SETTING FOOT IN 2021 - AFS POLICY FROM TAKING OFF IN INDIA - CARGO TALK
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Vol.: XXI Issue 02; January 2021 04th - 05th of same month at G.P.O. New Delhi-110001; RNI No.: DELENG/2003/10642; Date of Publication: 03/01/2021
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What is stopping Industry gears up for
AFS policy from vaccine storage
taking off in india & distribution
Setting foot in 2021
Editor
SanJeet
Editorial
Kalpana Lohumi
contents JANUARY 2021
6
Smita Kulshreshth
Pg. INTERNATIONAL NEWS
General Manager
Harshal Ashar News from the industry
Manager
Yogita Bhurani
Gaganpreet Kaur
Pg. 10 Industry Report
Sales Co-Ordinator
Auto component industry
Jaspreet Kaur registers exports at ` 390,003 cr
12
Design
Nityanand Misra
Advertisement
Pg. 12 Cover Story
Designers What is stopping AFS Policy
Vikas Mandotia
Nitin Kumar
from taking off in India?
Production Manager
Anil Kharbanda Pg. 22 Industry Opinion
Circulation Manager Industry gears up for vaccine
Ashok Rana
storage and distribution
Pg. 32 Industry Expectations
22 Setting foot in 2021
U22210DL2012PTC230432
Pg. 36 Tech Talk
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from Union Budget 2021-22
4 CARGOTALK JANUARY - 2021 www.cargotalk.in
INTERNATIONAL NEWS
46% of air cargo industry Asia-Pacific registers
ready for transportation of 3.2% growth in air cargo
vaccines: TIACA & Pharma.Aero business between Oct & Dec
TIACA, together with Pharma.Aero released a special report for According to data provider WorldACD, air cargo’s gradual demand
air cargo, pharmaceuticals and life sciences professionals de- recovery slowed in November, but there were signs that volumes were
tailing the requirements and airfreight preparedness for COV- picking up again in December. The company’s data for the month of
ID-19 vaccines transportation. The Sunrays project report shows November shows that in ‘a year like no other’ volumes declined by
that 46 per cent of 12.6 per cent year on year but rates experienced their strongest
air cargo industry increase since the months of April and May. The demand decreases
stakeholders, includ- lags behind performance in October, with volumes down by two per
ing airlines, freight cent. Despite this, rates were on the up. “Yields/rates in November
forwarders, ground are usually about four per cent above those in October; this year the
handlers, airport op- increase was 11.2 per cent, from US$2.97 per kg to US$3.30,”
erators and IT solu- WorldACD said. WorldACD added that overall capacity went up by
tion providers, now one per cent from October to November, with freighter capacity
feel well prepared for decreasing by one per cent and cargo capacity on passenger aircraft
the transportation of increasing by three per cent. “Asia Pacific was the only origin region
COVID-19 vaccines, growing its air cargo business between October and November by
a significant increase 3.2 per cent,” the data provider said. “Not surprisingly, given the
compared to only 28 large orders of PPE-goods, shipments above 5,000 kgs grew year on
per cent feeling ready two months ago. Although the improvement year, whilst all smaller weight breaks lost between 16 per cent and
is seen across the whole industry, ground handlers, who were 29 per cent year on year.”
the least prepared in September, reported the strongest jump in
preparedness. “Industry has clearly stepped up its efforts to get
ready for the largest logistics effort ever seen and with 79 per
cent feeling more prepared than three months ago, we applaud
the readiness progress the air cargo community has made,”
stated Nathan De Valck, Chairman of Pharma.Aero’s Board of
Directors and member of the Sunrays project.
Agility, Aramex, Hellmann Budapest Airport handles
& K+N join Hope Consortium 13,864 tonnes in Nov, records
to deliver vaccine doses 6.3% more than a year ago
The newly launched Hope Consortium, a UAE-based public-private
partnership, has bolstered its distribution reach following a strategic
agreement with leading international freight forwarders. The latest
consortium partners, which include Agility, Aramex, Hellmann
and Kuehne + Nagel, will help address the different steps of the
logistical challenge, including ‘last mile’, with a capacity of billions
of SARS-CoV-2 vaccine doses by the end of 2021. Spearheaded
by the Department of Health – Abu Dhabi, the Hope Consortium
appointed these global transport companies based on their expert
abilities and reach to safely and effectively deliver vaccine doses
under cold and ultra-cold conditions (temperature bands 2-8° C,
-20° C and -80° C) between transportation hubs, warehouses, Despite the global challenges experienced in 2020, Budapest
medical facilities and other final destinations in over 170 countries. Airport handled 13,864 tonnes of air cargo this November, which
is 6.3 per cent more than a year ago and the strongest monthly
cargo performance on record. Meanwhile, the volume of goods
received and launched from January to November 2020 has
exceeded 120,000 tonnes. With the year’s end approaching,
we can state with certainty that cargo traffic at the Hungarian
capital airport and the BUD Cargo City opened a year ago have
proven immune to the pandemic. Dr. Rolf Schnitzler, the CEO
of Budapest Airport highlighted that this is attributable not just to
pandemic-related shipments, changed purchasing habits and the
entire cargo community, but in particular to the 50 million EUR fully
private investment undertaken by Budapest Airport into the world-
class facilities of the BUD Cargo City, which attracts more and more
cargo business.
