Aircargo's unsung heroes will come out smiling – again!

Bharat Thakkar takes a look at the present dismal air cargo scenario but predicts that the sector’s stakeholders will be able to ride out the turbulence.

- Bharat Thakkar

Let us look back at 2008 Lehman crises and there after the global melt down, India did well during those years and so did our exports and the Indian forwarders who I call ‘unsung heroes of the economy’. These heroes came out smiling then and will do so now as just in time requirement of high value products will continue as always to fly by air and in 2020. Customer expectations are increasing and they are comparing services with integrators. Indian forwarders have to strengthen their last mile with help of network and technology to bypass any further speed breakers not experienced in the past.

Keeping that in mind, let’s take a look at air cargo forecasts. One such — through the double exponential smoothing (DES) method – has predicted that Indian air cargo volumes till 2020 would rise to 3.59 mn tonnes by the end of the year FY 2019-20. Another projection, this time made through trend analysis, reflected a figure of 2.23 mn tonnes.

Indian aircargo tonnage, however, passed around 3.70 mn tonnes in financial year 2019, a 7 per cent growth rate. It is pertinent to note that our industry should grow by at least 8 per cent a year to achieve the MOCA goal of 10 mn tonnes by 2030. What is, however, worrying is the fact that during the first seven months of the fiscal (April-October), exports contracted 2.2 per cent, while imports shrank 8.4 per cent leading to a trade deficit of $95 bn.

Air cargo slipped into the reverse gear through the year and there are — as yet — no indications of it improving. Nor are there any signs of increase in demand, though it’s early to predict if the first quarter of 2020 will see the demand growing.