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Air Cargo
Logistics


  Abhishek Rajan (103)
   Avishek Singh (113)
Maithilee Deshmukh (123)
 Nimisha Agarwal (133)
Rajesh Dharmarajan (143)
   Swapnil Wagh (153)
Logistics
“Management of the flow and services between point of origin
and point of use for satisfying the requirements of customers/
businesses.”
Global logistics industry – $ 4 trillion(source Cygnus India)

Air Cargo Logistics
“Using aircrafts and ware housing services for the transport of
goods quickly from point of origin to point of consumption for
satisfying the requirements of customers.”
Approximate size of the industry– $ 8.6bn in 2011
0.2% of the total logistics business.
Advantages
Faster delivery of information
Tighter control over cargo– less chances of theft,
 pilferages, and damage.
Perishable goods can be transported to longer distances.
Air-freight insurance premium charges are lesser.

However, it’s the most costly form of freight service, and
airlines do not accept goods mentioned in IATA’s
Dangerous Goods Regulation(DGR) like explosives, certain
chemicals, etc.
Top 30 Airlines Transport 75% of the World’s Air
Freight
       Rank              Carrier               (Millions FTK)
         1.            Federal Express             14,408
         2.            United Parcel Service        9,075
         3.            Korean Air                   8,072
         4.            Lufthansa                    7,680
         5.            Singapore                    7,603
         6.            Cathay Pacific               6,458
         7.            China Airlines               6,037
         8.            Air France                   5,532
         9.            EVA Air                      5,285
        10.            Cargolux                     5,149
        11.            JAL                          4,817
        12.            British                      4,767
        13.            KLM                          4,646
        14.            Emirates                     4,192
        15.            Northwest                    3,210
        16.            Martinair                    3,026
        17.            American                     2,905
        18.            Air China                    2,717
        19.            United                       2,649
        20.            Malaysia                     2,576
        21.            Asiana                       2,433
        22.            Nippon Cargo                 2,417
        23.            Qantas                       2,371
        24.            China Cargo                  2,250
        25.            Thai Airways                 2,002
        26.            Delta                        1,760
        27.            Lan Airlines                 1,753
        28.            China Southern               1,672       Represents 75%
        29.            All Nippon                   1,418       of world traffic
        30.            Dragonair                    1,404

      Source: IATA and direct reports           130,776 FTKs
• Busiest Air Freight Airports are in Europe, Asia and
  North America.
• In 2010, demand statistics grew by 20.6% in freight
• Revenue for 2011 are predicted to be $ 8.6 billion
• United States is the largest player in International
  Freight market.
• The top five fastest growing market: Hong Kong,
  China, Vietnam, Chinese Taipei and Russian
  Federation.
Integrators
                        FedEx, UPS, DHL, TNT, etc.
All Cargo Airline
                        Polar, Nippon Cargo, Cargolux, etc.
Combinational Airline   Korean Air, Cathay Pacific, Singapore Airline,
                        Lufthansa, Air France, Japan Airline British Airway,
                        Delta, American Airline etc.

Freight Forwarders
                        DHL Global Forwarding, Schenkar, Kuehne Nagal,

                        Aramex, etc.

Postal Offices
                        U.S. Postal, La Poste, Deutsche Post, etc.
Express




Air Freight




               Mail
1.2


      16.9




                            Africa
11                   42.6
                            Asia/Pacific

                            Europe
3.2
                            Latin America

                            Middle East

        25.1                North America
• “Open Skies” policy adopted in 1990s boosted the
  industry
• Indian Air cargo:- 6 to 7% of freight in terms of tonnage
• Domestic air freight market in India was at 568 metric
  tons in 2008 and is expected to reach 1043 metric tons
  by 2012-13
• Mumbai, Delhi and Chennai busiest airports in terms of
  Air Cargo.
15

          12   Perishable
               Mail
               Others


73
27%
                      Indian
38%                   Blue Dart
                      Kingfisher
                      Indigo
                      Jet lite
                      Others
                17%   Jet

