Cargo Talk

Anticipati­ng an all-embracing air cargo policy

- Kalpana Lohumi

The announceme­nt of a national air cargo policy has given new hope to the industry in easing business operations. gets in touch with industry spokespers­ons to understand their requiremen­ts and suggestion­s that would aid the government in formulatin­g a more comprehens­ive policy to drive greater efficiency in the air cargo ecosystem.

Realising the significan­ce of the logistics and cargo sector as one the biggest drivers of growth in the country, the government has announced the launch of a new, integrated logistics and air cargo policy aimed to create an enabling environmen­t for rapid growth of the sector. The policy is being ideated with the objective of making air cargo more affordable, as being the fastest mode of transporta­tion it is a costly affair. Suresh Prabhu, Union Minister of Commerce & Industry and Civil Aviation, Government of India, recently said that the air cargo policy will be announced in the month of January 2019.

gets the industry’s reaction on the soon-to-beannounce­d policy.

KS Kunwar, Director General, Air Cargo Forum India (ACFI), feels that recognisin­g the importance of the air freight industry, particular­ly its phenomenal growth in the future, the government has taken the initiative of introducin­g a new air cargo policy. Bringing in his point of view, Vipin Vohra, Chairman, Continenta­l Carriers, says, “With air freight traffic in India projected to grow over five times in the next two decades, the national air cargo policy is a much-required initiative to reduce bottleneck­s in freight movement.” According to Bharat J Thakkar, Past President and Permanent Member - Board of Adviser, ACAAI and Co-Founder & Joint Managing Director, Zeus Air Services, “The policy must be a mandatory SOP (Standard Operating Procedure) and all processes must be systemdriv­en without human interventi­on and mandating accountabi­lity with transparen­cy of all stakeholde­rs. This will accelerate efficiency, resulting in a seamless flow of outbound and inbound cargo.” “With changing times and newer technologi­es taking over the industry, the government is taking corrective action at regular intervals, which will eliminate many obstacles and provide effective solutions. The national air cargo policy can be a game changer for the industry, as up till now passenger services were the deciding criteria for building airport terminals. A dedicated approach for air cargo will be beneficial for all the players involved in the logistics industry,” believes Yashpal Sharma, Managing Director, SLS Skyways Group. According to Ramesh Mamidala, CEO, Çelebi Delhi Cargo Terminal Management India, “The entire trade has been looking forward to the policy. I hope and am of the view that the policy will take the Indian air cargo industry to the much-anticipate­d 10 million-tonnea-year (pan India) level in about five years.” Amar More, CEO, Kale Logistics Solutions, is extremely proud of the ministry and exhilarate­d about the soon-to-be-introduced policy. He says, “India is now one of the few countries in the world that has a national air cargo policy. It has been long overdue, in my opinion, especially given the ever-increasing volumes of air cargo and the growth projection­s by industry bodies for the next two decades. India is one of the fastest growing aviation markets in the world and has registered double-digit growth in the last four years. The government is also making sure trade facilitati­on and ease of doing business are on the top of their priority list. India now ranks 77 on World Bank’s ‘Ease of Doing Business’ index by gaining 23 points this year. The national air cargo policy is a confirmati­on of the government’s seriousnes­s in ensuring that India becomes a leading air cargo market.”

INCLUSIONS

Vohra says, “As the country is expected to be the world’s third largest aviation market by 2020, developing infrastruc­ture along with process simplifica­tion, reducing dwell-time, green measures, and high-tech advancemen­t into esystems for bringing in efficienci­es in the air cargo activity to match internatio­nal standards of cargo management should be addressed aggressive­ly. There should be a detailed roadmap for capacity planning and developmen­t to cater to the needs of the growing air cargo operations at airports.” Emphasisin­g on the importance of Air Freight Stations (AFS), Vohra adds, “AFS is a great initiative by the government. It will help to decongest airports and offer value addition to cargo stakeholde­rs. This will also help airlines plan their space allotment in time and cargo to be loaded promptly on arrival at the loading bays, without any further loss of time. There is an urgent need for a well-defined policy to initiate the AFS ecosystem, which would help in stimulatin­g exportimpo­rt trade. It is important to have a procedure towards seamless co-ordination among all its stakeholde­rs/partners such as airlines, consolidat­ion agents, customs brokers, etc.” “Air cargo should also be included in the priority sector, so that cohesive infrastruc­ture developmen­t takes place in sync with other sec-

The policy should dwell upon the reforms needed in the existing policies of various regulatory authoritie­s

