Air Cargo Logistics in India

1 1 | P a g e Air Cargo Logistics in India Working Group Report Ministry of Civil Aviation, Government of India 7th May, 2012 Air Cargo Logistics in India Page 2 of 119 1 Table of Contents List of Graphs .. 5 List of tables .. 6 Foreword .. 7 2 introduction .. 9 Overview .. 9 Air Cargo Logistics Operations .. 10 Stakeholders .. 11 3 Role of Air Cargo in Indian Economy .. 14 India s Economic Performance .. 14 Integration with global economy .. 15 Structure of international Trade (Merchandise) .. 17 Trends in Inbound / Outbound Air Cargo Traffic.

2 18 Performance of Air Cargo throughput in Indian Airports .. 21 Dedicated Domestic freight operations .. 23 Forecast of the air freight traffic .. 23 Cargo Forecast: a Comparative Analysis .. 25 Drivers of Air Cargo Traffic in India .. 26 4 Key performance Indicators of Air Cargo Logistics operations in India .. 28 Overview .. 28 Dwell Time- a key Performance indicator .. 29 Throughput efficiency at Cargo terminals .. 32 Menace of Missing/Non-traceable Cargo .. 36 5 Key Challenges - Infrastructure Bottlenecks .. 38 Inadequate and overloaded infrastructure facility .. 38 Gaps in Key facility infrastructure at Cargo terminals in Gateway airports.

3 39 Bottlenecks in truck docking .. 41 Air Cargo Logistics in India Page 3 of 119 Inadequate X-ray screening facilities and lack of associated trained manpower .. 43 Absence of off-site facility such as Air Freight Station (AFS) for Cargo processing .. 43 Special Cargo Infrastructure .. 47 Cold chain facilities .. 47 Lack of DG qualified staff leading to high turnaround 49 Security arrangements for the air Cargo complex .. 50 Express Companies- Infrastructure related issues.. 51 Air side infrastructure for Cargo operations .. 52 6 Key Challenges Regulatory Hurdles and Other Processes / Procedures / Systems .. 54 Overview.

4 54 Procedural hurdles in Operationalization of Air Freight Station (AFS) .. 55 Requirement of 100% export shipment examination leads to delay .. 56 Duplication of documentation .. 57 Simplify customs processes and documentation through full adoption of EDI .. 57 Provision for amendments in EDI 59 Transshipment a cumbersome process .. 59 Simplified process for managing overages and shortages .. 62 Practice of tendering Cargo during peak hours strain on infrastructure and resources 63 Lack of close supervision during Cargo offloading at truck dock .. 65 Packaging is another area that requires improvement .. 66 Multiple handling of the packages by various agencies working at the airport.

5 68 Restricted working hours leads to delay in Cargo 68 7 Key Challenges-Automation/IT Adoption .. 70 Overview .. 70 Warehouse Management System (WMS) .. 70 Flow of information is not 72 8 Recommendations of the Working Group .. 74 Initiatives needed from Ministries/Departments of Government of India .. 74 Integrated framework of Air Cargo Logistics Policy .. 74 Industry/Infrastructure Status to Air Cargo Logistics Sector .. 75 Air Cargo Logistics Promotion Board .. 78 Air Cargo Logistics in India Page 4 of 119 Augmentation of Off Airport Cargo logistic facilities .. 80 Service Levels for Key Performance Indicators.

6 84 Models for Facility Development at Airports .. 86 Promote key gateway airports as Cargo Transshipment Hubs .. 87 Promote dedicated Freighter operations .. 90 24X7 Operations in Air Cargo complex .. 91 Promote Air Cargo educational and training program for capacity building .. 94 Initiatives needed from Air port operators and Custodians .. 95 Air Cargo Infrastructure Development at Airports .. 95 Initiatives needed from Central Board of Excise and Customs .. 101 Customs Cost Recovery Issue .. 101 Reduce delay in processing of Export Cargo out of Cargo terminals- .. 103 introduction of post audit for exports .. 103 Introduce digital signature to reduce paper work.

7 104 Decongestion of warehouse .. 104 Facilitate Transshipment .. 105 Initiatives needed from Bureau of Civil Aviation Security .. 106 Initiatives needed from Airports Economic Regulatory Authority of India .. 109 Non-discriminatory treatment to all users .. 109 Need for Consistent policy on allotment of facilities .. 109 Monitoring and enforcement of service levels .. 110 Initiatives needed from Carriers, Air freight operators/CHAs and others .. 111 Active co-operation from Carriers for promoting Off-Air port Facilities .. 111 Uplift Capacity and Handling Capability .. 112 Investment in Human Resources .. 112 Integrated working Hours.

8 114 Timely filing of documents .. 114 Annex: I Copy of order constituting Working Annex: II List of members of Working Group, Other Experts & Special Air Cargo Logistics in India Page 5 of 119 List of Graphs Graph 1: Trends in GDP growth Graph 2: Trends in GDP & Air Cargo growth rates Graph 3: India s international Air trade to GDP ratio Graph 4: Share of Exports & Imports in India s total trade Graph 5: Share of Exports & Imports in India s total trade (Excluding Oil trade) Graph 6: Air Cargo Business high in value and low in volume Graph 7: Trends in growth of Air freight Traffic throughput at Indian Airports Graph 8.

9 Freight throughput across 6 metro Airports of India (2010-11) Graph 9: Forecast of Air freight Traffic throughput at Indian airports Graph 10: Cargo forecast for the 20 years period 2010-11 to 2030-31 Air Cargo Logistics in India Page 6 of 119 List of tables Table 1: India s merchandise Trade-GDP ratio in the period 1990-91 to 2010-11 Table 2: Size of India s foreign merchandise trade Table 3: India s inbound & outbound Air Cargo traffic (in 000 metric tonnes) Table 4: international trade by sea and Air Cargo - Volume and value growth comparison Table 5: Proportion of domestic Cargo carried as belly Cargo & in freighter aircraft Table 6: Global Benchmark of Dwell time vis- -vis Indian airports Table 7: Global comparison of Total throughput and transshipment Table 8: Efficiency norms for Air Cargo terminal warehouse Table 9: Air Cargo throughput efficiency in terminal of major gateway airports of India Table 10: Comparison of air Cargo infrastructure operations in India with global best practices Table 11: Comparison of Truck docking bays in major gateway airports of India with few overseas airports Table 12.

10 Comparison of air Cargo security infrastructure in India with global benchmark Table 13: Dedicated parking bays for freighter aircraft in Indian airports with Global comparison Table 14: Deployment of officers / distance of their offices from terminal of international airports Table 15: Operating hours of Cargo terminals at international airports Table 16: Comparison of air Cargo automation in India with global best practices Table 17: international benchmark for Cargo warehouse Air Cargo Logistics in India Page 7 of 119 Foreword Air Cargo Logistics play a vital role in the economic development of a nation. Airlines, Air Cargo terminal operators, Ground Handling service providers, Integrated Express Service Providers, Forwarders, Domestic Cargo Transport service providers and Custom House Agents are the key players in the entire Air Cargo supply chain.