Chapter–4 …shodhganga.inflibnet.ac.in/bitstream/10603/28488/12/12_chapter4.pdf ·...

Chapter�–�4�

LOGISTICS�SERVICES�RENDERED�BY�FREIGHT�FORWARDERS�IN�

INTERNATIONAL�AIRPORTS�IN�KERALA��AN�ASSESMENT�

The previous chapter analyzed the performance and future demand of

international air cargo traffic in Kerala and indicated an upward trend. But efficient

and effective flow of air cargo traffic depends upon the availability of high quality

logistics facilities in the airport. The principal logistics facilities which facilitate air

cargo traffic in the airport are freight forwarding, customs clearance and

warehousing. Air freight forwarding services are rendered by air freight forwarders

or clearing and forwarding agents (C&F) and they play a very significant role in the

smooth flow of international air cargo operations. Air freight forwarders, whether

individuals or organizations, provide service to shippers and importers which

originally involved receiving a consignment of freight from shipper, arranging its

routing, transportation handling ,and documentation to either final receiver or to a

foreign airport. It is the responsibility of air freight forwarders to ensure that

internationally traded goods move from point of origin to point of destination in good

order and condition and at the lowest cost.

Air freight forwarders are individuals or organizations offering air services

transport of merchants’ goods. They are IAIA cargo agents registered by IATA to act

on behalf of appointing airlines and are the key customers of the airlines. Appointing

airlines give them stock of Air Way Bill and commission. Air freight forwarders are

divided into domestic and international segments. They ensure the quality of services

Chapter-4 Logistics Services Rendered by Freight Forwarders in International Airports in Kerala –An Assessment`

Logistics Management in International Airports in Kerala 146

so that customer satisfaction is ensured. They are entrusted with the task of

maintaining and improving air freight services in addition to the responsibility of

ensuring that trader’s products are transported quake and safe.

In this chapter an attempt is made to analyze the services rendered by

freight forwarders in air cargo traffic in Kerala and the problems they face while

rendering the services. For this purpose, a survey was conducted among the freight

forwarders or C&F agents in the international airports in Kerala. The information

was collected from the freight forwarders with the help of a structured questionnaire

and detailed discussion. The respondents consisted of 115 freight forwarders: 45

from CIAL, 40 from TACT and 30 from CACC. All the freight forwarders were

IATA agents.

The analysis has two parts. The first deals with profile of the freight

forwarding firms; and the other deals with the assessment of services rendered by

freight forwarders in air cargo traffic in Kerala and the problems they face while

rendering the services.

Part-I

4.1 Profile of the Sample Organization

Profile of the sample firms is analysed by using the variable such as the

nature of the firm, number of years of functioning, number of employees in the firm,

and qualification of managers. These variables are analyzed in the following Tables:



4.1.1 Nature of the Organization

Freight forwarding firms operating in the airports in Kerala consists of

National level private companies and Multinational companies (MNC). The response

of freight forwarders regarding nature of the organization are given in Table 4.1.

Table 4.1

Nature of the Organization

Nature of the firms

Airports Total

CIAL TACT CACC

No % No % No % No %

National level private Company 29 64.44 23 57.50 17 56.67 69 60.0

0

Multinational Company 16 35.56 17 42.50 13 43.33 46 40.00

Total 45 100 40 100 30 100 115 100

Source: Survey data

Table 4.1 reveals that majority (60 per cent) of the air freight forwarding

firms in Kerala under study are National level private companies and the role of

multinational companies is only 40 per cent. Airport-wise analysis also shows more

or less the same result. It shows that 64.44 per cent firms in CIAL, 57.50 per cent

firms in TACT and 56.67 per cent firms in CACC are national level private

companies but 35.56 per cent firms in CIAL, 42.50 per cent firms in TACT and

43.33 per cent firms in CACC are multinational companies.



4.1.2 Number years of Functioning

The freight forwarding firms operating in the airports in Kerala consists of

less experienced and well experienced firms. The response of freight forwarders

regarding the number of years of functioning is given in Table 4.2.

Table 4.2

Number of Years of Functioning

Number of years of functioning

Airports Total

CIAL TACT CACC

No % No % No % No %

Less than 5 4 8.88 6 15.00 8 26.67 18 15.65

5-10 25 55.56 21 52.50 18 60.00 64 55.65

10 and above 16 35.56 13 32.50 4 13.33 33 28.70

Total 45 100 40 100 30 100 115 100

Source: Survey data

It is observed that 55.65 per cent of the air freight forwarding firms under

study have 5-10 years of experience in this field, 28.70 per cent have more than ten

years of experience and the remaining 15.65 per cent have less than five years of

experience (Table 4.2). Airport-wise analysis shows that 8.88 per cent firms in

CIAL, 15 per cent firms in TACT and 26.67 per cent firms in CACC have less than

five years of experience, 55.56 per cent firms in CIAL, 52.50 per cent firms in TACT

and 60.00 per cent firms in CACC have 5-10 years of experience. 35.56 per cent

firms in CIAL, 32.50 per cent firms in TACT and 13.33 per cent firms in CACC

have more than ten years of experience.



4.1.3 Number of employees in the office

The function of freight forwarding firms is to provide service to their

customers, not to produce anything. So less number of employees is needed to

conduct this type of business. The responses of freight forwarders regarding number

of employees in the office are given in Table 4.3.

