Cargo Talk - - Editorial - San­Jeet Ed­i­tor

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?

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