Chapter

Recommendations & Conclusion

To flourish in a highly complex and competitive environment, like air cargo industry, professionalism of each constituent part of the industry is essential. The industry cannot afford to have a weak link in its chain. All levels, everyone involved in the industry has a fully responsible role to play in furthering its utilization as a dynamic tool. Professionalism of industry, overseas, is based on the following primary factors: A well planned cargo complex at international airports Ade uately automated, facilities for expeditious handling of containerized and palletized cargo !ully computerized cargo and "#$ system for reservation, handling control and tracking of cargo enroute %pecially learned cargo personnel to man and operate the cargo terminals efficiently An updated "#$ system for the fast flow of messages and information A realistic and market oriented air cargo rate structures

There are a number of improvements which can be actioned at once and they are as under: 1. Infrastructural Facilities:

&a' $t would be desirable to entrust the management of airports to autonomous agencies for improving (anagement efficiency and financial control. &b' "stablishment of integrated air cargo complex even at inland domestic airports &for e.g. at )angalore' will be a step towards improvement of infrastructural facilities. &c' "stablishment of airport free trade zones is another step that has great potential not only for promoting exports by air but also for raising extra revenue. &d' *ocation of several administrative+ airlines offices on the ground floor of %ahar complex at )ombay is responsible for the paucity of space. These offices could be removed to the first floor to make way for import and export consignments. &e' %eparate the area of customs examination, both at %ahar and #elhi air cargo complex of perishable cargo consignments and general cargo consignments, so as to reduce the cluttering up and confusion. &f' All facilities such as trucking, availability of lifting e uipment, re, weighment, re,packing and short,term warehousing should be made available within easy reach of each air cargo complex. 2. Further simplification of documents -ustoms documents $ATA documents %implification of procedures and re uirements of customs, $AA$, .)$ etc.

3. Coordination of Planning Organization The planning organization should be made aware of the growing importance of air cargo traffic in order to ensure that they devote ade uate attention, at national level to the development of air cargo transport in transportation planning there should be co,ordination at the national planning level, sectors. between air transport and other economic

At micro level the local dialogue with the export trade is afforded mainly through chambers of -ommerce and at official forums such as, the Public /rievance -ommittee and the $AA$0s -argo !acilitation -ommittee, the $ndian Air -argo Agents through their association A--A$. The decisions taken at one committee meeting should be conveyed to members of other committees. 1ith the solid foundation of modernized cargo infrastructure, ma2or foreign airlines handle the planning and development of air cargo at )oard level. !or instance the keen personal interest of %$A3s (# in the development of air cargo industry in %ingapore and %$A0s role in it policy of assigning to a member of to )oard, the sole responsibility for the development of aircargo industry in 4apan. #r. "ser0s keen interest in the aircargo industry of /ermany and *50s participation, as a member of the *5 )oard prior to becoming #irector /eneral of $ATA. $t is high time to bring about direct involvement of the A$ )oard in aircargo development in $ndia by having a sitting member with cargo experience and expertise in the view of the vital importance of air cargo to the national economy and the complex and highly competitive challenges ahead. $t is, at least, in the fitness of things that the commercial #irector has recently been included as a member of the new A$ )oard ex,officio. $t would be advisable to also associate him with $AA$ )oard responsible for the modernization and upkeep of the four international airports in $ndia including cargo infrastructure. This will be about close coordination so essential between A$ and $AA$.

Pricing of air freight 5aving talked of more efficient and cost effective methods, it is essential that pricing of air freight must be re,structured in such a manner that this is acceptable to the shipper without being un,economical to the carriers. A very hard look, therefore, must be given by the airlines to the actual cost and benefit of cargo carriage.

$t is not my view that airlines should reduce freight rates below the levels of viability, but at the same time, with increasing freight rates, the $ndian shipper is finding it uneconomical to airfreight cargo to the highly competitive international markets. An alternative would appear to be to allow discounts on volume, and on cargo, where handling costs of the airlines are low. Presently there are numerous special commodity rates existing ex,$ndia at lower break,points, highest being 6.777 kilos. $ would suggest that many of these special commodity rates be eliminated by introduction of freight all kind &!A8' rates for loose as well as containerized cargo. $ would suggest that the present break,point of 9: kilos be replaced by 677 kilos on the same ;: per cent rebate on the normal rate. 5owever, break,points for !A8 rates at 677+<77+:77+6,777+;,777 kilos could be introduced at rates that are lower than %-.s. Containerization -ontainerisation of air cargo is yet another aspect that must be looked into very seriously both by the airlines, and the forwarders. $ntroduction of unit load device , =*#,-ontainerisation and conse uently =*# rates on sectors where wide,bodied or all freighter aircraft3s are being operated must now be considered. =*# rates should be the lowest tariff Applicable between any two points with an extra incentive for multiple =*#%. The weight breaks for =*# rating could be evolved at 677+;:7+:77+6,777+;,:77+:,777 kilos. Consolidation $ feel these steps would provide a boost to consolidation of cargo out of $ndia thereby benefiting small and medium shippers, as well as the airlines, the latter saving on administrative and operational costs, $t will also offer a greater challenge to the air cargo agents and give them the opportunity to improve their earnings to finance the sophisticated communication and handling e uipment and the cost and risk of participating in this programme. $ would also suggest that time structured rates, especially off,peak discount systems also be considered. This would balance traffic flow and would attract additional cargo.

