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GMR in talks with FedEx, DHL to make Hyderabad cargo hub

GMR in talks with FedEx, DHL to make Hyderabad cargo hub
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First Published: Wed, Nov 23 2011. 10 15 PM IST

New services: The Rajiv Gandhi International Airport, Hyderabad. The airport plans to create a dedicated express terminal that will allow companies to clear customs and move time-critical packages qui
New services: The Rajiv Gandhi International Airport, Hyderabad. The airport plans to create a dedicated express terminal that will allow companies to clear customs and move time-critical packages qui
Updated: Wed, Nov 23 2011. 10 16 PM IST
New Delhi: Bangalore-based GMR Infrastructure Ltd is in talks with international cargo airlines FedEx Corp. and DHL International GmbH to make Hyderabad airport their regional hub in India.
The country does not have a dedicated cargo hub. The civil aviation ministry’s plan to develop Nagpur as a cargo hub has not fructified in the past three years.
New services: The Rajiv Gandhi International Airport, Hyderabad. The airport plans to create a dedicated express terminal that will allow companies to clear customs and move time-critical packages quickly.
“We are in talks with FedEx and DHL,” said an official at GMR, operator of the Hyderabad airport. “Once GST (goods and services tax) is introduced, manufacturing can take place in Chennai or Bangalore or Mumbai, (and) distribution centres can be at Hyderabad.”
Implementation of GST, India’s most ambitious tax reform, will lead to a common, unified market. It was to be launched on 1 April 2010, but has been delayed because of lack of consensus between the Centre and the states.
Hyderabad airport wants the global airlines “to route their network via Hyderabad, which will improve connectivity”, said the GMR official, who declined to be named.
The airport plans to create a dedicated express terminal that will allow companies to clear customs and move time-critical packages quickly, he added.
The talks with FedEx and DHL, said a second GMR official who too asked to remain anonymous, are at a preliminary stage. A GMR team has visited FedEx’s Memphis hub in the US and another team is expected to visit DHL’s offices to study its feeder network.
Big cargo firms such as FedEx and DHL work on a hub model. So, even if they have to move a parcel between two floors of a building, they will send it to their hub and from there to the destination.
Hyderabad airport, which ranks number six in domestic and international cargo movement in the country, with Mumbai leading the pack, has 1,000 acres of land that it can use for other commercial purposes.
“FedEx does not comment on market speculation or rumours,” said Kenneth F. Koval, vice-president (India), FedEx Express. “Given the geography and development diversity of India, we determined that we needed to be located close to major manufacturing hubs to effectively connect the country with our global network. Our studies of the market revealed that Mumbai, Delhi and Bengaluru were the three nerve centres of the trade economy and we established our three gateways in these locations.”
A DHL spokesman only said the company is “always looking for new opportunities to support our business and DHL is continuously evaluating its options”.
India’s air cargo grew 21.3% in the first 11 months of 2010-11, with about 860,000 tonnes of domestic freight and 1.51 million tonnes of international freight, according to data from the Centre for Asia-Pacific Aviation.
Engineering goods, textiles, pharmaceuticals, leather, gems and jewellery are the major exports from India.
An aviation analyst said Hyderabad airport faces many challenges before it can come close to becoming a cargo hub.
“Hyderabad is not destined” as a cargo hub because of its location and a lack of local manufacturing base, this analyst said, asking not to be identified. “It’s a tricky situation. Their payback period or return on capital will come much later.”
Compared with the state-owned Nagpur airport that’s centrally located in the country, Hyderabad is in southern India, which would translate into longer distances for moving cargo from the northern and north-eastern regions.
“Between them, Nagpur is a little too raw, laid-back and (has) no local support though (it is) multi-modally better connected. Hyderabad is just more proactive and willing to give sops,” the analyst said.
Besides, Hyderabad airport does not have a dedicated cargo airline or enough scheduled airlines to bring sufficient belly cargo, which the Mumbai and Delhi airports have.
tarun.s@livemint.com
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First Published: Wed, Nov 23 2011. 10 15 PM IST
More Topics: Hyderabad Airport | GMR | FedEx | DHL | Cargo |