CBRE South Asia’s latest report titled, ‘Tier-II Cities: The Time to Shine’ highlights that nearly 35 major domestic and global retail brands entered 14 tier-II cities in the Jan-Sep’23 period, indicating a surge in warehousing activity in these locations. These 14 cities include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore, and Coimbatore. As per the report, several domestic and international retail brands, including Croma, Armani Exchange, Malabar Gold & Diamonds, Reliance Smart, Tanishq, H&M, Marks & Spencer, GAP, Starbucks, Pizza Express, Under Armour, among others, have expanded their retail footprint to tier-II cities in Jan-Sep’23 period. According to the report, the total retail stock in these 14 tier-II cities stood at 29 mn. sq. ft. as of Sep’23, with Jaipur, Lucknow, and Chandigarh each boasting retail stock ranging between 3 to 7 mn. sq. ft. The retail development in these cities has been a healthy mix of high streets and malls. The total retail supply recorded in these 14 cities has been ~2.4 mn. sq. ft. during Jul-Sep ’23. Top cities dominating supply addition during this period include Chandigarh, Jaipur and Lucknow. The total absorption across the 14 cities stood at 2.4 mn sq. ft. in Jul-Sep’23 period, led by Kochi, Jaipur, and Goa.

With an aim to maximize its freighter operations in 2024, IndiGo is tailoring its services to cater to the specific cargo needs, such as e-commerce, perishables, and time-sensitive items. The company is also focusing on enhancing the cargo terminal infrastructure in Tier-1 and Tier-2 cities, as well as evaluating the addition of more routes for China and Southeast Asia, to create air cargo-friendly routes, ensuring efficient and seamless transportation. IndiGo leverages its unique advantage by strategically deploying freighters on high-demand routes that complement its extensive domestic network. It provides belly cargo space in its fleet of 300+ aircraft along with three dedicated A321F freighters are key to achieving a target 10 million MT by 2030.

Mahendra Shah, Chairman and Managing Director, V-Trans (India) shares, “Attention of the current Government has been substantial on enhancing logistic and supply chain efficiency. We expect policymakers to support the same further and also take steps to reduce supply chain costs. Many measures taken to boost manufacturing have started showing results and an efficient supply chain will boost the cause further. In the forthcoming budget, we look forward to improved outlay for logistics Infrastructure. Regulatory and budgetary support for Fast-tracking multimodal logistics infrastructure projects is needed. In the last year, ULIP has already been operational, but the need of the hour is its faster adoption across the stakeholders. In the forthcoming budget, steps for easy usage of ULIP will help in waste reduction and improve interoperability in logistics. It is a sector that has a significant contribution to carbon emissions. We look ahead towards the initiatives for faster adoption of green logistics. Incentives and easier access to funds for the adoption of sustainable logistics can be a good option to move forward. Being a major player in road transportation, we would like to draw the attention of the Government towards issues related to drivers. The government needs to introduce some schemes in the logistics industry for drivers. Last but not least will be bringing petroleum products under the purview of GST. Fuel is the largest component of our expenses. Once the industry gets input credit benefit on fuel, it will be a major boost.”

IndoSpace has signed MoU with the Tamil Nadu Government to invest staggering INR 2000 crore to enhance the state’s industrial landscape and economic growth. This investment by IndoSpace is anticipated to generate 15,000 new jobs, providing a substantial boost to employment opportunities in the state. Rajesh Jaggi, Vice Chairman – Real Estate, Everstone Group, said: “Tamil Nadu continues to be a very important destination for us in developing industrial parks. It makes us proud that in providing world-class industrial logistics facilities to our clients, we are also able to contribute to enhancing the state’s industrial infrastructure. Signing this MoU is significant for us as it reaffirms the government’s trust in our capabilities. We are confident that this partnership will not only contribute to Tamil Nadu’s economic development but also work towards strengthening the overall economy for the nation.” IndoSpace has an existing land bank of approximately 600 acres in the region. With an expansive presence of 14 Grade A industrial and logistics parks strategically located around the main industrial hubs, IndoSpace has developed and leased around 13 mn. sq. ft. with a total investment of approximately INR 4000 crore in the state. This MOU with the Tamil Nadu Government is a part of the organisation’s continued commitment towards supporting industrial requirements and has led to the planning of an additional 5 mn. sq. ft. of land in the state.

“With ongoing enhancements to our online booking capabilities, we will continue to invest in our digital platforms, shares ” Camilo Garcia Cervera, Chief Sales and Marketing Officer at IAG Cargo. He adds, “Embracing a cloud-first approach, we’re migrating all applications to cloud environments for scalability, flexibility, and improved data accessibility. The airfreight industry is rapidly embracing a digital future, marking a transformation shift in approach. At IAG Cargo we have recently made substantial technological investments in our operation, notably in our cargo handling capabilities, opening a semi-automated state-of-the-art Premium facility at London Heathrow, and at our Madrid hub we have implemented a new Material Handling System– which enhances efficiency and automation of cargo handling processes.””

