India: why produce exporters do not use air cargo

Air-cargo, for long a mere bye-product of passenger transport business for airlines looking for extra bucks, is a segment that has begun to look very attractive.

Two major factors, the rapid growth of organised retail that promises imports from all over the world and the surge in exports of fruit, vegetables and flowers from India, have led to opportunities that were non-existent even two years ago. As the world opens up for time-sensitive exports the total volume of exports by air is growing like never before.

"Perishable cargo needs large belly space in an aircraft," says Cyrus Guzder, MD, AFL group. There is currently not enough widebody capacity being offered out of India to do justice to the business, he says. The segment is dominated by Gulf carriers like Gulf Air, Kuwait Air and Air-India, where the order of preference is clearly passenger baggage, bulk cargo and lastly perishables, industry sources said. This is because perishables come with liabilities in case of failure to deliver on time.

Hermes Travel and Cargo is one of the largest agencies in the perishable cargo space, controlling about 60% of the business from Mumbai. Speaking to ET, the company chairman Mahesh Thakker says business is booming. Hermes exports cargo like vegetables and fruit all round the year to hubs in the Gulf and Europe from where it is taken to retail outlets all over the world. Fresh fish like pomfret, which is not frozen, but transported on ice reaches hotels in Singapore and Japan within 24 hours, he says.

Though transportation by air is the fastest and most efficient way to carry perishables, exporters in India who can, have begun to chose the sea route. Lower costs and improved efficiencies of shipping lines make it more attractive, say exporters. Grape and Mango exports, that were earlier made exclusively by air are now being done through refrigerated containers, he said.

Keki Patel, Cargo manager, Emirates Sky Cargo, says meat exports a large chunk of the volumes sent by air earlier, have now moved to the sea because of new rules that forbid export of meat carcasses by air. Now only bonesless meat can be exported after going through stringent packing norms.

On the infrastructure front, some domestic airports have plans to improve their cargo facilities. Among them are the Delhi International airport which has air-conditioned space. Punjab government is planning a perishable cargo centre at the Amritsar airport and Cochin International Airport is building similar facility.

Domestic airlines plan to get freighters into their fleet. Flag carrier Air India has revived its latent operations by sending two A310 aircraft for conversion into freighters. Jet Airways, Kingfisher Airlines and GoAir have all announced their intentions to launch cargo ventures.

Jeh Wadia, CEO of GoAir says he is conducting the feasibility of establishing a low cost cargo carrier. The idea is to compete with the rates charged by existing airlines, railways and truckers. How many of the plans actually materialise remains to be seen.

Source: economictimes.indiatimes.com