Tide turns in favour of cargo

The Civil Avi­a­tion Pol­icy has raised hopes of the cargo sec­tor. The new ob­jec­tives can lead to the up­surge in the air cargo vol­umes in the coun­try along with im­prove­ment in turn­around time and costs.

Cargo Talk - - Front Page - KAL­PANA LOHUMI

Some­thing that the in­dus­try has been wait­ing for since in­de­pen­dence has fi­nally hap­pened. An in­te­grated Civil Avi­a­tion Pol­icy has been is­sued by the gov­ern­ment with the ob­jec­tive of mak­ing re­gional con­nec­tiv­ity a re­al­ity. Cargo has also re­ceived its much de­sired at­ten­tion this time. The pol­icy ap­proved by the Cabi­net aims to boost cargo op­er­a­tions. Pro­mo­tion of both do­mes­tic and in­ter­na­tional air cargo and ex­press de­liv­ery ser­vices is a key ob­jec­tive of the gov­ern­ment, tak­ing into the ac­count the ‘Make in In­dia’, e-com­merce and ex­ports per­spec­tives.

Cur­rently the air cargo vol­umes in In­dia are very low as com­pared to other lead­ing coun­tries due to high charges and turn­around time. As per the pol­icy, the Air Cargo Lo­gis­tics Pro­mo­tion Board (ACLPB) and the in­dus­try will sub­mit a de­tailed ac­tion plan af­ter stake­holder consultations with the ob­jec­tive of re­duc­ing dwell time of air cargo from ‘air­craft to truck’ to be­low 48 hours by De­cem­ber 31, 2016 and to 24 hours by De­cem­ber 31,

Cur­rently the air cargo vol­umes in In­dia are very low as com­pared to other lead­ing coun­tries due to high charges and turn­around time

2017 by re­duc­tion in free time and other mea­sures. For ex­ports, dwell time will be re­duced to 12 hours by De­cem­ber 31, 2016 and eight hours by De­cem­ber31, 2017.The ac­tion plan pro­posed by ACLPB will be for­warded to Cen­tral Cus­toms Co­or­di­na­tion Com­mit­tee (CCFC) to achieve the stated ob­jec­tives. Within the air cargo net­work, Ex­press De­liv­ery Ser­vices (EDS) has a dis­crete oper­a­tional na­ture and is be­com­ing fun­da­men­tal es­pe­cially in the light of dou­ble digit growth in e-com­merce. Air­port op­er­a­tors will be en­cour­aged to pro­vide space for a10-year lease to op­er­a­tors of ex­press cargo freighters who may then de­velop ded­i­cated in­fra­struc­ture to im­prove their oper­a­tional ef­fi­ciency. MoCA will also en­cour­age de­vel­op­ment of cargo vil­lages near air­ports. In­dus­try vet­er­ans are now bet­ting on a per­cep­ti­ble shift in the sec­tor.

G Balaraju, Man­ag­ing Di­rec­tor, Sindhu Cargo Ser­vices, says, “The Gov­ern­ment has re­moved bar­ri­ers of five years min­i­mum fly in do­mes­tic sec­tor for In­dian op­er­a­tors. We can see air­lines ven­tur­ing in the in­ter­na­tional sec­tor for pas­sen­ger move­ment which will help the cargo trade.”

More­over, Su­nil Kohli, Man­ag­ing Di­rec­tor, Ra­hat Cargo feels, “The new civil avi­a­tion pol­icy is ex­pected to bring fresh and en­cour­ag­ing hopes in re­gards to the de­vel­op­ment of air­ports, whose num­bers are likely to in­crease to 127 from the present 77. The de­vel­op­ment of new air­ports equipped with the lat­est tech­nol­ogy would fa­cil­i­tate the ex­porters to

usher in the cargo trade, thereby en­hanc­ing the up­lift ton­nage.” Ravin­der Katyal, Di­rec­tor, UTi, finds the new civil avi­a­tion pol­icy pos­i­tive. Ac­cord­ing to San­deep Vijh, Busi­ness De­vel­op­ment Man­ager–In­ter­na­tional Lo­gis­tics, Ra­hat Con­ti­nen­tal, “The new civil avi­a­tion pol­icy di­rects in im­pro­vis­ing the sup­ply chain process which will give cargo sec­tor a ma­jor boost.” Cargo fa­cil­i­ties co-lo­cated at an air­port are cov­ered un­der the ‘Har­monised List of In­fra­struc­ture’ and will get the ben­e­fit of ‘in­fra­struc­ture’ sec­tor. Com­ment­ing on the same, Bharat Thakkar, Past Pres­i­dent and Per­ma­nent Mem­ber-Board of Ad­vi­sors, ACAAI, and Joint Man­ag­ing Di­rec­tor, Zeus Air Ser­vices says, “This should be eq­ui­table, not just re­stricted for a few. With CCI Act in place which at­tracts com­pe­ti­tion and al­lows users (EXIM) to de­cide this is one sided and will only help the pri­vate air­port op­er­a­tors.”

On pa­per­less air cargo front, he adds, “This seems to be in­flu­enced by self reg­u­lated or­gan­i­sa­tion’s e–freight pro­gramme. The need of the hour is to stream­line and look at the path to pros­per­ity with a long term plan, it must be con­sid­ered to cre­ate an In­dia For­eign Trade Com­mu­nity Sys­tem where all reg­u­la­tors, air­lines ship­ping lines in­clud­ing all play­ers in the sup­ply chain op­er­ate on a sin­gle plat­form.”

