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VOL VIII ISSUE VII june 2017 `20
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Multimodal Logistics Park in Vijaywada
Moving towards Blue Revolution through Port Connectivity
SPECIAL FEATURE Freight Corridors Facilitating Accelerated Economic Development
Dangerous Goods Logistics: No room for error
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Contents
Volume VIII • Issue VII • june 2017
Editor and Publisher Smiti Suri Assistant Editor Archana Verma Feature Writers Tariq Ahmed Gaurav Dubey Sheena Sachdeva Deepashree Banerjee
32
12 COVER STORY
Apparel Logistics: Keeping Up with the Fashion Industry
SPECIAL FEATURE
Freight Corridors Facilitating Accelerated Economic Development
focus
INTERVIEW
Multimodal Logistics Park in Vijaywada ...........................................8
FEATURE
Asst Manager Marketing Asad Mohammad Marketing Executive Mehuli Choudhury Administration Vipin Marwah
Akash Bansal, Head logistics, Om Logistics Ltd ......................................60
Accounts and Administration Poonam Gupta
Abhijit Malkani, Managing Director, Indospace Capital Advisors ...........................62
Sr Designer & Visualiser Shaique Ahmad
Raaj Jobanputra, Director of JWR Logistics Pvt Ltd, JWC Logistics Park Pvt Ltd and JWL Cold Store Pvt Ltd ..................................................64
Designer & Visualiser Mayank Bhatnagar
Nihar Parida, Director, Minerva Integrated Logistics Pvt Ltd ............................................68
UPFRONT ....................................6 shippers speak ...............70,72 GUEST COLUMN .......................74 NEWS ..................................76-85 INTERNATIONAL CONNECT..86-87 EVENTS ................................88-93
Dangerous Goods Logistics: No room for error............................46
Marketing Manager Niti Chauhan
Alex Montebello, CEO, Malta Freeport Terminals Limited ........................................58
Franz-Joseph Miller, Managing Director of time:matters Group .......................................66
Moving towards Blue Revolution through Port Connectivity ...............40
Director Ajeet Kumar
PEOPLE CONNECT
Yashpal Sharma, MD, Skyways ................94
All material printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same. CargoConnect is printed, published and owned by Smiti Suri, and is printed at Compudata Services, 42, Dsidc Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014. Editor–Smiti Suri
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Upfront After the implementation of Sagarmala project, the cost of East–West movement of cargo would be reduced from USD 48 to USD 28 per tonne. And North – South movement of cargo cost would be reduced from USD 54 to USD 34 per tonne.
Nitin Gadkari
Minister of Road Transport and Highways of India
Suresh Prabhu Railway Minister of India
“One of the major impediments in our economic growth is high logistics cost. If our economy has to flourish, then it’s necessary to ensure sustainable and balanced growth in the country, we urgently need to reduce our logistics cost to globally comparable rates”
“Efficiency of freight terminals is being improved and three more dedicated freight corridors have been planned. To make transport systems in the country truly efficient we need to focus on integrated, seamless, multi-modal growth.”
Pusapati Ashok Gajapati Raju Union Minister for Civil Aviation
In d ia ha s w i t n e s s ed explosive growth of air traffic and infrastructure in the last two to three years. The Air Cargo industry is expected to register around 9 per cent growth in the next few years.
Rajiv Pratap Rudy
Union Minister of State for Skill Development and Entrepreneurship
Sultan Ahmed Bin Sulayem
Chairman and Chief Executive Officer, DP World
“Due to lack of proper storage, nearly 10,000 tonnes of fruit and vegetables get wasted in India. If proper planning is done and proper storage facility and logistic infrastructure made available, this wastage could be stopped.” 6
CargoConnect - june 2017
“With all infrastructure and logistics development, the need to develop skills of man power is also required. The employment seeker will need proper training for this area. The transport and logistics sector poised for a makeover, A lot of new jobs are likely to become available.”
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FOCUS
Multimodal
Logistics
Park in
Vijaywada
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Logistics play a vital role in the economy. Moving forward in the reign of the new government, GST will be a path breaking initiative. Further, on the same note, Vijaywada will be an upcoming bright spot in the state of Andhra Pradesh. Sheena Sachdeva brings an exclusive piece about upcoming project of multimodal logistics park in Vijaywada.
FOCUS
W
ith the onset of GST, t he I nd ia n log ist ics will have a 360 degree turnaround. Hence, India Integrated Transport and Logistics Summit has brought some future perspectives. During the event, “Integrated�, a term used by Minister of Road Transport and Shipping, Nitin Gadkari highlighted how all the modes of transport are interrelated, in sync and vital for better growth of economy. With the gover nment increasing focus on developing rail and waterways infrastructure and the implementation of GST turning India into a consolidated market, developing a network of multimodal logistics parks to act as logistics hubs will address some important aspects.
Benefits of an Existing Multimodal Logistics Park The basic functionalities of a multimodal logistics park will need to serve four key functionalities: a. Freight aggregation and distribution: Logistics Parks acting as freight aggregation and distribution hubs will enable line haul freight movement on larger sized trucks or rail. The existing warehousing landscape without intermodal connectivity near industrial hubs is smaller and fragmented to cater to the needs of production centers. In addition, Multimodal Logistics Parks will be a critical infrastructure to cater to the distribution needs of the consumption centres and to enable hub and spoke model of freight movement. b. Multimodal freight transportation: Multimodal Logistics Parks with road and rail connectivity is critical to enable multimodal freight transportation. This will aid freight transportation on line haul (between hubs) to shift from road to more efficient modes such as rail and waterways. In addition, completion of the proposed rail dedicated freight corridors (Dadri to JNPT, Dhankuni to Ludhiana, Delhi to Chennai, Mumbai to Kolkata, Kharagpur to Visakhapatnam) and focus on developing Coastal and Inland Waterways will enable accelerated option of rail and waterways respectively.
Current Situation
Ideal Situation
Point to point freight movement
Mumbai suburbs Thane
Mumbai Logistics n Tru park ck
Hub-and-Spoke model freight movement
30 Ton Truck
Mumbai Logistics park
10 To
10 Ton Truck
JNPT
ruck
on T
10 T
Rail
Logistics Park Enable Services Logistics Park Provide
Inland Waterways
Delhi
ruck
T 10 Ton
Gurgaon
10 Ton Truck 10 Ton
Noida Truck
Freight aggregation & distribution
Multimodal Freight movement
Storage & Warehousing
Value Added Services (Custom clearance etc.)
Surce: A.T. Kearney
c. Storage and Warehousing: Multimodal Logistics Parks will provide modern mecha n ised wa rehousi ng space, satisfying the special requirements of different commodity groups. With higher proportion of mechanised material handling, warehousing in logistics parks will enable a reduction in storing and handling losses. d. Value added services: Multimodal Logistics Parks are also expected to provide value added services such as customs clearance with bonded storage yards, warehousing management services, etc. Customs clearance at Multimodal Logistics Parks will enable waiting time reduction at the ports and thereby reduce the freight transportation cost and time for cargo. In addition, Multimodal Logistics Parks near the major ports (Chennai, Vishakhapatnam, Mumbai, Kolkata, e t c.) will have clearly demarcated Free Trade and Warehousing Zones to enable storage of trans-shipment cargo, without any tax implications.
Multiple Benefits of Developing Multimodal Logistics Parks: a . S e a m l e s s i nt e r m o d a l f r e i g ht movement: A Multimodal Logistics Park will enable seamless transfer of goods from one mode to another. This will enable a more efficient hub and spoke model of freight movement.
b. Reduction in inventory holding costs: Multimodal Logistics Parks will provide large modern and mechanised warehousing space. Wit h h ig he r prop or t ion of mechanised material handling, Multimodal Logistics Parks will result in reduction in losses involving storage and handling. In addition, availability of consolidated warehousing zone will enable reduction in inventory holding costs. c. Reduction in freight transportation lead ti mes: Customs clearance at Multimodal Logistics Parks will enable a reduction in waiting time at the ports. In addition, provisions for packaging or repacking and return management at the Multimodal Logistics Parks will enable a reduction in overall supply chain lead times.
Vijaywada: The Next Bright Spot for Logistics As the second largest city and capital of Andhra Pradesh, Vijaywada has a wellestablished network of roads, railways and airport at Gannavaram (the middle of the city) are considered distinct advantages for Vijayawada to be developed at par with other major Indian cities. Besides this, the Machilipatnam port is just about 60 kms away and development of National Waterway 4 connecting Kakinada and Puducherry in which the Vijayawada stretches of river Krishna and Buckingham Canal form a crucial link, make the city very
june 2017 - CargoConnect
9
FOCUS Pradesh Government shook hands to bring forward this idea of multimodal logistics park.
Salient Features The park will have an area of 150 acres. Situated 9 kms away from NH 16 along with 15 kms from the nearest railways line of around less than 15 kms. The park will have a proximity to Machilipatnam Port and Kakinanda Deepwater and Anchorage Ports. The current status of the project is that the land parcel is in the possession of Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and pre-feasibility studies initiated to determine the possible freight movement through the Vijaywada Multimodal Logistics Park. Connecting the Mallavali Village, the logistics park shall cater to various other cities across the country. This logistics park will have covered warehouses, aggregation-disaggregation space, customs clearance facility and cold-storage facilities. It is expected that in 2025 the expected freight movement through road at Vijaywada will be 162 Mn metric tonnes.
