FROM MAGAZINE: Air Cargo India - shaping ideas and building businesses

Air Cargo India, in its seventh edition, brought together the best of the global air freight industry to discuss & debate key issues and provided an opportunity to enhance their businesses in India, a country poised for substantial growth in air cargo in the years ahead.
Nahida Jafferi

Vandana Aggarwal, Economic Advisor, Ministry of Civil Aviation, Government of India, urged the delegates at Air Cargo India 2018, to tell what it needs from the government, and announced that it has earmarked INR 88,000 crore for capital projects at airport covering air cargo facilities over the next five years.

The conference cum exhibition kick started on a positive note as Aggarwal in her keynote inaugural address impressed upon that the government shall bring down logistics costs to 9 percent of GDP by 2022, from the current 13- 14 percent. “The ministry is also working towards improving India’s ranking in World Bank’s Logistics Performance Index (LPI) from 35 to 15 by 2020. This year, we shall be introducing a Domestic Logistics Performance Index to rank the Indian states as per competition,” informed Aggarwal.

The three-day event witnessed the innovative spirit of the industry with the launch of new initiatives and key partnerships, while the stakeholders discussed ways for making the air cargo business efficient. The event gathered close to 500 delegates, 79 exhibitors and about 2500 trade visitors.

The International Air Shippers Association (IASA) was launched on the first day that was also marked by many new deal announcements at the event. Des Vertannes, Director General of IASA, and former chief of cargo, IATA, said, “The objective is to give the air cargo shippers a platform where their voices can be heard because they are the ones behind the industry moving $6.4 trillion worth of goods around the world.”

At the Pharma Air Shipper’ Forum, Penta Freight and Amerijet International officially signed their new full memberships with Pharma.Aero, a cross-industry collaboration of Pharma Shippers, CEIV certified cargo communities, airport operators and other air cargo industry stakeholders.

Manoj Singh, the Senior Vice President-Head Cargo, Mumbai International Airport- GVK, announced, “MIAL is working on a prototype to the much expensive cool dollies which is expected to go live by March end. It will be a game changer for moving export cargo from India. Pharma handling at MIAL grew by 21 percent in 2017. The pharma centre at MIAL will be IATA CEIV certified by mid-March.” IATA CEIV certification helps mitigates the risk in pharma handling.

Marking another innovative launch at the event, Dheeraj Kohli, VP and global head for travel and transportation, Unisys, a global IT firm, announced its DIGI pet solution, an Internet of Things (IoT) device that enables pet owners to monitor and talk to their pets from their personal devices, while they are transported via air.

Glyn Hughes, Global Head of Cargo, IATA, moderated the first panel discussion on ‘charting a new flight path for Indian air cargo as a global destination’. Hughes put forth an important question: Is India ready for consistent growth in air cargo? Russi Batliwala, CEO, Chapman Freeborn, mentioned that the industry was not prepared for the upturn in 2017 due to the limited aircrafts including freighters, and not enough ground staff at airports. “The shippers were also forced to pay high rates. We’ve got people like Airbus and Boeing, IATA, legacy carriers, but we failed,” he said.

Air cargo in India witnessed a 15 percent growth in 2017, and expects to grow by 20 percent in 2018. While gauging the perceptions of the delegates, Aggarwal emphasized on India losing out on being a transshipment hub despite its geographic location. Hemanth DP, COO, Aerocommercial Cargo & Asia Pacific Flying School, GMR Airport, responded by saying that India’s import by air is less compared to export; only if the carriers come into wide-body and start offering connectivity the way they do on the domestic side, then transshipment would not be a far off dream.

Addressing the question on adding domestic freighter capacity, DP said, “We have nearly 600 aircraft doing close to 2000 flights a day with a capacity of 3000 tonnes, connecting 40-50 airports in the country. 60 percent of the domestic belly air cargo has an underload. If there is lot of cargo to be moved, shippers will be more than happy to send it via air provided the price point is right,” he reasoned.

At the exhibition, Aggarwal visited the Saudia Cargo stand that was based on the ‘Fly Perishables & Fly Pharma’ theme. She emphasized on the strong relations and growing trade between India and Saudi Arabia. Major Indian exports to Saudi Arabia include fruits, vegetables, meat, fish, basmati rice, textiles and machinery, while imports include organic and inorganic chemicals, metal crap, leather, gold and oil.

