ACFI ANNUAL CONFERENCE ON ‘INDIA – FUTURE AIR CARGO LEADER IN SOUTH EAST ASIA - AIR CARGO POLICY, A KEY FACILITATOR
 
 
 
 
 
Air Cargo Forum India (ACFI) organized a conference on ‘India – Future Air Cargo Leader in South East Asia - Air Cargo Policy, a key facilitator” on 10th April, 2019 at the Leela Palace New Delhi. The chief guest for the conference was Pradeep Singh Kharola, IAS, Secretary, Ministry of Civil Aviation, Government of India. The Guest of Honour was Ms. Vandana Aggarwal, Economic Adviser, Ministry of Civil Aviation (MoCA), Government of India. The conference brought together ministry officials and expert speakers from the industry, as well as Industry leaders from both India and abroad to debate on the National Air Cargo Policy that has been outlined and circulated by the government. The event was vigorously perceived and had attended more than 170 participants from senior government/ policy maker, key industry leaders including shipper.

 

To start with the inaugural session, Mr. Yashpal Sharma, Hon. Secretary ACFI, welcomed the Chief Guest Mr. Pradeep Singh Kharola Secretary Civil Aviation, the Guest of Honor Ms. Vandana Aggarwal, Economic Adviser, MoCA and all the guests present for their gracious presence. In his introductory speech Mr. Yashpal Sharma stated that the global aviation industry is on a high growth trajectory and has ushered in an era of rapid expansion. India is on the path to becoming the third fastest growing economy, which will consequently fuel the Indian aviation industry to take giant leaps and possibly become the third largest aviation market by 2030 in terms of passenger numbers as well as air cargo. He added that the air transportation plays a significant role in the completion of international trade & commerce. Though it carried only one per cent of the global trade by volume, however in terms of value, it enjoyed more than 35 per cent share of global market. “Last year, air cargo carried around $6.8 trillion worth of goods. The Indian air cargo industry stands at approximately 3.3 million tones today and has a huge potential to play a lead role not only in India but in Southeast Asia, which can become one of the largest manufacturing hubs over the next few decades.

 

Mr. Tushar K. Jani, President, ACFI in his welcome speech thanked Mr. Kharola Secretary MoCA for accepting ACFI request to be the Chief Guest of this function and thanked Ms. Vandana Aggarwal, Economic Adviser, MoCA for her presence as Guest of Honor. Mr. Jani highlighted the following points.

 

·        India’s air cargo potential will go a long way with the improvements and new policy initiatives brought by the various government departments & ministries for improving the level of ease of doing business in India from 100 in 2018 to 77 in 2019 among 190 countries of the world.

·        In order to keep pace with the global players the present government under the dynamic leadership of the Hon’ble Prime Minister Shri Narender Modi the country is marching ahead with its progressive and development policies like, Make in India, Digital India, Skill India, Bharat Mala etc. Ministry of Finance and Ministry of Civil Aviation two important Ministries play an important role in framing policies and procedures which may help improving ease of processing EXIM trade at the gateway airports of the country. In this direction MoCA has already released a National Air Cargo Policy Outline recently which has all the ingredients of a futuristic and growth potential for driving India to the Future Air Cargo Leader in South East Asia and Air Cargo Policy is considered to be a key facilitator to achieve this goal.  

·        India is close to become the third largest aviation market in terms of transportation of air passenger globally by 2030, and we have an opportunity to gain a similar progress  in cargo as the country enjoys the advantage of being strategically located. To make India an efficient logistics hub, we need boost both the consumption and manufacturing sectors, and India has both. High consumer and a huge manufacturing sector supported by government’s growth oriented policy initiatives like Make in India and Digital India and simplified taxation policy GST.

·        Due to government’s serious initiatives Dwell time of import & export cargo which used to be one time more than 100 hours came down to 39 hours for import and less than 24 hours for exports, but there is more to be done. These improvements certainly will push the growth of country’s international trade and image of the country in the eyes of the global economies. 