6 CARGOTALK JANUARY - 2021 www.cargotalk.in
INTERNATIONAL NEWS
Swiss WorldCargo Emirates SkyCargo
readies for lifts first batch
COVID-19 vaccine of Pfizer-BioNTech
distribution COVID-19 vaccines
Emirates SkyCargo has flown COVID-19 vac-
cines, manufactured by Pfizer-BioNTech,
to the UAE for the first time for the Dubai Lufthansa Cargo
Health Authority (DHA). On arrival at DXB, the
containers with the vaccines were unloaded unveils COVID-19 Temp
on priority from the aircraft and then taken
to Emirates SkyCargo’s dedicated pharma
Premium for vaccine
facility Emirates SkyPharma to await clear-
ance for delivery. Nabil Sultan, Emirates
transportation
Divisional Senior Vice President, Cargo says, In view of the approvals of various COVID-19
“At Emirates SkyCargo we are doing our part vaccines in many countries, Lufthansa
to join Dubai’s efforts to fight the COVID-19 Cargo has announced that the cargo
pandemic. Emirates SkyCargo has set up carrier is well prepared for their global
Swiss WorldCargo has prepared for the the world’s largest airside hub dedicated to distribution in the coming months. Air freight
distribution of COVID-19 vaccines, for the distributing COVID-19 vaccines and we stand is indispensable for the fast and reliable
past six months. Beginning in summer ready to support not just Dubai, but coun- intercontinental distribution of highly sensitive
2020, the company set up an internal tries around the world, including markets pharmaceuticals. Therefore, a dedicated
task force to analyse the potential for with limited cool chain infrastructure with our task force has prepared a variety of possible
shipping COVID-19 vaccines throughout advanced capabilities. transport scenarios since spring. While the
the world. The task force, comprising team transport of COVID-19 vaccines is already
members from different divisions, has available with Lufthansa Cargo the company
closely analysed how Swiss WorldCargo’s now announced a premium product to its
aircraft, network and capacity to and from customers that was specifically developed
Switzerland, can best support these global for the transport of COVID-19 vaccines. The
shipments. Recently, the company has product called COVID-19 Temp Premium will
successfully carried out first shipments. be bookable as of January 11, 2021 and
These have proven that the company can will provide a high level of comprehensive
handle complex regulatory and customer and personalised customer service along the
necessities, including temperature, cold- travel chain, including seamless monitoring
chain and timing requirements. of vaccine shipments throughout the entire
process and a 24/7 after-sales support.
LATAM to fly COVID vaccine Air Charter Service readies cargo
domestically at no charge capacity with BAe6 146 freighter
LATAM Airlines Group has announced that it will fly COVID-19 With the Brexit transition period ending on January 1, Air Charter
vaccine shipments at no charge on domestic flights in Latin Service has started to secure exclusive capacity for its customers
America. The offer is an extension of the airline’s Solidarity Plane by contracting a UK-registered BAe 146 freighter. The aircraft is
programme in which the carrier will transport vaccines, when they potentially the first of several options that ACS is securing in order
become available, to Brazil, Chile, Colombia, Ecuador and Peru. to ensure that, in the scramble for capacity due to Brexit disruption,
The company said it will support distribution of vaccines for free, it can continue to offer its clients competitive solutions. As the
based on requests from governments. Since August, a team of aircraft is UK-registered, there will be no need for permits to fly into
more than 20 people from LATAM Cargo has been planning the country. Dan Morgan-Evans, Group Cargo Director, Air Charter
transport scenarios for COVID-19 vaccines, which require special Service, says, “According to government statistics, if even a small
temperature-control equipment and processes. LATAM Cargo has percentage of cargo coming through the UK’s sea ports in January
stations with pharmaceutical capabilities at 30 locations in Europe, requires transportation by air due to the disruption, there would
the U.S. and Chile, and four that are waiting to be opened in China. be a significant requirement for airfreight – the equivalent of filling
LATAM has a certificate of excellence for meeting pharmaceutical thousands of Boeing B747 freighters, in some scenarios. With the
shipping standards from the International Air Transport Association. continued lack of belly capacity potentially exacerbated in January by
this anticipated spike in demand, charter aircraft will have to pick up
the shortfall.”
JANUARY - 2021 CARGOTALK 7
INTERNATIONAL NEWS
DB Schenker & Cargolux to Shell to supply sustainable
start weekly Indiana charter aviation fuel to DHL Express
for pharma shipments at Schiphol Airport
DB Schenker and Cargolux announced a new full charter cargo Shell Aviation has announced an agreement to supply DHL Express
connection between Luxembourg and Indianapolis, USA, starting with sustainable aviation fuel (SAF) at Schiphol Airport. The deal
in January 2021. With this new agreement both partners expand sees DHL Express become the first customer to be supplied
their well-established 15 year-long partnership. Cargolux’s initial under Shell and Neste’s SAF supply agreement, announced in
service between its home base in Luxembourg and the Indiana September 2020.
capital was inaugurated in 2005 to support DB Schenker’s busi- The agreement will enable DHL Express to take regular flights
ness in the region. The successful collaboration has grown over using SAF, an important step forward in its ambition of reducing all
the years and is now cemented through this charter solution. logistics-related emissions to zero by 2050. The volume of SAF being
With weekly departures on a Boeing 747 freighter DB Schen- supplied by Shell Aviation represents a full year of DHL Express’s fuel
ker makes Cargolux’s extensive experience in the handling of requirements from Schiphol Airport, helping to reduce its emissions
pharmaceutical and healthcare goods available for its customers from this European hub. The SAF will be used in blended form and
in Europe and Northern America. By partnering with the lead- is made from sustainably sourced, renewable waste and residue
ing provider of transportation services for pharmaceutical and raw materials. In its neat form and over the lifecycle it reduces
healthcare products and the airline that was, in 2014, the first greenhouse gas emissions by up to 80 per cent compared to fossil
to be GDP certified, DB Schenker reaches a milestone in setting jet fuels.
up its new healthcare service portfolio DB SCHENKERlife+.
CHAMP Cargosystems Cosco Shipping connects
and CargoAi join forces, Port of Le Havre to Russia
connect systems via APIs and Finland
CHAMP Cargosystems has announced its
partnership with CargoAi; by connecting
their systems through APIs, both partners
are giving their users new connections and
capabilities for the future. “Our clients and
users are at the heart of this partnership.