In Pipeline for Future: Top import districts important. National Highways 16 (ChennaiKolkata), 65 (Pune-Machilipatnam) pass through the city and National Highway (NH)-214 that links Pamarru to Katthipudi in East Godavari district is just 40 km away. The city has been a major junction for lorry
It is expected that by 2025 the freight movement through road at Vijaywada will be 162 Mn metric tonnes. operations for several decades with thousands of vehicles carrying goods through the length and breadth of the country every day. Coming to railways, Vijayawada station is one of the largest junctions in South India with over 300 express, passenger and freight trains passing through it every day. It has a very bright chance of being made the headquarters of the planned South East Coast Railway (SECoR) Zone located as it is on
10 CargoConnect - june 2017
Chennai-Howrah and Chennai-Delhi lines. The expansion of Gannavaram airport at an estimated cost of INR 200 crores is bound to give a fillip to growth of not only the city but the entire south coastal AP. The destinations served by this mid-sized airport are Mumbai, Hyderabad, Delhi and some private airline firms have plans to operate flights to more Indian cities. Coupled with this, Air Costa, the first private Airliner company set up at Vijayawada, it is all likely that Vijayawada-Guntur region is rightly positioned for formation of a new capital for the residual state of Andhra Pradesh, post bifurcation of Telangana. With an area of about 150 acre, NHAI (National Highways Authority of India) has found Vijaywada situated at the best location across the rivers Krishna and Godavari. The city is filled up with lots of trucks and industries spread all over the city. Recently, the Vijaywada Multimodal Logistics Hub got a green signal from the government wherein National Highways Authority of India (NHAI) and Andhra
• • • • •
Hyderabad Chennai Nalgonda Vishakhapatnam Guntur
Top export districts • • • • •
Hyderabad Chennai Kakinada Nalgonda Vishakhapatnam
Top import commodities • • • • •
Cement and structure Iron and Steel Provision and household goods Coal Rice
Top export commodities • • • • •
Provision and household goods Cement Iron and steel POL Building material
june 2017 - CargoConnect 11
cover story
Keeping Up with the
Fashion Industry In today’s internet dominant world, celebrities and style icons can spin the fashion industry on its head very quickly and apparel retailers and manufacturers have to change their collections in every two or three weeks. In such a dynamic environment, supply chain and logistics industries play a vital role in the growth of the apparel business. Gaurav Dubey explores deeper into the apparel logistics scenario.
12 CargoConnect - june 2017
cover story
june 2017 - CargoConnect 13
cover story
A
pparel companies across the country are in an aggressive competition, to manufacture exact replica of the dresses worn by the cinema industry’s icons, to capture the market. The companies send their supply chains into overdrive to deliver the dresses as soon as possible in the market. Such celebrity-inspired fashion crazes, as well as each year’s must-have items and standard seasonal clothing such as bathing suits and outerwear, make the apparel supply chain more time-sensitive than many other verticals. The ability to capitalise on instant—and often fleeting—demand is crucial to apparel and footwear manufacturers in their quest to boost profitability and satisfy fickle fashion consumers. Increasingly, apparel companies turn to technology to help meet the do-or-die supply chain demands that characterise this hypercompetitive environment.
Custom-tailored Enterprise Resource Planning (ERP), Warehouse Management System (WMS), Product Lifecycle Management (PLM) and inbound logistics software systems help apparel companies combat supply chain obstacles. Advances in RFID capabilities, webbased technology and reverse logistics applications, among others, also push the industry forward. These technologies dish out real-time visibility information that lets apparel companies track product across global supply chains better and make timely decisions on changes to style, colour, size, price, where products are sold and distribution patterns, among others. If a Spykar’s black jacket sells well in Indore, but not in Delhi for example, a retailer can reroute shipments of that item. If size 30 jeans sell faster than size 34, a manufacturer can increase production of the larger size to help meet the demand. Because of the value addition that technology provides—cost reductions, just-
Dynamics of Apparel Logistics Apparel manufacturers, importers, distributors, wholesellers and retailers must have a good grasp on what will sell, where it will sell and how to make sure it lands in the right place at the right time. Add to this the multiple colour and size choices for each style into the mix, and it’s easy to see the need for robust, flexible supply chain technology. Though timing is the most obvious critical factor in the apparel supply chain, it is hardly the only obstacle. The dual quest to cut costs internally and keep product prices low has driven many apparel and footwear companies to embrace global sourcing and manufacturing in low-wage areas such as Asia, India, northern Africa and Central and South America. Indeed, nearly 50 per cent of apparel sold in the United States today is made abroad, according to a 2004 Deloitte Consulting report outlining the top 10 issues facing the industry. Inherent in these complex global supply chains are issues involved in getting raw materials or finished products into and out of congested ports, dealing with security delays and keeping up-to-date on textile quota issues, as well as global trade and tax laws, the report finds.
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In apparel business, fast pace and efficiency are critical for success.
in-time capabilities, getting the product to store shelves faster, new methodologies and automation—the supply chain has become a margin factor rather than a cost factor for apparel companies. The strategic use of technology can help apparel companies, if they focus on three specific areas of the supply chain – enterprise-wide operations management, inbound logistics and reverse logistics.
Airlines and Apparel Transportation Several domestic as well as international airlines operating in the country are eyeing a bigger pie in the lucrative apparel business. Admitting the significance the sector holds for them, Anand Yedery, Regional Cargo Manager, South Asia, West Asia and Africa, Cathay Pacific
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cover story
The final destination for apparel cargo is mainly Europe and North America We are well connected with both of these regions through our Cathay Pacific Cargo network either directly or via our Hong Kong hub.
Anand Yedery, Regional Cargo Manager, South Asia, West Asia and Africa, Cathay Pacific Airways
2015-2016
Projection for 2017
Sometimes, handling heavy volumetric cargo and inconsistency in packaging also posses challenge for us.” Ajit Venkataraman, MD, APM Terminals India Private Limited feels that trends largely dominate the apparel business and as a fast-paced industry, speed and efficiency are extremely critical for success; and logistics is what keeps the apparel industry moving and able to deliver fashion in a timely way. “Logistic execution is what ensures that the right products reach the end customers at the right time and in the right condition,” he asserted.
Time: A Defining Factor
Airways said that the apparel industry is an important contributor to the air cargo business out of India, especially from markets like Delhi, Chennai, Bangalore and Mumbai. “This is because many apparel manufacturing setups are based around these cities. The final destination for this type of cargo is majorly Europe and North America. In both the regions, we are well connected through our Cathay Pacific Cargo network either directly or via our hub Hong Kong,” he added. Cathay Pacific Cargo offers convenient solutions for the apparel segment which may be volumetric in nature. Additionally, their strategic network is a key strength. To cite an example from Delhi, Cathay Pacific has direct freighters flying into Europe and thereby has the advantage to uplift apparels into some of the large European markets like Frankfurt,
16 CargoConnect - june 2017
London, Paris and Milan. Anand says, “We work very closely with our freight forwarding community and our partners across India for specific apparel brands to understand their production patterns, requirements in terms of transit times, new upcoming export destinations, special product handling like Garments on Hanger (GOH), or any specific project movements. Owing to this growing segment of manufactured apparels in India, we see a huge opportunity to further grow our presence in this segment and hence, will continue to work with forwarders and shippers to identify new business. RMG and apparels has always been a significant contributor to our overall India cargo uplift. On the basis of the nature of the garments – luxury wear, designer samples or mass production – the challenges may differ.
The apparel industry is trend-based and seasonal in nature and this necessitates a short shelf life of the products and makes display in stores at the appropriate time critical. Leading players have already shifted to smaller batch sizes and increased order frequency to avoid stocking slow moving and obsolete inventory. Needless to say, a lean supply chain is paramount. APM Terminals Inland Services understands the apparel industry’s logistics needs and has introduced innovations around its Garmenton-Hanger (GOH) solutions that help deliver quality and shorten the logistics cycles. Specialised fabrication of containers to carry garments on hangers, exclusive dust free and secured GOH chambers, mobile and transferable GOH stands are some examples. These solutions have enabled easy sorting of garments in a dust-free environment and reduced the time for stuffing the containers, as well as dependency on labour. Tangible benefits such as hasslefree execution, cost savings and improved turnaround time have followed. India holds second rank in the world in
cover story
The apparel industry is trend-based and seasonal in nature and this necessitates a short shelf life of the products and makes display in stores at the appropriate time critical. Needless to say, a lean supply chain is paramount in the apparel business. Ajit Venkataraman, MD, APM Terminals India Private Limited
the export business of textiles and apparels. The Indian Government’s push for logistics performance, combined with China’s shift in focus from manufacturing to IT and services, rising exports to Europe, proposed initiatives like integrated textile and apparel parks including the largest one at Warangal, are all harbingers of immense growth potential for the Indian apparel industry. At the same time, the comapny need to be mindful of tough competition from other manufacturing centers, located especially in Bangladesh and Vietnam.
enable them to prosper. Given the seasonal and trend based nature of the industry, time is the defining factor. If we understand the customers’ requirements well and consciously look for avenues to save time, new answers are found. APM Terminals Inland Services, for instance, introduced delivery of containers with customised GOH mobile stands directly to the stuffing site for its EXIM export customers, thereby avoiding rework and repacking, both at the factory as well as the container freight station. As a result, customers have experienced
Top air cargo imports through Sea-Tac Airport
Innovations to shorten the time cycle and infrastructure needed to support efficient supply chains will drive transformation in the industry. As always, APM Terminals Inland Services will continue to work with their customers, develop insights and deliver world-class supply chain solutions that will
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reductions in cost, time and effort, as well as the added ease of execution. Another equally critical aspect, though not spoken much about, is ensuring garments reach the final destination in proper condition. Proper handling, cleanliness and security of apparel are the underlying minimum
requirements of a successful logistics delivery. Apparel is by nature delicate, requires extensive care and is also prone to pilferage. The more amount of rework on garments enhances the chance of damage of apparels.
Challenges and Solutions The Third-Party Logistics (3PL) companies are faced with challenges of increasing number of retail channels and demands from customers. Technology has the potential to radically transform the way logistics is
Today’s players in apparel business require right blend of lead time, quality and cost to stay competitive in this dynamic business. executed. Its integration with systems built around the customer enables one to monitor the supply chain performance in real-time, thus facilitating identification and solutions to supply chain problems. This often makes on-time quick deliveries possible, resulting in better customer satisfaction. Venkataraman informed that they have deployed technologies including RFID, DGPS, yard management systems, customer service kiosks and online applications. These have helped them to deliver faster turnaround times in their Container Freight Stations. In addition to providing transparency to their customers, they provide a safe work environment for both their employees and customers, meeting all international requirements.
