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SpiceJet flight cancellations jolt ecommerce shipment companies

THE cancellation of dozens of flights by beleaguered airline SpiceJet and a decrease in air cargo space for commercial shipments have severely upset delivery schedules and several companies that deliver shipments for online retailers are bearing the brunt of the havoc in India's aviation sector.

The affected logistics firms include Ecom Express, Delhivery and Gojavas.

These logistics companies, many of which focus solely on India's booming ecommerce sector, are afraid the situation will worsen in the coming year, as airlines battling rough weather offer first preference to passengers over cargo in the crowded holiday season, the Times of India reported.

SpiceJet cancelled 100 flights in mid December and this has disrupted ecommerce shipments to cities like Chennai and Hyderabad where the airline offered good air connectivity from Delhi and Mumbai.

Analysts estimate that the boom in online retail this year - fuelled by deep discounts and speedy delivery - with retailers, particularly fashion portals competing to deliver in one day and sometimes on the same day, has increased demand for shipments by air.

Ecommerce shipments account for a tenth of the overall logistics market in India.

"About 80 per cent of the e-commerce shipments in India now travel by air," said managing director Harminder Sahani of retail consultancy Wazir Advisors, who estimates that logistics companies delivering online retail shipments don't use road or rail often.

"Due to the shrinking air cargo hold, larger players will have to get together to buy dedicated aircraft for e-commerce shipments," he said. This month, shipments have also been delayed due to fog and increase in passenger luggage which is mostly composed of winter wear, thus reducing air cargo space.

"The industry was already under pressure after Kingfisher downed shutters. With SpiceJet also under trouble, there will be delay in shipments out of Delhi," said CEO TA Krishnan of Ecom Express, a Gurgaon based e-commerce logistics player.

Ecommerce firms, whose major warehouses are based in Delhi are the worst hit.

"Majority of our goods, nearly 80 per cent, moves from Delhi and sectors such as Nagpur and Hyderabad have become difficult to handle," said chief operating officer Vijay Ghadge at Gojavas, which handles shipments for online retailers such as Healthkart, Lenskart and fashion portal Jabong.

Mr Ghadge expects prices to go up for shipments in the New Year.