Air Express Services: A Growing Role in Air Cargo
Page 1
Tulsi Nowlakha Mirchandaney
Evolution of Air Cargo
1911
AIRMAIL
1940
AIR CARGO
1969
AIR EXPRESS
Page 2
Air Express: Rapid Expansion
 *International
 1991: 3.5% Market Share (International Air Cargo)
 2005: 11.0% Market Share
 Growths: 17% (Average Annual – since 1997)
 *USA
 1975: 3.2% Market Share (Domestic Air Cargo)
 2005: 60.9% Market Share
81.4%
of the world’s
freighters are used
by
Air Express
Operators
 **India
 Size of Industry: 4,175 cr
 Average Annual Growths: 17.2% (Estimated)
* Source: Boeing: World Air Cargo Forecast 2007
** Internal Estimates
Page 3
International Express: Rapid Growths
Source: WACF 2007
Page 4
USA: Express Market Leadership
Source: WACF 2007
Page 5
Intra-Europe: Express Growths Overtake Air Cargo
Source: WACF 2007
Page 6
Intra-Europe: Express Growths Overtake Air Cargo
Source: WACF 2007
Page 7
Intra-Europe: Express Growths Overtake Air Cargo
Source: WACF 2007
Page 8
Air Express: End to End Solutions
Consignor
ORIGIN
CUSTOMER – TRANSPORT INTERFACE
Airline
TRANSPORT – CONSIGNEE INTERFACE
Agent
DESTINATION
INTEGRATORS
TRANSPORT MODEL(S)
Forwarder
Consignee
Time--Definite Time-Control
Integrated Service Providers
Page 9
Air Express: Critical Supply Chain Support
 Time-Definite, Door-to-Door Distribution
 Emphasis on Speed, Reliability, Security, Real-Time Data Flow
 Overnight Deliveries
 Business Driven
 Specially Relevant to:
Time-Sensitive/Emergency Material
High Value Goods
High-Security/Confidential Items
 Vital Role in Business Logistics Systems
TRADE
FACILITATOR
*5% of India’s
GDP (by value)
carried by Air
Express
Just In Time
Supply Chain Management
* Internal Research
Page 10
GDP Impacts on Air Cargo Growths
Source: WACF 2007
Page 11
% growth
India: GDP Impacts on Air Cargo & Air Express Growths
40.00%
38.00%
36.00%
34.00%
32.00%
30.00%
28.00%
24.00%
26.00%
24.00%
22.00%
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00% 4.40%
2.00%
0.00%
2000-01
31.00%
30.00%
28.00%
26.00%
21.00%
13.00%
22%
13%
10%
11%
5.80%
9.00%
8.50%
7.50%
2003-04
2004-05
10%
9.40%
6%
3.80%
2001-02
GDP
2002-03
Dom Cargo Traffic Growth
2005-06
2006-07
Air Express
Source: CMIE Report December 2007& Internal Sources
Page 12
Domestic Air Express: Economic Growth Co-relation
32
% change in y-o-y growth
28
Blue Dart
24
20
16
Services
12
8
Manufacturing
4
0
2001-02
2002-03
2003-04
2004-05
2005-06
Source: CMIE and Blue Dart Financials
Page 13
Air Cargo: The Indian Scenario
 Primarily Focused on Passenger Air Services &
Infrastructure
 Air Cargo considered a By-Product of Passenger Air
Services
 Air Cargo in India is not fully aligned to business needs.
