air logistics analysis

7/18/2019 Air Logistics Analysis

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SUMMER INTERNSHIP PROJECT

Larsen & Toubro

Air Logistics Analysis

y!Ms" Sau#ya Tri$at%i

lobsyn usiness Sc%ool

1



A CKNOWLEDGEMENT

T%e training t%at I %a' in LARSEN & TOURO Lt'" (as a uni)ue e*$erience"

T%e t%eoretical +no(le'ge cou$le' (it% $ractical +no(le'ge ga,e #e an

o$$ortunity to un'erstan' t%e -iner 'etails o- #anage#ent"

It gi,es #e i##ense $leasure to e*$ress #y $ro-oun' gratitu'e to(ar's Mr"

".annan/ Hea'/ Logistics Manage#ent Centre/ -or $ro,i'ing an o$$ortunityin t%e -or# o- t%is $ro0ect" He %el$e' #e in sol,ing #y 'i--iculties an'

#oti,ate' #e in all #y e--orts"

I (oul' e*$ress #y %eart-elt t%an+s to Mr"J" Subra#ania# an' Mr" J"1esai -or

t%eir ,aluable gui'ance an' encourage#ent e*ten'e' 'uring t%e entire course o-

t%e su##er training" In t%e en'/ I t%an+ all t%ose $eo$le (%o are le-t

un#entione' %ere but %a,e contribute' to #y success-ul training in t%eco#$any

Ms"Sau#ya Tri$at%i

2



EXECUTIVE SUMMARY

Logistics %as a crucial role to $lay in t%e #o'ern (orl'" It e,ol,e' in t%e battles

an' (ars/ but it is t%e business (orl' t%at is reali2ing its i#$ortance as -ar as

$ro'ucti,ity is concerne'" Air logistics is one suc% as$ect/ (%ic% nee's to be

analy2e'" As in t%e (orl' o- globali2ation/ air logistics (oul' c%ange t%e (ay

business o$erate"

One o- t%e i#$ortant -actors in air logistics is -uel surc%arge/ (%ic% is 'irectly

a--ecte' by t%e oil $rices" T%e airlines are boun' to c%arge #ore -uel surc%arge

(it% rising -uel $rices" It is necessary to analy2e in 'etails t%e tren' o- -uel

surc%arge increase o- airlines to i'enti-y o$$ortunities -or cost re'uction" T%e

$ro0ect is an e--ort in t%e sa#e 'irection"

3



TALE O3 CONTENTSTITLE PAE NO"

enesis & Ob0ecti,es 4

L&T! An O,er,ie( 5

Nature & Sco$e o- $ro0ect 67

Intro'uction o- Air Cargo in In'ia 68

Relations%i$ o- Air Cargo to tra'e & 1P 69

Mo'es o- air trans$ort :;

Nee' -or Air Cargo :6

Air -reig%t calculation ::

Constraints o- Air Logistics ::

Solutions & Reco##en'ations o- constraints :<

Co#$onents o- Air Cargo In'ustry :4

IATA &3reig%t Rate 3actors :5

Ha2ar'ous Materials <8

Air Cargo Containeri2ation 45

Air Cargo Han'ling Area & 3acility 48

3uel Surc%arge Analysis =<

ene-its o- Air In'ia to L&T ==

Case Stu'y o- L&T =7

ibliogra$%y =8

Pro0ect Learnings =9

4



ENESIS!

L&T is basically a $ro0ect co#$any/ (%ere t%ere are 'ea'lines an' late 'eli,eryclauses" Air logistics is use' in ti#es o- gra,e e#ergencies/ (%en t%e critical

'ea'lines are to be #et an' $ro0ect co#$letion on ti#e is obligatory to a,oi'

$enalty an' late 'eli,ery c%arges" Air trans$ort is ,ery costly" It is generally

use' to trans$ort %ig% ,alue goo's or $eris%able goo's"

Logistics is one o- t%e +ey as$ects o- any business" It is one o- t%e crucial

as$ects o- t%e su$$ly c%ain t%at (oul' gi,e a co#$any li+e L&T/ a co#$etiti,e

a',antage" Trans$ortation o- t%e -inis%e' goo's t%roug% air is necessary to

#aintain t%e co#$etiti,e a',antage o- $ro,i'ing t%e $ro'ucts on ti#e/ at rig%t

$lace an' in rig%t )uantities"

Air cargo rates co#$rise o- t%e basic co#$onent t%e t(o a''itional

co#$onents" T%e basic co#$onent is calculate' as $er t%e IATA rules an'

regulations/ (%ereas t%e a''itional co#$onent co#$rise o- -uel surc%arge an'

(ar surc%arge" It is -uel surc%arge t%at is a cause o- concern -or t%e co#$any

an' in'ustry as a (%ole/ as it is 'irectly a--ecte' by t%e cru'e oil $rices (%ic%

-luctuate to a great e*tent" Also/ a co#$any (ants to get t%e best 'eal" L&T(ants to analy2e t%e i#$act o- t%e -luctuating -uel $rices on its air trans$ort"

T%e stu'y (oul' gi,e ,ital in-or#ation regar'ing t%e i#$act o- -uel $rices on

t%e air logistics an' ser,e as a tool to e*$lore any $ossibilities o- cost re'uction"

T%e re$ort also see+s to un'erstan' t%e -actors t%at a--ect t%e -reig%t rates (%ic%

ulti#ately (oul' enable t%e co#$any to ,isuali2e t%e -reig%t rates an' #a+e

arrange#ents accor'ingly"

T%e $ro0ect is 'irecte' at reali2ing t%e cost a',antage t%at t%e air -reig%t ser,ice $ro,i'ers o--er to o$ti#i2e t%e e*$enses as -ar as trans$ortation is concerne'"

All t%e co#$anies try to re'uce t%eir cost as #uc% as $ossible/ so as to reali2e

t%e best $otential" Logistics as suc% is also a $arty to suc% cost re'uctions"

1ata collecte' -or t%e $ur$ose o- carrying out t%e $ro0ect (oul' in,ol,e!

•

Oil $rices -ro# No,e#ber :;;8• I'enti-ication o- t%e ser,ice $ro,i'ers o- interest to L&T

5



• Analysis o- t%e rates $ro,i'e' by t%e ser,ice $ro,i'er -or t%e selecte'

'estinations" 3uel surc%arge in $articular"

• Analysis o- $re#iu# co#$onent i"e" -uel surc%arge o- eac% rate"

•

Correlation bet(een t%e $re#iu# co#$onent i"e" -uel surc%arge an'cru'e oil $rices"

• Analy2ing t%e tren' o- -uel surc%arge (it% res$ect to cru'e oil $rices"

• A real Case Stu'y o- L&T>s O1C s%i$#ent

OJECTI?E!@

T%e $ro0ect is ai#e' at analy2ing air logistics in its co#$lete sense" It $ertainsto analy2e all t%e -actors t%at a--ect t%e air logistics o- t%e co#$any" T%e #ain

-actor to be consi'ere' is t%e -uel surc%arge"

T%e ser,ice $ro,i'ers> -uel surc%arge is analy2e'/ (%et%er it %as increase' at a

%ig% rate or a lo( rate/ cru'e oil $rices are increasing continuously"

T%e $ro0ect i'enti-ies an' analy2es t%e -actors t%at a--ect t%e cru'e oil $rices" It

i'enti-ies t%e -actors as t%e -un'a#ental -actors an' #ar+et 'ri,en -actors" ot%

a--ect t%e cru'e oil $rices in a 'i--erent #anner"

T%e ot%er ob0ecti,e o- t%e $ro0ect is to un'erstan' t%e IATA International Air

Trans$ort AssociationB" It gi,es a brie- intro'uction to IATA/ t%en it analy2es t%e

co#$onents o- t%e -reig%t rates/ %o( t%e -reig%t rates are calculate'" It also

intro'uces t%e air logistics/ an o,er,ie( o- (%ic% is also gi,en to get a co#$lete

$icture"

Anot%er ob0ecti,e o- t%e $ro0ect is to correlate t%e -uel surc%arge an' t%e cru'e

oil $rices" T%oug%/ it is an acce$te' notion t%at bot% %a,e a 'irect relations%i$"e %a,e use' a #at%e#atical #o'el to gi,e a scienti-ic basis to t%e researc%"

it% cru'e oil $rices as an in'e$en'ent ,ariable an' t%e -uel surc%arge as t%e

'e$en'ent ,ariable"

e %a,e got a strong $ositi,e correlation con-ir#ing t%at t%e -uel surc%arge

,aries 'irectly (it% res$ect to t%e cru'e oil $rices" It also %el$s us to i'enti-y t%e

tren's ,arious ser,ice $ro,i'ers (oul' -ollo( base' on t%eir $ast an' current

tren's" T%e airline consi'ere' is Lu-t%ansa" T%e -uel surc%arge $ro,i'e' by t%is

ser,ice $ro,i'er is $lotte' against t%e cru'e oil $rices" T%is gi,es a clear $icture

an' a co#$arati,e analysis as -ar as t%e -uel surc%arge is concerne'"

6



T%e $ro0ect also tries to un'erstan' t%e ,arious a',antages an' bene-its Air

In'ia %as to o--er as a $ros$ecti,e ser,ice $ro,i'er" L&T (ants to e*$lore t%e

$ossibilities o- contracting Air In'ia/ (%ic% it 'i' not 'o in t%e $ast -or certain

reasons"

7



LARSEN

&

TOURO

INTRO1UCTION!@

Larsen &Toubro Li#ite' L&TB is a tec%nology/ engineering/ construction an'

#anu-acturing co#$any" It is one o- t%e largest an' t%e #ost res$ecte' co#$any

in In'ia>s $ri,ate sector" Larsen & Toubro is an In'ian conglo#erate/ (it%

'i,erse interests suc% as construction/ %y'raulic e)ui$#ent/ electrical an'

electronic $o(er ser,ices/ -ertili2er $ro0ects/ #e'ical electronics/ -inancial

ser,ices an' in-or#ation tec%nology" It generates al#ost 8=D o- its re,enue

-ro# t%e construction business"

T%e co#$any (as -oun'e' in 69<8 by t(o 1anis% engineers/ Henning Holc+@Larsen an' Soren .ristian Toubro" ot% o- t%e# (ere strongly co##itte' to

8



'e,elo$ing In'ia>s engineering ca$abilities to #eet t%e 'e#an's o- in'ustry/ t%e

co#$any is %ea')uartere' in Mu#bai/ In'ia" eginning (it% t%e i#$ort o-

ce#ent #ac%inery -ro# Euro$e/ L&T ra$i'ly too+ on engineering an'

construction assign#ents" Se,en 'eca'es o- a strong/ custo#er@ -ocusse'

a$$roac% an' t%e continuous )uest -or t%e (orl'@class )uality %a,e enable' it to

attain an' sustain lea'ers%i$ in all its #a0or lines o- business" L&T %as an

international $resence/ (it% a global s$rea' o- o--ices" A t%rust on international

business %as seen o,erseas earnings gro( signi-icantly" It continues to gro( its

o,erseas #anu-acturing -oot$rint/ (it% -acilities in C%ina an' t%e ul- region"

T%e co#$any>s businesses are su$$orte' by a (i'e #ar+eting an' 'istribution

net(or+/ an' %a,e establis%e' a re$utation -or strong custo#er su$$ort" L&T

belie,es t%at $rogress #ust be ac%ie,e' in %ar#ony (it% t%e en,iron#ent" A

co##it#ent to co##unity (el-are an' en,iron#ental $rotection are an integral

$art o- t%e cor$orate ,ision"

L&T %as a global $resence" A t%rust on international business o,er t%e years %as

seen o,erseas re,enues gro(ing stea'ily" T%e co#$any %as #anu-acturing

-acilities in In'ia/ C%ina/ O#an an' Sau'i Arabia" It %as a global su$$ly

net(or+ (it% o--ices in 6; locations (orl'(i'e/ inclu'ing Houston/ Lon'on/

Milan/ S%ang%ai/ Seoul" Custo#ers inclu'e global #a0ors o,er <; countries"

L&T 1I?ISIONS

L&T Electrical &Electronics 1i,ision EB

Electrical & Electronics 1i,ision EB is one o- t%e core business o- Larsen &

Toubro Li#ite' L&TB In'ia>s largest engineering an' construction

conglo#erate"

T%e 'i,ision %as o$erations at 'i--erent locations in In'ia t(o in Mu#bai an'

one eac% in A%#e'nagar/ Mysore/ 3ari'aba' an' Coi#batoreB an' one unit -or

#anu-acturing o$erations in C%ina" Anot%er #anu-acturing -acility is soon

9



going to co#e u$ in Sau'i Arabia" E %as a co#$re%ensi,e )uality/

en,iron#ent an' sa-ety #anage#ent syste#" T%e )uality #anage#ent syste#

-or 'esign & 'e,elo$#ent/ $ro'uction/ sales/ #ar+eting an' ser,icing %as

recei,e' ISO 9;;6!:;;; certi-ication -ro# ?FI" In a''ition/ its #anu-acturing

-acilities %a,e been certi-ie' -or con-or#ity to ISO 64;;6 En,iron#ental

Manage#ent Syste#B an' OHSAS 68;;6 Occu$ational Healt% an' Sa-ety

Manage#ent Syste#B by ?FI" T%e 'i,ision %as i#$le#ente' Enter$rise

Resource Planning ERPB solution o- SAP A/ er#any an' it (ent li,e at <=

locations across t%e country si#ultaneously in t%e Gig ang> #o'e in 6999"

T%e business $ort-olio inclu'es lo( ,oltage s(itc%gear $ro'ucts/ electrical

syste#s/ energy #eters/ auto#ation solutions/ #e'ical e)ui$#ent an'

$etroleu# 'is$ensing $u#$s"

L&T Engineering Constructions & Contracts 1i,ision

ECC@ t%e Engineering Construction & Contracts 1i,ision o- L&T@ is In'ia>s

largest construction organisation" It -igures a#ong to$ ::= contractors in t%e

(orl'" It ran+s =4t% a#ong global contractors re,enues outsi'e t%e %o#e

countryB an' 7:n' a#ong international contractors re,enues -ro# %o#e as (ellas outsi'e countryB as $er sur,ey con'ucte' by t%e Engineering Ne(s Recor'