 1%   5%
           9%
 3%
Air India Cargo– wholly owned by the GoI and second
 largest player in terms of market share.
Jet Cargo Plus– dedicated airport to airport cargo
 delivery service operated by India’s largest airline, the Jet
 Airways.
Blue Dart Aviation– third largest player, dedicated freight
 service.
Kingfisher Cargo– same day delivery service operated
 the UB group owned Kingfisher Airlines.
Promoted by India’s Low Cost model pioneer, Capt.
 Gopinath.
Scaled up too quickly– revenues could not match the
 expenses.
Fleet of A310s– maintenance issues.
Couldn’t attract bi-directional trafficAir Cargo Industry
   Regionwise share in global on International
 routes.
                                 1.2

                         16.9


                                               Africa
                    11                 42.6
                                               Asia/Pacific
                                               Europe
              3.2
                                               Latin America
                                               Middle East
                          25.1                 North America
International Association:
• International Air Transport Association(IATA)

Domestic Association:
• Ministry of Civil Aviation
• Director General of Civil Aviation(DGCA)
• Air Cargo Agents Associations of India (ACAAI)
Steps involved in air cargo logistics
•   Network design
•   Demand forecasting
•   Supply demand planning
•   Product procurement
•   Transportation procurement
•   Transportation planning
•   Transportation management
•   Trade compliance
•   Warehouse management
•   Inventory management
•   Order management
•   Customer management
1. Freight Forwarding
    • An intermediary between the customer and various transportation servi
    • Establishing contractual relationships with carriers for successful delive
    • Dependency on cost of forwarding service
   Advantages:
    • Handles ancillary services
    • Peaceful and successful delivery
2. Trans-shipment of Cargo by Air
    • From an airport in India to another airport in India
    • From an airport in India to an airport abroad
i) Transshipment of cargo from a gateway airport to an inland airport:

Steps involved:
• Import the cargo
• File application and avail for transshipment permit
• Transport to transshipment warehouse of the domestic carrier under the Customs
   preventive escort.
• Acknowledgement of goods by the customs officer
• Execution of bond with the domestic carrier
• Preparation of EGMs by domestic carrier on receipt of goods
• Copies of EGMs sent to customs at the destination airport
• Checking at the destination airport with reference to EGM
• Final clearance
ii) Transshipment of cargo received at an airport in India from an airport abroad to an a
     abroad

Steps involved:
• Receipt of cargo to be transshipped at an airport
• Storage of transshipment cargo under Customs supervision by the concerned airline
• Cargo transfer manifest is required to be presented in triplicate to the Customs.
• Loading of cargo in the aircraft is undertaken under the Customs supervision
iii) Movement of export cargo from an inland airport to an airport abroad through an
     Intermediate airport in India

Steps Involved:
• Filing shipping bills
• Assessment of goods at the domestic airport
• Safety Assurance by furnishing bonds at domestic airport
• The domestic carrier is to carry cargo only under E.G.M. duly certified by the Custom
• At the gateway airport, transportation of the cargo received to the transshipment wa
• The domestic carrier presents the EGM copies to the officer in-charge of warehouse
• Storage of goods in transshipment warehouse
• Filing cargo transfer manifest to the Customs by the domestic carrier
• Transportation of goods in closed trucks under Customs supervision to the warehou
   foreign airlines
• Reconciliation of records by officer in-charge on the basis of EGM submitted
• Endorsement evidencing receipt of cargo and subsequent export on the copies of E
• brought by domestic carrier from the originating airport.
• Worldwide
  •   Overall growth estimation
  •   Increasing fleet demand
  •   Traditional v/s Express
  •   Air cargo traffic growth
  •   New opportunities on horizon
• India
  •   Greenfield airports in various cities
  •   Increased FDI limit from 49% to 74%
  •   Increasing fuel prices, a worry
  •   Upcoming MICH at Nagpur, will greatly benefit Indian exporters
  •   Domestic growth expected at 9.9%
• Global scenario challenges
  • Security concerns
  • Risk of developing over-capacity
  • Upward wage pressure
• Domestic challenges
  • Increasing tariffs(25-30% increase in last 2 yrs)
  • Lack of infra and high inventory cost
• Optimistic view
Thank   you