Creating value for them has always been our
priority and that is why we have the widest
range of suites of systems dedicated to air
freight. Being available on CargoAi, if they
wish, is therefore an additional service that COSCO Shipping has recently included Le Havre in its shortsea RFS4
Nicholas Xenocostas we can offer our clients,’’ says Nicholas
VP Commercial & schedule serving Russia and Finland every week. The container
Customer Engagement
Xenocostas, VP Commercial & Customer ship Mv NAVI BALTIC made its first call at the port, at the Terminal
CHAMP Cargosystems Engagement, CHAMP Cargosystems. de France, making HAROPA – Le Havre Port central to its RFS4
Connecting via shortsea service on December 16. This service was put in place
APIs, CHAMP and CargoAi in effect enable by COSCO SHIPPING in conjunction with its shortsea-dedicated
supply chain partners to be integrated. “Our subsidiary Diamond Line, and it now connects the Normandy port
goal remains the same; to make digitisation directly with Russia (port of Saint-Petersburg/Bronka) and Finland
accessible to all industry players. This (Kotka port). Starting on this date, a rotation will therefore involve
partnership with CHAMP is a real boon two Ice Class 1 AS vessels, a class representing the highest ice
for our customers. Because thanks to certification. These ships carry all types of container (20-feet, 40-
the joint work we have accomplished, our feet, Hi-Cube + SOC) and have over 300 reefer points on board.
customers can grow their businesses by This service is made possible by particularly competitive export &
being connected to each other, without import transit times: for exports, Le Havre can in fact reach Saint-
having to do anything,” says CargoAi CEO Petersburg in four days and Kotka in five; for imports, Kotka to Le
Matthieu Petot. Matthieu Petot
CEO, CargoAi Havre takes four days.
8 CARGOTALK JANUARY - 2021 www.cargotalk.in
INDUSTRY REPORT
Auto component industry
marks exports at 390,003 cr
The turnover of the automotive component industry stood at 1.19 lakh crore for the period April 2020 to September 2020
which is registering a decline of 34 per cent over the first half of the previous year. Component sales to OEMs in the
domestic market contracted the most to 87120 crore (US$ 11.6 billion), declining 42 per cent.
CT Bureau
utomotive Component 2020, registering a de-growth of 34 per faced unprecedented challenges in
A Manufacturers Association
of India (ACMA) has
announced the findings of its industry
cent over the first half of the previous
year. Commenting on the performance
of the auto component industry in India,
the first-half of FY 2020-21. The auto
component industry, through agility,
flexibility and financial discipline, has
performance review for the first half Vinnie Mehta, Director General, ACMA, displayed remarkable resilience and has
of fiscal 2020-21. The turnover of the says, “The auto industry witnessed a comeback strongly with the unlocking
automotive component industry stood downturn in FY2019-20, the situation of the economy. I am thankful to the
at 1.19 lakh crore (USD 15.9 billion) further aggravated with the outbreak OEMs for their support and for the
for the period April 2020 to September of the pandemic and the lockdown. timely intervention by the government,
While the first quarter for FY20-21 was especially in addressing the supply side
significantly stressed, however with challenges. Going forward, whilst the
unlocking of the economy, the sales performance of the industry during the
of vehicles witnessed improvement, festive season has been heartening,
month-on-month, in the second quarter. there are indications that the vehicle
The component industry, in tandem, demand, in the coming months, will
posted a subdued performance with de- be sustained. This, together with the
growth of 34 per cent over the first half increased focus by the auto industry
of the last fiscal, registering a turnover on deep-localisation and the recent
of 1.19 lakh crore (US$ 15.9 billion). announcement of PLI schemes for the
However, for the first time ever, the automotive sector and cell/battery
industry witnessed a trade surplus with manufacturing by the government,
Auto Component exports at 39,003 augur well towards making the auto-
crore (US$ 5.2 billion) and imports at component industry a self-reliant
37,710 crore (USD 5.0 billion); both one. We are also hopeful that the
exports and imports declined by 23.6 government would consider PLI or
Vinnie Mehta Deepak Jain per cent and 32.7 per cent respectively. appropriate manufacturing schemes for
Director General President
ACMA ACMA The aftermarket estimated at 31,116 auto-electronics and xEV components
crore, also witnessed de-growth of 15 as well.”
For the first time ever, The auto component per cent. Component sales to OEMs
in the domestic market contracted the Elaborating on the mood of the industry
the industry witnessed a industry, through agility, most to Rs.87120 crore (US$ 11.6 and outlook for the near to mid-term
trade surplus with Auto flexibility and financial billion), declining 42 per cent”. future, Jain mentioned, “According to
Component exports at discipline, has displayed the recent ACMA-PwC joint survey of
Sharing his insights on the performance ACMA leadership, despite concerns
39,003 crore (US$ 5.2 remarkable resilience and of the auto component industry, of another wave of pandemic, the
billion) and imports has comeback strongly Deepak Jain, President, ACMA said, industry is cautiously optimistic about
at 37,710 crore with the unlocking of the “In the backdrop of the pandemic and the prospects of the economy and the
(USD 5.0 bn) economy the lockdown, the automotive industry automotive sector for FY2021-22.”
10 CARGOTALK JANUARY - 2021 www.cargotalk.inCOVER STORY
What is stopping
AFS policy from
taking off in India? In a bid to ease processes and bring efficiency in the air cargo industry, the Air
Freight Stations (AFSs) policy was introduced by government in the country
six years ago. However, the concept was buried, and no AFS is operational
till date except the one in Chennai which was established before the policy
came out. delves into the reasons of why this project is not gaining
popularity in India as compared to the European and US countries.
