Sunil Arora, Managing Director, Delta Air Freight, and President of Air Cargo Agents Association of India, is the man who has always been seen at the forefront with his strong opinions whenever any situation has impacted the air cargo industry. Once again, he has openly shared his views on the situation of the freight forwarding and exports amid the prevailing adverse situation due to pandemic Covid-19. Increased freight rates and less support from the government are his major concerns.
Here are the 5 major takeaways from his discussion with APACE DIGITAL CARGO.
- Exports have begun and have seen decent jump in export volumes since the shutdown. Majorly, pharma and perishables have seen the exports. However, it must not be forgotten that primary air export commodity has been apparel and handicrafts from India to the West, which have been suffered and continue to see a sharp decline in exports. The merchandise are decently priced and probably cannot afford the increased freight rates and other attached logistics cost. With not much support from the government by way of direct subsidy or reduced handling cost from airport custodians, transporters etc, full recovery seems to be a distant reality.
- Freight capacity has been considerably low and deployment of additional frequencies is a hesitated affair. Initially even freight airlines did not optimally utilised their available fleet, but now in last 6-8 weeks with much increased revenue generation, airlines see freight as much priority over passenger movement. This Covid times has distinctively proved and established the importance of cargo with every airline, especially with Indian flag carriers.
- Main problems are: steep hike in air freight rates with no rate control mechanism. We all understand that market demand supply situation governs rates in every industry but in logistics industry it is different. Government must provide either direct freight subsidy to exporters, logistics handling cost rebates to airport operators through AERA and keep a complete control on multiple times hike in freight rates. With our own national airlines not in a position to deploy maximum space available for EXIM industry is leaving a breeding ground for other major international freighter players.
- Freight forwarders get no support from government; no reduced rates on lending overdrafts; just moratorium schemes are not enough. We play a very integral role in protecting promoting and participating proactively to support EXIM industry.
- IT and Automation in the process management of custom clearance have delivered significant and vitally required new interface and modules. I congratulate CBIT for the same. I at the same time appeal Ministry of Finance through Ministry of Civil Aviation and Ministry of Commerce to give an empathetic consideration if not sympathetic. Freight forwarders, Custom Brokers, truck operators, warehousing and distribution network, CTOs are going through toughest times ever. I urge the government to support us.