“Govt-led initiatives have potentially redefined the logistics business”
In an exclusive interview with Apace Digital Cargo; the industry veteran Vipin Vohra, Chairman, Continental Carriers Pvt Ltd talks about the post pandemic strategy – digitalisation, E-commerce. He talked in length about the focused areas, expansion plans and how the initiatives launched by the government can boost their plans. CCPL is all set to launch India’s first Greenfield air freight station, which is one of the major initiatives towards controlling logistics costs, he shared. Excerpts from his interview –
How has been the changing scenario of the air cargo industry in terms of digitalisation, new cargo airlines coming in and even the ocean carriers are making a mark in the air cargo? How do you see the contribution of Continental Carriers towards the industry?
Air Freight is one sector that is truly lacking in digitisation endeavours. The lack of a digital mindset is preventing the stakeholders from collaborating efficiently. A large number of Air Freight forwarders and even the carriers still rely on manual processes which stand in the way of end-to-end visibility and transparency from the customers’ standpoint.
Covid -19 pandemic has accelerated the process of digitization in the Air Freight sector with the large-scale adoption of many emerging trends including supply chain digitization, and end-to-end visibility by increased data sharing. AI, automation, and Big Data are some of the phrases that have made it into the vocabulary of the air cargo sector as technology continues to overthrow the old ways of doing business. Some of the primary objectives of automation of the air freight industry are enhanced customer experience, online services, transparency of data, and a sustainable future for the air freight industry.
By ‘Digitization of the Air Freight industry’, we mean a transformation of the way in which the stakeholders operate and interact with each other to create a seamless journey for the digital customers. This seamless journey of the customers necessitates an uninterrupted flow of data and processes among all the touchpoints till the successful completion of the shipment. These touchpoints are not limited to digital booking, digital invoicing, and constant status updates. Digitization in this sector implies the ability to meet client expectations of instant communication, transparency, speed, and streamlined processes. Additionally, air freight companies need to stop their reliance on manual data entry and make way for instant connectivity with the carriers, suppliers, and end customers.
Contribution of CCPL – CCPL is a company which provides unparalleled logistics services that focus on the changes that are impacting the logistics industry. It has more than 65 years’ experience in Air Freight Logistics, and strong relationships with many airlines and logistics integrators. CCPL is well placed to provide nothing but the best service. There is no denying that the future of air freight logistics is changing and evolving with the times. With the rapid growth in technology and the expectation of the delivery of goods, CCPL has future plans to invest in cost-effective and beneficial solutions. These solutions, as and when implemented, are expected to increase revenue, reduce manual labour, and simplify the process.
Moreover, CCPL understands the requirements of both the Airlines and the Ground Handling Agents. Forecasting the market demands, our intelligent solutions, once created and implemented will lead to easy, error-free management.
Air Freight is synonymous with Continental Carriers; such is the benchmark of CCPL in the air freight domain. So what are focussed areas and expansion plans? Any new endeavours plan? Please throw some light on your upcoming air freight station.
Major expansion plans are associated with the commissioning of AFS by CCPL. AFS has been created by CCPL as per the policy guidelines issued by MoCA on ‘Air Freight Stations’ in October 2014. It is an off-airport common user facility equipped with fixed installations of minimum requirements and offering services for handling International Air Cargo in the form of Air Freight Stations with a mandate to enable the Cargo Industry as follows:
- Off-Airport common user facility equipped with fixed installations of minimum requirements and offering services for handling and temporary storage of import/ export goods, loaded and empty Unit Load devices (ULDs) and cargo in bulk/loose for outright export
- Create an enabling environment for promoting International Air Cargo operations by reaching out to hinterland regions of the country besides decongesting the congested Air Cargo terminals in some gateway International Airports that face high dwell time.
- By also specially authorising some of the ICDs to cater to the International Air Cargo operations, the existing facilities in these ICDs, could be fully utilised.
Being pioneer in AFS creation, CCPL has larger national intent to strengthen and develop Air Cargo logistics in the country by creating and operationalizing the AFS.It is expected to reduce the bottlenecks in Air Cargo logistics and help in ‘ease of doing business’ concept, particularly for exporters.
The primary function of the AFS will be:
- Receipt of Export cargo for processing and to make the cargo “Ready for Carriage” condition, including ULD (Unit Load Device) building of export cargo and scanning of Cargo. While ULDs will be the ideal mode of handling cargo for and from AFS, export/import consignments both in palletized/ULD and bulk, loose form shall also be facilitated
- Transit operations by Road to and from serving Airport
- All customs related requirements for import and exports including inspection of cargo wherever required
- Unitization of Cargo
- Temporary storage of Cargo and Unit Load Device (ULDs)
- Re-building of ULDs of export cargo
- De-Stuffing of Import Cargo
- Storage, Examination, Packing and Delivery of Import Cargo
- Auction/Disposal of 30 days old uncleared Import Cargo
In a nutshell, all export and import cargo clearance including Customs related activities like assessment, examination, payment of duties etc., would be provided at the AFS, as is done in any other Customs station.
