A comprehensive National Air Cargo Policy is likely to take off soon to script new history of the air cargo industry in India by addressing all critical issues plaguing it for long. As per the key elements of the draft Policy that highlighted by Commerce & Industry and Civil Aviation Minister Mr Suresh Prabhu and subsequently by Ms Vandana Agarwal, Economic Advisor, Civil Aviation at “4th PHD Air Cargo Summit” held on November 20 in New Delhi, it is expected that the air cargo industry in India (both domestic and international) would keep the desire pace to achieve the projected growth potential and target (10 million metric tonnes by 2027) very systematically, thanks to a very pro-active Ministry of Civil Aviation, Government of India.
It is pertinent to mention that the National Civil Aviation Policy has set a target of 10 million metric tonnes of air cargo volumes by 2027. It also laid down provisions for setting up the Air Cargo Logistics Promotion Board (ACLPB) to facilitate growth in air cargo by way of cost reduction, efficiency improvement and better inter-ministerial coordination.
According to the Study Report published at the PHD Air Cargo Summit by Auctus Advisors titled “Enabling Continued Growth of Air Cargo”, presently air cargo industry is on the growth trajectory especially owing to increase in e-commerce, pharmaceuticals movement; though it needs to grow at least 13 per cent y-o-y to reach the set target by 2027. “This will require urgent steps to address key bottleneck issues of capacity, capability, connectivity and cost,” the study underlines. The study also highlighted that total air cargo at all Indian Airports during 2016-17 and 2017-18 witnessed a growth rate of 10.1 per cent and 12.7 per cent respectively with 3.35 million MT cargo traffic in FY ‘18. International air cargo traffic increased by 15.6 per cent to 2.14 million MT in FY ‘18 whereas domestic cargo traffic increased by 8 per cent to 1.21 million MT.
Presently international cargo contributes 60 per cent to India’s total cargo industry with approximately double the growth rate as compared to domestic cargo business. The air cargo market in India is however dominated mainly by belly-hold cargo carriers. The proportion of belly cargo in domestic air cargo has declined from 86 per cent in FY ‘06 but has remained steady over the past 4-5 years with the share of belly cargo being 78.8 per cent in FY ‘13 and 79.9 per cent in FY ‘16. The share of dedicated freighters accounts for only around 20 per cent of the total domestic air cargo traffic.
The Auctus Study reveals that over 2018-23, the international and domestic air freight is projected to grow at a CAGR of 8 per cent and 8.5 per cent respectively with an overall growth of 8.2 per cent. Considering this trend to continue till 2027, projected international and domestic air cargo will be 3.6 million MT and 2.1 million MT respectively resulting in total air cargo traffic of 6.8 million MT.
To reach the set target (10 million MT by 2027), the Study suggests that The Air Cargo Policy should focus on development of critical infrastructure such as Cargo Hubs and AFS. It should incentivize connectivity to Tier-2 and 3 cities. Government should incentivize freighter operations to Tier-2/3 cities through a scheme similar to the RCS scheme for passenger connectivity thereby boosting development of a wide cargo network.
The Study Report also emphasized on doing away with multiple paper works (documents) for cargo clearance. It pointed out that in India presently each cargo shipment carries more than 30 types of document and well over 100 copies resulting into significant documentation overheads, increased dwell time and supply chain opaqueness. Therefore, digitalization and automation are essential to capitalize on technological advances to promote a hurdle free system.
“We require robust air cargo and logistics infrastructure (including IT) to maintain the momentum of the growth of our country’s economy. Our Prime Minister has set up separate logistics division under the Ministry of Commerce. We are committed to facilitate cargo movement through integrated logistics network. The National Air Cargo Policy and Integrated Logistics Policy would lay out the foundation with specific guidelines in this direction,” said Mr Prabhu, while addressing the Summit. He stressed on more agro based cargo movement and creation of related infrastructure well in advance. “We would be requiring four times the present air cargo and logistics infrastructure to fulfill the future demand,” Mr Prabhu stated.
“We are creating four Greenfield Airports in the near future and there would be adequate capacity for cargo operation. Agro produces from catchment areas would be our major focus area,” added Mr Jayant Sinha, Minister of State for Civil Aviation.
Also present and addressed on this occasion were Mr Rajiv Nayan Choubey, Secretary, Civil Aviation; Mr Rajeev Talwar, President, PHD Chamber; Mr K Narayana Rao, Chairman, Civil Aviation Committee, PHD Chamber; Mr S Machendranathan, Chairperson, AERA; Mr Vipin Vohra, Co-Chairman, Civil Aviation Committee, PHD Chamber; Mr Tushar Jani, President, ACFI; Mr TA Varghese, President, ACAAI; Mr Manish Chheda, MD, Auctus and other industry experts.
At this Summit PHD Chamber felicitated some leading air cargo logistics companies for their outstanding contribution in this sector.
Mr Vaibhav Vohra and Mr Viraj Vohra from Continental Carriers receiving the Award from Mr Jayant Sinha, Minister of State, Civil Aviation.