Current status of global air cargo services and challenges

The share of the air cargo services is increasing in the global exports and imports. In the year 2014, the air cargo services transported more than 35 % of global trade by value. That is equal to the 18 billion worth of cargo every day. The share in revenue of the airlines from cargo services in also increasing.  For some airlines, the revenue from cargo services is more than the first class segment revenue.

Air cargo services are becoming vital for the export of all perishable goods and items.  Pharmaceutical industry, horticulture industry, electronics, depends on air cargo services. Vegetables are being exported by air cargo services only. The role of    air cargo services is the base on which multinational supply chain companies are operating. The likes of Amazon, e bay or Alibaba are International Courier service in Charni Road  doing their business on the solid support provided by air cargo services and daily flights.

The research and studies have suggested that the growth of e commerce companies is driving the growth of international cargo companies operating big air cargo jets.  The growth that is taking place in the Asia economies such as Indian, china, and countries of south East Asia are the second major driving force behind increase in air cargo services. The air cargo services from area have share of 40 percent in the global air cargo services

Challenges before air cargo industry –

Currently the demand is very robust from the customers all over the world. But there is stiff competition.  And volatility in the currency market also affects the revenue of air cargo airlines. The recent slowdown in leading economies is also affect the growth and expansion in major trading area. But the air cargo industry Packers and Movers for International in Kandivali  in Asia pacific region is witnessing expansion both in fleet and business.   The cargo airlines in the region are redrawing network to create new customers initiatives. 

The efforts are also on to curb the expensive and cut costs. The capacity addition will be more than the demand. The study estimated that the increase in capacity will be around 9 percent and the demand will grow by 8 percent. 

        

As the result of less demand than capacity, the airlines operating in cargo domain are facing stagnation. The stiff competition, slow down in major country like china and the cost difficulty in the India market is also part of the problems in front of air cargo service providers.

Future prospects are bright as the major deal in trade and creation of free trade areas in the pacific region will lead to increase in trade between countries and also with other regions like North America. This will automatically create demand for air cargo services.

Current status of air cargo services in India

With the growth of Indian economy the demand for air cargo operations have increased significantly in India.  The need for faster delivery and globalization of economy has created more demand. Changing nature of business, like just in time manufacturing and global outsourcing models have also played a major role in the demand creation.

The business means speed to market and movement of inventory is no longer compartmentalized process. The sourcing of inputs, parts and delivering of the final product has become part of the continuous value adding chain.

The air cargo has about 10 percent share in the revenue of the airlines .The air cargo is also barometer of the general health of the economy. The growth of the Indian economy is expected to be in the higher trajectory. This will create immense demand for more air cargo services and infrastructure in coming years.

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The air cargo operation involve industrial supply chain of airlines , ground services , customs , forwarders, air cargo terminals , distribution centers and international express services . Of all these, criticality of the air cargo terminals cannot be overemphasized.  The air cargo terminals are used by airlines, air cargo terminals operators and cargo agents. The air cargo agents are the main contributors to the revenue of the cargo terminals.

The major reason for comparatively low demand for air cargo is the cost of the service. The cost is at least 4-5 times the cost of the road transport and 15 times the cost of the sea transport. But the cost also differs from season to season and for product to product.

The cargo transported by air International Courier Service in Kandivali has higher value per unit and most of the products, which are traded by air, are time sensitive. The products traded by air are pharmaceutical, flowers, vegetables, perishable commodities, emergency supplies, spare parts and seafood. The companies are now using exclusive chartered cargo planes for trade. The small part of the cargo goes by commercial airlines.

The door to door delivery of the products is done by private express companies. These express services are also using air services for faster delivery.  The domestic cargo companies are concerned with the delivery the cargo within the country, while the international cargo service companies take cargo out of India and also bring the cargo at major international airports in India.  Some companies International Parcel Service in Kandivali operate both domestic and international segments of air cargo services. The growth of the industry has created job opportunities for people at various levels in the operational chain. 

Challenges before aviation logistic sector in India

Indian aviation sector has seen rapid growth in the last two decades after liberalization of the economy in 1991. The air cargo segment of the aviation market also has seen corresponding growth in last 20 years. The strong and efficient air cargo sector is essential for the growth of the export sector of the economy. But there are some issues, which air freight is facing in the country.

The first is that air cargo is very expensive.  This may be due to the fact that there are not many cargo airlines in India and attempt by some to start the cargo airlines has not met with success. The share of Indian aviation cargo in the world aviation cargo is only 3 percent.

Challengers of air cargo

Lack of adequate infrastructure is one of the main bottlenecks in the air cargo growth in India. The most of the   air cargo is concentrated in few metro airports. The second and third tier cities have negligible or hardly any air cargo facility. The airports which have some cargo for airlift do not have facilities to handle the movement of cargo.

  

The constrictions in the interstate movements of good also creates problem in the free movements of cargo to the airports in time. The lack of timely delivery impedes the air cargo services between inner city airports to the gateway airports.

Lack of modernization of cargo International Parcel Service in Kandivali  handling facilities delay the movements of cargo from airports to the airplanes. This lowers the cost efficiencies.  The delay in shipment increases the chances of rejection of export order and also low export reorders in future.

Companies engaged in air cargo services do not get the required trained manpower. 

The onsite training facility is not yet developed and companies cannot afford to spend money on training facilities of workers. The result is that there is lack of professionals to handle the air freight cargo. The untrained manpower cannot handle the operations efficiently.

The government has to create condition by regulations to encourage the growth of air cargo companies. Currently, the passenger airliners are doing the air cargo airlines jobs. The growth of air cargo companies will create competition and completion always reduces the rates.

Fortunately, the government of India is aware of these challenges. The government has taken number of step to promote the air cargo sector. The construction of air cargo hub in Nagpur in the Maharashtra will encourage International Parcel Service in Borivali  the private players to use air cargo services of airlines. 

The relaxation in regulation on the new airlines will add air cargo capacity in India. The price of air cargo is expected to come down in future, which will open up many opportunities in the second tier cities for growth of air cargo.