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Couriers' body up in arms

By Our Staff Reporter

NEW DELHI JUNE 25. The issue of a sharp increase in baggage rates for On-Board Couriers (OBC) threatens to snowball into a controversy with the Express Industry Council of India (EICI), an apex body representing the leading courier companies, strongly contesting the statement issued by the domestic airlines.

Arguing that the latest increase in OBC rates by the airlines would considerably affect courier operations, the EICI has issued a detailed statement comparing the old and new rates and the effective percentage change from the two leading domestic airlines -- Indian Airlines and Jet Airways.

While senior EICI officials fear it would lead to an ultimate 35 per cent increase in charges for the ultimate consumer, the airlines feel the effect of the rate hike on the courier companies would not be more than 1.5 per cent.

The EICI chart shows that the baggage rates per kilogram have increased by amounts varying between 20 per cent to as much as 125 per cent depending on the sector and flights. Based on the flights courier companies take and the load movements, the average increase in price works out to around 60 per cent. As to the effect of the baggage rate hike for the consumer, the EICI statement said that the cost of the OBC as a percentage to the sales price was around 40 per cent.

An increase of 60 per cent by the airlines coupled with the ticket charges and other service charges would mean the cost to the courier companies would go up by 30 per cent. If the increase to customers would have been only 1.5 per cent, as the airlines have stated, courier companies would have definitely absorbed the increase. "The airlines are obviously unaware of the costing structure of courier operations, and the courier companies are in no position to bear a 60 per cent increase,'' the EICI statement said.

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