Express cargo industry braces for freight rate hike, delays in delivery after Jet Airways grounding

Mumbai: Jet Airways’ grounding has resulted in delays in certain sectors for air parcels and led to fears of other airliners jacking-up fares for the express logistics sector, an apex body said Monday. The two primary concerns emanate from capacity and the fear of costs going up in the future, a senior functionary of the Express Industry Council of India (EICI) said.

“Excess capacity with airlines has ensured that there is no impact from the capacity perspective. Rates have also held on till now, but we fear rates will go up,” the council’s chief operating officer Vijay Kumar told PTI. However, there has been no change in the published tariffs floated by the airliners so far, he said.

Kumar said Jet Airways used to handle around 12 percent of the overall freight, which is almost at par with the market share which the Naresh Goyal-led airline had before coming to a halt last week.

 Express cargo industry braces for freight rate hike, delays in delivery after Jet Airways grounding

Representational image. Reuters.

On the delivery times getting extended, he said there may be a few sectors where Jet’s exit from operations would have resulted in some delays in the last few days.

Logistics players are forced to either route the cargo through multiple flights instead of a single flight connecting two cities or opt for surface transport to push a consignment which can result in a delay, he said.

“We are hoping that the capacity which has been lost will be added soon,” he wished.

When asked if the council is in touch with either with the airlines individually or any other representative body, he replied in the negative and said that this phase of some uncertainties will pass soon.

Jet grounded its fleet last Thursday, after being unable to get the required money to continue operations. Lenders, who are owed over Rs 8,000 crore, have refused any immediate lifeline to the company and betting fully on an auction process underway.


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