Table 4-3

Number of employees in the Office

Number of Employees

Airports Total

CIAL TACT CACC

No % No % No % No %

Less than 5 5 11.11 4 10.00 5 16.67 14 12.1

8

5-10 32 71.11 30 75.00 22 73.33 84 73.0

4

10 and above 8 17.78 6 15.00 3 10.00 17 14.7

8

Total 45 100 40 100 30 100 115 100

Source: Survey data

Out of 115 freight forwarding firms, majority (73.04 per cent) of the firms

have 5-10 number of employees, 12.18 per cent have less than 5 and 14.78 per cent

firms have more than 10 (Table 4.3). Airport-wise analysis does not show wide

variation in this regard. It shows that 11.11 per cent firms in CIAL, 10 per cent firms

in TACT and 16.67 per cent firms in CACC have less than five number of

employees, 71.11 per cent firms in CIAL, 75.00 per cent firms in TACT and 73.33

per cent firms in CACC have between 5-10 number of employees and 17.78 per cent



firms in CIAL, 15 per cent firms in TACT and 10 per cent firms in CACC have ten

and more number of employees.

4.1.4 Qualification of Managers

For conducting freight forwarding business no special qualification is

required. A certificate from Customs authority is required to perform customs

clearance function for the air cargo traffic. But air cargo logistics operations require

skilled manpower and proficiency with knowledge of customs procedure and IT

systems. Warehouse management, logistics and freight forwarding are separate

subjects and require specialized training. Hence, for successful conduct of business,

special qualification in the area of logistics management is necessary for the

successful conduct of the business. The response of freight forwarders in the airports

in Kerala regarding qualification of managers are given in Table 4.4.

Table 4.4

Qualification of Managers

Qualification

Airport Total

CIAL TACT CACC

No % No % No % No %

Specially qualified 11 24.44 8 20.00 6 20.00 25 21.74

Not specially qualified 34 75.56 32 80.00 24 80.00 90 78.26

Total 45 100 40 100 30 100 115 100

Source: Survey data



It is evident from the Table 4.4 that managers of 78.26 per cent freight

forwarding firms under study are not specially qualified and only 21.74 per cent

firms managers are specially qualified. Airport-wise analysis also shows more or less

the same results. It shows that managers of 75.56 per cent firms in CIAL, 80 per cent

firms in TACT and 80 per cent firms in CACC are not specially qualified and

managers of 24.44 per cent freight forwarding firms in CIAL, 20 per cent firms in

TACT and CACCs are specially qualified. The analysis reveals that managers of

majority of the firms operating in international airports Kerala have no special

qualification from the area of logistics management. Most of them are learn things

on the job itself. So firms needed to recruit specially qualified managers in the

field of logistics management for efficient functioning of the firms.

Part-II

4.2. Extent of Logistics Functions Performed by Freight Forwarders

in Air Cargo Traffic in Kerala

In this section, the services rendered by the freight forwarders in air cargo

traffic in Kerala are assessed. Variables identified under this head are freight

forwarders area of operations, destination of cargo handled, mode of transport used,

involvement in international trade activities, items of goods handled, regularity in

dealing, logistics facilities offered by the freight forwarders, type of carrier used, an

agents of all airlines, problems faced by freight forwarders from airlines, facilities

needed from the airlines’ common constraints in the airport and prospects of demand

of freight forwarding firms in Kerala. All these are assessed in the following tables:



4.2.1 Area of Operation

The area of operation of freight forwarders is either limited to one or two

airports or all airports in Kerala. The opinion of the freight forwarding firms

regarding area of operation is shown in Table 4.5.

Table 4.5

Area of Operation

Area of Operation

Airport Total

CIAL TACT CACC

No % No % No. % No %

All airports in Kerala 17 37.78 11 27.50 9 30.00 37 32.17

One or two airports in Kerala 28 62.22 29 72.50 21 70.00 78 67.83

Total 45 100 40 100 30 100 115 100 Source: Survey data

It is observed that majority (67.83 per cent) of the freight forwarding firms

have limited their operations to one or two airports whereas 32.17 per cent firms

have operations in all airports in Kerala (Table 4.5). The airport-wise analysis also

shows more or less the same results. It shows that 37.78 per cent firms in CIAL,

27.50 per cent firms in TACT and 30 per cent firms in CACC have operation in all

the airports in Kerala. But 62.22 per cent of firms in CIAL, 72.50 per cent firms in

TACT and 70 per cent firms in CACC limited their area of operations to one or two

airports only.

4.2.2 Destination of Cargo Handled

Cargo has international and domestic destinations. The opinion of the freight

forwarders regarding the destination of the cargo handled is shown in Table 4.6.



Table 4.6

Destination of Cargo Handled

Destination

Airports Total

CIAL TACC CACC No. %

No % No % No %

Domestic only - - - - - - - -

International only 31 68.89 31 77.50 22 73.33 84 73.04

Both 14 31.11 9 22.50 8 26.67 31 26.96

Total 45 100 40 100 30 100 115 100

Source: Survey data

Table 4.6 reveals that majority (73.04 per cent) of the freight forwarding

firms under study handle international trade only. None of the firms handle domestic

trade alone and 26.96 per cent handle both international and domestic trade. The

airport-wise analysis also shows more or less the same results. It shows that 68.89

per cent of freight forwarders in CIAL, 77.50 per cent freight forwarders in TACT

and 73.33 per cent freight forwarders in CACC handle international cargo traffic

only and 31.11 per cent freight forwarders in CIAL, 22.50 per cent freight forwarders

in TACT and 26.67 per cent freight forwarders in CACC handle both domestic and

international cargo traffic. None of them act exclusively for domestic trade.