Maga2ine August :;;5B" T%e $ro0ects un'erta+en by t%is 'i,ision -alls un'er

t%e -ollo(ing categories!@

• uil'ings & 3actories

• Trans$ortation In-rastructure

• Hy'el & Nuclear Po(er an' 3oun'ation Engineering

• In'ustrial Pro0ects & Utilities

• Po(er Trans#ission & 1istribution

• uil'ing Pro'ucts

• 1e,elo$#ental Pro0ects

ECC un'erta+es 1esign turn+ey construction o- institutional an' co##ercial

buil'ings" T%e range co,ers Ser,ice Sector IT T%e#e Par+s/ O--ice

Co#$le*esB Urban In-rastructure Sector Co##ercial Centres li+e s%o$$ing

#alls/ retail outlets/ air$ort buil'ings an' #etro rail stationsBLeisure sector International Class %otels/ Entertain#ent CentresB

10



E'ucational & Healt% Sector .no(le'ge Centres/ Su$er@s$eciality %os$itals

an' #e'ical collegesB/ Social Sector Public buil'ings/ religious con,ention

centres an' #onu#ental structuresB an' S$orts Sector large sta'iu#s/ s$orts

co#$le*esB" ECC o--ers engineering/ $rocure#ent an' construction ser,ices

-or air$ort co#$le*es/ inclu'ing ter#inal buil'ings/ ,isitors> lounges/

s$ecial air$ort e)ui$#ent li+e aero@bri'ges/ baggage %an'ling syste#/

#aintenance %angars an' run(ays/ a$rons/ ta*i(ays an' air-iel' lig%ting to

international stan'ar's"

L&T In-otec% 1i,ision

L&T In-otec% is a global IT ser,ices an' solutions $ro,i'er" T%ey $ro,i'e t%e

(inning e'ge to t%eir clients by le,eraging t%e business@ to@IT connect an'

'ee$ly co##itte' $eo$le" T%eir clients inclu'e in'ustry lea'ers li+e C%e,ron/

3reescale/ Hitac%i/ Sanyo an' Lar-age/ a#ong ot%ers"

T%e 'i,ision -ocuses on t%e -ollo(ing ser,ices!@

• A$$lication 1e,elo$#ent

• A$$lication Maintenance & Su$$ort

• A$$lication Outsourcing

•

Testing• SAP Ser,ices

• Oracle ser,ices

• Pro'uct Li-ecycle Manage#ent

• usiness Analytics

• Arc%itecture Consulting

• Integrate' Engineering Ser,ices

• In-rastructure Manage#ent Ser,ices

L&T 3inance 1i,ision

L&T 3inance Lt'" o$erates as a non@ban+ing -inance co#$any" T%e

co#$any -ocuses on leasing/ ai' -un'ing/ IPO -un'ing/ co##ercial

,e%icle -inancing/ an' -inancing securitise' recei,ables" It o$erates t%ree

'i,isions! Construction E)ui$#ent 3inancing/ Retail Pro'ucts 3inancing/

an' Cor$orate Pro'ucts 3inancing" T%e Construction E)ui$#ent3inancing 'i,ision o--ers ,arious -inancial $ro'ucts/ suc% as %ire

$urc%ase/ ter# loan/ lease/ an' bill 'iscounting to contractors an' sub@11



contractors" T%e Retail Pro'ucts 3inancing 1i,ision -ocuses on t%e

agricultural sector"

T%e Cor$orate Pro'ucts 3inancing 1i,ision caters to t%e -inancial

re)uire#ents o- t%e cor$orate t%roug% $ro'ucts/ suc% as ter# loan/ %ire $urc%ase -inance/ ,en'or -inancing/ lease/ #e'ical e)ui$#ent -inancing/

an' recei,able 'iscounting" T%e co#$any (as incor$orate' in 6994 an'

is base' in Mu#bai/ In'ia" L&T 3inance Lt'" o$erates as a subsi'iary o-

Larsen & Toubro Lt'"

T%e $ro0ect a$$raisal $rocess inclu'es ris+ analysis" T%ese ris+s are

#itigate' t%roug% a$$ro$riate $ro0ect structuring/ an' en%ance $ro0ect

,iability" T%e Pro0ect Assistance grou$ PAB e*$lores businesso$$ortunities in all in-rastructure sectors/ (it% a s$ecial -ocus on energy

an' trans$ort & logistics"

It i'enti-ies $ro0ects an' (or+s closely (it% 'e,elo$ers to #a+e t%ese

$ro0ects %a$$en" L&T In-ra can $artici$ate as a co@'e,elo$er in t%ese

in-rastructure $ro0ects by ta+ing e)uity e)uity lin+e' $ositions"

L&T Hea,y Engineering 1i,ision

L&T>s Hea,y Engineering 1i,ision %as establis%e' a re$utation in

global #ar+ets -or )uality $ro'ucts" T%e 1i,ision #anu-actures &

su$$lies custo# 'esigne' & engineere' critical e)ui$#ent & syste#s to

t%e nee's o- core@sector in'ustries an' t%e 'e-ence sector" It is t%e

$re-erre' su$$lier o- e)ui$#ent -or a select range o- $ro'ucts/ globally"

T%e 'i,ision %as also entere' into S%i$buil'ing business & is engage' in

construction o- s$eciality co##ercial ,essels & (ars%i$s -or t%e na,y as

(ell as t%e coast guar'" L&T %as state@o-@art #anu-acturing -acilities/(%ic% are ca$able o- #eeting t%e c%allenges o- tec%nology/ )uality

con-or#ance an' 'eli,ery/ (%ile ensuring cost co#$etiti,eness"

T%e #anu-acturing $lants are a#ong t%e to$ -abrication -acilities in t%e

(orl' (it% $rocesses strea#line' to ac%ie,e %ig% e--iciency an'

benc%#ar+e' to t%e latest tec%nologies"

L&T Engineering an' Construction 1i,ision

12



T%e Engineering an' Construction 1i,ision %as integrate' its strengt%s

in $rocess tec%nology/ basic an' 'etaile' engineering/ #o'ular

-abrication/ $rocure#ent/ $ro0ect #anage#ent/ construction an'

co##issioning" It o--ers single@ $oint@res$onsibility un'er stringent

'eli,ery sc%e'ules"

T%e 1i,ision %as o--ices at ,arious locations in In'ia!@ Po(ai Ca#$us@

Mu#bai/ ?a'o'ra an' 3ari'aba'"

L&T>s Mo'ular 3abrication 3acility M33B at Ha2ira/ one o- t%e largest

o- its +in' in Sout% Asia/ is ca$able o- #anu-acturing se,eral large

#o'ules si#ultaneously" T%is %as been -urt%er strengt%ene' by t%e ne(

J? co#$any/ Mo'ular 3abrication ar' LLC at Sultanate o- O#an"T%e Engineering & Construction 1i,ision is -ocusing on increasing its

global $resence" T%e 1i,ision %as secure' or'ers -ro# international

clients in Malaysia/ USA/ U./ ra2il/ Sau'i Arabia/ UAE/ Fatar/

angla'es%/ Sri Lan+a/ e"t"c"

T%e e*$ort earnings o- t%e 1i,ision %a,e been increasing stea'ily" T%e

custo#er $ro-ile inclu'es lea'ing na#es suc% as Sa#sung/ C%e,ron/

ec%tel/ .,aerner/ Pirelli/ Sia# Mic%elin/ oo'year/ e"t"c"

L&T Engineering & Construction 1i,ision $ro,i'es G'esign@

buil'>>turn+ey> EPC solutions in all #a0or engineering 'isci$lines/

inclu'ing ci,il structural/ $lant 'esign #ec%anical/ electrical an'

$rocess control auto#ation"

L&T Mac%inery & In'ustrial Pro'ucts 1i,ision

L&T o--ers a range o- in'ustrial #ac%inery an' $ro'ucts t%at are

'esigne' an' 'e,elo$e' in@%ouse or are #anu-acture' in $artners%i$

(it% (orl' lea'ers" Mar+eting an' custo#er su$$ort -or t%ese $ro'ucts

are $ro,i'e' by L&T t%roug% a (i'e net(or+ o- o--ices an' ser,ice

centres"

T%e $ro'ucts $ro'uce' by t%is 'i,ision are as -ollo(s!@

13



• Rubber $rocessing #ac%inery

• Plastic $rocessing #ac%inery

• Pa$er #ac%inery

•

Castings• Cutting tools

• Hy'raulic e)ui$#ent

• ?al,es

• Crus%ing #ac%inery & e)ui$#ent

• in'#ill co#$onents

• Mining e)ui$#ent

• Construction e)ui$#ent

• el'ing & In'ustrial $ro'ucts

LOISTICS MANAEMENT CENTRE

Logistics -unction -acilitates ti#ely 'eli,ery o- L&T $ro'ucts an' $ro0ects"

L&T grou$ s$en's annually #ore t%an Rs 7;; crores in logistics an' relate'

acti,ities" Logistics Manage#ent Centre LMCB %as e,ol,e' to #eet t%e

logistics nee' o- L&T"

?ision!@

To be a centre le'/ +no(le'ge 'ri,en/ trans$arent an' res$onsi,e 'e$art#ent o-

L&T/ catering to logistics re)uire#ents o- L&T grou$ by co#bining t%e

$urc%asing $o(er an' 'eli,ering o$ti#u# ser,ice le,els an' cost sa,ings"

Ob0ecti,es!@ • Pro,i'e all ty$es o- logistics ser,ices to entire L&T grou$"• Create in@%ouse e*$ertise on all as$ects o- logistics/ gat%er #ar+et

intelligence o- logistics in'ustry an' i'enti-y ne( tren's"

• Ac%ie,e cost sa,ings by consoli'ations/ long ter# contracts/ e"t"c"

• Pro,i'e en' t en' solutions in logistics -or co#$le* #o,e#ents"

• Pro,i'e regular re$orts on s%i$#ent un'er ,arious stages o-

e*ecution"

LMC Acti,ities!@

14



• Air s%i$#ents

• Roa' trans$ort

• Rail #o,e#ents

• Coastal #o,e#ents

• Regular brea+ bul+ s%i$#ent

• Pro0ect cargo brea+ bul+ s%i$#ent

• enc%#ar+ing (it% $ast s%i$#ents transactions -or negotiations

& co#$etiti,e $ricing

• LMC #ont%ly MIS re$ort

• Perio'ic re,ie( #eetings (it% t%e user grou$s

LMC ene-its!@

• A single source logistics solution $ro,i'er

• Cargo trac+ing & tracing

• Priority boo+ing -acility

• Tangible cost re'uction

• 3ast transit ti#es 3le*ible sc%e'ules

• ee+ly i(ee+ly status re$orts• Trans$arency in -reig%t cost brea+u$

15



NATURE & SCOPE

O3

THE PROJECT

16



Nature o- t%e $ro0ect!@

T%e $ro0ect is 'irecte' to(ar's t%e air logistics as$ect o- business" It ser,es to

un'erstan' t%e ,arious -actors associate' (it% t%e air logistics" T%e $ro0ect is

-ocuse' on t%e air -reig%t rates in,ol,e' in t%e in'ustry" It e*a#ines t%e relation

bet(een t%e cru'e oil $rices an' -uel surc%arge t%at -or#s a''itional co#$onent

o- t%e air rates"

T%e $ro0ect also in,ol,es a researc% an' use o- #at%e#atical tools so as to

su$$ort t%e -in'ings an' ot%er conclusions" T%e $ro0ect is in-or#ati,e as -ar as

IATA is concerne'/ t%oug% brie- in 'etail"

T%e $ro0ect is 'irecte' to(ar's reali2ing t%e $otential in logistics to ac%ie,e

o$ti#u# results as -ar as t%e air logistics is concerne'" It ser,es as a re-erence

tool to t%e alternati,es t%at can be consi'ere' as $ro-itable in t%e s%ort as (ell as

long run" T%e $ro0ect is researc% base' as suc%/ it tries to analy2e t%e -actors

a--ecting t%e air -reig%t/ (%ic% are t%e ones (%ic% -luctuate an' %o( can t%e

co#$any a'0ust it>s logistics to suc% -luctuations" Alt%oug%/ t%e -actors are

beyon' t%e co#$any>s control/ t%e co#$any can #a+e arrange#ents to re'uce

t%e i#$act o- t%e -actor -luctuations" One suc% -actor is stu'ie' in 'etail is t%e

cru'e oil $rices" Cru'e oil $rices 'irectly i#$act t%e -reig%t rates by #eans o-

-uel surc%arge/ (%ic% is nor#ally gi,en in ter#s o- +g or as a $ercentage o-

t%e s%i$#ent c%arges"

T%e general reaction o- t%e in'ustry to t%e increase in t%e cru'e oil $rices is to

increase in t%e cru'e oil $rices is to e*$ect an increase in -uel surc%arge" ut a

'etaile' analysis can %el$ a co#$any to stri+e a best 'eal" T%e $ro0ect uses

#at%e#atical tools to su$$ort t%e general notion t%at an increase in cru'e oil $rices lea's to an increase in -uel surc%arges" T%e results ac%ie,e' $ro,e t%at it

17



is in'ee' true t%at cru'e oil $rices an' -uel surc%arge are al#ost linearly

interrelate'/ t%oug% not $er-ectly linear/ a strong $ositi,e correlation is ac%ie,e'

in our case"

3uel surc%arges -or 4 #ont%s is analy2e' to i'enti-y t%e tren' -ollo(e' by -uelsurc%arge increase (it% t%e increase in cru'e oil $rices"

Sco$e o- t%e $ro0ect!@

T%e $ro0ect can be integrate' (it% t%e logistics re)uire#ent o- ot%er business

units o- L&T/ t%e $ro0ect can be re$licate' as (ell as in ot%er business units"

Pro0ect %as tre#en'ous sco$e -or t%e -uture re-erence an' -urt%er analysis" It

analyses t%e air logistics -ro# 'i--erent $ers$ecti,es/ (%ic% (oul' -urt%er

en%ance t%e sco$e -or analysis"

T%e $ro0ect also -ocuses on t%e -actors a--ecting t%e air -reig%t rates/ a better

un'erstan'ing o- (%ic% lea' to -or#ulation o- better logistics $olicies" T%e

$ro0ect (oul' enable t%e co#$any to re'uce t%e increasing costs 'ue to

increasing -uel surc%arges by i'enti-ying an' selecting t%e best $ossible airlines"

T%is $ro0ect %el$s to i'enti-y one (it% best bene-its" T%e $ro0ect also ser,es as a

sna$s%ot o- t%e IATA -reig%t rate ty$es an' co#$onents" T%e sco$e o- learning

is i##ense an' t%e $ro0ect tries to 'o t%e sa#e"

INTRODUCTION OF AIR CARGO IN INDIA

T%e 1e$art#ent o- Cargo (it% 6=5 Pro-essional E*ecuti,es/ (it% a,erage o- 6;years/ %as gro(n gra'ually (it% establis%#ent o- ate(ay Air Cargo Ter#inalsat .ol+ata 695=B/ C%ennai 6958B & 1el%i 6987B" T%e ca$acities %a,e beenaug#ente' +ee$ing $ace (it% air cargo gro(t%" T%e Integrate' Air CargoTer#inal at 1el%i $ro,i'es -or e*$orti#$ort transit cargo %an'ling -acilities"T%e Cargo Manage#ent Syste# %ere %as been u$gra'e' to a -ully co#$uteri2e'KOn Line Integrate' Cargo Manage#ent syste# (it% Electronic 1ata

