AIR FREIGHTING AIR FREIGHTING PRACTICESPRACTICES

by by

Dr. M C HARBOLADr. M C HARBOLA PROFESSOR PROFESSOR

AIR FREIGHT COMES INTO AIR FREIGHT COMES INTO CONSIDERATION WHEN CUSTOMERSCONSIDERATION WHEN CUSTOMERS

• WANT SHORT DELIVERY TIME• QUICKER CIRCULATION OF CAPITAL AND

REDUCED FINANCING COSTS• MAXIMUM SAFETY AND RELIABILITY• CHEAPER INSURANCE NO COSTLY

INTERMEDIATE STORAGE• PERSONALISED SERVICING DUE TO

INTERACTION WITH END-USER• Suitable for low volume hi value cargo • Food product,news products,emergencies

Benefits of air transporttion Benefits of air transporttion

• Create new markets for perishable and seasonal products• Lower cost of carryin inventory in transit• Reduced pacakagin cost coz of lighter pacakagin• Reduced cost of insurance-less breakage,pilferage,damage• Competitive adv over oda modes coz of speed• Airports create new mkts- industry clusters ‘round ‘em-jewellery

industry in surat & mumbai• Small industries –allow –JIT inventory based operation• Exporter able to provide greater teliability & after sales service to

customer-transport of spare parts• Allows exploration of far-off mkts eg.Latin America

AIR TRANSPORT NOT ALWAYS A COSTLY MODE, IF A PROPER AIR TRANSPORT NOT ALWAYS A COSTLY MODE, IF A PROPER AND COMPARATIVE ANALYSIS IS MADE OF THE COSTS OF AND COMPARATIVE ANALYSIS IS MADE OF THE COSTS OF

DIFFERENT ELEMENTS FROM THEPOINT OF VIEW OF TDCDIFFERENT ELEMENTS FROM THEPOINT OF VIEW OF TDC

• Reduced insurance , warehousing , no costly intermediaries, lighter packaging.

• WEIGHT• VOLUME• VALUE• INSURANCE• HANDLING/SHIFTING• TRANSIT TIME• DIRECT FREIGHT COST

SERVICES OFFERED BY AIRLINESSERVICES OFFERED BY AIRLINES

• PICK UP• CONSOLIDATION• WAREHOUSING• FORWARDING• PACKAGING/PACKING• TRACKING• INSURANCE• IMPORT BREAK-BULK• DOCUMENTATION• DELIVERY• CUSTOMS CLEARANCE

AIR-CARGO: SOME FACTS FOR THOUGHTAIR-CARGO: SOME FACTS FOR THOUGHT

• WORLD AIR FREIGHT MARKET WILL MORE THAN TRIPLE IN 20 YEARS AT AN ANNUAL GROWTH RATE OF 6.4%

• HIGHEST RATE OF GROWTH IN ASIA REGION (9% vis a vis WORLD AVERAGE GROWTH OF 6.2%)

• INDIAN SHARE IN THE WORLD EXPORT IS ONLY O.8% AND THE TARGET SET FORTH FOR THE YEAR 2007 IS 1%

• THE CURRENT GROWTH RATE OF INDIAN EXPORTS IS 20% ON AN AVERAGE

• OUR ROLE MODEL CHANIA’S SHARE IN THE WORLD EXPORTS IS APX. 4.5%

CHANGING ROLE OF AIR TRANSPORTCHANGING ROLE OF AIR TRANSPORT

1970s AND BEFORE

ELEMENT OF PHYSICAL TRANSPORTATION SYSTEM

1980s PHYSICAL DISTRIBUTION AND MATERIALS MANAGEMENT

1990s INTEGRATING A FEW CARGO SERVICES

2000 AND BEYOND

TOTAL LOGISTICS SUPPLY CHAIN SOLUTION

INTERNATIONAL/NATIONAL INTERNATIONAL/NATIONAL INSTITUTIONS/ ORGANISATIONSINSTITUTIONS/ ORGANISATIONS

• ICAO- international civil aviation organization• IATA-international air transporters association• FIATA-international federation of freight

forwarders associations • FFFAI- federation of freight forwarders

association of india • ACAAI- air cargo agents association of india • MINISTRIES (CA AND MOC&I)• DGCA- director general of civil aviation • AAI- airports athority of india

icaoicao

• a specialized agency of the United Nations, • codifies the principles and techniques of international air navigation• fosters the planning and development of international air transport to ensure safe and orderly growth. • Its headquarters are located in the Quartier International of Montreal, Quebec, Canada.• ICAO Council adopts standards and recommended practices concerning air navigation, its

infrastructure, Flight inspection, prevention of unlawful interference, and facilitation of border-crossing procedures for international civil aviation.

