Capacity upliftment, trained manpower, increased tech integration, and penetration are going to be game changers for air cargo and logistics industry in coming years, says Tushar Jani, Group Chairman, Cargo Service Center. Air cargo has been redefined as Agility, Innovation and Resilience and it will play different roles in near future, he adds.
Ritika Arora Bhola
How are things shaping up for air cargo and logistics sector after COVID cases reduced in the new normal?
The pandemic has brought a lot of challenges, and with it a lot of positivity for air cargo and logistic industry. The Indian supply chain is resilient than any supply chain of the world. India is becoming China’s plus one supplier to the world. Two iPhone factories have already come up. I believe three more are going to come up soon. Air cargo has shaped up well, with 85 per cent going by passenger belly and 15 per cent by freight before COVID. India is emerging as a quality supplier in the world. Not only that, during the pandemic, we had the best vaccination distribution in the world. The last gift by Narendra Modi, the Prime Minister is PMGS. We have ULIP, CFDA, and in 10 more years India will be at a different level, different place and logistics will be at the forefront.
Any comments about the existing bottlenecks in the market?
I entered this industry in 1976. I am happy with the bottlenecks I saw back then and what I am seeing in 2022. This apart, in the past three months, I visited 48 air cargo terminals in the world, and let me tell you, Indian infrastructure, processes, air cargo terminals are much, much superior. The Union government has done such a fantastic job. Let us appreciate the government and the people who are making a difference. India recently welcomed Pradhan Air Express. Cargo drones are being developed and e-freight penetration is the highest in India than any other country.
Do you think India needs more dedicated freighters?
We have a few—Pradhan Air Express, Air India Express, and now IndiGo Cargo. We need more widebody freighters because there is so much cargo, which is lying in remote locations that needs to be carried. First let us understand we need more global freighters than domestic freighters. I agree it is a costly operation. Multimodal transportation is going to be a game changer for Indian logistics. The government is improving inland waterways, coastal shipping, roadways, and rail. There is this new freight corridor, which will link the Northeast to Myanmar to Thailand to Cambodia to Vietnam and up to Philippines and down south we are going to be cooperating with Sri Lanka in the times to come so we are on the threshold of a new journey. Now that the government has launched the NLP, one will see the country in a higher orbit and there is nothing to go back to. If you have money put in logistics, it is time to invest in the supply chain. It is a sunrise industry.
Do you think India will have its own Air Freight Stations in coming years?
The Air Freight Station (AFS) Policy was launched in 2014, but no substantial work in this regard is happening. AFSs require huge air cargo volumes and India does not have enough cargo volumes to be stored in an AFS. At present, India is doing 1.4 million tons per annum, while Hong Kong International Airport does one million per month. Also, we do not have that kind of cargo uplifting capacity. If we get AFSs, stakeholders will invest in AFSs, but the prices will skyrocket. If we look at the things now, air freight prices are coming down, and there is enough superior infrastructure. There is no congestion at any airport. So, probably in five years from now, we may need a lot of AFSs.
The stakeholders insist on developing warehouses near airports. How will they benefit
the industry?
Yes, they are required, but unfortunately, land near the airports in India is expensive. Delhi airport pays 46 per cent royalty on the land. Is the government going to reduce that? If, for example, private airports are charging 100 from stakeholders as rent, 46 goes to the government. So, there is a problem with PPP model. The PPP is given to those who offer highest to the government. The charges will always be high.
In the past couple of years, e-commerce has seen tremendous growth. Do you think e-commerce is driving air cargo growth in India?
We have not touched cross border e-commerce in this country. Bringing cross border e-commerce into the country—that is the demand.
Do you think India has the potential to manufacture its own aircraft such as Boeing and Airbus?
India’s Hindustan Aeronautics Limited (HAL) is manufacturing aircraft in the next 10 years. In fact, much earlier. Did you imagine an Indian made
iPhone three years ago? Today it is a reality. So, I feel, it is going to happen much faster. It will bring a revolution in this industry. We see air cargo industry playing different roles in the coming years.
How important is industrial collaboration to succeed and achieve growth?
Collaboration, cooperation, and collectivity are the three important ‘Cs’, which can help us achieve growth. Air cargo requires cooperation and collaboration, and it is bound to happen. During COVID, the international air cargo incurred tremendous losses, still it continued with the transportation of essential commodities and pharma. Despite challenges, the industry witnessed growth and without collaboration, it is not possible without cooperation. During trying times, the stakeholders united and helped each other, and that’s the need of the hour.
According to you, what are the key growth drivers?
First one would be capacity upliftment. We must match uplifting the capacity because the government’s PLI scheme ‘Make in India’ aims at manufacturing more products here. These products need to be transported to the other side of the world. We will need capacity certainly. Secondly, we will need trained manpower. We must train people. Third is, increased technology penetration. India is now able to show examples to the world in terms of the air cargo tech penetration. Technology brand, Kale Logistics, has been providing services at more than 48 national and international airports. We should applaud and acknowledge that an IT front of India air cargo.