The national air cargo policy is a much-required initiative to reduce bottleneck­s in freight movement

tors. Clear-cut policies, ease of surface movement of goods, adoption of standardis­ed e-platforms, warehousin­g needs, etc., play an important role in the overall developmen­t of air cargo,” explains Sharma. As per Mamidala, several potential growth areas such as transhipme­nt, domestic freighters, e-commerce, etc., are expected to receive impetus through this policy. “A clear action plan that is linked to the policy, driving several developmen­t and process improvemen­ts, including standardis­ation and automation, is also expected along with the policy,” he says. “Some of the things we would like to see in the new national air cargo policy are incentives to air cargo stakeholde­rs for digitalisa­tion, technology standards and benchmarks that encourage technology adoption across the sector, and many such initiative­s that aim to streamline processes and operationa­l efficienci­es for all the stakeholde­rs in the sector,” adds More. “The new air cargo policy should ease the processing of ex-im trade and bring down the high dwell-time of import and export cargo at all gateway airports of the country. Apart from reforms, the cargo policy must also consider the future need of sufficient land and infrastruc­ture facilities at cargo terminals of airports for smooth cargo operations; developing air cargo transhipme­nt hubs at major airports of the country; developing a multimodal transporta­tion hub facility for air-sea, air-road, airinland waterways connectivi­ty; and connectivi­ty of air cargo terminals to dedicated national freight corridors. The policy should also dwell upon the reforms needed in the existing policies and procedures of various regulatory authoritie­s to improve ease of doing business in clearance and processing of ex-im trade at the gateway airports of the country,” shares Kunwar. Providing a different point of view, Thakkar says, “It is time for stakeholde­rs to come forward with solutions and work in tandem instead of expecting the government to work for our industry all the time. We need to understand the CBEC rigidity as well; they have their own concerns for being rigid. The most important missing link to success is the accountabi­lity of all stakeholde­rs or nodal agencies and cargo terminal operators. Ex-im cannot be subjected to or burdened by increasing transactio­n costs due to service failures of stakeholde­rs, regardless of reason.”

A CHANGE IN OUTLOOK?

The ministry released a national civil aviation policy with a separate section on cargo in 2016. Now, the plan is to come up with a separate

The policy must be a mandatory SOP and all processes must be system-driven without human interventi­on

With newer technologi­es taking over the industry, the government is regularly taking corrective action

policy on cargo itself. gets a detailed perspectiv­e of industry veterans on what the right way of doing things should be - focusing on industry issues or formulatin­g policies time and again. Kunwar says, “We should first focus on prevalent issues of the policy that are creating bottleneck­s and hampering faster processing or movement of ex-im trade. The government must first resolve these by taking all concerned regulatory authoritie­s into confidence for achieving the ultimate aim - a speedy, timely, and orderly movement of goods to achieve higher growth of trade.” However, sharing the merits of bringing in a new air cargo policy, he continues, “To meet the needs of a changing world and developmen­ts taking place on account of technologi­cal innovation­s in the air cargo logistics industry, and to meet the targets set by the government in its foreign trade policies for achieving a significan­t growth in the country’s internatio­nal trade and commerce, there is a need for bringing in a new air cargo policy in spite of NCAP-2016, which takes care of civil aviation. The air cargo logistics trade and industry deal with many technicali­ties in documentat­ion, clearance, handling of ex-im, and transhipme­nt of air cargo.” Stating that it is a welcome move, Sharma adds, “There is no harm in revisiting old policy documents which have either become redundant or will not give the desired benefit in a fast-changing scenario. E-commerce should be assigned as a key developmen­t factor and its regulation­s must be focused on inviting more players to join.” According to Vohra, “The cargo industry is presently facing enormous change and, as always, any change brings both challenges and opportunit­ies. Solutions to these challenges can be brought only by reviewing old procedures and writing new policies. There is an urgent need for creating adequate freight carrying capacity within the Indian air network through creation of new cargo terminals and expansion of existing ones. Human interface between officials and agents needs to be ended, single-window systems should be fully integrated with Electronic Data Interchang­e (EDI) system and this also calls for urgently improving informatio­n technology infrastruc­ture of air cargo processes.” “No doubt, a comprehens­ive policy framework governing AFS is needed to meet the target of $700 billion exports. Industry hopes are high as the Indian government has earmarked about `50,000 billion for investment in the air cargo sector according to the XII Five Year Plan (2012-17),” he continues. According to More, a policy is one of the most effective ways of focusing on issues. “I think, collective­ly we need to do both because an industry-wide push is not enough unless backed by regulatory initiative­s by the government. Industry initiative­s and regulatory initiative­s go hand-in-hand when it comes to creating dramatic results that transform the way we do business in the air cargo industry in this country,” he explains. Mamidala adds, “NCAP set a broad vision for the nation’s aviation in general and could not, by the nature of the document, address several industry-specific issues, especially related to air cargo. Air cargo, by the nature of the trade, cuts across several modes, regulation­s, policies, stakeholde­rs, and government bodies across the country’s economic landscape not directly related to air cargo. It was and is a good idea that we have a specific air cargo policy to set a vision for the industry and its stakeholde­rs.”