Vipin Vohra, Chairman, Continental Carriers, says, “In the forthcoming budget, Finance Minister Nirmala Sitharaman faces the challenge of charting India’s economic trajectory in an election year. Acknowledging the nation’s aspirations to become the third-largest economy by 2030, this interim budget serves as a pivotal guide for the road ahead. With favorable conditions of low inflation and robust GDP growth, the government’s focus on the ‘Make in India,’ ‘Digital India,’ and ‘Start-Up India’ initiatives has attracted multinational corporations, propelling economic expansion. The logistics industry, a crucial driver of economic efficiency, anticipates key policy measures to streamline operations. Expectations include simplified regulations, a ‘single window’ for approvals, and a reconsideration of permanent GST exemptions for international transportation services. The budget strategy must align with the PLI schemes and infrastructure investments to mitigate domestic logistics costs and enhance India’s supply chain efficiency, addressing current disparities in global Logistics Performance Index rankings. Additionally, the implementation of the National Logistics Policy and ‘Make in India’ schemes necessitates the alleviation of congestion at international airports. The budget should incentivize off-airport cargo handling locations to ease this strain. Furthermore, a growing call for increased budgetary allocations towards upskilling and vocational training highlights the need to bridge the skill gap and empower the workforce for effective utilization of emerging technologies in the logistics sector. Rationalizing and simplifying cargo movement costs, fostering an ‘Open Sky Policy,’ and tapping into the commercial potential of Tier II and Tier III cities are essential components for India to achieve its ambitious 10 MMT annual cargo throughput target by 2030.”

Tushar Jani, Group Chairman, Cargo Service Center (CSC) said, “The current trouble in the Red Sea will increase some air cargo volume however if the airline increases freight rate, then it will become counterproductive. The industry must work towards keeping a reasonable rate to achieve good growth and allow the supply chain to remain more productive and stable with air cargo compared to increased sea freight cost, provided air cargo remains affordable. We must learn the lesson of Covid where the air cargo rates became so exorbitant that some commodities moved their supply chain through maritime shipping. This is a golden opportunity for air cargo to convert those lost tonnages from maritime shipping back to air cargo, provided we keep the stability of the air freight rates keeping in mind the long-term advantage of growth. This will help in achieving the 10MMT target set up by the Government and Industry mutually.

Multinational logistics companies and shipping lines are now moving towards air transport and expecting more demand for air transport due to the ongoing Red Sea crisis, despite significantly higher costs. Recently DB Schenker has secured additional air freight space to be able to service the expected switch from shipping to air freight. ‘We expect the impact on air freight to occur in around two to three weeks,” the company said in a statement. “A combination of sea and air freight shipping could prove best, – for example goods could be shipped from China and unloaded just before the crisis-affected area to then be transported by air,” it added. According to the reports, Indian exporters especially those who are in the textiles and apparel sectors have not encountered widespread rejection of export consignments or demands for contract re-negotiation due to the Red Sea blockade, concerns are growing over potential business disruptions if the crisis prolongs. They are mainly witnessing extended transit times and increased freight costs, prompting worries about the sustainability of their operations. In many cases, buyers bear the transportation costs. However, sensing potential delays, some buyers, especially those dealing with seasonal fashion items, are opting for air cargo to avoid missing sales opportunities, said reports.

Kempegowda International Airport Bengaluru (BLR Airport) has seen a notable growth processing a total of 422,644 MT of cargo during CY 2023, indicating a 2% increase from previous year. BLR Airport continues to maintain its standing as a reliable hub for handling Perishable (PER) cargo in India for the third consecutive year, emphasizing its commitment to seamless cargo operations. The domestic sector soared with an impressive 11% growth, highlighting BLR’s strengthening position as a rapidly growing cargo hub in India. Perishables continued to be a key focus, with coriander exports surging by 67%. The export of mangoes reached a three-year tonnage record, achieving a 124% year-on-year growth. 684 MT of mangoes were exported, facilitated by an 86% increase in the number of pieces shipped. This accomplishment highlights BLR Cargo’s robust cold chain capabilities and dedication to efficient perishable handling. BLR Cargo’s strategic infrastructure developments in May 2023 welcomed two new Cargo terminal operators: Menzies Aviation Bangalore Pvt Ltd (MABPL) and WFS Bangalore Pvt Ltd (WFSBPL). MABPL provides dedicated facilities for domestic cargo and international cargo processing, while WFSBPL offers specialized cold chain capabilities in addition to international cargo processing. These partnerships are anticipated to enhance efficiency, expand capacity, and sustain cargo growth for the Airport in the coming years. The developments aim to elevate BLR Cargo’s cargo capacities to approximately ~1 million MT by the end of this decade. July 2023 also marked a significant milestone for BLR Cargo, handling the highest monthly domestic tonnage since the Airport’s opening, totaling 16,507 MT. Additionally, Oman Airlines commenced freighter operations last year, further diversifying and strengthening BLR Cargo’s global connectivity. As we reflect on 2023 as a year of resilience and milestone …

Pradeep Panicker, CEO, GMR Hyderabad International Airport (GHIAL) shares, “We have witnessed a boom in air cargo traffic in Tier 2 and Tier 3 cities. The growth is attributed to the rise in manufacturing units, increased industrial output, and the expansion of the e-commerce industry. The potential in perishable cargo has also been a major contributor to this development. However, these cities face challenges, including limited funds for upgrading airport infrastructure, where significant investment is needed. Land acquisition for expansion is complex and time consuming. Additionally, attracting private sector participation in these cities is challenging due to lower passenger and cargo volumes to metropolitan airports.”