Description
Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) is an airport project for Dr. Babasaheb Ambedkar International Airport, Nagpur. It is the biggest economical development project currently underway in India in terms of investments.
A STUDY ON PERFORMANCE OF INTERNATIONAL CARGO OPERATIONS AT COCHIN INTERNATIONAL AIRPORT LTD [CIAL] COCHIN PROJECT REPORT Submitted by SUNIL KUMAR K (REG.NO.06MTA2109) In partial fulfillment of requirements For the award of MASTER’S DEGREE IN TOURISM ADMINISTRATION Under the guidance of
T .JOHN COLLEGE (Affiliated to Bangalore University) Approved by AICTE Govt. of India. New Delhi Gottigere P.O., Bannerghatta Road, Bangalore-560083.India CERTIFICATE This is to certify that Mr. SUNIL KUMAR K has undertaken the project study entitled “ A STUDY ON PERFORMANCE OF INTERNATIONAL CARGO OPERATONS AT COCHIN INTERNATIONAL AIRPORT LTD [CIAL] COCHIN” in partial fulfillment of the requirement of the MASTER’S DEGREE IN TOURISM ADMINISTRATION under my guidance and to the best of my knowledge, it is his original work.
DECLARATION
I hereby declare that the internship report is a bonafide record of work done by me in the partial fulfillment of the requirement for the award of MTA Degree of the Bangalore University, is my original work and the same has not been previously presented for the award of any other Degree/ Diploma/ Fellowship or other similar title of any other university
SUNIL KUMAR K III MTA (Reg. No. 062109)
ACKNOLEDGEMENT
If words are considered as symbol of approval and tokens of knowledge then the words play the heralding role of expressing my gratitude to all those who helped me in completing this project. I avail this opportunity to bid my heartfelt thanks to all who wholeheartedly devoted their body and mind to help in throughout the entire project work. First and foremost, I wish to place my sincere and esteem thanks to SEEMA GOEL, the principal of T. JOHN college for granting permission to go for an on the job training. I thank principal sincerely. I owe an immense debt of heart-felt gratitude for my guide for her excellent guidance, constant encouragement, sustained interest and critical suggestion throughout my project completion, which really paved the way for the successful completion of this endeavor. I am deeply indebted to Mr. Suresh Kumar (GM, CIAL) and Mr. George Kozi (AIR CARGO, CIAL) for their wholehearted encouragement and valuable guidance in completing the project successfully. Last but not the least I express my profound sense of gratitude and thanks to all those who have lend their kind co-operation and help for the successful completion of this endeavor. Above all the grace of God lead me to complete my project.
INTRODUCTION TO THE STUDY The world economy has undergone revolutionary changes during the past fifty years. The distances between regions are shrinking day by day. Perhaps the greatest and the most profound change is emergence of global markets, global competitors and winners & losers in global competition. And the whole world has been considered as a global village of speedy transportation and easy communication. Due to the new global phenomenon such as globalization and liberalization the world trade has got prominent importance than the days gone. Competition in the world market has reached its zenith where speed, frequency, reliability and cost significant influence. Transportation plays a critical role in the logistical chain. Air transportation, the speediest of the different modes has boosted international business and paved way for economic integration in the present global scenario. The effect of airfreight is profound in the scene that it permits shipments that once required nearly 30 days, to arrive in a single day. It is estimated that 36% of world trade in terms of value is moving by air and the rate of growth of air cargo is increasing steadily. Thus sensitive and perishable goods, valuables, medical and chemical goods can be exported through air in a shorter period. Air cargo logistics plays a crucial role in ensuring the competitiveness and commercial success of most industries around the globe as it brings enormous economic benefits in the transportation of perishable and time dependent goods. This gives the shippers the confidence that their cargo will
receive special treatment needed, supplied with global expertise, ensuring the quality of product at delivery. The 18th century has been the era of full-rigged ship and waterborne commerce, the 19th century is the age of the steam-powered railroad; the 20th century to be the century of motor carrier and the 21st century will be the century of air cargo. In this era of J.I.T the shippers are not much bothered about how their cargo moves, provided it reaches its destination on time and in good condition. Though air transport is expensive many folds than through sea, the scope of reducing inventory costs makes many to use this mode. Statement of the problem Transporting is an important function in logistics, since it provide the place utility for a commodity. Multinational transport helps the movement of goods more efficiently through faster transit at reduced costs. Air transport brings the far cry regions closer. Cochin International Airport Limited [CIAL] is the only airport outside the government preview. Inspite of being located in the industrial city and very near to Cochin port and Export zones, the cargo movement is not as expected by the air cargo industry. Hence there is a need to study the cargo movements through CIAL and find the factor affecting it and to filter out the lucunous of the cargo complex and to provide better solution.
The study was undertaken at CIAL cargo complex during June and July 2007. Exporters, Importers, Airlines, Agents, Customs, Transporters and CIAL are included in the study. The main objective are to study international cargo operations through CIAL, the factors affecting it and to suggest improvement measures. A survey is conducted with three populations of agents, airlines and customers to evaluate their satisfaction level of CIAL. The study revealed that CIAL has shown significant growth in cargo handling. The major items moved include vegetables, seafood, spices, oleoresins, oils and garments. CIAL took over the charge of cargo from Air India in December 2000. The major constraints for cargo coming to CIAL are poor road condition in Kerala, lack of rail connectivity, non availability of specialized services, airport delays, disturbances like ‘Hartal’ strikes, government restrictions, entry taxes, lack of professionalism, lack of proper infrastructures, less frequency of flights and destinations served, non uniformity of packing norm adopted by exporters etc. Delays are mainly due to repetition of work, unsystematic process flow, rigid procedures, lot of paper work, lack of handling equipments, weighting machines, manpower etc. The customers are dissatisfied with the way grievances are handled, the duty schedule of CIAL staff and the services provided. If the CIAL remains the status Quo, the customers will shift to other airports.
Commitment to customer service, flexible slot times, consistent investments in new facilities and infrastructure innovations in applying sophisticated technologies and liberal approach to traffic rights and the tariffs will enhance the glory of CIAL. A marketing division is recommended. If the process flow is improved and made systematic, the repetition of work can be avoided. The time lost in physical examination can be reduced. Hence the space available can be efficiently used reducing congestion and delay. The cargo village and offices of the relevant departments should be established at the earliest. Seminars and workshops should be conducted to get an awareness of the current trends in industry. With these innovations CIAL can expand its leads overall as South India’s logistics centre, combining the air, rail, water and highway distribution skills .
NEED FOR THE STUDY Indian Civil Aviation Industry is one of the competitive industries in the world. The Government adopts effective steps for the betterment of Airports in India. Today the basic challenging topic in this area is regarding the privatization of the International airports in India, which are running without profit. Here is the importance of CIAL, which is an airport run by the private initiativeness. Since CIAL is stepping forward from childhood to adulthood a study on the infrastructure available for cargo transportation will be a timely and effective attempt. The cargo movement here is not as much as expected by the cargo industry, despite its nearness to Cochin port and Economic Process Zone. Though situated in the industrial city, the
performance can’t be hailed much. Hence there is a need to study the cargo movement through CIAL and find the factors affecting it and to filter out the lacumas of the cargo complex so as to provide better solutions. The analysis is done by collecting the feedback from the users of the Airport such as Air cargo agents, airlines and exporters. Once the strengths and weakness are brought to the limelight, CIAL can mark and dominate its position in the Aviation may. OBJECTIVES OF THE STUDY The study consists of the following objectives to be achieved. They are: Primary objective: 1. To study the International cargo operations of CIAL 2. To study the factors affecting cargo movements through CIAL 3. To formulate measures to improve the cargo output Secondary objective: 1. To study the infrastructure facilities of CIAL 2. To get an awareness of the operations of different Airlines(cargo), Agents, Customs 3. To know about the Exports and Imports through CIAL 4. To analyze the satisfaction of customer of CIAL 5. To get a clear picture of air cargo industry
The area of study includes both export and import sections of CIAL cargo, Airlines, Agents, Customs and exporters.
RESEARCH METHODOLOGY Research is a scientific and systematical approach to a particular situation or problem as it exists and to give ample suggestions to overcome the hindrances. Research has its special significance in solving various operational and planning problems of a firm. Here in this work some scientific research methodology has applied but with in the limitations. Sources of Data 1. Primary Data: Primary data are those collected fresh and for the first time and happens to be original in nature. Primary data are collected from CIAL officials, airline staffs, agents, customs and exporters through discussions, interviews and observations. Based on these assumptions were made. 2. Secondary Data: To gather the details of CIAL cargo, secondary data was collected. The main sources can be classified as Internal (organizational records, annual reports) and External (websites, dailies, journal, books etc.)
Research Design: Research design is the framework for a study that guides the collection and analysis of data. Exploratory type of research design was used. Sampling Design: Purposive sampling technique was used. The sample size elected for primary data collection can be described as follows: ? Air cargo Agents ? Airlines operating from CIAL ? Exports in and around Cochin ? Customers - 30 Nos - 12 Nos - 25 Nos - 12 Nos
Frame Tools Used: The analysis tools used in the research are the following: i. ii. iii. Simple Percentage Composite Percentage Growth Rating
iv.
SWOT Analysis
Method of Analysis: Percentage calculated for data was helpful in analyzing and interpreting the data. Percentage Analysis was used to complete analysis part of study. Scope of the Study: The project was aimed to study the effectiveness of International cargo operations of CIAL. It helps to study the cargo logistics management of CIAL. The scope of study was confined to the cargo services of CIAL. The study leads to the insight that will be helpful to the CIAL to get the feedback of the customers. It is hopeful that this research work will help CIAL authorities to know the needs and the wants of the customers through collecting their feedback. It can lead to make effective changes and take new policies. On the other hand the study will help the customers (users of the airport) to understand the infrastructure available at the airport. It will also be helpful to any person who is related to the airport operations. Limitations of the Study: I. The short span of time as a major constraint in conducting an exhaustive study.
II. The sample size was small and hence only a minority opinion was generated. III. The accessibility to certain areas (sterile areas) was limited. IV. Some of the airline staff, agents and CIAL were busy and were not willing to disclose much. Some of the responses were incomplete and biased though. V. The study may not be free from sampling errors though precautions were taken. VI. Since many of the agents were running by hectic schedule, they were not having enough time to go through all the questions carefully and they answered the questions in a hurry manner. Therefore, the accuracy of the survey still remains a big question mark, even though pre-cautions were taken while recording the data.
Company profile
COMPANY PROFILE PROFILE OF CIAL Cochin International Airport Limited is a novel venture in the history of civil aviation in India where Government of Kerala, NRI’s, Travelling public, Financial institutions, Airport Service Providers and others joined hands in the equity structure. This is the International Airport in the country outside the ambit of the Government of India. This airport has been constructed to enable any type of wide bodied aircraft to land with the state of art facilities. The Airport site is very close and centrally to all three National Airways passing through Kerala (NH 47, NH 17, NH 49). The main railway line from Kanyakumari to Delhi is adjacent to the Airport and it is situated between Alwaye and Angamaly Railway Stations. The Cochin Sea Port, one of the biggest in the country is also situated close by. The Cochin Airport would certainly boost international trade, tourism and enhance the country’s image. The Cochin International Airport Limited is managed by the Government representations, industrialists, NRI’s from 30 countries and representatives of financial institutions. The ground handling at the airport is done by Air India. The Airport suitable for operations of wide bodies Boeing-747 types of Aircraft. The Airport is planned in phases on modular basis, to suit future requirements and also to minimize the initial investments so as to generate revenue at the earliest possible time. The Central, Kerala state Governments Ministry of Civil Aviation and the Airport Authority of India have extended their full support and co-operation for making this
project successful. The Airport Authority of India has provided all navigational and communications equipments including operation and maintenance. The Air traffic management also is being undertaken by Airport Authority of India. The Airport has full range of multi model transport linkages viz. the National Highways, Cochin Sea port, Water ways, Railways etc. the Airport is suitable for operation of Boeing-747; 400 types of Aircrafts and Airbus types of Aircrafts. It has 3400M of Runway with PCN 60, with sufficient Apron space for parking 8 Aircrafts at a time. Other international airlines are soon expected to operate to Europe, Africa, Australia, United States of America, Canada and Japan. In addition to this many chartered flights are operating to different countries. TECHNICAL DATA Phase I [Completed phase] ? Location (Latitude & Longitude) 10 09’08’’N, 24’29’’E ? Runway: An Asphaltic concrete runway of length 3400M with shoulders, stop ways. ? Taxiways Taxi Track of 930 Mts. (3400 ft) with two link taxi ways connecting runways ? Apron AN Apron of size 425 x 125 Mts. of cement concrete sufficient to part 8 Aircraft at a time including 6 wide bodied Aircraft. ? Isolation parking bay: A separate isolation parking bay for parking aircraft under threat as per the requirement of international standards.
? Terminal complex fully air conditioned Domestic terminal (10000 Sq.M) and International terminal of 12800 Sq.M with all modern passenger amenities. ? Cargo building a spacious integrated cargo complex including cold storage, courier service area, valuable, diplomatic, hazardous cargo areas of 4500 Sq. M ? Ground lighting facilities: The Airport is being equipped with night landing facilities for 24 hours operation ? Approach Lights CAT I Approach lighting for Runway 27 end and simple approach lighting system for runway 09 ? PAPI- Precision Approach Path Indicators are being provided at both end of runway ? Instrument Landing- ILS being provided for Eastern end of runway approach coupled with Distance Measuring Equipments(DME) ? Navigational Aids two Doppler VOR’s, one at airport site and other at Munnar to facilitate Aircraft Navigation. One non-directional beacon is also being provided to meet the requirements of small aircraft, which are not provided with DVOR ? Control Tower cum Technical Modern Control Tower cum Tech Block is being provided. The tower height is 50 mts. Building is fully air conditioned for efficient operations of electronic and communication equipments ? Safety services: A fire station building to suffice CAT 8 safety services standards is also being provided. The fire station also will have an observation tower, first aid room etc.
? Fuel Hydrant System BPCL’s fuel hydrant system for refueling aircraft at 3800 1/minute using PLC based control and monitoring system Phase II [Proposed Phase] ? Terminal Building II: A modern Terminal Building 40000 Sq.M area with all modern passenger and other facilities. American architectural consultants were selected based on Global competition, to prepare the architectural drawings, estimates etc. ? Extension of Runway: The Runway will be extended by 300 M to make a total length of 3700 M ? Taxi way: A parallel taxi way for the entire runway with high speed link taxi way is planned ? Apron : An Apron size of 500 Mts. x 125 Mts. in front of the second phase terminal building to accommodate 12 Air Traffic Control Systems ? Navigational and Communication Systems: A state of art radar is planned including automation of communication and Air Traffic Control Systems ? Other commercial activities ultimately, the surroundings of the airport is planned to develop as the total self-sufficient township with star hotels, recreation centres, commercial establishments, export zones etc. It is also planned to extend the existing railway line to the airport complex to serve both cargo and passenger movements
? Cargo village: An area about 80 acres is reserved for the setting up of a cargo village.
AIR CARGO INDUSTRY PROFILE
AIR CARGO INDUSTRY PROFILE Air transport plays an important role in international trade. More and more goods especially those of high value, time sensitive or perishable are moving by air. About 36% of the world trade item, in terms of value are been moving by air and the rate of growth of air cargo traffic has been higher than that of any other mode of transport. The carriage of goods by air had its origin mostly during the Second World War. The progress made in the aircraft design during the war conversion of military aircraft to suit civilian requirements led to the growing use of this mode for passenger and freight. Wide bodies’ jet all air cargo aircraft introduced subsequently contributed to the progress of the transport industry. The advantage of air transport is speed. Since it’s not hampered by geographic borders over flow, it avoids delays and the risk of damage or theft incidental to border stops or transshipment points. Less liability to damage or thefts results in lower insurance premise. Other advantages are economic advantages such as savings in packing and warehousing costs. Besides faster movement accelerates turn over in capital and enables both manufacturers and traders to maintain their inventories at relatively low levels. The main advantage is the high cost of transport reflected in freight rates. Another is the limitation in regard to the size or volume of commodities that can be transported by air. The rate of growth of air cargo in the Asia Pacific region is higher than the world growth rate, mainly because of the emerging economics of this region which loan heavily on exports. Particularly sophisticated electronic goods, jewelers, readymade garments, leather goods,
vegetables and other perishables which lend themselves to safer and quicker transport by air. The land locked countries have this option when the surface transport facilities haven’t developed. About 90% of the world air cargo traffic is handled by the cargo agents who act on behalf of both air strippers and airlines to which they are approved sales agents. The cargo movements are mainly done by scheduled flights or chartered flights. The chartered flights don’t have a preset schedules or destinations like the scheduled flights. EVOLUTION OF AIR CARGO It is with the I world war that there emerged a new scope of carrying goods by air. In the beginning, the airlines were used exclusively for the military purpose. After the war, in the year 1945, only commercial air cargo operations started to operate. But today this has become an exigency for the modern world. After the I and II world wars a thrust was emerged for the speedy dispatch of goods by air. Thousands of veterans returned home in USA and Europe, inspired by the possibilities created by improving aviation technology. Many sought jobs associated with flying cargo, planting the seeds for dozens of airlines, freight forwarders and other companies that would paint the world’s air transportation picture for decades to come. The early years after II world war there initiated fast widening of both small package or air express traffic and air freight or bulk shipments. With the improvement of frequency, air transport gave the primary message to the shippers, which is nothing but the speedy business. End of 1940s and 1950s clearly show a constant growth of the volume of domestic and international air freight.
Boeing 707 was introduced with the new hope of break through in the airfreight scenario. In the 1980s just-in-time (JIT) transportation became the new entry in the air cargo lexicon. JIT defined the delivery of shipments between specific hours on a specific day to dovetail with production requirements. In 1990s what are found is the fully committed logistics and logistic providers. The authentic logistic providers assured single entry control through every stage of the operations with door-to-door service. In the twilight of the II millennium, driven by globalization and the internet, the half-century old air cargo industry found itself roiled by the accelerated pace of acquisition and consolidation. However it may be, IATA and FIATA have made a unified form of operations. The air cargo industry today is a solid constituent of transportation that caters the shippers wants and needs in a faster and faster way. GLOBAL SCENARIO OF AIR CARGO World is ever growing and ever changing with indefinite fastness. Air cargo picture is also changing day by day. It seems to be unbelievable in the case of the Airport O’Hare in Chicago. The airport handles 2700 flights per day from its 4 terminals. Every 2 minutes an airplane takes off from the port. In 2004 it handled 68.5 million passengers. Today every govt. has a thrust to promote the aviation industry by providing better facilities and by encouraging its National carriers. But on the other hand there is a high competition among the private airlines by providing better service in the areas of speed, frequency, reliability and cost.
