Despite challenges such as rising costs and capacity troubles, the industry is moving towards growth. Increased global demand for faster deliveries, driven by e-commerce and pharma, is fuelling need for efficient solutions. As the industry adapts to evolving landscape, the sector is positioning to overcome hurdles and capitalise on opportunities in global trade.
Ritika Arora Bhola
Of late, air cargo and logistics sectors have demonstrated resilience and adaptability with increasing e-commerce demand and a growing manufacturing sector. Indian carriers and logistics firms are stepping up the ante to address capacity constraints, enhance operational efficiency and improve infrastructure. Continuous investments in airport modernisation and digitalisation are helping streamline cargo processes, while dedicated freighters and improved supply chain management are mitigating disruptions.
The air cargo sector is leveraging its strategic location, robust domestic market, with government support to navigate obstacles and remain a key player in global trade. It is combating bottlenecks such as Red Sea conflict, Russia-Ukraine war, new trade tariffs, capacity shortage and rising costs. Fluctuating fuel prices and economic uncertainty are also contributing to delays and inefficiencies in Indian EXIM trade.
According to industry experts, there is need for airlines to invest in expanding dedicated freighter fleets. This would provide reliable and scalable solutions to growing demand. Investment in more efficient airport infrastructure can reduce congestion and speed up the industry’s throughput.
Collaboration between airports, airlines, and logistics providers to create air cargo hubs can help improve overall capacity. Currently, only 15 per cent of air cargo volume is carried by freighter aircraft and the remaining is carried in the belly of passenger flights. The increasing tariffs levied by Cargo Terminal Operators add to cost burdens, reduce overall competitiveness and strain cost-effectiveness of LSPs. Companies encountering delays in sea freight caused by geopolitical concerns have now opted for air freight to ensure prompt deliveries. For example, Inditex, the parent company of Zara, boosted its air shipments from India by 37 per cent over the last year to circumvent shipping delays. Enhanced intermodal connectivity, by fostering better links between air cargo and various modes of transport, will improve the flow of goods and reduce congestion.
TRAVTALK delves in-depth and discusses with experts about the current situation of air cargo and logistics sectors in India.
GST on export cargo obstacle for businesses
Kamesh Peri, CEO, Celebi Delhi Cargo, Terminal Management, India
With demand outpacing available capacity, constraints remain vital issue, mainly during peak seasons in global sea lanes. Delays, volume fluctuations, volatile fuel prices, evolving global compliance need costly rerouting. They are some of the strains facing the industry. Besides GST on export freight (a hurdle for forwarders), we see a shift towards upgrading infra and introducing automated data handling, legacy practices and slow change makes it harder to move cargo. Even with improvements in monitoring operational inefficiencies and not so fast pace of adopting technology limit productivity.”
Investment in airport infra to cut congestion
Malcolm D’souza, Director, Airfreight & Member, Management Board, Jeena and Co.
Airlines must expand dedicated freighter fleets. This would provide a more reliable and scalable solution to growing air cargo demand. Airlines should work on maximising belly hold capacity in passenger flights to carry less time-sensitive cargo. To increase efficiency, cargo and passenger ops should coordinate to ensure optimal use of available space. Investment in airport infra can reduce congestion and give pace to air cargo throughput. Collaboration between airports, airlines and logistics providers may help create dedicated cargo hubs and improve capacity.”
15% cargo in freighters, majority in pax aircraft
M Afzal Malbarwala, Managing Director, Galaxy Freight
As per latest trade tariffs imposed by USA on China, Canada and Mexico, container shipping is getting costlier for USA importers to send goods by air to USA. India-USA and India-EU trade lanes have recorded growth, thanks to 6.1 and 3.2 per cent rise on Asia-North America and Europe-Asia trade lanes. This growth could be due to ‘Make in India’, export-driven policies and e-commerce market. Currently, 15 per cent of volumes is carried by freighters, while majority still goes in the belly hold of passenger flights. There’s need to connect road infra to strategically placed airports.”
Digital platforms may reduce processing time
Keku Bomi Gazdar, CEO and MD, Aviapro Logistic
Limited cargo space creates stiff competition, especially during peak seasons. Navigating new trade tariffs, customs needs and security protocols are time-consuming and expensive. Delays are caused by unpredictable weather, ineffective logistics and technical glitches. Rising fuel prices and skilled labour costs added to expenditure, putting pressure on forwarders’ profit margins. Paper-based procedures reduce productivity and increase risk of errors. Leveraging digital platforms and data analytics for booking and tracking, among others will reduce the processing time.”
Erratic airport handling procedures lead to delay
Vipin Vohra, Chairman, Continental Carriers
Capacity constraints, regulatory inefficiencies, and infrastructure gaps continue to challenge air cargo growth. The lack of dedicated freighters, congestion at major airports, and high logistics costs impact supply chain fluidity. Inconsistent airport handling procedures lead to delays, while a shortage of skilled staff affects operational efficiency. The increasing tariffs levied by CTOs add to cost burdens, reducing competitiveness and straining cost-effectiveness for LSPs. Expanding airport cargo terminals, investing in freighters, and enhancing multimodal linkage can improve capacity.”
Less cargo space disrupts flow during peak season
Vandana Singh Chairperson, Aviation Cargo, FAII
Airlines have expanded freighter ops, repurposing pax aircraft for cargo transport to address capacity shortages. Digitalisation has played a vital role, with AI-driven logistics, real-time tracking, and predictive analytics optimising cargo flow and minimising delays. Firms have diversified supply routes, reducing dependency on specific hubs. Shortage of cargo space, particularly during peak demand, disrupts global cargo movement. Collaboration between logistics providers, airlines and govts have led to faster regulatory approvals and improved crisis management strategies.”
Labour conflicts, global tensions impact cargo biz
Surendra Bhatia, SVP, Global Airfreight, Freight Systems
We have witnessed flexible approach towards expansion of capacity through belly and cargo-only aircraft as apt on routes. Inditex, the parent company of Zara, boosted its shipments from India by 37 per cent over the last year to circumvent shipping delays. Geopolitical factors, including labour conflicts and regional tensions, impact air cargo strategies. Airports experience congestion due to increasing pax and cargo flights. This blockage results in hold-ups in flight take-offs, landings and handling causing a bottleneck at airports thereby hindering the logistics chain.”
Lack of infrastructure causes delays, high costs
Sunil Kohli, Managing Director, Rahat Cargo
The cargo and logistics sectors have witnessed decline in global trade added with regulations after Covid-19. These sectors need to enhance technical abilities in sync with the trade requirements. The challenge to have adequate skilled workers must be addressed soon. There are not enough airports to accommodate the rise in demand. The air cargo industry is competing for the same space on aircraft, which results in price wars and reduced margins. The air cargo market is suffering from lack of infrastructure, which is not only causing delays but also high costs.”
Demand, regulations affect cross-border flow
Aditya Shah, ED, V Trans (India) & CEO, V Xpress
The industry has adapted to global supply chain disruptions through increased flexibility with freighters, enhanced real-time tracking and route optimisation and stronger partnerships for faster clearance. Diversifying networks, expanding infra with specialised facilities and focusing on sustainability through fuel-efficient aircraft and SAF adoption will boost resilience. These measures ensure timely delivery of critical goods. However, capacity constraints, regulatory complexities and infrastructure gaps affect cross-border movement in emerging markets.
