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

1. OPERATIONS INVOLVED IN AIR CARGO
INDUSTRY
BY:
RAJIV BABU CHINTALA

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. 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. 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. 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. INDIAN SCENARIO(conti…

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. 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. 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).

10. TRANSSHIPMENT -PROCESS

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. 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. 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. 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

16. ASSOCIATIONS OF AIR CARGO
INDUSTRY
INTERNATIONAL ASSOCIATION:
 IATA
DOMESTIC ASSOCIATION:
Ministry Of Civil Aviation
DGCA
ACAAI