According to the predictions of the experts, the world’s freighter fleet will double by the year 2015. At present 35% to 40% of world trade by volume is carried by air transportation, which will increase substantially. The forecast result is that the air cargo market will grow at 6.7 % per year between 1996 to 2015. Airbus sources indicate that there were 1184 freighters (cargo only aircrafts) in service in 1994 and forecast indicates that it will grow to 1801 by 2008. These trends indicate that 21st century is likely to be the air cargo century. Another forecast shows that world air born cargo will grow at 6.4% per year during the next 20 years. Growth in air cargo anticipated exceeding passenger traffic growth in every major regional market. It is not surprising that forecasts anticipate the addition of more than 2600 freighter airplanes by 2019. E-Commerce leads to a surge in the air transportation business. Thus, timedefinite service, cost efficiency and integration of customer and transport system have been made component. Development in E-Commerce has made the problems of distance, time and speed irrelevant and the globe has been reduced to a village. AIR CARGO ENVIRONMENT IN INDIA India is a dynamic and rapid changing market. Even though the globalization will cause for a drastic change in the economic situation in India by 2010, the exporting from our country will keep raising in the following years to come. The role of airlines and air cargo agents will be a crucial one in the liberalized economy where there will be high import & export business. It is
a fact in India that the international business depends on the air cargo for a limited percentage only. But it is indicated that a promising growth rate of 10% to 12.5% per annum in the air cargo handling. Bulk of gems and jewelers, textiles, leather, perishables and pharmaceuticals are carried mostly by air. After announcing the open sky policy of the govt. in 1991 there began a large competition from the foreign airlines. PERFORMANCE OF INDIAN AIRPORTS There are 449 airports or airstrips in the country. Among these, the Airport Authority of India owns and manages 5 international airports, 87 domestic airports and 28 civil enclaves. In 1998-99, these 120 airports and enclaves handled 4.20 lakhs aircraft movements involving 24.17 million domestic and 12.83 million international passengers and 221 thousand metric tones of international cargo. TABLE SHOWING THE SHARES OF INTERNATIONAL TRAFFIC FROM INDIA’S MAJOR AIRPORTS Sl. No. 1 2 3 4 5 6 Major Airports Sahara Airport, Mumbai Indira Gandhi Airport, Delhi Meenambakkam Airport, Chennai Dum Dum Airport, Kolkata Thiruvananthapuram Airport Cochin International Airport Total Source: www.airportindia.com No. of Traffic 33795 30707 11870 6895 6598 2615 92480 Shares 36.54 33.20 12.84 7.46 7.10 2.86 100
The above table depicts the frequency of international traffic from the major airports in which with 36.54% Mumbai port handles the maximum number. The share of Delhi airport is 33.2%. While kolkata and Thiruvananthapuram airports have shares of 7.46% and 7.10% respectively. CIAL handles only 2.86%.
TABLE SHOWING THE SHARES OF INTERNATIONAL CARGO HANDLING FROM INDIA’S MAJOR AIRPORTS Sl. No. 1 2 3 4 5 6 Major Airports Cargo Handling (Tonnes) 195770 165500 72450 32520 25750 3942 495932 Shares (%) 39.48 33.37 14.60 6.56 5.19 0.80 100
Sahara Airport, Mumbai Indira Gandhi Airport, Delhi Meenambakkam Airport, Chennai Dum Dum Airport, Kolkata Thiruvananthapuram Airport Cochin International Airport Total Source: www.airportindia.com
The above table shows the upper hand of Mumbai airport with 39.48% share. Below that falls the Delhi airport with 33.37% share. Chennai airport has the share of 14.40%. Kolkata and Thiruvananthapuram Airports have 6.56% and 5.19% shares respectively. Cochin international airport that is in the initial stage has only 0.80%. But the manifest of CIAL shows that it handled 6288 tonnes of cargo. SPECIAL CARGOS The different types needing special attention.
1) Live Animals Need special carriage area at the cargo terminal. Import of live animals is restricted by important licenses in most countries. They also subject to quarantine, which differ from country to country. The IATA live animals Regulations deals with matters such as documentations, handling, labeling of containers etc. arising in
connection with the carriage of live animals. Before shipment of live animals is accepted by an airline, shippers are required to furnish a certificate certifying inter alia that the consignment has been properly described and is in proper condition for carriage by air according to the IATA Regulations. 2) Dangerous Goods Some type of cargo, although in common use, have inherently dangerous properties when carried by air. Paint for example, with a change in atmospheric pressure and temperature can give off a highly inflammable rapur. Many chemicals have corrosive or explosive nature and can be accepted if packed to restrict those properties to a safe level. A comprehensive list of packing and handling requirements in respect of substances known to have dangerous properties is contained in the IATA Dangerous Good Regulations. It is important that those responsible for the carriage of such substances ensure that they are handled in accordance with these regulations. Before shipment, a declaration by the shipper that the IATA regulations have been compiled which is required. 3) Valuable cargo It is given special handling and storage within a cargo terminal. It comprises essentially: ? Any article with a declared value of US $ 1000 or equivalent or more per gross kg ? Gold in all forms, legal bank notes, securities share and share coupons, traveler’s cheques, stamps (excluding mint) 3) Other cargo needing special handling
? Drugs to save live: have the highest priority of traffic moved at short notice. ? Dangerous drugs, pathological specimens, airmail, newspaper and news films. ? Perishables (fruits, flowers, vegetable and meat) vulnerable consignments, human remain or bodies. AIR CARGO RATES TACT The Air Cargo Tariff containing the rates, rules and producers are contained in the publication “TACT” (The Air Cargo Tariff) which is jointly issued by the airlines participating in its publication. TACT Rules containing the general rules, regulations and procedure published twice a year. 1. North America- contains the rates to/from and from within the US and Canada [via the Atlantic and Pacific plus rates between Canada/US and other parts in IATA Area]. 2. Worldwide contains all rates, except those included in the issue relating to North America. The establishment of freight rates applicable to transportation of cargo over the routes covering the three IATA traffic area is mainly the task of the airlines comprising the IATA Tariffs Co-ordination Conferences. The rates have to be filed with and approved by the respective Governments. BASIC OF CHARGING RATES The amount of cargo that can be loaded on an aircraft is limited by weighting and volume. Heavy and small loads will tend to raise the weight limitation of the aircraft before the volume limitation is reached,
thus resulting in unsold volume capacity, light and bulky loads will reach the volume limitation before the weight limitation is reached, thus resulting in unsold weight capacity. The airlines have therefore, considered it logical to establish the chargeable weight of a shipment on its ‘actual gross weight’ if it is small and heavy or on its ‘volume weight’ if it is light and bulky, in order to compensate themselves for the unsold volume or unsold weight capacity. For this purpose, a cargo is usually reckoned as high-density cargo (to be charged on “Actual Gross Weight” basis) if it weights more than 1kg per 6000 cubic cm and low density cargo (to be charged on “volume weight” basis) if it weights less than 1kg per 6000 cubic cm. RATE STRUCTURE AND TYPE OF FREIGHT RATES The special condition applied to certain types of goods are determined by various factors such as the amount of traffic between one area and another, competing means of transportation types and quantities of commodities, their value, special handling requirements etc. Consideration of all these factors has resulted in a complex rate structure not necessarily the same in each direction.
(i)
GENERAL CARGO RATES (GCR)
These are rates applicable to commodities moving between two points for which there are no special rates. These rates are subject to quantity discounts, i.e. the rate is reduced for delineated weight categories- a reduction of ascertain % for the first and gradually more for the following weight categories. The normal rates published applied to consignments up to 45 kgs.
(ii)
MINIMUM CHARGES
The minimum charge represents the level below which the airlines considers it uneconomical to transport a consignment, taking into account the fixed costs involved in handling even a very small package. The freight charges of a consignment, computed by multiplying the chargeable weight by the applicable rate may, therefore, never be lower than the published minimum charge. The level of the minimum charge depends on the IATA areas within or between which transportation takes place. (iii) SPECIFIC COMMODITY RATES (SCR) These are usually substantially lower than general cargo rates and applied to specified point of origin to a specified destination point. They are subject to a minimum weight, which is published along with the rate. They may also be subject to special conditions relating to minimum charges and density requirements. The main purpose of SCR is to offer shippers competitive rates, which will make it economical for them to send their products by air and also enable optimum use to be made of the airlines transport capacity. Applications for SCR may be made by the shipper to the airline and the latter may then submit the application to IATA with its own recommendations. After consulting the member lines, IATA either rejects the application or publishes the special rates. (iv) CLASS RATES OR COMMOCITY CLASSIFICATION RATES They are expressed as a % discount or surcharge on general cargo rate and apply to a limited number of commodities within or
between certain designated areas. These rates are applied hen there are no specific commodity rates available for the commodity. The main commodity to which they apply are live animals, animal containers and stalls, valuable cargo such as gold, bullion etc, news paper, magazines, periodicals, book, catalogues, Braille type equipment and talking goods for the blind, baggage shipped as cargo, human remains etc. Live animals, valuable cargo etc is usually levied as surcharge while newspaper and other publications, baggage etc are allowed discounts. (v) FREIGHT ALL KINDS (FAK) RATES Introduced to simplify the rate structure, FAK are a rate for volume reserved in a container irrespective of the type of commodity carried, simplifies handling and makes lower rates possible. There are, however, certain restrictions on FAK rates viz livestock, perishable cargo, valuable cargo etc are prohibited. If the cargo is containerized by the shipper himself, a rate reduction is available as against cargo, which is tendered to the carrier in a loose form.
(vi)
CONTAINER RATES
If the goods are shipped in containers of an approved design, the airlines usually make a reduction in the freight costs. Containers are usually shipper-owned and the use of such containers entitles the shipper to an allowance for the empty eight of the container. (vii) MISCELLANEOUS There are rates levied by the airlines for special services or under
special circumstances which may be mentioned although they do not constitute any category of freight rates in the normal course of air transportation. a) ULD Rates They are not freight rates but the cost of moving a container or pallet of specific design and containing cargo up to a specific weight of cargo without variance by reason of the type or quantities of the actual goods being shipped. Any excess weight is charged in decreasing increments upto an allowable absolute minimum. b) Deferred cargo rate This is lower than the normal rate and is levied when the transportation of a consignment is not urgent and can wait till space becomes available on the aircraft. c) Unified cargo rates Which a consignment is transported in various stages by one or a number of carriers, the carrier may charge a freight lower than the total for the different stages. d) Group rates Since the traffic conference meeting held in Athens in 1969, IATA has confirmed the practice of companies to consent to a reduction (about 30%) to clients who send their consignment in pallets or containers in the same direction. These rates are generally intended for transport professionals such as freight forwarders or air cargo agents.
e) Charter rates Aircraft or space in it may chartered at market rates depending upon the requirements of the shipper. These may be more than regular tariff rates depending upon demand and supply. AIR CARGO AGENCY The air cargo intermediaries are the necessary link between the shippers/ consignees on the one hand and air carriers/ airlines on the other. They fall under two categories: 1. IATA Cargo Agent The forwarding agent approved by airlines belonging to IATA to act on their behalf, such approval being granted on the basis of certain prescribed criteria, including proof of ability to develop air cargo business, possession of requisite physical material and financial resources, employment of qualified staff etc. They provide service to both air shippers (preparing airline documentation, checking of import and report licenses and packing certificates in respect of dangerous goods, booking space with airlines, arranging insurance of cargo) and to airlines (presenting goods in a “ready for carriage condition” which involves issuance of airway bill packing, marking and labeling of packages, preparation of certificates). Their responsibility ends when he has handled over the cargo and the documents to the carrying airlines and charge 5% on transport charges from the airlines.
2. Air Freight Forwarder Provides services in addition to the above like consolidation or group age (assembling a number of individual consignments and dispatching them as one bulk to a common destination) beneficial to shipper and the airline, attending to customs clearance, monitoring on behalf of customers for payment of duties and taxes etc. While providing consolidation services, the airline issues a Master Air Way Bill [MAWB] in respect of the consolidated consignments showing the break bulk agent at the destinations as the consignee.
CIAL CARGO
CARGO OPERATIONS OF CIAL The air cargo complex at CIAL was commissioned on 1st December, 2000 including both import and export sections and an unaccompanied baggage section. The cargo terminal is only ½ a kilometer from the international terminal. Before the coming up of the new airport at Nedumbassery, the operations were from the Naval airport at Wellington Island. A separate cargo village is on the process where all the cargo activities of the private and the public can be undertaken. An area of 180 acres of land is earmarked for cargo village, which will be a land mark for the CIAL activities. The present activities CIAL is involved in all cargo handling services, which include exports, imports and transshipment of general cargo, perishables, precious cargo, heavy cargo, unaccompanied baggage, consolidated cargo, diplomatic bags etc. to various countries and forwarded by different agents. The one time holding capacity is 250 MT for export cargo and 100 MT for import cargo. The annual holding capacity is 13000 MT and 7000 MT for export and import cargo respectively. The cargo terminal have office spaces for CIAL, Agents, Airlines, Customs etc. The federal bank collects the handling charges of CIAL and Air India (as cash, cheques or DD). Customs charges are collected by SBT (accepted DD and cash for small amount as cash). Both banks provide Forex facilities but no normal banking. The main exports are spices, coir, readymade garments, fabrics, valuables (foreign currencies, gold), perishables like fruits, vegetables, frozen fish and meat, live crabs, ornamental fish and post office mails. The imports consist of unaccompanied baggage and general cargo.
The facilities available • Built up area of cargo complex – 5845 Sq. mts [63000 Sq. ft] • Weighing scales – 4 [1000 kg:1, 500 kg:2, 300 kg:1] • X-ray machine [Large capacity] – 1 • Tractor – 2 • Container lazy rollers – 18 • Pallet lazy rollers – 7 • Container mobile dolly – 4 • Pallet mobile dolly – 4 • Fork lift – 4 [3 toner] • Platform hand trolleys – 8 [2 toner] • Manual godrej fork lift – 2 [2 toner] • Strong room for valuables • Walk in type cooler – 370 cubic mts vol. (for perishables) upto + 4 degree C • Racked storage area – general cargo unaccompanied baggage • Public amenities • Water cooler • PCO/ STD facility • Snack bar, Coffee/ Tea vending machines • Business centre • Toilets • Parking space – 150 vehicles
• Import cargo – accepted and shifted to the storage area on the same day of delivery • Export cargo accepted and exported: o General cargo – D-24 hrs o Fruits/ vegetables/Marine products – D-6 to D-4 hrs o News papers – D-4 to D-2 hrs o Valuables – D-2 to D-1 hrs • Human remains will be cleared on round the clock basis by CIAL staff. *D – The scheduled departure of flight CIAL handles transshipment cargo too. The cargo bound to Thiruvananthapuram and Calicut are either air lifted or trucked to the destination. Transshipment cargo for various districts around Cochin too are received at CIAL by air. Introduction to cargo operations In import side CIAL stores and delivers the cargo. The main functions of CIAL in export side are accepting, loading and manifestation of cargo. For these operations CIAL interact with customers, airline officials, passengers and agents. Manifest The manifest is a written document, which contain the following details: i. Name of the airline
ii. iii. iv. v. vi. vii. viii. ix. x. xi.
Flight number and Date Point of Lading Point of Unlading Airway Bill number Number of pieces/ weight Nature of goods Origin station Destination ULD number Remarks
Airway Bill (AWB) An Airway Bill (also called Master AWB), which constitutes the very basis of air cargo transportation, may be defined as a legal document of contract, between the carrier and the shipper or their approved agents, for carriage of cargo by air between two airports. Every AWB has a number known as Airway Bill Number. Firstly it identifies the airline (the first 3 letter prefix) and the remaining 8 letter identifies the consignment. An Airway Bill contains the Airway Bill No., Shipper’ Address, Consignee Address, accounting information, issuing agents address, Agent’s IATA code, Account No., airport of departure, reference number, optional shipping information, routing, first carrier, destination/ routing, Final destination, Flight No., Date, Currency, Charges code, declared value for carriage, declared value for customs, amount of insurance, handling information, No. of pieces, Gross weight, commodity item No., chargeable weight, rate, total, nature and quality of goods, prepaid, weight charge, valuation charge, tax, total other charges due to agent, total other charges
due to carrier, total prepaid, total collect currency conversion rates, CC charges in destination currency, date and place etc.
House Airway Bill House Airway Bill is a supplementary AWB issued by agents or airline for consolidation purpose of cargo. This enables to distinguish between the pieces of different consignees, which come under one Master Airway Bill. IGM Number (Import General Manifest) This is a serial number of each international flight landed in Cochin for customs reference. If international cargo arrived in international/ domestic flight IGM number allotted by customs. EGM Number (Export General Manifest) As IGM, EGM is also a serial number for customs reference. The difference is that EGM keeps the serial number of each international departed flight. If international cargo departure in international/ domestic flight EGM number allotted by customs. CHA (Customs House Agents) These are licensed agents for clearing cargo. Usually general cargo is cleared by these agents. Exporting is also done by these agents. Note: for TSP/ DO/ Statistics the rate may change according to the management/ IATA/ Government rules.
CARGO OPERATIONS AT CIAL The operations of cargo at CIAL can broadly be divided into two divisions:
IMPORT
This division takes care of general cargo/ unaccompanied baggage received from airline, and will release the same to passengers after inspection and on producing valid documents. It maintains stores, records and statutory reports of consignments. 1. Numbering Import cargo starts when receives cargo manifest from aircraft on arrival. There are two types of import cargo – general cargo and unaccompanied baggage. For general cargo the shipper and the consignee will be different and in case of unaccompanied baggage the shipper and the consignee will be the same. By checking the AWB distinguishes the general cargo and unaccompanied baggage and allocating rotation number, which is the continuation of previously, allocated rotation number. For each consignment a rotation number is allocated for the cargo. For general cargo rotation number starts with a prefix ‘R’ and rotation number for unaccompanied baggage starts with a prefix ‘B’. The proposed system should identify each consignment as either general cargo or unaccompanied baggage and should allocate its rotation number. 2. Check in In this process one must check for the number of arrived pieces and the condition of the same. The arrived number of pieces should tally with the number of pieces shown in the manifest. If the cargo, received is in damaged condition, CAIL will file CDR (Cargo Discrepancy Report) for that. It holds
the status of cargo in arrival register. Customs formatted reports are generating after checking the cargo. These reports are as follows: ? Cargo Discrepancy Reports: Damaged cargo detail keeps in this report for future reference. It contains the details of the damaged cargo (condition of cargo, Airway Bill No., No. of pieces, weight of pieces manifested, actual weight of the piece when CIAL received the cargo etc.) ? Segregation Report: Segregation report is a custom document which contains the details of the actually received cargo. This report contains No. of pieces manifested, No. of pieces actually received, details of short landed cargo, details of excess landed cargo, discrepancy if any etc. ? Short Landed Cargo: The non-received manifested cargo is called short landed cargo (This means, the cargo not received or the number of cargo actually received is less than the number which is manifested). The short landed cargo verifies with excess landed cargo and regularizes if any match is found. ? Excess Landed Cargo: The unmanifested cargo received by CIAL is called Excess Landed Cargo. The excess landed cargo verifies with short landed cargo and regularizes if any match is found. ? Flight Handling Report: In addition to segregation report CIAL keeps one more report (Flight Handling Report) which contains precious cargo details, total cargo weight, ULD details etc.