Interc%ange E1IB an' ar Co'ing Ca$abilities" T%e Cargo Manage#entSyste#s at Mu#bai/ C%ennai & .ol+ata are also co#$uteri2e' t%oug% not yetKOn Line syste#" At 1el%i/ t%e Multi le,el ET? syste# -or %an'ling loa'e'

18



$allets & containers is being aug#ente' by an a''itional ET? syste#en%ancing t%e $resent :84 slot ca$acity by al#ost =; $er cent"

A $eris%able Cargo %an'ling ter#inal (it% Pre@cooling c%a#bers/ in'e$en'ent

c%a#bers -or 3ruits/ 3lo(ers/ 3ro2en Pro'ucts etc"/ %as been in o$eration at1el%i" A #uc% bigger Peris%able Cargo Ter#inal is $lanne' at Mu#bai Air$ort(%ere $eris%able cargo constitutes 4;D o- total air cargo" AAI Air CargoTer#inals $ro,i'e -or Truc+ 1oc+s/ Strong Roo#s/ Li,e Ani#al S%e's/Ha2ar'ous Cargo o'o(n/ an' Palletisation Station/ O--ices -or Airlines/o,ern#ent Regulatory Agencies/ Multi@#o'el Cargo O$erators/ rea+ ul+ Agents/ an' Consoli'ators -or ease o- o$eration an' user con,enience" To #eetsa-ety stan'ar's CCT? Syste#s/ @rays Scanners etc"/ are $ro,i'e'" Mo'erncargo %an'ling e)ui$#ent li+e cranes/ -or+li-ts/ %ig% #ast stac+ers/ $o(er Pallet

truc+s etc are use' -or t%e Cargo %an'ling" Also a,ailable is a state@o-@t%e@artcentre -or e*$ort $eris%able Cargo li+es -lo(ers/ -ruits/ ,egetables an' #eat" Si*(i'e@bo'ie' aircra-ts can be $ar+e' si#ultaneously in an e*clusi,e A$ron areain -ront o- t%e Cargo ter#inal"

T%e gate(ay air$ort cargo ter#inals toget%er are ca$able o- %an'ling OneMillion Tonnes o- i#$orte*$orttransit cargo annually" Present ca$acityutili2ation is about 5=D@8;D" T%e Cargo Ter#inal at In'ira an'%iInternational Air$ort IIAB/ Ne( 1el%i/ (as co##issione' in

6987 -or t%e $rocessing o- i#$ort/ e*$ort an' trans@s%i$#ent cargo an'unacco#$anie' baggage" S$rea' o,er an area o- :5 acres/ it (as t%e -irst se#i@#ec%ani2e' ter#inal in In'ia to %a,e t(o Ele,ate' trans-er ?e%icles ET?B (it%< le,el stac+er $ositions <48 slotsB -or t%e storage an' retrie,al o- built@u$containers an' $allets" IIA>s Cargo Ter#inal $ro,i'es a (i'e range o- -acilitiesun'er one roo- at $ar (it% any international air$ort" T%e Ter#inal %as t(o(ings/ one -or E*$orts an' one -or I#$orts $lus a re#ote unit -or t%e 'is$osal o- unclai#e' cargo"T%e 'esign an' construction o- all air cargo ter#inals %as been un'erta+en byPlanning & Engineering 1e$art#ents o- AAI in liaison (it% Cargo 1e$art#ent"3easibility stu'y -or Air Cargo Ter#inal at .at%#an'u/ Ne$al (as un'erta+en

by AAI" AAI is ca$able o- un'erta+ing not only 'esign/ 'e,elo$#ent an'construction o- cargo ter#inals/ but also #anage#ent an' o$erations"

Relationship of Ai Ca!o to Ta"e an" GD#

T%e relations%i$ o- air cargo an' tra'e an' 1P are %a,ing 'irect an' t%ey areinter'e$en'ent" Air cargo enables nations/ regar'less o- location to e--icientlyconnect to 'istant #ar+et an' global su$$ly c%ains in a s$ee'y/ reliable #anner"T%us in t%e ne( s$ee'y logistic era/ nations (it% goo' air cargo ca$ability %a,e

co#$etiti,e tra'e an' 'e,elo$#ent a',antage o,er t%ose (it%out suc%ca$ability" Co#$etiti,e a',antage/ as Mic%ael Porter an' ot%ers %a,e

19



'ocu#ente' -un'a#ental -or gro(t%" 3ro# t%e abo,e re-erences/ t%ere is (ellestablis%e' correlation bet(een air cargo an' 1P gro(t%" T%e %istoricalrelations%i$ bet(een air-reig%t an' 1P by (orl' region -ro# 698; to :;;;re,eals t%at t%ere is a close relation bet(een t%ree" 3or e*a#$le/ t%e orl' an+

stu'y :;;; re,eals t%e relations%i$ bet(een t%e (orl's 1P to (orl' air-reig%t $re'icts close (it% a$$ro*i#ately 95";D accuracy" Since/ t%ese t(o are#utually causal/ an' t%ey are %ig%ly inter'e$en'ent" usiness rules are being'istorte' by t%e con,ergence o- globali2ation/ 'igiti2ation/ a,iationan' ti#e base' co#$etition 1e,elo$#ent $olicies suc% as D$%ai Aipot &ee

Ta"e 'one (%ic% allo(s 6;;";D -oreign o(ners%i$ o- co#$anies/ ta*%oli'ays to co#$anies -or <; years an' $osses no 'uties on e*$orte' goo'sB%a,e #a'e 1ubai a$$ealing to co#$anies (%o (is% to locate $ositions o- t%eir global su$$ly c%ain t%ere/ as (ell as ca$itali2e on E(iates Ailines/ (%ic% is

ra$i'ly e*$an'ing net(or+s an' 1ubai>s strategic location in gro(ing Euro$e@Asia air cargo 'istribution net(or+s"

MO1ES O3 AIR TRANSPORT

T%ere are t(o #o'es o- Air trans$ort (%ic% are as -ollo(s!@

• Commercial Aircraft !@ A co##ercial aircra-t is t%e $art o- ci,ila,iation bot% general a,iation an' sc%e'ule' airline ser,ice t%at in,ol,es

o$erating aircra-t -or %ire"

• Cargo Aircraft :- A cargo aircraft plane (also knon as

freight aircraft or freighters! is a "#e$-ing aircraft

$esigne$ or con%erte$ for t&e carriage of goo$s' rat&er

t&an passengers )&e* are $e%oi$ of passenger amenities'

an$ generall* feat+re one or more large $oors for t&e

loa$ing an$ +nloa$ing of cargo20

http://en.wikipedia.org/wiki/Fixed-wing_aircraft

http://en.wikipedia.org/wiki/Fixed-wing_aircraft



T%ese are o- t(o ty$es!@

Nose O$ening Aircra-t

Si'e O$ening Aircra-t

,. / A CA

Air Cargo is an in'ustry (ort% o,er :;; billion a year an' is res$onsible -or

$%ysical #o,e#ent o- :5 #illion tonnes o- goo's eac% year"

It is not 0ust t%e CEO>s o- big MNC #anu-acturing organi2ations or

(ealt%y (estern consu#ers t%at nee' air cargo" Ho(e,er / -or gro(ers in

'e,elo$ing countries Air cargo o--ers a li-eline t%roug% its ability to

21



'eli,er t%eir -res%ly gro(n -ruits/ ,egetables an' -lo(ers to #ar+ets

aroun' t%e (orl' (it%in %ours o- t%eir $ro'uce being $ic+e'" T%e global #ar+et is getting s#aller" Peo$le tra,el #ore/ %a,e better

co##unications an' loo+ -or ne( $ro'ucts" T%e #o'ern consu#er is no

longer $re$are' to (ait a year or so -or establis%e' $ro'uct in one $at o-

t%e (orl' to beco#e a,ailable in t%eir o(n country" T%e s$ee' an' reliability o- air cargo #eans t%at lea'ing #anu-acturers o-

in-or#ation tec%nology %ar'(are/ -or e*a#$le can no( Gbuil' to or'er>

an' still 'eli,er a tailore' $ro'uct to eac% in'i,i'ual custo#er any(%ere

in t%e (orl' (it%in a co##itte' ti#e-ra#e o- -e( 'ays"

AIR 3REIHT CALCULATION

T%ere are t(o costs in,ol,e' in t%e calculation o- air -reig%t!@

asic cost

?ariable cost

6" 3uel Surc%arge 3SCB:" Security Surc%arge SSCB<" ar Surc%arge SCB

CONSTRAINTS O3 AIR LOISTICS

The Ma)o po%le(s in Ai *a!o

1(ell ti#e -or i#$ort an' e*$ort cargo at In'ian air$orts is t%ree an' se,en'ays/ res$ecti,ely 'es$ite #any ste$s ta+en by t%e air$ort o$erators/ t%eo--icial a''e'" %ile '(ell ti#e -or i#$orte' cargo in Singa$ore is 6: %ours/ at

1el%i air$ort it ta+es 67= %ours" At S%ar0a% air$ort/ t%e '(ell ti#e -or e*$ortcargo is 0ust -our %ours"On t%e reco##en'ation o- an inter@#inisterial grou$/ c%aire' by ci,il a,iationsecretary/ air$ort o$erators across t%e country/ inclu'ing MR rou$@bac+e'1el%i International Air$ort 1IALB an' ?. rou$@le' Mu#bai InternationalAir$ort MIALB/ %a,e re'uce' -ree ti#e -or cargo at air$orts" %ile -or i#$ortcargo t%e -ree ti#e %as been re'uce' to 5: %ours -ro# -i,e 'ays earlier/ -or e*$ort cargo it %as been retaine' at :4 %ours"T%ere are so#e i#$ortant $roble#s/ (%ic% nee' i#$ro,e#ent@

Only -e( @ray #ac%ines are (or+ing $ro$erly" In @ray #ac%ine o--ice t%e e*a#ine $erson 'i'n>t e*a#ine t%e (%ole

cargo"22



T%e (or+ing en,iron#ent o- bon'e' area is not so goo'" T%ere is lac+ o-

-res% air T%ere is ,ery rus% o- agent bet(een 6 $# to 5 $# be-ore it t%e truc+ 'oc

gate $erson %a' no (or+"

T%e #aintenance o- cargo e)ui$#ents are not regular t%at>s (%y t%ey'on>t (or+ $ro$erly"

T%e groun' o- bon'e' area (as so sli$$ery 'ue to oil o- ,e%icles/ (%ic%

#o,es al(ays" T%e custo#s $eo$le are also not (or+ing $ro$erly" T%ey are not $resent

in t%eir $lace at t%e ti#e o- (or+" T%e tec%nology/ (%ic% is use' by t%e Air cargo in In'ia is )uite $oor

co#$are' to 'e,elo$e' countries" Air is t%e #ost e*$ensi,e #o'e o- trans$ort

Increasing tra'e barriers an' tari--s are obstructing -ree tra'e

It is -acing #o'al co#$etition -ro# truc+ing an s%i$$ing in'ustries"

ro(ing congestion along #a0or corri'ors t%reatens access to +ey

air$orts"

ol+tions an$ ecommen$ations

In -act 7= $er cent o- t%e e*$ort cargo arri,e bet(een 6 $"#" an' 5 $"#"Q 6: $er

cent bet(een 5 $"#" an' 6; $"#"/ an' only -i,e $er cent bet(een 6; a"#" an' 6 $"#" T%e incenti,e intro'uce' -or $resenting cargo in early %as been (it%'ra(n'ue to lac+ o- su$$ort -ro# t%e e*$orters" T%e -our +ey areas (%ic% t%ere-orere)uire attention are bee-ing u$ o- t%e security syste#/ u$ gra'ation o- tec%nologies/ si#$li-ication o- $roce'ures an' re'uction in '(ellti#e" T%ere s%oul' be a -aster 'eli,ery syste# by creating se$arate area in t%e

$ort $re#ises clearly ear#ar+e' -or i##e'iate 'eli,ery o- cargo to s$eci-ie'accre'ite' i#$orters"

On air cargo security $re$are'ness/ t%e ste$s being ta+en inclu'e installation o- @ray #ac%ines in su--icient nu#ber/ 'e$loy#ent o- CIS3 $ersonnel in +ey

$ositions/ #aintaining cooling o-- $erio' (it% e--ect -ro# January 6/ 6;; $er cent @ray screening o- e*$ort cargoB/ intro'ucing regulate' agents conce$t an'security au'it co,ering t%e $er-or#ance o- CCT? syste#/ %an'ling 'angerousgoo's/ 'u##y c%ec+s an' secure' at#os$%ere T%ere s%oul' be (eb@base'connecti,ity (it% ,arious tra'e $artners an' bar co'ing syste# are yet to beintro'uce'" S#o+ing s$itting in t%e Cargo Ter#inal $re#ises is strictly

$ro%ibite'" Any ,iolation s%all be sternly 'ealt (it% inclu'ing i#$osition o- -ine $enalty"

To a*hie+e the (ission, Ai *a!o sho$l" fo*$s on- En%ancing t%e use o- In-or#ation Tec%nology

23



Strea#lining Custo#s $roce'ures

Encouraging ,oluntary co#$liance

E,ol,ing coo$erati,e initiati,es

Assisting in t%e -or#ulation o- Tari-- Policies

Co#bating re,enue e,asion/ co##ercial -rau's an' social #enace

e--ecti,ely Measuring con-or#ance to ser,ice 'eli,ery stan'ar's

1e,elo$ing $ro-essionalis# an' res$onsibility

E33ECT O3 LOAL MELT1ON ON AIR LOISTICS

Accor'ing to IATA/ airlines re'uce' ca$acity but (ere unable to +ee$ $ace

(it% t%e -all in 'e#an'" T%e 'eterioration in tra--ic is alar#ingly -ast@

$ace' an' (i'es$rea'/ sai' io,anni isignani/ IATA>s 'irector general"

E,en t%e goo' ne(s t%at t%e oil $rice %as -allen to %al- its July $ea+ is not

enoug% to o--set t%e i#$act o- t%e 'ro$ in 'e#an'" Cargo tra--ic 'ro$$e'

5"5 D -ro# last year>s -igure" IATA is -orecasting a loss o- =": billion -or

t%is year/ isignani sai'"