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cover story Safexpress has gained invaluable experience in developing innovative solutions to meet the demanding needs and individual challenges of various apparel firms. Safexpress offers cutting edge logistics solutions to its customers, enabling them to focus on their core competencies. Vineet Kanaujia, Vice President, Marketing, Safexpress Private Limited
A p p a r e l industry is all about innovation and setting new trends. The industry is ever-evolving. The supply chain and logistics industry plays a vital role in the growth of apparel business. According to Vineet Kanaujia, Vice President, Marketing, Safexpress Private Limited, the product life cycle of apparel has many stages. From procurement of raw materials to development of finished goods and then to make the goods reach the end-customer within the stipulated time-frame is a daunting task. Efficient supply chain and logistics plays a crucial role in this. Safexpress has been providing its valueadded services to the apparel industry from the last two decades. Over the years, Safexpress has gained invaluable experience in developing innovative solutions to meet the demanding needs and individual challenges of various apparel firms. Safexpress offers cutting edge logistics solutions to its customers, enabling them to focus on their core competencies. The apparel industry has witnessed a spurt in investment during the last five years. In recent years, the industry has attracted huge amounts of FDI. The industry is growing at a good rate and has ample scope for further growth. The Indian apparel industry, currently estimated at around US $100 billion, is expected to double to over US $200 billion by 2021. The exponential growth in the apparel industry is due to people being more concerned about their
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lifestyle. This has led to rapid increase in demand for branded and quality clothes across the country. The industry’s future looks very promising due to both strong domestic consumption as well as export demand. Undoubtedly, the apparel industry is very dynamic. Demand of apparels generally has a short span of life due to the ever-changing fashion sense of the market. Therefore, lead time, accuracy, availability and reliability, all become of critical importance. The distance between raw material provider, buyer and supplier makes time-factor very crucial in the apparel business. Timely delivery of products is dependent on efficient supply chain and logistics systems. Issues and challenges involved in various logistics activities impact on-time delivery which results in business loss. Timely delivery of goods is a critical success factor in the apparel business. Safexpress offers innovative solutions which are designed to meet all the distribution requirements of apparel industry, through its fully integrated surface, air and multimodal
infrastructure. The company covers all 688 districts of India through its massive distribution network of more than 620 destinations. The company has a fleet of over 5000 GPS-enabled vehicles, operating 365 days a year on more than 1000 defined routes across the country. Safexpress ensures time-definite and absolutely safe deliveries of apparels to every square inch of the country. In fact, supply chains have become a key driver of success for apparel companies. Today, they are more strategically important than ever before. Consumer demands are changing daily. Companies have to react quickly when varied consumer requirements appear, thus making time-definite deliveries and fast movement of apparels a big necessity. In order to shorten the supply chain, an organisation has to bring many changes across various functions. Broadly, we can classify these changes into three categories. First, these categories are related to technological advancements such as computer-aided design, body scanning, digital printing etc. Second, in terms of adopting flexible manufacturing systems, computer integrated manufacturing tools and techniques and finally, organisational changes in terms of flexible culture and empowering employees by assigning more responsibilities. Adoption of these kinds of business strategies will lead to shortening of product life cycle and development cycle, thus resulting in shortening of the supply chain. This will, in turn, allow
cover story
With the faster turn-around-time, accurate inventory management and growing usage of technology, apparel industry is making greater strides. Logistics play vital role from sourcing to delivery in the apparel industry. The growth in the apparel industry directly fuels growth in the logistics sector. Rahul Mehra, CEO, AWL India
manufacturers to respond more quickly and flexibly to fast-changing consumer demands.
C o mp e t it i o n , G r ow t h a n d Technology In today’s competitive world, growth and technology go hand in hand. For a company to grow, it needs to adopt latest technology and systems. Use of technology increases efficiency, reduces the chances of errors and helps in on-time delivery of goods every time. 3PL companies use Transportation Management System (TMS) to support supply chain procedures and transportation choices. TMS software enables real-time, tangible information that can be analysed to identify problems and solutions within the supply chain. Creating solutions with insight gained from TMS data often results in better
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customer satisfaction. These firms also use a Warehouse Management System (WMS), which is specifically designed to cater to the dynamic needs of 3PL customers. This system helps control the movement and storage of materials within a warehouse and provides the key information in real-time and on-the-go. Enterprise Resource Planning (ERP) software is also being utilised by 3PL firms. It helps to streamline operations while also improving productivity. The system helps in providing a better coordinated workforce and enhanced customer service. Safexpress offers 3PL solutions ranging from designing, implementing to operating the complete supply chains of companies. These solutions help in reducing costs, streamlining delivery schedules and providing a better customer experience. Rahul Mehra, CEO, AWL India maintains that work scope of Logistics Service Providers (LSPs) today are not just limited to providing logistics services. Mehra says, LSPs now have started providing all the value-added services to their clients and have transformed themselves to more than just a traditional moving company. LSPs, by performing activities like tagging, labelling, barcoding, kitting, packing etc., have ensured that the manufactures or brand owners get a single window to interact with and efficiently use the resources to get maximum output. With the faster turn-around time, accurate inventory management and growing usage of technology, apparel industry is making greater strides. The raw data from logistics firms is now getting analysed by the industry to predict the fashion, season and
demographic trends for effective forecasting. Logistics play a vital role from sourcing to delivery in the apparel industry. Hence, the growth in the apparel industry directly fuels growth in the logistics sector. Other government policies like GST will also play an important role in the expansion of vision of this sector. The timely delivery of goods is of critical importance to ensure that the apparels reach the store at the right time for the consumer
As per recent reviews, global market for fashion apparels is estimated to be around $45 billion, with a predicted growth of 10% annually. The huge demand for fashion apparel has given way for more specialized services in the logistics industry. to select the goods, beyond which the goods are of no use. Employing big-data analytics now-a-days, the giants are able to plan the manufacturing/sourcing well in advance reducing the risk factors. 3PL companies are also updating their system to keep up with the current dynamic requirements of the market. With a blast of business flowing in from e-Commerce channels to the increase of volumes in lieu of GST implementation, 3PL players are investing a lot in latest technologies and are getting platform independent. Usage of QR codes, API interfacing with manufacturers and online portals, customer-access portals to maintain transparency, 100 per cent barcoding and
cover story
The trend towards fast fashion brings a number of challenges in the supply chain industry, given that a $50 shirt needs the same consideration as a $500 phone. Our company has a number of products and solutions that can help their customers in this regard. Andrew Jillings, Chief Executive Officer and Group Managing Director, Tigers Group
sorter machines and much more has been introduced and used by logistics companies to provide timely and precise data enabling, clients to handle the challenges, stay ahead in competition and most importantly, efficiently organise the orders and saving the cost. The trend towards fast fashion brings a number of challenges in the supply chain industry, given that a US $50 shirt needs the same consideration as a US $500 phone. Andrew Jillings, Chief Executive Officer and Group Managing Director, Tigers Group said, “Our company has a number of products and solutions that help our customers in this regard. First, a hybrid seaair product allows us to massively speed up transit times between China and Europe as well as the US, much more so than through ocean and reduce greenhouse emissions and cost compared to exclusive air route. Second, the TigerPac product is designed to not only facilitate origin or destination consolidation, but to also produce retail ready merchandise
Apparels have a short life cycle and their demand dies with the changes in trends. This ever changing trend increases the importance of logistics service providing companies so that fashion freak consumers could be satisfied. at origin when garments would otherwise be waiting for a sailing and importantly allowing trans-shipment direct to the retail at origin, avoiding any further delays. Finally, our company recently launched the Tigers Gravity System, which allows our
customers the first truly end-to-end visibility experience in the fashion business; literally from concept/plan board through PO/ Booking and delivery to store/end consumer. In addition, Tigers Gravity uses big data to monitor thousands of data sources, including news sources, for issues that might affect our partners and their extended supply chains.” Marcel Opitz, Director Sales, Schenker India Private Limited holds a view that the textile sector is a labour intensive sector and is one of the largest employing sectors of the country. According to Opitz, the textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports amounting to $40 bn in FY 2015-16. “It provides 40 millon direct and 60 million indirect employments to the people. This industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale,” he explained.
Logistics - Right Product at the Right Place The logistics function is to ensure the availability of right product at the right place, in right quantities and right condition at the right time and right cost to the customer. The logistics services are provided by the private sector and the logistics infrastructure such as roads, ports, airports etc. are provided by the governments. The performance of the logistics sector depends on both hard and soft infrastructure, skilled manpower, government policies, cluster locations and
24 CargoConnect - june 2017
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cover story
Fashion and apparels is the definition of a fast moving industry. Lead times, accuracy, availability and reliability are all of critical importance. Therefore the transportation and logistics industry plays a key role in the fashion and textile industry. Textile and apparel goods require greater care and packaging. Based on the demands and trends, the merchandise needs to reach the market well in time. Marcel Opitz, Director Sales, Schenker India Private Limited
connectivity, service providers, insurance agents and a host of other things in addition to those connected with actual goods transport and delivery. The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles, make the Indian textiles sector unique in comparison to the industries of other countries. The apparel industry in India is one of the leading apparel industries in the world. Earlier, it was quite unorganised but the scenario has been changing with time. It was mainly started after the economic liberalisation of Indian economy in 1991. The opening up of economy gave the muchneeded thrust to the Indian apparel industry, which has now successfully become one of the largest in the world. India is one of the largest producers of fibre in the world. The main fibres produced in India include cotton, silk, jute, wool and man-made fibres. India is the second largest producer of cotton and silk, and the fifth largest producer of manmade fibres. India has a strong domestic as well as international demand which led to huge overall growth. From the past few years, the fashion retailing sector has been aligning with global trends with retailing firms such as Shoppers Stop and Crossroads entering into middle class segment. It is predicted that the apparel
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sector in India will grow at a very fast rate in the next few years. Also considering that the Indian Government has introduced FDI rules
Application of technology in business strategies, will lead to shortening of product life cycle and development cycle, thus resulting in shortening of the supply chain.
transportation and logistics industry plays a key role in the fashion and textile industry. Textile and apparel goods require greater care and packaging. Based on the demands and trends, the merchandise needs to reach the market well in time. Fast fashion clothing collections are based on the most recent fashion trends presented at Fashion Weeks in both the spring and the autumn of every year. Emphasis is on optimising certain aspects of the supply chain for these trends to be designed and manufactured quickly and inexpensively to allow the mainstream consumer to buy current clothing styles at a lower price. This philosophy of quick manufacturing at an affordable price is used in large retailers such as H&M, Zara, Peacocks, Primark, Xcel Brands and Topshop.