For both short landed and excess landed cargo CIAL keeps separate registers. 3. Intimation Once the cargo arrived CIALL is responsible for informing the consignee. CIAL will be intimated about arrival of consignment through “Cargo Arrival Notice (CAN)” by mail, which is mandatory. Other options include phone/ Fax/ e mail/ website/ IVR (Interactive Voice Response) for improving customer services. CAN contain the details of consignment, charges to be remitted, Rotation number, IGM number etc. Demurrage will be charged if consignment is not cleared within the specified number of days. ? IVR (Interactive Voice Response System): CIAL require application software should handle consignee queries about arrival cargo and respond the status of the consignment with number of packages arrived and last date of clearance. ? Automatic Emailing and Web Hosting: Application software should send emails to the specified consignee if email address is specified. Application software should host the website with Airway Bill Number, number of package arrived, weight, consignee name. Flight No. and date. At any point of time web site should give the uncleared unaccompanied baggages/ General cargo which are received by CIAL. Application software should take care of the website. In the website there should be a searching facility for AWB number. The result should provide the number of packages arrived, weight, consignee name, flight no. and date for the particular AWB number. Phone Register: The details of consignee along with their telephone numbers are stored in this register.
Postal Record: The details of the consignee along with the postal address and the amount spent for mail/ telex etc. are stored in this register. 4. Warehouse Management Arrived cargo stored in racks available, in warehouse, cold storage or strong room. The cargo kept according to the rotation number in tracks. The proposed system should list out all available positions. Rack is divided into each cell and each cell has a unique number for locating the cargo randomly. The proposed system should monitor the stock. 5. Delivery Order Before clearing the cargo by the consignee, a delivery order should be issued for each consignment. The customer approaches CIAL office with his Airway Bill/ CAN, passport etc. CIAL staff manually verifies the documents produced by the consignee and issues delivery order. Delivery order contains: i. ii. iii. iv. v. vi. Date IGM Number Rotation Number Number of pieces/ weight Flight Number/ Date Amount etc.
Delivery Order charges are as follows: The charges contain: a) Service Charges b) Cartage Charges c) Break Bulk Charges d) Freight Charges
e) 2% of Charges Collect Charges For each Master Airway Bill, the consignee has to pay a sum of Rs.150/(Break Bulk Charges). If the Master Airway Bill contains House Airway Bill, then the charge will be Rs.150 + (150* will be collected for each Airway Bill) ** These charges may changes according to management decision. 6.Terminal Storage and Processing (TSP) It is a receipt which contains the handling charges, warehouse charges, cold storage charges, strong room charges, cartage charges etc. Sl.No. 1 2 Types of cargo General Cargo Special & valuable Rate per kg. Minimum rate/consignment 3 100 6 200
? Handling Charges: General cargo & baggage Valuable cargo ? Strapping Charges: Strapping charges : Rs. 5.00/- per each packet. ? Demurrage Charges: Free storage period for import cargo shall be 5 working days including the date of arrival of flight. For the next 2 days demurrage will be charged at per kg per day on non-cumulative basis provided the consignment is cleared within 7 days. If clearance is effected after 7 days (including the date of landing) demurrage will accrue for the entire period from the arrival of flight for all types of cargos as follows: Rs.3.00/- per kg subject to a minimum of Rs. 100/- for each consignment. Rs. 5.00/- per packet.
For 5 days 6th day 7thday 8thday 9thday 30thday Beyond 30 days
Free Re. 1/- x weight Rs. 2/- x weight Re. 1 x 7 x weight + Rs. 2/- x weight Re.1 x 7x weight + Rs. 2 x2 x weight Rs. 1 x 7 x weight + Rs.2 x (30-7) x weight Rs. 1 x 7x weight + Rs. 2 x 23 x weight x Rs. 3 x (Total number of
days-30) x weight * Subject to a minimum of Rs. 250/- consignment. Notes: • Consignments of human remains coffin including baggage of decreased and human eyes will be exempted from the purview of TSP, demurrage & Delivery order charges. • Free storage period for consol baggage shall be 7 working days (including the date of landing). • Charges will be levied on the “Gross weight” or the “Chargeable weight” of the consignment whichever is higher. Where ever the Gross weight and (or) Volume weight is wrongly indicated on the AWB and is actually found more, charges will be levied on the actual gross weight/ actual volumetric weight/ chargeable weight whichever is higher. • # Special import cargo consists of cargo stored in cold storage, live animals, hazardous goods, valuables, ornamental fish, live chicks etc. • @ Valuable cargo consists of gold, bullion, currency notes, securities, shares, share coupons, Travelers cheques, diamonds, diamond
jewelry, watches made of silver, gold, platinum, computer parts, mobile phones and items valued at US $ 1000/ kg and above. ? Palletization/ De Palletization and Containerization/ De Containerization: In CIAL stuffing and destuffing of cargo for all airlines company (except Air India) is been done by CIAL itself. For that separate stuffing and destuffing charges will be levied. The recent list of such charges is given below: Pallet 10 ft Pallet 10 ft contour Container AMF ALF PLA/ FLA BULK ? Cold Storage Charges: Cold storage charges: Re.1/- per kg subject to a minimum of Rs. 200 for each consignment. ? Strong Room Charges: Strong room charges: charges will be levied as per the schedule. Stuffing(Rs.) 2000 each 2500 each 600 each 1700 each 1200 each 1300 each .50/ kg Destuffing(Rs.) 1500 each 1500 each 500 each 1500 each 1000 each 1000 each .50/ kg
Strong Room Charges (Rs.) period (week) 1st 2nd 3rd 4th 5th 6th 7th 0-50 470 1410 2350 3290 4230 5170 6110 51-100 940 2820 4700 6580 8460 10340 12220 Weights(kg) 101-150 151-200 1410 4230 7050 9870 12690 15510 18330 1880 5640 9400 13160 16920 20680 24440 201-250 2350 7050 11750 16450 21150 25850 30550 251-300 2820 8460 14100 19740 25380 31020 36660
? Fork Lift Charges: Fork lift charges are levied from the exporters/ importers only. Fork lift charges: Rs. 10/- per kg subject to a minimum of Rs.100/consignment. 6. Gate Pass This is the final part of cargo clearance. Once examined the baggage and pay the duty CIAL issues gate pass. No cargo taken outside without gate pass. This contains details like: i. ii. iii. iv. v. vi. vii. viii. Date IGM Number Rotation Number Number of packets Name of the passenger Flight Number/ Date Amount B.D. number and date etc.
7. Disposed Cargo
The uncleared cargo for a specified period disposes after issuing final remainder to the consignee.
Export
Export division will accept the cargo from shippers/ agents along with the concerned documents. Cargo to be exported booked through an agent, who cuts the Airway Bill number (AWB) and issues a shipping bill (SB) which is obtained from the customers on declaration of his code number. After necessary endorsements the cargo is then carted to the cargo complex where: 1. The SB is passed. 2. The cargo is examined by customs. 3. The cargo is permitted to be carted to the CIAL. Sterile area of the ware house, where it is stored to observe the cooling period. DLB (Display Load Booking) It is the booking detail of cargo in an aircraft. DLB contains the AWB number, No. of pieces weight. According to the booking in the DLB which is provided to the CIAL by the airlines, the shipments are loaded in the ULDs. ULD is Unit Load Device such as pallets and containers, which is used for loading the shipments in the aircraft.
EXPORT PROCESS Shipper/ Agent Weighment Export TSP Acceptance Immediate Release 24 hrs cooling Warehousing Security X-ray Loading Manifestation Report 1. Weighment While taking weight of cargo CIAL records the number of pieces, weight, transfer point in India, final destination, agents/ shipper details, acceptance Time, flight number, type of cargo etc. If the cargo need not cover the cooling period it screens. The types of cargo are as follows: ? Perishable cargo: Normally perishable cargo will not kept in the warehouse for completing the cooling period. For example: News papers, vegetables, fruits etc. So inorder to ensure security CIAL screens and send cargo. For screening CIAL collects the charges from the airline or shipper.
? General cargo: Any dry normal cargo neither dangerous nor valuable and does not need any special attention is considered as General cargo. Normally general cargo will be kept for 24 hours cooling period. If the cooling hours is not sufficient for the cargo, which is brought by the shipper or the agent, CIAL screens the cargo and forward to the flight. ? Special cargo: Special cargo includes all the cargo that requires special attention while carriage. Special cargo can be defined as which is acceptable only under certain conditions or restrictions and needs utmost care in handling of storage. It includes cargo like live animals, dangerous goods and valuable cargo. The rates of special cargo are double to that of any cargo. ? Valuable cargo: For the valuable cargo screening is done but charges are not taken. CIAL take only the TSP charge, which is fixed. Each type has its own rate and should be computed by the system. The proposed system should compute the handling charges considering the weight and type of cargo. 3. Export Register All accepted cargo detail records in a register called export register which contains airline code, AWB number, date, time of acceptance, receipt number, if TSP is issued; CTM number etc. ? CTM (Cargo Transfer Manifest) Number: CTM is issued to the carrier to uplift cargo up to certain point on behalf of other carrier. Revenue will be shared for the sector the carrier uplifted as for CTM.
4. TSP Charges It is handling charges, which contains handling/ loading charges, warehouse charges, cold storage, strong room, cartage, x-ray, miscellaneous charges. The rate of each category varies and has a minimum charge. The rates of some category are given below: Sl.No. 1 2 3 4 Type of Cargo General # Special Perishables News papers Rate per kg. Rs.0.50 Rs.1.00 Rs.0.35 Rs. 0.25 Min. rate / consignment. Rs.100 Rs.200 Rs.100 Rs.100
5. Demurrage Charges Sl.No. 1 2 Notes: • The free period for export cargo shall be 48 hrs for examination processing by the shippers. • TSP charges applicable to newspapers (daily) and TV reel consignments shall be 50% of the prescribed charges for general cargo. • Consignments of human remains coffin including unaccompanied baggage of deceased and human eyes are exempted from the purview of TSP and demurrage charges. • # Special cargo consists of live animals, hazardous goods and valuable cargo. This includes ornamental fish, chicks etc. Type of Cargo General # Special Rate per kg. Rs.0.50 Rs.1.00 Min. rate / consignment. Rs.100 Rs.200
• Charges will be levied on the “Gross weight” or the “Chargeable weight” of the consignment which ever is higher. Wherever the gross weight and (or) volume weight is wrongly indicated on the AWB and is found more, charges will be levied on the “Actual Gross weight” or “Actual Volumetric weight”, whichever is higher. • For mis-declaration of weight above 2% and upto 5% of declared weight penal charges @ double the applicable TSP charges will be levied. For variation above 5%, the penal charges will be levied @ five (5) times the applicable TSP charges of the differential weight. No penal charges will be levieable for variation upto and inclusive of 2%. 6. X-ray Machine Usage Charges These charges are levied either from the shipper or from the respective airline. Sl.No. 1 2 3 Type of Cargo General Perishable P.O. mails Rate per kg. Rs.1.50 Rs.1.00 Rs.1.50 Min. rate / consignment. Rs.100 Rs.100 Rs.100
7. Strong Room Charges Strong room charges: Rs.470/- per week upto 50 kg. More than 50 kg as Per schedule. Same day clearance Rs.470/- will be Charged irrespective of weight of the consignment. (More than 4hrs). 8. Cold Storage Charges Cold storage charges: 9. Loading Rs.1/- per kg per day subject to a minimum of Rs.200/- for each consignment.
Before loading CIAL verifies the flight folder whether any general cargo covered cooling period for the specified flight. CTM number puts if necessary. System should generate CTM number. The loading is according to the ULDs allotted by the airline. The system should provide all information about export cargo, flight as well as date wise. Whenever we enter the flight number, the system should display all the consignments booked for that particular flight, whose 24 hrs cooling period (only for general cargo) and all the customs formalities has been completed. 10.Manifestation It deals with preparation of manifest. For each flight a manifest has to be prepared even if no cargo is loaded. A manifest contains all the details of the cargo that is being uplifted on that particular flight and also shows ULD wise loading of each shipment. Manifest should contain details like flight number/ date, registration and airport of destination etc. The system should provide a dialog box to enter the ULD number and for each ULD there must have separate screen to enter the following details: 1. Airway Bill Number 2. No. of pieces 3. Gross weight 4. Airport of Destination 5. Shipping Bill Number 6. CTM Number (if any) 7. Security (X-ray, Cooling, Period, Physical examination) This list is not complete and prospective suppliers should describe additional functionality conforming to international standards. 11.Report writer
CIAL will require a report writer capable of working with the above applications. Prospective suppliers should be able to provide a report writer tool, to define regular and ad hoc reports, enquiries and file maintenance. The report writer should be straight forward to use by end-users. Suppliers should provide a full description of the proposed report writer, at both overview and detailed levels. The format of both import and export reports are attached as annexure. Some statistics reports depending on the palletisation/ depalletisation/ containerization. The various charges are given below: Palletization/ Depalletization charges to Airlines Rs.1500/Rs.3000/Rs.500/Rs.0.50/kg Rs.300/For 10 feet size pallet For 20 feet size pallet Per containerization Bulk cargo Polythene sheet covering for each pallet. Human remains and human eyes Free facility for both Export and Import All MIS reports are generating periodically as well as airline wise. The list given below is not complete, however main reports are: i. ii. iii. iv. v. vi. vii. viii. ix. Delivery Register Arrival Register Airline wise Import Detail Airline wise Export Detail Export Register Short Landed Cargo Detail Excess Landed Cargo Detail Flight/ ULD wise reports Commodity wise
x. xi. xii. xiii. xiv. xv. xvi. xvii. xviii. xix. xx. xxi. xxii. xxiii.
Agent wise Fort night report Airline wise Monthly/ weekly statement Sector wise report Gate pass Detail TSP Detail Airline wise Delivery Detail Postal record Detail Stock Detail General cargo Detail Unaccompanied baggage Detail Uncleared baggage/ General cargo Detail Disposed cargo Detail
12.Year End Process and Renumbering April 1st of every year bill number is starting from 1, unaccompanied baggage/ general cargo renumbers of every December 1st . The closing detail of previous year should reflect the current financial year. There should be a provision for referencing each financial year. Advantage of Air cargo to Exporters Air cargo boosts the export of any country. Exporters to place themselves on the track of competition are compelled to depend on air transportation. Some of the explicit advantages of air cargo can be mentioned as follows: • The relative importance of speed:
Speed is important factor to the shipper who wants to market his goods on the accurate date. Speed is the important factor particularly in the case high fashioned cloths in a very sensitive market and also in the case of fresh fruits, flowers, semi frozen products etc. • High level of frequency: Frequency is most important factor when goods can be sold in small quantities at frequent intervals. • High reliability is possible: It is an essential requirement to the shipper whose goods are sold against expiry date on Letter of Credit. Shipper expects to deliver the goods in prime conditions. IATA prescribes standards to be maintained for the delivery without damage. • High level of customer service: A customer in a business is the one who demands for the product at the particular time and particular manner. Through the air transportation he is satisfied. • Packing cost is less compared to sea transport: This is due to the speedy delivery in less time.
ORGANIZATIONAL STRUCTURE Cargo operation consists of exporting and importing of goods. In CIAL, the cargo department is done by CIAL itself. The organizational structure of cargo department, CIAL consists of: 1 Senior Manager, 2 Deputy Managers, 4 Assistant Managers, 41 Executives, 70 Loaders and 7 Drivers (4 tractors & 3 Fork lifts) Senior Manager Dy. General Manager
Asst. Manager Asst. Manager Asst. Manager Asst. Manager Executive Executive Executive Executive
Working Hours at Cargo Complex CIAL Customs Plant quarantine & Fumigation Department Bank 09.30 Hrs. to 17.30 Hrs. 10.00 Hrs. to 17.00 Hrs. 09.15 Hrs. to 17.00 Hrs. (Mon-Fri) 10.00 Hrs. to 16.30 Hrs. ( Mon-Fri) 10.00 Hrs. to 14.00 Hrs. (Sat)
Round The Clock Operation ? Palletization ? Release of Export to Airlines ? Import ? Depalletization ? Flight checking ? Instant billing ? Special cargo clearance AIRLINES OPERATING FROM CIAL CIAL handles more than 95 flights per week for international trips alone. Both domestic and international airlines that operate from CIAL are the following: ? Indian Airlines( IC) ? Air India (AI) ? Jet Airways ? Air Sahara ? Emirates (EK) ? Gulf Air (GF) ? Kuwait Airways (KU) ? Oman Air (WY) ? Qatar Airways (QR) ? Saudi Arabian Airlines (SV) ? Silk Air (MI) ? Sri Lankan Airlines (UL) The transshipments are mostly undertaken mostly by the following airlines:
? Cathey Pacific ? Lufthansa ? British Airways ? Singapore Airlines Since the airport is viable for multimode transport linkage, each year there is a growth in the international trade, tourism etc. More international are looking at the growth of the CIAL and hoping to start their operations. Oman Airlines is the first foreign airline that started its operations from CIAL from 22nd August 2001. Air Transport Geography Knowledge of the geographical areas connected with air transport including countries, major commercial centres and city codes is essential for the efficient handling of air cargo. IATA have found it convenient to divide the world into three Traffic Conference Areas taking into account different economic, social and business conditions and practices prevailing in different parts of the world and are known as TC1, TC2 and TC3.
? IATA Traffic Conference Area 1 (TC1)
North America, Central America, South America, Greenland, Bermuda and the Hawaiian Island.