Accor'ing to isignani/ urgent #easures are nee'e'" All areas i#$acting t%e

business #ust be e*a#ine' -or (ays to re'uce costs an' 'ri,e e--iciencies"

It>s a #atter o- sur,i,al/ sai' isignani"

Co#$onents o- Air Cargo In'ustry!@

• T%e air cargo in'ustry is #a'e u$ o- t%e -ollo(ing!@

3reig%t -or(ar'ers

Cargo airlines

Custo#s House Agents CHAsB

Custo#s

Regulatory Agencies

24



Airline groun' %an'ling agents

• Large -reig%t -or(ar'ers are t%e +ey $layers as t%ey %a,e relations%i$s or

#ultinationals %a,ing t%eir o(n establis%#ent

• CHAs #anage t%e co#$lete custo#s clearances an' 'uty $ay#ents" T%ey

%an'le clearance 'uty $ay#ent an' $%ysical %an'o,er to carriers"

AIR 3REIHT

Mini#u# Rate

• T%e rate is gi,en/ (%en t%e -reig%t is less" ?olu#e is lo(Q -reig%t

-or(ar'er (ants a #ini#u# c%arge on t%e -reig%t" 3or -reig%t rates belo(

6;;;+g/ rates are calculate' as $er t%e slab range (%ic% is gi,en as

-ollo(s!@

.g>s 4= 4= 6;; =;; 6;;;

3or #ore t%an 6 ton/ t%e -or(ar'er or t%e user negotiates -or a s$ecial rate

(it% t%e carriers/ i"e" s$ot rate"

3lat Rate

• I- t%e -reig%t is 6 ton or #ore t%an 6 ton/ -lat rate is gi,en" Nor#ally/ not

gi,en by t%e -reig%t -or(ar'ers"

E*!@3lat rate 6"6 US Mini#u# Rate 5= US

3las% Rate• T%ese rates are gi,en in urgent situations" T%ey are ,ery %ig%Q goo's are

trans$orte' at lig%tning s$ee'" T%ese rates are 5 to 8 ti#es %ig%er t%an t%e

nor#al rates"

T%e -reig%t ele#ent in air cargo co#$rises o- !@ Actual -reig%t $ayable

3uel surc%arge

Security surc%arge (ar surc%arge c%arge (%en t%ere is a t%reat

o- (arB

25



3reig%t is c%arge' on actual (eig%t or ,olu#e/ (%ic%e,er is %ig%er"

?olu#e (eig%t ratio consi'ere' by airlines is 6!7

%en t%e -reig%t arri,es at t%e 'estination/ t%e -ollo(ing c%arges are #a'e!@

1eli,ery or'er c%arges

Cartage c%arges trans$ortation c%argesB

rea+ bul+ -ee C%arges to brea+ cargo into rele,ant sub $artsB

IM -iling c%arges I#$ort eneral Mani-estoB

Ser,ice Ta*

A$art -ro# abo,e c%arges/ CC -ee C%arges CollectB is c%arge'/ (%ic% is

:D o- t%e -reig%t ,alue"

C%arges a-ter clearance by CHA!@ AAI (are%ouse c%arges

Octroi i- a$$licableB

Ai.a/ 0ill

A bill o- la'ing t%at co,ers bot% international an' 'o#estic -lig%ts trans$ortinggoo's to a s$eci-ic 'estination" T%is is non negotiable 'ocu#ent o- air trans$ort

t%at ser,es as a recei$t -or a s%i$$er/ in'icating t%at carrier %as acce$te' goo's

liste' an' obligates itsel- to carry t%e consign#ent to t%e air$ort o- 'estination

accor'ing to s$eci-ie' con'itions"

26



27



IATA & 3REIHT RATE 3ACTORS

Intro'uction!@

Air trans$ort is one o- t%e #ost 'yna#ic in'ustries in t%e (orl'" T%e

International Air Trans$ort Association IATAB is its global tra'e organisation"

T%e #o'ern IATA is t%e successor o- International Air Tra--ic Association

-oun'e' in t%e Hague in 6969 t%e year o- (orl'>s -irst international sc%e'ule'

ser,ices"

T%e International Air Trans$ort Association (as -oun'e' in Ha,ana/ Cuba/ in

A$ril 694=" It is t%e $ri#e ,e%icle -or inter@airline coo$eration in $ro#oting28



sa-e/ reliable/ secure an' econo#ical air ser,ices@ -or t%e bene-it o- t%e (orl'>s

consu#ers" T%e international sc%e'ule' is no( #ore t%an 6;; ti#es larger t%an

it (as in 694=" 3e( in'ustries can #atc% t%e 'yna#is# o- t%at gro(t%/ (%ic%

(oul' %a,e been #uc% less s$ectacular (it%out t%e stan'ar's/ $ractices an'

$roce'ures 'e,elo$e' (it%in IATA"

O,er 74 years/ IATA %as 'e,elo$e' t%e co##ercial stan'ar's t%at built a global

in'ustry" To'ay>s IATA>s #ission is to re$resent/ lea' an' ser,e t%e airline

in'ustry" Its #e#bers co#$rise so#e :<; airlines@ t%e (orl'>s lea'ing

$assenger an' cargo airlines a#ong t%e#@ re$resenting 9< $ercent o- sc%e'ule'

international air tra--ic"

IATA see+s to i#$ro,e un'erstan'ing o- t%e in'ustry a#ong 'ecision #a+ersan' increase a(areness o- t%e bene-its t%at a,iation brings to national an' global

econo#ies" It -ig%ts -or t%e interests o- airlines across globe/ c%allenging

unreasonable rules an' c%arges/ %ol'ing regulators an' go,ern#ents to account/

an' stri,ing -or sensible regulation"

IATA>s ai# is to %el$ airlines %el$ t%e#sel,es by si#$li-ying $rocesses an'

increasing $assenger con,enience (%ile re'ucing costs an' i#$ro,ing

e--iciency" T%e groun'brea+ing si#$li-ying t%e business initiati,e is crucial in

t%is area" Moreo,er sa-ety is IATA>s nu#ber one $riority/ an' IATA>s goal is tocontinually i#$ro,e sa-ety stan'ar's/ notably t%roug% IATA>s O$erational

Sa-ety Au'it IOSAB" Anot%er #ain concern is to #ini#ise t%e i#$act o- air

trans$ort on en,iron#ent"

IATA ensures t%at $eo$le an' goo's can #o,e aroun' t%e global airline net(or+

as easily as i- t%ey (ere on a single airline in a single country" In a''ition/ it

$ro,i'es essential $ro-essional su$$ort to all in'ustry sta+e%ol'ers (it% a (i'e

range o- $ro'ucts an' e*$ert ser,ices/ suc% as $ublications/ training an'consulting" IATA>s -inancial syste#s also %el$ carriers an' t%e tra,el in'ustry

#a*i#ise re,enues"

ene-its o- IATA!@

• 3or consu#ers/ IATA si#$li-ies t%e tra,el an' s%i$$ing $rocesses/ (%ile

+ee$ing costs 'o(n" Passengers can #a+e one tele$%one call to reser,e a

tic+et/ $ay in one currency an' t%en use t%e tic+et on se,eral airlines in

se,eral countries29



• IATA allo(s airlines to o$erate sa-ely/ securely/ e--iciently an'

econo#ically un'er clearly 'e-ine' rules

• IATA ser,es as an inter#e'iary bet(een airlines an' $assenger as (ell as

cargo agents ,ia neutrally a$$lie' agency ser,ice stan'ar's centralise'-inancial syste#s

• A large net(or+ o- in'ustry su$$liers an' ser,ice $ro,i'ers gat%ere' by

IATA $ro,i'es soli' e*$ertise to airlines in a ,ariety o- in'ustry solutions

• 3or go,ern#ents/ IATA see+s to ensure t%ey are (ell in-or#e' about t%e

co#$le*ities o- t%e a,iation in'ustry to ensure better/ long ter# 'ecisions"

IATA Rates Structure!@T%e #a0or constituents o- t%e current IATA rates structure are gi,en as

-ollo(s!@

General Cargo Rates

T%ese constitute nor#al rates -or cargo trans$ortation" T%ey are

a$$licable to a s%i$#ent (eig%ing belo( or about 4= +ilogra#s" %ile

o--ering airlines a reasonable $ro-it/ t%ese rates %a,e beco#e obsolete in

catering to #ar+et 'e#an'/ $articularly in t%e conte*t o- current

re,olution in co##unications an' trans$ortation" S%i-t o- tren's an'

balance o- (orl' tra'e an' e,olution o- ne( #ar+eting conce$ts %as le'

to consi'erable ret%in+ing on eneral Cargo rates"

Class Rates

T%ese are surc%arge' or 'iscounte' rates -or certain classi-ie' ite#s/ e"g

,aluable cargo/ li,e ani#als/ ne(s$a$ers/ etc"

Specific Commodity Rates (SCR)

T%ese are also calle' co@rates/ accounts -or se,enty $ercent o- t%e cargo carrie'

out o- In'ia" T%ese rates are #ar+et@oriente' an' ta+e into account actual

'e#an' re)uire#ents" T%ey recogni2e t%e ,arying ability o- t%e user to $ay air trans$ortation accor'ing to t%e re)uire#ents" I- t%e rates structure 'i' not

30



'i--erentiate in t%is (ay/ t%e rates (ill be %ig%er or lo(er -or t%e user/ 'e$en'ing

on t%e ty$e o- co##o'ity" On t%e ot%er %an'/ t%is a$$roac% results in

'iscri#ination/ an' is not al(ays relate' to t%e cost o- trans$ortation"

Freight- All- kind Rates

T%ese are 'i--erent -ro# SCR>s / in t%is t%ey can carry a co#bination o-

'i--erent co##o'ities as against t%e SCR>s/ un'er (%ic% carriage is restricte'

only to t%e co##o'ity s$eci-ically a$$ro,e' by t%e IATA carriers" T%ese rates

-a,our -or consoli'ation" T%is a$$roac% / alt%oug% si#$le to 'e,elo$ an' a$$ly/

is not acce$table to #any airlines -or it ,irtually i#$lies t%e (%ole@selling o-

ca$acity o- -reig%t -or(ar'ers"

Government Mandatory Rates

T%roug% bilateral #ultilateral negotiations/ t%e go,ern#ent can intro'uce lo(er

rates un'er #an'atory or'ers to o--er incenti,es to t%e e*$ort o- certain

co##o'ities" 3or e*a#$le/ o,ern#ent o- In'ia %as 'irecte' lo( rates -or t%e

e*$ort o- leat%er -ro# In'ia to ,arious countries in Euro$e/ USA etc"

IATA ECONOMIC 0RIE&ING1 #ASSENGER AND &REIG2T&ORECASTS 3445 TO 34661

IATA>s latest -orecast/ base' u$on a co#$re%ensi,e sur,ey o- t%e airlinein'ustry/ s%o(s t%at $assenger an' -reig%t 'e#an' gro(t% (ill continue to

$ro,i'e a $ositi,e boost to airline re,enues o,er t%e -i,e years to :;66"Ho(e,er/ t%e $ro-ile o- gro(t% (ill 'i--er" Co#$are' to :;;7 gro(t% le,els/international $assenger gro(t% is e*$ecte' to slo( slig%tly/ 'o#estic $assenger gro(t% to i#$ro,e slig%tly an' international -reig%t gro(t% to re#ain at asi#ilar le,el" International $assenger ,olu#e gro(t% %as $asse' its $ea+ le,el

-or t%e current cycle/ but (ill re#ain strong" International air $assenger nu#bers are e*$ecte' to gro( at an a,erage annual gro(t% rate AARB o- ="6D bet(een :;;5 an' :;66/ lo(er t%an t%e a,erage rate o- 5"4D seen bet(een:;;: an' :;;7" 1e#an' gro(t% (ill be (ea+ene' by slig%tly slo(er globalecono#ic gro(t%/ but (ill also be booste' by t%e liberali2ation o- #ar+ets an't%e e#ergence o- ne( routes an' ser,ices" 1o#estic $assenger gro(t% ise*$ecte' to $ic+@u$ slig%tly/ le' by strong gro(t% in t%e C%inese an' In'ian'o#estic #ar+ets" 1o#estic $assenger nu#bers are -orecast to gro( at anAAR o- ="<D bet(een :;;5 an' :;66/ %ig%er t%an t%e a,erage rate o- 4"4Dseen bet(een :;;: an' :;;7" Airlines are in a better -inancial $osition t%an t%ey(ere -i,e years ago" ut t%e c%allenges o- t%e last -i,e years %a,e le-t t%e

31



in'ustry (it% little or no -inancial sa-ety@net" T%e ne*t -i,e years o--er signi-icant 'e#an' gro(t% o$$ortunities -or airlines/ but co#$etition -or t%atgro(t% (ill be strong as ne( ca$acity increases at an increase' rate" 3urt%er cost e--iciencies/ rational ca$acity #anage#ent an' greater o$erational

-le*ibility are necessary to translate t%e i#$ro,e#ents alrea'y ac%ie,e' into astable an' $ro-itable in'ustry o,er t%e ne*t -i,e years" T%e airline in'ustry/ an't%ese -orecasts/ re#ain e*$ose' to se,eral ris+s/ ranging -ro# te#$orarynegati,e i#$acts e"g" security scaresB to %ig% -uel $rices an' slo(er t%ane*$ecte' gro(t% in t%e global econo#y"

To$ 6; Airlines (orl'(i'e in Air Cargo Mo,e#ent are as -ollo(s!@

loal

ank

Airlines Cargo ?olu#es

;;;>sB6 .orean Airlines 8674

: Lu-t%ansa 8;:8

< Singa$ore Airlines 564<

4 Cat%ay Paci-ic Air(ays =857

= C%ina Airlines =74:

7 3e'eral E*$ress Cor$ ==9=

5 E,a Air(ays Cor$ =455

8 Air 3rance =<84

9 ritis% Air(ays 45566; Cargolu* Airlines International 475;

3ACTORS THAT A33ECT 3REIHT RATES

3un'a#ental 3actors!@

nternational )ra$e Agreements

lobal $ro'uction an' 'istribution are also a--ecte' by international tra'e

agree#ents/ )uotas/ an' tari-- restrictions" T%e 'yna#ics o- t%e global#ar+et$lace %a,e 'ri,en t%e -or#ation o- nu#erous large regional tra'ing blocs

inclu'ing Euro$ean Union EUB/ t%e ASEAN 3ree Tra'e Area A3TAB/ t%e #ost32



i#$ortant -or t%e Unite' States/ Nort% A#erican 3ree Tra'e Agree#ent

NA3TAB" T%ese agree#ent 'e-ine t%e tra'e routes/ t%e nature o- e*$orts as a

(ell as i#$orts/ tra'e restrictions an' ot%er t%ings t%at a--ect t%e -reig%t rates"

nternational )ransportation Agreements

ilateral an' #ultilateral international trans$ortation agree#ents o-ten in,ol,e

co#$le* negotiations as t%e nations in,ol,e' see+ to $rotect t%eir interests an'

to create o$$ortunities -or tra'e an' econo#ic gro(t%"

