!!To be able to see this page correctly, you need to have Flash player 7 or higher installed!!
Please click here to start installing the player.
Please click here to start installing the player.
India airfreight set for take-off
January 2008
Phil Hastings, International Trade Today
India’s importance to UK exporters and importers – total bilateral trade between the two countries jumped from £7.9bn in 2005 to more than £8.7bn in 2006 – was highlighted by the recent official launch of the government-backed UK India Business Council (UKIBC). Enhanced international logistics services have a key role to play in supporting further growth in that trade. Our award-winning logistics correspondent Phillip Hastings visited New Delhi to find out what improvements are expected in the key airfreight sector. uK exporters and importers trading with India have traditionally relied on airfreight services to bypass the country’s often congested sea ports and inadequate inland transport infrastructure when they have shipments requiring faster, more reliable delivery.
However, shortcomings in freight handling and Customs clearance performance at India’s main international airports have often led to transit times for both inbound and outbound shipments falling well below internationally-accepted standards.
Now, though, several apparently imminent developments in that country’s airfreight sector look set to bring forward the time when it should begin to perform more on a par with comparable operations in other major world markets.
One key innovation in that context, maintain local airfreight industry executives, would be the introduction of regular off-airport handling operations at major gateways such as Delhi and Mumbai. Such a development would mean export shipments could be delivered to airports in pre-loaded pallets, while import pallets could be delivered directly to Customs warehouses or consignees, they explained.
‘We have made bits and pieces of progress on that front but, when we have achieved something, it has been where Customs or an airport authority has made an exception. So far, it has not proved possible to roll anything out across India on a wider basis,’ commented Vikram Paul, Delhi-based vice-president (Asia Pacific airfreight) for global forwarder UTi.
One recent example of such a development was the establishment in Chennai of India’s first off-airport station for handling airfreight import traffic. That move involved allowing an inland seafreight station run by government company CWC (Central Warehousing Corporation) additionally to handle airfreight imports for customers such as telecommunications equipment manufacturer Nokia.
‘Imports coming into Chennai airport are being moved to the CWC facility under Customs escort,’ explained the regional operations and quality manager for Air France Cargo-KLM Cargo in Delhi, Rajendra Varma. Now, he said, talks were continuing between forwarders, airlines and Indian Customs about allowing more general development of off-airport handling operations across India for both export and import air cargo.
A second development required to improve the overall performance of airfreight services in and out of India, agree local observers, is an upgrading of that industry’s EDI links with Indian Customs to achieve faster, more consistent clearance times.
Air France Cargo-KLM Cargo’s director for India, Nepal and Bhutan, Jean-Pascal Cetran, said that while developments in that area were generally moving in the right direction ‘despite a few hiccups from time to time’, further enhancements were needed.
‘We should see more developments over the next year because government ministries and the Customs authorities are now putting a big emphasis on developing EDI for both imports and exports,’ he added.
In the case of Delhi’s Indira Gandhi International Airport, airfreight sector performance should additionally benefit from apparently imminent moves to bring in a second freight handler. Airport operator DIAL (Delhi International Airport (P) Ltd), a public/private venture which took over the running of that gateway in 2006, is reportedly close to sending out a request to tender for the concession to run an additional handling facility. Currently, all international airfreight is handled by GMR Group, the majority shareholder in DIAL.
DIAL’s chief commercial officer, Sudhir Mathur, said the plan was to attract ‘another cargo handler, one with global experience, to run its own facility’. He added that an area of land had already been allocated for the project and it was hoped the new freight facility would be built within two years.
DIAL is also planning to develop a cargo village on land to the south of the existing freight terminal to provide warehousing for forwarders. The precise location should be decided as soon as the route alignment for a metro line running across that area into a planned new passenger terminal, due to open in 2010, is finalised. ‘We hope to get the go-ahead to start work on the new cargo area by the end of this year,’ commented Mathur.
Meanwhile, British and other overseas importers looking to bring in goods from India by air can expect to continue benefiting from current excess capacity and resulting low rates out of that market.
The head of sales and international customer service for British Airways World Cargo, Baba Devani, confirmed that rates for airfreight shipments ex-India remained under great pressure. ‘Volume-wise, we are doing very well out of India at the moment and are continuing to grow our market share in both Delhi and Mumbai. But the yield across that market as a whole has dropped significantly as the result of all the capacity which is available.’
SAD H IMPLEMENTED
A new UK customs system based on the EU’s harmonised Single Administrative Document (SAD H) was finally implemented in October. HM Revenue and Customs (HMRC) had originally planned to introduce the new system in July but was subsequently forced to postpone due to the late delivery of its own software for the project (ITT May/June 2007).
‘All declarants who are ready to make declarations in the new format will be expected to do so from this date,’ stated HMRC. ‘Those declarants who are not ready to submit declarations in the new format will be given an additional period of time to become SAD H-compliant. This will run to midnight on January 20, 2008, during which time declarants will be able to continue to use old messages and old data. After January 20, CHIEF (Customs Handling of Import and Export Freight) will no longer accept old style declarations and they will be rejected.’
Agency Sector Management (ASM) has released Version 11.1 of GeMS (Global e-cargo Management System), which, it stated, would enable forwarders to fully comply with SAD H. ‘GeMS provides users with an integrated cargo management solution, including a consistent interface for import and export processing and all documentation,’ added ASM.