? IATA Traffic Conference Area 2 (TC2)
Europe including the erstwhile USSR as far as the Arabs and Iceland, The Azores Africa and the adjacent Island, The Middle East including Iran. ? IATA Traffic Conference Area 3 (TC3)
Asia beginning with Pakistan, Australia and the Pacific Islands (Except the Hawaiian Island in TC1) TC1 is referred to as the eastern hemisphere and TC2 and TC3 together constitutes the western hemisphere.
DATA ANALYSIS AND INTERPRETATION
INTRODUCTION Analysis and interpretation part is the important part where the data collected are analyzed and interpreted with different tools. This chapter includes tables and diagrams. Analysis highlights the factors of infrastructure available at CIAL. Feedback from Air cargo Agents, Exporters and Airlines is collected for the following areas of infrastructure: 1. Network of Communication. 2. Automation in Cargo Handling. 3. Customs Clearance Procedures. 4. Warehousing Facilities and Security Scenario (Strong Room, Cold Room, X-Ray and Cooling off) 5. Equipment for Carting and Loading. 6. Personals in Cargo Handling. 7. Accessibility to the Airport. For categorizing the users of the Airport four different scales were used such as: a. Highly Satisfied b. Satisfied c. Partially Satisfied d. Dissatisfied For the analysis of the data the tools used are: Simple Percentage, Composite Percentage Growth, Rating and SWOT Analysis.
TABLE SHOWING EXPORT FROM AIR CARGO COMPLEX, CIAL IN DIFFERENT YEARS (Figures in Tons) Period AI AI Express IC Jet Airways Oman Silk KU EK QR SV UL GF Polar Mahar Volga Dnepr Silkway Total 3942.6 00-01 786.4 01-02 2496.7 02-03 3151.4 03-04 2749.7 04-05 2674.7 05-06 1353.7 181.8 1038.8 587.2 677.9 463.9 830.4 3044 685.4 2007.2 658.6 489.2 58.4 136 .9 12076. 5 Total 13212.8 181.8 5212.2 2750.2 1282.3 1507 3404.6 7773.3 2888.4 5123.8 1094.6 1195.2 24.6 58.4 136 .9 45846.1
175.1
619.2 626.1 84.8 89.9 25.7
1398.5 490.7 90.7 244.7 671.1 215.4 24.6 1.6
1108.6 495.0 62.9 342.9 938.7 1710.1 754.8 1002.5 114.7 191.2 12.9
872 551.2 366 365.5 938.7 2803.8 1423.6 2112.5 321.3 514.8 11.7
6288.8
9484.0
13092. 7
961.5
TABLE SHOWING IMPORT TO AIR CARGO COMPLEX, CIAL IN DIFFERENT YEARS (Figures in Tons) Period AI AI Express IC Jet Airways Oman Air Silk Air KU EK QR SV UL GF AL Israel Cargolux Mahar Air BondedTruck Polar Air Singapore VolgaDnepr Alltalia Lufthansa Total 00-01 01-02 02-03 474.5 1603.7 996.8 95.5 Total 4804.6 .3704 282.4 313.8 326.2 1718 83.1 103.4 98.4 448.6 6 12.5 6.3 44.34 26.5 70.4 114.3 643.8 6.7 615.8 476.6 2399.3 161.6 993.7 4652.9 19.3 199.6 575.9 .4 287.9 2835.2 81.2 52.8 506.6 3.7 40.04 37 37 2.7 2.7 1.6 1.6 148.9 148.9 22.1 22.1 7 7 138.6 138.6 36.4 36.4 2.9 2.9 2008.4 2375.2 3341.8 5181.6 5589.8 19066.9 03-04 742.6 04-05 614.4 05-06 3726.4 .3704 292.1 408 77.1 86.6 8.9 10.6 172.2 260.4 599.9 700.3 1586.8 1910.8 275.5 81.5 1271.9 1275 60.4 312.2 15.44 20.9
570
COCHIN CARGO HINTERLAND: TOTAL AIR CARGO TRAFFIC Total air cargo traffic from the CIAL is estimated @ 1,00,000 MT – 13% of the total India’s Air Cargo Traffic. Bangalore is the largest cargo belt and accounts for roughly half 48% of total cargo in the CIAL. TRV – 25%, Coimbatore – 16%, COK – 7%, CCJ – 4%. AIR CARGO TRAFFIC FROM CIAL Cargo belts Loaded Un Loaded Loaded Un Loaded Loaded Un Loaded Estimated cargo traffic 3360 3704 21180 41150 13783 2153 % of total Commodity 5% 7% 10% 15% 13% 4% Spices. News papers, Spare parts. Perishables. Garments. Electronic items, Flowers. Leather goods, Silk, Machinery.
TABLE SHOWING THE MAJOR COMMODITIES EXPORTED THROUGH CIAL Sl. No. 1 2 3 4 5 6 Types of Commodities Vegetables and Fruits Spices and Spice products Garments News papers and Magazines Food Stuffs Others Total Source: Airport Manifest Percentage 38.33 12.80 10.12 2.16 3.63 32.96 100
The above table depicts the shares of different types of commodities exported through CIAL. Vegetables and fruits with 38.33% occupy the major share. Spices and spice products have the share of 12.80%. Garments occupy the third position with 10.12%. News papers and magazine and food stuffs have the shares of 2.16% and 3.63% respectively. The other categories share 32.96%. The inference that can be drawn from the table is that there is more scope for the vegetables and fruits to increase the cargo quantity.
TABLE SHOWING THE RESPONSE OF AIR CARGO AGENTS TO THE NETWORK OF COMMUNICATION AT CIAL Ratings No. of Air cargo Agents Highly Satisfied 6 Satisfied 22 Partially Satisfied 2 Dissatisfied 0 Total 30 Source: Primary Data Percentage 20 74 6 0 100
The table depicts the fact that 74% of the respondents are satisfied with the Network Communication at CIAL. While 20% of them respond with high satisfaction, 6% are partially satisfied. No respondent is dissatisfied with this regard. The inference that can be drawn from the above table is that CIAL has a satisfactory Network of Communication.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE FACILITY OF THE NETWORK OF COMMUNICATION AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 1 10 1 0 12 Percentage 8 84 8 0 100
The above table depicts that 84% of the respondents satisfied when both the highly satisfied and the partially satisfied are with 8% each. No respondent is dissatisfied. It can be understood that the majority of the Airlines are satisfied with the Network of Communication at CIAL.
TABLE SHOWING THE RESPONSE OF AIR CARGO AGENTS TO THE CUSTOMS CLEARANCE PROCEEDURE AT CIAL Ratings No. of Air cargo Agents Highly Satisfied 6 Satisfied 16 Partially Satisfied 2 Dissatisfied 6 Total 30 Source: Primary Data Percentage 20 54 6 20 100
In the table 54% of respondents are in the satisfied group. Both the highly satisfied and the dissatisfied groups are equal with 20%. Only 6% of respondents are in the partially satisfied group. The reference that can be drawn is that since 20% of respondents are in the dissatisfied group CIAL has to improve in this respect.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE CUSTOMS CLEARANCE PROCEEDURE AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 0 2 9 1 12 Percentage 0 16 75 9 100
According to the tables majority of the respondents (75%) are satisfied partially. 16% are satisfied. While no respondent is highly satisfied, 9% of the respondents are in the dissatisfied group. It seems that the Airlines expect high improvements in the customs formalities.
TABLE SHOWING THE RESPONSE OF AIR CARGO AGENTS TO THE WAREHOUSING FACILITIES AT CIAL
Ratings No. of Air cargo Agents Highly Satisfied 6 Satisfied 22 Partially Satisfied 2 Dissatisfied 0 Total 30 Source: Primary Data
Percentage 20 74 6 0 100
From the above table it is clear that 745 of the respondents are in the satisfied group. 20% 0f them are highly satisfied and 6% of them are partially satisfied. No respondent comes under the dissatisfied group. CIAL Warehousing are satisfactory since majority of respondents are satisfied.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE THE WAREHOUSING FACILITIES AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 3 7 2 0 12 Percentage 26 58 16 0 100
As shown in the table the satisfied group covers 58% of the total respondents. And 26% of the respondents are highly satisfied and 16% of them are partially satisfied. Since no respondent is dissatisfied it is clear that CIAL Warehousing facilities are appreciable.
TABLE SHOWING THE AIR CARGO AGENTS PREFERENCE FOR CARGO HANDLING AT CIAL Ratings No. of Air cargo Agents Highly Satisfied 2 Satisfied 16 Partially Satisfied 8 Dissatisfied 4 Total 30 Source: Primary Data Percentage 6 54 26 14 100
The above table shows that satisfactory group figures 54% who are followed by partially satisfied category of 26%. The dissatisfied group of 14% is high, compared to 6% of highly satisfied group. Even though majority is satisfied there are a good number of respondents who expect developments.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE PERSONNEL AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 1 6 4 1 12 Percentage 8 50 34 8 100
The above table shows that 50% of the respondents are satisfied with the service provided, 34% of the respondents are partially satisfied. And the highly and dissatisfied respondents shares 8% equally. Airlines show their response to get better services in this regard. There should have more skilled personals in the cargo handling section.
THE EXPORT – IMPORT – TRANSSHIPMENT RATIO AT CIAL Import Export Transshipment Total 2375.2 6288.8 190.8 8854.8 27% 71% 2% 100%
Source: Records of CIAL. Above table depicts that 71% of the total cargo handled is Export cargo. The import cargo ratio constitutes 27% of the total. Transshipment cargo to Thiruvananthapuram and Kozhikode constituted 2% of the total.
Export- Import- Transhipment Ratio
100% 80% 60% 40% 20% 0% Total Transshipment Export Import
SWOT ANALYSIS
SWOT analysis comprises both the organizational factors and the environmental factors. The organizational factors are ‘S’ and ‘W’ i.e. strengths and weakness. The environmental factors are ‘O’ and ‘T’ i.e. opportunities and threats in the business environment. Strengths are the internal competencies of a firm, particularly in comparison with that of its competitors. Weaknesses are those factors which tend to decrease the competencies of the firm, particularly in comparison with its competitors. Opportunities as well as threats are the factors in the outside environment. Opportunities of one firm can be threats of another and vice versa. In SWOT analysis the researcher analyses the cargo movement from Cochin. The major competitors of CIAL in the field of cargo operation are Chennai Airport, Thiruvananthapuram Airport and Bangalore Airport. STRENGTHS 1. The Airport has full range of multi-model transport linkages. The airport is close to the National Highways, Waterways, Railways and Cochin sea ports. 2. The Airport is provided with Instrumental Landing System, which helps 24 hrs. flight operation and is also suitable for the operation of Boeing b 747 – 400 and Airbus types of aircrafts. 3. Eight international airlines and four domestic carriers are operating from CIAL with high frequency level. 4. The CIAL has constructed a cargo complex recently to integrate the whole cargo activities
WEAKNESS 1. The customs clearance procedures at CIAL are very slow. About 60% of the airlines, 90% of the air cargo agents and 85% of exporters are only partially satisfied. 2. There is no 24 hrs customs clearance from CIAL even though for special fees the service is available during the off hours. 3. The personals are to be well trained and the number of working force in the cargo section is less and insufficient to meet the needs. OPPURTUNITIES 1. The CIAL is situated in the important area are far as the geographical and commercial factors are concerned. 2. The CIAL is a joint venture of NRIs all over the world, especially that of the Keralites. This unity will help for future developments. 3. The Special Economic Zone (SEZ) is situated near the Airport. This will boost the international trade from the state. 4. Geographically the infrastructure of the CIAL is viable to make further developments and construction such as complexes, runways, multi – modal transport linkage etc. 5. The proposed cargo village with an area of about 80 acres will help the CIAL air cargo for hyper developments. 6. The Airport – Seaport Highway which connects the industrial zone at Ambalamugal, where there are BPC, IOC & HPC, Kakkanad SEZ, Kinfra Park and IT Park at HMT, Kalamassery will be very effective in the coming years to add fuel to growth.
THREATS
1. The CIAL has to face the competition from other airports, especially from Chennai and Thiruvananthapuram who are having upper hands in cargo handling. 2. The pace at which the developmental programs are being carried out is rather slow and will affect the future of the airport badly. 3. The growing international terrorism is another threat, which is a hindrance for the gradual growth.
FINDINGS AND SUGGESTIONS
FINDINGS AND SUGGESTIONS Logistics is a process which involves movement of materials and products from the vendor right through to delivery at the customs door, including moves through manufacturing facilities, warehouses, and third parties such as re-packages or distributors. A logistics provider must control all components of the air cargo logistics chain like material handling, transporters, freight forwarders, distributors, warehousing, customs clearance etc. many airlines are trying to integrate these service to provide tailor made logistical solutions for the problem of their customers. CIAL has to strengthen its air cargo logistics chain so as to expect a sustained response from overseas buyers. This chapter comprises of the findings and analysis. The findings and analysis part has been depicted from the analysis and interpretation of data. From the pragmatically point of view this is an important part which invites for some action. FINDINGS 1. Majority of the air cargo agents, airlines and exporters in and around Cochin is satisfied with the Network of Communication at CIAL. 2. Out of the 30 sample size, 100% of agents are regular agents of CIAL cargo 3. 60% of agents are concentrating in both export and import, while 25% of agents concentrate only in exporting. 4. Most of the users of airport are less satisfied with customs formalities at CIAL, especially the air cargo agents.
5. Majority of the respondents are either highly satisfied or simply satisfied with regard to warehousing facilities at CIAL. 6. From the surveyed data, clearance of import cargo is fast. 7. Majority of the respondents are satisfied with the scanning machines at CIAL cargo and of the opinion that custodian services at CIAL cargo are excellent. 8. Majority of the agents are very much satisfied with the goods being handled in the CIAL cargo. 9. CIAL facility for automation in cargo handling is satisfactory for the airlines. 10.Security scenario in CIAL is satisfactory for majority of airlines, but suggested for further developments. 11.70% of the agents were highly satisfied with the hospitality of cargo officials at CIAL. 12.Two third of the airlines are satisfied with the equipments used for carting and loading. 13.Most of the exporters are satisfied with the accessibility to the airport. 14. Majority of customers are using water as mode of transport except a few engaged in import/ export of cargo. 15.Most of the customers opined that cost of the air transport is high. 16.For durable goods customers prefer water transport but for seasonal goods, they prefer air transport. 17.Even though freight charges are high, customers are willing to use air transport because of its regularity and security. 18.Lack of professionalism in every element of the logistics chain like CIAL, agents, transport providers, airlines, customs etc.
19.There is no uniformity in the packing norms adopted by the exporters. International standards have to be followed. 20.Strikes, road blocks, hartals, power failures, traffic jams etc. are frequent occurrences in Kerala. Some of these can be prevented but some cannot SUGGESTIONS 1. The important areas to be considered for an immediate improvement are the customs procedures and clearances of Duty drawback, for which a healthy coordination and effective cooperation is needed. 2. A conscious and strategical effort is needed for integrating the activities of disparate operations such as customs, airlines, agents and exporters. 3. If the company reduces the cargo handling charges and delay of getting clearance, the company can get more customers. 4. The company has to improve their facilities available inside the warehouse like seating comfort, telephone facilities and canteen also. 5. Providing more information about their concern through the website will be helpful for new customers to know the procedures. 6. Increase the number of modern equipments for cargo handling. 7. Continuous effort should be made to attract the exporters who should feel reliability by constant presence and participation in all activities. 8. Company has to develop a new website which contains only the details of cargo. 9. Number of personals is to be increased; they need operational as well as inter personal skills.
10. Company should open a grievance cell to solve complaints and introduce a help desk at CIAL cargo. 11.Try to keep an upper hand over the activities of the union workers and there should be vigilance to avoid the unauthentic practices in the clearance section. 12.For durable goods, if some concessions are given customers will switch over from after to air transport. 13.An effective utilization of EDI system is to be adopted for efficient information interchange. 14.CIAL has to give special attention to exporters by making efficient and friendly liaison. 15.Bonded trucking has to be improved. 16.Introduce a “User Friendly” strategy to attract more exporters and airlines. 17.Efforts should be made to attract Foreign Direct Investment to improve the infrastructural facilities in the airport. The urgent necessities are weigh bridge, more scanning machines, more cargo handling equipments, quality service and professional handling of cargo, easy accessibility and office space for airlines and agents with warehouse facilities. 18.Free Trade Zone (FTZ) can be established to promote export cargo with an eye to staying ahead of increasingly fierce competition and to cash in on the ever growing SCM and Logistics industries. 19.CIAL cargo force should be given training in customer relationship management and professional handling of cargo.
20.Regular meetings with airlines, agents, customs and CIAL staff should be conducted to study their problems, complaints, recommendations and suggestions. As a future prospect, CIAL can be upgraded to an Air Cargo Hub and inbound and out bound operations can be made under one roof. This will enable to handle more cargo and the capacity to process shipments/ hour will also increase.
CONCLUSION
CONCLUSION The air cargo industry plays an important role in the global supply chain. Air cargo services between Asia, Europe and America are widely expanding as liberalization and globalization of global trade create new demand. The growth projection of volume of international air cargo shows and with of 6.6 million tonnes during the five years forecast period. New technological developments are visible in air cargo, which surges the growth of standard and speedy operations. Now there are decreasing errors, increasing performance and improving customer satisfaction. Rapid growth and development in IT and wireless technologies is opening new prospective for air cargo, supporting both planning and real time operations. There are strong challenges in the aviation industry such as terrorist, hijacks and unhealthy competition. These factors have created a sudden decrease in aviation industry. But, it is getting well and many exporters have started using the shipment via air. The basic thing that is needed as the foundation of the industry is the infrastructure for smooth movement. The present stage of CIAL is that of childhood, from which it has to grow rapidly by improving the infrastructure facilities. For this CIAL air cargo should meet the changing and the ever growing needs of the air cargo agents, exporters and airlines by modifying and upgrading their models and systems.
BIBLIOGRAPHY
TEXT BOOKS 1. Logistics Management (Bowersox Donald). 2. Logistics Management and World Seaborne Trade (Krishnaveni Muthiah) 3. An Investigation of Air Cargo Operation at Canadian International Airport Breaking through Bottlenecks (Jeremy.N. Smith) JOURNALS 1. Cargo Talk 2. Yogana, “Augmenting Airport Infrastructure for Air Freight” 3. CIAL Manual WEBSITES 1. www.aircargoworld.com 2. www.cial.org 3. www.airportindia.com
4. www.cochincustoms.nic.in
ANNEXURE
doc_650245090.doc
Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) is an airport project for Dr. Babasaheb Ambedkar International Airport, Nagpur. It is the biggest economical development project currently underway in India in terms of investments.