12 CARGOTALK JANUARY - 2021 www.cargotalk.inCOVER STORY
Sunil Arora Raman Raj Sud
President, Air Cargo Agents Association of President
India (ACAAI) and Mentor Cargo Industry, Delhi Customs Broker Association (DCBA)
India Cargo Awards
If we study the best Private custodians do
practices worldwide, not wish AFS to come up
85-90 per cent of the because of their vested
cargo in the major interests. Without thinking
cargo hubs like Dubai, about the trade, the
Singapore, Hong Kong custodians are monopolising
come from AFS the air cargo sector
policy guidelines of AFS as this is very
important for the logistics infrastructure
in the country. ACAAI supported this
policy and we were even part of the
consultative committee. However, it is
quite strenuous to understand the main
reason of AFS not taking off in India.”
Commenting on why the project is
not taking off in India, Raman Raj
Sud, President, DCBA, voices, “Private
custodians do not wish AFS to come
Kalpana Lohumi up because of their vested interests,”
in adding, “Without thinking about the
n October 28, 2014, the formalities should be completed without trade, the custodians are monopolising
O Ministry of Civil Aviation
announced the policy
guidelines on AFSs with an objective
hassles for cargo transport. However,
the concept never took off in India
despite the fact that shipping industry
the air cargo sector. Hence, they are not
letting it to be implemented.”
to strengthen air cargo logistics is using off-dock freight stations “Making a policy is one thing and
infrastructure in the country. The effectively from last so many years and then implementation of it is also a
initiative of AFS was taken to create an flourishing. spoke to industry very serious matter. There is no use of An enabling environment
enabling environment for promoting experts to understand why the air cargo making a law or a policy if government
international air cargo operations by sector has failed to imitate the success cannot implement it,” he adds The initiative of AFS was taken
reaching out to hinterland regions of of Container Freight Stations (CFSs) in to create an enabling environment
the country besides de-congesting the shipping industry. In one of the conferences organised by for promoting international air
cargo operations by reaching
congested air cargo terminals in some PHD Chamber of Commerce in 2018,
out to hinterland regions of the
gateway international airports that face On this, Sunil Arora, President, Air Former Civil Aviation Secretary, R N country besides de-congesting
high dwell time. AFS was supposed to Cargo Agents Association of India Choubey also focussed on the matter, the congested air cargo
be an extension of the airport or an off- (ACAAI), shares, “Lot of analysis and saying, “We are actively pushing for terminals in some gateway
terminal facility where all import/export studies were done before setting up the establishment of offsite AFS. This is international airports.
JANUARY - 2021 CARGOTALK 13COVER STORY
against the financial interest of airport thereby reducing air logistics costs for departments but have failed miserably
operators, but this is the way forward.” companies engaged in foreign trade. due to the fact that terminal operators
Continental Carriers is the first company have more say in MoCA/AERA/Logistics
Stressing on the monopoly of terminal that did huge investment in the AFS, Departments of Commerce Ministry
operators, Vipin Vohra, Chairman, believing the Government of India’s AFS and they are not interested that this
Continental Carriers, says, “This is a policy appreciating the idea of boosting concept gets started.”
government policy and a key project the economy and bringing supply
of ‘Make in India’ campaign, still we chain management on par with global He further added that unnecessary
wonder why MoCA is not initiating and standards. This has been a disappointing hurdles and roadblocks in infrastructure
starting air freight stations in the country. journey since the first Green Field AFS are not allowing this policy to take off.
The AFS policy was announced with an of Continental Carriers was approved Since the announcement, Continental
aim to increase air cargo volumes by by government on August 8, 2016. It’s Carriers has communicated with all
decongesting the air cargo terminals already been six years. We have been the government departments viz.
at the international gateway airports, struggling with all the government MoCA/AERA/Logistics Departments of
Commerce Ministry etc., but no result
has been formulated. Today, when
everyone is gearing up for COVID
vaccine delivery management, we are
still not sure about the future of AFS,
whereas, in other countries the concept
of off-airport cargo handling has been
in practice for decades. The failure of
this policy will only hamper our Prime
Minister’s vision to ‘Make in India’ and
develop India as a manufacturing hub
for the world.
AV Vijaykumar, Chairman, FFFAI
shares the key obstacles which
have derailed this initiative. He says,
“Firstly is the reluctance on the part
of terminal operators based on the
unfounded fear of loss of revenue.
14 CARGOTALK JANUARY - 2021 www.cargotalk.inCOVER STORY
Vipin Vohra AV Vijaykumar
Chairman, Continental Carriers and Chairman
Gallery of Legends 2015, India Cargo Awards FFFAI
AFS is a present-day Reluctance on
solution to complement air the part of terminal
cargo terminals and would operators based on
make air cargo handling and the unfounded fear
supply chain management of loss of revenue and
on par with the global failure of AERA to fix
Second is the failure of AERA to fix “The policy aims at increasing air cargo at standards of logistics charges are the
charges for airside to landside transfer various airports across India by utilising management key obstacles
of pallet charges. Then, there is airline capacity where cargo handling
hesitation amongst airlines to support facilities are not adequate. Unexpected sufficient human resources, shortage
off location movement of inbound lockdown because of COVID-19 has of import cargo storage and lack of
cargoes as they were unsure of the already shown us the challenges we are customs clearance airport are few of the
liability allocation. Also, there are going to face in the future. During this reasons which might not be letting this
BCAS screening regulations and lack of period the airport terminals got over project to take off.”
export consolidation and USD selling for congested and operators were not able
outbound cargoes.” to handle cargo. AFS is undoubtedly On the other hand, Rajesh Menon,
an innovative alternate solution that Regional Head Cargo – South Asia,
“The Ministry of Civil Aviation had would decongest air terminals and help Middle East and Africa, Cathay Pacific
announced the policy very ambitiously, in better cargo management and an Airways, expresses optimism by saying,
surely with other ministries on board essential step towards making India a “The government has been actively
in the year 2014. The guidelines manufacturing hub under the Prime pushing for establishment of AFSs as
were also drawn but the quickness Minister’s ambitious ‘Make in India’ per the policy guidelines of 2014. And,
with which the guidelines have been scheme. If a solution is not found soon, with the 2019 air cargo policy and the
implemented was not up to the mark, this industry will remain a victim to the government’s vision to make India
to say the least. There should have monopolistic practices being carried out among the top five air freight markers by
been one Ministry responsible with by the terminal operators,” points Vohra. 2025, there have been multiple initiatives
all committee members of different towards key infrastructural development.