At the panel session on ‘air cargo facilitating global trade’, moderated by Bart Pouwels, Director Business Development Cargo, Amsterdam Airport Schiphol, said, “It is critical to digitise the operations and make better use of the information.” Mark Sutch, Regional GM, South Asia, Middle East & Africa, Cathay Pacific Group pointed out, “Developing free trade agreements are helping the cargo in a bigger way.”

In a discussion on digitilisation, the panelists stressed upon the need of blockchain, the looming challenge of data transparency due to stakeholder’s reluctance to share data on cloud platforms, urgent need for standardisation, and much more. It also raised speculations on whether the days of freight forwarders are numbered due to digitlisation led data transparency.

Burak Omero?lu, Middle East and South Asia Regional Senior Vice President, Turkish Airlines, said, “We use the e-AWB, in addition to the technologies at the facilities to make cargo visible. We are ensuring that our new state-of-the-art facilities would make use of high end technologies from the very beginning.”

Highlighting an exciting initiative, Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management, said, “We are considering the use of drones in our warehouses to carry out live inventory and are working with regulators to make it a reality.” He added that the biggest challenge is the fragmented interface with multiple stakeholders like customs, airports, airlines and the absence of standardisation.”

Echoing similar views, Amar More, CEO, Kale Logistics Solutions called for a union of all the standard setting bodies as the regulators have a huge role to play to make industry holders adopt digitalisation. Kale Logistics, MIAL and Schipol Airport, Netherlands and Cargonaut have pioneered a digital air corridor between India and the Netherlands. Kale Logistics and Cargonaut will collaboratively develop a shared interface between their respective air cargo community systems, which will facilitate flow of information within the stakeholder chain and optimise cargo visibility across the stakeholder network.

Following the brainstorming sessions on the second day of ACI 2018, the STAT Times International Award for Excellence in Air Cargo was held to honour the industry players. The STAT Times Lifetime Achievement award was bestowed upon Arvind Parikh. 91-year-old Parikh is the chairman of Lemuir Group, and one of the living legends of the Hindustani classical music.

The third day covered e-commerce retail, the biggest contributor to the 2017 upturn for the air freight industry after years of lull. Pinakiranjan Mishra, partner and national leader, retail and consumer products, E&Y, suggested the industry to do something transformational like adding drone capacity to deliver profitability faster. Mishra said, “In the Indian market, e-commerce shipments through air cargo has gone down from 60 percent to 70 percent in 2014, to 40 percent today. The only way the industry can win is by making it low cost by forming an ecosystem with the efficient technology that the Indian tech startups are building.”

Abhishek Middha, Founder, The BOHO Street, pointed towards the reliability and transparency factor in the air cargo industry. He stated, “The tracking updates from freight forwarders are not reliable to us. Also, from India international delivery by air, takes 2-3 weeks. China is delivering the same shipment in 7-8 days in economy service.” Middha cited the example of China Post that has a tie up with USPS to let shippers deliver across border to US at a lower price, and urged to take cue.

Setting a cautious tone, Tom Crabtree- Regional Director, Airline Market Analysis, Marketing and Business Develoment, Boeing, said, “E-commerce is changing consumers’ expectations and increasing manufacturing demand. Airlines are considering capacity additions. However, we are not over excited about the growth, since we have key learnings from the downturn in 2008.”

From the airport perspective, Steven Verhasselt, VP, Commercial, Leige Airport, called for collaborative thinking. He said “Different airports need to work on the supply chain together to meet the requirements of e-commerce. An airport building an extra warehouse is not efficient enough because cargo needs to be in the airplane and not lying in the warehouses.”

While moderating the session on ‘Industry collaboration to ensure profitable supply chains’, Emir Pineda, Manager Aviation Trade & Logistics, Miami-Dade Aviation Department, MIA, asked the panelists the importance of trust factor with their customers in the air cargo industry.

Tushar Jani, Chairman of Cargo Service Center responded, “Air cargo is the relay race. That is why you hand over your cargo in someone else’s hand. The data has to come from shipper to ensure efficiency in supply chain. It is the shipper who is reluctant to pass over the data.”

However, Steven Polmans, Vice Chairman, TIACA, opined, “We need to create data transparency for the entire organization and not just the shipper, to reduce the dwell time significantly. We don’t need transparency to tell the shipper some information without being able to reduce the dwell time.”

ACI 2018 clearly gave out the message that if the industry has to move forward, it needs to arrive at a consensus on steps to be taken. The event enabled the industry to understand that collaboration between stakeholders and competitors, coupled with the logistics backbone of technology, and transparency is the way forward for enhancing air cargo share in global trade.