Efficiency in Logistics which allow giant MNCs like H&M, GAP, INDITEX, M&S to invest and launch their individual retail operations within India. This will surely be beneficial for India. Fashion and apparels is the definition of a fast moving industry. Supply chains are extended and complex, as manufacturing moves to lower cost countries. Fashion is all about innovation and perfection and it’s always on the move. Therefore, the
Consumers have heightened expectations about how quickly they should be able to access information and share ideas. Those expectations are driving many logistics companies to leverage technology in new ways to meet customers’ higher demands. A growing number of logistics service providers are turning to newer customer engagement technologies to inform, educate and interact with customers. Customers turn to logistics services providers (LSPs) because they expect that LSPs will be able to run their warehousing and transportation operations more efficiently and cheaper than they can run on their own. That means LSPs need to run as lean an operation as possible, while at the same time, making sure of getting paid for each and every service provided to the customer. At the same time the industry
cover story
India has been presenting a growth story for the entire world, not only as a consumption centre but also as a key supplier to the world for many products. With promotion of Make in India initiative worldwide, production and exports of apparels from India would surely increase. Harpreet Singh Kohli, Zonal Head, Operations, Future Supply Chain Solutions Ltd
requires very high flexibility of services and exceptional visibility of inventories through the whole supply chain. Efficient logistics is essential to provide the reach to the organisation and it also enables business growth. Logistics helps in business expansion across the country and enables growth of the business. Harpreet Singh Kohli, Zonal Head – Operations, Future Supply Chain Solutions Limited said, “In the current world, apart from the merchandise, there is a competition between the supply chains of the companies; the one with better and efficient SCM has the edge over its competitors.” India has been presenting a growth story for the entire world, not only as a consumption centre but also as a key supplier to the world for many products. With the promotion of Make in India initiative worldwide, production and exports of apparels from India would surely increase. While selecting technology for supply chain, a long term horizon should be considered as technology advances with a galloping speed. Better equipped tech friendly organisations are always ready to face the ever changing market. Volume of sales also plays a vital role in selecting the technology; with high volume ROI is much faster than as compared to the low volume ROI. 3PL companies create enormous value for customers in following ways: • Reduces cost, shares the common cost of warehouse with other customers. • Bring expertise of warehouse management. • Fast ramp-up is feasible; change is network design can be managed with lesser lead times. • 3PL companies invest in the DC building/ Racking/MHEs and WMS etc., customer
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The apparel industry has witnessed a spurt in investment during the last five years. In recent years, the industry also attracted huge amounts of FDI. The Indian apparel industry, currently estimated at around USD 100 billion, is expected to double to over USD 200 billion by 2021.
can use the capital for core business. The landscape of the fashion industry has changed drastically. The industry has become more competitive with consumers becoming fashion savvy and demanding. Consumers are shopping for products 24X7 across locations and want it delivered to their doorstep the very next day. RS Subramanian, Senior Vice President and Country Manager, DHL Express India says this is the reason supply chain plays an essential role to play in the fashion industry to ensure that the consumers’ wants are swiftly met. Supply
chains have to be flexible and responsive to adapt to fluctuations in demand that are a part of the industry. In this regard, logistics has greatly helped the apparel industry meet the demands of the international market by driving speed to market, shortening turnaround times, managing complexity in the entire sourcing network as well as working with tighter inventory cycles. Cross border e-commerce trade has opened up the global market to India and logistics is critical to the business model of most players in sourcing and fulfillment of demand. India has been a sourcing centre for the fashion trade globally for over two decades. According to DHL Express’ ‘The 21st Century Spice Trade’ report on cross-border e-commerce, globally, cross-border trade is expected to grow two times faster than domestic trade. In fact, 71 per cent of retailers expect the share of cross-border revenue to grow in the future. Exports of readymade garments in India are projected to grow at a 4.5-6.5 per cent CAGR over 2015 to 2020. Though this signifies the immense potential in cross-border trade that India can leverage, the scenario still remains challenging.
E-Commerce and Logistics The emergence and growth of cross border e-commerce trade is a massive opportunity for Indian manufacturers to access global customers directly. There is a scope to access them through e-commerce platforms and market places right up to building their own brands to move up the value chain and derive better realisation of margins. Fashion enthusiasts across the globe are also increasingly interested in ethnic Indian apparels, which have led to India significantly rising in the ranks of fashion sourcing
cover story Supply chains have to be flexible and responsive to adapt to fluctuations in demand that are a part of the apparel industry. In this regard, logistics has greatly helped the industry to meet the demands of the international market by driving speed to market, shortening turnaround times, managing complexity in the entire sourcing network as well as working with tighter inventory cycles RS Subramanian, Senior Vice President and Country Manager, DHL Express India
destinations to look out for the world over. The opportunity is bigger than it has ever been before. However, for India to achieve its potential in the apparels business, it needs to have a sturdy supply chain to be able to deliver to the clients across the borders that look out for efficiency in transactions. With India being the world’s second largest exporter of textiles and clothing, we see this industry as one of high significance and sure shot growth to supply chain players. Fashion is all about ‘what-in’ and ‘what-out, as seasons change as per the trends. Today’s fashionista is looking to set trends rather than follow them. Trends change rapidly and customers want to increasingly keep up with the latest fashion trends. In such a scenario, apparel businesses have to source raw materials, create the end product and deliver it to the customer at break neck speed, while overcoming all the complexities involved in the ramp-to-rack cycle due to the volatile nature of the industry. With plenty of competition, fashion players cannot afford to take timeliness lightly as customers easily have a range of alternatives to choose from. Customers are highly aware of the choices that are available to them which give them the power to demand for
swiftness in service. Keeping this in mind, logistics players especially those who are in express logistics, ensure time definite and just in time supply chain. Apparel industry is highly time-sensitive; a shortened supply chain speeds up the movement of goods. This will significantly reduce the ramp-to-rack cycle. We see notable improvement in the outlook with the government stepping up the focus on infrastructure. Additionally, the landmark regulatory framework in the form of GST promises to build a unified Indian market ensuring seamless flow of goods across the country with simplified processes. Moreover, moving towards paperless documentation in the entire supply chain process, such as paperless customer clearances, and adequate trade infrastructure such as development of air cargo terminals will also add to the swiftness in the overall supply chain.
In today’s competitive world, growth and technology go hand in hand. Use of technology increases efficiency, reduces the chances of errors and helps in ontime delivery of goods every time. Technological advancement will surely speed up the process of pickup and delivery for both consumers and logistics players. The recent DHL report on ‘Logistics trend radar’ touches upon how innovations such as self-driving vehicles have already made inroads in logistics, reaching a level of maturity for commercial use in warehouse operations. Additionally, pilot tests have demonstrated the future potential of Unmanned Aerial Vehicles (UAVs), especially in rural delivery scenarios. DHL’s Parcel has successfully run trials for its Parcelcopter and most recently completed its latest trial run in the Bavarian community of ReitimWinkl. Moreover, augmented reality (AR) accessed via smart glasses has exceeded predicted levels of impact. First productive deployments have delivered promising results. A pilot by DHL and Ricoh in the Netherlands showed a 25 per cent efficiency increase as well as strong positive feedback from the users. Additionally, technology adoption in terms of migration to paperless documentation throughout the supply chain process will also greatly ease the entire process. With the clients and the end consumer looking at a seamless supply chain process that is free from inaccuracies and errors, damaged and misplaced goods, technology will be a game-changer.
30 CargoConnect - june 2017
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SPECIAL feature
Freight Corridors Facilitating Accelerated Economic Development
32 CargoConnect - june 2017
SPECIAL feature
Indian Railways is currently in the process of building two world-class freight corridors that might just transform the way goods are transported along India’s busiest routes. Given India’s energy security issues and escalating concerns about traffic accidents, congestion and the greenhouse gas emissions associated with road transport, these efforts will help increase the share of rail transportation in the country. Additionally, this will also aid to the development of our economy which gets dragged down due to poor infrastructure and road network. Tariq Ahmed deals with the subject to give you a closer look.
june 2017 - CargoConnect 33
SPECIAL feature Introduction India has a robust transport infrastructure comprising of 5.25 Million km of road network, 1,20,000 kms of railway network, 7,500 km coastline with 13 Major Ports and 205 Minor Ports and 125 airports. Additionally, India has a network of 14,500 km of navigable inland waterways. However, Logistics Performance Index (LPI) – a ranking published by World Bank to measure logistics performance of countries – ranks India at 35, primarily due to suboptimal modal mix and inefficient logistics operations. India not only lags behind the developed countries on the LPI ranking, but also ranks low as compared to other Asian countries as indicated below in Figure 1:
4.23
4.07
to roads and shipping is 60 per cent cheaper, thrice as fuel efficient and 60-90 per cent less polluting than roads.
Key issues with existing infrastructure The salience of road freight has steadily increased from 31 per cent in 1970 to 61 per cent in 2012, despite road movement being 50 per cent costlier than rail movement and 60 per cent costlier than shipping. A brief description of the issues plaguing the logistics sector follows. 1. Inadequate investment in railway infrastructure Investment in building railway and domestic shipping infrastructure has been limited. With increasing traffic, this has led to large Figure 1
3.99
3.97 3.42
Germany
UK
USA
Japan
India
Source: LPI Reports
India’s logistics cost as a percentage of its GDP stands at 13-14 per cent and the same has doubled over last 15 years. This is very high compared to the other developed countries, pointing to the inherent inefficiencies in the freight movement in the country. The reason for such an alarming cost for logistics can be translated from the fact that a huge amount of variable costs are involved in transporting goods in our country, apart from the fixed operating costs. The fixed operating costs for logistics involve vehicle maintenance costs, driver salaries, annual vehicle and thirdparty insurance, national permit, road tax and fitness certification fee. The variable cost includes fuel, toll and loading and unloading. A fair comparison can be drawn from Figure 2. The modal split for India compares unfavourably with other leading economies. Road is the dominant mode of freight transport in India, even though railways are 50 per cent cheaper, twice as fuel efficient and 50-75 per cent less polluting compared
34 CargoConnect - june 2017
congestion on the existing infrastructure. India’s network density of railway is comparable to that of USA – however, our “If implemented properly, private investment in Railways can begin the virtuous circle by freeing up the resources of Indian Railways and providing focus on basic infrastructure such as modern signalling equipments and robust rail network. The result will be more capacity augmentation from existing infrastructure and more cargo movement...”