A STUDY ON PERFORMANCE OF INTERNATIONAL CARGO OPERATIONS AT COCHIN INTERNATIONAL AIRPORT LTD [CIAL] COCHIN PROJECT REPORT Submitted by SUNIL KUMAR K (REG.NO.06MTA2109) In partial fulfillment of requirements For the award of MASTER’S DEGREE IN TOURISM ADMINISTRATION Under the guidance of
T .JOHN COLLEGE (Affiliated to Bangalore University) Approved by AICTE Govt. of India. New Delhi Gottigere P.O., Bannerghatta Road, Bangalore-560083.India CERTIFICATE This is to certify that Mr. SUNIL KUMAR K has undertaken the project study entitled “ A STUDY ON PERFORMANCE OF INTERNATIONAL CARGO OPERATONS AT COCHIN INTERNATIONAL AIRPORT LTD [CIAL] COCHIN” in partial fulfillment of the requirement of the MASTER’S DEGREE IN TOURISM ADMINISTRATION under my guidance and to the best of my knowledge, it is his original work.
DECLARATION
I hereby declare that the internship report is a bonafide record of work done by me in the partial fulfillment of the requirement for the award of MTA Degree of the Bangalore University, is my original work and the same has not been previously presented for the award of any other Degree/ Diploma/ Fellowship or other similar title of any other university
SUNIL KUMAR K III MTA (Reg. No. 062109)
ACKNOLEDGEMENT
If words are considered as symbol of approval and tokens of knowledge then the words play the heralding role of expressing my gratitude to all those who helped me in completing this project. I avail this opportunity to bid my heartfelt thanks to all who wholeheartedly devoted their body and mind to help in throughout the entire project work. First and foremost, I wish to place my sincere and esteem thanks to SEEMA GOEL, the principal of T. JOHN college for granting permission to go for an on the job training. I thank principal sincerely. I owe an immense debt of heart-felt gratitude for my guide for her excellent guidance, constant encouragement, sustained interest and critical suggestion throughout my project completion, which really paved the way for the successful completion of this endeavor. I am deeply indebted to Mr. Suresh Kumar (GM, CIAL) and Mr. George Kozi (AIR CARGO, CIAL) for their wholehearted encouragement and valuable guidance in completing the project successfully. Last but not the least I express my profound sense of gratitude and thanks to all those who have lend their kind co-operation and help for the successful completion of this endeavor. Above all the grace of God lead me to complete my project.
INTRODUCTION TO THE STUDY The world economy has undergone revolutionary changes during the past fifty years. The distances between regions are shrinking day by day. Perhaps the greatest and the most profound change is emergence of global markets, global competitors and winners & losers in global competition. And the whole world has been considered as a global village of speedy transportation and easy communication. Due to the new global phenomenon such as globalization and liberalization the world trade has got prominent importance than the days gone. Competition in the world market has reached its zenith where speed, frequency, reliability and cost significant influence. Transportation plays a critical role in the logistical chain. Air transportation, the speediest of the different modes has boosted international business and paved way for economic integration in the present global scenario. The effect of airfreight is profound in the scene that it permits shipments that once required nearly 30 days, to arrive in a single day. It is estimated that 36% of world trade in terms of value is moving by air and the rate of growth of air cargo is increasing steadily. Thus sensitive and perishable goods, valuables, medical and chemical goods can be exported through air in a shorter period. Air cargo logistics plays a crucial role in ensuring the competitiveness and commercial success of most industries around the globe as it brings enormous economic benefits in the transportation of perishable and time dependent goods. This gives the shippers the confidence that their cargo will
receive special treatment needed, supplied with global expertise, ensuring the quality of product at delivery. The 18th century has been the era of full-rigged ship and waterborne commerce, the 19th century is the age of the steam-powered railroad; the 20th century to be the century of motor carrier and the 21st century will be the century of air cargo. In this era of J.I.T the shippers are not much bothered about how their cargo moves, provided it reaches its destination on time and in good condition. Though air transport is expensive many folds than through sea, the scope of reducing inventory costs makes many to use this mode. Statement of the problem Transporting is an important function in logistics, since it provide the place utility for a commodity. Multinational transport helps the movement of goods more efficiently through faster transit at reduced costs. Air transport brings the far cry regions closer. Cochin International Airport Limited [CIAL] is the only airport outside the government preview. Inspite of being located in the industrial city and very near to Cochin port and Export zones, the cargo movement is not as expected by the air cargo industry. Hence there is a need to study the cargo movements through CIAL and find the factor affecting it and to filter out the lucunous of the cargo complex and to provide better solution.
The study was undertaken at CIAL cargo complex during June and July 2007. Exporters, Importers, Airlines, Agents, Customs, Transporters and CIAL are included in the study. The main objective are to study international cargo operations through CIAL, the factors affecting it and to suggest improvement measures. A survey is conducted with three populations of agents, airlines and customers to evaluate their satisfaction level of CIAL. The study revealed that CIAL has shown significant growth in cargo handling. The major items moved include vegetables, seafood, spices, oleoresins, oils and garments. CIAL took over the charge of cargo from Air India in December 2000. The major constraints for cargo coming to CIAL are poor road condition in Kerala, lack of rail connectivity, non availability of specialized services, airport delays, disturbances like ‘Hartal’ strikes, government restrictions, entry taxes, lack of professionalism, lack of proper infrastructures, less frequency of flights and destinations served, non uniformity of packing norm adopted by exporters etc. Delays are mainly due to repetition of work, unsystematic process flow, rigid procedures, lot of paper work, lack of handling equipments, weighting machines, manpower etc. The customers are dissatisfied with the way grievances are handled, the duty schedule of CIAL staff and the services provided. If the CIAL remains the status Quo, the customers will shift to other airports.
Commitment to customer service, flexible slot times, consistent investments in new facilities and infrastructure innovations in applying sophisticated technologies and liberal approach to traffic rights and the tariffs will enhance the glory of CIAL. A marketing division is recommended. If the process flow is improved and made systematic, the repetition of work can be avoided. The time lost in physical examination can be reduced. Hence the space available can be efficiently used reducing congestion and delay. The cargo village and offices of the relevant departments should be established at the earliest. Seminars and workshops should be conducted to get an awareness of the current trends in industry. With these innovations CIAL can expand its leads overall as South India’s logistics centre, combining the air, rail, water and highway distribution skills .
NEED FOR THE STUDY Indian Civil Aviation Industry is one of the competitive industries in the world. The Government adopts effective steps for the betterment of Airports in India. Today the basic challenging topic in this area is regarding the privatization of the International airports in India, which are running without profit. Here is the importance of CIAL, which is an airport run by the private initiativeness. Since CIAL is stepping forward from childhood to adulthood a study on the infrastructure available for cargo transportation will be a timely and effective attempt. The cargo movement here is not as much as expected by the cargo industry, despite its nearness to Cochin port and Economic Process Zone. Though situated in the industrial city, the
performance can’t be hailed much. Hence there is a need to study the cargo movement through CIAL and find the factors affecting it and to filter out the lacumas of the cargo complex so as to provide better solutions. The analysis is done by collecting the feedback from the users of the Airport such as Air cargo agents, airlines and exporters. Once the strengths and weakness are brought to the limelight, CIAL can mark and dominate its position in the Aviation may. OBJECTIVES OF THE STUDY The study consists of the following objectives to be achieved. They are: Primary objective: 1. To study the International cargo operations of CIAL 2. To study the factors affecting cargo movements through CIAL 3. To formulate measures to improve the cargo output Secondary objective: 1. To study the infrastructure facilities of CIAL 2. To get an awareness of the operations of different Airlines(cargo), Agents, Customs 3. To know about the Exports and Imports through CIAL 4. To analyze the satisfaction of customer of CIAL 5. To get a clear picture of air cargo industry
The area of study includes both export and import sections of CIAL cargo, Airlines, Agents, Customs and exporters.
RESEARCH METHODOLOGY Research is a scientific and systematical approach to a particular situation or problem as it exists and to give ample suggestions to overcome the hindrances. Research has its special significance in solving various operational and planning problems of a firm. Here in this work some scientific research methodology has applied but with in the limitations. Sources of Data 1. Primary Data: Primary data are those collected fresh and for the first time and happens to be original in nature. Primary data are collected from CIAL officials, airline staffs, agents, customs and exporters through discussions, interviews and observations. Based on these assumptions were made. 2. Secondary Data: To gather the details of CIAL cargo, secondary data was collected. The main sources can be classified as Internal (organizational records, annual reports) and External (websites, dailies, journal, books etc.)
Research Design: Research design is the framework for a study that guides the collection and analysis of data. Exploratory type of research design was used. Sampling Design: Purposive sampling technique was used. The sample size elected for primary data collection can be described as follows: ? Air cargo Agents ? Airlines operating from CIAL ? Exports in and around Cochin ? Customers - 30 Nos - 12 Nos - 25 Nos - 12 Nos
Frame Tools Used: The analysis tools used in the research are the following: i. ii. iii. Simple Percentage Composite Percentage Growth Rating
iv.
SWOT Analysis
Method of Analysis: Percentage calculated for data was helpful in analyzing and interpreting the data. Percentage Analysis was used to complete analysis part of study. Scope of the Study: The project was aimed to study the effectiveness of International cargo operations of CIAL. It helps to study the cargo logistics management of CIAL. The scope of study was confined to the cargo services of CIAL. The study leads to the insight that will be helpful to the CIAL to get the feedback of the customers. It is hopeful that this research work will help CIAL authorities to know the needs and the wants of the customers through collecting their feedback. It can lead to make effective changes and take new policies. On the other hand the study will help the customers (users of the airport) to understand the infrastructure available at the airport. It will also be helpful to any person who is related to the airport operations. Limitations of the Study: I. The short span of time as a major constraint in conducting an exhaustive study.
II. The sample size was small and hence only a minority opinion was generated. III. The accessibility to certain areas (sterile areas) was limited. IV. Some of the airline staff, agents and CIAL were busy and were not willing to disclose much. Some of the responses were incomplete and biased though. V. The study may not be free from sampling errors though precautions were taken. VI. Since many of the agents were running by hectic schedule, they were not having enough time to go through all the questions carefully and they answered the questions in a hurry manner. Therefore, the accuracy of the survey still remains a big question mark, even though pre-cautions were taken while recording the data.
Company profile
COMPANY PROFILE PROFILE OF CIAL Cochin International Airport Limited is a novel venture in the history of civil aviation in India where Government of Kerala, NRI’s, Travelling public, Financial institutions, Airport Service Providers and others joined hands in the equity structure. This is the International Airport in the country outside the ambit of the Government of India. This airport has been constructed to enable any type of wide bodied aircraft to land with the state of art facilities. The Airport site is very close and centrally to all three National Airways passing through Kerala (NH 47, NH 17, NH 49). The main railway line from Kanyakumari to Delhi is adjacent to the Airport and it is situated between Alwaye and Angamaly Railway Stations. The Cochin Sea Port, one of the biggest in the country is also situated close by. The Cochin Airport would certainly boost international trade, tourism and enhance the country’s image. The Cochin International Airport Limited is managed by the Government representations, industrialists, NRI’s from 30 countries and representatives of financial institutions. The ground handling at the airport is done by Air India. The Airport suitable for operations of wide bodies Boeing-747 types of Aircraft. The Airport is planned in phases on modular basis, to suit future requirements and also to minimize the initial investments so as to generate revenue at the earliest possible time. The Central, Kerala state Governments Ministry of Civil Aviation and the Airport Authority of India have extended their full support and co-operation for making this
project successful. The Airport Authority of India has provided all navigational and communications equipments including operation and maintenance. The Air traffic management also is being undertaken by Airport Authority of India. The Airport has full range of multi model transport linkages viz. the National Highways, Cochin Sea port, Water ways, Railways etc. the Airport is suitable for operation of Boeing-747; 400 types of Aircrafts and Airbus types of Aircrafts. It has 3400M of Runway with PCN 60, with sufficient Apron space for parking 8 Aircrafts at a time. Other international airlines are soon expected to operate to Europe, Africa, Australia, United States of America, Canada and Japan. In addition to this many chartered flights are operating to different countries. TECHNICAL DATA Phase I [Completed phase] ? Location (Latitude & Longitude) 10 09’08’’N, 24’29’’E ? Runway: An Asphaltic concrete runway of length 3400M with shoulders, stop ways. ? Taxiways Taxi Track of 930 Mts. (3400 ft) with two link taxi ways connecting runways ? Apron AN Apron of size 425 x 125 Mts. of cement concrete sufficient to part 8 Aircraft at a time including 6 wide bodied Aircraft. ? Isolation parking bay: A separate isolation parking bay for parking aircraft under threat as per the requirement of international standards.
? Terminal complex fully air conditioned Domestic terminal (10000 Sq.M) and International terminal of 12800 Sq.M with all modern passenger amenities. ? Cargo building a spacious integrated cargo complex including cold storage, courier service area, valuable, diplomatic, hazardous cargo areas of 4500 Sq. M ? Ground lighting facilities: The Airport is being equipped with night landing facilities for 24 hours operation ? Approach Lights CAT I Approach lighting for Runway 27 end and simple approach lighting system for runway 09 ? PAPI- Precision Approach Path Indicators are being provided at both end of runway ? Instrument Landing- ILS being provided for Eastern end of runway approach coupled with Distance Measuring Equipments(DME) ? Navigational Aids two Doppler VOR’s, one at airport site and other at Munnar to facilitate Aircraft Navigation. One non-directional beacon is also being provided to meet the requirements of small aircraft, which are not provided with DVOR ? Control Tower cum Technical Modern Control Tower cum Tech Block is being provided. The tower height is 50 mts. Building is fully air conditioned for efficient operations of electronic and communication equipments ? Safety services: A fire station building to suffice CAT 8 safety services standards is also being provided. The fire station also will have an observation tower, first aid room etc.
? Fuel Hydrant System BPCL’s fuel hydrant system for refueling aircraft at 3800 1/minute using PLC based control and monitoring system Phase II [Proposed Phase] ? Terminal Building II: A modern Terminal Building 40000 Sq.M area with all modern passenger and other facilities. American architectural consultants were selected based on Global competition, to prepare the architectural drawings, estimates etc. ? Extension of Runway: The Runway will be extended by 300 M to make a total length of 3700 M ? Taxi way: A parallel taxi way for the entire runway with high speed link taxi way is planned ? Apron : An Apron size of 500 Mts. x 125 Mts. in front of the second phase terminal building to accommodate 12 Air Traffic Control Systems ? Navigational and Communication Systems: A state of art radar is planned including automation of communication and Air Traffic Control Systems ? Other commercial activities ultimately, the surroundings of the airport is planned to develop as the total self-sufficient township with star hotels, recreation centres, commercial establishments, export zones etc. It is also planned to extend the existing railway line to the airport complex to serve both cargo and passenger movements
? Cargo village: An area about 80 acres is reserved for the setting up of a cargo village.
AIR CARGO INDUSTRY PROFILE
AIR CARGO INDUSTRY PROFILE Air transport plays an important role in international trade. More and more goods especially those of high value, time sensitive or perishable are moving by air. About 36% of the world trade item, in terms of value are been moving by air and the rate of growth of air cargo traffic has been higher than that of any other mode of transport. The carriage of goods by air had its origin mostly during the Second World War. The progress made in the aircraft design during the war conversion of military aircraft to suit civilian requirements led to the growing use of this mode for passenger and freight. Wide bodies’ jet all air cargo aircraft introduced subsequently contributed to the progress of the transport industry. The advantage of air transport is speed. Since it’s not hampered by geographic borders over flow, it avoids delays and the risk of damage or theft incidental to border stops or transshipment points. Less liability to damage or thefts results in lower insurance premise. Other advantages are economic advantages such as savings in packing and warehousing costs. Besides faster movement accelerates turn over in capital and enables both manufacturers and traders to maintain their inventories at relatively low levels. The main advantage is the high cost of transport reflected in freight rates. Another is the limitation in regard to the size or volume of commodities that can be transported by air. The rate of growth of air cargo in the Asia Pacific region is higher than the world growth rate, mainly because of the emerging economics of this region which loan heavily on exports. Particularly sophisticated electronic goods, jewelers, readymade garments, leather goods,
vegetables and other perishables which lend themselves to safer and quicker transport by air. The land locked countries have this option when the surface transport facilities haven’t developed. About 90% of the world air cargo traffic is handled by the cargo agents who act on behalf of both air strippers and airlines to which they are approved sales agents. The cargo movements are mainly done by scheduled flights or chartered flights. The chartered flights don’t have a preset schedules or destinations like the scheduled flights. EVOLUTION OF AIR CARGO It is with the I world war that there emerged a new scope of carrying goods by air. In the beginning, the airlines were used exclusively for the military purpose. After the war, in the year 1945, only commercial air cargo operations started to operate. But today this has become an exigency for the modern world. After the I and II world wars a thrust was emerged for the speedy dispatch of goods by air. Thousands of veterans returned home in USA and Europe, inspired by the possibilities created by improving aviation technology. Many sought jobs associated with flying cargo, planting the seeds for dozens of airlines, freight forwarders and other companies that would paint the world’s air transportation picture for decades to come. The early years after II world war there initiated fast widening of both small package or air express traffic and air freight or bulk shipments. With the improvement of frequency, air transport gave the primary message to the shippers, which is nothing but the speedy business. End of 1940s and 1950s clearly show a constant growth of the volume of domestic and international air freight.
Boeing 707 was introduced with the new hope of break through in the airfreight scenario. In the 1980s just-in-time (JIT) transportation became the new entry in the air cargo lexicon. JIT defined the delivery of shipments between specific hours on a specific day to dovetail with production requirements. In 1990s what are found is the fully committed logistics and logistic providers. The authentic logistic providers assured single entry control through every stage of the operations with door-to-door service. In the twilight of the II millennium, driven by globalization and the internet, the half-century old air cargo industry found itself roiled by the accelerated pace of acquisition and consolidation. However it may be, IATA and FIATA have made a unified form of operations. The air cargo industry today is a solid constituent of transportation that caters the shippers wants and needs in a faster and faster way. GLOBAL SCENARIO OF AIR CARGO World is ever growing and ever changing with indefinite fastness. Air cargo picture is also changing day by day. It seems to be unbelievable in the case of the Airport O’Hare in Chicago. The airport handles 2700 flights per day from its 4 terminals. Every 2 minutes an airplane takes off from the port. In 2004 it handled 68.5 million passengers. Today every govt. has a thrust to promote the aviation industry by providing better facilities and by encouraging its National carriers. But on the other hand there is a high competition among the private airlines by providing better service in the areas of speed, frequency, reliability and cost.