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Air cargo logistics

  • 1. Air Cargo Logistics Abhishek Rajan (103) Avishek Singh (113) Maithilee Deshmukh (123) Nimisha Agarwal (133) Rajesh Dharmarajan (143) Swapnil Wagh (153)
  • 2. Logistics “Management of the flow and services between point of origin and point of use for satisfying the requirements of customers/ businesses.” Global logistics industry – $ 4 trillion(source Cygnus India) Air Cargo Logistics “Using aircrafts and ware housing services for the transport of goods quickly from point of origin to point of consumption for satisfying the requirements of customers.” Approximate size of the industry– $ 8.6bn in 2011 0.2% of the total logistics business.
  • 3. Advantages Faster delivery of information Tighter control over cargo– less chances of theft, pilferages, and damage. Perishable goods can be transported to longer distances. Air-freight insurance premium charges are lesser. However, it’s the most costly form of freight service, and airlines do not accept goods mentioned in IATA’s Dangerous Goods Regulation(DGR) like explosives, certain chemicals, etc.
  • 4. Top 30 Airlines Transport 75% of the World’s Air Freight Rank Carrier (Millions FTK) 1. Federal Express 14,408 2. United Parcel Service 9,075 3. Korean Air 8,072 4. Lufthansa 7,680 5. Singapore 7,603 6. Cathay Pacific 6,458 7. China Airlines 6,037 8. Air France 5,532 9. EVA Air 5,285 10. Cargolux 5,149 11. JAL 4,817 12. British 4,767 13. KLM 4,646 14. Emirates 4,192 15. Northwest 3,210 16. Martinair 3,026 17. American 2,905 18. Air China 2,717 19. United 2,649 20. Malaysia 2,576 21. Asiana 2,433 22. Nippon Cargo 2,417 23. Qantas 2,371 24. China Cargo 2,250 25. Thai Airways 2,002 26. Delta 1,760 27. Lan Airlines 1,753 28. China Southern 1,672 Represents 75% 29. All Nippon 1,418 of world traffic 30. Dragonair 1,404 Source: IATA and direct reports 130,776 FTKs
  • 5. • Busiest Air Freight Airports are in Europe, Asia and North America. • In 2010, demand statistics grew by 20.6% in freight • Revenue for 2011 are predicted to be $ 8.6 billion • United States is the largest player in International Freight market. • The top five fastest growing market: Hong Kong, China, Vietnam, Chinese Taipei and Russian Federation.
  • 6. Integrators FedEx, UPS, DHL, TNT, etc. All Cargo Airline Polar, Nippon Cargo, Cargolux, etc. Combinational Airline Korean Air, Cathay Pacific, Singapore Airline, Lufthansa, Air France, Japan Airline British Airway, Delta, American Airline etc. Freight Forwarders DHL Global Forwarding, Schenkar, Kuehne Nagal, Aramex, etc. Postal Offices U.S. Postal, La Poste, Deutsche Post, etc.
  • 8. 1.2 16.9 Africa 11 42.6 Asia/Pacific Europe 3.2 Latin America Middle East 25.1 North America
  • 9. • “Open Skies” policy adopted in 1990s boosted the industry • Indian Air cargo:- 6 to 7% of freight in terms of tonnage • Domestic air freight market in India was at 568 metric tons in 2008 and is expected to reach 1043 metric tons by 2012-13 • Mumbai, Delhi and Chennai busiest airports in terms of Air Cargo.
  • 10. 15 12 Perishable Mail Others 73
  • 11. 27% Indian 38% Blue Dart Kingfisher Indigo Jet lite Others 17% Jet 1% 5% 9% 3%
  • 12. Air India Cargo– wholly owned by the GoI and second largest player in terms of market share. Jet Cargo Plus– dedicated airport to airport cargo delivery service operated by India’s largest airline, the Jet Airways. Blue Dart Aviation– third largest player, dedicated freight service. Kingfisher Cargo– same day delivery service operated the UB group owned Kingfisher Airlines.
