The air cargo sector failed to emulate the success of the
container freight station (CFS) in the maritime industry. With the growth in
air cargo traffic across the country, more so in Chennai, there is now a
growing demand for the revival of the air freight station (AFS) to help
customers get their cargo for production at the shortest possible time.
The concept of AFS
was first introduced in the country nearly some six years ago, in Chennai, to
help customers take delivery of cargo in one or two days. (Currently they have
to wait for a week.) However, the concept was buried, as also the
infrastructure created for the purpose at the Central Warehousing Corporation
in Virugambakkam.
Lagging behind
The maritime industry understood the concept of an
off-dock freight station and used it effectively to prosper. On the contrary,
the air cargo sector failed to understand the benefits of an AFS and is lagging
behind with delays in clearance of cargo from the airport, said G. Raghu
Sankar, Chairman, Logistics Committee of Southern India Chamber of Commerce
& Industry. “Please revive the AFS,” Sankar appealed to senior officials of
the Civil Aviation Ministry at a recent seminar in Chennai. The trade is
deprived of the fruits of a good project (AFS) as it has become a non-starter,
he said.
Being closely
involved in bringing India’s first AFS to Chennai way back in 2007, Sankar
feels saddened that the concept did not take off. It was one of the best
projects in the aviation sector. But, unfortunately, it did not go through.
Even the second AFS at Mulund in Mumbai did not take off, he said.
The AFS is similar
to a container freight station (CFS) in the port sector. In fact, Chennai has
the maximum number of CFSs in the country. The moment the cargo is off-loaded
from the aircraft in the form of a unit load device (ULD, which is equivalent
to a container for sea) it has to be moved to an AFS, where the de-stuffing
happens. Customers can take cargo from the AFS instead of the air cargo
terminal at the airport.
i t is the reverse in exports. All the cargo stuffing can
be done in the AFS and the Customs can clear the cargo at the facility. The cargo
can then be moved to the airport for clearance though the security requirement
of screening of cargo is yet to be addressed.
Air cargo volume
in Chennai has been growing progressively, and even recording a double digit
growth consistently. While the storage space was shrinking, volumes were ever
increasing, which prompted the Air Cargo Agents Association of India (ACAAI)
and Chennai Custom House Agents Association to suggest and pursue AFS as off
airport location facilities.
Unfounded fears?
Secondly, in the absence of competing facility there is
no value addition or qualitative improvement in services. Once an alternative
is available then there is a need to be efficient, said Siva Subramaniam,
Member of the Managing Committee of ACAAI.
There is a reason why AFS did not take off, says Krishnan
of ACAAI. The Airports Authority of India (AAI), which has been controlling the
air cargo operations, felt that it may lose control and revenue if cargo is
moved out to an off-dock AFS.
“Both are ill-founded and are an indication of the myopic
outlook of the custodian. Both private container terminals inside the Chennai
port have not lost revenue or control due to multiple CFS and, in fact, these
facilities have complemented the terminal and allowed further growth,” said S.
Vijaykumar, President, Chennai Customs House Agents Association.
The concept of AFS
was conceived to reduce congestion in the airport premises, by permitting
transfer of cargo to designate/customs-notified freight Stations — AFS or ICDs
— through bonded trucking operations. This would facilitate greater throughput
efficiency, reduce dwell time, and maximise the utilisation of installed
capacity. AFS is an innovative solution that would complement an Air Cargo
Terminal.
This concept of
Off-Airport Cargo processing is well-known globally and has been proved as a
successful model in maritime cargo sector in India, feels Sankar.
Normally, AAI
takes two days to complete the handling formalities and make the cargo ready
for delivery. This means, only one day would be available for an importer to
clear the cargo without any penalty.
If the ULD is moved to an AFS (this has to be done within
8 hours of the cargo offloaded from the aircraft), the cargo can be made
available in less-than-a-day’s time as per Customs directive and, hence, penal
charges could be avoided by an importer, said Sankar.
Road blocks
After the AFS was notified, initially, AAI wanted same
terminal, storage and processing (TSP) charges to be levied and paid to them.
They wanted users to pay additional charges for handling at the AFS, including
transport, storage to and at AFS. This was found to be unviable and, hence,
there were no takers for the facility.
Subsequently, when
AAI marginally reduced the TSP charges, interest of the users in the facility
was lost due to undue delay and uncertainty, which were purely the creation of
AAI, said Asad Cassim, Secretary, ACAAI.
Customs have
permitted transport of individual packages, container cargo and ULDs for both
export and import cargo clearance at AFS. However, it has been noted that
existing AFSs, as notified by Customs, have not been made operational. The key
reasons for this non-operationalisation of AFS include lack of enforcing
procedures in place for off-airport clearance facilities, absence of legal
framework to ensure creation and utilisation of AFS, instead of mere
notification of the facility, lack of enthusiasm on the part of carriers and
airport operators to support this concept, he said.
Even the economic
adviser to the Aviation Ministry, M. Kannan, strongly advocated for AFS.
Repeated attempts to revive it have not borne fruit. It is a global practice,
which has been thrashed. The airline industry should take a cue from the port
sector in Chennai. There are 33 CFSs in and around Chennai. In the last five
years, the container throughput at Chennai port has gone up by nearly five
times due to movement of the containers to off-dock CFS that clear nearly 70
per cent of the port’s boxes.
The cargo is
cleared at the CFS not at the container terminal. This can be replicated at the
airport too, he said. But it cannot be ignored that with introduction of
automated storage and retrieval system by AAI in Chennai, the space
requirements could be managed. But still AFS as a facility should be available
as space alone is not the reason for below par performance of air cargo
terminal in Chennai. There are equipment, manpower and management deficiencies,
which will not be addressed by ASRS. AFS will be a good alternative, said
Vijaykumar.
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