Anticipating an all-embracing air cargo policy
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.