 
  
 
The Chief Guest Mr. Pradeep Singh Kharola, IAS, Secretary, Ministry of Civil Aviation, Government of India, released the ACFI White Paper (Booklet) on “Potential of Air Cargo Logistics Industry and its challenges” prepared by the ACFI Task Pillar on Knowledge & Research partnered with KPMG for sharing Industry Knowledge.

 

Ms. Vandana Aggarwal, Economic Adviser, Ministry of Civil Aviation, Government of India, the   Guest of Honor touched upon following issues;

 

·        In the last few years, we have emphasized on the fact that the entire value chain is important, and we cannot work in silos. One of the major developments the ministry had brought the National Air Cargo Policy Outline and every word of which was written in consultation with all the stakeholders of the cargo industry.

·        The potential the country held for being an air cargo leader in the South East Asia region, MoCA  made a mark by taking up an important initiative in a short span of about two weeks period with our partner Bangladesh in the month of October’ 2018. Keeping in mind that Dhaka was completely choked and Chittagong airport was facing issues, MoCA agreed to partner with Bangladesh to make it a win situation for both countries and initiated the land bonded truck movement from Dhaka to Beanpole and Petra pole, and onwards by air from Kolkata to Europe and the rest of the world.

·        It was an important land-air movement and more than 400 tones under the pilot project have already begun to move. More importantly, cargo movement, which used to take 27 days to reach Europe, is now reaching there in less than four days.

·        Taking cues from this initiative, India would reach out to other partner countries in Southeast Asia.”

·        Ministry of External Affairs had entered a trilateral agreement with Myanmar and Thailand, and the bonded trucking potential used in this trilateral partnership could pave the way for improved trade with landlocked countries in Southeast Asia.

·        About the IT initiatives taken up by MoCA, government is working on the development of a National Air Cargo Community System (NACS) a single nationwide window for the entire air cargo industry stakeholders duly connected for the documentation, processing, payment of charges and passing information for the clearance of import & export cargo. She requested the cooperation of all the industry stakeholders for its successful implementation.

 

Ms. Vandana Aggarwal concluded that we need to address the balance between on-airport and off-airport cargo processing facilities. For a country the size of India, there has only been 3.34 million tons of air cargo movement per annum till now which itself is a challenge for all us in this industry.

 

In his inaugural address the chief guest of the conference Mr. Pradeep Singh Kharola, IAS Secretary Civil Aviation, GOI, in his key note address said that ACFI is the true nature of Logistics Industry as it represents the members from the entire air cargo logistics industry. We should have regular dialogue with ACFI on air cargo issues on the similar lines of MoCA’s meetings with the Airlines on passenger issues so that air cargo can achieve the target of 10 Million MT by 2030. Global Aviation Industry is in a high growth and India shall be the 3rd largest civil aviation market soon. The air cargo logistics supply chain is the lifeline and plays a very significant role for a successful completion of international trade & commerce of any country as it moves more than 35% of the total global trade by value. He spoke about some good things about the industry as under;

 

·      Indian Aviation Industry is doing very good.

·      GST is implemented in a very efficient manner.

·      MoCA has timely released the National Aviation Policy 2016

·      MoCA has also released National Air Cargo Policy Outline 2019

 

He further said that due to some hurdles in processing and movement of international trade through gateway airports, India's total annual air freight volume remains at 3.3 MMT whereas some single airports in the world like Hong Kong handle more than 5 Million Mt of cargo annually. Mr. Kharola stressed on the streamlining of procedures and minimum ground time/ dwell time of import & export cargo. He touched upon the threats of Indian Aviation industry like costs on ATF & taxes which is almost 30-40% of the total earnings of the industry/ airline.

 
 
 

Mr. Kharola assured that he will await recommendations from this Conference, so as to achieve the projected growth by facilitating the air cargo movement in the country. Air cargo community to take measures to strengthen itself to such a degree that these little blips, which were beyond their control, did not adversely affect the overall growth of air cargo. Mr. Kharola hoped that with all our sincere joint efforts by the government & the cargo industry no one could stop our major airports becoming the international cargo hubs. 

