The woeful lack of infrastructure notwithstanding, the Indian aviation sector has started dreaming big. “India,” according to Dr. Nasim Zaidi, the government’s Civil Aviation Secretary, “has the potential to emerge as a global trans-shipment hub.”
     Dr. Zaidi has been taking a special interest in air cargo and has initiated moves over the last year or so to ensure that the sector is comparable to those in developed nations. He was instrumental in setting up the Working Group on Air Cargo/Express Service Industry. The group was entrusted to address the issues related to the air cargo industry, report on the current situation of the industry, and assess its future growth potential. The Group, comprising representatives from the airline industries, airports, cargo associations, the Customs department, and the Ministry, has completed a detailed study of the existing system of services available and identified areas that require further improvements to seize the emerging opportunities in international trade and in the context of the faster pace of economic growth in India.
     Aware of the bottlenecks at Indian airports, Dr. Zaidi said there was “a need to decongest cargo terminals with simplification of customs procedures, greater use of mechanized handling and speedy clearances of shipments.”
     The civil aviation ministry has geared up to infuse new life in the sector. As Secretary Zaidi pointed out, the government was working on a new civil aviation policy that would specifically seek to promote private investments in the ailing sector. “We have decided to frame a new civil aviation policy that will help meet the challenges of the next decade. The challenges are wide-ranging, from viability of the sector to human resources. The policy will encompass all that,” Dr. Zaidi said.
     The policy will be applicable for 10 years and will be the foundation for a promotion board for air cargo. “We have about five months to complete the process,” said Dr. Zaidi. Meanwhile, he emphasized, the air freight stations at Mumbai and Chennai—the two were set up some time ago, but have yet to start functioning—would start operations soon. The Secretary also hoped that to keep up with the booming traffic in cargo, customs procedures would have to be reviewed for speedy clearance of cargo.
     The Secretary’s assurance about the new policy comes at a crucial time. There was an urgent need to help the air cargo industry to not only stand steady on its feet, but also march ahead. Dr, Zaidi underlined the fact that GDP had been growing annually at nearly eight percent (though this year, the growth might not be there at all) and that the air cargo industry had recorded an average annual growth of 12 percent. Indian airports, in fact, had handled a total of 2.33 million tonnes of cargo in 2010-11. While domestic cargo is expected to increase from 0.8 million tonnes to 1.7 million tonnes by 2016-17, international cargo will move from 1.5 million tonnes to 2.7 million tonnes during the same period.
     It is not that the situation has not improved. Air cargo pundits say that the Foreign Direct Investment (FDI) limit in cargo airlines was raised by the government from 49 percent to 74 percent and that has attracted players from abroad—especially those from the Middle East—to expand their Indian network.      What remains unknown is whether the future will promote the start of Indian cargo operators.
Tirthankar Ghosh

     A major strike has hit Port Klang, Malaysia, causing container movement to almost come to a complete halt as of May 2.
     FlyingTypers learned Malaysian freight haulers launched the strike against depot operators in Port Klang over what the haulers say are “inefficiencies in releasing the containers in agreed upon time frames and other issues, including fees.”
     Port Klang haulers feel the port operators, in addition to an “unjust financial and service squeeze,” have pared service delivery with common waiting times that can be as long as 6 hours.
     Haulers are also enraged over an abrupt increase in Depot Gate Charges that feel unjustified and without merit.
     “Closure of normal shipping in Port Klang, Malaysia’s major ocean gateway, will cause shippers to seek alternative solutions just as ocean business is showing some signs of a pulse,” a source said.
     Stay tuned . . .