• In addition, the ICAO defines the protocols for air accident investigation followed by transport safety authorities in countries signatory to the Convention on International Civil Aviation, commonly known as the Chicago Convention.

• The ICAO also standardizes certain functions for use in the airline industry, such as the Aeronautical Message Handling System AMHS; this probably makes it a standards organization.

• The ICAO defines an International Standard Atmosphere (also known as ICAO Standard Atmosphere), a model of the standard variation of pressure, temperature, density, and viscosity with altitude in the Earth's atmosphere. This is useful in calibrating instruments and designing aircraft.[1]

• The ICAO standardizes machine-readable passports worldwide.[2] Such passports have an area where some of the information otherwise written in textual form is written as strings of alphanumeric characters, printed in a manner suitable for optical character recognition. This enables border controllers and other law enforcement age

• Air freight forwarer- more comprehensive services as compared to iatta agent .

– Consoligdates the cargo, benificial for shipper and the air liines

– Attends custom clearance

– Monitors cargo movement on behalf of the shipper

– Pays duty n tax on their behalf

• Iata-

– Voluntary , non political orgn of airlines established in 1945 . Membership to all scheduled air lines

– Aims – promote safe, economical regular air transport for benefit of people around the world

– Means of collaboration bw air transport enterprise

– Corporate with ICAO and others

– Iata cargo agent is Forwarding agent approved by airlines belonging to iata to act on their behalf

– Service to exporter importer and airlines

– Prepare documents

– Check license

– Packing certificate in case of dangerous goods

– Book space with airlines

– Insurance arranged

– Surface traansport arranged

– Air lines – ready to carry condition for airlines – issuance of airwaybill , packing, marking, labelling of packages , prepantn of shi[pers cetificate for dangerous goods

fiatafiata

• FIATA, is a non-governmental organisation, and represents an industry covering approximately 40,000 forwarding and logistics firms, also known as the "Architects of Transport", employing around 8 - 10 million people in 150 countries.

• FIATA has consultative status with the United Nations Economic and Social Council (ECOSOC) (inter alia ECE, ESCAP, ESCWA), the United Nations Conference on Trade and Development (UNCTAD), and the United Nations Commission on International Trade Law (UNCITRAL).

• It is recognised as representing the freight forwarding industry by many other governmental organisations, governmental authorities, private international organisations in the field of transport such as the International Chamber of Commerce (ICC), the International Air Transport Association (IATA), the International Union of Railways (UIC), the International Road and Transport Union (IRU), the World Customs Organization (WCO), the World Trade Organization (WTO), etc.

• In summary FIATA is the largest non-governmental organisation in the field of transportation. Its influence is worldwide

fffaifffai• On 5th November 1963, the Federation was registered under the Societies Registration Act,

1860 at Bombay. Mr. Karsandas Tulsidas Khimji of M/s Tulsidas Khimji Pvt. Ltd., was chosen to be the founder President of the Federation.

• Federation was enrolled as National Member of FIATA - The International Federation of Freight Forwarders Associations, at the World Congress at Copenhagen on 9th September 1965.

• The main object if the Federation is to • organise united action to project and promote the interests of the profession in all its aspects at

the national level; • and for that purpose to co-ordinate the activities of the Customs House Agents' Associations

and their members ;• to collect and disseminate information to members on subjects of common interest ; • to take part in conferences; • to help members and to acquaint the authorities with their common problems, • to protect and to improve the common benefits, • to get redressal of legitimate grievances by all peaceful and constitutional means and

procedures to exercise beneficial supervision over the clearing trade with a view to maintain a high standard of integrity and public confidence;

• to evolve a code of ethics for the Customs House Agents and/or members of the Federation

aaiaai

• The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority

• with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.

