India airfreight growth expected to trump ship and rail development

THE Associated Chambers of Commerce and Industry of India (ASSOCHAM) is predicting that the aviation sector will continue to outperform the nation's railways and shipping lines in coming years.

The ASSOCHAM study, entitled "Changing Pattern of Cargo Traffic in India" covers 2000 - 2007 and shows airfreight growing 19 per cent against 10.3 per cent growth for shipping and 9.2 per cent for rail.

This comes after the airfreight sector surpassed the traditionally preferred railways and shipping mode of transport for cargo over the last three years, reported India's Infoline News Services.

It said that with the deployment of dedicated cargo aircraft on international and domestic routes, the airfreight sector is expected to cut into rail and shipping market share.

Figures indicate domestic airlines saw freight volume rise 34 per cent this year, while international air cargo movements grew 15 per cent.

Domestic airlines, logistic firms and retail majors plan to launch dedicated freight aircraft, the report said, while rail and ship traffic would suffer declines.

ASSOCHAM expressed concern about the slowdown in key infrastructure sectors, noting that the growth rate of rail freight shrank to 6.9 per cent from April to June 2007 compared to 7.4 per cent in the same quarter last year, with airfreight picking up the slack.

Indian shipping suffered a drop in growth of 11.3 per cent in 2004-05 to 10.4 per cent in 2005-06, again falling 9.5 per cent this year. By comparison, airfreight in India rose from 15.6 per cent in 2005-06 to 21.5 per cent in 2006-07, recording a compound annual growth rate of 9.5 per cent for the last six years.