Air Freight Trends: Developments in cargo handling infrastructure

Developments in cargo handling infrastructure

The air cargo industry has started to recover. The overall international freight traffic during April-September 2021-22 increa­sed 58 per cent over April-September 2020-21. Similarly, domestic freight traffic during April-September 2021-22 increased 72.1 per cent over April-September 2020-21. The industry was significantly impacted because of Covid-19 in 2020-21 as air freight traffic during the period declined by 25.7 per cent over 2019-20. Prior to that, air freight traffic grew at a compound annual growth rate (CAGR) of 5.67 per cent between 2014-15 and 2019-20, reaching 3.3 million tonnes in 2019-20. During 2014-15 to 2019-20, domestic and international freight traffic inc­reased at a CAGR of 6.14 per cent and 5.37 per cent respectively. Of the total freight traffic in 2020-21, international and domestic traffic ac­counted for a share of 61.54 per cent and 38.46 per cent respectively.

The Ministry of Civil Aviation has set up a sub-group, comprising members of the Do­m­es­tic Air Cargo Agents Association of India; Airports Authority of India’s (AAI) logistics arm, AAI Cargo Logistics and Allied Services Com­pany Limited; various airlines and a joint venture airport, for suggesting ways and means to improve cargo-related infrastructure issues. The sub-group will study all the issues and ch­a­llenges facing do­mestic air cargo operations and come up with recommendations with a view to facilitate and in­crease volumes of domestic air cargo. The gro­up is expected to submit its report soon.

Key developments

Air cargo terminal at the Devi Ahilya Bai Holkar airport

In February 2021, Kannur International Airport in Kerala opened its 1,200 square metre cargo complex with an annual capacity of 12,000 metric tonnes. Its 6,000 square metre international cargo terminal will also soon be ready. The airport is now aiming to become the air cargo hub for the region by exporting goods to the Gulf region and even to the US by beating other airports with its advantages. The airport is also planning to increase the runway length to 4,000 metres.

Inflatable hanger at Hyderabad airport

GMR Aero Technic, the maintenance, repair and overhaul division of GMR Air Cargo and Aero­space Engineering Limited at Hyderabad airport, has added a new “inflatable hangar” in addition to its existing permanent and immovable han­gars on its sprawling premises. An automatic control system will be installed in the hangar to continuously monitor and control operative pa­rameters. The hangar is designed to withstand wind speeds up to 158.4 km per hour. It can handle temperatures from negative 30 ºCel­sius to positive 70 ºCelsius.

Domestic air cargo terminal at Hubballi airport starts operation

North Karnataka’s first dedicated domestic air cargo terminal started operations at Hubballi airport on November 4, 2021. The air cargo terminal is spread across an area of 1,000 square metres and has a one-time hold capacity of 100 mt and annual capacity of 15,000 mt. It is capable of handling general, perishable and other categories of goods. A dedicated storage space for valuables and dangerous goods, as well as a commercial office space for freight forwarders, e-commerce and courier companies, is available at the cargo terminal. Going forward, depending on the demand, airlines such as Indigo, Alliance Air and StarAir may operate cargo charters or freighters through this terminal.

Kolkata airport opens international courier terminal

Kolkata airport has recently opened an international courier terminal to facilitate express cargo clearance from the airport itself. This will enable direct export and import of courier, which had to be routed via Delhi or Mumbai till now and req­u­ir­ed additional two days in transit. The 1,120 square metre facility is located next to the existing cargo terminal. It has started operation in phases with dedicated customs officers handling courier operations. The terminal has dedicated XBIS, CCTVs, ETD, handheld scanners and a dedicated staff for fast and reliable processing of over 6,000 tonnes of courier cargo annually and will be managed by a software express car­go clearance system that enables faceless, contactless and efficient customs clearances.

Cargo operations at Dimapur airport

The Bureau of Civil Aviation Security has appro­v­­ed cargo operations from Dimapur airport. The cargo service will target the farming sector to facilitate the export of agricultural produce from Nagaland to a wider consumer base. The cargo service will operate from a dedicated building and the processing of cargo for transport will take place four hours before the de­parture of the flight.

SpiceJet to transfer its cargo and logistics services business

SpiceJet has announced that it has received the shareholders’ approval for transferring its cargo and logistics services business valued at Rs 25.56 billion to its subsidiary, SpiceXpress and Logistics Private Limited, on a slump sale basis. The company added that the consideration for the slump sale will be discharged by Spice­X­press by the issuance of its shares in favour of SpiceJet. This proposed transfer of the logistics business will give SpiceJet a one-time gain and wipe out a significant portion of its negative net worth. Further, the airline is all set to provide a cargo facility in passenger aircraft and has also received approval from the Bureau of Civil Avia­tion Security. The SpiceJet management will provide cargo service from Gwalior to Ahmeda­bad, Mumbai, Bengaluru, Hyderabad, Kolkata, Jam­mu, Pune and Jaipur.

The way forward

The air cargo throughput is projected to quadruple to 17 million tonnes in the fiscal year 2040. Cargo processing will be completely paperless and dwell times will be reduced to one to two hours. The Indian cargo infrastructure is in im­mediate need of electronic custo­ms processes and documentation through full adoption of ele­ctronic data interchange. Elec­tronic communication for import and export re­gis­tration, clearan­ce, drawback and e-payme­nt of duty will help release several customs officers, who can contribute in part for 24×7 op­e­rations. The industry will speedily adopt in­novations like big data, blo­ckchain, biometrics and artificial intelligence to improve the transparency and reliability of operations.

As the domestic cargo market matures, the need for cargo handling capacity at Tier II and Tier III airports is going to rise. The authorities need to take measures to identify the cities where common user a domestic cargo terminal should be established. In addition, the rise of e-commerce has also led to the need of better infrastructure and more capacity to process both international and domestic cargo in Tier II and Tier III airports. Airlines, airports and cargo terminal operators that process courier cargo can fully integrate themselves with the information technology system of e-commerce logistics companies in order to provide seamless and real-time status updates of shipments. While there are infrastructure bottlenecks that can potentially impede the overall development of the air cargo industry, there are also several untapped opportunities in the air cargo business for various stakeholders.