dgcadgca• 1. Registration of civil aircraft;• 2. Formulation of standards of airworthiness for civil aircraft registered in India• and grant of certificates of airworthiness to such aircraft;• 3. Licensing of pilots, aircraft maintenance engineers and flight engineers, and• conducting examinations and checks for that purpose;• 4. Licensing of air traffic controllers;• 5. Certification of aerodromes and CNS/ATM facilities;• 6. Maintaining a check on the proficiency of flight crew, and also of• other operational personnel such as flight dispatchers and cabin crew;• 7. Granting of Air Operator’s Certificates to Indian carriers and regulation of air• transport services operating to/from/within/over India by Indian and foreign• operators, including clearance of scheduled and non-scheduled flights of such• operators;• 8. Conducting investigation into accidents/incidents and taking accident• prevention measures including formulation o f• implementation of Safety Aviation Management Programmes;• 9. Carrying out amendments to the Aircraft Act, the Aircraft Rules and the Civil• Aviation Requirements for complying with the amendments to ICAO Annexes,• and initiating proposals for amendment to any other Act or for passing a• new Act in order to give effect to an international Convention or amendment• to an existing Convention;• 10. Coordination of ICAO matters with all agencies and sending replies to State• Letters, and taking all necessary action arising out of the Universal Safety• Oversight Audit Programme (USOAP) of ICAO;

AIR TRANSPORT GEOGRAPHYAIR TRANSPORT GEOGRAPHY

INTERNATIONAL AIR TRANSPORTERS ASSOCIATION (IATA) HAS DIVIDED THE WORLD INTO FOLLOWING THREE TRAFFIC

CONFERENCES (TCs):

1. TC 1 : NORTH AMERICA, CENTRAL AMERICA, SOUTH AMERICA, GREENLAND, BERMUDA AND THE HAWAIIN ISLANDS.

2. TC 2 : EUROPE INCL. USSR AS FAR AS URALS, ICELAND, THE AZORES, AFRICA AND ADJACENT ISLANDS, THE MIDDLE EAST INCL. IRAN.

3. TC 3 : ASIA BEGINNING WITH PAKISTAN, AUSTRALIA, AND THE PACIFIC ISLANDS (EXCEPT HAWAIIN ISLANDS INCLUDING AREAS IN TC 1.

AIR CARGO RATES – IATA TARIFFAIR CARGO RATES – IATA TARIFF

• THE AIR CARGO TARIFF (TACT): PUBLISHED IN 3 VOLUMES

BASIS• ACTUAL GROSS WEIGHT• VOLUME WEIGHT

RATE STRUCTURE : FACTORS• AMOUNT OF TRAFFIC• COMPETITION

Contd.Contd.

• TYPES AND QUANTITIES OF COMMODITIES

• VALUE OF COMMODITY• SPECIAL HANDLING REQUIREMENT

AIR CARGO RATES DO NOT INCLUDE SURFACE TRANSPORT COST AND TRANSSHIPMENT CHARGES

RATES MAY DIFFER IN BOTH THE DIRECTIONS OF THE SAME ROUTE.

TYPES OF AIR FREIGHT RATESTYPES OF AIR FREIGHT RATES

• GENERAL CARGO RATES (GCR)• MINIMUM CHARGES (M)• SPECIAL COMMODITY RATES (SCR)• CLASS RATES OR COMMODITY CLASSIFICATION • RATES• FREIGHT ALL KINDS (FAK) RATES• CONTAINER RATES• MISC. e.g.,• ULD (UNIT LOAD DEVICES)• DEFERRED CARGO RATES• UNIFIED CARGO RATES• GROUP RATES (CONSOLIDATORS' RATE)• CHARTER RATES

AIR CARGO INDUSTRY IN INDIA – AIR CARGO INDUSTRY IN INDIA – EVOLUTION AND DEVELOPMENTEVOLUTION AND DEVELOPMENT

• INTERNATIONAL AIRPORTS IN THE COUNTRY

• AIR CARGO COMPLEXES• INFRASTRUCTURE FACILITIES• CARGO HANDLED – EXPORT/IMPORT• INTERNATIONAL AIRPORTS WITH MAJOR

SHARE• ISSUES AND PROMOTIONAL MEASURES

THANK YOUTHANK YOU