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

Cargo Talk - - Front Page - KALPANA LOHUMI

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.

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