      China’s leading carriers will continue to occupy a more prominent position on international routes to and from the country as government policies and their own investments enable them to build market share, believe leading analysts and industry executives contacted by FlyingTypers.
      According to figures from the Seabury Group, four of the top carriers in China on international scheduled routes featuring wide-bodied capacity are already Chinese, with Air China leading the way with 15 percent of the market (see chart). The only foreign carrier to make the top five is Korean Air Lines with 5 percent of the market. Integrators, which currently take a big chunk of cargo markets, do not feature because large parts of their capacity are typically unscheduled.
      A spokesman for Seabury said “the combined share of the big Chinese carriers increased from 30 percent a few years ago to 35 percent today.” Carrier executives predict the trend will accelerate in the future.
      Alvin Tay, Vice President Sales and Marketing at second-placed China Cargo Airlines (CK) which boasts some 12 percent of the market, said the Chinese government was encouraging the growth of Chinese carriers and this had prompted the formation of several cargo joint ventures over the last few years, not least CK itself, in which China Eastern Air Holding Company holds 51 percent, China Ocean Shipping Group [COSCO] 17 percent, and both EVA Air and Singapore Airlines Cargo retain 16 percent each.
      “During the Great Recession of 2009, the Chinese government identified logistics as one of the ten key industries of the Chinese economy,” he said. “In that respect, being part of the logistics chain, freight carriers are certainly part of that equation. In the latest 12th Five Year Plan, logistics is again identified as one of the key service industries that must see greater development and growth.
      “We believe Chinese carriers will continue to grow and expand their network and presence on overseas lanes. For China Cargo, we will continue to look at our network to rationalize and improve it. We will be increasing frequencies to existing destinations and adding new points to the network as we expand our fleet.”
      He admitted China would remain a target for foreign lines looking to expand, but said the market would favor those with domestic networks. “[Foreign carriers are expanding at] all established airports such as Beijing, Shanghai and Guangzhou, but also at up and coming airports in the western part of China,” he said.       “We expect Chinese carriers to gain more market share but at the same time we have to note that the overall market is expanding.”

      Won-Joon Lee, a Managing Partner at consultants Accenture, said China’s airlines have a huge opportunity in the coming years to win a growing share of international business and build a strong presence at both ends of the supply chains into and out of China.
      “The reason is that China as a country, and its leading operators, are currently investing in a massive capacity expansion,” he told FlyingTypers.

      He said that over the next five years, China planned to build 45 new airports as part of a RMB1,500 billion investment in its aviation sector, including the construction of ‘merchant’ airports dedicated to cargo movements.
      “This is providing the opportunity to leapfrog established competitors with outdated infrastructure by putting in place new logistics based on the latest thinking and management technologies,” he said. “In turn, Chinese operators—and those with international joint venture partners—should be able to offer highly competitive pricing and superior service.
      “If China’s new airports are created in a strong partnership with the air cargo industry, there is a significant opportunity to put in place exceptionally efficient processes that enable the same sort of gains that other leading Asian destinations such as Korea and Singapore have achieved in both freight and passenger carriage.
      “If China’s airline industry can make similar gains, it not only stands to win a greater share of the cargo market, it should help to make air cargo more competitive with sea and land freight.”
SkyKing

     Shawn McWhorter has a stone in his shoe.
     Actually, the O’Hare Chicago-based President, NCA Cargo Airlines North America with big responsibilities is not limping around, and in fact the last time we saw him, he looked in good shape and was moving about quite well. His ongoing concern is that people in air cargo do not know how big an air cargo factor NCA is in America, where the all-cargo carrier is actually number one (non-integrator) with tonnage, in terms of international operations at Chicago’s O’Hare International Airport.
     Today, NCA has offices in New York, Chicago, Atlanta, and San Francisco, plus a flight operations office at Anchorage, and Hermes as GSA for its services in Mexico.
     “We have a large freighter network between Asia and USA and are looking right now to connect to Latin America to better serve our customers who are concerned as to how they can route their Latin American cargo to and from Asia.
     “We operate line flights between Japan and San Francisco, Los Angeles, Chicago, and New York.
     “But we are also quite interested in connecting between Latin America (Mexico) and our Los Angeles all-cargo services.
     “In terms of business in 2011, we felt a temporary affect in the shipment of electronics and automotive production (automotive parts is 15 to 20 percent of NCA’s business from the region) as a result of the earthquakes.
     “But that business has really come back.
     “In November 2011 the impact on our business from the flooding in Thailand had made things interesting, because many of the auto manufacturers (Honda/Toyota) had been dual sourcing auto parts between the USA and Thailand, but with Thailand unable to produce, we saw a push to move sourcing to Japan from the USA, and that increased our two-way Trans-Pacific business.”
     Right now Mr. McWhorter notes:
     “Security is top priority, but understanding our customer’s requirements is also a constant at NCA as we continue to increase our flexibility to deliver.
     “That is what NCA is all about.”
Geoffrey

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