Ministries to take quick decisions. Sharing the reason why it didn’t take We are sure the AFS project will be rolled
An off-terminal facility
The AFS operator should have got off in India, Tigist Eshetu, Regional out as a part of the same.”
the results within a fortnight. The Director – Indian Suncontinent, AFS was supposed to be an
delay in the process leads to the cost Ethiopian Airlines, mentions, “There According to Mahesh P Trikha, extension of the airport or an
escalation in infrastructure projects is lack of modern infrastructure and Managing Director, Aargus Global off-terminal facility where all
like this which no one wants to effective technology for cargo handling Logistics, “Investing in AFS in the given import formalities should be
undertake. Even today it is not late, supply chain. The overall infrastructure circumstances is very challenging and completed without hassles for
let a formidable committee be made did not have the facility for warehousing rather innovative too.” He says, “Indian cargo transport. However, the
with decision making authorities special cargo like frozen food, animals, air cargo sector fully understands concept never took off in India
and you would see the results on DGR/express products. Complicated the benefits of it. The major hurdle, despite the fact that shipping
the ground,” says S. Ramakrishna, regulatory processes and procedures at the moment, seems to be lack of industry is using off-dock
Director, Balaji Mariline. is another reason. Moreover, lack of transparency or understanding by freight stations effectively.
JANUARY - 2021 CARGOTALK 15COVER STORY
a couple of government agencies cargo hubs like Dubai, Singapore, Hong global standards then AFS is the only
especially relating to security. Hence, Kong come from AFS. Moreover, AFS ideal solution where all loose cargo
there are few takers for setting up AFS should not be taken as a competitive will be processed, centralised and will
in the present circumstances.” establishment to the airports, be it a be delivered to airports and in the
Greenfield or Brownfield airport. It reverse flow will be shifted to AFS for
Competition brings should be considered as an additional further delivery to the end customer. We
efficiency facility to promote the Exim of the must appreciate the fact that AFS is a
“It is proven worldwide that AFSs have country,” emphasises Arora. present-day solution to complement
brought in healthy competition because air cargo terminals and would make
if we study the best practices worldwide, “AFS should not be restricted only for air cargo handling and supply chain
85-90 per cent of the cargo in the major big freight forwarders to open rather it management on par with the global
should have been considered as a policy standards of logistics management and
which would bring in lot of infrastructure a step towards growth and efficiency.”
investment in the country. Lot of big
giants, not only multinational freight “Competition always brings efficiency
forwarders, but big manufacturing and presently there is no competition.
organisations like Panasonic, Siemens, At Delhi airport, the custodian is Delhi
Honda, Pfizer, Dr Reddy’s Lab and International Airport (DIAL) and it
Lupin, etc. should have been given an has further appointed two different
opportunity to open an AFS wherein concessionaires; Celebi and DCSC. The
cargo immediately, after landing, moves aim of making DCSC was that there
into AFS and gets customs cleared. And, would be competition between the
for export purpose a big export unit two concessionaires and the benefit
should have been allowed to open their will go to trade but unfortunately it
AFS where they can clear their cargo,” has not happened because airlines
he continues. are now divided between the two
concessionaires. So, if we have to do
S. Ramakrishna Tigist Eshetu Adding to this, Vohra notes, “At business with any airline one cannot
Director Regional Director – Indian Suncontinent present, the infrastructure at several go to any other than the specified
Balaji Mariline Ethiopian Airlines
major airports is inadequate, causing concessionaire by them. It was
Even today it is not Lack of sufficient human extensive delays. Consequently, the discussed and they said it is technically
dwell time becomes very high. The not feasible. Technical feasibility should
late, let a formidable resources, shortage of transaction costs also increase due to have been seen before appointing two
committee be made import cargo storage and such delays, thereby making exports of them,” underlines Sud.
with decision making lack of customs clearance from India uncompetitive in comparison
to exports from other countries. AFS He says, “With AFS coming up, there will
authorities and you airport are few of the reasons will certainly make dwell cost low and be more competition and naturally it will
would see the results on which might not be letting export rates competitive. If we want benefit the service level and commercial
the ground this project to take off the Indian air cargo industry to match level. Competition always brings out the
16 CARGOTALK JANUARY - 2021 www.cargotalk.inCOVER STORY
delays and sub optimal performances,”
expresses Vijaykumar, in adding, “A
close comparison of the rates charges at
the terminals would highlight that rates
are almost similar despite the variable
capital and operating costs of the
terminal operators. The issue of royalty
is a serious cost push to users.”
Throwing more light on the subject,
Sud adds, “As and when meetings were
held between AERA and custodians to
discuss rates, which were arbitrarily
increased, DCBA was not taken in
the loop in deciding the rates but the
minutes of such meetings showed
the presence of DCBA. The same was
also brought to the notice of AERA.