According to the predictions of the experts, the world’s freighter fleet will double by the year 2015. At present 35% to 40% of world trade by volume is carried by air transportation, which will increase substantially. The forecast result is that the air cargo market will grow at 6.7 % per year between 1996 to 2015. Airbus sources indicate that there were 1184 freighters (cargo only aircrafts) in service in 1994 and forecast indicates that it will grow to 1801 by 2008. These trends indicate that 21st century is likely to be the air cargo century. Another forecast shows that world air born cargo will grow at 6.4% per year during the next 20 years. Growth in air cargo anticipated exceeding passenger traffic growth in every major regional market. It is not surprising that forecasts anticipate the addition of more than 2600 freighter airplanes by 2019. E-Commerce leads to a surge in the air transportation business. Thus, timedefinite service, cost efficiency and integration of customer and transport system have been made component. Development in E-Commerce has made the problems of distance, time and speed irrelevant and the globe has been reduced to a village. AIR CARGO ENVIRONMENT IN INDIA India is a dynamic and rapid changing market. Even though the globalization will cause for a drastic change in the economic situation in India by 2010, the exporting from our country will keep raising in the following years to come. The role of airlines and air cargo agents will be a crucial one in the liberalized economy where there will be high import & export business. It is
a fact in India that the international business depends on the air cargo for a limited percentage only. But it is indicated that a promising growth rate of 10% to 12.5% per annum in the air cargo handling. Bulk of gems and jewelers, textiles, leather, perishables and pharmaceuticals are carried mostly by air. After announcing the open sky policy of the govt. in 1991 there began a large competition from the foreign airlines. PERFORMANCE OF INDIAN AIRPORTS There are 449 airports or airstrips in the country. Among these, the Airport Authority of India owns and manages 5 international airports, 87 domestic airports and 28 civil enclaves. In 1998-99, these 120 airports and enclaves handled 4.20 lakhs aircraft movements involving 24.17 million domestic and 12.83 million international passengers and 221 thousand metric tones of international cargo. TABLE SHOWING THE SHARES OF INTERNATIONAL TRAFFIC FROM INDIA’S MAJOR AIRPORTS Sl. No. 1 2 3 4 5 6 Major Airports Sahara Airport, Mumbai Indira Gandhi Airport, Delhi Meenambakkam Airport, Chennai Dum Dum Airport, Kolkata Thiruvananthapuram Airport Cochin International Airport Total Source: www.airportindia.com No. of Traffic 33795 30707 11870 6895 6598 2615 92480 Shares 36.54 33.20 12.84 7.46 7.10 2.86 100
The above table depicts the frequency of international traffic from the major airports in which with 36.54% Mumbai port handles the maximum number. The share of Delhi airport is 33.2%. While kolkata and Thiruvananthapuram airports have shares of 7.46% and 7.10% respectively. CIAL handles only 2.86%.
TABLE SHOWING THE SHARES OF INTERNATIONAL CARGO HANDLING FROM INDIA’S MAJOR AIRPORTS Sl. No. 1 2 3 4 5 6 Major Airports Cargo Handling (Tonnes) 195770 165500 72450 32520 25750 3942 495932 Shares (%) 39.48 33.37 14.60 6.56 5.19 0.80 100
Sahara Airport, Mumbai Indira Gandhi Airport, Delhi Meenambakkam Airport, Chennai Dum Dum Airport, Kolkata Thiruvananthapuram Airport Cochin International Airport Total Source: www.airportindia.com
The above table shows the upper hand of Mumbai airport with 39.48% share. Below that falls the Delhi airport with 33.37% share. Chennai airport has the share of 14.40%. Kolkata and Thiruvananthapuram Airports have 6.56% and 5.19% shares respectively. Cochin international airport that is in the initial stage has only 0.80%. But the manifest of CIAL shows that it handled 6288 tonnes of cargo. SPECIAL CARGOS The different types needing special attention.
1) Live Animals Need special carriage area at the cargo terminal. Import of live animals is restricted by important licenses in most countries. They also subject to quarantine, which differ from country to country. The IATA live animals Regulations deals with matters such as documentations, handling, labeling of containers etc. arising in
connection with the carriage of live animals. Before shipment of live animals is accepted by an airline, shippers are required to furnish a certificate certifying inter alia that the consignment has been properly described and is in proper condition for carriage by air according to the IATA Regulations. 2) Dangerous Goods Some type of cargo, although in common use, have inherently dangerous properties when carried by air. Paint for example, with a change in atmospheric pressure and temperature can give off a highly inflammable rapur. Many chemicals have corrosive or explosive nature and can be accepted if packed to restrict those properties to a safe level. A comprehensive list of packing and handling requirements in respect of substances known to have dangerous properties is contained in the IATA Dangerous Good Regulations. It is important that those responsible for the carriage of such substances ensure that they are handled in accordance with these regulations. Before shipment, a declaration by the shipper that the IATA regulations have been compiled which is required. 3) Valuable cargo It is given special handling and storage within a cargo terminal. It comprises essentially: ? Any article with a declared value of US $ 1000 or equivalent or more per gross kg ? Gold in all forms, legal bank notes, securities share and share coupons, traveler’s cheques, stamps (excluding mint) 3) Other cargo needing special handling
? Drugs to save live: have the highest priority of traffic moved at short notice. ? Dangerous drugs, pathological specimens, airmail, newspaper and news films. ? Perishables (fruits, flowers, vegetable and meat) vulnerable consignments, human remain or bodies. AIR CARGO RATES TACT The Air Cargo Tariff containing the rates, rules and producers are contained in the publication “TACT” (The Air Cargo Tariff) which is jointly issued by the airlines participating in its publication. TACT Rules containing the general rules, regulations and procedure published twice a year. 1. North America- contains the rates to/from and from within the US and Canada [via the Atlantic and Pacific plus rates between Canada/US and other parts in IATA Area]. 2. Worldwide contains all rates, except those included in the issue relating to North America. The establishment of freight rates applicable to transportation of cargo over the routes covering the three IATA traffic area is mainly the task of the airlines comprising the IATA Tariffs Co-ordination Conferences. The rates have to be filed with and approved by the respective Governments. BASIC OF CHARGING RATES The amount of cargo that can be loaded on an aircraft is limited by weighting and volume. Heavy and small loads will tend to raise the weight limitation of the aircraft before the volume limitation is reached,
thus resulting in unsold volume capacity, light and bulky loads will reach the volume limitation before the weight limitation is reached, thus resulting in unsold weight capacity. The airlines have therefore, considered it logical to establish the chargeable weight of a shipment on its ‘actual gross weight’ if it is small and heavy or on its ‘volume weight’ if it is light and bulky, in order to compensate themselves for the unsold volume or unsold weight capacity. For this purpose, a cargo is usually reckoned as high-density cargo (to be charged on “Actual Gross Weight” basis) if it weights more than 1kg per 6000 cubic cm and low density cargo (to be charged on “volume weight” basis) if it weights less than 1kg per 6000 cubic cm. RATE STRUCTURE AND TYPE OF FREIGHT RATES The special condition applied to certain types of goods are determined by various factors such as the amount of traffic between one area and another, competing means of transportation types and quantities of commodities, their value, special handling requirements etc. Consideration of all these factors has resulted in a complex rate structure not necessarily the same in each direction.
(i)
GENERAL CARGO RATES (GCR)
These are rates applicable to commodities moving between two points for which there are no special rates. These rates are subject to quantity discounts, i.e. the rate is reduced for delineated weight categories- a reduction of ascertain % for the first and gradually more for the following weight categories. The normal rates published applied to consignments up to 45 kgs.
(ii)
MINIMUM CHARGES
The minimum charge represents the level below which the airlines considers it uneconomical to transport a consignment, taking into account the fixed costs involved in handling even a very small package. The freight charges of a consignment, computed by multiplying the chargeable weight by the applicable rate may, therefore, never be lower than the published minimum charge. The level of the minimum charge depends on the IATA areas within or between which transportation takes place. (iii) SPECIFIC COMMODITY RATES (SCR) These are usually substantially lower than general cargo rates and applied to specified point of origin to a specified destination point. They are subject to a minimum weight, which is published along with the rate. They may also be subject to special conditions relating to minimum charges and density requirements. The main purpose of SCR is to offer shippers competitive rates, which will make it economical for them to send their products by air and also enable optimum use to be made of the airlines transport capacity. Applications for SCR may be made by the shipper to the airline and the latter may then submit the application to IATA with its own recommendations. After consulting the member lines, IATA either rejects the application or publishes the special rates. (iv) CLASS RATES OR COMMOCITY CLASSIFICATION RATES They are expressed as a % discount or surcharge on general cargo rate and apply to a limited number of commodities within or
between certain designated areas. These rates are applied hen there are no specific commodity rates available for the commodity. The main commodity to which they apply are live animals, animal containers and stalls, valuable cargo such as gold, bullion etc, news paper, magazines, periodicals, book, catalogues, Braille type equipment and talking goods for the blind, baggage shipped as cargo, human remains etc. Live animals, valuable cargo etc is usually levied as surcharge while newspaper and other publications, baggage etc are allowed discounts. (v) FREIGHT ALL KINDS (FAK) RATES Introduced to simplify the rate structure, FAK are a rate for volume reserved in a container irrespective of the type of commodity carried, simplifies handling and makes lower rates possible. There are, however, certain restrictions on FAK rates viz livestock, perishable cargo, valuable cargo etc are prohibited. If the cargo is containerized by the shipper himself, a rate reduction is available as against cargo, which is tendered to the carrier in a loose form.
(vi)
CONTAINER RATES
If the goods are shipped in containers of an approved design, the airlines usually make a reduction in the freight costs. Containers are usually shipper-owned and the use of such containers entitles the shipper to an allowance for the empty eight of the container. (vii) MISCELLANEOUS There are rates levied by the airlines for special services or under
special circumstances which may be mentioned although they do not constitute any category of freight rates in the normal course of air transportation. a) ULD Rates They are not freight rates but the cost of moving a container or pallet of specific design and containing cargo up to a specific weight of cargo without variance by reason of the type or quantities of the actual goods being shipped. Any excess weight is charged in decreasing increments upto an allowable absolute minimum. b) Deferred cargo rate This is lower than the normal rate and is levied when the transportation of a consignment is not urgent and can wait till space becomes available on the aircraft. c) Unified cargo rates Which a consignment is transported in various stages by one or a number of carriers, the carrier may charge a freight lower than the total for the different stages. d) Group rates Since the traffic conference meeting held in Athens in 1969, IATA has confirmed the practice of companies to consent to a reduction (about 30%) to clients who send their consignment in pallets or containers in the same direction. These rates are generally intended for transport professionals such as freight forwarders or air cargo agents.
e) Charter rates Aircraft or space in it may chartered at market rates depending upon the requirements of the shipper. These may be more than regular tariff rates depending upon demand and supply. AIR CARGO AGENCY The air cargo intermediaries are the necessary link between the shippers/ consignees on the one hand and air carriers/ airlines on the other. They fall under two categories: 1. IATA Cargo Agent The forwarding agent approved by airlines belonging to IATA to act on their behalf, such approval being granted on the basis of certain prescribed criteria, including proof of ability to develop air cargo business, possession of requisite physical material and financial resources, employment of qualified staff etc. They provide service to both air shippers (preparing airline documentation, checking of import and report licenses and packing certificates in respect of dangerous goods, booking space with airlines, arranging insurance of cargo) and to airlines (presenting goods in a “ready for carriage condition” which involves issuance of airway bill packing, marking and labeling of packages, preparation of certificates). Their responsibility ends when he has handled over the cargo and the documents to the carrying airlines and charge 5% on transport charges from the airlines.
2. Air Freight Forwarder Provides services in addition to the above like consolidation or group age (assembling a number of individual consignments and dispatching them as one bulk to a common destination) beneficial to shipper and the airline, attending to customs clearance, monitoring on behalf of customers for payment of duties and taxes etc. While providing consolidation services, the airline issues a Master Air Way Bill [MAWB] in respect of the consolidated consignments showing the break bulk agent at the destinations as the consignee.
CIAL CARGO
CARGO OPERATIONS OF CIAL The air cargo complex at CIAL was commissioned on 1st December, 2000 including both import and export sections and an unaccompanied baggage section. The cargo terminal is only ½ a kilometer from the international terminal. Before the coming up of the new airport at Nedumbassery, the operations were from the Naval airport at Wellington Island. A separate cargo village is on the process where all the cargo activities of the private and the public can be undertaken. An area of 180 acres of land is earmarked for cargo village, which will be a land mark for the CIAL activities. The present activities CIAL is involved in all cargo handling services, which include exports, imports and transshipment of general cargo, perishables, precious cargo, heavy cargo, unaccompanied baggage, consolidated cargo, diplomatic bags etc. to various countries and forwarded by different agents. The one time holding capacity is 250 MT for export cargo and 100 MT for import cargo. The annual holding capacity is 13000 MT and 7000 MT for export and import cargo respectively. The cargo terminal have office spaces for CIAL, Agents, Airlines, Customs etc. The federal bank collects the handling charges of CIAL and Air India (as cash, cheques or DD). Customs charges are collected by SBT (accepted DD and cash for small amount as cash). Both banks provide Forex facilities but no normal banking. The main exports are spices, coir, readymade garments, fabrics, valuables (foreign currencies, gold), perishables like fruits, vegetables, frozen fish and meat, live crabs, ornamental fish and post office mails. The imports consist of unaccompanied baggage and general cargo.
The facilities available • Built up area of cargo complex – 5845 Sq. mts [63000 Sq. ft] • Weighing scales – 4 [1000 kg:1, 500 kg:2, 300 kg:1] • X-ray machine [Large capacity] – 1 • Tractor – 2 • Container lazy rollers – 18 • Pallet lazy rollers – 7 • Container mobile dolly – 4 • Pallet mobile dolly – 4 • Fork lift – 4 [3 toner] • Platform hand trolleys – 8 [2 toner] • Manual godrej fork lift – 2 [2 toner] • Strong room for valuables • Walk in type cooler – 370 cubic mts vol. (for perishables) upto + 4 degree C • Racked storage area – general cargo unaccompanied baggage • Public amenities • Water cooler • PCO/ STD facility • Snack bar, Coffee/ Tea vending machines • Business centre • Toilets • Parking space – 150 vehicles
• Import cargo – accepted and shifted to the storage area on the same day of delivery • Export cargo accepted and exported: o General cargo – D-24 hrs o Fruits/ vegetables/Marine products – D-6 to D-4 hrs o News papers – D-4 to D-2 hrs o Valuables – D-2 to D-1 hrs • Human remains will be cleared on round the clock basis by CIAL staff. *D – The scheduled departure of flight CIAL handles transshipment cargo too. The cargo bound to Thiruvananthapuram and Calicut are either air lifted or trucked to the destination. Transshipment cargo for various districts around Cochin too are received at CIAL by air. Introduction to cargo operations In import side CIAL stores and delivers the cargo. The main functions of CIAL in export side are accepting, loading and manifestation of cargo. For these operations CIAL interact with customers, airline officials, passengers and agents. Manifest The manifest is a written document, which contain the following details: i. Name of the airline
ii. iii. iv. v. vi. vii. viii. ix. x. xi.
Flight number and Date Point of Lading Point of Unlading Airway Bill number Number of pieces/ weight Nature of goods Origin station Destination ULD number Remarks
Airway Bill (AWB) An Airway Bill (also called Master AWB), which constitutes the very basis of air cargo transportation, may be defined as a legal document of contract, between the carrier and the shipper or their approved agents, for carriage of cargo by air between two airports. Every AWB has a number known as Airway Bill Number. Firstly it identifies the airline (the first 3 letter prefix) and the remaining 8 letter identifies the consignment. An Airway Bill contains the Airway Bill No., Shipper’ Address, Consignee Address, accounting information, issuing agents address, Agent’s IATA code, Account No., airport of departure, reference number, optional shipping information, routing, first carrier, destination/ routing, Final destination, Flight No., Date, Currency, Charges code, declared value for carriage, declared value for customs, amount of insurance, handling information, No. of pieces, Gross weight, commodity item No., chargeable weight, rate, total, nature and quality of goods, prepaid, weight charge, valuation charge, tax, total other charges due to agent, total other charges
due to carrier, total prepaid, total collect currency conversion rates, CC charges in destination currency, date and place etc.
House Airway Bill House Airway Bill is a supplementary AWB issued by agents or airline for consolidation purpose of cargo. This enables to distinguish between the pieces of different consignees, which come under one Master Airway Bill. IGM Number (Import General Manifest) This is a serial number of each international flight landed in Cochin for customs reference. If international cargo arrived in international/ domestic flight IGM number allotted by customs. EGM Number (Export General Manifest) As IGM, EGM is also a serial number for customs reference. The difference is that EGM keeps the serial number of each international departed flight. If international cargo departure in international/ domestic flight EGM number allotted by customs. CHA (Customs House Agents) These are licensed agents for clearing cargo. Usually general cargo is cleared by these agents. Exporting is also done by these agents. Note: for TSP/ DO/ Statistics the rate may change according to the management/ IATA/ Government rules.
CARGO OPERATIONS AT CIAL The operations of cargo at CIAL can broadly be divided into two divisions:
IMPORT
This division takes care of general cargo/ unaccompanied baggage received from airline, and will release the same to passengers after inspection and on producing valid documents. It maintains stores, records and statutory reports of consignments. 1. Numbering Import cargo starts when receives cargo manifest from aircraft on arrival. There are two types of import cargo – general cargo and unaccompanied baggage. For general cargo the shipper and the consignee will be different and in case of unaccompanied baggage the shipper and the consignee will be the same. By checking the AWB distinguishes the general cargo and unaccompanied baggage and allocating rotation number, which is the continuation of previously, allocated rotation number. For each consignment a rotation number is allocated for the cargo. For general cargo rotation number starts with a prefix ‘R’ and rotation number for unaccompanied baggage starts with a prefix ‘B’. The proposed system should identify each consignment as either general cargo or unaccompanied baggage and should allocate its rotation number. 2. Check in In this process one must check for the number of arrived pieces and the condition of the same. The arrived number of pieces should tally with the number of pieces shown in the manifest. If the cargo, received is in damaged condition, CAIL will file CDR (Cargo Discrepancy Report) for that. It holds
the status of cargo in arrival register. Customs formatted reports are generating after checking the cargo. These reports are as follows: ? Cargo Discrepancy Reports: Damaged cargo detail keeps in this report for future reference. It contains the details of the damaged cargo (condition of cargo, Airway Bill No., No. of pieces, weight of pieces manifested, actual weight of the piece when CIAL received the cargo etc.) ? Segregation Report: Segregation report is a custom document which contains the details of the actually received cargo. This report contains No. of pieces manifested, No. of pieces actually received, details of short landed cargo, details of excess landed cargo, discrepancy if any etc. ? Short Landed Cargo: The non-received manifested cargo is called short landed cargo (This means, the cargo not received or the number of cargo actually received is less than the number which is manifested). The short landed cargo verifies with excess landed cargo and regularizes if any match is found. ? Excess Landed Cargo: The unmanifested cargo received by CIAL is called Excess Landed Cargo. The excess landed cargo verifies with short landed cargo and regularizes if any match is found. ? Flight Handling Report: In addition to segregation report CIAL keeps one more report (Flight Handling Report) which contains precious cargo details, total cargo weight, ULD details etc.
