THE AIR CARGO AGENTS ASSOCIATION OF INDIA (ACAAI) - FAPAA

ACAAITHE AIR CARGO AGENTS ASSOCIATION OF INDIA(ACAAI)COUNTRY REPORTFOR THE33rd EXECUTIVE COUNCIL MEETINGOFTHE FEDERATION OF ASIA PACIFIC AIR CARGOASSOCIATIONS (FAPAA)INTHE FIRST WORLD HOTEL GENTING - MALAYSIA9 TH & 10 TH JUNE 20061

ACAAITHE AIR CARGO AGENTS ASSOCIATION OF INDIA (ACAAI)Office Bearers:President:Vice-President:Hon. Secretary General:Hon. Treasurer:Mr. R. Vijay KondathMr. Keshav TannaMr. Bharat ThakkarMr. S.L. SharmaManaging Committee Members:Mr. Sunil AroraMr. Hemant BhatiaMr. J. KrishnanMr. Anil VaziraniMr. Lalit SethMr. Ajit DuttaMr. Rajiv KhannaSecretariat:The Air Cargo Agents Association of India28-B, Nariman Bhavan, 2 nd Floor,Nariman Point,Mumbai 400021Tel: 91-22-22021923, 22025584Fax: 91-22-22824029Email: ho_bom@acaai.org.inWebsite: www.acaaiindya.org2

AIR CARGO INDUSTRY IN INDIA:The Air Cargo Industry in India is poised for significant growth in the year2006-07 after having achieved a growth rate of 20% in the year 2005-06. Withfurther liberalization of the economy and open sky policy adopted by theGovernment the air traffic in India is experiencing a boom and there is significantgrowth across all categories of traffic, aircraft movement, cargo traffic, etc. Theforecast is again a double-digit growth in air traffic this year.This growthreflects the improved economic scenario in the country.This growth whencompared to the comparative data of world airports is significant and the currenttrend indicates growth on a continuous basis. The growth in the economy alsobrings in higher foreign exchange reserves, high inflow of foreign capital, andincrease in the country’s percentage of world trade, which all contributes to theoverall growth.Currently about 50 carriers operate Cargo and passenger services to andfrom India. Few more have announced their intention to enter the growingIndian market. With India increasingly acquiring the status of a manufacturingbase, the cargo segment is hoping to achieve all-round growth. India placedsignificant orders this year for aircrafts and the number of Airlines operating thedomestic and international sector has increased.With the open sky policy, with about 100 airports in the country, anddevelopment and growth of a number of export promotion zones, better3

infrastructural facilities, all-round economic growth will provide further impetusfor growth of Air Cargo Industry. The return of many Airlines who discontinuedtheir operations due to the slump after the attack on World Trade Centre at NewYork to India to commence their operations, is indicative of the bright future forAir Cargo Industry in India.Government, in consultation with all concerned is constantly reviewing theneed for further liberalization of the economy and take steps towardsglobalisation of Trade. The Export-Import Policy announced for a 5 year period(2002-2007) fixed an ambitious target of achieving 1% share for India in theglobal trade by 2007, which is likely to be achieved in 2006 itself.The AviationSector including the Air Cargo Agents/Freight Forwarders will have an active roleto play in this task and the Air Cargo Agents Association of India (ACAAI) is fullyrepresented in the Core Committee constituted by the Government of India(Ministry of Civil Aviation).ACAAI – ORGANISATION & ACTIVITIES:Acaai is the sole representative body of Air Cargo Agents all over Indiaand currently have 234 Active members, 220 Associate members, 42 Allied(Airlines) members, Allied General Sales Agents and Commercial memberstotalling 496 members. With the growths of Air Cargo business more and more4

Air Cargo Agents are getting the IATA registration and consequently themembership of ACAAI is expected to grow further in the year 2006.ACAAI is managed by a Managing Committee consisting of 24 Membersincluding past Presidents and 4 Office Bearers. The Office Bearers (President,Vice-President, Hon. Secretary General and Hon. Treasurer) are responsible forthe day-to-day functioning of the Association assisted by the Secretariat atMumbai. India, geographically is divided into eight Regions and RegionalChairmen represent the members located at these Regions. The ManagingCommittee meets once in two months. The Regional members meet once amonth.In order to achieve close coordination and smooth working relationshipwith Airlines, for the first time, a joint Committee consisting representatives fromAirlines and Air Cargo Agents was constituted in the year 2004 and issuespertaining to the air cargo business has been discussed in this joint Forum.Many of the problems have been resolved and separate Action Sub-Committeeshave been formed to undertake in depth study of such issues, which needs moreattention. The joint action initiated by the Airlines/Agents Committee at Regionallevel is helping in resolving many issues.5

ACAAI has been proactive in projecting issues/problems concerning theindustry with the Government Authorities, Chamber of Commerce, Airlines,Exporters/Importers, etc. ACAAI has taken initiatives and provided leadership onEDI, Aviation Security, simplification of procedures, Airports development, Cargoterminals to name a few. We continue to have very close interaction with theMinistries of Commerce and Civil Aviation, Central Board of Excise & Customs,Airport Authority of India, etc. and have been an active member of varioustaskforces and action groups on export promotion, cargo facilitation, Customs reengineering,EDI, etc. It is the constant endeavour of ACAAI to improve andsustain the relationship between Airlines and Air Cargo Agents.ACAAI is also affiliated to international bodies such as IATA, FIATA,FAPAA, and are actively involved in all activities of the International CargoAgents feternity. ACAAI also coordinates with other National Associations such asFFFAI, BCHAA, FIEO, and AMTOI on common issues and is a member of CentralEmployers organisations such CII, ASSOCHAM & Indian Merchants Chamber,Mumbai.ACAAI organizes a convention every year, where Air Cargo Agents andAirline Representatives, Government Agencies assembles in large numbers for 3days and eminent speakers on various subjects connected with Air Cargo Trademakes presentations, followed by lively question and answer sessions. Collective6