Page 14
The India Challenge: Mammoth, Diverse, Poorly Connected
USA
*9.161
EU
3.976
PARAMETERS
Area (mn sq. km)
INDIA
*2.973
301
50 + 1 district
2**
490
Population (mns)
25 member states States
20
Languages
1130
28 + 7 UT
16
0.227
6.43
4.165
14,947
5.675
0.237
4.635
2.400
3,393
4.259
0.063
3.383
1.604
346
0.811
Railways (mn km)
Roadways (mn km)
Paved Roads (mn km)
Airports
Tonnage: 2 largest airports (mns)
Source: CIA World Fact Book, 2007
* Area of land only (area of territorial water excluded)
** English and Spanish contribute ~ 93%, remaining are mixed dialects
Page 15
Air Express: The Business Imperative
Infrastructure
 6 Freighters (3 B757s and 3 B737s)
 Integrated Road Network
 Advanced Technology
DEL
AMD
CCU
Network
 62 Route Connections
 300 tonnes each night
 7 Aviation Hubs
BOM
HYD
MAA
BLR
 9 Domestic Hubs
 21 Ground Regional Hubs
 4,021 Vehicles
Source: CMIE and Blue Dart Financials
Page 16
Air Express: The Business Imperative
Quality
 Net service reliability levels of
99.96%
Volumes
JAN-DEC 2007
 Despatch Reliability 99.25%
 ISO 9001-2000 Certified standards
for the entire Operations, Products
and Services.
People
 Committed, Professional, Trained
SHIPMENTS (In mns)
Domestic
72.40
TONNAGE:
Express and airfreight loads
- 191,875 tonnes
(> the total exports out of
Chennai & Bangalore)
Source: CMIE and Blue Dart Financials
Page 17
India: Positive Future Outlook
Logistics Spend:
India: 13% of GDP
compared to
USA: 8.7%
30
25
% to GDP
20
15
10
5
0
Peru
Argentina
China
Brazil
Mexico Germany
India
Taiwan
Portugal Canada
Japan
Italy
UK
USA
Countries
Domestic Consumption
 Large Population
 Increased purchasing
power
 Changing lifestyles
Source: CMIE and Blue Dart Financials
Page 18
India: Positive Future Outlook
 Outsourcing hub
 80% of goods will be manufactured in countries
other than where they would be purchased.
Source: CMIE and Blue Dart Financials
Page 19
India Opportunity: FTA with SAARC
Key Role in South Asia Trade
 3.9% of World Air Cargo
 4.2% of World Tonne/Kms
 Over 1.4 mn tonnes
into/out of the region
Source: CMIE and Blue Dart Financials
Page 20
USA: Trucking Network Complements Air Services
Page 21
USA & Europe: Trucking Network Complements Air Services
India’s Golden Quadrilateral is an opportunity
Page 22
Regional Hub: Some Asian Success Stories
DUBAI CARGO VILLAGE
 Dubai Airport Free Zone
 Capacity
– 800,000 tonnes (annual)
– 7,420 tonnes (storage)
– Truck Docks: 56 (with 7 solely for sea-air)
– Ship to Plane: 4 hours
 Individual Express Facility for FedEx & DHL
 Commenced Operations in July 1991
 Annual Airfreight Movement (tonnes): 751,575*
 Ranked 17th largest Cargo Airport in the World**
* Dubai Cargo Village: 2007 statistics
** Airports Council International
Page 23
India’s Opportunity: Regional Hub
Dubai & Mumbai Airports: Air Cargo Traffic (1991-2007)
1650000
1500000
Metric Tonnes
1350000
1200000
1050000
900000
750000
600000
450000
300000
150000
0
1991
1993
1995
Dubai
1997
1999
2001
2003
2005
2007
Mumbai
Source : CMIE Report March 2006
Dubai International Airport
Page 24
India’s Opportunity: Regional Hub
USD Bn
GDP
Industry
Services
Agriculture
India
912
252
493
167
Singapore
133
46
87
0
UAE
163
102
58
3
Thailand
205
73
112
20
Malaysia
168
79
74
15
Exports
Imports
127
173
273
240
143
86
128
127
160
124
SIN
1.91
DXB
1.50
BKK
1.18
KUL
0.67
Airports
BOM DEL
(Mn Tonnes) 0.431 0.38
Source: Press Information Bureau, CIA –World Fact book, Ministry of Finance and Department of Statistics, Malaysia, Central bank of thailand, DBresearch,
Airport Council International, Airports Authority of India
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THANK YOU
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