%ere carrier entry or $artici$ation is restricte' in a $articular #ar+et/ rates

ten' to be %ig%er" Eac% #o'e o$erates un'er a uni)ue set o- international

arrange#ents" International air ser,ice agree#ents 'e-ine t%e ser,ice routes/ an'

t%ey control t%e nu#ber o- carriers -ro# eac% country/ as (ell as t%e ty$e o- aircra-t/ t%at can ser,e t%ose routes" Alt%oug% international (ater trans$ort is

largely -ree -ro# route restrictions/ carrier con-erences in-luence rates an'

ser,ices in #a0or #ar+ets/ an' cargo $re-erences #ay li#it carrier $artici$ation

in so#e tra'e"

/+el rices

3or all #o'es o- trans$ortation/ -uel is large an' ,olatile cost co#$onent" An

increase in -uel $rices is li+ely to result in trans$ortation rate increases -or -aster

#o'es e"g"airB an' -or $re#iu# ser,ices $ro,i'e' by a gi,en #o'e e"g" %ig%

s$ee' rail container an' trailer carriageB" Line@%aul cost o- ,arious #o'es/

(%ic% is a -unction o- 'istance/ (ill also be i#$acte' by -uel $rice c%anges"

Accor'ingly/ so#e c%anges in 'e#an' -or s$eci-ic co##o'ities or s%i-t o-

#o'e #ay occur" %en e,aluating t%e e--ect o- -uel $rice c%anges on c%oice o-

#o'e/ it is necessary to consi'er -uel re)uire#ents -or co#$eting ser,ices rat%er

t%an #o'al a,erages"

anpoer

T%e a#ount an' s$eciali2ation o- $eo$le re)uire' to s%i$ t%e $ro'ucts (ill also

a--ect t%e air -reig%t rate" T%is #eans t%at t%e ty$e o- ser,ice re)uire' (ill

c%ange t%e air -reig%t rates" I- ite#s are to be %an'le' by e*$erts/ t%en #ore

33



cas% is re)uire' in or'er to co,er t%e a''itional #an$o(er" Man$o(er also

inclu'es t%e ,arious $eo$le (%o (ill %an'le t%e $a$er(or+ o- cargo"

Ob,iously/ it (ill ta+e t%e e*$ertise o- #ore t%an one $erson to #a+e sure t%at

t%e cargo re#ains as sa-e as $ossible"

pee$

T%is -actor is secon' only to 'e#an' on its e--ects on t%e air -reig%t rate" It is

o-ten t%e case t%at co#$anies %a,e 'i--erent air -reig%t rates base' on t%e s$ee'

by (%ic% t%ey can 'eli,er t%e ite#s"

T%ere are co#$anies (%ic% o--er -aster 'eli,ery ser,ices -or a''itional c%arges"

T%ere are co#$anies (%o can 'eli,er ite#s in one 'ay/ an' so#e co#$anies cane,en 'eli,er goo's (it%in a -e( %ours/ o- course 'e$en'ing u$on t%e 'istance"

T%e s$ee' o- 'eli,ery is ,ery i#$ortant because it is o-ten t%e case t%at

custo#ers stic+ (it% an air -reig%t ser,ice because o- s$ee' by (%ic% t%ey can

get t%e 0ob 'one"

o%ernment +si$iation of Carriers

o,ern#ent subsi'i2ation o- carriers re'uces trans$ort costs an' a--ects

co#$etition bet(een classes o- carriers/ bet(een #o'es/ an' bet(een o$eratorso- carriers registere' in 'i--erent countries" A#ong 'o#estic carriers/ t%e rail

in'ustry %as been concerne' about subsi'i2ation o- t%e #otor carrier an' barge

in'ustries"

n%ironmental olicies an$ estrictions

En,iron#ental $olicies an' restrictions a--ect all #o'es o- trans$ortation" Air

carriers/ $articularly t%e all@cargo carriers t%at o$erate ol'er aircra-t an' t%at

o$erate $ri#arily at nig%t/ are #ost a--ecte' by noise restrictions" Also/ ot%er restrictions are relate' to t%e aircra-t e#issions" T%ese en,iron#ental $olicies

an' restrictions signi-icantly a'' to t%e cost o- -reig%t trans$ortation" In a''ition

to t%e i#$acts o- en,iron#ental $olicies on #o'al costs/ -reig%t rate also is

a--ecte' by en,iron#ental $olicies (%ic% a--ect 'ecisions on t%e locations o-

in'ustrial sites an' t%e locations at (%ic% ra( #aterials are $ro'uce'"

afet* olicies an$ estrictions

34



Sa-ety regulations increase carrier ca$ital an' o$erating costs (%ile re'ucing all

acci'ent@relate' costs insurance/ liability $ay#ents/ loss an' 'a#age/ an'

'elayB" T%ese regulations also create so#e s#all costs -or sa-ety ins$ections an'

recor' +ee$ing" T%e regulation o- %a2ar'ous #aterials %a2#atB trans$ort

increases trans$ort costs" Alt%oug% (e are a(are o- no 'ata on t%e costs o-

%a2#at regulation/ (e belie,e t%ese costs 'o re$resent a signi-icant $ro$ortion

o- carrier o$erating costs -or %a2#at s%i$#ents" Route restrictions -or %a2#at

truc+ o$erations are t%e res$onsibility o- state an' local go,ern#ents" T%e

a#ount o- suc% route restrictions is $robably increasing/ an' #ay beco#e a

signi-icant -actor in c%oice o- #o'e in t%e -uture"

)ec&nological A$%ances

A nu#ber o- signi-icant tec%nological a',ances in e)ui$#ent an' in-or#ation

syste#s o,er t%e $ast t%ree 'eca'es %a,e %a' a $ro-oun' i#$act on -reig%t

trans$ortation in,ol,ing all #o'es" T%e #ost notable e)ui$#ent a',ances

inclu'e containeri2ation/ 'ouble@stac+ tec%nology/ auto#ation an' robotics/

%an'ling an' interc%ange syste#s/ auto#ate' ter#inals/ an' con,eyance 'esign"

A',ances in in-or#ation syste#s inclu'e Electronic 1ata Interc%ange E1IB/

Auto#ate' E)ui$#ent I'enti-ication AEIB/ a$$lications o- Intelligent

Trans$ortation Syste#s ITSB to co##ercial ,e%icle o$erations/ global $ositioning syste#s/ an' cargo container routing an' trac+ing syste#s"

Tec%nology (ill continue to e,ol,e an' i#$ro,e/ a--ecting all -acets o- -reig%t

trans$ortation inclu'ing t%e ty$e/ si2e an' (eig%t o- co##o'ities/ t%e #eans by

(%ic% t%ey are $ro'uce' an' 'istribute'/ an' t%e associate' costs"

Aircraft Capacit*

Aircra-t ca$acity a--ects t%e -reig%t rates" It also 'e$en's on (%et%er t%e aircra-t

is a $ure -reig%t carrying one or a Co#bi-lig%t"

nfrastr+ct+re

T%e basic re)uire#ent -or t%e -reig%t in'ustry is t%e a,ailability o- air$orts/

aircra-ts/ an' ot%er as$ects o- in-rastructure necessary -or loa'ing an' unloa'ing

o- goo's" T%e #ore tec%nologically a',ance' t%e -acilities/ %ig%er t%e -reig%t

rates"

Mar+et 3actors !@

35



ackaging aterials

T%e use o- lig%t(eig%t #aterials as $rotecti,e $ac+aging -or #any

#anu-acture' $ro'ucts %as resulte' in a re'uction in a,erage (eig%t an' 'ensity

(eig%t ,olu#eB o- s%i$#ents" T%is #eans t%at %ea,y -ragile $ro'ucts suc% asa$$liances/ glass $ro'ucts/ co#$uters an' e)ui$#ent are no( #ore

trans$ortable t%an t%ey use' to be" T%e increase in lo(@'ensity s%i$#ents %as

also create' a 'e#an' -or larger truc+ trailers an' s%i$$ing containers i"e"

%ig%er ,olu#e or cube li#itB"

ntermo$al perating Agreements

Trans$ortation carriers %a,e beco#e increasingly #ulti#o'al/ loo+ing -or t%e

#ost e--ecti,e (ays to integrate an' #ar+et t%eir ca$acity an' to co#bine t%e

ser,ices o- rail/ truc+/ (ater an' air #o'es" Tra'itional co#$etitors/ bot% (it%in

an' across #o'es/ are recogni2ing t%e nee' to buil' coo$erati,e relations%i$s"

As a result o- inter#o'al o$erating agree#ents an' 0oint ,entures/ carriers are

able to o--er broa'er range o- ser,ices an' to tailor ser,ice $ac+ages -or

in'i,i'ual s%i$$ers/ resulting in lo(er costs an' %ig%er le,els o- ser,ice -or

-reig%t trans$ortation"

ser C&arges an$ t&er )a#es

User c%arges are t%e $rinci$al #eans o- -inancing $ublicly@$ro,i'e'

in-rastructure" o,ern#ent e--orts to reco,er t%e costs o- buil'ing an'

#aintaining trans$ortation in-rastructure (ill continue to a--ect t%e co#$etiti,e

$osition o- t%e #o'es in,ol,e'" 3or t%e air #o'e/ -e'eral s$en'ing on air$orts

an' air(ays is su$$orte' by ta*es on 'o#estic an' international airline

$assenger tic+ets/ air cargo (aybills/ an' -uel ta*es all o- (%ic% are 'e$osite'

in t%e Air$ort an' Air(ay Trust 3un'B/ (it% construction an' o$eration o-

in'i,i'ual air$orts also -inance' t%roug% re,enue bon's/ -acility leases/ lan'ing

-ees/ an' slot -ees" In a''ition to user c%arges/ trans$ortation co#$anies $ay

business/ sales/ an' $ro$erty ta*es"

Use' in resulting in %ig%er rates an' $rices -or carriers/ s%i$$ers an' recei,ers

o- $ro'ucts" T%ese -ees an' ta*es can be i#$ose' base' u$on t%e ,alue/ (eig%t/

,olu#e or 'i#ension o- co##o'ities/ s%i$#ents an' ,e%icles/ t%us a--ecting

t%ese c%aracteristics o- -reig%t in t%e tra--ic strea#"

36



)&e .;s

T%e s%i$$ing containers/ also +no(n as t%e Unit Loa' 1e,ices are 'esigne' to $rotect cargo -ro# t%e 'a#ages cause' by t%e 0ourney" 1i--erent ite#s re)uire

'i--erent containers" I- one is loo+ing -or a s$ecial container to $rotect ite#s/ it

coul' a'' a bit #ore to air -reig%t rate t%an (%at is antici$ate'"

T%e UL1>s use' in an air -reig%t ser,ice are usually suite' to 'i--erent ty$es o-

cargo" T%is #eans t%at t%e ty$e o- ite# t%at is s%i$$e' (ill a--ect t%e air -reig%t

rates" I- a''itional security #easures are re)uire' to $rotect cargo/ t%en one

(oul' %a,e to $ay #ore #oney"

)&e competition

T%e co#$etition bet(een t%e -reig%t carriers o$erating along t%e sa#e route

also a--ects t%e -reig%t rates" It #ay in,ol,e a sort o- $rice (ar as all t%e carriers

try to gain #a*i#u# #ar+et s%are"

Carrier-&ipper Alliances

T%ere %a,e been 'ra#atic c%anges in t%e institutional relations%i$s a#ong

trans$ortation $ro,i'ers an' users" S%i$$er 'e#an' -aster/ reliable/ sea#less

'oor@to@'oor trans$ortation ser,ices/ o-ten (it%out stating a #o'e $re-erence"

Suc% ser,ices can be #a'e a,ailable t%roug% a single ,en'or (%o can arrange/

#anage/ an' #onitor t%e #o,e#ent" Increasingly/ s%i$$ers are entering into

$artners%i$s (it%/ an' o-ten $ro,i'ing in@$lant s$ace -or/ $ersonnel o- logistics

co#$anies (%ic%/ in turn/ o-ten are subsi'iaries o- carriers"

T%e #a0or i#$acts o- carrier@s%i$$er alliances on -reig%t rates inclu'e lo(er

logistics costs $er unit o- co##o'ity/ %ig%er reliability o- on ti#e 'eli,ery an'lo(er $robability o- loss or 'a#age clai#"

Cartels

It i#$lies to a con'ition in (%ic% all or so#e o- t%e $layers in an in'ustry reac%

an agree#ent to li#it co#$etition by 'eci'ing t%e $ricing toget%er/ (%ic% (oul'

37



also 'eci'e t%e $ro-its -or eac% $layer in,ol,e' in t%e cartel" T%is %as a $ro-oun'

e--ect on t%e -reig%t rates"

HAAR1OUS

MATERIALS

38



What is meant by “dangerous goods!

