Air Cargo India 2014 sees a successful start

The fifth edition of Air Cargo India opened on a grand note. More than 73 exhibitors from over 29 countries are participating in one of the popular air cargo events in the world to seek business opportunities in one of the emerging markets. The three-day event saw a large number of visitors in attendance on the opening day. Interestingly, there was a remarkable turnout at the Pharma Shipperss Forum, where pharma shippers got an opportunity to dialogue and discuss issues and concern of their industry with global logistics companies, airports and airlines.

Mr Rafeeq Ahmed, President of Federation of Indian Exports Organisation (FIEO), an apex body of all export promotion councils under the Ministry of Commerce, inaugurated the event. In his keynote address he spoke at length on issues that are currently affecting the export market in India. Mr. Ahmed highlighted that in the past two to three years, India has witnessed a trade deficit because of the imports surpassing the exports. At the same time, he also assured that the scenario is soon to change. “After interacting with exporters of all types, we believe that exports will grow at a level of 15 to 20 percent in 2014.” However, one cannot ignore that India has also seen a slowdown in the manufacturing sector that has had a huge effect on the exports. “When manufacturing grows, exports jump up.” Among other factors, Mr. Ahmed acknowledged, “frequent changes in our policies are affecting our exports.” Representing shippers all over India, he requested airlines and airports present at the conference to help move goods as fast as possible in keeping with the rising demand for less lead time. On an optimistic note, Mr. Ahmed stated that a lot of import and export commodities will come under zero duty level under the Free Trade Agreement (FTA) towards the end of next year.

The highlight of today’s event was the first business session of day which focused on beating challenges in Indian air cargo. Desmond Vertannes, Global Head of IATA, chaired the session. Among the panellists present were stalwarts of the industry representing major airlines and airports around the world. In accordance with the theme, “Moving from sustainability to profitability”, the panellists unanimously voiced that there is a need for integration across the air cargo supply chain. Nabil Sultan, Divisional Senior Vice President-Cargo of Emirates Airlines, stated, “In the cargo industry, there are certain fundamentals that need to be put in place in order to have an operation that generates profit eventually. All stakeholders in the cargo supply chain are critical – starting from the aircraft manufacturers—where we need to demand better fuel-efficient aircraft generation with probably cheaper aircraft, because at the end of the day, you have the boundaries of yield and tonnage. And unless you are able to bring in the aircraft at a reasonable cost, you will not be able to achieve profitability”

Peter Scholten, Vice President Commercial, Saudia Cargo said, “We see growth in belly capacity in passenger flows. Passenger airlines are, in general, profitable. So, it offers cargo airlines, cargo divisions of passenger airlines the opportunity to grow the business. And to attack modal shift we can offer faster solutions than anybody else.”

With all this talk about fundamental change, the need to drive value for air cargo supply chain, the responsibility lies with everyone in the industry. This means that every association must work together. “The regulators are there to try and only educate us if we don’t legislate ourselves. We have got the solutions, let us make sure we install them and let’s drive the value proposition up,” said Mr. Vertannes.

Among the key commodities that will drive Indian exports is pharmaceuticals. Pharma will be one of the leading sectors which will show excellent growth. However, there is a need for more interaction between drug manufacturers and logistics heads. With this understanding, a lot of delegates and visitors were present at the Pharma Shippers Forum co-hosted by Amsterdam Airport Schiphol. Indian pharma industry is the world’s third largest in terms of manufacturing volume. “Drugs coming inside, and going out of the country, security of the drugs are very important and shippers can play a greater role in working more closely with the drug controllers,” said Dr. Venugopal G. Somani, Joint Drugs Controller (India).

Interesting insights and key trends were brought up for discussion during the forum. One such insight was about different modes of transport: shippers think that to move temperature sensitive products from USA to India, it’s safer to send by sea, but at the same time it also depends on the product.

Packaging plays a key role in transportation of pharma products. An experienced logistics professional with from Nairobi dealing with pharmaceuticals said, “In terms of packaging, we tend to use special corrugated boxes that are thermal controlled.”

Since infrastructure is integral to the transportation of pharmaceuticals and Hyderabad Airport is noted for its state-of-the-art facilities, an airline official said, “We as an airline are convinced that the investment is there and can be suitably handed. If we feel the product can be handled, then we would look to go to Hyderabad.”

An official from Etihad Cargo said, “We are expanding in June into Hyderabad, we are also looking at options of a freighter as well.”

The issue of Good Distribution Practice (GDP) certification in Europe was a concern. Renate de Walle from Air France-KLM stated: “There is no one standard. Everyone is designing their own standards and imposing that on the customer. We are getting different standards from each forwarder. So, basically the best way to get around this is to cooperate. We need to answer with all parties in the supply chain, start with a small flow and make progress from there. We need to become GDP compliant for the future.”

All in all, day one was lively and buzzing! Follow all the action on our twitter handle @aircargoindia