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International Air Freight From and To IndiaInternational Logistics
Table of Content1. International Air Freight : Introduction2. Volume : Trends and Growth3. Forecast4. Key Players and Distribution5. International Hubs across India6. Challenges7. Government Plans and Actions8. Conclusion9. Recommendations10. ReferencesIntl Logistics : Air Freight India 2
International Air freight : What, When , How ?• The service of transporting of goods across borders through aircrafts iscalled International Air Freight.• Air Freight came into business in 1910 and was introduced in India onlyafter 1954 by Air India.• Pictorial Presentation:3WarehouseInternational Logistics : Air Freight India21 June 2013
Volume : Trends and Growth• The Indian Logistics sector is valued at US$120 billion about 2.5% of globalmarket (US$ 4.0 trillion globally).• India’s international Air Trade to GDP ratio has doubled from 4% to 8% inthe last twenty years.40 500 1000 1500 2000 2500 3000 3500 4000 4500 50001995-961997-981999-2K2001-022003-042005-062007-082009-102011-12Yearly traffic trends & growthInt’l TotalInternational Logistics : Air Freight India21 June 2013
Volumes : Forecast• Studies have highlighted an annual growth rate of 6%-7% in long term basis.• As per industry estimates the growing cargo market in India 90 freighteraircrafts in the international market would be required by 2025 to meet thegrowing demand : Air IndiaInternational Logistics : Air Freight India 502000400060008000100001200014000Airbus MoCA AAITonnesin1000sAgenciesForecast volume growth for International Air frieght growthin India for 2010-20312010-2031ForecastedGrowth RateAir bus : 4 timesMoCA : 7.5 timesAAI : 6.1 times21 June 2013
Key Players and Distribution618%16%12%11%9%9%8%6%6%5%Major Player and Percentage ShareSingapore AirlinesLufthansaEmiratesAir indiaBritish AirwaysCathay Pacific AirwaysJet AirwaysEthihad AirwaysThai Intl AirwaysKorean AirwaysVolume (Tonnes)305772793420037188511581614721126901057296859281Accelerating factors for freightgrowth• International tie ups ofcompanies• Reduced customrequirements to WTO andGATT agreements• Liberalized FDI in retail sector• Encouragements in valueadded agriculture• Floriculture, Flower exports• Fresh Vegetable and frozenfood exportsInternational Logistics : Air Freight India21 June 2013
International Hubs across IndiaInternationaloperational airports :• Chennai• HAL Bangalore• Calcutta• Old Hyderabad• Ahmedabad• Goa• Trivanathapuram• Calicut• Jaipur• Srinagar• Nagpur• Amritsar• Mumbai• Delhi• KochiThe five major airports Mumbai, Delhi, Calcutta, Chennai and Bangaloreaccounts for around 88% of the total cargo in India.
Challenges8EDI process throughwhich the airports getthe details of the cargoconsignments from theairport of origin muchbefore the aircraftlands.Reduce the time takenfor clearance of cargo10-12 hrs for exportand 24 hrs to import.• Infrastructure Bottleneck : capacity constraint inparking bays, warehousing, handling equipment.• High Cost : navigation and airport cost, aviationturbine fuel is more than other developedcountries• Interrupted electric power supply, road and railconnectivity, port, cargo hubs and cold storagefacilities• Lack of EDI• Lack of stable logistic policyInternational Logistics : Air Freight India21 June 2013
Government Plans and Actions9• Ministry has also raised the FDI from 49% to 74% in the cargo sector.• Setting up of permissible integrated multi modal cargo hub.• Cargo village is being set up in Karnataka.• Better traffic rights• Improve the maintenance and repair operations• Efficient facilities for cargo handling• Modernisation of Air Traffic Control with better control system andautomation• E-Payments for custodian charge• Automated storage and retrieval systemInternational Logistics : Air Freight India21 June 2013
Conclusion10The growth in Freight movement from 2011 to 2013 has been 19% due tothe open sky policy and raise in customer demand as against 10.12%growth in sea freight and 9.19% in rail freight.International Logistics : Air Freight India21 June 201302468101214161820Air frieght Sea frieght Rail frieghtGrowth rate from 2011- 2013
Recommendations11• Need of hour is to realize the best practices for raising freight &logistics value chain to increase the capacity of the airports and freighthandling systems.• Invest in better fuel efficient freight aircraft to reduce operating cost ofIndian players and raise their performance in international air freightbusiness.• Form a conference with civil aviation ministry to stabilize the tariff andreduce dynamic market risk on air freight business.• Develop resource development program and educational program tosupport the emerging change with best practices (PL3 development).• Focus on realizing the failure and risk. Transfer them to experts tohandleInternational Logistics : Air Freight India21 June 2013
Reference• “Air Cargo Logistics in India - MOCA WORKING GROUP ON AIR LOGISTICSREPORT.pdf.” Accessed April 17, 2013.• “Challenges in Indian Logistics Sector – Aviation Logistics.” Accessed April 17, 2013.• Ministry of civil aviation. “Moca_000783.pdf” (n.d.): 54. Accessedfebruary15, 2013.• Tungatkar, Sandhya. “Indian Logistics Industry,” November 2011.http://www.iseindia.com/ResearchPDF/Logistics_Update1.pdf.• Project report on cargo growth in India undertaken by Hindavia AeronauticalServices Private Limited12International Logistics : Air Freight India21 June 2013