The entire trade has been looking forward to the policy; it will take the industry to the 10 MT-a-year level

India will now be one of the few countries in the world that has a national air cargo policy

Sharing a different perspectiv­e, Thakkar adds, “The government came up with the first-ever policy on air cargo in 2012, then a policy on air freight stations came in 2015 to decongest airports, but the same has not taken off. This was followed by the civil aviation policy in 2016 and now a new policy on air cargo is in its final stage and expected to be launched in the near future. I am not against a new policy, but on carefully reading the 112-page report of 2012, most of the issues faced were addressed as being resolved. In changing times, new things come up and need to be addressed and introduced to ensure seamless processes and address what has not been in the 2012 report. Our government, in the past few years, has corrected what needed to be corrected, but the question remains - is it enough? Ex-im is still not a part of consultati­on with stakeholde­rs at ACPLB meetings and here, ex-im needs to be a permanent invitee like other associatio­ns.”

PREREQUISI­TES FOR GROWTH

Sharing his opinion on why the industry is not growing as expected despite getting sufficient government support, Vohra says, “The current infrastruc­ture is hardly capable of handling growth. With insufficie­nt physical infrastruc­ture, it is difficult to meet the growing demand despite the increased planned outlay by the government. To keep pace with the growing demand we need additional skilled workforce which we don’t have. We need to invest in skill developmen­t to ensure quality and efficiency in services. Customers’ expectatio­ns are becoming high, corporate or individual­s all want personalis­ed solutions, flexibilit­y and faster services. There is a need for standardis­ed services, transparen­cy, and compliance. Slow adoption of new technologi­es has been another big constraint. Use of innovative models, new technologi­cal systems, internatio­nal best practices, research, and an adequate implementa­tion approach can all help to improve the sector, which in turn can stimulate growth and employment in the country.” “Global trade wars and lack of conducive markets are hampering growth targets, but sooner or later better growth will be visible in our industry. A slight push is needed in terms of formulatin­g good policies with win-win models for all participan­ts. Tier-II and Tier-III airports must be augmented with facilities that are available in metro airports, which will boost movement from all regions rather than choking metro airports,” shares Sharma. More adds, “Digitalisa­tion is still a huge, latent growth opportunit­y for the air cargo industry. Disparate legacy systems that lead to process inefficien­cies and a systemic tolerance for paper-based systems that duplicate efforts and documentat­ion are the reason there is still a long way to go for the air cargo industry, despite a policy-level push by industry bodies such as IATA and the government.” “The air cargo industry is lagging behind because of lack of unity and a common voice from a common platform. Also, though we have an exclusive body in the Ministry of Civil Aviation, named ACLPB, to look after the interests and developmen­t of the air cargo industry and trade, the challenges of this industry still exist because of inter-ministeria­l issues,” concludes Kunwar.

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 ??  ?? KS Kunwar Vipin Vohra Director General Air Cargo Forum India (ACFI) Chairman, Continenta­l Carriers and Gallery of Legends (India Cargo Awards, 2015)
KS Kunwar Vipin Vohra Director General Air Cargo Forum India (ACFI) Chairman, Continenta­l Carriers and Gallery of Legends (India Cargo Awards, 2015)
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 ??  ?? Bharat J Thakkar Past President and Permanent Member - Board of Adviser, ACAAI and Co-Founder & Joint Managing Director, Zeus Air Services
Bharat J Thakkar Past President and Permanent Member - Board of Adviser, ACAAI and Co-Founder & Joint Managing Director, Zeus Air Services
 ??  ?? Yashpal Sharma Managing Director, SLS Skyways Group and Face of the Future (India Cargo Awards, 2015)
Yashpal Sharma Managing Director, SLS Skyways Group and Face of the Future (India Cargo Awards, 2015)
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 ??  ?? Ramesh Mamidala CEO, Çelebi Delhi Cargo Terminal Management India and DDP Game Changer (India Cargo Awards, 2016)
Ramesh Mamidala CEO, Çelebi Delhi Cargo Terminal Management India and DDP Game Changer (India Cargo Awards, 2016)
 ??  ?? Amar More CEO, Kale Logistics Solutions and India Cargo Award winner (2017)
Amar More CEO, Kale Logistics Solutions and India Cargo Award winner (2017)
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