Rohit Chaturvedi Managing Partner, Kitzo Management Advisory, a logistics strategy and operations consulting firm investments towards improving the rail network are 40 per cent lower. This has led to higher congestion on India’s rail network – highlighted by India’s higher traffic density. Similarly, capacity constraints and congestion at ports has hindered adoption of
coastal shipping as an alternative mode for freight movement. For instance, only 35 per cent of 400 berths at non-major Ports have a draft more than 6 metres, restricting the operation of larger sized coastal vessels with 5,000 – 40,000 DWT capacity. Most of the berths having higher draft are captive ones like Mundhra, Pipavav, Hazira with limited capacity for other consignors. Also, terminal infrastructure on most of the 111 routes declared as National Waterways is not conducive to cargo movement. As of 2017, terminals are available only on 5 NWs (NW-1, NW-2, NW-3, Goa and Maharashtra). Most new terminal infrastructure on NW-1 will not be completed before 2019 and terminals on other NWs will take even longer to be operational. 2. Inadequate infrastructure to ensure seamless intermodal movement As of today, none of the terminals on NW-1 have railway sidings and more than 10 out of 23 existing/planned terminals are not connected with all-weather roads. Additionally, roads leading to some ports are too narrow for container/cargo movement and many minor ports are not directly connected to railway lines. 3. Regulatory challenges and misaligned policy initiatives There are several regulatory and policy issues plaguing the rail and coastal shipping sector. With a focus on improving capacity utilisation of rolling stock, railways restrict non-rake load bookings. While coal, iron ore and cement continue using railways under this policy, other cargo, which typically are less than rake-load, prefer road as the mode of transport. Also, continuous movement between the east coast and west coast of India via Pamban Pass is permitted by Directorate General (Shipping) for only about four months a year, when adequate channel depth is available. Alternatively, vessels are forced to go around Sri Lanka, which further increases regulatory challenges. 4. Lack of integrated planning While the pace of highway construction in the country has gone up in the past few years, the planning for highway upgradation in the country has been ad-hoc and driven primarily by local considerations with limited focus on large-scale network planning. Corridor approach to road development is in nascent stage in India, with most of the development
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SPECIAL feature Figure 2
Freight Cost Breakup Freight Cost Comparison 1.9
Variable Costs
Fixed Operating Costs
Other
7%
Toll Tax
11%
Fuel
34%
Insurance Permit, Tax Maintenance Salaries Capital Costs
0.9 3% 12% 15% 17% India
happening on individual stretches, with limited emphasis on maintaining uniform infrastructure between the origin and the destination of the corridor. 5. Poor implementation of planned infrastructure The planning of infrastructure is not carried out keeping in mind the future growth potential, leading to suboptimal implementation. There are points of local congestion on the existing corridors, driven by interaction of local city traffic with the highway through traffic, reducing the overall efficiency of the corridors. For instance, lack of ring road in Bangalore hampers freight movement on North South Corridor. 6. Pricing initiatives The pricing policies for rail and coastal shipping are not designed to help promote them as the preferred mode of freight transport. Freight movement on rail has traditionally subsidised passenger movement in India. A stark comparison is seen between China and India – passenger fare to freight fare ratio in India is 0.3, compared to 1.2 in China, as illustrated below. Similarly, for coastal vessels, the berth rental charges are the same as those for international vessels, leading to overall higher operational costs and overall lower usage of coastal shipping for freight
36 CargoConnect - june 2017
28%
Fuel Costs
50%
Overheads
22%
Capital Costs
USA
movement purposes.
Global examples of multi-modal corridor development There are multiple global examples of successful implementation of development of road and rail corridors. Developed economies have also focused on developing infrastructure to enable shifting of freight from congested roads onto rail, coastal shipping and inland waterways. “Rajasthan plays an important role in logistics. Forty per cent of the freight corridor passes through the state.”
Vasundhara Raje Chief Minister, Rajasthan A successful example is the core network of corridors aimed at providing multimodal connectivity throughout EU. The following are some of the network corridors identified: The Rhine-Alpine Corridor is one of the busiest freight routes in Europe. The corridor connects the North Sea ports at Rotterdam and Antwerp to the Mediterranean basin. The Atlantic Corridor links the Western region of the Iberian Peninsula to Paris and further to Mannheim with rail lines (conventional and high speed). This corridor also includes the Seine as an inland waterway.
The Mediterranean Corridor links the Iberian Peninsula with the Hungary-Ukraine border region. The 3,000 kilometer corridor provides multimodal connectivity to the ports of western Mediterranean region with the Centre of the European Union. The North Sea-Baltic Corridor – connects the ports of eastern end of Baltic Sea with the Northern Sea ports. The corridor provides road and rail transport links between the Baltic states and Poland, Germany, Netherlands, Belgium. This corridor also includes inland waterways. The most important project in this corridor is “Rail Baltic”, which provides rail connectivity between regions of Tallinn, Riga, Kaunas and Poland. The North Sea-Mediterranean Corridor stretches from Ireland to the Mediterranean Sea in southern France. The multimodal corridor includes inland waterways in Benelux and France, providing multimodal connectivity from North Sea ports to Maas, Rhine, and Seine etc. Countries in Eastern Africa have majorly invested in development of transportation corridors to facilitate economic liberalisation and trade. The Northern Corridor is a transport corridor linking the capital cities of Burundi, Rwanda, Uganda and Kenya with the port of Mombasa in Kenya. The corridor is a multi-modal corridor integrating road, rail, inland waterways and pipeline transport.
Connectivity Enhancement – Need for Holistic Network Development A scientific approach with focus on connecting centers of economic importance in the most efficient way is needed to identify and prioritise the next wave of development in the country. This will enable improvement in the logistics efficiency of the country through a reduction. In addition, an integrated multimodal development approach is essential to ensure a consistent congestion free carriageway infrastructure along key corridors. Specific measures need to be taken for each mode to ensure bestin-class practices are adhered to. However, at the same time, it is important to ensure there is alignment on the development plan among different public and private agencies, to ensure seamless multimodal connectivity. For this, a central authority for managing the overall infrastructure and facilities is ideal. The central authority
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R eliability
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SPECIAL feature must ensure coordinated planning across different modes and presence of intermodal connectivity for seamless movement of freight throughout the country. Apart from the measures for ensuring coordination between different modes, including the development of multimodal logistics parks in key locations and intermodal connectivity, specific measures are being taken to improve the state of individual modes as discussed below. To improve the road network in the country, a comprehensive network of corridors and associated feeder routes need to be planned to connect the key economic centers in the country, to augment the existing network. A
the congestion in these points. Potential interventions could vary from improving the quality of existing roads to developing additional carrying capacity through construction of bypasses, elevated corridors, flyovers, lane expansion etc. Similarly, various interventions are needed to improve rail freight movement in India, foremost being the rationalisation of rail freight charges. According to a study on rail freight analysis, revenue maximisation for an average distance of 1,100 kilo-meter is achieved at INR 15 per TEU per km, a reduction of approximately 33 per cent from the prevailing rates of INR 20 - 22 per TEU per kms. This potential rationalisation in freight charges
Corridor development – Expected Impact Details of the potential benefits of adopting a corridor approach to development of transportation infrastructure are highlighted below: • Average Speed Improvement: Average speed of freight vehicles plying on the road corridors is expected to increase by 10-25 per cent once the choke points on the corridors are removed and adequate lane infrastructure is provided on these corridors. Additionally, the Dedicated Rail Freight Corridors are expected to double the average speed of freight trains. • Fuel efficiency improvement: With an improvement in average speed of vehicles
There are multiple global examples of successful implementation of development of road and rail corridors. Developed economies have also focused on developing infrastructure to enable shifting of freight from congested roads onto rail, coastal shipping and inland waterways.
network of 50 corridors along with 175 feeder routes to this network is needed to carry 70 per cent of the total national inter district road freight movement in the country. In addition, a network of such a magnitude is needed to provide good quality road connectivity to more than 75 per cent districts. In addition to developing new corridors, inter corridor routes and feeder routes, there is a need to improve the efficiency of the existing and proposed corridors, to ensure a seamless, well-connected India aiding freight movement. There are multiple localised congestion points on the corridors hampering the traffic movement and thereby reducing the overall efficiency of the corridor. The right intervention needed to eliminate congestion and improve corridor efficiency would depend on the root cause driving
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could be compensated by the premium that could be charged on dedicated freight corridors. In addition, measures to increase the priority for freight trains on railways network need to be explored. Also, an integrated pricing from the origin to destination covering the road freight movement on the first and last mile needs to be explored. For an integrated multimodal transport, consistency across different modes of transport is a necessary condition. In the present system, railways charge separately for the first and last mile of connectivity, based primarily on slab rates. Adopting an integrated pricing for the complete distance, including the first and last mile will have a major impact in reducing the cost of the freight movement, thereby providing an impetus to seamless multimodal freight transport.
by 15-20 per cent, the fuel efficiency of freight vehicles is expected to increase by 2–3 per cent. Also, favorable shift of freight from road to rail and water will result in reduction in CO2 emissions by 50-90 per cent. • Turnaround time reduction: Seamless i nte r mo d a l a nd robust l a st-m i le infrastructure will help reduce the turnaround time for cargo in India, le ad i n g to c on s id e r able s av i n gs for end-users. In summary, the interventions planned will enable a reduction of 5 – 6 per cent in the overall logistics costs in the economy. It is hoped that all the involved stakeholders will recognise the need for a collaborative effort to improve the state of logistics in India and help make the logistics in India cheaper, greener and more efficient.