1angerous goo's #eans goo's (%ic% by t%eir nature or c%aracter are/ or reasonably a$$ear li+ely to beco#e/ a 'anger to $ersons or $ro$erty or an illegalor unacce$table 'anger to t%e en,iron#ent"

Meaning of dangerous in rules of law 3ro# t%e $oint o- ,ie( o- t%e carrier/ 'angerous goo's are goo's (%ic% $oseun-oreseeable %a2ar's to t%e s%i$ an' to t%e ot%er cargo" +no(le'ge o- t%enature o- t%e goo's an' $ro$er %an'ling #et%o's are in'is$ensable in or'er to

$re,ent 'anger" Accor'ing to tra'e an' in'ustry/ 'angerous goo's are t%at about(%ic% so#et%ing #ust be +no(n so as to $re,ent 'anger" T%at #eans t%at tra'e

39



an' in'ustry is $ri#arily concerne' (it% rules (%ose 'angerous c%aracteristicscan be antici$ate' be-ore%an'"

C"asses and di#isions of dangerous goods in the I$DGCode

%&' C"ass &( )*+"osi#esT%ese are a#ong t%e #ost 'angerous o- all goo's carrie' by sea an' t%e

$recautions outline' in t%is class o- t%e Co'e are $articularly stringent" T%eclass is 'i,i'e' into si* 'i,isions (%ic% $resent 'i--erent %a2ar's"

1i,ision 6"6! substances an' articles (%ic% %a,e a #ass e*$losion %a2ar'" A#ass e*$losion is one (%ic% a--ects al#ost t%e entire loa' ,irtually

instantaneously" 1i,ision 6":! substances an' articles (%ic% %a,e a $ro0ection %a2ar' but not a#ass e*$losion %a2ar'"

1i,ision 6"<! substances an' articles (%ic% %a,e a -ire %a2ar' an' eit%er a#inor blast %a2ar' or #inor $ro0ection %a2ar' or bot%/ but not a #ass e*$losion%a2ar'

1i,ision 6"4! substances an' articles (%ic% $resent no signi-icant %a2ar'" T%is'i,ision co#$rises substances (%ic% $resent only a s#all %a2ar' in t%e e,ent o- ignition 'uring trans$ort" T%e e--ects are largely con-ine' to t%e $ac+age an' no

$ro0ection o- -rag#ents o- a$$reciable si2e or range is to be e*$ecte'" Ane*ternal -ire nee' not cause ,irtually instantaneous e*$losion o- al#ost t%eentire contents o- t%e $ac+age"

1i,ision 6"=! ,ery insensiti,e substances (%ic% %a,e a #ass e*$losion %a2ar'"T%is 'i,ision co#$rises substances (%ic% %a,e a #ass e*$losion %a2ar' but areso insensiti,e t%at t%ere is ,ery little $robability o- initiation or o- transition-ro# burning to 'etonation un'er nor#al con'itions o- trans$ort"

1i,ision 6"7! e*tre#ely insensiti,e articles (%ic% 'o not %a,e a #asse*$losion %a2ar'"Class 6 is uni)ue in t%at t%e ty$e o- $ac+aging an' #et%o' o- $ac+ing use'

-re)uently %as a 'ecisi,e e--ect on t%e %a2ar' an'/ t%ere-ore/ on t%e assign#ento- an e*$losi,e to a $articular 'i,ision an' co#$atibility grou$" Alt%oug% t%esa-ety o- goo's in Class 6 can be best assure' by sto(ing t%e# se$arately/ t%iscan rarely be 'one in $ractice" To ensure t%at t%ey are sto(e' as sa-ely as

$ossible/ t%e goo's in t%e class are arrange' in t(el,e co#$atibility grou$s"

%,' C"ass , - Gasesases carrie' on boar' s%i$s %a,e ,arious c%e#ical $ro$erties an' co#e in'i--erent states" T%ey #ay be co#$resse'/ li)ue-ie' at a#bient te#$erature

un'er %ig% $ressure/ 'issol,e' un'er $ressure in a sol,ent/ (%ic% is t%enabsorbe' in a $orous #aterial/ or li)ue-ie' by re-rigeration"5; T%ey #ay/ -or

40



e*a#$le/ be non@-la##able/ non@$oisonous/ -la##able/ $oisonous an'corrosi,e/ su$$ort co#bustion or be a co#bination o- all or so#e o- t%ese"So#e gases are lig%ter t%an air/ (%ile so#e are %ea,ier"3or t%e $ur$ose o- sto(age an' segregation/ Class : is 'i,i'e' into < subclasses

accor'ing to t%e %a2ar's $resente' by t%e gases 'uring trans$ort" Class :"6! -la##able gases Class :":! non@-la##able/ non@$oisonous gases Class :"<! $oisonous gases%.' C"ass . - F"ammab"e "i/uidsT%is class 'eals (it% li)ui's (%ic% gi,e o-- -la##able ignitableB ,a$ours at or

belo( 76C close' cu$ c"cB" T%is is calle' -las%@$oint" So#e -la##able li)ui'sare inclu'e' in ot%er classes54 because o- t%eir ot%er #ore $re'o#inant

$oisonous or corrosi,e $ro$erties"

Class < is 'i,i'e' into t%ree subclasses accor'ing to t%e -las%$oints o- t%eli)ui's!Class <"6 co,ers li)ui's (it% a lo( -las%$oint belo( @68C c"c" ;3B/ suc%as acetoneQ Class <":" co,ers li)ui's (it% an inter#e'iate -las%$oint @68C u$to but not inclu'ing :<C c"c" 5<3B/ suc% as ben2eneQ an' Class <"<" co,ersli)ui's (it% a %ig% -las%$oint :<C an' abo,e u$ to 76C c"c" 6463B/ suc% ascertain alco%olic be,erages"5= enerally s$ea+ing/ (ater is unsuitable in-ig%ting a -ire in,ol,ing -la##able li)ui's"%0' C"ass 0 - F"ammab"e so"ids or substances

T%is class is 'i,i'e' into t%ree subclasses (%ic% %a,e ,ery 'i--erent $ro$erties"T%e class inclu'es so#e co##only +no(n $ro'ucts/ #any o- (%ic% see#%ar#less enoug% but (%ic% can be ,ery 'angerous unless $ro$erly $ac+e'/%an'le' an' trans$orte'" T%e lo(est te#$erature o- a li)ui' at (%ic% its ,a$our -or#s an ignitable #i*ture (it% air Class 4.1 – Flammable solidsT%e substances an' #aterials in t%is class are soli's $ossessing t%e $ro$erties o-

being easily ignite' by e*ternal sources/ suc% as s$ar+s an' -la#es/ an' o- beingrea'ily co#bustible or being liable to cause or contribute to -ire t%roug%-riction" T%is class also co,ers substances (%ic% are sel-@reacti,e/ i"e" liable toun'ergo at nor#al or ele,ate' te#$eratures a strong e*ot%er#ic 'eco#$ositioncause' by e*cessi,ely %ig% trans$ort te#$eratures or by conta#ination/ an''esensiti2e' e*$losi,es/ (%ic% #ay e*$lo'e i- not 'ilute' su--iciently" Un'er certain con'itions/ an e*$losi,es subsi'iary ris+ label is re)uire' -or so#esubstances" T%is class co#$rises!

rea'ily co#bustible soli's an' soli's (%ic% #ay cause -ire t%roug% -rictionQ sel-@reacti,e soli's an' li)ui'sB an' relate' substancesQ an' 'esensiti2e' e*$losi,es

41



So#e co##on $ro'ucts co,ere' by t%is class are celluloi'Q ca#$%orQ 'ry,egetable -ibers suc% as cotton/ -la*/ 0ute/ %e#$/ +a$o+Q so#e #etal $o('ersQna$%t%aleneQ sisalQ %ay an' stra(Q #atc%esQ rubber scra$ an' scul$ture"Class 4.2 – Substances liable to spontaneous combustion

Substances in t%is class are liable to beco#e (ar# an' to ignite s$ontaneously"So#e are #ore li+ely to 'o so (%en (ette' (it% (ater or in contact (it% #oistair" So#e #ay also gi,e o-- to*ic gases i- in,ol,e' in a -ire" ecause o- t%ese

$ro$erties/ $ac+ing an' sto(age re)uire#ents are i#$ortant" Alt%oug% so#egeneral in-or#ation is containe' in t%e intro'uction to t%e class/ #ore 'etaile'in-or#ation is gi,en in t%e in'i,i'ual sc%e'ules" Co##on $ro'ucts inclu'e' int%is class are c%arcoal/ celluloi' scra$/ co$ra/ (et or 'a#$ or oily -ibers/ so#enitrocellulose@base' $lastics/ -is%#eal an' see' ca+es"Class 4.3 – Substances which, in contact with water, emit

fammable gasesSince t%e substances in t%is class gi,e o-- gases (%ic% are so#eti#es sub0ect tos$ontaneous ignition an' are also to*ic/ -ire@-ig%ting is a $articular $roble#"T%e use o- (ater/ stea# or (ater@-oa# e*tinguis%ers #ay #a+e #atters (orsean' e,en t%e use o- carbon 'io*i'e can 'o #ore %ar# t%an goo' in so#esituationsQ -or s#all -ires/ neutrali2ing $o('ers or san' is reco##en'e'"Co##on $ro'ucts in t%is class inclu'e calciu# carbi'e/ #etal $o('ers/-errosilicon/ #agnesiu# an' #agnesiu#@base' $ro'ucts/ $otassiu# an'

$otassiu# base' $ro'ucts/ rubi'iu# an' so'iu#"

%1' C"ass 1 - O*idi2ing substancesT%is class is 'i,i'e' into t(o subclasses" Class ="6 'eals (it% o*i'i2ingsubstances (%ic%/ alt%oug% not necessarily co#bustible in t%e#sel,es/ #ayincrease t%e ris+ an' intensity o- a -ire by gi,ing o-- o*ygen" Class =": co,ersorganic $ero*i'es/ #ost o- (%ic% are co#bustibleClass 5.1 – !idi"ing substances #agents$T%e -act t%at all substances in t%is class gi,e o-- o*ygen (%en in,ol,e' in -irecreates ob,ious -ire@-ig%ting 'i--iculties/ e,en t%oug% t%ey are not necessarilyco#bustible t%e#sel,es" So#e substances #ay also be sensiti,e to i#$act/-riction or a rise in te#$erature/ an' so#e #ay react ,igorously (it% #oisture/so increasing t%e ris+ o- -ire"Mi*tures o- t%ese substances (it% organic an' co#bustible #aterials are easilyignite' an' #ay burn (it% e*$losi,e -orce" T%ere (ill also be a ,iolent reaction

bet(een #ost o*i'i2ing substances an' strong li)ui' aci's/ $ro'ucing %ig%lyto*ic gases" One -ire@-ig%ting $roble# is cause' by t%e -act t%at so#esubstances in t%is class gi,e o-- o*ygen (%en in,ol,e' in a -ire/ so t%at t%e useo- stea#/ carbon 'io*i'e or ot%er inert gas e*tinguis%ers #ay be ine--ecti,e"T%is class inclu'es a##oniu# nitrate -ertili2ers/ c%lorates/ c%lorites/ an'calciu# an' $otassiu# $er#anganates"

Class 5.2 – rganic pero!idesIn a''ition to being o*i'i2ing substances agentsB/ #ost substances in t%is class

42



are liable to ,iolent or e*$losi,e 'eco#$osition" Most (ill burn ra$i'ly an' aresensiti,e to %eat" So#e are also sensiti,e to i#$act or -riction" To re'uce t%issensiti,ity to a sa-e le,el/ t%ey are carrie' in a solution/ suc% as a $aste/ (ette'(it% (ater or (it% an inert soli'" E,en so/ so#e #ay react 'angerously (it%

ot%er substances"

So#e organic $ero*i'es can be $articularly 'angerous to t%e eyes/ e,en a-ter only #o#entary contact/ an' i##e'iate rinsing o- t%e eyes lasting at least 6; to6= #inutes is essential/ -ollo(e' by #e'ical attention"So#e substances #ay begin to 'eco#$ose (%en a certain te#$erature ise*cee'e'/ an' in so#e cases t%is #ay lea' to an e*$losion" To $re,ent t%is/so#e organic $ero*i'es %a,e to be trans$orte' at a controlle' te#$erature" 3ireis anot%er $roble# an' #ay result in e*$losion" Pac+ages containing organic

$ero*i'es s%oul' be #o,e' a(ay -ro# t%e %eat o- any -ire or 0ettisone'"58Organic $ero*i'es are carrie' by sea on 'ec+ only an' are $ro%ibite' -or carriage on #ost $assenger s%i$s"%3' C"ass 3 - To*ic and infections substancesClass 7 is sub'i,i'e' into t(o classes"Class %.1 – &o!ic substancesSubstances in Class 7"6 #ay cause serious in0ury or e,en 'eat% i- s(allo(e'/in%ale' or absorbe' by contact t%roug% t%e s+in" T%ey are arrange' in t%ree

$ac+@

57 ?iolent 'eco#$osition #ay be cause' by traces o- i#$urities suc% as aci's/#etallic o*i'es or a#ines"55 IM1 Co'e :"="<"4 an' in'i,i'ual sc%e'ules contain in-or#ation on t%eseas$ects"58 I- t%is is not $ossible an' e,en (%en t%e -ire %as been e*tinguis%e'/ $ac+agess%oul' be treate' (it% great care/ since organic $ero*i'es (%ic% %a,e beene*$ose' to %ig% te#$eratures #ay start a ,iolent 'eco#$osition at any ti#eT%is class co,ers #ainly $estici'es an' insectici'es/ but also substances suc% asc%loro-or#/ cyani'es/ stryc%nine an' tear gas"Class %.2 – 'n(ectious substancesT%ese are substances containing ,iable #icro@organis#s/ inclu'ing bacteriu#/,irus/ ric+ettsia/ $arasite/ -ungus or a reco#binant/ %ybri' or #utant t%at are+no(n or reasonably belie,e' to cause 'isease in ani#als or %u#ans" Ho(e,er/t%ey are not sub0ect to t%e $ro,isions o- t%is class i- t%e s$rea' o- 'isease to%u#ans or ani#als e*$ose' to suc% substances is consi'ere' unli+ely"In-ectious substances carry a s$ecial label" In t%e case o- 'a#age or lea+age/

$ublic %ealt% aut%orities %a,e to be noti-ie' i##e'iately"%4' C"ass 4 - Radioacti#e materia"sT%e $ro,isions o- t%is class are base' on t%e $rinci$les o- t%e IAEA>s

Regulations -or t%e Sa-e VTrans$ort o- Ra'ioacti,e Materials" T%ey o--er gui'ance to t%ose in,ol,e' in t%e %an'ling an' trans$ort o- ra'ioacti,e #aterials

43



in $orts an' on s%i$s (it%out necessarily consulting t%e IAEA sa-etyregulations/ alt%oug% re-erences to t%e IAEA Regulations %a,e been inclu'e' int%e Class 5 IM1 Co'e" Pac+ing/ labelling an' $lacar'ing/ sto(age/segregation an' ot%er re)uire#ents ,ary accor'ing to t%e ra'ioacti,ity o- t%e

#aterial" Ra'ioacti,e #aterials are 'i,i'e' into t%ree categories/ 'e$en'ing onra'iation le,els/ Category I being t%e least 'angerous"%5' C"ass 5 - Corrosi#esSubstances in t%is class are soli's or li)ui'sQ t%ey can 'a#age li,ing tissue an'#aterials/ in so#e cases ,ery se,erely" So#e o- t%e# gi,e o-- irritating/

