Middle East-to-Asia and Middle East-to-North America markets.

Latin American airlines reported a decline in demand of 4.5 per cent and a drop in capacity of 4.7 per cent in September 2016, compared to the same period in 2015. The ‘within South America’ market has been the weakest performing market so far this year with volumes contracting 14 per cent year-on-year in August, the most recent month for which route specific data are available. The comparative strength of the US economy has helped boost volumes between North and South America with US imports by air from Colombia and Brazil increasing by five per cent and 13 per cent year-on-year respectively.

African carriers saw freight demand increase by 12.7 per cent in September 2016 compared to the same month last year – the fastest rate in nearly two years. Capacity surged year-on-year by 34 per cent on the back of long-haul expansion in particular by Ethiopian Airlines and North African carriers.

Credit: www.iata.org

ACAAI 2016 - CargoConnect 87

PHOTO FEATURE

TIACA International Air Cargo Forum held at Paris 28th TIACA International Air Cargo Forum and Exhibition 2016 was held at Porte de Versailles in Paris, France. The event which kicked off on October 26 and continued until October 28, 2016, provided a networking opportunity for shippers, partners, suppliers, and regulators from across the globe, as well as a chance to find new supply chain solutions, explore the latest trends and source new ideas. The event featured three days of panel discussions, workshops and master classes focused on the trends and issues affecting us all in the air cargo supply chain, as well as the most up-to-date information on the effects of new legislation.

88 CargoConnect - ACAAI 2016

events

Independent cargo subsidiary company AAICLAS launched by AAI Shri P. Ashok Gajapathi Raju, Hon’ble Union Minister of Civil Aviation launched AAI Cargo Logistics and Allied Services Company Limited (AAICLAS) on October 25, 2016 at Hotel Taj Palace, New Delhi. The AAICLAS is an independent cargo subsidiary company by corporatisation of AAI’s cargo department. Neera Rawat has been appointed as the MD of the subsidiary and BK Mehrotra would be Chief Executive Officer of AAICLAS. The vision of the company is to become the foremost integrated logistics network operator in India with primary focus on air cargo handling and allied services. This new subsidiary will be allowed to develop its own distinct culture, organisation structure and business model while at the same time draw upon the strength of its large parent origination, Airports Authority of India. All the activities currently being carried out by the cargo department of AAI will be merged into the new company and the department will no longer be functioning with AAI. The company will be shortly initiating comprehensive discussion with all the stakeholders to ensure smooth transition of all cargo activities to the new company. Creating AAICLAS by AAI would bring multiple advantages as there are lot of activities on the cargo front from the AAI in the period ahead. AAI already has vast reservoir of human resources in cargo handling who possess the requisite expertise and experience in handling cargo operations which would be gainfully utilised for the organisational benefits. The efforts are being taken by Airports Authority of India in establishing regional connectivity through air cargo movement across the country.

Dr Guruprsad Mohapatra, IAS, Chairman, AAI wished them and their team success in their endeavour to make this first of its kind AAI subsidiary a force to reckon. He also urged them to take this company from its fledgling stage to an effective establishment and ensure that AAI and the nation benefit from this effort.

CONCOR AIR LTD.

CAL

कॉनकॉर एअर िलिमटे​ेड (A wholly owned subsidiary of CONCOR)

Concessionaires for International & domestic air cargo terminals at Mumbai International Airport.

Management & Operations of Courier terminal at Chennai Airport.

Bonded Trucking of air cargo

Ground Handling Operations (GHO) Management & Operations of Air & Sea Cargo complex at Ozar airport, Nasik Management & Operations of Center For Perishable Cargo & EXIM general cargo at Dabolim Airport, Goa

FOR COMPLETE AIR CARGO SOLUTIONS

CONCOR Bhawan,C-3, Mathura Road, Opposite Apollo Hospital, New Delhi - 110 076 Tel: +91-11-41673126 / 41673097

guest column

Customers Drive The Real Air Cargo Momentum

By Bharat J. Thakkar

Air freight remains indispensable and is the best choice — if not always the cheapest solution—of transport for higher values and just in time shipments. As the importance of air cargo industry increases, so does the need for skilled freight forwarders to be able to cope up with the high pressures of delivering goods in a customer-oriented or customised manner.

A

viation benefits beyond borders and breaks down the economic and social benefits of air transportation by region and in some national statistics. It also explores the potential for growth in air transport with a forecast global average rate of 4.3 per cent per annum.

Based on current industry growth rates, it is expected that globally the air transport will support 99.1 million jobs and $ 5.9 trillion in global GDP in 2024. However, should growth turn out to be just one per cent lower per annum in the next two decades, over ten million jobs would be generated and it would reduce a trillion dollars in the sector’s contribution to global GDP. No business or business model can survive over a long period without evolving. Air cargo is being buffeted by forces for change.

These include changes in the economics of just-in-time manufacturing, longer delivery lead times, innovation by alternative modes of transport and environmental pressures.

In the face of these challenges, air cargo needs to work together as an industry to improve competitiveness and protect its value proposition.

By working together we have made

90 CargoConnect - ACAAI 2016

global air cargo safe, secure and reliable. So reliable, that it is often taken for granted. It is the unsung hero of the global economy— underpinning global supply chains and delivering products to markets. But, if we are to return the business to growth, the industry must collectively embrace an agenda for enhanced quality, efficiency and security.

We need to see air cargo through the eyes of our customers who have high expectations right across the value chain. Air cargo is a premium product. Customers valuing speed or a 100 per cent cool chain need to be certain that their goods will be delivered on time and be handled appropriately. By working together, I know that we can generate real momentum in the race to drive up quality and reliability.

Promotion of domestic and international air cargo including express delivery services is a key objective of the Government of India. Currently, over 160 airports fall into this category and following through on this initiative would improve regional connectivity across the nation. It is difficult to say exactly what scale of impact this will have on the logistics sector since most goods are still transported by road or rail.

But, we can be assured that it would only be an improvement for the existing state of things. The reach of companies operating in the logistics sphere would increase if the logistics sector sees transport by air as a viable option.

However, it’s the modalities adopted which makes air transportation expensive, not only increasing in the transaction cost of customer, but also of the intermediary who is exposed to market risk.

Air cargo amounts to above ten per cent of airlines’ revenues. Air cargo is suffering from a prolonged slump that has seen falls in yields, revenues and market share. Since 2010, world trade has grown by 12 per cent whereas air cargo demand growth has been basically flat with only a two per cent increase. A divergent trend in the passenger demand, with growth continuing in the historical five to six per cent range, has complicated the situation. As airlines grow fleet capacity to meet rising passenger demand, capacity has been introduced into weak cargo markets, putting considerable downward pressure on yields.

Shippers have been under pressure to cut distribution costs. However, air freight remains indispensable and is the best choice—if not always the cheapest solution—of transport for higher values and just in time shipments.

Sensitive cargo also prefers the air. As the importance of air cargo industry increases, so does the need for skilled freight forwarders to be able to cope up with the high pressures of delivering goods in a customer-oriented or customised manner.

Freight forwarders thrive at skillfully answering their clients’ needs and consistently delivering the best combination of price and quality. Finally, boom in e-commerce will boost domestic air logistics.

(The author is former President of ACAAI and Permanent Advisor to the Board, Co-founder and JMD Zeus Air Services Pvt Ltd)

Highest Standard of Excellence Ensured at Each Level of Operation

CELEBI DELHI CARGO TERMINAL MANAGEMENT INDIA PVT. LTD. Cargo Terminal, Indira Gandhi International Airport, New Delhi- 110037, Phone: +91 11 2560 1310, Fax : +91 11 2560 1320