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Operations of air cargo

it covers operations of air cargo, growth of air cargo in domestic as well as international and transshipment process.

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Operations of air cargo

  2. 2. IMPORTANCE OF AIR CARGO INDUSTRY The Air Cargo Industry acts as an engine of growth for the air transport sector and economic growth. Aircraft carry 2% of international trade by volume, but 40% by value. Growth of Air Cargo industry is directly related to the GDP. Vital to development of Global Economy.  Key to on-going success of Globalization.
  3. 3. GROWTH OF AIR CARGO INDUSTRY De-regulation and liberalization of air Transport Industry.  Global interdependence helped by world trade agreements (thru WTO) or increasing regional accords such as EU, NAFTA, ASEAN, etc.  International production and sales of goods and services.  New inventory management concepts such as “Just-in-Time” and “Zero” stocks.
  4. 4. GLOBAL SCENARIO  Since 1970, The Air Cargo market has doubled in volume over ten years and is expected to continue growing at an average annual rate of 6.5 per cent over the next two decades. Boeing forecasts that 60 million tones of cargo will be transported by air in the year 2017, thus tripling 1977 volumes.  The past trends show that cargo traffic growing faster than passenger traffic. Within the cargo traffic, the international component increasing faster than the domestic component.  According to ICAO “Outlook for Air transport to the Year 2015”, the international cargo traffic likely to increase by 5.8 per cent per annum.
  5. 5. INDIAN SCENARIO In the past, the growth in air cargo had been faster than the growth in passenger traffic. The trend has changed. In recent years Passenger traffic, both international and domestic increasing at a higher rate than the Cargo traffic. According to AAI forecasts, the Passenger traffic is likely to increase by 18.8 per cent per annum during the Eleventh Five Year Plan (2007 to 2012), where as, Cargo traffic is likely to grow only by 11.4 per cent. International Cargo Traffic likely to grow at the rate of 9.8 per cent while the Domestic Cargo Traffic expected to increase by 8.4 percent.
  6. 6. INDIAN SCENARIO(conti…
  7. 7. STEPS INVOLVED IN AIR CARGO LOGISTICS Source of Cargo Regional Warehouse (Source) Central Warehouse (Source) Freight Forwarding Transshipment of Cargo Central Warehouse (Destination) Regional Warehouse (Destination) Destination Intended
  8. 8. PLAYERS INVOLVED  Shipper (or Consignor) – the one who requests service in transporting the cargo (source node of the supply chain)  Freight forwarder (or forwarder) –the forwarder typically arranges for the transportation of cargo from the shipper’s warehouse, delivers (or has a contractor deliver) it to the departing airport, prepares the necessary paperwork, picks up at the arriving airport, and delivers (or contracts for the delivery) to the consignee.  Carrier – The firm who provides the air delivery of cargo from the origin airport to the destination airport. There are primarily two classes of carriers: cargo carriers that primarily carry cargo and freight (e.g. FedEx, DHL), and combination carriers that carry both passengers and cargo that is stored in the bellies of aircraft (e.g. Korean Air, Lufthansa, Delta).
  9. 9. PLAYERS INVOLVED  Ground Handler – An agent at an airport that physically handles the freight; this usually refers to whenever freight is loaded, unloaded, transferred, stored, retrieved, broken down, or consolidated.  Consignee – The receiving party that the goods are sent to (sink node of the supply chain).
  11. 11. I) Transshipment of cargo from a gateway airport to an inland airport Steps involved:  Import the cargo  File application and avail for transshipment permit.  Transport to transshipment warehouse of the domestic carrier under the Customs preventive escort.  Acknowledgement of goods by the customs officer  Execution of bond with the domestic carrier  Preparation of EGMs by domestic carrier on receipt of goods  Copies of EGMs sent to customs at the destination airport  Checking at the destination airport with reference to EGM  Final clearance
  12. 12. ii) Transshipment of cargo received at an airport in India from an airport abroad to an airport abroad. Steps involved:  Receipt of cargo to be transshipped at an airport  Storage of transshipment cargo under Customs supervision by the concerned airline  Cargo transfer manifest is required to be presented in triplicate to the Customs.  Loading of cargo in the aircraft is undertaken under the Customs supervision
  13. 13. iii) Movement of export cargo from an inland airport to an airport abroad through an Intermediate airport in India  Filing shipping bills  Assessment of goods at the domestic airport  Safety Assurance by furnishing bonds at domestic airport  The domestic carrier is to carry cargo only under E.G.M. duly certified by the Custom.  At the gateway airport, transportation of the cargo received to the transshipment warehouse.  The domestic carrier presents the EGM copies to the officer in-charge of warehouse.  Storage of goods in transshipment warehouse  Filing cargo transfer manifest to the Customs by the domestic carrier  Transportation of goods in closed trucks under Customs supervision to the warehouse of foreign airlines  Reconciliation of records by officer in-charge on the basis of EGM submitted  Endorsement evidencing receipt of cargo and subsequent export on the copies of EGM brought by domestic carrier from the originating airport
  14. 14. Air Freight- Services and Pricing  Domestic:  Same Day  Overnight  Second Day  Deferred (3-5 business days)  Time Definite  International Services:  Consolidation Service  Direct Service  Door to Airport  Door to Door