The civil aviation ministry might look at allowing cargo carriers like Blue Dart and UPS to do their own ground handling at airports. This is a result of a recent representation by Blue Dart, the country’s largest operating cargo carrier, against the new ground handling policy which will come into effect in airports from January 1, 2009.
The representation criticised the proposed policy, saying it ignores the needs of express cargo services which require special handling and would only be increasing their costs and decrease efficiency of the operations.
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The representation also said that express cargo carriers like Blue Dart should be allowed to do their own handling at the airports rather than being forced to outsource to others as per the policy. Cargo carriers in the US and Europe are allowed to do their own ground handling.
“We have engaged consultancy firm PriceWaterhouseCoopers (PWC) to look at the air cargo policy, which will be finalised in some time. Issues being looked at include allowing cargo carriers to do their own ground handling at airports. We understand that ground handling agents may not be skilled enough to handle express cargo which is operated by freighter airlines,” said a senior civil aviation ministry official.
Express cargo is a specialised form of cargo which entails time-bound deliveries and a money back guarantee. It also involves a system through which the customer can track the whereabouts of his consignment.
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The ground handling policy says that the same set of agents would handle passenger baggage, cargo that is carried in the bellyhold of passenger aircraft and express cargo. Ground handling agents like Menzies Bobba and Air India-Sats already do the ground handling at Hyderabad and Bangalore airports.
Cargo executives said that express cargo in both these places have seen an increase in delays both in sending and receiving shipments, which leads to additional costs since any delay beyond the promised delivery period means the money has to be returned to the customer. Carriers also say outsourcing the work to ground handling agents requires them to pay additional charges. The cost impact would be more than passenger carriers since they would be leveraged over a small number of players.
“The proposed ground handling policy would significantly impact the quality of air express airline operations and render the business untenable. We would recommend a review of the policy to exclude air express airline operations because of the special needs of the segment that are completely different from the passenger segment and because of the significant role air express cargo plays in trade facilitation within the country and across borders. We are making our representation to the ministry,” said Tulsi Mirchandaney, managing director, Blue Dart.
Express cargo carrier executives said that handling express cargo requires a special kind of training and time-bound efficiency to implement the services.
“For instance, express cargo includes specifications like putting priority cargo above non-priority cargo. Also, the shipments need to be sorted destination wise, colour coded, bagged and subject to various scans at various airports. This requires a dedicated workforce trained by the company to carry out the jobs,” said a cargo carrier executive.
“Also, once the policy comes into action, a huge trained workforce which currently does the ground handling for cargo carriers would lose their jobs,” he added.
Due to limited infrastructure, the express cargo industry in India has grown at a slower pace than the world. More than 80 per cent of the world’s total cargo is carried by express carriers while 80 per cent of the total cargo in India is carried in the bellyhold of passenger aircraft. The Indian express cargo market is Rs 7,000-crore industry, compared to the US, which is a $95-billion industry.