Ease of e-commerce for air deliveries ...............................................................................
The thriving e-commerce sector has brought about a fundamental change in every industry and air cargo, too, has not been left behind with its benefits. Industry experts opine on the influential factors that let e-commerce players opt for air as a mode of
E-commerce sector is booming and there are opportunities in this market trend that not to be missed. looks at the opportunities available for air cargo market and what can be done to convince e-commerce players to choose air as a mode of transport for deliveries. Talking about how e-commerce industry will help drive air cargo industry, R.S. Subramanian, SVP & Country Manager, DHL Express India, said, “Crossborder e-commerce has developed into a large, and fast growing eco-system and has become a great success story for many e-tailers, who have been able to sell their products over the internet directly to end consumers.”
“Consumers are motivated to shop crossborder for fundamental reasons; product availability as well as a more attractive offering including price and trust. With this growth in e-commerce, the demand for air express services has gone up considerably as this mode of transportation can move goods from one location to another within a short span of time, which is what e-commerce consumers are looking for. However, many airports in smaller cities are still limited in their ability to service freight aircraft, particularly with larger payloads. As international express volumes increase further on the back of e-commerce growth, and its demand in Tier-II and Tier-III cities picks up pace, there will be a need to further expand air cargo connectivity,” he added.
According to H.L. Santharam, CEO, Connect Cargo (International Freight Forwarding vertical of Jayem Logistics), “In e-commerce industry, majority of the buyers are end consumers and mostly want instant delivery of goods. Even if they are not the end consumers, and just the business entity, when they decide to buy the goods through e-commerce they always look for immediate delivery. So, any purchases through e-commerce are to be delivered speedily and thus the fastest mode of transport need to be used for such deliveries. And, as the e-commerce business grows, the demand for the fastest mode of delivery, ‘air’ mode of transport would grow.”
In this context, Kaustubh Mittal, Managing Director, Sugam Group, said, “Keeping in view the today’s tough competition to reach out to the consumer on same day, air cargo capacities available will have a major role to play. In turn, they will also help the e-commerce companies in cutting their carrying cost thus being more price sensitive.”
With the feeling of optimism, Lalit Bhardwaj, Founder, FlymyParcel.com, shares, “e-commerce is the major player to drive air cargo industry. The demand of express delivery depends on air movement only. Air cargo can provide (as compared to other modes of transportation) fast, time-definite and real tracking information.”
Mike Chew, CEO, AISATS, said, “The Indian e-commerce industry is pegged to be the fastest growing market in the world, poised to reach US $64 billion by 2021. With the ever-increasing customer demands for a narrow delivery window, the on-time delivery of goods is a key sustaining factor in this dynamic industry. The air cargo industry will play a crucial part in building a delivery platform that efficiently connects consumers with online retailers.”
“The growth of the e-commerce industry brings with it the need for an efficient supply chain to process the volume of trade. Increased space allocation such as dedicated e-commerce hubs and air freight terminals, enhanced warehousing practices, and trained and skilled personnel to handle various types of cargo are some of the primary aspects that the air cargo industry is focusing on,” he explained.
“The Regional Connectivity Scheme (RCS) initiated by the Government of India will not only bring flying to the masses but would also facilitate trade by connecting the Tier II and Tier III cities with the major airports at Tier I cities, thereby opening up new avenues for air cargo. The e-commerce industry will greatly benefit from a strong air cargo
After charged premium for urgent deliveries, the demand keeps on increasing, adding more pressure to the air sector
Keeping in view the tough competition to reach out to the consumers, air cargo capacities available will have a major role to play
The demand of express delivery depends on air movement. Air cargo can provide fast, time-definite and real tracking information
The e-commerce industry will greatly benefit from a strong air cargo infrastructure that makes seamless use of cutting-edge IT
The demand for air express services has gone up considerably as this mode move goods within a short span of time
Any purchases through e-commerce are to be delivered speedily and thus the fastest mode of transport need to be used for deliveries
infrastructure that makes seamless use of cuttingedge information technology. Many stakeholders within the industry are adopting e-freight as an initiative to help create a paper-free air cargo supply chain,” Chew added.
A preferred choice
Considering the fact that, being the fastest mode of transport air is also expensive as comparison to other modes particularly road. Presenting his views on why air should be the ideal choice, Santharam explains, “The cost advantage has to be given to e-commerce players by consolidating the dispatches at the origin points/ countries. The consolidated dispatches would reduce the per unit transport cost of air transport and would still give the advantage of speedy delivery to destination.”
“Today SKU’s available with e-commerce have a wide spectrum and if we further categorise them into high value, time sensitive, perishables with normal size ,the volumes will be very high. These can be fully utilised by air. And, it has also been experienced that in such cases even the consumer does not mind spending extra money. Today, the reach of air services add an advantage to this industry,” tells Mittal.
Echoing similar views, Subramanian avers, “e-commerce has transformed the air express business from being supply chain focused to become much more ‘customer centric’. The transportation of goods by air offers many advantages for the exporter as it brings about benefits in terms of access into new markets, time savings, economic benefits and safety. The movement of goods via air is faster and allows the exporter to build a loyal customer base even with lower inventories. Also, when goods are time-dependent and need to be delivered with urgency, air transport is the most effective.”
Owning planes
Explaining why e-commerce players are coming up with their own planes, Subramanian informs, “Globally, e-commerce players have begun leasing and buying planes in order to better manage surges in their own volumes and ensure that they have sufficient capacity to meet service commitments during peak periods. We believe that the main international express players are already offering a high level of service quality at an attractive price point that reflects the value embedded in the service. To achieve the reach of the present industry requires large capital investments, global recruitment and training. The international express industry is one where specialisation creates real value – the main players are here have deeprooted expertise in managing large transport networks and crossing international borders.” Sharing the effects of the move, Bhardwaj says, “This step will definitely increase the cost of operation. The change of business model can affect the growth. As there is a high volume of small shipments, it may affect the efficiency within the supply chain, demand for time definite and reliable movement of goods,” in adding, “It will affect the existing players and may result in greater competition and greater pressure for companies to improve profits and achieve a competitive advantage.” “e-commerce firms expect airlines to deliver their goods to their customers as well as pick procurements from several vendors across the country. The market is observing a changing pattern of online consumer preferences. After charged premium for urgent deliveries, the demand keeps on increasing adding pressure in terms of volumes and service to the air sector,” shares Ajay Khosla, Regional Manager - North India, CCI Logistics.