4.2.3 Mode of Transport for International Destination

Mainly two modes of transport—air and sea—is used for international trade.

Opinion of the freight forwarders regarding the mode of transport for international

air cargo traffic shown in the Table 4.7.



Table 4.7

Mode of transport for International Destination

Mode

Airport Total

CIAL TACC CACC

No % No % No % No %

Air only 9 20.00 18 45.00 19 63.33 46 40.00

Both Air and Sea 36 80.00 22 55.00 11 36.67 69 60.00

Total 45 100 40 100 30 100 115 100

Source: Survey data

It is clear from the Table 4.7 that 60 per cent respondents handle both sea and

air cargo traffic, and 40 per cent handle air transport only. But the airport-wise

analysis shows some differences in this regard. It shows that 20 per cent respondents

in CIAL, 45 per cent respondent in TACT and 63.33 per cent respondent in CACC

handle air cargo only and 80 per cent respondent in CIAL, 55 per cent in TACT and

36.67 per cent respondent in CACC handle both air and sea cargo. It may be due to

the fact that in CIAL and TACT, there is better connectivity to sea port and as a

result a greater number of freight forwarders handle both air and sea cargo.

4.2.4 Activities in International Trade

International trade activities consist of both exports and imports. Some firms

deal with exports activities only, some deal with imports activities only and another

group deals with both imports and exports activities. Opinion of the freight

forwarders in this regard is shown in the Table 4.8.



Table 4.8

Freight Forwarders’ Involvement in International Trade Activities

Activities

Airports

CIAL TACT CACC Total

No % No % No % No %

Exports only 12 26.67 16 40.00 13 43.33 41 35.65

Imports only 8 17.78 13 32.50 8 26.67 29 25.22

Both 25 55.55 11 27.50 9 30.00 45 39.13

Total 45 100 40 100 30 100 115 100

Source: Survey data

It is observed that 35.65 per cent freight forwarders under study deal with

export activity only, 25.22 per cent with import activity only and 39.13 per cent

handle both export and import activities. (Table 4.8). But the airport-wise analysis

shows some difference in this regard. In CIAL, the majority (55.55 per cent) of

freight forwarders deal with both export and import activities but in TACT only

27.50 per cent deal with both activities and it is 30 per cent in CACC. 26.67 per cent

freight forwarders in CIAL, 40 per cent freight forwarders in TACT and 43.33 per

cent freight forwarders in CACC deals with export activity only.17.78 per cent

freight forwarders in CIAL, 32.50 per cent freight forwarders in TACT and 26.67 per

cent freight forwarders in CACC deals with import activity only.

4.2.5 Items of goods handled in the International Sector for Exports

Exports cargo handled in the international airports in Kerala mainly consists

of perishable cargo, general cargo, valuable cargo and other items which include



dangerous goods and courier items. Responses of the freight forwarders regarding

item handled for exports are given in Table 4.9

Table 4.9

Items of goods handled in the International Sector for Exports

Items Opinion

Airports


No % No % No % No %

Perishable

Always 24 64.86 27 100 22 100 73 84.88

Sometimes 4 10.81 - - - - 4 4.65

Never 9 24.32 - - - - 9 10.47

Total 37 100 27 100 22 100 86 100

General

Always 20 54.05 4 14.82 - - 24 27.91

Sometimes 12 32.43 5 18.51 7 31.82 24 27.91

Never 5 13.52 18 66.67 15 68.18 38 44.18

Total 37 100 27 100 22 100 86 100

Valuable

Always 4 10.81 - - - - 4 5.88

Sometimes 7 18.92 6 22.22 4 18.18 17 19.76

Never 26 70.27 21 77.78 18 81.82 65 75.58

Total 37 100 27 100 22 100 86 100

Others

Always - - - - - -

Sometimes 13 35.14 6 22.22 3 13.64 22 25.58

Never 24 64.86 21 77.78 19 86.36 64 74.42

Total 37 100 27 100 22 100 86 100

Source: Survey data



As far as perishable cargo is concerned, 84.88 per cent freight forwarders

always deal with it; 4.65 per cent sometimes deal with it and the remaining 10.47per

cent never deal with it (Table 4.9). But the airport-wise analysis shows that all the

freight forwarders in TACT and CACCs under study always deal with perishable

cargo but in CIAL it is only 64.87 per cent. This happens because in TACT and

CACCs almost 98 per cent (Table 3.22 and Table 3.23) of the quantity of exports

cargo consists of perishable items but in CIAL it is around 60 per cent (Table 3.21).

In the case of general cargo, majority (44.18 per cent) of freight forwarders

under study never deal with it; only 27.91 per cent sometimes deal with it and the

same percentage always handle it (Table.4.9). The airport-wise analysis shows that

around 67 per cent of the freight forwarders in TACT and CACCs never deal with

general cargo, whereas in CIAL such persons account for 13.52 per cent and 54.05

per cent constantly deal with it. The reason behind this difference is that in CIAL,

around 40 per cent (Table 3.21) of quantity of exports cargo consists of general cargo

but in other airports only negligible quantity of exports cargo (around 2 per cent )

consists of general cargo (Table 3.22 and Table 3.23).

Majority (75.58 per cent) of the freight forwarders under study never deal

with valuable cargo, 19.76 per cent sometimes deal with it and only 5.88 per cent

always deal with it. (Table.4.9). Airport-wise analysis shows that in TACT and

CACCs none of them always deals with valuables cargo but in CIAL it is 10.81 per

cent. Only 18.92 per cent of freight forwarders in CIAL, 22.22 per cent in TACT and

18.18 per cent of freight forwarders in CACC sometimes deal with valuable cargo.