On how much growth the in­dus­try ex­pects, Balaraju says eight to 10 per cent. On the other hand Vijh feels, “At least eight to 12 per cent growth but could boost up to 25 per cent in the fol­low­ing year.”

How­ever Kohli says, “The new pol­icy tar­gets to in­crease the cargo vol­ume to 10 mil­lion tonnes by the year 2027. If the pol­icy is im­ple­mented in let­ter and spirit with a vigour and pos­i­tive in­tent, a likely in­crease of 20-25 per cent per an­num growth in ex­port may be ini­tially pro­jected which may wit­ness the sub­se­quent en­hance­ment.” Ac­cord­ing to the pol­icy, the gov­ern­ment will stream­line and sim­plify cus­toms pro­ce­dures. Thakkar adds, “The first step is to im­ple­ment the Tax Ad­min­is­tra­tion Re­search Com­mis­sion (TARC) re­port which places no cap­i­tal cost but only busi­ness process re-engi­neer­ing for ef­fec­tive ad­min­is­tra­tion of tax laws.”

The pol­icy states that there had been con­sis­tent rep­re­sen­ta­tion to the CBEC that the ac­cu­rate in­for­ma­tion about the num­ber of pieces or gross weight ac­tu­ally car­ried can only be pro­vided by the air­lines. Ac­cord­ing to Thakkar, “It may be em­pha­sised here that the seem­ingly ‘slight twist’ made to the pro­vi­sions pro­posed in US have had ma­jor im­pli­ca­tions in the pro­vi­sions made in In­dia and have been the ma­jor source of dis­or­derly

G Balaraju Man­ag­ing Di­rec­tor Sindhu Cargo Ser­vices It may take about one year for the op­er­a­tors to plan and de­ploy re­sources and then the in­dus­try would start notic­ing the change Su­nil Kohli Man­ag­ing Di­rec­tor Ra­hat Cargo With a brisk com­mence­ment of the pol­icy’s ini­tia­tives, the pos­i­tive re­sults may be vis­i­ble within a year. The de­vel­op­ment of air­ports will boost trade Bharat Thakkar Past Pres­i­dent and Per­ma­nent Mem­ber-Board of Ad­vi­sors, ACAAI, and Joint Man­ag­ing Di­rec­tor, Zeus Air Ser­vices Pa­per­less air cargo seems to be in­flu­enced by self reg­u­lated or­gan­i­sa­tion’s e–freight pro­gramme. The need of the hour is to stream­line Ravin­der Katyal Di­rec­tor UTi It would take three to nine months to see a turn­around, in re­gards to the pro­posed ac­tion steps. The pol­icy will help im­pro­vise the sup­ply chain process San­deep Vijh Busi­ness De­vel­op­ment Man­ager – In­ter­na­tional Lo­gis­tics, Ra­hat Con­ti­nen­tal Six to eight months are enough to see things mov­ing in the right di­rec­tion. At least eight to 12 per cent growth is ex­pected with the changes

func­tion­ing of im­port pro­ce­dures both by air and by ocean.”

The pol­icy men­tions that the gov­ern­ment has com­menced 24x7 Cus­toms op­er­a­tions at sev­eral air­ports. How­ever, it has not been utilised op­ti­mally by in­dus­try. ACLPB will work closely with the in­dus­try and pro­pose ac­tion steps to spread out cargo han­dling round the clock. How­ever, Thakkar feels un­less the se­vere staff short­age in cus­toms depart­ment is ad­dressed this will fail to be fully func­tional.

On 10-year lease to pri­vate op­er­a­tors, “This is dis­crim­i­na­tory against hard freight for­warders. There must be equal op­por­tu­ni­ties pro­vided to any cargo in­ter­est ir­re­spec­tive of whether it is ex­press or other­wise, as all air freight is ex­press,” opines Thakkar.

But Balaraju opines, “Al­lot­ment of space and other in­fra­struc­ture for ex­press cargo in­dus­try is likely to pass on price ad­van­tage to cus­tomers, es­pe­cially e-com­merce play­ers. This would en­able them to be price com­pet­i­tive and im­prove TAT for de­liv­er­ies.”

On how the Ex­press In­dus­try would fare, Vi­jay Ku­mar, Chief Oper­at­ing Of­fi­cer, Ex­press In­dus­try Coun­cil of In­dia (EICI) says, “The pol­icy takes cog­nizance of the dis­tinc­tive­ness of the ex­press de­liv­ery ser­vices and the po­ten­tial it of­fers.The pol­icy recog­nises ex­press de­liv­ery ser­vices as a sep­a­rate seg­ment within air cargo ow­ing to its dis­tinc­tive na­ture and pro­cesses.

The Ex­press In­dus­try is be­com­ing a piv­otal seg­ment for en­hanc­ing the ex­ports, es­pe­cially in the SME seg­ment, in view of ex­pan­sion of e-com­merce and other new age in­dus­tries. With the em­pha­sis of the gov­ern­ment on ‘Make In In­dia’, ‘ease of do­ing busi­ness’ and en­hance­ment of ex­ports, it is im­por­tant that EDS is recog­nised and fa­cil­i­tated with ad­e­quatea in­fra­struc­ture at the air­ports with ra­tio­nal lease tenures and rentals to pro­vide ef­fi­cient ser­vices in In­dia.”

Vi­jay Ku­mar Chief Oper­at­ing Of­fi­cer Ex­press In­dus­try Coun­cil of In­dia (EICI) The Ex­press In­dus­try is be­com­ing a piv­otal seg­ment for en­hanc­ing the ex­ports, es­pe­cially in the SME seg­ment, in view of ex­pan­sion of e-com­merce

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