Port Wings Maritime Exim Weekly Newspaper 1 July 2020 Issue

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Published from Chennai and Circulated among the trade across the country RNI TNENG/2014/59741

Wednesday, July 1, 2020

8 Pages

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We Need To Expand Use of Aviation May Air Cargo Shows Slight Pickup Amid Continuing Assets To Cut Logistics Cost: Gadkari Capacity Crunch: IATA

New Delhi Port Wings News Network ndia needs to start using its grounded aircraft and minor airports for cargo handling to bring down logistics costs and make exports of fish, vegetables and fruits more viable, Union Minister of Road Transport, Highways and MSME Nitin Gadkari has said, reports Livemint. In an online interaction with members of the Domestic Air Cargo Agents Association of India titled “Rebooting Transportation Logistics & Air Cargo” on 30 June 2020, Gadkari said he will speak with defence minister Rajnath Singh to use assets such as decommissioned Air Force planes for cargo. This, he said, will make exports of certain commodities more viable, enhance incomes of people and benefit the nation. “The government will support your efforts. The point is we need to get maximum work done by our assets and elicit maximum utility to keep costs low." He said India needs to bring down its logistic cost from the existing 13%. Gadkari stated: “I have many suggestions for air cargo movement. There is a lot to do, especially in the case of fruits, vegetables and fish. Our marine economy is worth ₹1 trillion. We want to scale it up to ₹6 trillion, but our biggest problem is transportation." An efficient air cargo ecosystem will help in exporting items like prawns from cities like Nagpur to Dubai and Singapore, he added. Gadkari said higher logistics costs

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have been one of the challenges for industry, with costs in India much higher than in China and the US.

He said the 12-lane DelhiMumbai expressway that is in the works is expected to drastically cut travel time between the two cities. “The number of trips taken by a truck will also increase and cost will go down." The webinar was attended by airlines, airport operators, cargo terminal operators, transportation, logistics and air cargo service providers and moderated by Shri Dinesh Kumar, IAP. Welcoming the guests, President DACAAI, Amit Bajaj stated that the importance of domestic air cargo movement in the country was demonstrated during Covid lock down when along with airline, airport operators, DACAAI members & their staff were in forefront of moving Essential supplies, PPE Kits, Pharmaceuticals, Ventilators, Medical Equipment, Face masks etc. across the country, disregarding risk of their own self. Amit Bajaj, President, DACAAI brought out the issue of mandating

Truck manufacturers in India to encourage usage of bio diesel fuel which is much cheaper than diesel, in order to reduce logistics cost as well as reduce import of crude oil. Nitin Gadkari stated that currently production of bio diesel in India is very less. His ministry was working on this issue and experimenting to make bio fuel from Parally, sewage and organic waste. It will take some time to make bio diesel usage compulsory. He asked the truck owners to think and purchase LNG trucks and bigger double axle, high tech trucks of higher capacity which will bring the transportation cost lower. Mrs Vandana Aggarwal, informed that MoCA was facilitating the cargo operators with any difficulties to address the inter-ministerial issues affecting them. She requested, Shri Gadkari to recommend bringing Jet Fuel under GST, which was 40% cost of aircraft operation, which will reduce the logistics cost of air carriage considerably. She informed that MoCA had also operationalized Air Cargo Community System for use by all stakeholders in paperless mode which will also reduce costs. Shri Suraj Aggarwal, Secy General, raised the issue of GST which was 18% on transportation by air for perishables, while Sea was exempt and Rail/Road was charged at 5%. Shri Gadkari stated Contd. on page -2

Chennai

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Port Wings News Network he International Air Transport Association (IATA) released data for global air freight markets in May showing a slight improvement in the air cargo market. But capacity remains unable to meet demand as a result of the loss of belly cargo operations on passenger aircraft that have been parked. G l o b a l d e m a n d , measured in cargo tonne-kilometers (CTKs*), fell by 20.3% in May (-21.5% for international operations) compared to the previous year. That is an improvement from the 25.6% year-on-year drop recorded in April. Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 34.7% in May (-32.2% for international operations) compared to the previous year, a slight deceleration from the 41.6% year-on-year drop in April. Belly capacity for international air cargo shrank by 66.4% in May compared to the previous year due to the withdrawal of passenger services amid the COVID-19 crisis (up slightly from the 75.1% yearon-year decline in April). This was partially offset by a 25.2% increase in capacity through expanded use of freighter aircraft. The cargo load factor (CLF)

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rose 10.4 percentage points in May. This was a slight decrease from the 12.8 percentage point rise in April. However, the extent of the increase suggests that there is still pent-up demand for air cargo which cannot be met due to the continued grounding of many passenger flights. Global export orders continue to fall but at a slower pace. The Purchasing Managers Index (PMI) File Photo

tracking new manufacturing export orders improved from the trough seen in April despite remaining in contractionary territory. “Air cargo demand is down by over 20% compared to 2019. And with most of the passenger fleet grounded capacity was down 34.7%. The gap between demand and capacity shows the challenge in finding the space on the aircraft still flying to get goods to market. For that the prospects for air cargo remain stronger than for the passenger business but the future is very uncertain. Economic activity is picking up from April lows as some economies unlock. But predicting the length and depth of the recession remains difficult,” said Alexandre de Juniac, IATA's Director General and CEO. Regional Performance All regions suffered declines in May. Airlines in Europe and Latin America suffered the sharpest drops in year-on-year growth in total air Contd. on page -2

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RNI No. TNENG/2014/59741 Postal Registration No. TN/CNIGPO/067/2018-2020 Posted at Pathrika Channel, Egmore, RMS, Chennai-8. Date of Publication - Wednesday, Posted on Tuesday / Wednesday


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