From airports to cargo hubs: An untapped potential

Infrastructure developments have been rapid in India’s air cargo industry; however, when we look for Indian airports that could boast cargo hubs of world standard there aren’t any close to the top ones at airports in Hong Kong and Dubai. But the potential is huge. Jasleen Kaur

India seemingly has all the ingredients to be one of the world’s great air cargo centers. Rapid growth of international trade, a huge manufacturing engine and a population of more than 1.2 billion all bode well for the industry. However, for a variety of reasons, India has not realized this great potential to a broader extent. The historical challenges facing India are well documented; inadequate infrastructure in particular has proved a major stumbling block in further developing the country’s air cargo sector.

Few months ago, Air Cargo Forum of India organized a seminar on ‘Transforming India airports into international cargo hubs’ in New Delhi where Union Minister of Civil Aviation P Ashok Gajapathi Raju said, “Infrastructure and airlines have great role to play for developing cargo hubs. Now it is the right time to translate ideas into actions. We (the government) are eagerly looking for ideas from the industry players to work together. Let’s work together to turn our dreams into a reality.”

Elaborating the elements required to create a resourceful cargo hub, Indana Prabhakar Rao, CEO, Delhi International Airport Limited (DIAL), said, “Sound infrastructure till the end point, rationalized policies and networking are three factors to make an efficient cargo hub. There is a need to make an end to end value chain. We need some sort of efficiency and reduction in cost in order to make it successful.”

“Here the question is how and what can be done to convert Indian airports into international sky cargo hub. An integrated multi-modal hub should include connectivity as well as accommodation and other services. It is essential that related sectors such as access to manufacture, business, and tourism and pilgrim centres are also developed,” Rao added.

Sam Katgara, owner of a freight forwarding firm Jeena and Company, said, “The government’s ongoing effort to develop infrastructure, the easing of regulations for foreign investment in aviation and the introduction of cargo hubs and Special Economic Zones figure to provide momentum for the growth of air cargo in the coming years. Air cargo is not recognized as an industry by the Indian government, which has not shown a strong commitment to making it efficient and viable.”

He woefully added, “Cargo is generally the last part to be thought of and is relegated to that part of the airport, considered not important otherwise. This leaves the entire logistics of cargo – infrastructure and facility – in woefully inadequate and poorly-managed area of the airport. Cargo infrastructure is much more than the cargo terminal, but also includes special facilities for express freight, temperature-controlled goods, airmail and hazardous goods. Therefore, development of cargo hubs is essential for India’s major airports.”
Offering a different point of view, Tushar Jani, Chairman, Delhi Cargo Service Centre (DCSC), said, “It’s a myth that India has lack of infrastructure, the need is to use the available infrastructure efficiently. ‘Make in India’ would never be successful if cargo is sitting outside. Thus, customs should play a role only when cargo is moving out of the terminal, thereby reducing the turnaround time.”

Considering its geographical location, India, especially Delhi, has the potential to become a global hub for air cargo. Not only its geographical location but also the amount of international trade that the country is engaged in now makes India a good location for such a hub. Even a place like Dubai, where there is any manufacturing, has made itself a good cargo hub destination. There is no reason why India with all its growth in manufacturing sector and exports and imports could not become another global hub.
Similarly, with a vision to create Rajiv Gandhi International Airport (RGIA) Airport as the cargo hub of India, Hemanth DP, COO, Hub Development, Free Trade Zone and Logistics Business at Hyderabad airport, said, “My aim is to make the Rajiv Gandhi International Airport (RGIA) the logistical hub of India and South-Asia. To realize this vision, we have leveraged the strategic central location of Hyderabad, built excellent infrastructure and unique air logistics centric businesses such as India’s first airport-based Free Trade Zone (FTZ). When something is imported, the inventory has to be stored for a period in the importing country because components have to be stocked and assembled and this doesn’t happen overnight. Moreover, the minute something enters India, you need to pay duties and taxes on it. The assembling, the packaging of goods inside a free-trade zone, as the name suggests, doesn’t attract duties and taxes and you save all these upfront costs till later. The same applies to the goods you export. It is the unique offerings such as free-trade zones, other than excellent infrastructure, and strategic locations that have made the airport of Singapore and Dubai the best and largest in the world.”

Multimodal cargo hubs are a need of the hour especially in India. Due to severe infrastructure constraints at existing airports , the shipments have to spend a lot of time in transit from the shipper’s location to the gateway airports and vice versa. The potential is huge as airports and airlines along with the government are considering this seriously and coming to forefront in a big way.

With the vision-2020 provided by the civil aviation ministry, India is expected to touch nine million metric tonnes by 2020. The year 2020 would witness India in top ten ranking of the largest international freight market with supplies pouring in from US and China. Enabling the entry of private participants by eased governmental policies, India forecasts growth of the Tier-2 and Tier-3 cities for building air cargo hubs to offer better connectivity by effectively channelising the chaos of the metro cities.