The implications of Deccan 360

I am personally surprised at the reception of Deccan 360 by the industry. Considering its potential and implications one might have expected a lot of hulla ballo similar to the Nano project. But may be its implications haven't yet been realised by many. So why am I so excited about this venture?

Because within a couple of years an industry which is 90% unorganised becomes a highly organised one. Capt. Gopinath threatens to remove half the trucks that ply on today's national highways. From then on one doesn't need to pack his house a week before and wait for a week after if he is shifting his home from Agartala to Mumbai. Trucker's strike would have little impact on commodities movement.

Airports like Salem, Tuticorin which have been closed due to unviability can expect huge revenues from Cargo handling as they are strategically located near large industrial clusters. Since Deccan plans to have international entry points at Delhi, Nagpur, Mumbai, Hyderabad and Chennai, customs clearance could be finished at these airports and be sent to other places as domestic cargo. So little infrastructure needed at these small airports. Overall revenue of all domestic airports would increase thus making their modernisation profitable. The low-cost model will make average exporter shift to air transport from land and rail transport.

The current model followed is a 3rd party logistics manager manages warehouses at various points across the country and mostly outsources the transportation part from transport companies. This leads to production delay in the manufacturing industry. But within half a decade one can do away with such a system. As soon as a batch of components is manufactured, it can be air transported to the customer company in a day or two.

Now after all this, the ground situation is, MIHAN is only partly ready. Chennai the second busiest cargo port in India is facing capacity constraints. Chennai being a manufacturing hub for many auto components and electronics in industry is the customer end of many cargo routes. Airports like Salem and Tuticorin are ready to receive the ATRs of Deccan 360 but not their cargo. A cargo terminal at each of these airport is essential and also needs to be adequately staffed.

Deccan has cleverly chosen its initial sectors. Let it prove its mettle in the high density sectors and then expand. Maybe there will be a day when the number of Deccan's parcel coaches outnumber the yester year's postal department's van. That is something like privatisation of postal dept!!!!