Majority of the freight forwarders (70.27 per cent) in CIAL, 77.78per cent in TACT

and 81.81 per cent in CACC never deal with valuable cargo.

Regarding other cargo exported through international airports in Kerala, none

of the freight forwarders always deal with it; only 25.58 per cent sometimes deal it;

and 74.42 per cent never deal with it. Airport-wise analysis shows that none of the

freight forwarders in all the three airports always deal with other cargo. 35.14 per

cent freight forwarders in CIAL, 22.22 per cent in TACT and 13.64 per cent firms in

CACC sometimes deal with other cargo. 64.86 per cent freight forwarders in CIAL,

77.78 per cent freight forwarders in TACT and 86.36 per cent freight forwarders in

CACC never deals with other cargo.

4.2.6 Items of goods handled in the International Sector for Imports

Imports cargo handled in the airports mainly consists of Unaccompanied

Baggage (UB), general cargo including valuable cargo, courier cargo and dangerous

goods. Responses of the freight forwarders regarding item handled for imports are

given in Table 4.10



Table4.10

Items of goods handled in the International sector for Imports

Items Opinion

Airports

CIAL TACC CACC Total

No % No % No % No %

UB

Always 5 15.15 14 58.33 13 76.47 32 43.24

Sometimes 8 24.24 6 25.00 4 23.53 18 24.32

Never 20 60.61 4 16.67 - - 24 32.44

Total 33 100 24 100 17 100 74 100

General

Always 26 78.79 5 20.83 - - 31 41.89

Sometimes 4 12.12 4 16.67 7 41.18 15 20.27

Never 3 9.07 15 62.50 10 58.82 28 37.84

Total 33 100 24 100 17 100 74 100

Source: Survey data

The Table 4.10 reveals that majority (43.24 per cent) of the air freight

forwarder always deal with UB; 24.32 per cent sometimes deal with it; and the

remaining 32.44 per cent never deal with UB. But the airport-wise analysis shows

wide variation in this regard. It shows that in CIAL majority (60.61 per cent) never

deal with UB; but in Trivandrum and CACCs majority of firms always deal with UB.

The reason may be that in TACT and CACCs majority of the imports cargo handled

consists of UB (Table 3.30 and Table 3.31).

As far as general cargo is concerned majority (41.89 per cent) of the

respondents always deals with it. But the airport-wise analysis shows some



difference in this regard. It shows that in CIAL almost 79 per cent respondents

always deal with general cargo but in TACT and CACC that majority of respondent

never deals with general cargo(Table 4.10).

4.2.7 Regularity in Dealing with Air Cargo Business

Some freight forwarders in international airports in Kerala regularly deal with

the air cargo traffic while others do not do so. Responses of the freight forwarders

regarding regularity in dealing are given in Table 4.11

Table 4.11

Regularity in Dealing with Air Cargo Business

Opinion

Airports


No % No % No % No %

Regular dealer 38 84.44 35 87.50 22 73.33 95 82.61

Not a regular dealer 7 15.56 5 12.50 8 26.67 20 17.39

Total 45 100 40 100 30 100 115 100

Source: Survey data

It can be seen from the table that majority (82.61 per cent) of the respondents

are regularly engaged in air cargo business and only 17.39 per cent are not regular

dealers (The table 4.11). The airport-wise analysis also shows more or less the same

results. It shows that 84.44 per cent freight forwarders in CIAL, 87.50 per cent in

TACT and 73.33 per cent freight forwarders in CACC regularly deal with air cargo



business. Remaining 15.56 per cent freight forwarders in CIAL, 12.50 per cent in

TACT and 26.67 per cent in CACC do not regularly deal with air cargo business.

4.2.8 Regular shipper or consignee

Freight forwarders who are regularly dealing with air cargo business

sometimes have regular shipper or consignee. Responses of the freight forwarders

regarding regular shipper or consignee are given in Table 4.12.

Table 4.12

Freight forwarders having Regular Shipper or Consignee.

Opinion

Airports


No % No % No % No %

Yes 35 92.11 25 71.43 19 86.36 79 83.16

No 3 7.89 10 28.57 3 13.64 16 16.84

Total 38 100 35 100 22 100 95 100

Source: Survey data

It is observed from the table 4.12 that 83.16 per cent freight forwarders

regularly dealing in air cargo business have regular shipper or consignee (Table

4.12). The airport-wise analysis also shows more or less the same results. It shows

that 92.11 per cent freight forwarders in CIAL, 71.43 per cent in TACT and 86.36

per cent freight forwarders in CACC have regular shipper or consignee and the

remaining 7.89 per cent in CIAL, 28.57 per cent in TACT and 13.64 per cent in

CACC have no regular shipper or consignee.



