BIAL plagued by cargo inefficiencies

In my visit report of 28-May-2008, I have highlighted the shortcomings of BIAL in the services and cargo areas. On 7-June, CNBC-TV18 is confirming, the situation is far from acceptable.

If you are sending a package to or from Bangalore, be prepared for a delay of at least two days. That's not all, you will be paying more for it too! Air cargo agents are struggling to cope with inadequate facilties at the new Bangalore Airport.

Freight forwarders in Bangalore are up in arms. They claim that the ground handling at the new airport is not smooth. They say the cargo is not being off loaded on time and on several instances, entire consignments have gone missing. There is also the problem of warehousing. Logistics companies claim all the warehousing space at the new airport is being monopolized by DHL.

Shesh Kulkarni, President, UTI Worldwide said, "One company has been given an undue advantage which is an unfair business trade practice, this was not transparent and nobody was told how this happened. They seem to have got 12,000 sq ft of space inside premises."

The lack of warehousing and office space at the airport means cargo and employees have to be transported into the city and back to the airport at Devanahalli everyday. It is pushing operational costs by nearly 40%; a cost freight companies say they will pass it on to their customers.

Nirmal Singh Sandhu, President, Bangalore Air Cargo Club said, "We have made some rough working. Costs will go up by 30-40% because it is a direct cost."

Some companies have begun moving cargo to Chennai by road because its simply faster that way. The Air Cargo Club in Bangalore plans to meet with officials at Bangalore International Airport Limited (BIAL) to put forward their requests. They say if their demands are not met they will consider taking legal action against BIAL for unfair trade practices.



I have made some specific proposals for improvement earlier. The losses have already commenced. Insurance may cover losses, but without meaning to sound bombastic, any loss of cargo, is a national loss, and a loss to Bangalore.

Cargo is the core reason of an airport, as far as industry is concerned. With the lack of a seaport in Bangalore the criticality only increases adding to the pressure.

India ranks a lowly 39th in the World Bank's Logistics Performance Index. In all crucial benchmarks India was below rank 40, only the competence of the people in the clearing process (customs excluded) at rank 31, salvaged the overall ranking. This has to improve, and Bangalore has always led the way.

Both the warehouses (Menzies Bobba and AI-SATS) have not taken advantage of the 2 month delay, and are just not ready. Their services are not up to international standards. From reports of airlines, air cargo agents, customs house agents, the situation will stabilise only after 1~1.5 months. This is simply unacceptable. It needs to be set right in 15 days.

BIAL was brought in to deliver a "world class" airport, and this includes cargo. BIAL has to accept a simple fact, ultimately, BIAL is responsible to deliver. The buck stops at Mr. Brunner's desk.

India has established the WRDA, and BIAL management has to realise that it is ultimately responsible for delivering "Global Service" quality levels. It needs to be the big, bad, bar bouncer, and push its people and partners, in to delivering. If any operator cannot deliver results, they should be suspended from operation till they improve.

Some suggestions for BIAL management and their concessionaires' managements

a.
BIAL management should recognise that cargo and logistics operations are a vital part of an airport and its interaction and impact is with a much larger hinterland, when compared to its passenger catchment area. Failures will have much more widespread impact.
b.
Engage with Chambers of Industry and operate with them in an open and transparent manner.
c.
Create a joint Cargo-Terminal, Airline, Cargo-Agent, Customs-Agent and Industry Chambers task force that will meet and measure, on a monthly basis the :

• Effectiveness and Efficiency of the clearing process
• Infrastructure
• Ease and affordability
• Competence of the clearance process and people
  
• Package Traceability
• Reliability and repeatability i.e. confidence level

d.
Bring in the managements of both Menzies Aviation Bobba and Air India-Singapore Airport Terminal Services and get categoric commitments on SLAs, with penalties payable to airlines, importers/exporters, for the following :

• Import Bonding - Target 3 hours
• Import IGM filing - Target 3 hours (if airlines do not comply, ban them)
• Cargo Traceability - No more than 1 hour. GMP or GS1 standards.
  
• Exports - Target 2 hours
• Goods vehicle parking - No truck should stand on the service road
• Infrastructure
  

e.
Make a parking for all the commercial vehicles at the airport. The service road is choked with lorries, LCVs, mini-trucks, goods auto-rickshaws, etc., encroaching and eating up the existing road space.
f.
Need to enforce basic GMP and GS1 standards in warehousing.
g.
Strongly consider adding a third cargo terminal, but ensure you get a very high quality vendor.
h.
Add specialist warehousing options, to increase the value proposition. For example Frozen (below 20 Deg C), Chilled (-4 to +4 Deg C), Cold Room (+4 to +15 Deg C) abilities.
i.
Provide public facilities and toilets for the employees.

These initial steps initiated and monitored by BIAL, and executed by its concessionaires, will go a long way in restoring the fast eroding credibility, and credibility of a business is a very elusive but vital asset.