MIAL sees future cargo growth pegged to e-commerce volumes

Currently e-commerce forms 75-80 per cent of the total domestic cargo business of MIAL which expects an annual growth rate in volumes from this sector of around 7-8 per cent.

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Launching a common user terminal (CUT ) for domestic air cargo operations on Monday, Mumbai International Airport Ltd (MIAL) said it expects e-commerce logistics to grow 7-8 per cent per year. Currently e-commerce forms 75-80 per cent of the total domestic cargo business of MIAL, said airport officials according to a dna.com report.

The CUT, outsourced to Concor Air Ltd on build-operate-transfer basis, has a capacity of 300,000 tonnes of cargo annually and is built on the an area of 5,574 sqm.

“The need to upscale air cargo facility was necessitated in view of an increased growth in the domestic air cargo business in the last three years with the rise in e-commerce,” a senior MIAL official told dna on the sidelines of the event.

A recent study by trade association body Assocham estimated the likely size of the e-commerce industry in the country at over US$38 billion by 2016, a 67 per cent jump over 2015. The e-commerce industry was valued at $17 billion in 2014 and a mere $3.8 billion in 2009.

“Since CSIA is a land constraint airport, we planned for an elevated cargo terminal building structure whereby all the arriving domestic cargo will be managed from the basement level while the departing cargo is being handled at the upper level,” said the official on design of the CUT.

At present, only Air India and Bluedart handle their own domestic cargo operations, while Jet airways has reportedly shifted its operations to the newly launched CUT.

The Indian freight transport market is expected to grow at a compounded annual growth rate (CAGR) of 13.35 per cent by 2020 driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors, another Assocham report said in December last. Air freight comprises around 1.0 per cent of the total freight market in India, which will grow around 12.5 per cent CAGR over the next five years with the shorter turnaround time needed for delivery such as 24-hour deliveries by the e-commerce sector, the report said.

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