This completely signifies that we are
being misled.”
best in the services. With AFS in place, distinct advantage of handling more
an exporter will rather go to the nearby aircrafts which would mean more “With AFS in place, all work which is
AFS than to the airport; it is exactly the revenue, more efficacy, ranking of their done at the airport presently will be
same we have seen being done in ICDs airport will be high, the logistics cost will done in an AFS and when it is done in
and CFSs. The purpose of ICD, CFS and reduce. Above all, the Exim trade is at a AFS, container will directly get loaded
AFS is to make processes simpler.” distinct advantage.” in the aircraft from AFS, so definitely
there is a possibility of less charges
Explaining further, Vijaykumar says, TSP charges; a reason as compared to the cargo which goes
“The role of an airport operator is not to of deferral directly to the airport. In the current
warehouse cargoes pending clearances. According to the circular issued by scenario, let’s say if the TSP charges
Congestion at airports are regular MoCA, airport operators and air are 100 per cent, when cargo will come
occurrences and lack of competition cargo terminal operators shall accept through AFS it will be 30-40 per cent of
has also diluted the performances on palletised ULDs for bulk cargo in the case the existing charges,” expounds Arora.
par with international standards across of exports from an approved AFS facility
many Indian airports. An AFS can offer and facilitate its transfer to the airside. Arora comments, “If exporters and
an economic and efficient remedy to They shall not insist on levying full importers have to pay twice; one to the
these issues.” Terminal, Storage and Processing (TSP) AFS and secondly when cargo goes to
charges on consignments/cargo meant the airport then export through AFS will
“We have been fighting for this policy for/received from AFS (particularly in not be feasible and will not be a practical
AFS; an enabler in to take off for years, but the first AFS has respect of ready for carriage conditions approach. If the expenses are not
Make in India scheme not even started yet. We at ACAAI have export cargo) for its transfer from land incurred on the cargo coming from AFS
supported this policy, and whatever to airside and vice-versa since no value then why charge for that? If it is a direct
AFS is an innovative alternate has been the issue, whether it is rates addition is contemplated at the airport transfer of cargo from AFS to airside
solution that would decongest air or tariff adjustments, they should have terminal. AERA while approving TSP or to the ramp then in that case bare
terminals and help in better cargo been discussed and amicably agreed charges shall give a break-up of Transit, minimum charges should be worked
management and an essential upon,” says Arora. Storage and Processing charges. out, discussed, negotiated because at
step towards making India a the end of the day it is not about TSP
manufacturing hub under the
According to Ramakrishna, “It is not “It is unfortunate that despite the charges, there has to be willingness to
Prime Minister’s ambitious ‘Make
in India’ scheme. If a solution only going to be the efficiency level establishment of AERA, users have not bring AFS policy up and running. If the
is not found soon, this industry alone, saving of cost will also be a witnessed any accountability on the policy had been concluded by this time,
will remain a victim to the major factor. Giving a little perspective terminal operators commensurate with we would have at least 30-40 AFSs not
monopolistic practices to efficiency level, he adds, “If the the charges levied. AERA seems to only in and around Delhi but around
being carried out by the build-up unit is moved to and fro from be fixated on a ‘light touch’ approach major hubs like Mumbai, Bengaluru,
terminal operators AFS, the airport operators will have a despite the users highlighting the Hyderabad, etc.”
18 CARGOTALK JANUARY - 2021 www.cargotalk.inCOVER STORY
Rajesh Menon
Regional Head Cargo – South Asia
Middle East and Africa, Cathay Pacific Airways
There have been
multiple initiatives towards
key infrastructural
development. We are sure
the AFS project will be
Sharing an exporter perspective, operator. Representatives of FFFAI also able to offer the service to our Indian
rolled out as a part of
HKL Magu, Managing Director, Jyoti feel that it is necessary to have clarity customers too,” adds Menon. the same
Apparels and Immediate Past Chairman, in the distribution of the charges as
Apparel Export Promotion Council this would affect the revenue models of Talking about whether airlines are ready
(AEPC), says, “Logistics charges are cargo movement to the airport through to accept cargo in palletised position in
already high and there is no scope the AFS as most of the activities related India, Menon says, “A pallet container
to pay higher charges. Exporters to the cargo will be performed at AFS. that is preloaded at the shipper or
are already struggling because of The TSP issue has caused unexplainable freight forwarders facility is widely
competitive prices worldwide, hence, it delay and huge financial burden to the accepted by Cathay Pacific across the
is not at all advisable to ask for higher aspiring entrepreneur.” globe and we hope to extend this to
charges. I hope authorities will take care India soon. India being an important
of this and the Ministry will ensure to Cargo in ULDs market, this will be a great booster for
implement the announced policy of Air The bonded cargo is arriving in ULDs the business and help us provide more
Freight Stations announced in the year across the world, so why this concept options to our customers.”
October 2014.” is not getting popular in India. On this,
Eshetu says, “The main but not limited “We are in a position to accept palletised
Explaining further on the subject, Sud reasons are Indian infrastructures cargo in India if the above-mentioned
says, “Another problem is both the limits, timely delivery of cargo at a challenges can be overcome,” confirms
concessionaires have different set of point for further chain continuity, lack Eshetu, in adding, “Almost the entire
protocols and work in their own ways of technically evolved RFS companies, cargo is transported in ULDs in Africa,
which not only brings confusion but also tedious paperwork procedure of that is, 95 per cent of our cargo is
leads to extra charges.” customs at origin/destination and coming to ADD with ULD.”
borders, and insufficient infrastructure
“Continental Carriers has taken up for managing & building ULDs for “Hong Kong is the world’s leading
the issue of reduced terminal charges RFS movement.” cargo hub and the Cathay Pacific Hong
in all the meetings with Air Cargo Kong cargo terminal is well equipped Direct transfer of cargo
Logistics Promotion Board, Ministry of “The bonded cargo across the world to handle shipments in ULDs. We see
Civil Aviation, Ministry of Commerce, is transported in ULDs. However, in almost the majority of cargo shipped
Scope Air, AERA and all the concerned India there have been challenges due or received in ULDs from our hub,” If exporters and importers
ministries since 2014. Unfortunately, to the lack of adequate infrastructure informs Menon.
have to pay twice; one to
the AFS and secondly when
all through these years this issue still and formalised processes. With the cargo goes to the airport then
remains unresolved,” informs Vohra. civil aviation 2019 policy, we see a Benefits of AFS export through AFS will not
He continues, “Presently TSP charges lot of promise in the infrastructure Commenting on how the trade is going be feasible and will not be a
of cargo are provided to the airport development in the country and to be to be benefitted if this project gets practical approach.
JANUARY - 2021 CARGOTALK 19COVER STORY
and get it loaded in the aircraft. The
industry will support AFS strongly.”
