Grounding of fleets by airlines across the globe, due to outbreak of Coronavirus, has brought air cargo business to an unprecedented standstill. According to IATA, global demand fell by 15.2% in March compared to the previous year whereas global capacity shrank by 22.7% in March. In this challenging time, Delhi Cargo Service Center (DCSC) is serving the industry relentlessly by handling essential cargo to keep our lives moving. Avinash Razdan, CEO, DCSC in an interview talks on the impact of Coronavirus on the air cargo industry, facilities rolled out by the company for ease in the cargo handling process and much more. Excerpts follow:
The International Air Transport Association (IATA) in its February’s report has revealed a 3.3% decline in air freight demand, which holds true over the past several months. Now, Covid-19 has brought businesses on a standstill, how will this diminish trend in global air freight demand impact air cargo business in India?
The decline which commenced with the global recession somewhere around summer of 2019 had been slow in showing any improvement and now with the outbreak of Covid-19 pandemic our industry has been hit extremely hard. We are witnessing unprecedented downfall in air cargo volumes.
Presently all passenger operations in India are on hold. Grounding of passenger aircraft and fears of airline liquidity crisis will lead to a serious capacity crunch as a significant volume of cargo flies in bellies of these planes. This will create an adverse impact on the air cargo business, even to the extent of threatening survival.
Looking at the most critical question today, which is the progression and duration of Covid-19 pandemic, we fear that adverse impact and damage will be much more devastating than anyone has seen before, if the pandemic persists for long.
Last month DCSC rolled out 24×7 export AWB acceptance facility and e-CSD. How will the newfacility benefit the customers and ease cargo handling processes?
The facility has been rolled out for bringing about an ease of doing business with us. Being the first to support digitization it is but natural that we have shifted the entire cargo handling process from manual processing of documents to electronic processing. Further, we have integrated the customs messaging with our systems electronically. This has eliminated the need for the agents to stay for hours to get the documentations and regulatory processes done and thus saved them a considerable amount of time.
Efficient cargo handling service requires skilled manpower and logistics industry is plagued with the problem of unskilled workforce. How are you tackling this challenge? Apart from this, what are the other challenges that the cargo handling business has to face?
CSC Group is the largest cargo handler of the country and handles around 1.2mn tons of cargo every year. CSC is quintessentially a company that is highly employee centric. We take great pride in the fact that everybody who works in the company is an employee of CSC as we do not believe in outsourcing manpower.
Importance of skilled manpower cannot be ignored in this industry, but unfortunately skilled talent is scarce and in high demand. Our policy encourages development and retention of skills which is the biggest strength that we have. We also have our own training facility to refresh our inhouse staff or upskill them for the changing protocols, processes and technologies. However, we demonstrate a culture of valuing employees and taking steps to retain talent. We involve our people in various levels of decision-making which empowers them and does much to foster cohesion and team spirit. Especially during difficult times such as now it is the teams like these that actively participate in optimizing resources.
The other major challenge faced by us is that our financial realities are directly linked with that of the airlines. For example, amidst the coronavirus pandemic one of the first industries to be affected was aviation whose natural offshoot is the air cargo industry.
What are the facilities that the Delhi Cargo Service Centre provides to its Pharma Customers?What measures do you follow to keep temperature fluctuations at bay at your cold storage facilities?
Our terminal is equipped with the modern and latest equipment, facilities and technologies. We have all the three temperature zones required for pharma: 15 ̊- 25 ̊C, 2 ̊-8 ̊C and subzero. We have abundant space for handling pharma cargo — 40% of our space in the perishable facility is utilized for pharma. Our central control room helps us monitor cargo remotely and eliminate the temperature fluctuations. Apart from that we also provide thermal blankets for our customers to take care of the shipment in times of transit.
What is that one big target that the Delhi Cargo Service Centre is striving to achieve in the long run? And at present, how prepared do you think the company is, in order to achieve this long-run target?
Delhi Cargo Service Centre is a group concern of the CSC. Delhi Airport has been a flagship business for us so far as construction and operation of cargo terminals is concerned.
Delhi and Mumbai airport are the two major gateway airports of India. We operate cargo terminals at both these airports which itself is a testimony of our success but we do not rest here. We aspire to be the market leader. Progress towards this requires meaningful investment, cultural changes and shared responsibilities. With us, it is always a march towards growth, improvement and delivering promises.
You are a seasoned professional having close to 3 decades of experience in diverse industries and are known to navigate organizations through complex situations. Could you please tell us one such instance when you steered DCSC through a tough business situation? Also, what lesson would you like to pass on to new age logistics professionals?
I spent most part of my career as a finance professional. I joined DCSC as a Chief Financial Officer in 2011. This is my first experience in service industry as I worked in the manufacturing industry prior to joining DCSC. DCSC started with the construction of cargo terminal infrastructure at Delhi airport and now operates the terminal. As in any infrastructure project the upfront investment is substantial, proportion of fixed cost is high but initial revenues are meagre. It is important to manage the early period finances and cash flows with extreme care to survive through and reach the goals. I am happy that I was able to steer the company’s finances successfully during this stage. I took over as Chief Executive Officer of DCSC in 2018.
The lesson for new age professionals from me is to adapt to technology as it is the future. Efficiency, multitasking and resilience are the keys to success. I propose a data-driven, action-oriented and digitally supported approach. Entrepreneurial mindset is essential for professional success and this is the most successful mantra that I have adopted.