The Hindu Business Line : Complexities of air cargo

The size of the world air cargo market is estimated at 27 million tonnes, valued at $200 billion. Our airports could hope to cope with the challenges to be thrown up by the projected increase in cargo traffic provided several problems are adequately addressed.

REPORTS have it that the Airports Authority of India (AAI) has before it proposals to set up cargo complexes at various airports keeping in view the projected growth in air cargo traffic. According to one estimate, till 2006, the air cargo market in the country will grow at seven per cent per annum against global freight market's projected 5.3 per cent growth in the same period. By 2010, the air freight traffic in India is to double and the four metros are to handle about 9.8 lakh tonnes against 5.5 lakh tonnes now. The question therefore arises: Will the facilities at our airports be adequate by 2006 to handle the projected growth of cargo traffic?

The size of the world air cargo market is estimated at 27 million tonnes valued at $200 billion. At more than 6 per cent, the growth of the cargo traffic has been more than that of passenger traffic. With a daily throughput of 2,880 tonnes, India accounts for a meagre 3 per cent of the market. Between 1997-98 and 2002-03, India's export cargo increased from 3.3 lakh tonnes to 4.2 lakh tonnes and import cargo from 1.6 lakh tonnes to 2.3 lakh tonnes, thus recording on an average 5 per cent growth in exports and seven per cent in imports and total 6 per cent. Among the world's top five air cargo traffic handling airports are Memphis (3.39 million tonnes annually), Hong Kong (2.52 mt), Anchorage (2.03 mt), Tokyo (two mt) and Los Angeles (1.76 mt). With annual throughputs of 3.1 lakh tonnes, Mumbai occupies 58th position in the world ranking, Delhi (2.8 lakh tonnes) the 70th, Chennai (1.4 lakh tonnes) 120th, Kolkata (60,000 tonnes) 168th and Thiruvananthapuram (30,000 tonnes) 247th.

AAI manages cargo complexes in eight airports. The oldest was set up in Kolkata as early as 1975, followed by Mumbai (1977), Chennai (1978), Delhi (1986), Nagpur (1997), Guwahati (1999), Lucknow (2000) and Coimbatore (2001). The cargo throughputs in last four airports have been negligible. In 2002-03, the throughput of Coimbatore was 1073 tonnes, Lucknow 72 tonnes, Nagpur 36 tonnes and Guwahati 25 tonnes. At Bhubaneswar, the air cargo complex, operated by the Customs, is run from a shed belonging to the Orissa Government.

A proper cargo complex presupposes extension of the runway from 7,440 to 9,000 ft to facilitate landing of bigger aircraft. However, the work on the runway has been held up due to diversion of road to be built by the State government. At Agartala, cold room facility was established in 1999 but remained non-operational. The plug-in type walk-in cold room was shifted from Indira Gandhi International Airport's cargo terminal. The MoU between APEDA and the State government undertaking concerned is being finalised.

In 2002-03, the airports in four metros handled a total of 5.5 lakh tonnes, comprising 3.65 lakh tonnes of exports and 1.9 lakh tonnes of imports, posting 14 per cent growth over the previous year's total throughput of 4.88 lakh tonnes (comprising 3.25 lakh tonnes of exports and 1.68 lakh tonnes of imports). Individually, Mumbai airport handled a total of 224,068 tonnes (exports and imports taken together), at Delhi 197,432 tonnes, Chennai 106,836 tonnes and Kolkata 27,025 tonnes during the same year.

Our airports could hope to cope with the challenges to be thrown up by the projected increase in cargo traffic provided several problems are adequately addressed. The problems include poor quality warehousing, complex procedures, participation of various intermediaries in cargo processing, improper implementation of EDI (electronic data interchange), varying levels of automation in documentation and handling between airlines and shipping companies, uncoordinated procedures with no technology interface among ground handling agencies, outdated handling equipment, absence of efficient storage system and quick clearance of cargo, absence of improved inventory systems, inadequate X-ray facilities and absence of improved access to the cargo terminals.

As a cumulative effect of all this, the airports suffer from high dwell time and artificial congestion, particularly during peak hours resulting in discrepancies. The average dwell time for export cargo is 2.11 days (50 hours 37 minutes) and for import cargo 7.58 days (182 hours 32 minutes).

As for congestion, 65 per cent of the export cargo arrive between 1 p.m. and 7 p.m.; 12 per cent between 7 p.m. and 10 p.m., and only five per cent between 10 a.m. and 1 p.m. The incentive introduced for presenting cargo in early has been withdrawn due to lack of support from the exporters. The four key areas which therefore require attention are beefing up of the security system, upgradation of technologies, simplification of procedures and reduction in dwell time.

AAI has already taken initiatives in these matters. On air cargo security preparedness, the steps being taken include installation of X-ray machines in sufficient number, deployment of CISF personnel in key positions, maintaining cooling off period (with effect from January 1, 100 per cent X-ray screening of export cargo), introducing regulated agents concept and security audit covering the performance of CCTV system, handling dangerous goods, dummy checks and secured atmosphere.

As for EDI, AAI has introduced online ICMS (inter-continental memory systems) at a cost of Rs 11 crore at all metro airports in January 2002, established direct connectivity with Customs system by June 2003. However, web-based connectivity with various trade partners and bar coding system are yet to be introduced.

Since the dwell time for import cargo has been brought down to seven days from 21, the free time too should be reduced from the present five days to two. Similarly, free period for export too needs to be brought down to one day from four days in view of the drop in dwell time to two days, it is felt.

AAI, with assistance of APEDA, has set up state-of-the-art centres for perishable cargoes at Chennai, Hyderabad, Delhi and Mumbai at a considerable cost. A similar facility is being created also at Kolkata. However, the existing facilities remain grossly underutilized as the perishables arrive at last moment, unitised and airlifted. AAI, therefore, seeks support of the trade for fuller utilisation of the facilities.

Finally, the growth of passenger services is also important for the growth of air cargo as 60 per cent of the air cargo is carried in the belly of the passenger aircraft, while charter aircraft account for a meagre 5.5 per cent.

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