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Air Cargo Logistics in India

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Air Cargo Logistics in India Air Cargo Logistics in India Working Group Report th 7 May , 2012 Ministry of Civil Aviation, Government of India 1 | P a g e Air Cargo Logistics in India 1 Table of Contents List of Graphs ......................................................................................................................................................................... 5 List of tables ........................................................................................................................................................................... 6 Foreword ...................................................................................................................................................................................... 7 2 Introduction ..................................................................................................................................................................... 9 2.1 Overview .................................................................................................................................................................. 9 2.2 Air Cargo Logistics Operations ..................................................................................................................... 10 2.3 Stakeholders ......................................................................................................................................................... 11 3 Role of Air Cargo in Indian Economy ................................................................................................................... 14 3.1 India’s Economic Performance ..................................................................................................................... 14 3.2 Integration with global economy ................................................................................................................. 15 3.3 Structure of International Trade (Merchandise) .................................................................................. 17 3.4 Trends in Inbound / Outbound Air Cargo Traffic ................................................................................. 18 3.5 Performance of Air Cargo throughput in Indian Airports ................................................................. 21 3.6 Dedicated Domestic freight operations .................................................................................................... 23 3.7 Forecast of the air freight traffic .................................................................................................................. 23 3.8 Cargo Forecast: a Comparative Analysis .................................................................................................. 25 3.9 Drivers of Air Cargo Traffic in India ........................................................................................................... 26 4 Key performance Indicators of Air Cargo Logistics operations in India ............................................... 28 4.1 Overview ................................................................................................................................................................ 28 4.2 Dwell Time- a key Performance indicator ............................................................................................... 29 4.3 Throughput efficiency at cargo terminals ................................................................................................ 32 4.4 Menace of Missing/Non-traceable Cargo ................................................................................................. 36 5 Key Challenges - Infrastructure Bottlenecks .................................................................................................... 38 5.1 Inadequate and overloaded infrastructure facility .............................................................................. 38 5.2 Gaps in Key facility infrastructure at Cargo terminals in Gateway airports .............................. 39 5.3 Bottlenecks in truck docking ......................................................................................................................... 41 Page 2 of 119 Air Cargo Logistics in India 5.4 Inadequate X-ray screening facilities and lack of associated trained manpower ................... 43 5.5 Absence of off-site facility such as Air Freight Station (AFS) for cargo processing ................ 43 5.6 Special Cargo Infrastructure .......................................................................................................................... 47 5.7 Cold chain facilities ............................................................................................................................................ 47 5.8 Lack of DG qualified staff leading to high turnaround time.............................................................. 49 5.9 Security arrangements for the air cargo complex ................................................................................ 50 5.10 Express Companies- Infrastructure related issues. ............................................................................. 51 5.11 Air side infrastructure for Cargo operations .......................................................................................... 52 6 Key Challenges –Regulatory Hurdles and Other Processes / Procedures / Systems ...................... 54 6.1 Overview ................................................................................................................................................................ 54 6.2 Procedural hurdles in Operationalization of Air Freight Station (AFS) ...................................... 55 6.3 Requirement of 100% export shipment examination leads to delay ........................................... 56 6.4 Duplication of documentation ...................................................................................................................... 57 6.5 Simplify customs processes and documentation through full adoption of EDI ....................... 57 6.6 Provision for amendments in EDI system................................................................................................ 59 6.7 Transshipment a cumbersome process .................................................................................................... 59 6.8 Simplified process for managing overages and shortages ................................................................ 62 6.9 Practice of tendering Cargo during peak hours – strain on infrastructure and resources 63 6.10 Lack of close supervision during cargo offloading at truck dock ................................................... 65 6.11 Packaging is another area that requires improvement ...................................................................... 66 6.12 Multiple handling of the packages by various agencies working at the airport ...................... 68 6.13 Restricted working hours leads to delay in cargo clearance............................................................ 68 7 Key Challenges-Automation/IT Adoption ......................................................................................................... 70 7.1 Overview ................................................................................................................................................................ 70 7.2 Warehouse Management System (WMS) .................................................................................................... 70 7.3 Flow of information is not seamless........................................................................................................... 72 8 Recommendations of the Working Group ......................................................................................................... 74 8.1 Initiatives needed from Ministries/Departments of Government of India ................................ 74 8.1.1 Integrated framework of Air Cargo Logistics Policy .................................................................. 74 8.1.2 Industry/Infrastructure Status to Air Cargo logistics Sector ................................................. 75 8.1.3 Air Cargo Logistics Promotion Board ............................................................................................... 78 Page 3 of 119 Air Cargo Logistics in India 8.1.4 Augmentation of Off Airport Cargo logistic facilities ................................................................. 80 8.1.5 Service Levels for Key Performance Indicators ........................................................................... 84 8.1.6 Models for Facility Development at Airports ................................................................................ 86 8.1.7 Promote key gateway airports as Cargo Transshipment Hubs ............................................. 87 8.1.8 Promote dedicated Freighter operations ....................................................................................... 90 8.1.9 24X7 Operations in Air Cargo complex ........................................................................................... 91 8.1.10 Promote Air Cargo educational and training program for capacity building .................. 94 8.2 Initiatives needed from Air port operators and Custodians ............................................................ 95 8.2.1 Air Cargo Infrastructure Development at Airports .................................................................... 95 8.3 Initiatives needed from Central Board of Excise and Customs ...................................................
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