$oisonous or %ar#-ul ,a$ours an' so#e are -la##able or gi,e o-- -la##ablegases un'er certain con'itions" Substances in t%is class #ay be corrosi,e to#etals suc% as alu#iniu#/ 2inc an' tin but not to iron or steel/ (%ile ot%ers arecorrosi,e to all #etals" So#e substances e,en corro'e glass" ater can also

a--ect so#e substances by #a+ing t%e# #ore corrosi,e/ by liberating gases an'/in a -e( cases/ by generating %eat" 1ue to t%ese 'i--erent $ro$erties/ $ac+ing/sto(age an' segregation are e*tre#ely i#$ortant" T%e substances are also'i,i'e' into t%ree $ac+aging grou$s/ $ac+aging rou$ 6 being t%e #ost'angerous" T%e intro'uction to Class 8 gi,es 'etaile' in-or#ation on t%e ty$eso- $ac+aging to be use'" Most -ires in,ol,ing corrosi,e substances can be 'ealt(it% by any e*tinguis%ing agent/ inclu'ing (ater/ alt%oug% t%ose (%ic% are also-la##able s%oul' be 'ealt (it% in t%e sa#e (ay as substances in Class < o- t%eIM1 Co'e" Care #ust also be ta+en in ,ie( o- t%e %ig% ris+ o- $oisoning

t%roug% -u#es" T%is class inclu'es battery aci'/ -or#ic aci'/ caustic so'a an'sul$%uric aci'"%6' C"ass 67$isce""aneousT%is class inclu'es substances/ #aterials an' articles (%ic%/ -or ,arious reasons/'o not co#e (it%in any o- t%e ot%er classes" As t%eir $ro$erties an'c%aracteristics are so ,arie'/ t%e in'i,i'ual sc%e'ules usually inclu'e 'etaile'in-or#ation on sto(age an' segregation/ $ac+ing an' -urt%er obser,ation"

%&8' C"ass &87 $arine +o""utantsMarine $ollutants are substances (%ic%/ because o- t%eir $otential to accu#ulatein sea-oo' or because o- t%eir %ig% to*icity to a)uatic li-e/ are sub0ect to t%e

$ro,isions o- Anne* III o- MARPOL 5<58" Marine $ollutants are not a se$arateclass/ alt%oug% t%ey are regulate' un'er a s$ecial title" Many o- t%e substancesin Class 6to 9 are/ in -act/ consi'ere' to be #arine $ollutants"

IATA Dangerous Goods Regu"ations

T%e International Air Trans$ort Association IATAB recogni2e' in t%e early69=;st%at t%ere (as a nee' to stan'ar'i2e t%e rules go,erning t%e trans$ort o-

44



'angerous goo's by air" T%ese rules (oul' $ro,i'e not only -or t%e sa-e/e--icient trans$ortation o- t%ese #aterials but (oul' also %el$ to i'enti-y an'sto$ un'eclare' an' ot%er $otentially %a2ar'ous s%i$#ents -ro# being carrie'"

3" 1angerous goo's regulations -or ot%er #o'es o- trans$ort :9 airline an'tec%nical e*$erts (ere gi,en t%e tas+ o- $ro'ucing t%e IATA Restricte' ArticleRegulations RARB an' t%e -irst set o- regulations go,erning t%e internationaltrans$ort o- 'angerous goo's (as issue' in 69=7"%ile t%e RAR (as use't%roug%out t%e in'ustry by all #ain carriers/ t%ey (ere only a$$licable to IATA#e#bers an' t%eir a'o$tion an' use (ere ,oluntary"

Nonet%eless/ o,er 8; countries a'o$te' t%e RAR in t%eir national legislation"Ho(e,er/ since t%ey coul' not be e--ecti,ely en-orce'/ t%e regulations coul'

only ac%ie,e so #uc% in t%e relati,ely s#all air trans$ort in'ustry o- t%at ti#e"In t%e early eig%ties/ IATA re)ueste' t%e International Ci,il A,iationOrgani2ation ICAOB to incor$orate t%e RAR in a set o- regulations (%ic%(oul' be bin'ing on all states in,ol,e' in ci,il a,iation an' #e#bers o- t%eC%icago Con,ention" As a result/ t%e Air Na,igation Co##ission o- ICAO'e,elo$e' in 6986 Anne* 68 to t%e C%icago Con,ention in res$onse to a nee'-or an internationally agree' set o- $ro,isions go,erning t%e sa-e trans$ort o- 'angerous goo's by air" T%e $ro,isions o- t%is Anne* are base' on t%eReco##en'ations o- t%e Unite' States Co##ittee o- E*$erts on t%e Trans$ort

o- 1angerous oo's an' t%e Regulations -or t%e Sa-e Trans$ort o- Ra'ioacti,eMaterials o- t%e IAEA" T%e $ro,isions o- Anne* 68 are a#$li-ie' by t%e ICAOTec%nical Instructions -or t%e Sa-e Trans$ort o- 1angerous oo's by Air ICAOTI>sB/ -irst $ublis%e' in 698<"

Ho(e,er/ IATA recogni2e' t%at t%e goal o- go,ern#ent legislation (as to $ro'uce a legal 'ocu#ent (%ic% coul' be easily use' in court to en-orce t%erules" T%is is so#eti#es at o''s (it% clear an' $lain instructions on %o( toco#$ly (it% t%e legal re)uire#ents" %ile t%is is not so i#$ortant (%en 'ealing(it% ta*ation/ t%e cri#inal co'e an' so on/ it is a serious concern (%enconsi'ering sa-ety issues suc% as %ig%(ay rules an' 'angerous goo'sregulations" Conse)uently/ IATA 'eci'e' to continue $ublis%ing its Regulations

but (it% a rene(e' -ocus on $ro,i'ing t%e rules in as clear/ $recise an'una#biguous -as%ion as $ossible" T%is is in'ee' t%e i'ea o- t%e current IATA1angerous oo's Regulations/ (%ic% re$lace t%e RAR an' are $ublis%e'annually (it% t%e latest rules on t%e trans$ort o- 'angerous goo's by air -ro#states/ o$erators an' t%e ICAO" It constitutes a #anual o- in'ustry carrier regulations to be -ollo(e' by all IATA #e#ber airlines" %ile it %as noregulatory basis/ it incor$orates all ICAO re)uire#ents an' sets %ig%er criteria

-or #e#ber airlines"

45



IMPORTANT POINTS 3OR HAAR1OUS MATERIALS

#a*7a!in! 89: C&R 65;<

A$$ro,e' UN sta#$e' %a2ar'ous #aterials $ac+aging syste#s are (an"ato/

-or %a2ar'ous #aterials s%i$$ing" UN sta#$e' %a2ar'ous #aterials $ac+agingsyste#s are a$$ro,e' by t%e Unite' Nations Trans$ortation oar' -or t%etrans$ort o- %a2ar'ous #aterials" UN $ac+aging syste#s are 'esigne' an'constructe' to $re,ent a release o- %a2ar'ous #aterial 'uring trans$ortation"Pac+aging syste# re)uire#ents are s$eci-ic to t%e ty$e o- %a2ar'ous #aterialo--ere' -or s%i$$ing"ackaging $angero+s goo$s is t&e s&ipper;s responsiilit*< )&e s&ipper m+st limit t&e =+antit* of $angero+s goo$s inaccor$ance it& t&e ist of .angero+s oo$s

< )&e s&ipper m+st +se t&e correct packaging an$ follo t&eappropriate packing instr+ctions' assemling an$ sec+ring allcomponents of t&e packaging e#actl* in t&e manner inten$e$< )&e s&ipper m+st ens+re t&at all of &is responsiilitiesassociate$ it& t&e package &a%e een complete$ correctl*&en &e presents t&e package to an operator

Ma7in!s 89: C&R 653=;44<Pro$er #ar+ings on s%i$#ent containers are (an"ato/ -or s%i$$ing a%a2ar'ous #aterial" Pac+ages (it% i#$ro$er or inco#$lete in-or#ation (illty$ically not be 'eli,ere' to t%eir 'estination" In a''ition/ suc% %a2ar'ous#aterial $ac+ages t%at are in,ol,e' in a s$ill or $ersonal in0ury 'uring trans$ort/can result in $ersonal liability i#$acts"

T%e -ollo(ing ite#s are re)uire' to #ar+e' on any $ac+age containing a%a2ar'ous #aterial!

• Pro$er s%i$$ing na#e• UNNA I1 nu#ber

• Tec%nical na#es na#e o- c%e#icalsB being s%i$$e'

• Consignee or Consignor>s na#e an' a''ress

All the Ma7in!s ($st %e

Attac%e' to or $rinte' on t%e $ac+age"

1is$laye' on bac+groun' o- contrasting colour

1urable an' $rinte' in Englis%

UN@obscure' an' a(ay -ro# ot%er #ar+ings

46



La%els 89: C&R 653=944<

Pro$er labels on s%i$#ent containers are (an"ato/ -or s%i$$ing a %a2ar'ous#aterial"

• C%oose $ro$er labelsB

• Pac+ages #ay %a,e #ore t%an 6 label• Labels can be $urc%ase'

All la%els ($st %e

Attac%e' to or $rinte' on t%e $ac+age"

UN@obscure' an' a(ay -ro# ot%er #ar+ings"

Locate label (it%in 7 o- #ar+ing

Shippin! #apes 89: C&R 653=344<

T%e accurate co#$letion o- $ro$er s%i$$ing $a$ers is re)uire' -or all %a2ar'ous#aterials s%i$#ents"

• May be a ill o- La'ing or ot%er a$$ro,e' s%i$$ing 'ocu#ent"

• Must contain t%e -ollo(ing!

Pro$er 1OT s%i$$ing 'escri$tion inclu'ing $ro$er s%i$$ing na#e/

%a2ar' class/ UNNA I1 nu#ber an' $ac+ing grou$" SeeHAMAT TableB

Total Fuantity

E#ergency Res$onse In-or#ation

S%i$$er Certi-ication

S%i$$er na#e an' a''ress

AIR CARGO CONTAIN)RI9ATION&ippers can realie sa%ings an$ minimie cargo loss *containeriing t&eir air cargo s&ipments Airlines enco+rage +seof containers * pro%i$ing special tari>s for containerie$ /A? (/reig&t-All-?in$s! s&ipments on man* ro+tes Certaincommo$ities are e#cl+$e$ from air cargo /A? special rates

Air carriers prefer containerie$ s&ipments for a n+mer of reasons:

47



Re'uces t%e nu#ber o- in'i,i'ual $ieces o- cargo t%at #ust be %an'le' in

ter#inals"

Pro,i'es -or #ost e--icient use o- cubic ca$acity o- t%e aircra-t"

Per#its use o- #ec%anical %an'ling syste#s an' e)ui$#ent to best

a',antage"

S$ee's loa'ing an' unloa'ing o- aircra-t"

Mini#i2es e*$osure o- cargo to (eat%er/ t%e-t/ $il-erage an' %an'ling

'a#age (%ile in custo'y o- t%e carrier"

Ai Ca!o Containes &all into &o$ 0asi* Cate!oies

6= Ai Ca!o #allets

1esigne' -or use (it% con,eyor syste#s in ter#inals an' in aircra-t" T%e lo(@ $ro@-ile -lat $allet is e)ui$$e' (it% -ittings -or securing t%e $allet -ir#ly to t%e#ain 'ec+ o- an all@cargo aircra-t" Cargo is nor#ally secure' to t%e $allet by useo- cargo nets/ tig%tene' o,er cargo by t%e a$$lication o- tensione' stra$s"

3= Conto$e" Ai Ca!o Containes

Contoure'/ se#i@structural co,ers calle' Ty$e KAKare use' to $ro,i'e $rotection-or cargo an' +ee$ cargo (it%in sa-e 'i#ensions -or loa'ing in aircra-t"

T%ese containers #ay %a,e one si'e -rontB o$en/ (it% cargo secure' by nets or %a,e #etal or -iberglass re#o,able 'oors/ (%ic% are ca$able o- being seale'"

;= Lo.e De*7 Containes

1e,elo$e' -or use in t%e lo(er 'ec+ cargo s$aces o- %ig%@ca$acity aircra-t/ t%eyare -ully structure' an' co#$letely enclose'"

Cargo is loa'e' into t%e container/ (%ic% #ay be e)ui$$e' (it% s%el,es-or acco##o'ation o- s#all or irregularly s%a$e' cargo"

T%e container 'oors o- #etal/ -abric or a co#bination o- bot% are close'an' seale'"

Containers are loc+e' 'irectly into air@cra-t restraint syste#s (it%outnee' -or nets or tie@'o(ns" Pro,i'e 'unnage or s%el,ing to $re,ent crus%ing o- cargo at recesse' en' o- lo(er 'ec+ container"9= 0o>-T/pe Containes

1e,elo$e' in stan'ar' si2es to -acilitate establis%#ent o- uni-or# s%i$$ingrates/ t%ey are use' to consoli'ate s%i$#ents"

o*@ty$e containers are o-ten use' by -reig%t -or(ar'ers to consoli'ates%i$$ers cargo into one easily %an'le' an' rate' unit"

T%ese containers are constructe' o- (oo'/ -iberglass/ $ly(oo'/ -iberboar'/#etal or co#binations o- t%ese #aterials"

Ai *a!o han"lin! Aea an" fa*ilit/W I#$ort cargoW Co##ercial cargoW Unacco#$anie' baggage

48



W ?aluable ite#s li+e 0e(ellery & 'ia#on'sW E*$ort cargoW Co##ercial cargoW Outgoing unacco#$anie' baggage

W ?aluable ite#s li+e 0e(ellery & 'ia#on's&a*ilities 1

W Se$arate go'o(ns -or e*$orts/ i#$orts & unacco#$anie' baggageW E*a#ination %alls -or e*$orts & i#$ortsW E*$erience' sta-- at all t%e %an'ling area"W Su--icient %an'ling e)ui$#ent -or t%e air cargo

Go$n" S$ppot E?$ip(ent

So#e e)ui$#ent is $laying a ,ery i#$ortant role in E*$ort an' I#$ort cargo"roun' su$$ort e)ui$#ent Ta*ing in$us%ing bac+ Go$n" s$ppot

e?$ip(ent 8GSE< is -oun' at an air$ort/ usually on t%e ra#$/ t%e ser,icing area by t%e ter#inal" T%is e)ui$#ent is use' to ser,ice t%e aircra-t bet(een -lig%ts"As its na#e i#$lies/ SE is t%ere to su$$ort t%e o$erations o- aircra-t on t%egroun'" T%e -unctions t%at t%is e)ui$#ent $lays generally in,ol,e groun' $o(er o$erations/ aircra-t #obility/ an' loa'ing o$erations -or bot% cargo an'

$assengersB"