“Custodians are taking advantage
of monopoly and doing business on
their own terms. For example, with the
purpose of decongesting the airport and
not letting it be used as a warehouse,
AAI issued a circular for reduction of
free period from 72 hours to 48 hours
and it also says that if 24x7 facility is
not available then you will not charge
for the holidays. Now, in Delhi 24x7
facility is available only on paper but
if allied agencies which means drug
controllers, FSSAI, plant quarantine,
animal quarantine, banks are not
functioning on a holiday or close in half
through, Trikha says, “The transaction operating through AFSs, once the policy time on Saturdays, how will we manage
cost for the exporter may come down gets through, Vijaykumar says, “If an to do the clearance. So, there is no use
as they will enjoy the benefit of lower economically attractive proposal is of custodians being operational if allied
freight rates due to consolidation of put forth, members of the forwarding agencies are not operational. With AFS
cargo for multiple shipments.” community will likely to take up in place, there will be competition in
this challenge.” true sense. AFS will break the monopoly,
Sharing his views on whether FFFAI ease processes and benefit the trade,”
members would be interested in “If the policy doesn’t get approval by says Sud, in adding, “We have always
the government then the time is not far supported this initiative and once this
away when cargo will be lying outside policy gets a go ahead, we will definitely
the airports when ‘Make in India’ be using the AFS facilities for better
will come into action in the next two services. On one side, the policy is made
years. In ocean freight, ICDs/CFSs are and on the other side semi government
a major relief to the seaports, if ICDs organisations are not bothered about
and CFSs would not have been there, the implementation.”
the country would have been in big
trouble because of shortage of space Connecting AFS with COVID vaccine
at seaports. Similarly, if the AFS policy distribution scenario, Arora says, “If we
is not implemented in the next one had got AFS placed all over India or if
or two months and the government this policy had taken off, any logistics
does not come forward and remove person or any supply chain management
all the obstacles in the way of policy consultant would feel that it would have
implementation, it will not only cause been a fantastic opportunity and ease
Mahesh P Trikha H K L Magu major losses but also adversely affect distribution of vaccine throughout the
Managing Director, Aargus Global Logistics Managing Director, Jyoti Apparels and the ease of doing business concept,” country because the vaccine would have
and Best Cargo Professional of the Year 2019, Immediate Past Chairman, Apparel Export been immediately transferred to the
states Vohra.
India Cargo Awards Promotion Council (AEPC)
respective AFS and from the AFS onto
The major hurdle seems Exporters are Arora says, “An airport is situated in an arterial network this vaccine would
the heart of a city with lot of traffic have reached much faster.
to be lack of transparency already struggling restriction, if there is an AFS in and
or understanding by a because of competitive around an airport or may be at a little Vohra adds, “Once the COVID-19
couple of government prices worldwide, distance, say at an industrial park like vaccine starts moving from India, AFS
agencies especially relating hence, it is not at all Faridabad or Gurugram or Manesar, will be able to help in creating cool
then why would I take my cargo to the chain warehouses close to distribution
to security. Hence, there are advisable to ask for airport. I would comfortably take it to an centres in India and for export/import
few takers for AFS higher charges AFS, custom clear it, palletised it there within India and countries aboard.”
20 CARGOTALK JANUARY - 2021 www.cargotalk.inINDUSTRY OPINION
Industry gears up for
Vaccine storage
& distribution Logistics industry is gearing up to take on the colossal
task of transporting COVID-19 vaccine across the
country. reviews the state of preparedness as
logistics and supply chain companies are relentlessly
working to meet the impending demands for
vaccine transport.
22 CARGOTALK JANUARY - 2021 www.cargotalk.inINDUSTRY OPINION
to handle the COVID vaccine to pass
through our cargo terminal at Delhi.”
“We are ready to move vaccine across
the country,” says Sanjiv Gupta,
CEO, SpiceXpress. He further explains,
“In order to gear up for the upcoming
vaccine movement we have recently
launched our cold chain product –
SPICE PHARMA PRO with the intent to
provide a seamless end-to-end logistics
solution to the pharma companies. We
have partnered with some of the leading
logistics companies in India not only to
provide a speedy and reliable solution Tushar Jani
Chairman, CSC and Gallery of Legends 2015,
to the vaccine manufacturers but to India Cargo Awards
also create a sustainable cold chain
network. Our validated cold chain boxes Delhi Airport, where we
lined with phase change material and
vacuum insulated panels ensure zero
operate, is fully ready with
temperature excursions. Our modified infrastructure, manpower
data loggers and real time tracking and processes to handle
portal “SpiceSENSE” demonstrate our
the COVID-19 vaccine to
IT capabilities. Furthermore, with our
robust ground handling infrastructure pass through our
and varied aircraft fleet it would not cargo terminal
be out of place to mention that we
are appropriately equipped to handle
end-to-end logistics of the most sought-
after vaccine.”
Yashpal Sharma, Managing Director,
Skyways Group, says, “With pan-India
presence and deep insight into the
fine aspects of vaccine transportation,
we have existing infrastructure for
temperature control in three cities in
India and have enhanced these facilities
to be able to handle larger quantities of
vaccine. We have even collaborated with
Kalpana Lohumi a few cold chain warehouses in India,
Germany and the USA to participate in
iming to immunise around technology to track movement and COVID vaccine movement.”
A 300 million people by August
2021, India is readying a
huge vaccination drive. An incredible
monitor temperature. Speaking to the
industry experts, delves into the
non-negotiable requirements where the
“We also have reefer trucks now to
manage movement of vaccine and
amount of effort is going into the company must invest and what support a control tower has been set up to
development of COVID-19 vaccine and industry entails from government for facilitate the minutest detail of vaccine
once this immunisation drive will begin, smooth logistics of vaccine. movement. We have even worked
we will need a reliable and resilient around ample capacities with our airline
Reliable supply chain needed
supply chain for vaccine delivery. Are logistics service providers ready partners to cater to the international
Logistics and supply chain companies to serve the nation? movement of vaccine,” he adds.
