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Sky to Boost the Global Trade & Economic Growth

Deepak Wadhwa
Managing Director - IT India-FedEx Express
Wednesday, February 5, 2014
Deepak Wadhwa
Founded in 1971, FedEx Express is the world's largest express transportation company, providing fast and reliable services for more than 3.6 million shipments each business day. The company is headquartered in Memphis, U.S. and has the current market cap of $42.02 Billion.

Air cargo logistics has emerged as a radical facilitator of international trade and promoting global economic growth. World trade is expected to nearly double, rising at more than twice the rate of global GDP growth, with China, India and other emerging markets leading the way. With the Indian government raising the limit of FDI in cargo airlines to 74 percent, the aviation sector is expected to grow about 25 percent over the next decade. Today, cargo contributes to sustainability and reduction of waste by avoiding unnecessary hold time. Customers have come to rely on, and expect the fast service of air cargo to optimize the level of their stocks. However, these benefits come at a cost.

Today, air transport has become a vital component of many industries' global supply chain, used primarily for the transfer of goods that are light, compact, perishable and have a high unit value. While accounting for less than 0.5 percent of the tonnage of global trade, air freight makes up over a third of the value of international trade. Rapid delivery is particularly important to those businesses whose customers are running streamlined production processes or who need urgent delivery of spare parts for machinery and equipment. Air cargo logistics also plays a key role in the pharmaceutical industry and export of perishables like flowers that require speedy delivery because of their time-sensitive nature.

In any country the air cargo industry, trade and GDP are interdependent and interlinked. The air cargo industry connects cities, countries and continents, thereby connecting diverse markets and forming global supply chains. As far as the air cargo industry is concerned, the impressive growth shown by India in international and domestic trade over past few years has helped the sector in India to grow. The last few years have seen the air cargo market evolving rapidly in India. It has overtaken the ocean freight & rail freight market by expanding at nearly 19 percent in the last 3 years, as against 10.3 percent growth registered by ocean freight and 9.2 percent by railways. Around 40 percent of India's trade in terms of value is done through the airport mode which leaves a huge market for logistics companies to tap.

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