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feature
Moving towards Blue Revolution through Port Connectivity
India has a long coastline of 7,500 kilometres spanning through 13 maritime states and union territories. Several benefits could be gained by India from such a long coastline but till now we have failed to exploit its complete potential. Lack of proper port infrastructure, poor railway and roadway connectivity and high turnaround time have emerged as a stumbling block in India’s EXIM growth. The Government of India has launched Sagarmala Project to overcome all these hurdles so that India could also tread on the success path. Gaurav Dubey delves on the project and presents views of the Chairmen of Jawaharlal Nehru Port Trust and V.O. Chidambaranar Port Trust in this short report.
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feature New Endeavours in Ports Logistics The Government of India has been encouraging multi-national companies as well as national companies, under the ambitious ‘Make in India’ initiative, to manufacture their products in the country. The initial efforts of Prime Minister Narendra Modi also brought some early success as India received Foreign Direct Investment (FDI) of US $63 billion in the year 2015. India surpassed even the United States of America and People’s Republic of China in terms of FDI. However, the ultimate aim of the government of making India as a manufacturing hub could not be fulfilled till the country has better logistics infrastructure and last mile connectivity. An excellent network of roadways, railways, waterways and airways is quintessential for any country to move its freight from one place to another. Apart from this, ports of a country also play an important role in the export import business. The twelve major ports of the country handle approximately 90 per cent of the total EXIM business, still their contribution in the national income is far less than the railways and roadways. And, with the initiation of programmes like Make in India and efforts of the Government to ease the process of doing business in the country, the cargo traffic is expected to grow from 976 Million Metric Tonnes (MMT) in 2012 to 1758 MMT by 2017. So, it is essential to make the country’s ports more effective and efficient in terms of cargo handling. To achieve this objective, the Government of India came up with the ‘Sagarmala project’ in the year 2015. The project is a strategic and customeroriented initiative of the 95 per cent Government of India of India’s trade by to modernise India’s volume and 70 per cent ports so that port-led by value take place development can be through maritime augmented and coastlines transport. can be developed to contribute in the country’s growth. The project looks towards transforming the existing ports into modern world class ports and integrate the development of the ports, the industrial clusters and hinterland by efficient evacuation systems through road, rail, inland and coastal waterways resulting in ports becoming the drivers of economic activity in coastal areas.
The Sagarmala project revolves around four basic ideas – • Port modernisation • Port connectivity • Port led industrialisation • Coastal community development Six megaports are also planned under the Sagarmala project, which are located across various locations in the country. The new ports which are to be developed are located at Sagar Island (West Bengal), Paradip Outer Harbour (Odisha), Sirkhazi (Tamil Nadu), Enayam (Tamil Nadu), Belikeri (Karnataka) and Vadhavan (Maharashtra). The project is now moving from the planning to the implementation stage. More than 200 projects from approximately 400 projects identified under Sagarmala have come under various stages of implementation and development. Enhancing the port connectivity to hinterland and increasing the share of domestic waterways (inland waterways and coastal shipping) are key objectives of the Sagarmala project. In this regard, the Ministry of Shipping has been taking multiple steps to develop the 111 National Waterways in the country. To achieve full potential of ports they have to be seamlessly connected with the railway network, road network and inland
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The Government of India has proposed investments to the tune of Rupees 4 lakh crore to improve rail and road connectivity for container movements through various projects under Sagarmala.” Anil Diggikar, Chairman, Jawaharlal Nehru Port Trust
waterways. CargoConnect interacted with Anil Diggikar, Chairman, Jawaharlal Nehru Port Trust and S Anantha Chandra Bose, Chairman, V.O. Chidambaranar Port Trust and took their views on this ambitious project which would provide an unprecedented boost to the logistics industry of the country. Anil Diggikar says, Sagarmala’s vision has been created in such a way that it can fulfill and promote port-based industrial and manufacturing clusters across the coastline in India. These clusters would be developed in line with three archetypes of energy, materials and discrete manufacturing. There are two needful objectives of this national programme – reduction in logistics cost and reduction of time for domestic and EXIM cargo. The Government of India has proposed for investments to the tune of `4 lakh crore to improve rail and road connectivity for container movements through various projects under Sagarmala. The project would help in reducing cost for both the domestic and export-import (EXIM) cargo as movement of raw materials and finished products through coastal shipping and inland waterways would become 60 per cent to 80 per cent cheaper than road and rail transport. There are new port development projects that have been identified based on three themes – port saturation, non-availability of a port on the coastline stretch and strategic location. Vadhawan, Paradip south satellite port and Sagar port have been identified at such locations where existing ports have saturated. The port at Vadhavan near Dahanu in Thane District with a depth of 20 metres, will act as a satellite port for JNPT, which is mainly expected to cater to container traffic from north hinterland. JNPT has been developing India’s first multi-product port-based Special Economic Zone (SEZ) in the close proximity to the JN Port to promote exports based industries. JNPT
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SEZ is developed under Sagarmala project which is expected to bring more than `4,000
Cargo traffic expected to grow from 976 MMT in 2012 to 1758 MMT by 2017.
crore of investments in the region and would provide employment opportunities to the large extent of population. The rail and road infrastructures are undergoing a major transformation for EXIM trade to bring down the overall cost. In addition to that, the programme would increase the share of inland waterways and coastal shipping in the modal mix from six per cent to 12 per cent.
“We truly believe that someday India’s ports will act as one of the major gateways in promotion and strengthening of the international trade. JNPT has always remained active and played a catalytic role in forming synergies in the times to come. We have already joined hands with Iran’s Chabahar Port to develop port-based infrastructure in Iran that will further open trade opportunities for both the nations. The partnership of India and Iran has been achieved through India Ports Global Private Limited (IPGPL), which is a SPV of JNPT and Kandla Port. Recently, IPGPL has signed a MoU with the Inland Waterways Authority of India to be the implementing agency for the Kaladan Multimodal Transit Transport Project in Myanmar,” Diggikar said. JNPT has introduced a rebate of `728 for movement of containers from the local Container Freight Station (CFS) connected by railway which resulted in 80 per cent jump in movement of containers by rail from the local CFS. Handling rates for containers moved by rail has been brought down to be at par with the rate of road to incentivise
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feature After successful implementation of the Sagarmala project, commodities such as steel, cement, fertilizers and food grains could also be moved coastally to the extent of about 60 mn tonnes by 2025” S Anantha Chandra Bose, Chairman, V.O. Chidambaranar Port Trust
modal shift. JN Port is directly connected to 50 inland container depots in the country. In what could be a major boost to EXIM trade in moving their containers at ease would be commencement of Dedicated Freight Corridor project connecting JN Port with the Northern hinterland, being taken up by the Dedicated Freight Corridor Corporation of India Ltd. The project is estimated to be completed by March 2018, and with its completion the present ICD shares are expected to go up to 35 per cent from the current 16 per cent. Direct Port Delivery (DPD) is another major achievement of JN Port. The DPD of import containers have increased to 15 per cent from three per cent by taking the steps like waiving minimum volume criterion, online registration, abolition of deposits and awareness campaigns. The percentage
for the exporter. S Anantha Chandra Bose, Chairman, V.O. Chidambaranar Port Trust says, according to a study done under Sagarmala project, the cost per tonne kilometer of moving cargo by sea or inland waterway routes can be 60 to 80 per cent less than by road or rail. However, the modal share of coastal shipping and inland waterways remains low. The study has found significant potential of movement of raw materials and finished products using coastal shipping and inland waterways instead of rail or road. For example, coastal shipping can play a significant role in lowering the delivery cost of domestic thermal coal. The cost of coal logistics contributes up to 35 per cent of the cost of power for thermal plants which are located 800 to 1,000 km away from the coal mines.
Turnaround time in days in India is 4.5 days while it’s 1 day in China.
is set to go up to 40 per cent with the help of a ‘transport solution’ being implemented by JNPT. The DPD has ensured that the importers gain a saving in cost ranging from `8000 to `20,000 and in time ranging from five to seven days. Also, the direct port entry of export containers has increased to 74 per cent in March 2017 from 30 per cent in March 2016 through conversion of parking yard as custom processing area. The DPD has also helped in significant savings in time and cost
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Advantages of Sagarmala Project After successful implementation of the Sagarmala project, commodities such as steel, cement, fertilisers and food grains could also be moved coastally to the extent of about 60 million tonnes by 2025. An emphasis on coastal shipping to complement road and rail transport can have multiple benefits coastal shipping is 80 per cent cheaper on per tonne-kilometre basis compared to rail, and this strategy could deliver `30,000-`40,000
crores logistics savings per annum; potential additional investment of over `20,000 crores on expanding road and railways could be deferred; coastal shipping is also more environment-friendly with significantly lower emissions per tonne kilometre. According to the year-end review statement released by Ministry of Shipping, as part of Sagarmala, more than 400 projects, at an estimated infrastructure investment of more than ` 7 lakh crore, have been identified across the areas of port modernisation and new port development, port connectivity enhancement, port-linked industrialisation and coastal community development. These projects will be implemented by relevant Central Ministries, State Governments, Ports and other agencies primarily through the private or PPP mode. The financing of Sagarmala projects will also be undertaken by their respective implementing agencies. However, the actual investment will come through central and state government sources as well as PPPs and private investment. Export data points out that India’s exports have registered a positive growth and the government is taking various measures to boost the country’s exports. Trade Infrastructure for Exports Scheme (TIES) is an important scheme promoting trade facilitation by enhancing the ease of doing business. The number of mandatory documents required for exports and imports have been reduced, which is comparable with international benchmarks. Such measures will have a positive impact on trade and logistics in India. The sea logistics industry almost entirely depends on the Major Ports and the increase in cargo handling capacity will immensely benefit the logistics industry. As envisaged in the Sagarmala, better connectivity of ports with railway networks and other ports will result in both cost and time efficient operation. This is indeed a boon to the logistics industry.
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No room for error The safety of many depends on the strength of the supply chain. Dangerous goods surround us every day, everywhere. Transport of such goods is governed by international laws which determine how they need to be transported to ensure safety all around. Nicin Varghese delves into the growing importance of dangerous goods transportation with the help of a few industry experts.