decisions, which are based on consensus, are taken in the Business Sessions.These sessions serve the purpose of providing retraining/refresher programmesfor our members. Further the Conventions provide an ideal platform to network,connect and build business relations for the future. The 33 rd Annual Conventionwas held at Bangkok, Thailand in the month of December 2005. The Theme ofthe Convention was “Air Logistics-New Markets-New Values”, which wasattended by more than 500 delegates from India and Thailand. ACAAI organizedfour Conventions outside India on a continuous basis from 2002, the locationsbeing Colombo, Dubai, Kuala Lumpur and Bangkok. The ACAAI Convention isthe only major event of the air cargo industry in India, at which participationincludes every important segment of the industry, the Departments/Undertakingof the Ministries of Civil Aviation, Commerce and Finance, the Reserve Bank ofIndia, Central Board of Excise and Customs, the Airport Authority of India, theAirlines and the Shippers/logistics/HRD experts.ACAAI also arranges various training programmes for its members andtheir staff on the following subjects directly by ACAAI and also in collaborationwith Air India, the National Carrier. More than 200 people were trained in theyear 2005:1. DGR - Dangerous Goods Course2. DGR - Refresher Course3. Basic/ Cargo Introductory Course7

4. Seminar on Service Tax, Important Tools for International Trading, EDI,etc.In addition, ACAAI also deputes its members to various trainingprogrammes organised by Employers Organisations.For the benefits of itsmembers, an internal Newsletter is published on quarterly basis and circulated toall members.PROBLEMS FACING THE AIR CARGO INDUSTRYThere is no doubt the nation has achieved significant progress and the AirCargo Industry is actively involved in this effort. However, when a comparison ismade with countries like China, Brazil and Gulf countries the achievement lookssmaller. In fact there is a feeling that India could have achieved much more.From the point of view of Air Cargo Industry, the problems we face, theroadblocks for further progress, needs careful review, full involvement ofGovernment, and joint efforts of all concerned including Government machinery,Air Cargo Agents, Airlines, etc. to achieve the desired effect. Major problemsfaced by the Air Cargo Industry are as follows:1) Infrastructure development. In order to compete with other nations, thereis need for World-class infrastructure facilities. The airport needs hugeinvestment, and a beginning is already made in regard to Mumbai andDelhi Airports. We need excellent facilities such as electronic connectivity,large and quick X-ray facility, simplified procedure whether in customs,8

excise, security, need for qualified as well as trained manpower, and quickand efficient processing of cargo movement.2) Even if India have world-class privately managed airports, supportingneeds/systems such as uninterrupted power supply, better network ofroads, ports, and transportation facilities, cargo hubs and cold storagefacilities are absolutely necessary.The delay in developing thesesupporting systems is adversely affecting the Air Cargo Industry andadding to the delay and additional cost. These complex problems needsto be resolved by time bound action plans, which should synchronise withthe emergence of World-class Airports and Seaports as planned.3) The Air Cargo industry in India, which witnessed a steady growth in the70s & 80s, and partially in 90s, is today faced with a number of challengesof low growth and profitability, lack of modern technology/system in theworkplace, and adoption of operational and marketing methods that caterto the specific and extensive needs of the customers.The Air Cargoindustry is an inherently dynamic, flexible and qualitative mode oftransportation and can value add the supply chain in a dynamic manner.Logistics is becoming a vital necessity and hence the role played by AirCargo industry is dynamic, in concepts of international sourcing,manufacturing and marketing. Air Cargo is no longer simply moving aproduct from one airport to another. It now encompasses end-to-endcargo care, with a higher degree of time sensitivity. The concept is now9

total distribution, door to door, which needs higher involvement,professionalism and responsibility and liability for each segment in its role.4) Information management in Systems and Communication plays a criticalrole in the global trade.The introduction of electronic commerce inWorld-trade as the exclusive means of documentation and processingmeans this type of documentation brings the need and urgency for India,to achieve the international criteria in this regard.5) Another problem facing the Air Cargo industry is the diminishing return toall the players in the industry. Airlines are squeezed of their profits, AirCargo Agents are worried about the ever increasing cost of theiroperations and the perpetual reduction in their earnings, Shipper andexporters are aggrieved on the increase in freight and other costs forexports. A number of surcharges such as fuel surcharge, securitysurcharge, war risk surcharge, X-ray screening charges, etc. adds to thefreight cost and surcharges should not be used to generate revenue tocover regular operating expenses, which should be through revision ofprices/freight.These issues have been taken up by ACAAI at theappropriate forums.6) There is no official joint forum constituted by the Ministry of Civil Aviationto deal with common problem facing the Aviation industry as such. Thereis need for a joint council consisting of the representatives of Ministries ofCivil Aviation, Commerce, Finance, AAI, Airlines, Cargo Agents,10

Shippers/Exporters’ body, Central Employers’ Associations, etc., whichshould meet periodically and review the targets fixed and achieved andissues connected with the Air Cargo industry. In the absence of a jointcouncil, there are no coordinated efforts to resolve the issues and rectifythe anomalies.There are several problems, which needs urgent attention and there isneed for improvement in the way we do business in Air Cargo industry inIndia. It is vital to resolve these problems jointly in a coordinated fashionto achieve the economic development of the Nation.In conclusion ACAAI in India is sole recognized body of Air Cargo Agentsin India endeavouring to protect and safeguard their collective interests.*********11