  • 13. Promoted by India’s Low Cost model pioneer, Capt. Gopinath. Scaled up too quickly– revenues could not match the expenses. Fleet of A310s– maintenance issues. Couldn’t attract bi-directional trafficAir Cargo Industry Regionwise share in global on International routes. 1.2 16.9 Africa 11 42.6 Asia/Pacific Europe 3.2 Latin America Middle East 25.1 North America
  • 14. International Association: • International Air Transport Association(IATA) Domestic Association: • Ministry of Civil Aviation • Director General of Civil Aviation(DGCA) • Air Cargo Agents Associations of India (ACAAI)
  • 15. Steps involved in air cargo logistics
  • 16. Network design • Demand forecasting • Supply demand planning • Product procurement • Transportation procurement • Transportation planning • Transportation management • Trade compliance • Warehouse management • Inventory management • Order management • Customer management
  • 17. 1. Freight Forwarding • An intermediary between the customer and various transportation servi • Establishing contractual relationships with carriers for successful delive • Dependency on cost of forwarding service Advantages: • Handles ancillary services • Peaceful and successful delivery 2. Trans-shipment of Cargo by Air • From an airport in India to another airport in India • From an airport in India to an airport abroad
  • 18. i) Transshipment of cargo from a gateway airport to an inland airport: Steps involved: • Import the cargo • File application and avail for transshipment permit • Transport to transshipment warehouse of the domestic carrier under the Customs preventive escort. • Acknowledgement of goods by the customs officer • Execution of bond with the domestic carrier • Preparation of EGMs by domestic carrier on receipt of goods • Copies of EGMs sent to customs at the destination airport • Checking at the destination airport with reference to EGM • Final clearance
  • 19. ii) Transshipment of cargo received at an airport in India from an airport abroad to an a abroad Steps involved: • Receipt of cargo to be transshipped at an airport • Storage of transshipment cargo under Customs supervision by the concerned airline • Cargo transfer manifest is required to be presented in triplicate to the Customs. • Loading of cargo in the aircraft is undertaken under the Customs supervision
  • 20. iii) Movement of export cargo from an inland airport to an airport abroad through an Intermediate airport in India Steps Involved: • Filing shipping bills • Assessment of goods at the domestic airport • Safety Assurance by furnishing bonds at domestic airport • The domestic carrier is to carry cargo only under E.G.M. duly certified by the Custom • At the gateway airport, transportation of the cargo received to the transshipment wa • The domestic carrier presents the EGM copies to the officer in-charge of warehouse • Storage of goods in transshipment warehouse • Filing cargo transfer manifest to the Customs by the domestic carrier • Transportation of goods in closed trucks under Customs supervision to the warehou foreign airlines • Reconciliation of records by officer in-charge on the basis of EGM submitted • Endorsement evidencing receipt of cargo and subsequent export on the copies of E • brought by domestic carrier from the originating airport.
  • 21. • Worldwide • Overall growth estimation • Increasing fleet demand • Traditional v/s Express • Air cargo traffic growth • New opportunities on horizon
  • 22. • India • Greenfield airports in various cities • Increased FDI limit from 49% to 74% • Increasing fuel prices, a worry • Upcoming MICH at Nagpur, will greatly benefit Indian exporters • Domestic growth expected at 9.9%
  • 23. • Global scenario challenges • Security concerns • Risk of developing over-capacity • Upward wage pressure • Domestic challenges • Increasing tariffs(25-30% increase in last 2 yrs) • Lack of infra and high inventory cost • Optimistic view
  • 24. Thank you