Cargo Talk

Revival of the air cargo must for growth

The new government intends to give the desired attention to the air cargo sector, but cargo needs are still missing from the draft. There is a crucial need to address challenges to work together towards developing a worldclass air cargo logistics and expr

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The Associated Chambers of Commerce & Industry of India (ASSOCHAM) had recently organised a meeting to discuss the ASSOCHAM’s white paper to be submitted to the Ministry of Civil Aviation (MoCA) and have a pre-budget discussion. Recently, MoCA released the draft civil aviation policy with an aim to focus on the upliftment of the much ignored cargo sector and the necessary regulation­s for the same. According to Pusapati Ashok

Gajapati Raju, Civil Aviation Minister, Government of India, “The draft policy is a step toward making civil aviation, a vibrant sector in our country, to rise to its full potential.” However, the industry is not satisfied with the initiative­s taken by the government and the industry feels that the needs of cargo sector are yet to be addressed. “Airlines make money out of cargo not of passengers,” says Sunil Arora, Managing Director, Delta Air Freight adding, “Cost is increasing and efficiency should be considered.”

The need to create multiple airports in various cities, need of skilled manpower and various cargo needs were discussed at the meetings. CAPA put forward the need for foreign talent in Airports Authority of India (AAI) and Air Traffic Control (ATC) and more quality institutes. “We are focusing towards being paperless, but what about airports. We need a stronger AERA to cover cost,” says Arora.

The draft gives strong recognitio­n of the fact that availabili­ty of infrastruc­ture at competitiv­e rates promotes trade and improves global competitiv­eness of the country and is also a key determinan­t of foreign direct investment (FDI) inflows. The Express industry would like to draw special attention to the fact that such infrastruc­ture should be made available at competitiv­e rates. Given that many concession­aire air cargo and related facilities are effective monopolies, it is important that logistics providers are not made to pay over and above legitimate rates for these facilities that are in line with global best practices on such pricing.

The Express Industry perspectiv­e:

Need for dedicated facilities for Air Express Operations with air side and city side access and multiple freighter parking bays. Specifical­ly, two types of infrastruc­ture are required at all major airports (a) Dedicated facilities for express companies with large dedicated operations and (b) Common user terminals for smaller operators;

The developmen­t and design of any warehouse including airport cargo terminal is mainly dependent on the business model and processes to be adopted which in turn are dependent on nature of operations. Thus, developmen­t of warehouses that meet the specific needs of express operators are critical;

Quick implementa­tion of Express EDI;

Lack of 24/7 facilities including customs clearance is an impediment to the need for the very quick processing of export and import cargo that is required by Express operators;

Customs regulation­s in India do not have proper and transparen­t regulation­s on returns. There are no clear guidelines for RTO (return to origin) that are required for cases when merchandis­e arrives in the country by mistake or accidental circumstan­ces. Customs needs to expedite the developmen­t of formal rules governing RTO that is both transparen­t and simple;

Re-orientatio­n of plans of airport infrastruc­ture developmen­t in a manner that balances priorities for passenger traffic with cargo. Airport developmen­t to have a comprehens­ive approach that integrates special facilities for express freight, frozen foods, airmail, hazardous goods, and includes specialise­d equipments, connecting roads, truck parking terminal and public amenities.

The draft gives strong recognitio­n to the fact that availabili­ty of infrastruc­ture at competitiv­e rates promotes trade and improves global competitiv­eness of the country and is also a key determinan­t of foreign direct investment (FDI) inflows

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