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D
angerous goods are materials or items with hazardous proper t ies wh ich, if not properly cont rol led , present a potential hazard to human health and safety, infrastructure and/or their means of transport. It can be pure chemicals, mixtures of substances or manufactured products which can pose a risk to people, animals or the environment if not properly handled in use or in transport. Many common chemicals found in thousands of businesses look harmless, but if one overlooks the risks and stores them incorrectly, add heat, moisture or mix them together - they can become deadly. Many products which we encounter on a daily basis can be hazardous to our health if we come into contact with them too often or for too long. The packaging of substances such as household cleaning fluids and gardening
The handling of dangerous goods is regulated in order to prevent mishaps related to such goods (from causing accidents to persons or to other goods). Keeping these objectives in view, dangerous substances have been listed and classified according to the risks involved so that appropriate precautions can be taken by the concerned agencies. Extreme caution is imperative. Da ngerous good s t ra nspor tat ion i nduces d i rect th reat i n nearest surroundings of transportation routes or much more dangerous, the environmental pollution for long time period even for places situated far away from place of accident. Such irresponsible behaviour may be subject to acute, temporary or permanent traumatic conditions requiring a financially difficult diagnosis and therapy. Prevention is essential in this case. Safety is of primary concern. Therefore, there exists an enormous number of conventions, codes, regulations to eliminate the risk of
products will often carry what are known as Risk and Safety phrases together with one or more small square orange symbols which describe the nature of the hazard and the actions that should be taken if the substance is accidentally spilled or swallowed.
such shipments to the minimum possible level. On the other hand, it is necessary to recognise that the dangerous goods are an essential part of our lives and give us a wide range of useful applications, it is therefore necessary to look for ways that
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leads to lower costs, but not at the cost of reducing safety or quality, but maintain the availability of these commodities to support economic growth in all countries, either directly or by supporting inputs for different sectors of the national economy.
Classification of Dangerous Goods • Liquid Nitrogen: mainly used to transport biological cargo such as tissues and organs • Explosive substances: any solid or liquid substance which has a chemical reaction of producing gas at such temperature and pressure and at such speed as to cause damage to the surroundings. • Pyrotechnic substances: that produces an effect by heat, light, sound, gas or smoke or a combination of these as the result of non-detonative, self-sustaining exothermic chemical reactions. • Compressed gas: which when packaged under pressure is entirely gaseous at 20°C. • Liquefied gas: which when packaged is partially liquid at 20°C. • Refrigerated liquefied gas: which is l iquefied by refrigeration and maintained at or near its boiling point at atmospheric pressure. • Gas in solution: Compressed gas which when packaged is dissolved in a solvent. • Flammable liquids: petroleum products including kerosene, petrol, LPG, naphtha etc. • Flammable solids: which are readily combustible or may cause or contribute to fie through friction, explosives which may explode if not diluted sufficiently. • Oxidising substances: substances which may, by yielding oxygen, cause, or contribute to, the combustion of other material. • O r g a n i c p e r o x i d e : t h e r m a l l y unstable substa nces wh ich may undergo exothermic self accelerating decomposition. • Infectious substances: which contain pathogens or micro-organisms (including bacteria, viruses, parasites, fungi that are known or reasonably expected to cause infectious disease in animals
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Transportation of goods categorised as Dangerous Goods under IATA DG Regulations needs specialised and trained IATA DG certified staff at all points of the supply chain. This includes the shippers or manufacturers, their forwarding partner, the carrier, ground handling and all other supply chain stakeholders, both at the transit (if applicable) and destination airports. Keki Patel, Cargo Manager, India and Nepal, Emirates SkyCargo
or humans. This era of rapidly increasing industries has upped the demand for dangerous goods which are used in the fields of agriculture, construction, mining and resources, various industries, manufacturing, retail, government and defense organisations, marine, oil and gas sectors.
Trained Personnel; Need of the Hour By law, any person who causes dangerous goods to be transported by a public carrier must follow specific regulations and must have proof of training. International regulation such IMO’s IMDG code and ICAO’s Technical Instruction for Safe Transport of Dangerous Goods requires that anyone involved in the transport of dangerous goods should be thoroughly trained in aspects of the regulation. Keki Patel, Cargo Manager, India and Nepal, Emirates SkyCargo speaks about the importance of specialised training. “Transportation of goods categorised as Dangerous Goods under IATA DG Regulations needs specialised and trained IATA DG certified staff at all points of the supply chain. This includes the shippers or manufacturers, their forwarding partner, the carrier, ground handling and all other supply chain stakeholders, both at the transit (if applicable) and destination airports. Airport custodians also need to have dedicated handling and storage for Dangerous Goods which is segregated from other types of cargo. It is extremely important that the shipment documentation prepared by the shipper and the forwarding agent is complete and accurate. This ensures that the shipment ac-
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ceptance and carriage on the aircraft complies with all the regulations for transportation. Emirates SkyCargo has a staff that is trained for handling of Dangerous Goods across our network and with our extensive freighter network, we are well positioned to accept all Cargo Aircraft Only (CAO) type of dangerous goods.” A g r e e i n g t o Pat e l , Moh a m m e d Al Musafir, Senior Vice President –
Commercial Cargo, Oman Air also emphasises on the importance of ensuring safety while transporting dangerous goods. “In accordance with the IATA Dangerous Goods Regulations, we ensure the highest standards of safety at all stages of transporting dangerous goods. Our operations team are periodically sent for DGR training in order to be informed on the most recent processes, procedures and regulations to handle DGR using the latest industry standards. Our new Muscat Hub Cargo Facility will have constant security supervision and surveillance in its dedicated DGR storage deposi-
tory, with further dedicated storage for radioactive material. Our expert teams ensure the secure movement of goods throughout our transportation chain, ensuring safe delivery under the most secure operating conditions.”
Storage Matters A Lot There is no doubt that an error in the storage of dangerous goods can be a serious potential threat to public safety as well as property. The Global DGM organisation is one agency which provides services related to storage, handling and transport of dangerous goods and training. It takes an expert to untie the knots and understand the intricacies involved in the handling of dangerous goods. There are specific requirements and conditions to be considered while selecting the location of a warehouse for dangerous goods so that toxic substances do not cause any grievous impact on humans as the environment in case of a mishap. All experts agree on the need to set up such a warehouse in an isolated area or in a designated chemical zone. Radharamanan Panicker, Director, Dangerous Goods Management Private Ltd says, “The selection of a dangerous goods warehouse depends on the local rules of the municipality or state government. But by and large, such warehouses obviously cannot be near any residential or commercial area. They have to be in an industrial area or designated chemical zone. If such zones are not there, ideally they should be far away from residential area.” At the same time, the warehouse location should be properly distanced from an industrial area because if any incident occurs in the industrial area there are
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In accordance with the IATA Dangerous Goods Regulations, we ensure the highest standards of safety at all stages of transporting dangerous goods. Our operations team are periodically sent for DGR training in order to be informed on the most recent processes, procedures and regulations to handle DGR using the latest industry standards. Mohammed Al Musafir, Senior Vice President, Commercial Cargo, Oman Air
chances the warehouse would be in danger seeing the hazardous materials stored in it. Besides, the warehouse location should be located far from the local city because if there is any incident in the warehouse it shouldn’t affect the life of the people staying there. The storage area is created in an isolated area with all the needed facilities and free from any polluted atmosphere. The movement at this area is also quite restricted. Only authorised persons are allowed to handle the DGR cargo and move in these designated areas. Close monitoring is kept round the clock of DG storage area Further,
don’t have all these requirements codified under one single law or guideline.” In terms of construction design, the warehouse walls must be tough, cement concrete walls. Panicker opines, “The walls of the storage compartment having a product with fire hazard must be capable of withstanding two hours of fie. In terms of storage practice, incompatible dangerous goods must be stored in different areas or compartments and not mixed.” Precautions to be taken before setting up a warehouse include separation between dangerous goods and risk receptors by dis-
it is restricted that the storage of DG cargo is carried out as per classification in separate locations. Panicker says, “There are different laws and guidelines to be adhered to in terms of the warehousing of hazardous and dangerous goods, ranging from Explosive Act, Gas Cylinder Rules, Environmental Protection Act, to name a few. Then there are fire safety norms to be adhered to. Unfortunately, we
tance or barrier, emergency equipment such as fire fighting facilities and personal protective equipment, safety procedures, building competence in key personnel and emergency plans. It has to be ensured that no fire activity takes place in that area and preventive measures are to be taken to see that electrical installations, fixtures and fittings do not hang loosely and are firmly positioned. Further, a wire mesh door
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be provided to have proper ventilation. In order to ensure that special features are incorporated in warehouse to ensure no mishap occurs, the DGR cargo is stored as per classification separately. The warehouse should be equipped with emergency measures like proper firefighting equipment, first aid, lighting and water storage and emergency communication systems
The Demand for Special Packaging Dangerous goods to be transported in bulk require to be packed as per the specifications or regulations. Bulk transport refers to the transport of goods (whether dangerous or not) in large amounts (more than 500 litres/kg) in closed containers. Being in containers does not mean that it is packed. Packaging in SAP means a packing material used for safe sealed package of the goods. This requires integration with handling units, a part of core logistics. When labeling is employed, the container or storage location where it is stored is often marked by a diamond signage. Panicker says, “Packaging plays a very key role in ensuring that dangerous goods can be safely transported. It should be strong enough and suitable to withstand the normal conditions and rigours encountered in the transportation process. And, it must be suitable for the product to be transported. Because of these requirement, every package used for transporting dangerous goods is to be designed and manufactured as per the specification given in Part six of the Volume II of UN Model Regulation for Transport of Dangerous Goods. Thereafter, they need to be tested as per the UN Manual of Test and Criteria. Packages or batches tested in this manner are then marked
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The selection of a dangerous goods warehouse depends on the local rules of the municipality or state government. But by and large, such warehouses obviously cannot be near any residential or commercial area. They have to be in an industrial area or designated chemical zone. If such zones are not there, ideally they should be far away from residential area. Radharamanan Panicker, Director, Dangerous Goods Management Pvt Ltd
specified and approved disposal plants,” advices Panicker. In order to avoid any accidents the following safety procedures should be followed: • These materials should be stored in a separate space with no electricity connection nearby. • Warehouses storing these types of goods need to have proper firefighting measures for e.g. sprinkler systems, hydrant pumps, monitors etc. which should be in workable condition and monitored on timely basis. If proper compliance is not applied it may create major accidents where recovery would be impossible. • An emergency response team should be stationed 24x7 to tackle any incidents. • Apart from this, cell phones should not be permitted inside the premises as they may cause radioactive energy to pass. with Test Specification Mark to identify that these packages can be used for sending dangerous goods. Normal packages are not made and tested as per the specification and they easily break or leak when shipping dangerous goods in them.” The government has appointed the Indian Institute of Packaging to certify and approve packaging for hazardous material after rigid testing criteria. As such, packaging is usually of much better standard than normal packages. Special care is taken which packing hazardous goods. Class three stencil labels are pasted on the packing material in order to classify the material. Also in some cases, if the product is more dangerous, special provisions are mentioned on the packing material and what steps are to be taken in case of any emergency.
