Transshipment woes. Air cargo transfers stuck in slow lane

The domestic air cargo industry aims to treble its annual throughput at Indian airports to about 10 million tonnes by 2030. What could slow this, however, are the security measures and other time-consuming processes at the airports; aviation industry stakeholders are urging the government to simplify the processes to help grow the transshipment business.

At 3.36 million tonnes, Indian airports handled 7 per cent more cargo in FY 2024 than in the previous year. While domestic cargo increased by 3 per cent, international cargo increased by 9.7 per cent during the period. Yet, this quantity pales in comparison to the cargo handled by the major global hubs. Hong Kong airport, the world’s busiest for cargo traffic, alone handled 4.3 million tonnes in CY 2023. 

A major factor that slows down, and thereby limits transshipment at Indian airports is the security regulation requiring rescreening of the cargo — both domestic and international. For instance, a Dubai-bound consignment flown in from Singapore via Mumbai is removed from the pallet or container and X-rayed at the airport before it is sent along. This adds up costs and complexities, making Indian airlines and airports less competitive compared to peers. 

Even cargo movement within the country requires rescreening if it involves a change in aircraft. 

Another challenge is the customs department’s requirement for a pre-clearance if goods are flown to an international destination on two different airlines. While the approval process is automated, it is nevertheless time-consuming, industry executives complain.

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“We work closely with regulators and have created a transshipment excellence centre (TEC) at the airside in Delhi airport to act as a zone outside the cargo terminal to cut down process time. We continue to work closely [with the regulators] to further eliminate other inefficiencies that are delaying transshipment. Some of the concerns being addressed at the highest levels include complete digitisation of transshipment documentation/ processing to eliminate manual interventions and paperwork, a relook at double screening of cargo, and so on, to hasten shipment to match global standards,” says Sanjiv Edward, chief executive officer of cargo at GMR group, which runs the Delhi and Hyderabad airports.

New opportunities

Delhi airport, the country’s busiest, has positioned itself as ‘Southeast Asia’s leading cargo hub’, facilitating transshipment of 8,000 tonnes of cargo from Bangladesh.

The transshipment facility for Bangladeshi cargo, which commenced operations last February, has proved to be a faster and cost-effective route. Readymade garments from Bangladesh now pass through Delhi airport on their way to European markets, including Spain, the Netherlands and France, among others. After the US, the European Union is the second-largest export destination for Bangladeshi apparel, followed by the UK and Canada.

“Major cargo airports and hubs have a specific focus on transshipment, which clocks about 40 per cent share in the total cargo transacted through them. However, for Delhi airport, the share is just about 10 per cent; so the airport has enough headroom to improve not only in total cargo volume but also the share of transshipment cargo,” says Edward. 

The Delhi airport is working with airlines and non-scheduled carriers to explore new markets and expand business. This includes freight from neighbouring countries such as Nepal to Europe and from Southeast Asia to Africa. 

Air India, which has the largest international network originating from Delhi among airlines, is also pitching for a review of transshipment policies. The airline operates widebody Boeing aircraft to Europe, North America and Australia but is unable to offer competitive air cargo services due to the existing regulations.

Global examples

It is learnt that last month a delegation comprising cargo industry executives, and representatives of the civil aviation ministry and the Bureau of Civil Aviation Security had visited airports in Germany and Singapore to observe first-hand their cargo handling practices related to transshipment. 

The officials, however, were not available for comment.

The domestic air cargo industry wants the government to introduce a programme to validate security systems at overseas airports, on the lines of the European Union (EU) norms that require screening of all cargo and mail coming from a non-EU airport. This, they believe, will obviate the need for rescreening and the consequent delays.

Shortfall in infrastructure

The other challenges on ground include limited availability of connecting flights for the onward journey, and speed restrictions for the tractors and trollies that move pallets, industry bodies say.

“Cargo terminal operators have to ensure the entire handling of transshipment cargo in a time-bound and cost-effective manner. Freight forwarders are mandated by exporters/importers to offer logistics at the most economical cost. All such stakeholders need to work in a product-friendly environment of simplified procedures. There are so many challenges on the city-side [namely traffic snarls, parking issue and so on] also that freight forwarders and other users face,” says CK Govil, president, Air Cargo Agents Association of India.