4.2.9 Logistics Functions Offered by Freight Forwarders to Shipper

Logistics functions offered by the freight forwarders to the shipper includes

arrangement of transportation, freight forwarding, customs clearance, warehousing,

packaging, order processing and reverse logistics. The opinion of the freight

forwarders in this regard is given in the Table 4.13



Table 4.13 Logistics Functions offered by Freight Forwarders to Shipper

Logistics functions Opinion

Airports Total

CIAL TACC CACC No. % No % No % No %

Arrangementof

Transportation

Always 37 100 27 100 22 100 86 100 Sometimes - - - - - - - -

Never - - - - - - - -

Total 37 100 27 100 22 100 86 100

Warehousing

Always 25 67.57 18 66.67 14 63.6

4 57 66.28

Sometimes 7 18.92 3 11.11 3 13.6

4 13 15.11

Never 5 13.51 6 22.22 5 22.7

3 16 18.61

Total 37 100 27 100 22 100 86 100

Customs Clearance


Never - - - - - - - - Total 37 100 27 100 22 100 86 100

Freight Forwarding


Never - - - - - - - - Total 37 100 27 100 22 100 86 100

Packaging

Always - - - - - - - -

Sometimes 5 13.51 8 29.63 3 13.6

4 16 18.60

Never 32 86.49 19 70.37 19 86.3

6 70 81.40

Total 37 100 27 100 22 100 86 100

Orderprocessing

Always - - - - - - - -

Sometimes 5 13.51 4 14.81 4 18.1

8 13 15.12

Never 32 86.49 23 85.19 18 81.8

2 73 84.88

Total 37 100 27 100 22 100 86 100

Reverse logistics

Always - - - - - - - -

Sometime 13 35.14 5 18.52 3 13.6

4 21 24.42

Never 24 64.86 22 81.48 19 86.3

6 65 75.58

Total 37 100 27 100 22 100 86 100 Source: Survey data



Table 4.13 reveals that logistics functions such as arrangement of transportation,

customs clearance and freight forwarding are always performed by all the freight

forwarders in international airports in Kerala to shippers. Airport-wise analysis also

shows the same result.

As far as warehousing function is concerned 66.28 per cent freight forwarders

always perform this function; 15.11 per cent sometimes and 18.61 per cent never

perform it. The airport-wise analysis also shows the same results. It shows that 67.57

per cent freight forwarders in CIAL, 66.67 per cent freight forwarders in TACT and

63.64 per cent freight forwarders in CACC always perform warehousing function to

the shipper. 18.92 per cent freight forwarders in CIAL, 11.11 per cent in TACT and

13.64 per cent in CACC sometimes performed warehousing function to shipper and

13.51 per cent freight forwarders in CIAL, 22.22 per cent freight forwarders in

TACT and 22.73 per cent freight forwarders in CACC never perform warehousing

function to the shipper.

Majority (81.40 per cent) of the respondents never perform packaging

function to the shipper. Only negligible number of respondents occasionally does this

and there is none who always does it. Airport-wise analysis also shows the same

results. It shows that 13.51 per cent freight forwarders in CIAL, 29.63 per cent in

TACT and 13.64 per cent in CACC sometimes perform this function and 86.49 per

cent in CIAL, 70.37 per cent in TACT and 86.36 per cent in CACC never perform

packaging function to the shipper. It shows that majority of the freight forwarders

deal with cargo which is packed by the shipper himself. In the case of logistics



functions such as reverse logistics and order processing more or less the same results

are observable.

The above analysis clearly reveals that only limited logistics functions such

as arrangement of transportation, freight forwarding and customs clearance are

offered by air freight forwarders in international airports in Kerala. All other

functions are performed by the shipper himself.

4.2.10 Auxiliary Services Offered

Auxiliary services offered by freight forwarders consist of insurance

arrangement, analysis of routine and mode of transport, preparation and submission

of documents, payment arrangement with bank and rate negotiation. Responses of

the agents regarding auxiliary services offered are shown in Table4.14



Table 4.14

Other Auxiliary Services to Shipper

Auxiliary Services Opinion

Airports Total

CIAL TACT CACC

No % No % No % No %

Insurance arrangeme

nt

Always - - - - - - - -

Sometimes 6 16.22 6 22.22 4 18.18 16 18.60

Never 31 83.78 21 77.78 18 81.82 70 81.40

Total 37 100 27 100 22 100 86 100

Analysis of routine

and mode of

transport

Always - - - - - - - -

Sometimes 10 27.03 5 18.52 6 27.27 21 24.42

Never 27 72.97 22 81.48 16 72.73 65 75.58

Total 37 100 27 100 22 100 86 100

Preparation and

Submission of

documents

Always

Sometimes 37 100 27 100 22 - 86 100

Never - - - - - - -

Total 37 100 27 100 22 100 86 100

Payment arrangeme

nt with bank

Always 34 100 21 100 12 100 86 100

Sometimes - - - - - - - -

Never - - - - - - - -

Total 37 100 27 100 22 100 86 100

Rate Negotiatio

n

Always 37 100 27 100 22 100 86 100

Sometimes - - - - - - - -

Never - - - - - - - -

Total 37 100 27 100 22 100 86 100

Source: Survey data



The analysis reveals that preparation and submission of documents, payment

arrangement with banks and rate negotiations are the auxiliary functions always

offered by all the freight forwarders in international airports in Kerala. Airport-wise

also shows the same result (Table 4.14).

Majority (81.40 per cent) of the freight forwarders never make any insurance

arrangement for cargo to the shipper, 18.60 per cent sometimes do it and none of

the freight forwarders always arrange it. Airport-wise analysis also shows more or

less the same results. It shows that 16.22 per cent freight forwarders in CIAL, 22.2

per cent in TACT and 18.18 per cent in CACC sometimes provide insurance

arrangement to the shipper and 83.78 per cent freight forwarders in CIAL, 77.78 per

cent in TACT and 81.82 per cent in CACC never provide it. The function of analysis

of routine and mode of transport also shows more or less the same results.