For both short landed and excess landed cargo CIAL keeps separate registers. 3. Intimation Once the cargo arrived CIALL is responsible for informing the consignee. CIAL will be intimated about arrival of consignment through “Cargo Arrival Notice (CAN)” by mail, which is mandatory. Other options include phone/ Fax/ e mail/ website/ IVR (Interactive Voice Response) for improving customer services. CAN contain the details of consignment, charges to be remitted, Rotation number, IGM number etc. Demurrage will be charged if consignment is not cleared within the specified number of days. ? IVR (Interactive Voice Response System): CIAL require application software should handle consignee queries about arrival cargo and respond the status of the consignment with number of packages arrived and last date of clearance. ? Automatic Emailing and Web Hosting: Application software should send emails to the specified consignee if email address is specified. Application software should host the website with Airway Bill Number, number of package arrived, weight, consignee name. Flight No. and date. At any point of time web site should give the uncleared unaccompanied baggages/ General cargo which are received by CIAL. Application software should take care of the website. In the website there should be a searching facility for AWB number. The result should provide the number of packages arrived, weight, consignee name, flight no. and date for the particular AWB number. Phone Register: The details of consignee along with their telephone numbers are stored in this register.
Postal Record: The details of the consignee along with the postal address and the amount spent for mail/ telex etc. are stored in this register. 4. Warehouse Management Arrived cargo stored in racks available, in warehouse, cold storage or strong room. The cargo kept according to the rotation number in tracks. The proposed system should list out all available positions. Rack is divided into each cell and each cell has a unique number for locating the cargo randomly. The proposed system should monitor the stock. 5. Delivery Order Before clearing the cargo by the consignee, a delivery order should be issued for each consignment. The customer approaches CIAL office with his Airway Bill/ CAN, passport etc. CIAL staff manually verifies the documents produced by the consignee and issues delivery order. Delivery order contains: i. ii. iii. iv. v. vi. Date IGM Number Rotation Number Number of pieces/ weight Flight Number/ Date Amount etc.
Delivery Order charges are as follows: The charges contain: a) Service Charges b) Cartage Charges c) Break Bulk Charges d) Freight Charges
e) 2% of Charges Collect Charges For each Master Airway Bill, the consignee has to pay a sum of Rs.150/(Break Bulk Charges). If the Master Airway Bill contains House Airway Bill, then the charge will be Rs.150 + (150* will be collected for each Airway Bill) ** These charges may changes according to management decision. 6.Terminal Storage and Processing (TSP) It is a receipt which contains the handling charges, warehouse charges, cold storage charges, strong room charges, cartage charges etc. Sl.No. 1 2 Types of cargo General Cargo Special & valuable Rate per kg. Minimum rate/consignment 3 100 6 200
? Handling Charges: General cargo & baggage Valuable cargo ? Strapping Charges: Strapping charges : Rs. 5.00/- per each packet. ? Demurrage Charges: Free storage period for import cargo shall be 5 working days including the date of arrival of flight. For the next 2 days demurrage will be charged at per kg per day on non-cumulative basis provided the consignment is cleared within 7 days. If clearance is effected after 7 days (including the date of landing) demurrage will accrue for the entire period from the arrival of flight for all types of cargos as follows: Rs.3.00/- per kg subject to a minimum of Rs. 100/- for each consignment. Rs. 5.00/- per packet.
For 5 days 6th day 7thday 8thday 9thday 30thday Beyond 30 days
Free Re. 1/- x weight Rs. 2/- x weight Re. 1 x 7 x weight + Rs. 2/- x weight Re.1 x 7x weight + Rs. 2 x2 x weight Rs. 1 x 7 x weight + Rs.2 x (30-7) x weight Rs. 1 x 7x weight + Rs. 2 x 23 x weight x Rs. 3 x (Total number of
days-30) x weight * Subject to a minimum of Rs. 250/- consignment. Notes: • Consignments of human remains coffin including baggage of decreased and human eyes will be exempted from the purview of TSP, demurrage & Delivery order charges. • Free storage period for consol baggage shall be 7 working days (including the date of landing). • Charges will be levied on the “Gross weight” or the “Chargeable weight” of the consignment whichever is higher. Where ever the Gross weight and (or) Volume weight is wrongly indicated on the AWB and is actually found more, charges will be levied on the actual gross weight/ actual volumetric weight/ chargeable weight whichever is higher. • # Special import cargo consists of cargo stored in cold storage, live animals, hazardous goods, valuables, ornamental fish, live chicks etc. • @ Valuable cargo consists of gold, bullion, currency notes, securities, shares, share coupons, Travelers cheques, diamonds, diamond
jewelry, watches made of silver, gold, platinum, computer parts, mobile phones and items valued at US $ 1000/ kg and above. ? Palletization/ De Palletization and Containerization/ De Containerization: In CIAL stuffing and destuffing of cargo for all airlines company (except Air India) is been done by CIAL itself. For that separate stuffing and destuffing charges will be levied. The recent list of such charges is given below: Pallet 10 ft Pallet 10 ft contour Container AMF ALF PLA/ FLA BULK ? Cold Storage Charges: Cold storage charges: Re.1/- per kg subject to a minimum of Rs. 200 for each consignment. ? Strong Room Charges: Strong room charges: charges will be levied as per the schedule. Stuffing(Rs.) 2000 each 2500 each 600 each 1700 each 1200 each 1300 each .50/ kg Destuffing(Rs.) 1500 each 1500 each 500 each 1500 each 1000 each 1000 each .50/ kg
Strong Room Charges (Rs.) period (week) 1st 2nd 3rd 4th 5th 6th 7th 0-50 470 1410 2350 3290 4230 5170 6110 51-100 940 2820 4700 6580 8460 10340 12220 Weights(kg) 101-150 151-200 1410 4230 7050 9870 12690 15510 18330 1880 5640 9400 13160 16920 20680 24440 201-250 2350 7050 11750 16450 21150 25850 30550 251-300 2820 8460 14100 19740 25380 31020 36660
? Fork Lift Charges: Fork lift charges are levied from the exporters/ importers only. Fork lift charges: Rs. 10/- per kg subject to a minimum of Rs.100/consignment. 6. Gate Pass This is the final part of cargo clearance. Once examined the baggage and pay the duty CIAL issues gate pass. No cargo taken outside without gate pass. This contains details like: i. ii. iii. iv. v. vi. vii. viii. Date IGM Number Rotation Number Number of packets Name of the passenger Flight Number/ Date Amount B.D. number and date etc.
7. Disposed Cargo
The uncleared cargo for a specified period disposes after issuing final remainder to the consignee.
Export
Export division will accept the cargo from shippers/ agents along with the concerned documents. Cargo to be exported booked through an agent, who cuts the Airway Bill number (AWB) and issues a shipping bill (SB) which is obtained from the customers on declaration of his code number. After necessary endorsements the cargo is then carted to the cargo complex where: 1. The SB is passed. 2. The cargo is examined by customs. 3. The cargo is permitted to be carted to the CIAL. Sterile area of the ware house, where it is stored to observe the cooling period. DLB (Display Load Booking) It is the booking detail of cargo in an aircraft. DLB contains the AWB number, No. of pieces weight. According to the booking in the DLB which is provided to the CIAL by the airlines, the shipments are loaded in the ULDs. ULD is Unit Load Device such as pallets and containers, which is used for loading the shipments in the aircraft.
EXPORT PROCESS Shipper/ Agent Weighment Export TSP Acceptance Immediate Release 24 hrs cooling Warehousing Security X-ray Loading Manifestation Report 1. Weighment While taking weight of cargo CIAL records the number of pieces, weight, transfer point in India, final destination, agents/ shipper details, acceptance Time, flight number, type of cargo etc. If the cargo need not cover the cooling period it screens. The types of cargo are as follows: ? Perishable cargo: Normally perishable cargo will not kept in the warehouse for completing the cooling period. For example: News papers, vegetables, fruits etc. So inorder to ensure security CIAL screens and send cargo. For screening CIAL collects the charges from the airline or shipper.
? General cargo: Any dry normal cargo neither dangerous nor valuable and does not need any special attention is considered as General cargo. Normally general cargo will be kept for 24 hours cooling period. If the cooling hours is not sufficient for the cargo, which is brought by the shipper or the agent, CIAL screens the cargo and forward to the flight. ? Special cargo: Special cargo includes all the cargo that requires special attention while carriage. Special cargo can be defined as which is acceptable only under certain conditions or restrictions and needs utmost care in handling of storage. It includes cargo like live animals, dangerous goods and valuable cargo. The rates of special cargo are double to that of any cargo. ? Valuable cargo: For the valuable cargo screening is done but charges are not taken. CIAL take only the TSP charge, which is fixed. Each type has its own rate and should be computed by the system. The proposed system should compute the handling charges considering the weight and type of cargo. 3. Export Register All accepted cargo detail records in a register called export register which contains airline code, AWB number, date, time of acceptance, receipt number, if TSP is issued; CTM number etc. ? CTM (Cargo Transfer Manifest) Number: CTM is issued to the carrier to uplift cargo up to certain point on behalf of other carrier. Revenue will be shared for the sector the carrier uplifted as for CTM.
4. TSP Charges It is handling charges, which contains handling/ loading charges, warehouse charges, cold storage, strong room, cartage, x-ray, miscellaneous charges. The rate of each category varies and has a minimum charge. The rates of some category are given below: Sl.No. 1 2 3 4 Type of Cargo General # Special Perishables News papers Rate per kg. Rs.0.50 Rs.1.00 Rs.0.35 Rs. 0.25 Min. rate / consignment. Rs.100 Rs.200 Rs.100 Rs.100
5. Demurrage Charges Sl.No. 1 2 Notes: • The free period for export cargo shall be 48 hrs for examination processing by the shippers. • TSP charges applicable to newspapers (daily) and TV reel consignments shall be 50% of the prescribed charges for general cargo. • Consignments of human remains coffin including unaccompanied baggage of deceased and human eyes are exempted from the purview of TSP and demurrage charges. • # Special cargo consists of live animals, hazardous goods and valuable cargo. This includes ornamental fish, chicks etc. Type of Cargo General # Special Rate per kg. Rs.0.50 Rs.1.00 Min. rate / consignment. Rs.100 Rs.200
• Charges will be levied on the “Gross weight” or the “Chargeable weight” of the consignment which ever is higher. Wherever the gross weight and (or) volume weight is wrongly indicated on the AWB and is found more, charges will be levied on the “Actual Gross weight” or “Actual Volumetric weight”, whichever is higher. • For mis-declaration of weight above 2% and upto 5% of declared weight penal charges @ double the applicable TSP charges will be levied. For variation above 5%, the penal charges will be levied @ five (5) times the applicable TSP charges of the differential weight. No penal charges will be levieable for variation upto and inclusive of 2%. 6. X-ray Machine Usage Charges These charges are levied either from the shipper or from the respective airline. Sl.No. 1 2 3 Type of Cargo General Perishable P.O. mails Rate per kg. Rs.1.50 Rs.1.00 Rs.1.50 Min. rate / consignment. Rs.100 Rs.100 Rs.100
7. Strong Room Charges Strong room charges: Rs.470/- per week upto 50 kg. More than 50 kg as Per schedule. Same day clearance Rs.470/- will be Charged irrespective of weight of the consignment. (More than 4hrs). 8. Cold Storage Charges Cold storage charges: 9. Loading Rs.1/- per kg per day subject to a minimum of Rs.200/- for each consignment.
Before loading CIAL verifies the flight folder whether any general cargo covered cooling period for the specified flight. CTM number puts if necessary. System should generate CTM number. The loading is according to the ULDs allotted by the airline. The system should provide all information about export cargo, flight as well as date wise. Whenever we enter the flight number, the system should display all the consignments booked for that particular flight, whose 24 hrs cooling period (only for general cargo) and all the customs formalities has been completed. 10.Manifestation It deals with preparation of manifest. For each flight a manifest has to be prepared even if no cargo is loaded. A manifest contains all the details of the cargo that is being uplifted on that particular flight and also shows ULD wise loading of each shipment. Manifest should contain details like flight number/ date, registration and airport of destination etc. The system should provide a dialog box to enter the ULD number and for each ULD there must have separate screen to enter the following details: 1. Airway Bill Number 2. No. of pieces 3. Gross weight 4. Airport of Destination 5. Shipping Bill Number 6. CTM Number (if any) 7. Security (X-ray, Cooling, Period, Physical examination) This list is not complete and prospective suppliers should describe additional functionality conforming to international standards. 11.Report writer
CIAL will require a report writer capable of working with the above applications. Prospective suppliers should be able to provide a report writer tool, to define regular and ad hoc reports, enquiries and file maintenance. The report writer should be straight forward to use by end-users. Suppliers should provide a full description of the proposed report writer, at both overview and detailed levels. The format of both import and export reports are attached as annexure. Some statistics reports depending on the palletisation/ depalletisation/ containerization. The various charges are given below: Palletization/ Depalletization charges to Airlines Rs.1500/Rs.3000/Rs.500/Rs.0.50/kg Rs.300/For 10 feet size pallet For 20 feet size pallet Per containerization Bulk cargo Polythene sheet covering for each pallet. Human remains and human eyes Free facility for both Export and Import All MIS reports are generating periodically as well as airline wise. The list given below is not complete, however main reports are: i. ii. iii. iv. v. vi. vii. viii. ix. Delivery Register Arrival Register Airline wise Import Detail Airline wise Export Detail Export Register Short Landed Cargo Detail Excess Landed Cargo Detail Flight/ ULD wise reports Commodity wise
x. xi. xii. xiii. xiv. xv. xvi. xvii. xviii. xix. xx. xxi. xxii. xxiii.
Agent wise Fort night report Airline wise Monthly/ weekly statement Sector wise report Gate pass Detail TSP Detail Airline wise Delivery Detail Postal record Detail Stock Detail General cargo Detail Unaccompanied baggage Detail Uncleared baggage/ General cargo Detail Disposed cargo Detail
12.Year End Process and Renumbering April 1st of every year bill number is starting from 1, unaccompanied baggage/ general cargo renumbers of every December 1st . The closing detail of previous year should reflect the current financial year. There should be a provision for referencing each financial year. Advantage of Air cargo to Exporters Air cargo boosts the export of any country. Exporters to place themselves on the track of competition are compelled to depend on air transportation. Some of the explicit advantages of air cargo can be mentioned as follows: • The relative importance of speed:
Speed is important factor to the shipper who wants to market his goods on the accurate date. Speed is the important factor particularly in the case high fashioned cloths in a very sensitive market and also in the case of fresh fruits, flowers, semi frozen products etc. • High level of frequency: Frequency is most important factor when goods can be sold in small quantities at frequent intervals. • High reliability is possible: It is an essential requirement to the shipper whose goods are sold against expiry date on Letter of Credit. Shipper expects to deliver the goods in prime conditions. IATA prescribes standards to be maintained for the delivery without damage. • High level of customer service: A customer in a business is the one who demands for the product at the particular time and particular manner. Through the air transportation he is satisfied. • Packing cost is less compared to sea transport: This is due to the speedy delivery in less time.
ORGANIZATIONAL STRUCTURE Cargo operation consists of exporting and importing of goods. In CIAL, the cargo department is done by CIAL itself. The organizational structure of cargo department, CIAL consists of: 1 Senior Manager, 2 Deputy Managers, 4 Assistant Managers, 41 Executives, 70 Loaders and 7 Drivers (4 tractors & 3 Fork lifts) Senior Manager Dy. General Manager
Asst. Manager Asst. Manager Asst. Manager Asst. Manager Executive Executive Executive Executive
Working Hours at Cargo Complex CIAL Customs Plant quarantine & Fumigation Department Bank 09.30 Hrs. to 17.30 Hrs. 10.00 Hrs. to 17.00 Hrs. 09.15 Hrs. to 17.00 Hrs. (Mon-Fri) 10.00 Hrs. to 16.30 Hrs. ( Mon-Fri) 10.00 Hrs. to 14.00 Hrs. (Sat)
Round The Clock Operation ? Palletization ? Release of Export to Airlines ? Import ? Depalletization ? Flight checking ? Instant billing ? Special cargo clearance AIRLINES OPERATING FROM CIAL CIAL handles more than 95 flights per week for international trips alone. Both domestic and international airlines that operate from CIAL are the following: ? Indian Airlines( IC) ? Air India (AI) ? Jet Airways ? Air Sahara ? Emirates (EK) ? Gulf Air (GF) ? Kuwait Airways (KU) ? Oman Air (WY) ? Qatar Airways (QR) ? Saudi Arabian Airlines (SV) ? Silk Air (MI) ? Sri Lankan Airlines (UL) The transshipments are mostly undertaken mostly by the following airlines:
? Cathey Pacific ? Lufthansa ? British Airways ? Singapore Airlines Since the airport is viable for multimode transport linkage, each year there is a growth in the international trade, tourism etc. More international are looking at the growth of the CIAL and hoping to start their operations. Oman Airlines is the first foreign airline that started its operations from CIAL from 22nd August 2001. Air Transport Geography Knowledge of the geographical areas connected with air transport including countries, major commercial centres and city codes is essential for the efficient handling of air cargo. IATA have found it convenient to divide the world into three Traffic Conference Areas taking into account different economic, social and business conditions and practices prevailing in different parts of the world and are known as TC1, TC2 and TC3.
? IATA Traffic Conference Area 1 (TC1)
North America, Central America, South America, Greenland, Bermuda and the Hawaiian Island.