CCPL is of the opinion that since Govt of India supports this progressive step taken by CCPL, AFS cargo needs to be incentivized by way of lower charges vis-à-vis rates applicable to cargo being handled at the Airport by Air Cargo Terminal Operators.
Being associated and working closely with the government, how do you see initiatives taken by the government for the freight forwarders community? One side National Logistics Policy is unveiled and then comes the government decision to discontinue GST exemption on air freight 18 pc. So do you see these two actions by the government and impact on the growth of the sector and exports?
Government-led initiatives have potentially redefined the logistics business in India. As a result, global investors have realised the merit in investing in Indian logistics businesses, logistics infrastructure and logistics networks.
Recognising freight as a crucial and indispensable component of Indian economic activity, Air Freight community has already won a small battle. Dedicated freight corridors, created/being created across the country, deliver an ecologically and economically sensitive edge in the business of freight that we need. On high intensity corridors, there is a possibility of transitioning loads from road to rail, especially by way of dedicated freight corridors. This will be ecologically smarter as well as economically competitive.
Since its introduction in 2018, the government has extended the exemption from GST on export freight twice. The most recent extension, which lasted for two years, concluded on September 30, 2022. Freight forwarders community including ACAAI, FFFAI etc have written to Hon’ble Finance Minister,Govt of India, requesting an extension of the previously-granted exemption from the GST on export freight. It has been claimed that failure to grant the extension “will compound their liquidity challenges”. If the exemption is not extended for another term, exporters would be required to pay 18 per cent GST on export freight, which will increase the logistical costs for Indian commodities on the international market. Early decision will be very much appreciated by the exporting community which is passing through a difficult phase and is likely to become further difficult in months to come.
E-commerce and digitalisation are the trends of the industry. Even “Digital freight forwarder” is the latest term to be used. What do you have to say on this? How will it impact the traditional freight forwarding? How to cope with the changing trends in the industry?
The Air Cargo Industry, over the past two years, has reshaped massively. Due to the Covid -19 pandemic outbreak, the industry faced a downfall, later shifting to the transportation of vaccines and perishable goods. Over the years, the Air Cargo Industry has evolved, and its importance has increased manifold. The effect of COVID-19 also led to the industry’s transformation into digital modes. The Air Cargo ecosystem promises to grow in diverse ways and become environmentally conscious in the upcoming years.
The trend which fetched the most light during the pandemic is the rise of e-Commerce. To date, this trend has been the most beneficial in terms of speed and efficiency of transportation. The consumer has been satisfied with the quick deliveries. According to a report published by IATA, cargo demands increased in 2021 compared to 2020 and are growing in 2022. The rise of the e-Commerce sector has benefited both the shipper and consumer. With the use of the latest technology, consumers are also able to track their shipments.
With the onset of the pandemic, there has been a shift in consumers’ shopping habits. With the rise of e-Commerce, companies have realised the importance of increasing the number of fleets and capacity. With the increasing demand and competition, organisations have started providing end-to-end services. This has resulted in the eradication of traditional methods. For instance, Amazon has expanded its services to Amazon Air Services to ensure seamless delivery. Mutual partnerships between shippers and airlines have constantly been booming.
On a global scale, businesses are starting to rely more on air freight logistics; Air Cargo has become a common option in a wide variety of sectors and industries, with most logistics companies offering it as standard.
From all of this, it can be concluded that supply chain diversification is a growing trend which will be important moving forward into the future. As gradual as its growth may be, the trend is already well established on a global scale.
ACAAI 46th Convention is all set to take place in Bangkok from 24th to 27th Nov, after a gap of 2 years due to pandemic situation; what is your anticipation for the convention as post pandemic scenario and resilience of the industry will be key topics of the discussions at the convention?
The impact of the Covid 19 pandemic on the worldwide air cargo logistics industry is significant and will affect the industry’s ability to recover from COVID-19. We are grateful to many governments all over the world for taking resolute actions to fight the COVID-19 outbreak. ‘Utilisation of passenger aircraft’, ‘expanded use of the charter flights’, ‘demands on the flexibility in bi-lateral and multilateral regulations’, ‘new standards for operations’, ‘protection of personnel’, we are witnessing new procedures and logistics arrangements almost every day.
During the ACAAI 46th Convention, the emphasis will be on efficiency, recognition of aviation’s role and removing restrictions for operations. We also have resolved to design and develop recovery mechanisms and action plans towards stabilisation and expedited recovery from these economic hardships. We need to implement new procedures within our industry in order to prepare ourselves for potential crises in the future so that we are able to create emergency plans to anticipate this type of crisis. Air Cargo will play a significant role in supporting the recovery of the global supply chain and the economy.