At one of the annual Air Cargo Agents Association of India (ACAAI) meet three years ago, a top cargo boss from Lufthansa outlined the three important factors that hindered the growth of air cargo in India. He put it simply as: “Infrastructure, infrastructure, infrastructure.”
Today, those words sound prophetic. With the downturn and losses, carriers are no longer wooing passengers. The focus is now on air cargo and the government has, at last, woken up tothe need of enhancing and upgrading air cargo infrastructure. At last, because,for quite some time the governmentseemed to be virtually unaware that aircargo existed.
Waking up, the Airports Authority of India (AAI) decided towards the end of last year to go ahead with a 10-year development plan that would create modern cargo hubs across the country. In addition, the AAI is keen to go through with a national air cargo policy.
Titled Vision 2020, the policy is being prepared by international consultancy firm PriceWaterhouseCoopers, which will project a vision for air cargo growth by the year 2020.
The report will take stock of the current status of the industry, the procedures involved in the sector, and be key to laying down the ground rules going forward.
According to sources in the civil aviation ministry, the PwC’s report will be in two parts. The first part will suggest measures to remove infrastructure bottlenecks and the second will provide the growth projection for 2020.
The move to enhance air cargo infrastructure has been brought up a number of times at different fora. In May 2008, for example, the ACAAI held a one-day symposium in Delhi to highlight the problems faced by the air cargo industry.
Aptly titled “Revitalising air cargo: Imperative for the growth of India’s global trade”, the symposium observed that the forwarding and logistics industry had been going through a diffi cult patch, particularly exports.
“Not only had the growth faltered due to the weakening of the US and other economies, the dropping dollar and the soaring fuel prices, but air cargo too faced a host of challenges and constraints shackling the industry,” a note issued at the end of the symposium pointed out.
Reacting to the constraints, the AAI initiated steps – even before Vision 2020 has come into effect – to enhance cargo infrastructure. Among the steps that have been taken to boost cargo infrastructure over the last few years include a perishable cargo policy introduced in April 2006. The policy offers a number of concessions for setting up state-of-the-art centres for perishable cargo.
Colour X-ray machines for the scanning of all export cargo have been installed at metro and other airports by the AAI and usage charges have been reduced to boost perishable exports. Greater automation in cargo handling has been brought about by introducing Elevated Transfer Vehicle (ETV) for storage of ULDs (Unit Load Device) of Export Cargo.
The AAI also implemented Internetbased Electronic Data Interchange (EDI), with its community partners including Customs, airlines, exporters, importers, agents, banks, etc., has also been established.
The civil aviation ministry through the AAI has also taken up work to establish an integrated cargo complex at Kolkata and Chennai, a cargo complex and a centre for handling perishable cargo at Amritsar and interim facilities for handling international cargo at Indore.
One of the subjects that the air cargo policy will deal with – and it is incidentally one that has been on the wish-list of most of the stakeholders in the sector – is thecreation of cargo villages.
New cargo village strategy
In fact, a Cargo Village was opened near the new Bangalore International Airport on New Year’s day. A first-of-its kind in any airport in India, the village has started providing the necessary infrastructure muscle to Bangalore’s position as a commercial centre.
The village, spread over 11 acres has provision for future expansion. Built over a period of 10 months and a small investment of only US$2.4 million, it has adequately accommodated 120 freight forwarders, 80 custom house agents and banks. The facility has conference rooms, training rooms, a business centre, staff canteen and truck parking making it one of the well-equipped cargo facilities in the country.
The new cargo village is in addition to BIAL’s current facilities which include two operational cargo terminals, built and operated by Menzies Aviation Bobba Pvt Ltd and Air India SATS Joint Venture consortium. While the first has a capacity to handle 150,000 tonnes of cargo, the latter has a two-floor warehouse with a capacity of 200,000 tonnes.
These two terminals have handled 70,905 tonnes of cargo since the airport was opened on 24 May 2008 and have the capability to handle twice Bangalore’s present annual cargo requirement. With the new cargo village, the new airport will be able to reach its target of 350,000 tonnes a year in a few years.
At Mumbai, a blueprint for a major transformation of the airport by 2010 had been unveiled for the Chhatrapati Shivaji International Airport (CSIA). The plan, designed to expand and upgrade the infrastructure at CSIA, was worked out to cater to one million tonnes of cargo annually.
Other private airport players have also seized the opportunity to boost their cargo revenues. The GMR Hyderabad International Airport (GHIAL), for instance, will be establishing a stateof- the-art centre for perishable cargo at the Rajiv Gandhi International Airport (RGIA). The move is well-planned: The airport will be able to leverage its position and logistics facilities to ensure the reach of perishable cargo, both in India as well as Southeast Asia, the
Middle East, Europe and US. According to GHIAL’s chief commercial officer, Viswanath Attaluri, the Centre for Perishable Cargo (CPC) will give a great boost to the movement of perishables. The CPC has been designed to handle 15,000 tonnes per annum of perishable cargo in Phase I (up to 2011). The capacity will be raised to 25,000 tonnes per annum in Phase II (2013-2014).
In Kerala’s Cochin International Airport (CIAL), similar moves are taking place. CIAL too has decided to set up a CPC. The INR530 million project is being developed with assistance from the Agriculture Product Development Agency, and will have the facility to export about 20,000 tonnes of perishable cargo every year.
In addition, Kochi airport has also started constructing dedicated parking bays for cargo flights and a container parking yard to facilitate the smooth functioning of the CPC.
It may be worthwhile to mention that ACAAI has formed a Civil Aviation Core Group (CACG) Committee, which directly interacts with the Ministry of Civil Aviation to study the challenges and needs of the Air Cargo Industry and to provide solutions. Among the proposals the CACG has put forward are the creation of world-class infrastructure, bonded forwarders’ terminals, cargo village concepts, industrial level EDI and search and create trained manpower.
If the recent moves by the AAI, the Ministry of Civil Aviation and private operators are any indication, air cargo could very well come out of the shadows to claim its rightful place in the economy of the country. The figures indicate such a trend.
According to industry estimates, Indian airports handled around 1.55 million tonnes of cargo in 2006-07 and 1.4 million tonnes during 2005-06. Air cargo has grown by around 19 per cent against 10.3 per cent and 9.2 per cent in shipping and railways respectively, inthe three years, 2005-2008.