? IATA Traffic Conference Area 2 (TC2)
Europe including the erstwhile USSR as far as the Arabs and Iceland, The Azores Africa and the adjacent Island, The Middle East including Iran. ? IATA Traffic Conference Area 3 (TC3)
Asia beginning with Pakistan, Australia and the Pacific Islands (Except the Hawaiian Island in TC1) TC1 is referred to as the eastern hemisphere and TC2 and TC3 together constitutes the western hemisphere.
DATA ANALYSIS AND INTERPRETATION
INTRODUCTION Analysis and interpretation part is the important part where the data collected are analyzed and interpreted with different tools. This chapter includes tables and diagrams. Analysis highlights the factors of infrastructure available at CIAL. Feedback from Air cargo Agents, Exporters and Airlines is collected for the following areas of infrastructure: 1. Network of Communication. 2. Automation in Cargo Handling. 3. Customs Clearance Procedures. 4. Warehousing Facilities and Security Scenario (Strong Room, Cold Room, X-Ray and Cooling off) 5. Equipment for Carting and Loading. 6. Personals in Cargo Handling. 7. Accessibility to the Airport. For categorizing the users of the Airport four different scales were used such as: a. Highly Satisfied b. Satisfied c. Partially Satisfied d. Dissatisfied For the analysis of the data the tools used are: Simple Percentage, Composite Percentage Growth, Rating and SWOT Analysis.
TABLE SHOWING EXPORT FROM AIR CARGO COMPLEX, CIAL IN DIFFERENT YEARS (Figures in Tons) Period AI AI Express IC Jet Airways Oman Silk KU EK QR SV UL GF Polar Mahar Volga Dnepr Silkway Total 3942.6 00-01 786.4 01-02 2496.7 02-03 3151.4 03-04 2749.7 04-05 2674.7 05-06 1353.7 181.8 1038.8 587.2 677.9 463.9 830.4 3044 685.4 2007.2 658.6 489.2 58.4 136 .9 12076. 5 Total 13212.8 181.8 5212.2 2750.2 1282.3 1507 3404.6 7773.3 2888.4 5123.8 1094.6 1195.2 24.6 58.4 136 .9 45846.1
175.1
619.2 626.1 84.8 89.9 25.7
1398.5 490.7 90.7 244.7 671.1 215.4 24.6 1.6
1108.6 495.0 62.9 342.9 938.7 1710.1 754.8 1002.5 114.7 191.2 12.9
872 551.2 366 365.5 938.7 2803.8 1423.6 2112.5 321.3 514.8 11.7
6288.8
9484.0
13092. 7
961.5
TABLE SHOWING IMPORT TO AIR CARGO COMPLEX, CIAL IN DIFFERENT YEARS (Figures in Tons) Period AI AI Express IC Jet Airways Oman Air Silk Air KU EK QR SV UL GF AL Israel Cargolux Mahar Air BondedTruck Polar Air Singapore VolgaDnepr Alltalia Lufthansa Total 00-01 01-02 02-03 474.5 1603.7 996.8 95.5 Total 4804.6 .3704 282.4 313.8 326.2 1718 83.1 103.4 98.4 448.6 6 12.5 6.3 44.34 26.5 70.4 114.3 643.8 6.7 615.8 476.6 2399.3 161.6 993.7 4652.9 19.3 199.6 575.9 .4 287.9 2835.2 81.2 52.8 506.6 3.7 40.04 37 37 2.7 2.7 1.6 1.6 148.9 148.9 22.1 22.1 7 7 138.6 138.6 36.4 36.4 2.9 2.9 2008.4 2375.2 3341.8 5181.6 5589.8 19066.9 03-04 742.6 04-05 614.4 05-06 3726.4 .3704 292.1 408 77.1 86.6 8.9 10.6 172.2 260.4 599.9 700.3 1586.8 1910.8 275.5 81.5 1271.9 1275 60.4 312.2 15.44 20.9
570
COCHIN CARGO HINTERLAND: TOTAL AIR CARGO TRAFFIC Total air cargo traffic from the CIAL is estimated @ 1,00,000 MT – 13% of the total India’s Air Cargo Traffic. Bangalore is the largest cargo belt and accounts for roughly half 48% of total cargo in the CIAL. TRV – 25%, Coimbatore – 16%, COK – 7%, CCJ – 4%. AIR CARGO TRAFFIC FROM CIAL Cargo belts Loaded Un Loaded Loaded Un Loaded Loaded Un Loaded Estimated cargo traffic 3360 3704 21180 41150 13783 2153 % of total Commodity 5% 7% 10% 15% 13% 4% Spices. News papers, Spare parts. Perishables. Garments. Electronic items, Flowers. Leather goods, Silk, Machinery.
TABLE SHOWING THE MAJOR COMMODITIES EXPORTED THROUGH CIAL Sl. No. 1 2 3 4 5 6 Types of Commodities Vegetables and Fruits Spices and Spice products Garments News papers and Magazines Food Stuffs Others Total Source: Airport Manifest Percentage 38.33 12.80 10.12 2.16 3.63 32.96 100
The above table depicts the shares of different types of commodities exported through CIAL. Vegetables and fruits with 38.33% occupy the major share. Spices and spice products have the share of 12.80%. Garments occupy the third position with 10.12%. News papers and magazine and food stuffs have the shares of 2.16% and 3.63% respectively. The other categories share 32.96%. The inference that can be drawn from the table is that there is more scope for the vegetables and fruits to increase the cargo quantity.
TABLE SHOWING THE RESPONSE OF AIR CARGO AGENTS TO THE NETWORK OF COMMUNICATION AT CIAL Ratings No. of Air cargo Agents Highly Satisfied 6 Satisfied 22 Partially Satisfied 2 Dissatisfied 0 Total 30 Source: Primary Data Percentage 20 74 6 0 100
The table depicts the fact that 74% of the respondents are satisfied with the Network Communication at CIAL. While 20% of them respond with high satisfaction, 6% are partially satisfied. No respondent is dissatisfied with this regard. The inference that can be drawn from the above table is that CIAL has a satisfactory Network of Communication.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE FACILITY OF THE NETWORK OF COMMUNICATION AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 1 10 1 0 12 Percentage 8 84 8 0 100
The above table depicts that 84% of the respondents satisfied when both the highly satisfied and the partially satisfied are with 8% each. No respondent is dissatisfied. It can be understood that the majority of the Airlines are satisfied with the Network of Communication at CIAL.
TABLE SHOWING THE RESPONSE OF AIR CARGO AGENTS TO THE CUSTOMS CLEARANCE PROCEEDURE AT CIAL Ratings No. of Air cargo Agents Highly Satisfied 6 Satisfied 16 Partially Satisfied 2 Dissatisfied 6 Total 30 Source: Primary Data Percentage 20 54 6 20 100
In the table 54% of respondents are in the satisfied group. Both the highly satisfied and the dissatisfied groups are equal with 20%. Only 6% of respondents are in the partially satisfied group. The reference that can be drawn is that since 20% of respondents are in the dissatisfied group CIAL has to improve in this respect.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE CUSTOMS CLEARANCE PROCEEDURE AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 0 2 9 1 12 Percentage 0 16 75 9 100
According to the tables majority of the respondents (75%) are satisfied partially. 16% are satisfied. While no respondent is highly satisfied, 9% of the respondents are in the dissatisfied group. It seems that the Airlines expect high improvements in the customs formalities.
TABLE SHOWING THE RESPONSE OF AIR CARGO AGENTS TO THE WAREHOUSING FACILITIES AT CIAL
Ratings No. of Air cargo Agents Highly Satisfied 6 Satisfied 22 Partially Satisfied 2 Dissatisfied 0 Total 30 Source: Primary Data
Percentage 20 74 6 0 100
From the above table it is clear that 745 of the respondents are in the satisfied group. 20% 0f them are highly satisfied and 6% of them are partially satisfied. No respondent comes under the dissatisfied group. CIAL Warehousing are satisfactory since majority of respondents are satisfied.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE THE WAREHOUSING FACILITIES AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 3 7 2 0 12 Percentage 26 58 16 0 100
As shown in the table the satisfied group covers 58% of the total respondents. And 26% of the respondents are highly satisfied and 16% of them are partially satisfied. Since no respondent is dissatisfied it is clear that CIAL Warehousing facilities are appreciable.
TABLE SHOWING THE AIR CARGO AGENTS PREFERENCE FOR CARGO HANDLING AT CIAL Ratings No. of Air cargo Agents Highly Satisfied 2 Satisfied 16 Partially Satisfied 8 Dissatisfied 4 Total 30 Source: Primary Data Percentage 6 54 26 14 100
The above table shows that satisfactory group figures 54% who are followed by partially satisfied category of 26%. The dissatisfied group of 14% is high, compared to 6% of highly satisfied group. Even though majority is satisfied there are a good number of respondents who expect developments.
TABLE SHOWING THE RESPONSE OF AIRLINES TO THE PERSONNEL AT CIAL Ratings Highly Satisfied Satisfied Partially Satisfied Dissatisfied Total Source: Primary Data No. of Airlines 1 6 4 1 12 Percentage 8 50 34 8 100
The above table shows that 50% of the respondents are satisfied with the service provided, 34% of the respondents are partially satisfied. And the highly and dissatisfied respondents shares 8% equally. Airlines show their response to get better services in this regard. There should have more skilled personals in the cargo handling section.
THE EXPORT – IMPORT – TRANSSHIPMENT RATIO AT CIAL Import Export Transshipment Total 2375.2 6288.8 190.8 8854.8 27% 71% 2% 100%
Source: Records of CIAL. Above table depicts that 71% of the total cargo handled is Export cargo. The import cargo ratio constitutes 27% of the total. Transshipment cargo to Thiruvananthapuram and Kozhikode constituted 2% of the total.
Export- Import- Transhipment Ratio
100% 80% 60% 40% 20% 0% Total Transshipment Export Import
SWOT ANALYSIS
SWOT analysis comprises both the organizational factors and the environmental factors. The organizational factors are ‘S’ and ‘W’ i.e. strengths and weakness. The environmental factors are ‘O’ and ‘T’ i.e. opportunities and threats in the business environment. Strengths are the internal competencies of a firm, particularly in comparison with that of its competitors. Weaknesses are those factors which tend to decrease the competencies of the firm, particularly in comparison with its competitors. Opportunities as well as threats are the factors in the outside environment. Opportunities of one firm can be threats of another and vice versa. In SWOT analysis the researcher analyses the cargo movement from Cochin. The major competitors of CIAL in the field of cargo operation are Chennai Airport, Thiruvananthapuram Airport and Bangalore Airport. STRENGTHS 1. The Airport has full range of multi-model transport linkages. The airport is close to the National Highways, Waterways, Railways and Cochin sea ports. 2. The Airport is provided with Instrumental Landing System, which helps 24 hrs. flight operation and is also suitable for the operation of Boeing b 747 – 400 and Airbus types of aircrafts. 3. Eight international airlines and four domestic carriers are operating from CIAL with high frequency level. 4. The CIAL has constructed a cargo complex recently to integrate the whole cargo activities
WEAKNESS 1. The customs clearance procedures at CIAL are very slow. About 60% of the airlines, 90% of the air cargo agents and 85% of exporters are only partially satisfied. 2. There is no 24 hrs customs clearance from CIAL even though for special fees the service is available during the off hours. 3. The personals are to be well trained and the number of working force in the cargo section is less and insufficient to meet the needs. OPPURTUNITIES 1. The CIAL is situated in the important area are far as the geographical and commercial factors are concerned. 2. The CIAL is a joint venture of NRIs all over the world, especially that of the Keralites. This unity will help for future developments. 3. The Special Economic Zone (SEZ) is situated near the Airport. This will boost the international trade from the state. 4. Geographically the infrastructure of the CIAL is viable to make further developments and construction such as complexes, runways, multi – modal transport linkage etc. 5. The proposed cargo village with an area of about 80 acres will help the CIAL air cargo for hyper developments. 6. The Airport – Seaport Highway which connects the industrial zone at Ambalamugal, where there are BPC, IOC & HPC, Kakkanad SEZ, Kinfra Park and IT Park at HMT, Kalamassery will be very effective in the coming years to add fuel to growth.
THREATS
1. The CIAL has to face the competition from other airports, especially from Chennai and Thiruvananthapuram who are having upper hands in cargo handling. 2. The pace at which the developmental programs are being carried out is rather slow and will affect the future of the airport badly. 3. The growing international terrorism is another threat, which is a hindrance for the gradual growth.
FINDINGS AND SUGGESTIONS
FINDINGS AND SUGGESTIONS Logistics is a process which involves movement of materials and products from the vendor right through to delivery at the customs door, including moves through manufacturing facilities, warehouses, and third parties such as re-packages or distributors. A logistics provider must control all components of the air cargo logistics chain like material handling, transporters, freight forwarders, distributors, warehousing, customs clearance etc. many airlines are trying to integrate these service to provide tailor made logistical solutions for the problem of their customers. CIAL has to strengthen its air cargo logistics chain so as to expect a sustained response from overseas buyers. This chapter comprises of the findings and analysis. The findings and analysis part has been depicted from the analysis and interpretation of data. From the pragmatically point of view this is an important part which invites for some action. FINDINGS 1. Majority of the air cargo agents, airlines and exporters in and around Cochin is satisfied with the Network of Communication at CIAL. 2. Out of the 30 sample size, 100% of agents are regular agents of CIAL cargo 3. 60% of agents are concentrating in both export and import, while 25% of agents concentrate only in exporting. 4. Most of the users of airport are less satisfied with customs formalities at CIAL, especially the air cargo agents.
5. Majority of the respondents are either highly satisfied or simply satisfied with regard to warehousing facilities at CIAL. 6. From the surveyed data, clearance of import cargo is fast. 7. Majority of the respondents are satisfied with the scanning machines at CIAL cargo and of the opinion that custodian services at CIAL cargo are excellent. 8. Majority of the agents are very much satisfied with the goods being handled in the CIAL cargo. 9. CIAL facility for automation in cargo handling is satisfactory for the airlines. 10.Security scenario in CIAL is satisfactory for majority of airlines, but suggested for further developments. 11.70% of the agents were highly satisfied with the hospitality of cargo officials at CIAL. 12.Two third of the airlines are satisfied with the equipments used for carting and loading. 13.Most of the exporters are satisfied with the accessibility to the airport. 14. Majority of customers are using water as mode of transport except a few engaged in import/ export of cargo. 15.Most of the customers opined that cost of the air transport is high. 16.For durable goods customers prefer water transport but for seasonal goods, they prefer air transport. 17.Even though freight charges are high, customers are willing to use air transport because of its regularity and security. 18.Lack of professionalism in every element of the logistics chain like CIAL, agents, transport providers, airlines, customs etc.
19.There is no uniformity in the packing norms adopted by the exporters. International standards have to be followed. 20.Strikes, road blocks, hartals, power failures, traffic jams etc. are frequent occurrences in Kerala. Some of these can be prevented but some cannot SUGGESTIONS 1. The important areas to be considered for an immediate improvement are the customs procedures and clearances of Duty drawback, for which a healthy coordination and effective cooperation is needed. 2. A conscious and strategical effort is needed for integrating the activities of disparate operations such as customs, airlines, agents and exporters. 3. If the company reduces the cargo handling charges and delay of getting clearance, the company can get more customers. 4. The company has to improve their facilities available inside the warehouse like seating comfort, telephone facilities and canteen also. 5. Providing more information about their concern through the website will be helpful for new customers to know the procedures. 6. Increase the number of modern equipments for cargo handling. 7. Continuous effort should be made to attract the exporters who should feel reliability by constant presence and participation in all activities. 8. Company has to develop a new website which contains only the details of cargo. 9. Number of personals is to be increased; they need operational as well as inter personal skills.
10. Company should open a grievance cell to solve complaints and introduce a help desk at CIAL cargo. 11.Try to keep an upper hand over the activities of the union workers and there should be vigilance to avoid the unauthentic practices in the clearance section. 12.For durable goods, if some concessions are given customers will switch over from after to air transport. 13.An effective utilization of EDI system is to be adopted for efficient information interchange. 14.CIAL has to give special attention to exporters by making efficient and friendly liaison. 15.Bonded trucking has to be improved. 16.Introduce a “User Friendly” strategy to attract more exporters and airlines. 17.Efforts should be made to attract Foreign Direct Investment to improve the infrastructural facilities in the airport. The urgent necessities are weigh bridge, more scanning machines, more cargo handling equipments, quality service and professional handling of cargo, easy accessibility and office space for airlines and agents with warehouse facilities. 18.Free Trade Zone (FTZ) can be established to promote export cargo with an eye to staying ahead of increasingly fierce competition and to cash in on the ever growing SCM and Logistics industries. 19.CIAL cargo force should be given training in customer relationship management and professional handling of cargo.
20.Regular meetings with airlines, agents, customs and CIAL staff should be conducted to study their problems, complaints, recommendations and suggestions. As a future prospect, CIAL can be upgraded to an Air Cargo Hub and inbound and out bound operations can be made under one roof. This will enable to handle more cargo and the capacity to process shipments/ hour will also increase.
CONCLUSION
CONCLUSION The air cargo industry plays an important role in the global supply chain. Air cargo services between Asia, Europe and America are widely expanding as liberalization and globalization of global trade create new demand. The growth projection of volume of international air cargo shows and with of 6.6 million tonnes during the five years forecast period. New technological developments are visible in air cargo, which surges the growth of standard and speedy operations. Now there are decreasing errors, increasing performance and improving customer satisfaction. Rapid growth and development in IT and wireless technologies is opening new prospective for air cargo, supporting both planning and real time operations. There are strong challenges in the aviation industry such as terrorist, hijacks and unhealthy competition. These factors have created a sudden decrease in aviation industry. But, it is getting well and many exporters have started using the shipment via air. The basic thing that is needed as the foundation of the industry is the infrastructure for smooth movement. The present stage of CIAL is that of childhood, from which it has to grow rapidly by improving the infrastructure facilities. For this CIAL air cargo should meet the changing and the ever growing needs of the air cargo agents, exporters and airlines by modifying and upgrading their models and systems.
BIBLIOGRAPHY
TEXT BOOKS 1. Logistics Management (Bowersox Donald). 2. Logistics Management and World Seaborne Trade (Krishnaveni Muthiah) 3. An Investigation of Air Cargo Operation at Canadian International Airport Breaking through Bottlenecks (Jeremy.N. Smith) JOURNALS 1. Cargo Talk 2. Yogana, “Augmenting Airport Infrastructure for Air Freight” 3. CIAL Manual WEBSITES 1. www.aircargoworld.com 2. www.cial.org 3. www.airportindia.com
4. www.cochincustoms.nic.in
ANNEXURE
doc_650245090.doc