Latest Trends in Air Freight International and Domestic

Agenda
Typical Air freight forwarding process Air Freight Market
Top Players Growth Forecast

Latest Trends
International
Accumulation of unexpected events Increasing airline consolidation Boost in e-freight and cargo 2000 sector Tightened security requirements Wide body aircraft

Domestic

Summary References

Cargo Collection

Customs Clearance at Port of entry

Document Checked

Air Freight Forwarding Process

Pre-Advice to consignee and broker Confirmation of shipping fees & shipping address

Booking on carrier
10/31/2013

Bill of entry prepared and submitted to customs and excise

3

International Growth Trend

Players
India has 52 players

Expected Growth Trend

Domestic Growth Over The Years

Domestic Expected Growth Trend

Accumulation of unexpected events

Unexpected events have wrought havoc on the airline industry in general and the air freight in particular. Some of the noteworthy events that agitated the air transport industry are: September 11 The earthquake in Japan Revolutions in the Middle East The Eurozone crisis Fuel costs

Increasing airline consolidation

There is an increasing trend of airlines consolidating in the current economic environment. Air Transport Services Group Inc. is merging its Air Transport International and Capital Cargo International Airlines subsidiaries following the loss of its dedicated air-cargo business for DB Schenker, a German logistics company that bases its U.S. operations in Freeport, N.Y. Another recent merger was that of Great Wall Airlines Company with China Cargo Airlines in 2011 LATAM Airlines Group formed out of LAN Airlines of Chile and TAM Airlines of Brazil in 2010. The group is currently headquartered out of Sao Paolo, Brazil

Continental merged into United Airlines in 2010

List of airline mergers in the US(includes passenger and cargo): http://www.airlines.org/Pages/U.S.-Airline-Mergers-and-Acquisitions.aspx

e-freight
e-freight aims to take the paper out of the air cargo supply chain and replace it with cheaper, more accurate and more reliable electronic messaging. The project is an industry-wide initiative involving carriers, freight forwarders, ground handlers, shippers and customs authorities. Each air cargo shipment carries with it as many as 30 paper documents enough to fill 80 Boeing 747 freighters every year. E-freight engages the entire cargo supply chain to put in place standards that remove paper documents from the process of shipping air cargo, from origin to destination. The documents are replaced with the exchange of electronic data. The first phase of the project focused on building an e-freight network. In 2011, the attention turned to building up e-freight volume over this network with a target of achieving 10% e-freight penetration on live e-freight trade lanes.This target was exceeded with the achievement of 11.1% efreight penetration. The Global Air Cargo Advisory Group (GACAG), a unified voice for the cargo industry that includes IATA; FIATA (International Federation of FreightForwarders Associations); TIACA (the International Air Cargo Association); and the Global Shippers Forum, is taking the lead in supporting e-freight adoption across the industry. In 2012, IATA is focusing on mobilizing airlines to adopt the e-Air Waybill (e-AWB), a catalyst for achieving e-freight. The IATA Board of Governors has set a 2012 target of 15% e-AWB global penetration.

cargo 2000
Cargo 2000 claims itself as the Quality organization of the Air Freight industry
VISION STATEMENT C2K defines quality standards for the supply chain, improving the efficiency of the air cargo industry, improving customer service and reducing costs for all participants through implementation of a program of agreed business and automation standards which are measurable and promote quality competitive performance.

Tightened security requirements

If you're exporting consignments by airfreight, your forwarder or small-parcels operator will need to comply with government-regulated security requirements. Security measures in the UK are regulated by the Aviation and Maritime Security Act 1990. This means that all airfreight consignments must either be screened or originate from a Department for Transport (DfT) accredited known consignor before being loaded onto an aircraft. IN the US, The Transportation Security Administration (TSA) is responsible for ensuring the security of all modes of transportation, including cargo placed aboard airplanes and particularly focuses on passenger-carrying planes. TSA worked closely with Congress for more than six months to significantly strengthen security in air cargo through the 9/11 Bill, which was signed into law on August 3, 2007. 100 % screening of narrow body aircraft by TSA from 2008 onwards

Wide body Aircraft

100% 90% 80% 70% 60% 50%

% Fleet

40% 30% 20% 10% 0%

1970 1991 2003

Domestic
Air cargo represents about 10% of the airline industrys revenues. As 35% of the value of goods traded internationally is transported by air, air cargo is a barometer of global economic health. The fortunes of the transport and logistics industry are closely connected to the economic cycle. When economic activity is buoyant, demand for transport and logistics services is equally strong. Consumer and business demand for goods and services inevitably translates into higher demand for transport and logistics services. The fortunes of the transport and logistics industry are closely connected to the economic cycle. When economic activity is buoyant, demand for transport and logistics services is equally strong. Consumer and business demand for goods and services inevitably translates into higher demand for transport and logistics services

Projected Growth Rates

Per Capita trips

Projected Air trade to GDP

Summary
Growth in GDP of India sets a pace for higher air cargo movement

Government has increased ceiling for foreign direct investments (FDI) in air transport services
Non-scheduled air-transport services: It includes operations by non-scheduled airlines, chartered carriers and cargo airlines. FDI of up to 74 per cent and investment of up to 100 per cent by NRIs is allowed through the automatic route. Foreign airlines cannot invest directly or indirectly in non-scheduled and chartered airlines, but they can invest up to 74 per cent in cargo airlines in India

References
http://www.oliverwyman.com/4482.htm http://www.nglog.com/resources/blog/air-freight-industry-trends-ngl-and-cleveland-research-company http://www.iata.org/about/Documents/annual-review-2012.pdf http://www.fta.co.uk/export/sites/fta/_galleries/downloads/logistics_report/LR12_web.pdf http://www.boeing.com/commercial/cargo/01_02.html www.crisilresearch.com www.isiemergingmarkets.com

Thank You !