None of the freight forwarders in international airports in Kerala always

perform function of analysis routine and mode of transport, 24.42 per cent sometimes

do this and 75.58 per cent never do this. The airport-wise analysis shows that 27.03

per cent freight forwarders in CIAL, 18.52 per cent in TACT and 27.27 per cent in

CACC sometimes perform this and 72.97 per cent freight forwarders in CIAL, 81.48

per cent in TACT and 72.73 per cent in CACC never perform this function to the

shipper.



4.2.11 Freight Forwarders’ Warehouse near the Airport

Freight forwarders who have warehouse near the airport are very helpful

both for the shipper and the consignee. The number of freight forwarders with

warehouse near the airport is given in Table4.15

Table 4.15

Freight Forwarders who have Warehouse near the Airport

Opinion

Airports


No % No % No % No %

Yes 9 20 5 12.50 4 13.33 18 15.65

No 36 80 35 87.50 26 86.67 97 84.35

Total 45 100 40 100 30 100 115 100

Source: Survey data

It is evident from the Table 4.15 that only 15.65 per cent freight forwarders

in international airports in Kerala have warehouse near the airport. The airport-wise

analysis also shows more or less the same results. It shows that 20 per cent freight

forwarders in CIAL, 12.50 per cent in TACT and 13.33 per cent in CACC have

warehouse near the airport. 80 per cent freight forwarders in CIAL, 87.50 per cent

freight forwarders in TACT and 86.67 per cent freight forwarders in CACC do not

have this desirable facility.

.



4.2.12 Consolidated Cargo

In order to handle small lots of consignment efficiently and competitively,

freight forwarder usually put many consignments into one lot then tender to carrier

for forwarding. This is called consolidation. In this case, each consignment will be

shipped with one House Air Way Bill (HAWB) respectively and all of them will be

under one Master Air Way Bill. Since consolidation reduces transportation costs,

logistics costs also decrease. Opinions of the selected freight forwarders regarding

consolidation of cargo are given in Table 4.16.��

Table 4.16

Consolidation Function Performed by Freight Forwarders

Opinion

Airports


No % No % No % No %

Always 5 13.51 4 14.82 3 13.64 12 13.95

Sometimes 6 16.22 3 11.11 4 18.18 13 15.12

Never 26 70.27 20 74.07 15 68.18 61 70.93

Total 37 100 27 100 22 100 86 100

Source: Survey data

The analysis reveals that majority (70.93 per cent) of the respondents never

consolidate cargo, 13.95 per cent always do it and the rest 15.12 per cent sometimes

do it (Table 4.16). The airport-wise analysis also shows more or less the same results.

It shows that 13.51 per cent freight forwarders in CIAL, 14.82 per cent in TACT and

13.64 per cent in CACC always consolidate cargo; 16.22 per cent in CIAL, 11.11 per

cent in TACT and 18.18 per cent in CACC sometimes do it.70.27 per cent freight



forwarders in CIAL, 74.07 per cent in TACT and 68.18 per cent in CACC never

consolidate. In other words, only a limited number of respondent provide cargo

consolidation to the shipper.

4.2.13 Freight Forwarders as Integrated Logistics Service Provider

In air cargo traffic, integrators are agents who oversee the entire cargo

movement process and act as the forwarder and the carrier. In this case the agents

have either own flight or depend on rented flight. But in international airports in

Kerala no freight forwarders provide integrated logistics service to their shipper.

That is none of the freight forwarders have their own flight or rented flight. They

merely act as forwarders.

4.2.14 Type of Carrier available in the Airport for Air Cargo Traffic

In air cargo shipment, there are two types of carrier are used— the freighter

and the combination carrier or belly aircraft. Freighter means carrier used exclusively

for cargo traffic and combination carrier means cargo moved only through belly hold

of passenger aircraft. The major problem of combination carrier is offloading. Types

of carrier available in the international airports in Kerala are given in Table 4.17.



Table 4.17

Type of Carrier used for Cargo Traffic in the Airports in Kerala

Opinion

Airports Total

CIAL TACT CACC

No % No % No % No %

Freighter only - - - - - - - -

Combination carrier only 45 100 37 92.50 30 100 112 97.39

Both - - 3 7.50 - - 3 2.61

Total 45 100 40 100 30 100 115 100

Source: Survey data

Majority of the respondents (97.39 per cent) opine that only combination

carriers are used for air cargo traffic. None of the freight forwarders opine that

freighter service only is used in the airports in Kerala. 2.16 per cent say that both

freighter and combination carrier are used for cargo traffic (Table 4.17). The airport-

wise analysis shows that in CIAL and CACCs only combination carriers are used but

in TACT 7.50 per cent opine that both freighter and combination carrier are

employed. But the analysis reveals that only a negligible number of freighter

services is available in TACT. Thus combination carrier is mainly used for cargo

traffic in airports in Kerala since it is the only available mode of air cargo movement

here.

4.2.15 Agent of all Airlines Operating in the Airports in Kerala

If freight forwarders are the agents of all airlines operating in the airports in

Kerala, it is more helpful to the freight forwarders to negotiate the freight rate which



benefit to the shipper. The opinions of the freight forwarder in this regard are given

in Table 4.18

Table 4.18

Agent of all Airlines Operating in the Airports in Kerala

Opinion

Airports Total

CIAL TACT CACC

No. % No % No % No %

Yes 22 59.46 17 62.96 14 63.64 53 61.63

No 15 40.54 10 37.03 8 36.36 33 38.37

Total 37 100 27 100 22 100 86 100

Source: Survey data

Table 4.18 reveals that 61.63 per cent freight forwarders are the agents of all

the airlines operating in the international airports in Kerala and 38.37 per cent are not

so. Owing to this the shipper can get cargo space at more negotiated rates. The

airport-wise analysis also shows more or less the same results. It shows that 59.46

per cent freight forwarders CIAL, 62.96 per cent in TACT and 63.64 per cent in

CACC are the agents of all airlines operating in the airport.0.54 per cent freight

forwarders in CIAL, 37.03 per cent in TACT and 36.36 per cent in CACC are not the

agents of all airlines operating in the airport.

