Airfreight helps lift up EXIM trade

Sanjiv Kumar, Aviation Consultant, talks about the concept and success of Air Freight Stations (AFS) in India while enumerating the dynamics of import and export production.

India is a vast country with production of goods spread out over a huge area. With easy availability of land in rural areas, lower cost of labour and operations, it makes more sense to set up the manufacturing units at remote locations. Moreover, with the ‘Make In India’ concept being promoted by the Prime Minister of India, there would be a major fillip to home production and export. To be able to achieve a higher production and in turn lower costs, we have to look at bigger markets outside India and higher exports. The value of the goods need not be in direct proportion to the volume. Electronic items like chips, mobiles, sim cards can have a larger value but small volume/weight while products like garments would be of high volume/ weight and values would not be proportional. Getting these products to the final consumer or export become challenging and therefore less likely to manufactured in remote areas.

Managing distribution
Also, in case if the products have to be shipped by individual manufacturers to the gateway points, it may not work out to be financially viable. While domestic distribution can be handled/managed with the existing infrastructure of railways and road network (which is growing day by day). However, on the export front, there is lot to be done. It may not be economically viable for each industry to forward the product to main airports and arrange for their clearances at the gateway points. It may make more sense to consolidate the various products, for same destination, at remote areas, have local clearing arrangements and then ship them in a single ULD to the gateway points for onward shipping to various destinations.

The need of the hour is therefore to have gateway points in interior areas for export of goods. However, as we are aware, setting up of airports and ensuring direct flights would be an expensive proposition and far-fetched at this stage as there may not be sufficient cargo or passenger traffic to warrant such a move.

Role of Air Freight Stations
One of the steps being taken in the developed countries is setting up of AFS. There has been sufficient mention of following the customs regulations in force from time to time to be applicable on the AFS. They have been equated with the Inland Container Depots (ICDs), currently in vogue for shipping and surface transportation. In fact it is stated at some point that the same ICD can be used as an AFS or parties could set up separate AFS subject to meeting the minimum requirement stipulated in the policy.

While going through the policy, it appears that the focus is more on the space requirements, handling, storage and customs requirement. While it does mention BCAS approval for security arrangements of AFS entity, it does not cover the security aspect in much detail. While there is a mention in the policy that the screening of the cargo would be done at the AFS, it would be containerised or palletised and sent to the airport, where airport operators would have to create an area on the airside for storage etc., the guidelines for security and movement would be issued by BCAS.

Need of the hour
Security of the goods and safety during transportation from remote areas to the hub airports is of paramount importance and has a major role in successful operations of the AFS. Advanced countries like USA, Australia and European Continent have an elaborate road network and AFSs set up to provide the facility. The basic requirement, in my understanding, a highly sterile area fwould be or acceptance/scanning and build up of cargo at the AFS with security equivalent to airports, if not more, and a secure methodology for tamperproof transportation of the goods to the airports and access to the trucks to sterile areas for storage of the goods prior to its loading on flights. It would not make any sense if the entire cargo has to be broken at the airport terminal, rescreened and ULDs built up again, which is the existing procedure. Multiple handling of the goods can lead to damage or even pilferage of the goods. A detailed procedure for security of the products and overall security has to be built up to ensure successful implementation and operation of the AFS policy in India.

To ensure support to the industry for export, it is necessary to establish AFS at interior points that have the infrastructure to handle the goods both from the frontier formalities perspective and also have a procedure for secure acceptance and transport of the goods to gateway points.

(The views expressed are solely of the author. The publication may or may not subscribe to the same.)
Sanjiv Kumar
Aviation Consultant