Mumbai: The Indian courier industry is in the dock as domestic air carriers have effected a sudden increase of Rs5 a kilo for air sectors across the board.
“The situation is so grave that many small courier firms may have to shut shops and the existing ones have to live with half the profit margin,” Express Industry Council of India’s (EICI)Secretary and Chairman of DTDC Ltd Subhasis Chakraborthy told PTI.
EICI is an industry body representing 20-odd top courier domestic companies.
Chakraborthy said that domestic carriers have effected the pice hike for both on-board cargo and as well as dedicated freighters in the country from 16 May.
“A Rs5 hike in aircargo charges add to 15-25% cost esacalation of the air sector. This has dampened our business,” Chakraborthy said.
The courier industry has been trying to pass on the increased burden to customers. Though many of them are willing to share the burden, a handful of them are not willing to budge, he said.
“We generally enjoy a profit margin of 10% and with this hike, that is going to come down by half in the current fiscal,” Chakraborthy said.
He, however, claimed that there is no loss of business since air cargo cannot be transported thorugh other medium, but margins will be hit hard.
Chakraborthy, however, does not blame aircarriers for this poor run of the courier industry as according to him this was just awaiting to happen in the face of such exhorbitant price hike.