THE FUTURE IS EXPRESS
The air cargo industry across the globe is going through testing times. And that is visible from the trends that the price-sensitive market is showing. There are lukewarm responses to the air cargo industry in particular, though there are signs of a reviving world economy, especially in the major market in USA and Europe. Multiple reasons, such as escalating fuel costs, increasing security hassles, over-capacity and declining yields are continuously bleeding air-cargo operators and service-providers. The scenario in India is more critical now, owing to the unprecedented slide and volatility of the Indian currency As a result, while the export market has shown double-digit growth during the last couple of months, the same was not translated into an increase in air cargo traffic from the country. A prolonged uncertainty is looming over this segment for quite some time now. interestingly, the immediate gainer from the surge of Indian export is sea cargo. General cargo, which is the base of cargo traffic for majority of the carriers, is now making a beeline to shipping lines. This happening primarily because of two factors: less cost and no urgency in view of the sluggish demand from international buyers.
Significantly, express cargo (which is essentially air cargo) is growing fast in and out of the country. Many airlines (apart from express cargo carriers) are reportedly being fed by this vertical. The industry is one of the fastest-growing segments of the logistics industry. It is poised for high growth in the future, though the same is constrained by inadequate transport infrastructure and procedural delays at gateway checkpoints (airports, state border checkpoints) in addition to threats from regulatory restrictions and the economic slowdown. A study say that, in these times, major customer industries include auto components, banking and financial services, garments, pharma, telecom products and IT components. Other segments like organised retail and e-commerce are also emerging as large customer segments. These products generate high value in revenue terms for the carriers.
Unfortunately, India does not possess the required physical infrastructure and a clear policy framework to support the fast movement of cargo from airport and check posts on the surface network. In spite of modernisation and privatisation of airports here, the transit time is still a lot as compared to other international airports. It is time to fast-track government policies for the greater interest of air cargo industry and hence the country's economy. Will MoCA and the Air Cargo Logistics Promotion Board take some more pro-active initiatives and fast actions?