4.2.16 Shipper’s Involvement in the Carrier Selection

Some shippers insist the forwarders move their cargo only through a

particular airline or airlines. Opinions of the agents regarding shipper’s involvement

in carrier selection are given in Table 4.19.



Table 4.19

Shipper’s involvement in Carrier Selection

Opinion

Airports Total

CIAL TACC CACC

No % No % No % No %

Yes 13 28.89 11 27.50 9 30.00 33 28.70

No 32 71.11 29 72.50 21 70.00 82 71.30

Total 45 100 40 100 30 100 115 100

Source: Survey data

Table 4.19 reveals that 28.70 per cent freight forwarders opine that shippers

involve themselves in carrier selection and 71.30 per cent opine that there is no

involvement on the part of the shipper in selecting the carrier. The airport-wise

analysis also shows same results. It shows that 28.89 per cent freight forwarders in

CIAL, 27.50 per cent in TACT and 30 per cent in CACC are of the opinion that

shippers have involvement in carrier selection. 71.11 per cent freight forwarders in

CIAL, 72.50 per cent in TACT and 70 per cent in CACC opine that shippers have no

involvement in carrier selection.

4.2.17 Satisfaction of Service of Carrier

Better service from airlines is essential for the smooth flow of air cargo

traffic. Satisfaction levels of freight forwarders with regard to the service of airlines

are shown in the following Table.



Table 4.20

Satisfied with the Services of Carrier/Airlines

Opinion

Airports Total

CIAL TACT CACC

No % No % No % No %

Yes 24 53.33 23 57.50 16 53.33 63 54.78

No 21 46.67 17 42.50 14 46.67 52 45.22

45 100 40 100 30 100 115 100

Source: Survey data

It is observed that 54.78 per cent freight forwarders in international airport in

Kerala under study are satisfied with the service provided by the carrier and 45.22

per cent are not. The airport-wise analysis shows that 53.33 per cent freight

forwarders in CIAL, 57.50 per cent in TACT and 53.33 per cent in CACC are

satisfied with the service of airlines and 46.67 per cent freight forwarders in CIAL,

42.50 per cent freight forwarders in TACT and 46.67 per cent in CACC are not

satisfied with the service of airlines or carrier.

4.2.18 Problems Faced by the Freight Forwarders from the Carrier

Freight forwarders face many problems from the carrier such as off loading,

high freight rate, shortage of cargo space, lack of direct flight and support services in

exporting cargo. The most important problems faced by the agents from the carrier

are given in Table 4.21



Table 4.21

Problems Faced by the Freight Forwarders from the Carrier for Exports

Problems

Airports


MeanScore

RankMeanScore

RankMeanScore

Rank Mean score Rank

Shortage of Direct Flight 3.97 1 3.63 2 3.55 1 3.76 1

Shortage of Cargo Space 3.51 2 3.67 1 3.50 2 3.56 2

Offloading 2.78 3 2.63 4 2.59 4 2.69 3

High Freight Rate 2.41 4 2.70 3 2.95 3 2.64 4

Support Service 2.32 5 2.37 5 2.41 5 2.36 5 Source: Survey data

��Notes��1.��Results�presented�here�is�the�opinion�of�all�the�sample�freight�forwarders��

��engaged�in�Exports��

� ��2.��Ranking�is�done�on�the�basis�of�Weighted�Scores�

� ��3.��Scoring�is�done�as�per�the�following�scale�1st�Rank=5,�2nd=4,�3rd=3,4th�=2,�and��

��5th�=1��

� ��4.��Maximum�Possible�Score=N*5�

Table 4.21 reveals that shortage of direct flights is the most acute problem

faced by freight forwarders from carrier for exports of cargo. What comes next is the

shortage of cargo space, off loading, high freight rate and support service. The

airport-wise analysis shows that in CIAL the same result but in TACT shortage of

cargo space is the most important problem faced by freight forwarders, followed by

shortage of direct flight, high freight rate, off loading, and support service. But in

CACC, shortage of direct flight is the most important problem followed by shortage

of cargo space, high freight rate, off loading, and support service.



4.2.19 Factors considered while selecting the carrier for Exports

Selection of the carrier is based on the number of factors such as availability

of space, direct flight, punctuality, connecting flight, shortest delivery time,

convenient schedule, freight rate and preference of exporters. Table 4.22 reveals the

freight forwarders’ opinion regarding factors considered while selecting an airline.