 

Mr. Ramesh Mamidala, Chairman, ACFI Task Pillar on Research & Innovation and CEO, Celebi Delhi Cargo Terminal Management India Pvt. Ltd. presented the outlines of the ACFI White Paper on the potential of Air Cargo Logistics Industry and its challenges. The main highlights of his presentation were as under

 

·                   The Indian aviation sector is one of the fastest growing industry with a healthy contribution of 0.5% to the country’s GDP currently and poised to grow to 2% by 2030.

·                   Air Cargo is the 2nd largest contributor of Gross Revenue across Indian aviation sub-sectors with a significant 20.9% contribution.

·                   Air cargo represents approximately 10% the Indian airline industry’s revenues.

·                   Also 36% of the total direct employment in the aviation sector comes from the Air Cargo Logistics industry.

·                   SWOT analysis of the air cargo industry- both infrastructure and IT have been identified as weaknesses in SWOT analysis,

·                   IT as an enabler and opportunities of new innovations in the air cargo logistics such as block chain, Artificial Intelligence (AI), Big Data, drones, market liberalization, etc. and some of them are already in use in India. These ideas would act as enablers of the Growth of the industry.”

·                   Two of the biggest challenges for the air cargo industry are real-time data exchange and single point entry of data.

·                   “Given the fact that we have multiple stakeholders in the chain, data across the supply chain is creating issues which can be resolved with the adoption of Artificial Intelligence.

·                   More importantly, across the supply chain, managing inventory intelligently by predicting customer behavior before the customer decides to purchase or makes the purchase, would significantly improve the efficiency of the supply chain.

  

Business Sessions

 

Two Business Sessions one moderated by (I) Mr. Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India Private Limited & the other (II) Mr. Yashpal Sharma, MD, Skyways Air services (P) Ltd.  Eminent Panel Speakers from overseas and within India were divided in these two sessions as below;

 

Business Session 1: Theme - “Air Cargo Policy – Role of Infrastructure & Information Technology (IT)

 

The Moderator of this session Mr. Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India Private Limited kicked off the session with his following remarks;

 

The world is evolving around the day to day scientific innovations taking place for the development of mankind, India cannot be left behind in this race of progress. The Innovation has become the mantra of today’s developing world, started from industrial mechanization, computerization immediately followed by the Electronic Data Interchange (EDI) and now the Artificial Intelligence (AI), Block Chain & Internet of Things (IOT) is going to transform the wellbeing of the entire world. How robotics is impacting autonomous systems, and a vision for artificial intelligence (AI), on-demand mobility that could transform society.

 

The following speakers of this session explored on the ranges of subjects such as the impact of digital technologies on the way we design and operate for the faster processing and movement of air cargo.

 

Speakers of the Session- 1

 

i.         Mr. Amber Dubey, Partner, KPMG India Pvt. Ltd.

ii.        Mr. Keku Bomi Gazder, CEO, AACLAS

iii.      Mr. Mahbubul Anam, MD, Expo Freight Ltd.(Bangladesh)

iv.      Mr. Dennis Lister, VP – Cargo Commercial Development, Emirates Sky Cargo, (Dubai)

 

Key Takeaway Points of the Session - 1

 

·       International Airports of the country to give more focus on the development of Air Cargo Infrastructure.

·       Single window clearance of cargo should be expanded to Other Ancillary Regulatory

·       Authorities with fully equipped to work online with Customs system

·       More focus to be given on E-Commerce & Perishable cargo export.

·       India to learn lesions from Bangladesh which is the 2nd largest garment exporting country with a growth of 125% in the last 5 years

·       India could help Bangladesh becoming a transit hub for Bangladesh export cargo having more connecting flights to east & western countries.

·       Mental Blocks to be removed as it is causing delay/high dwell time of import/export cargo at Indian Airports.

·       The belly space of passenger A/C goes 66% vacant needs to be filled up.

·       Regulated Agents concept should pick up for the growth & movement of cargo.