Studies

As $ mentioned earlier, air cargo industry, is facing a very keen competition today from sea cargo transportation, for it is deeply embedded in the minds of the shippers that sea freight is cheaper than air freight. This is not only in $ndia but c worldwide conception. 5owever, when total cost analysis has been made for specific commodities, some commodities have yielded a definite benefit in favor of air cargo. %everal overseas carriers are doing such analysis professionally through computer exercises and $ would venture to suggest that a proper study of total distribution cost be made by professionals in $ndia in a scientific manner. >ne of the factors inhibiting growth of consolidation ex,lndia is that presently 0charges collect0 shipments are not permitted to move in consolidation. $f included, this would result in greater volume moving under consolidation resulting in lower freight at higher break,points thereby helping the competitiveness of the $ndian export product in the world market. $ seek the assistance of the .eserve )ank of $ndia in removing this bottleneck. Transshipment !or the movement of air cargo from interior airports to gateway airports, it is necessary that economical freight rates and our domestic carrier are available. $f the shipper is to obtain the full benefit and facilities made available at the internal integrated air cargo complexes. At present, number of shippers still prefer to use cheaper surface transportation services for movement of, cargo to gateway airports. Alternatively, the facility of moving cargo in bonded transport trucks should be permitted. 1e find that neither the full benefit of setting up these internal integrated air cargo complexes is availed of by the shippers nor are most of these air cargo complexes running profitably for lack of full utilization of their operating capacities. Another factor which is hampering the movement of cargo from internal air cargo complexes to gateway points is the delays and inade uate transshipment facilities at the gateway airports. ir cargo agents $t is also essential that the air cargo agents be licensed freely by customs to operate at the integrated air cargo complexes at internal airports as well as at the gateway

airports, as lone as they satisfy the normal customs re uirements. This is essential in order that cargo front internal as well as gateway airports can be consolidated and a speedy, efficient and economical service to the shipper and buyer is provided. )oth the shipper and the buyer wish to know the movement of cargo at all times and this can only be done provided the consolidating agent is in full control of the cargo from the moment it leaves the shipper0s warehouse until $t reaches the destinations. !ew of members are holding customs house agent3s license at some of the customs ports but are not allowed to operate at other customs houses. $t is our submission, that restricted -5A licenses to operate at integrated cargo complexes be granted to recognized $ATA air me cargo agents, who are members of this association, particularly so, if they hold license at one of the customs ports. Statistics $t is very essential for long term management decisions that statistics are available to the industry speedily for studying past performances and making future pro2ections. Availability of accurate statistics of airborne cargo on a regular basis an on going market research programme by the national airline in collaboration with the local agents association is essential. Training Training in any industry is a very important aspect and more in so in this fast expanding highly capital intensive and competitive industry. %pecialized training of key personnel in the aircargo field is essential. as a fully rounded airfreight person that is an authentic professional is very much in short supply in $ndia.

Finall!" Indian Cargo Industr! can ha#e mar#elous future if it adopts the follo$ing four factors: 6. The consumer is the key. -onse uently, the air cargo industry must clearly establish the re uirements of the two prime types of user , the planned and the emergency. $t must offer door ,to,door geared to minimizing delivered cost, getting away from tee old concepts of routes and rates.

;. %ervice is the name of the game and this is primarily defective on the ground where movement &or lack of it' accounts for almost ?7@ of total door ,to,door air cargo transit times. $n addition, effective communication is a prere uisite for effective transportation. let alone distribution. <. The current economies of the contemporary user and supplier, of distribution and aviation. need vastly better multilateral appreciation. To do this mating must be made much simpler. Then pricing and cost parameters can be geared to viable commercial operation on all sides. 9. Partnership particularly between carriers and forwarders is essential to afford the client a better service and make its production most cost effective and profitable for suppliers.

Understanding the Cargo Jargons

Airway Bill (AWB) The cargo equivalent of a passenger ticket which means the document made out by or on behalf of the shipper. It evidences the contract between the shipper and the carrier(s) for carriage of goods over routes of the carrier. Cargo /oods carried by airline&s' on behalf of its customer Cargo Terminal A building or location where cargo is received stored Customs cleared and prepared for delivery and delivered. Charter Contract A special agreement whereby carrier for an agreed operation places at shipper!s disposition the entire capacity of an aircraft. Charterer A person who has signed a charter contract with carrier. Consignee A person whose name appears on the A"# as the party to whom the goods are to be delivered. Consignor %Shipper&

A person whose name appears on the A"# as the party contracting with the carrier(s) for carriage of goods. Consignment %Shipment& $ne or more pieces of cargo accepted by the carrier from a single shipper destined for one specific address moving on one A"# to one consignee. Cut-o time The latest time cargo will be accepted for a specific flight prior to its departure. !estination The ultimate stopping place according to the contract of carriage. "m#argo %efusal by carrier for a limited period to accept goods for transportation. $ATA International Air Transport Association & an Association that establishes international rules and standards for participating air carriers. $ATA mem#er Indicates an airline being member of International Air Transport Association. $nterline Agreement A contract between two or more carriers to e'pedite e'change of traffic between the parties to the agreement.

%inimum Connecting Time The minimum time needed to move cargo from one flight to another. &erisha#les Time sensitive items needing specialised handling. 'nit (oad )e#ice %'()& (allet or rigid container used to hold cargo.