Table 4.22

Factors considered while selecting a Carrier for Exports

Factors

Airports


Mean

Score Rank

Mean

Score Rank

Mean

Score Rank

Mean

score

Rank

Availability of space 5.16 1 5.78 1 5.77 1 6.40 1

Punctuality 5.05 2 5.63 2 4.73 3 5.94 2

Direct Flight 4.97 3 4.52 3 4.45 5 5.51 3

Connecting Flight 4.62 4 3.96 6 4.55 4 5.21 5

Shortest Delivery time 4.51 5 4.33 4 5.09 2 5.37 4

Convenient Schedule 4.38 6 4.19 5 3.86 7 4.84 6

Freight Rate 3.70 7 3.67 8 4.23 6 4.55 7

Preference of Exporters 3.59 8 3.93 7 3.32 8 4.19 8

Source: Survey data

��Notes�1.�� Results�presented�here�is�the�opinion�of�all�the�sample�agents�engaged�in�Exports�� 2.�� Ranking�is�done�on�the�basis�of�Weighted�Scores�� 3.�� Scoring� is� done� as� per� the� following� scale� 1st� Rank=8,2nd=7,��

��3rd=6,4th�=5�,�5th�=4�,�6th=3,7th=2and�8th=1�

� ��4.�� Maximum�Possible�Score=N*8�



Table 4.22 reveals that the availability of space, punctuality and direct flight

are the major factors considered by the freight forwarder while selecting a carrier for

exports in international airports in Kerala. Freight rate and preference of exporters

are the least preferred factors for selecting the service of airlines. The airport-wise

analysis shows that in CIAL and TACT gives the same results but in CACC,

availability of space, punctuality and shortest delivery time are the most preferred

factor for selecting the service of airlines. In all the three airports freight rate and

preference of exporters are the least preferred factors in the selection of the carrier.

4.2.20 Facilities Likely to be provided by the Airlines for Exports

For smooth movement of cargo at the lowest cost, some more facilities such

as extra space, better tariff, support service and more incentives are required by the

freight forwarders from the airlines. The views of the freight forwarders regarding

the most important facilities needed from the carrier are given in Table 4.23

Table 4.23

Facilities likely to be provided by the Carrier for Exports

Facilities

Airports Total

CIAL TACT CACC

Mean Score Rank Mean

Score Rank Mean Score Rank Mean

Score Rank

More Space 2.92 1 2.78 1 2.82 1 2.81 1

More Incentives 2.70 2 2.33 4 2.68 2 2.55 2

Better Tariff 2.22 3 2.52 2 2.18 4 2.26 4

Support service 2.16 4 2.37 3 2.32 3 2.38 3 Source: Survey data

��Notes�1.��Results�presented�here�is�the�opinion�of�all�the�sample�freight�forwarders�engaged�in��Exports�� 2.��Ranking�is�done�on�the�basis�of�Weighted�Scores�� 3.��Scoring�is�done�as�per�the�following�scale�1st�Rank=4,�2nd=3,�3rd=2,4th�=1�� 4.�Maximum�Possible�Score=N*4�



It can be seen from the Table4.23 that the most important facility required by

freight forwarders in international airports in Kerala from carrier was more space. It

is followed by more incentives, better tariff and support services. The airport-wise

analysis also shows more or less the same results.

4.2.21 Common Constraints in the Airport for Air Cargo Traffic.

Freight Forwarders face many constraints from the airport for air cargo traffic

in Kerala. The opinions of the freight forwarders regarding common constrains faced

by them are given in Table 4.24

Table 4.24

Common Constraints in the Airports for Cargo Traffic

Airports Total

CIAL TACT CACC Mean score RankMean

score Rank Mean score Rank Mean

score Rank

Inadequate Facilities 4.18 1 4.05 1 3.90 1 4.06 1

Poor Securities 3.62 2 3.70 2 3.57 4 3.63 2

High clearance time 3.58 3 3.25 5 3.30 5 3.39 5

Customs Problems 3.47 4 3.38 4 3.70 3 3.50 3

Tedious formalities 3.13 5 3.45 3 3.77 2 3.41 4

High service tax 3.02 6 3.18 6 2.77 6 3.01 6 Source: Survey data

Notes 1. Results presented here is the opinion of all the sample Freight Forwarders

2. Ranking is done on the basis of Weighted Scores

3. Scoring is done as per the following scale 1st Rank=6,2nd=5, 3rd=4,4th =3 , 5th =2

and 6th=1

4. Maximum Possible Score=N*6



Table 4.24 reveals that inadequate facilities are the most important constraint

faced by freight forwarders from international airports in Kerala. It is followed by

poor security, customs problems, tedious formalities, high clearance time and high

service tax. Airport-wise analysis shows that in CIAL inadequate facilities are the

most important constraint, followed by poor security, high clearance time, customs

problems, tedious formalities and high service tax. In TACT also inadequate

facilities are the most important constraint followed by poor securities, tedious

formalities, customs problems, high clearance time and high service tax. In CACC

also, inadequate facilities are the most important constraint followed by tedious

formalities, customs problems, poor securities, high clearance time and high service

tax.

4.2.22 Prospects of Development of air Freight Forwarding Business in Kerala

Te opinion of the agents regarding prospects of development of logistics

industries are given in Table 4.25



Table 4.25

Opinion about the Prospects of development of air Freight Forwarding business

in Kerala

Opinion Airports


No % No % No % No %

Optimistic 34 75.56 31 77.50 20 66.67 85 73.91

Pessimistic 7 15.56 4 10.00 6 20.00 17 14.79

No opinion 4 8.88 5 12.50 4 13.33 13 11.30

Total 45 100 40 100 30 100 115 100

Source: Survey data

The result shows that over 73.91 per cent of the respondents opine that they

are optimistic about the future of logistics industries in Kerala. Only 14.79 per cent

are pessimistic in this regard while 11.30 have no opinion (Table 4.25). The airport-

wise analysis also finds no wide variation in this regard.

��

Date post:	05-Apr-2018
Category:	Documents
Upload:	duongtruc
View:	216 times
Download:	3 times

Chapter–4 …shodhganga.inflibnet.ac.in/bitstream/10603/28488/12/12_chapter4.pdf ·...

Documents