·       Build up Units at the agents ware houses be allowed.
 
 
 

Business Session 2: Theme - “Air Cargo a Key Contributor to the entire Value Chain”

 

Mr. Yashpal Sharma, MD, Skyways Air services (P) Ltd. the moderator of session 2 started the session with his following introductory remarks;

The air cargo logistics supply chain is the lifeline and plays a very significant role for a successful completion of international trade & commerce of any country as it moves more than 35% of the total global trade by value. However due to disruptions in the processing and movement of international trade, EXIM cargo still remains at the Indian international gateways Airports in days together where as it takes few hours at the leading international airports of the world which puts the credibility of our country at stake in the international market. Total annual air freight volume of our country is 3.3 Million MT (2018-19) which is less than the air freight handled by any one of the leading airports of the world (Hong Kong 5 Million MT, Memphis 3.56 Million MT & Shanghai 3.26 Million MT.in 2017-18). He further said that as per the Boeing 20-Year Forecast, while global air cargo would grow at an annual average rate of 4.2% by 2035, Asia will lead the growth at 6.2% and Indian market expanding at the highest rate of 6.7% p.a.

 

About the developments taking place in the Indian Civil Aviation particularly in cargo industry Ministry of Civil Aviation has recently released vision statement through National Air Cargo Policy Outline 2019.

 

Speakers of the Session - 2

 

(i)             Mr. Satish Lakkaraju, CCO, Agility Logistics Pvt. Ltd.

(ii)           Mr. Peter Penseel, Senior Vice President Cargo, Qatar Airways Cargo (Doha)

(iii)          Ms. Tulsi N. Mirchandaney, MD, Blue Dart Aviation Ltd.

(iv)          Mr. Sanjiv Edward, CCO, Delhi International Airport Ltd.

(v)           Mr. Tushar K. Jani, Chairman, CSC India Pvt. Ltd.

 

Key Takeaway Points of the Session 2

·        To leverage the Indian air cargo network to provide cargo transportation by air to the masses at an affordable cost and to connect every village to the national and global supply chain.

·        To make air cargo and logistics in India the most efficient, seamless, and cost and time effective in the world over a period of 10 years through collaborations with stakeholders which is missing at present.

·        To ensure global competitiveness of Indian products with strict performance benchmarking and monitoring of stakeholders strictly in the air cargo logistics chain to achieve the target of handling/ transportation of 10 Million MT of air cargo in 2030.

·        Goods moving by road in India is 60% of the total in compare to 30% globally.

·        Time bound executions of the govt. policies uniformly across the country. Ms. Safali Juneja, Joint Secretary, MoCA emphasized on the following

-     National Skill Development council to collaborate with the cargo industry partners

-     MoCA to hold a Round Table Conference on Skill Development under PPP mode.

-     Air Cargo Logistics subject to come in the colleges/universities & Logistics Apprentice courses be introduced 

-     Skill Development Hubs to be created/developed at various regions/parts of the country.

 
 
 

Summary of the Key Take Away points of the event:

 

·       It is believed that all the stake holders of entire air cargo supply chain have been benefited by the deliberations of this summit well in time to generate the future growth of air cargo.

·       Stimulate various innovations in the technology being used in the processing & handling and paperless processing/transaction to improve the level of ease of doing business in the processing & handling & movement of EXIM trade which would serve the industry in transforming India the future Air Cargo leader in South East Asia.

·       India can become one of the largest manufacturing hubs and Indian major Airports in to International Cargo Hubs over the next few decades.

·       Ministry of External Affairs had entered a trilateral agreement with Myanmar and Thailand. The bonded trucking potential used in this trilateral partnership could pave the way for improving trade with landlocked countries in Southeast Asia.

·       We are also confident that all the stakeholders in the air cargo industry including the government agencies would adopt the new National Air Cargo Policy outline proactively which will bring fundamental changes in their workings for improving the level of ease of doing business which is must if the country has to achieve three to four time growth in the movement of international trade and commerce and triple its international trade to become the fourth largest economy of the world by 2030.