Catein! +ehi*le1Many airlines subcontract groun' %an'ling to an air$ort or a %an'ling agent/ or e,en to anot%er airline" roun' %an'ling a''resses t%e #any ser,icere)uire#ents o- a $assenger aircra-t bet(een t%e ti#e it arri,es at a ter#inalgate an' t%e ti#e it 'e$arts on its ne*t -lig%t" S$ee'/ e--iciency/ an' accuracy arei#$ortant in groun' %an'ling ser,ices in or'er to #ini#i2e t%e turnaroun' ti#et%e ti#e 'uring (%ic% t%e aircra-t re#ains $ar+e' at t%e gateB" S#all airlinesso#eti#es subcontract #aintenance to a #uc% larger an' re$utable carrier/ as itis a s%ort@ter# c%ea$er alternati,e to setting u$ an in'e$en'ent #aintenance

base" So#e airlines #ay enter into a Maintenance an' roun' Su$$ortAgree#ent MASAB (it% eac% ot%er/ (%ic% are use' by airlines to assesscosts -or #aintenance an' su$$ort to aircra-t"Most groun' ser,ices are not 'irectly relate' to t%e actual -lying o- t%e aircra-t/an' instea' in,ol,e ot%er ser,ice tas+s" Cabin ser,ices ensure $assenger co#-ort an' sa-ety" T%ey inclu'e suc% tas+s as cleaning t%e $assenger cabin an're$lenis%#ent o- on@boar' consu#ables or (as%able ite#s suc% as soa$/

$illo(s/ tissues/ blan+ets/ an' #aga2ines" Security c%ec+s are also #a'e to#a+e sure no t%reats %a,e been le-t on t%e aircra-t"

49



Cho*7s Tolle/ fo pallets Tolle/ fo *ontaines

C%oc+s are use' to $re,ent an aircra-t -ro# #o,ing (%ile $ar+e' at t%e gate or in a %angar" C%oc+s are $lace' in t%e -ront an' bac+ o- t%e (%eels o- lan'inggear " T%ey are #a'e out o- %ar' (oo' or %ar' rubber "

0a! *ats

aggage carts are use' -or t%e trans$ortation o- luggage/ #ail/ cargo an' ot%er

#aterials bet(een t%e aircra-t an' t%e ter#inal or sorting -acility" Carts are -itte'(it% a bra+e syste# (%ic% bloc+s t%e (%eels -ro# #o,ing (%en t%e connectingro' is not attac%e' to a tug" Most carts are co#$letely enclose' e*ce$t -or t%esi'es (%ic% use $lastic curtains to $rotect ite#s -ro# (eat%er

Tollies fo *ontaines an" pallets

T%e trolley -or containers an' $alettes are use' -or t%e trans$ort o- loa's $lace'in containers an' on $allets" T%e bot% +in's o- trolley %a,e inbuilt rollers or

balls in t%e s$ace -or t%e acce$tance o- containers or $allets -or t%eir easier

#o,ing" T%e containers or $allets on trolleys #ust obligatory be secure' (it% built@in -uses" T%e #ec%anical bra+e/ 'e$en'ing on construction bloc+s t%e(%eels (%en t%e $ole o- trolley is raise' in air or is on t%e groun'"T%e trolleys -or containers %a,e re,ol,ing $attern to #a+e containers turne'aroun' in 'irection o- loa'ing on aircra-t" On all trolleys t%e $arts as bra+e -or (%eels bloc+ing/ t%e (%eels/ t%e $ole/ t%e %oo+ -or connecting/ -uses o- re,ol,ing $lat-or#/ an' -uses -or bloc+ing containers or $allets #ust be in or'er or (it% t%e# is $ro%ibite' any trans$ort"

#o.ee" e?$ip(ent

Ref$elles

Hy'rant truc+ aircra-t re-ueller

50



Aircra-t re-uellers can be eit%er a sel- containe' -uel truc+/ or a %y'rant truc+ or cart" 3uel truc+s are sel- containe'/ ty$ically containing u$ to 6;/;;; US gallonso- -uel an' %a,e t%eir o(n $u#$s/ -ilters/ %oses/ an' ot%er e)ui$#ent" A %y'rant

cart or truc+ %oo+s into a central $i$eline net(or+ an' $ro,i'es -uel to t%eaircra-t" T%ere is a signi-icant a',antage (it% %y'rant syste#s (%en co#$are'to -uel truc+s/ as -uel truc+s #ust be $erio'ically re$lenis%e'

T$!s an" ta*tos

T%e tugs tractors at an air$ort %a,e se,eral $ur$oses an' re$resent t%e essential $art o- groun' su$$ort ser,ices" T%ey are use' to #o,e any e)ui$#ent t%at cannot #o,e itsel-" T%is inclu'es bag carts/ #obile air con'itioning units/ air starters/ la,atory carts/ an' ot%er e)ui$#ent"

Go$n" po.e $nits Aipot 0$s

A groun' $o(er unit is a ,e%icle ca$able o- su$$lying $o(er to aircra-t $ar+e'on t%e groun'" roun' $o(er units #ay also be built into t%e 0et(ay/ #a+ing ite,en easier to su$$ly electrical $o(er to aircra-t" All aircra-t re)uire :8? o- 'irect current an' 66;? 4;; H2 o- alternating current" T%e electric energy is carrie' -ro# a generator to aconnection on t%e aircra-t ,ia a ,ery t%ic+ cable" T%ese connectors are stan'ar'-or all aircra-t

Containe loa"e

T%e loa'er -or (i'ebo'ie' aircra-t cargo $lat-or#B is use' -or loa'ing an'unloa'ing o- cargo $lace' in containers or on $allete" T%e loa'er %as t(o

$lat-or#s (%ic% in'e$en'ently raise or co#e 'o(n" T%e containers or $aletteson t%e loa'er are #o,e' (it% t%e %el$ o- built@in rollers or (%eels/ an' arecarrie' in aircra-t across t%e $lat-or#s"

Containe Tanspote A )et ai state

51



T%e trans$orters are cargo $lat-or#s constructe' so t%at besi'e loa'ing an'unloa'ing can trans$ort cargo" 1e$en'ing on t%e ty$e an' loa' ca$acity t%e

containers coul' be trans$orte'/ an' t%e sa#e is ,ali' -or greater trans$ortersan' $alettes"

An air starter is a ,e%icle (it% a built@in gas turbine engine (%ic%/ 'uring t%estart o- aircra-t engine/ gi,es t%e necessary )uantity o- air to start t%e engine"%ile a co#$ressor cannot 'eli,er t%e necessary )uantity o- air -or its o(n(or+/ t%e air is $ro,i'e' by an air starter" An air starter blo(s air in by a %oseattac%e' to aircra-t"

De@anti-i*in! +ehi*les

T%e $roce'ure o- 'eanti@icing/ $rotection -ro# -lui's -ree2ing u$ on aircra-t/ is'one -ro# s$ecial ,e%icles" T%ese ,e%icles %a,e boo#s/ li+e a c%erry $ic+er / toallo( easy access to t%e entire aircra-t" A %ose s$rays a s$ecial #i*ture t%at#elts current ice on t%e aircra-t an' also $re,ents so#e ice -ro# buil'ing u$(%ile (aiting on t%e groun'"

3UEL SURCHARE ANALSIS

Date Destination Airlines FuelSurcharge

Crude oilprices

52



(Euro/kg) (Euro/Barrel)

29/11/200 !ilan to!u"#ai

$u%thansa 0&9 '&2

22/01/2009 *uren#org

to !u"#ai

$u%thansa 0&+ '1&0

0+/2/2009 Dusseldorgto !u"#ai

$u%thansa 0& '1&

12/2/2009 Frank%urt to!u"#ai

$u%thansa 0&+ ',&0'

19/02/2009 Frank%urt to!u"#ai

$u%thansa 0& ,9&

2/02/2009 !ilan to!u"#ai

$u%thansa 0& '0&22

e %a,e i'enti-ie' a strong

$ositi,e correlation bet(een t%e cru'e oil $rices an' -uel surc%arge" e -in't%at t%e -uel surc%arge increases (it% e,ery increase in t%e cru'e oil $rices"

T%is can be illustrate' (it% t%e %el$ o- t%e gra$%!@

53

Correlation is 0&921'1



+ft&ansa +ft&ansa +ft&ansa

0

10

20

30

40

50

60

Cr+$e oil prices

/+el +rc&arge

54



Air n$ia ene"ts to @):-

oo+ing& s$ace $riority -or L&T

Pre-erre' custo#er status

?olu#e 'iscounts an' s$ecial rates -or all L&T units an' subsi'iary

co#$anies across t%e country No'al $oint -or $ro,i'ing Air -reig%t ser,ices

Pre-erre' ,alue a''e' ser,ices

Si#$li-ication o- $roce'ures

One $oint contact at National HF an' no'al o--ices at i#$ortant stations

across t%e country an' roun' t%e cloc+ boo+ing E*$loring Syste# integration solutions

Air In'ia is )uite an attracti,e o$tion to be consi'ere' as a ser,ice $ro,i'er -or

L&T" Also/ Air In'ia is en%ancing its o$erations in Asia/ an e#erging econo#ic

$o(er%ouse" T%is (oul' (ell -oster t%e co#$any $lans to access t%e Asian

#ar+ets in a better #anner"

55



CA ). / @)

Air C%arter -ro# Mu#bai to Russia

A critical syste#/ #a'e in Talegaon/ near Pune (as to be #o,e' -ro# Mu#baito Russia (it% #ini#u# trans@s%i$#ent" It consiste' o- =: bo*es o- cargo

(eig%ing a$$ro*" 7; MT in Marc% :;;9"

1i#ensions o- t%e biggest bo* (ere Lengt% 9"7 #/ i't% 4"4 # an' Heig%t :"5

# an' its (eig%t (as a$$ro*" := MT"

%ic% aircra-t (as c%osen an' (%yX

Antono, 6:4 6;; (as c%osen/ since it %as an Internal i't% o- 7"4 # an'

Internal Heig%t o- 4"4 #" T%is aircra-t can carry cargo u$to 6;; MT" Since t%e#o,e#ent o- t%is consign#ent in,ol,e' #ulti$le %an'ling trans@s%i$#ents/

In'ian Na,y e*$resse' a 'esire t%at t%e entire consign#ent be 'is$atc%e' to

Russia in a s$ecial c%artere' aircra-t/ 'uly a$$ro,e' by it"

To get an a$$reciation o- t%e ,olu#e o- t%e consign#ent/ it (oul' be (ort%

noting t%at -i,e trailers an' t(o truc+s (ere engage' -or roa' trans$ortation

-ro# L&T Talegaon to Mu#bai Air$ort" T%e Main Asse#bly (as e*tra (i'e

an' %ence an escort %a' to be $ro,i'e'" Certain #o'i-ications in t%e (oo'en

$ac+ing/ as suggeste' by t%e airlines/ (ere un'erta+en an' co#$lete' outsi'e

t%e Mu#bai Air$ort gate"

On arri,al an' rea'iness o- t%e aircra-t/ t%e loa'ing (as co#$lete' un'er LMCs

su$er,ision" S$ecial loa'ing e)ui$#ent/ suc% as ra#$s an' (inc%es an' o,er@

%ea' cranes a,ailable on@boar' t%e aircra-t/ enable' to loa' t%e cargo s#oot%ly"

T%e entire trans$ortation cycle in,ol,e' close co@or'ination (it% HE1>s Pro0ect

Manage#ent rou$/ Mar+eting an' Purc%ase 1e$art#ents at Po(ai an' HE1

$ersonell at Talegaon/ Pac+ing S$ecialist/ Roa' Trans$orter/ 3reig%t 3or(ar'er/

3reig%t 3or(ar'er>s Agent/ Custo# Clearing Agent/ Octroi Agent/ Airline Sta--

an' roun' Han'ling Sta-- at t%e air$ort" T%e 'uration o- t%e entire e*$erience

(as = 'ays -ro# 6=t% to 69t% Marc%/ :;;9B

56



T%e $icture o- t%is Aircra-t is s%o(n belo(!@

57



0i%lio!aph/

Maga2ines

.aul .a$il/ Pro#ise o- e*citing Ti#es" Sur,ey o- In'ian In'ustry :;;8

Cargo Ti#es

ebsites

Air -reig%t c%arging structure

%tt$!((("air$ortsin'ia"org"incargosc%e'uleYrates"0s$

IATA at Air Trans$ort In'ustry>s

%tt$!((("iata"orgin'e*"%t#

58

http://www.airportsindia.org.in/cargo/schedule_rates.jsp

http://www.iata.org/index.htm

http://www.airportsindia.org.in/cargo/schedule_rates.jsp

http://www.iata.org/index.htm



PROJECT LEARNINS

T%e $ro0ect %as $ro,i'e' i##ense +no(le'ge about t%e ,arious as$ects o- air

logistics" e %a,e stu'ie' t%e IATA rate structure as (ell as t%e #anner in(%ic% t%e -reig%t rates are calculate'" e %a,e also analyse' t%e -actors t%at

a--ect t%e -reig%t rates" T%is %el$s us to better un'erstan' t%e nature an' reasons

be%in' t%e -reig%t rate -luctuations"

T%oug% (e +no( t%e cru'e oil $rices an' -uel surc%arge are correlate'/ (e

%a,e a concrete $roo- (it% %el$ o- a #at%e#atical #o'el an' also (e are able to

i'enti-y t%e tren' as -ar as t%e -uel surc%arge is concerne'" it% t%e %el$ o- t%is

tren'/ (e can ,isuali2e t%e -uel surc%arge increase t%e ser,ice $ro,i'ers (oul'un'erta+e in t%e -uture"

In t%is #anner/ (e can -acilitate better 'ecision #a+ing" As a $art o- t%e $ro0ect/

-iel' ,isits (ere arrange'" T%e -ollo(ing $laces (ere ,isite'!@

Carrier 3reig%t Station C3SB

East est Carriers P,t" Lt'/ (%ic% is a -reig%t -or(ar'ing co#$any

T%e #eetings (ere ,ery $ro'ucti,e an' ga,e an insig%t into actual -iel'" T%e

$ro0ect %as nu#ber o- learnings in -or# o- in-or#ation collecte' t%roug% suc%

-iel' ,isits an' #eetings" T%e in-or#ation obtaine' is gi,en as -ollo(s!@

3uel Surc%arge 3SCB is a$$licable on gross (eig%t c%argeable (eig%t"

In US/ C%ina/ c%argeable (eig%t is consi'ere' an' in In'ia/ gross (eig%t

is consi'ere'" ?olu#e is co#$are' (it% (eig%t an' (%ic%e,er is %ig%er is consi'ere'"

O1C O,er 1i#ensional CargoB 'e$en's on aircra-t ty$es" It is 'i--erent

-or -reig%ters an' $assenger airlines" O1C 'e$en's on t%e sector an' eac% airline 'e$en's on aircra-t ty$e"

3SC calculation is 'i--erent -ro# airline to airline"

Air$ort c%arges in In'ia are %ig%er t%an t%at o- neig%bouring countries"

T%is is inbuilt into t%e basic -reig%t rate" SC ar Surc%argeB is a'0uste' to(ar's %ea,y insurance $re#iu#"

3SC 'e$en's on origin air$orts only an' not on 'estination

59

air logistics analysis

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