An incredible amount of
are relentlessly working to meet Commenting on how CSC is preparing
effort is going into the
the impending demands for vaccine for the distribution of COVID-19 vaccine “Anticipating a strain on the logistics
development of COVID-19 vaccine
transport by expanding warehousing throughout the country, Tushar Jani, infrastructure, with the commissioning and once this immunisation drive
facilities, procuring refrigerated trucks, Chairman, CSC, informs, “Delhi Airport, of the vaccine candidate against will begin, we will need a reliable
containers and temperature-controlled where we operate, is fully ready with COVID-19, we have ramped up our and resilient supply chain for
packaging systems, and deploying infrastructure, manpower and processes pre-existing specialised ‘Temperature vaccine delivery.
JANUARY - 2021 CARGOTALK 23INDUSTRY OPINION
These rooms are in proximity to our local freezer and storage capacity and
Blue Dart Aviation Stations which helps know-how with in-country logistics.
increase our already pristine turnaround
time and will aid in speedy delivery. With our fleet of six Boeing 757
We also use both single-use packaging freighters, 20,000+ ground vehicles,
(which provides temperature stability of servicing 14,000+ pin codes and a
48-72 hours) and multi-use boxes (credo strong army of Blue Darters, we can
boxes) which provide temperature confidently say that we are prepared to
stability of 96 hours,” informs Ketan provide resilient, reliable and responsive
Kulkarni, CMO & Head - Business services as the trade facilitator to the
Development, Blue Dart. nation,” Kulkarni continues.
Sanjiv Gupta Yashpal Sharma
CEO, SpiceXpress and Managing Director, Skyways Group and
India Cargo Awards Winner 2017 Entrepreneur of The Year 2017, India Cargo Awards “Work-related process flows have Commenting on the preparedness, Amit
been designed and rehearsed Tandon, Managing Director, AS India,
We have recently We have even across locations where we have our says, “We are now certified for GDP
launched our cold chain collaborated with Conditioning Rooms. We have done (Good Distribution Practices) for storage
product – SPICE PHARMA a few cold chain our background work in terms of and distribution of pharmaceutical
capacity requirements i.e. materials products. Accordingly, we have entered
PRO with the intent to warehouses in India, for packaging, availability of data into agreements with GDP certified
provide a seamless end-to- Germany and the USA to loggers, insulated shippers, walk in transporters and warehouse operators
end logistics solution to the participate in COVID cold room, coolant, network reach, for transportation and storage of
manpower preparedness, technology pharmaceutical products under
pharma companies vaccine movement investment to handle requirements in controlled conditions as per guidelines.”
this direction. As a part of the DPDHL
Controlled Logistics (TCL)’ solution Group we have access to a larger set In view of the vaccine storage,
to successfully transport the vaccine of assets like reefer vehicles and cold Snowman Logistics has almost 12,000
into the remotest village and the most storage trucks from DHL Smart Trucking pallets available immediately at various
crowded city. We have also ramped up as well as access to the global network locations in its network with a good
our Pharma Grade Conditioning Rooms of DPDHL. We have access to a global spread. Adding to this, Sunil Nair,
located at eight strategic locations. shipping network at scale as well as CEO & Whole Time Director, Snowman
24 CARGOTALK JANUARY - 2021 www.cargotalk.inINDUSTRY OPINION
Logistics, notes, “This should ideally
store around 100 million vaccine doses.
Some of our new locations are under
construction, they should be ready
by March 2021. With that we can
additionally provide space for another
100 million vaccine doses and with our
partner network, we can add another
100 million. So, in short, we can provide
space equivalent to 300 million doses, agro products and not pharma. It’s country already has an infrastructure for
nationally. With that, we have our heartening to see that the government polio vaccination which requires 2 to 8
own 300 trucks and 200 trucks from is now realising this and hopefully degrees. If it is at 2 to 8 degrees, most
partners. We can surely spare around will help us to build the infrastructure of the distribution companies have their
200 trucks for this purpose. Moreover, going ahead.” infrastructure ready, so with the marginal
we are already operating vaccine investment the industry is ready to face
Ketan Kulkarni distribution for influenza and typhoid. “We have very limited players dealing this challenge and distribute.
CMO & Head - Business Development
Blue Dart and India Cargo Awards 2017 We are imparting similar training to in sub-zero storage and transportation,
our other employees, so that we have so it will be interesting to see the We wish to put it on record, India as a
We have ramped up our handling experience at all locations.” government protocols for the vaccine. In country delivers roughly 2.5 to 3 million
pre-existing specialised addition, another issue correlated with parcels delivery per day of e-commerce
Has India enough infrastructures? the vaccine is geographical distribution on a nationwide basis. This network and
‘Temperature Controlled Logistics industry is prepping up for and healthcare personnel available infrastructure can be used for vaccine
Logistics (TCL)’ solution to the storage and movement of vaccine, to transmit the doses to the masses. distribution easily,” he adds.
successfully transport the but the question remains, does India Although India has carried out the
have enough infrastructure to distribute polio vaccination programme over the
vaccine into the remotest vaccine. On this Nihar Parida, Industry last few decades very successfully and
village and the most Ecosystem in place
Expert, says, “India is definitely not this ecosystem will come really handy
crowded city equipped to move these vaccines at for the movement of COVID vaccine
India has carried out the polio
such low temperature. The Government to the smaller towns and villages,”
vaccination programme over the
of India has never concentrated in explains Sharma. last few decades very successfully
providing help to pharma companies and this ecosystem will come
or other logistics stakeholders to build Adding to this, Jani notes, “India is ready really handy for the movement
these infrastructures. The cold chain for distribution if the COVID vaccine of COVID vaccine to the smaller
infrastructure was more inclined towards requires 2 to 8 degrees because the towns and villages.
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