For India to be a favoured factory to the world, critical functions like product quality, raw material, fully geared up infrastructure, compliances, connectivity, strategic viability, ROE to investors, etc. will need to be in sync, stresses Yashpal Sharma, Managing Director, Skyways Group. In an in-depth conversation, the young and dynamic leader speaks to Ritika Arora Bhola, the need for efficient strategies, policies and plans that will help India become a bigger production house of the world.
According to you, how is the Indian air cargo industry reacting and responding to the COVID-19?
The Indian air cargo industry has been at the forefront in terms of responding to the crisis, starting from day zero. Although the news about the virus spread was in circulation since Jan’20, the devastation it could cause was never anticipated by anyone across the globe. It is remarkable to note and appreciate the resilience shown by logistics companies to work tirelessly in the most challenging and life-threatening atmosphere. The air cargo industry was very quick to adapt to the new ‘COVID world’ and was able to bring remarkable solutions to customers in these extremely tough times to keep the supply chains active, especially healthcare.
How did air cargo operations change as a result of coronavirus?
The use of technology to reduce the manual touch points has been the biggest positive change in this situation. While the government and regulators have been trying to digitalise the industry, for a while, this COVID situation removed various mental bottlenecks. This change will surely have a very positive impact on the industry going forward.
The Indian logistics industry and air cargo sector were the worst hit. Now that the operations have resumed, tell us about the strategies that you have adopted to ensure smooth operations and a hundred per cent safety of cargo as well as staff.
As a responsible trade member and empathetic employer, Skyways have put in place several measures to mitigate the dual risks posed in the safe handling of goods, as well as employee health and well-being matters. The guidelines issued by the government are implemented at our workplaces from time to time, in true letter and spirit. Besides, we have added a couple of extra layers of measures to keep our teams and workplaces safe and secure.
Does Skyways follow a risk management policy to cope up with crisis like this?
Skyway has had a robust risk analysis and mitigation policy for a very long time now. We have a business continuity plan in place for each aspect of our business. Whether infrastructure, team, finance, each aspect has been carefully planned for any contingency. This helped us hugely to mitigate the challenges thrown at us due to the COVID situation. From creating a work from home ecosystem to keeping our customers’ operations well-attended, and all our financial commitments being cleared immaculately, our risk management capability has truly been a boon for us.
What can governments do to facilitate the smoother flow of cargo amid the COVID-19 outbreak?
I would like to compliment the government of India for being on top of the situation through their teams at all times. Ministry of Civil Aviation has played more than an active role in this period. They have been active 20 hours a day to ensure the movement of air cargo does not even pause. The government has come out with a fiscal package for the country, but I feel not much is there in it for the aviation and logistics industry. Most governments across the world have stepped in to help the airlines that have been hugely impacted due to the crisis. Air cargo can come to a grinding halt without the airlines, and they for sure, need government’s financial assistance to survive through these tough times. Other players in the air cargo chain should also be supported by the governments to tide over these tough times.
Tell us about the challenges that you are facing as a freight forwarder, especially in the last few months.
There are three major challenges that any freight forwarder is facing in this period – huge drop in revenues, recovery of dues from customers, and engagement of teams. Having a very strong risk management plan in place, Skyways was able to meet these challenges pretty well. Our group has a big spread of product offerings – freight forwarding, trucking, learning, etc. We were able to dig deep into our customer base to minimise the revenue dip. We operated a few charters to control capacity and create a new revenue-generating stream. We also have a big employee engagement programme and the same was given a multiplier in this period to keep each of our team members engaged and motivated. Our customers were constantly communicated, and most of them came forward to clear off their dues to help our cash flows.
How long do you think the impact of coronavirus will last and by when the Indian air cargo/logistics industry will achieve the same supply/demand graph as it was in 2018-2019?
Recovery from this situation is a real long-haul. I am expecting the business to be at 50 per cent level of the pre-COVID times by the end of September 2020. Thereon, recovery will be no more than five per cent a month. We may see pre-COVID levels of business activity by the end of Q4 2021.
What do you think of India as a manufacturing destination, as for foreign investors reportedly start boycotting China?
India needs to become a bigger production house for the world. Investment alone cannot drive any economy upwards. A lot of other critical functions like product quality, raw material, fully geared up infrastructure, compliances, connectivity, strategic viability, ROE to investors, etc. will need to be in sync for India to be a favoured factory of the world. Therefore, we will have to upgrade manufacturing, policies and infrastructure in a cohesive manner to attract the big buyers of the world, to come and invest in procuring their products from India. China is in the hot-spot currently. But the shifting of supply chains from China to India will be fiercely competed by many other countries like Vietnam, Bangladesh, etc.
Will the future of the air cargo industry be different as a result of this pandemic?
The pandemic slowdown has given a subtle yet timely alert to the air cargo industry to realign its product basket and network route planning. Air cargo was always the lesser important product for airlines, as they put all their energy into the passenger business. This COVID period will ensure they now give a much better position to air cargo in their business plans. Digitalisation will get a big shot in the arm from selling to execution. A lot of consolidation can also be expected, and some acquisitions are surely around the corner.