54 CargoConnect - june 2017
If a product is rejected or leaks or spills over, it can be a threat to the environment. It should be prevented from seeping into the soil which could spell disaster for obvious reasons.”The design of the warehouse will have to have features which will capture the leakages from seeping into the soil. The flooring must be preferably made of epoxy or such coating which can allow for cleaning of the floor easily. Then you have collection sumps to which these leakages will flow into, if they are liquid. If they are spilled on the floor, you use material like sand to spread over the wastes and then collect the sand for disposal. These wastes then need to be disposed off in a specific manner as prescribed in the Environmental Protection Act and Rules. Generally, you would send it off to
A Closure Note Safety during the transportation of dangerous goods is extremely important as it involves the risk of injury or loss to public and/or crew, environmental pollution, economic loss and of company image loss, etc. In India, the risk from hazardous chemicals transport is even greater due to ignorance in general, lack of education and training of crew, poor condition of roads and vehicles, lack of amenities to crew and is further compounded due to inadequate concern by the consigner, the consignee, the transport contractor and the authorities. Sincere joint efforts by the industry and the concerned authorities can surely contribute to bring substantial improvements in all the aspects of transportation safety of dangerous goods.
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Interview The Malta Freeport Terminals (MFT) has registered remarkable growth since its inception in the year 1988. The MFT is located at the crossroads of some of the world’s greatest shipping routes and in the heart of Europe–North Africa–West Asia triangle. Undoubtedly MFT, through whopping investment of millions of Euros and capitalisation of its strategic location, has emerged as a leading maritime transshipment logistics centre in the Mediterranean region. Alex Montebello, CEO, Malta Freeport Terminals Limited in an exclusive interview to Gaurav Dubey talks about the facilities the MFT offers and much more.
Malta Freeport - A Leading Port at the Crossroads of Important Sea Routes 58 CargoConnect - june 2017
How much investment has been undertaken by Malta Freeport Terminals in its facilities after its privatisation? How has it facilitated the port in its operations? Malta Freeport Terminals (MFT) has undertaken an ambitious investment programme at its facilities to the tune of over 237 million euros since its privatisation in October 2004. This has enabled MFT to handle 18,000 Twenty Foot Equivalent Unit (TEU) vessels and larger simultaneously on its both container terminals. The Freeport now offers total operational deep water quays of 2,463 metres, a total area for container storage of 7,71,000 square metres and a total of 15,290 container ground slots. All the mainline berths at Malta Freeport Terminals have a water depth of 17 metres enabling Malta Freeport Terminals to be able to accommodate any containership presently afloat. Malta Freeport Terminals is presently equipped with twenty-one quayside cranes. MFT’s current capacity is of 3.8 million TEUs which will be further increased to 4.5 million TEUs with the developments planned to be undertaken in the coming years.
Malta Freeport Terminals has network connection with various ports worldwide and with plenty of ports in the Mediterranean region. Does the port have connectivity with any Indian port and how much business it transacts with the India in a year? MFT presently has connections with 115 ports worldwide, 60 of which are in the Mediterranean and the Black Sea. The Freeport offers connections to the Indian ports of Cochin, Chennai, Mundra and Nhava Sheva as a result of the MEDEX Service (operated on a weekly basis both eastbound and westbound by CMA CGM, UASC and Hapag Lloyd) and the NEMO Service (which calls on a weekly basis, westbound and operated by CMA CGM and Hapag-Lloyd).
Malta Freeport is located at the crossroads of some of the world’s greatest shipping routes and in the heart of the Europe – North Africa – West Asia Triangle. How the port has capitalised its strategic location? Malta’s geographical location plays an important role in its transshipment business. Being strategically located on the main trade routes in the Mediterranean, vessels can call at Malta Freeport Terminals (MFT) with a minimal deviation of just six nautical miles between Gibraltar and the Suez Canal whilst carriers calling at MFT are able to serve both east and west Mediterranean markets with a single mainline call. The hub concept offers several
gains for Malta Freeport’s clients, including fewer mainline port calls, reduced voyage times through minimal diversions and shorter transit times by switching east-and-west-bound services over at the port facility. As a result this enables them to concentrate on profitable voyage legs. This is one of the prime reasons that make Malta Freeport a major transshipment centre in the Mediterranean, with its transshipment traffic accounting to 96 per cent of its business. It is also the result of the heavy investment undertaken over the years in its facilities, a long-term forwardlooking vision for the terminals as well as a reputable and high quality service to its clients. Besides its transshipment business, MFT also handles around 80 per cent of the local imports and exports. The Freeport recognises its importance to the local economy as it is providing the local organisations with regular worldwide connections as a result of the transshipment services operating from Malta Freeport which otherwise would simply not be possible since no shipping line would call with a mainline service for a market with the restrictive size of Malta.
What is the Unique Selling Proposition (USP) of the Malta Freeport which stands it apart from the other Mediterranean container terminals? Main strengths of Malta Freeport Terminals include• Capability of operating vessels with a capacity of 18,000 TEUs and over simultaneously on both the terminals • All mainline quays dredged o 17.0m LAT • Guaranteed window system • Substantial weekly common feeder network to tap new markets • Competitive port call expenses package • A current capacity of 3.8 million TEUs which will be further increased to 4.5 million TEUs Malta Freeport Terminals offers value to the customers and over the years has implemented various measures and work methods as well as intensive training programmes to boost its productivity levels. Malta Freeport strives to cater for the clients’ increasing demands and to be proactive and be fully geared up to face all possible challenges.
How Malta Freeport has implemented modern technology to optimise efficiency and strengthen the intelligent movement of cargo through the container terminal? The Freeport is served by a specialised realtime container terminal computerisation system from Navis Corporation. Indeed, the
Navis Spares and Navis Express System are providing accurate information for planning, managing and tracking container movements throughout the Container Terminals. Effective EDI connections are also in place to facilitate the intermodal handling of containers by streamlining information exchange. MFT is presently implementing the Navis N4 Terminal Operating System which is widely being used by other international ports. This system which will be fully operational in the coming months is a sophisticated and modern technology platform which will optimise efficiency and strengthen the intelligent movement of cargo through the Container Terminals.
Where does Malta Freeport foresee its position in the Mediterranean region after five years from now? In a view of the far-reaching investment undertaken in its facilities since its privatisation, the terminals are now in an unmatched position to efficiently handle the business of various carriers including the shipping alliances that have chosen the Freeport as their central Mediterranean hub port over the years. This investment was imperative considering that the shipping lines are investing heavily in ever-larger container vessels. In fact, ports and terminals are facing increasing challenges not only due to the deployment of larger container ships as carriers which seek economies of scale but because of resultant formation of larger carrier alliances in order to fill these ships. In a view of the recent restructuring of the major shipping alliances, new carriers have commenced calling at MFT as from May 2017. The Freeport has managed to rope in the Ocean Alliance which is led by CMA-CGM and made up of China Cosec Shipping, Evergreen Line, and Orient Overseas Container Line. Through the new services being launched at the Freeport, MFT is expecting to strengthen the port’s connectivity. The 2M Alliance, which is made up of Maersk Line and MSC is sustaining its calls at the port. Other carriers that are presently calling at the Freeport regularly include Hamburg Sud, Hapag-Lloyd, Seago Line and UASC together with a number of other shipping lines offering feeder services. With a present annual capacity of 3.8 million TEUs, the company is in a position to encourage new carriers to choose it as their Central Mediterranean transshipment Port or to handle additional business generated by the current shipping lines calling at MFT. To boost its capabilities of handling higher traffic volumes, the company has concrete plans to increase its current capacity to 4.5 million TEUs.
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Interview
Commitment for timely and efficient services 60 CargoConnect - june 2017
Om Logistics Ltd has been providing unparalleled services for the transport and logistics segment by means of road, air and rail in the country since 1999. Subsequently, they added more feathers to their services though adding warehousing, freight forwarding and value added services among other solutions, thus striving for a holistic balance in the complete loop of operations. Now brimming with success and widely acclaimed in the industry, Akash Bansal, Head logistics, OM Logistics Ltd, in an exclusive interview with Tariq Ahmed, talks about the new services, milestones achieved and much more. Here are the excerpts:
Tell us about the newly introduced Road Feeder Services in association with Çelebi? What are the main highlights of this partnership with Çelebi? Road feeder service or custom bonded trucking, as it is popularly known in India, is in line with our ambitious offering of cost effective and “use and pay” model that we always propose and plan to offer to our customers. We always try to optimise our cost for our customers to ensure that they pay only for what they use and should not be asked to pay for something which is born out of inefficiencies in the model. Hence, with this consideration and our commitment of timely and efficient services, we in partnership with Çelebi have introduced a customised model for bonded cargo movements to Delhi Airport. We have started this service for our prestigious customers in Ludhiana and Kanpur initially and would be extending the same to many further locations to enable them to use benefits of rates and services at Delhi Airport for their export shipments. With this partnership of Om Logistics and Çelebi, we are planning to provide our customers across India a cost effective and service oriented model for their exports from Delhi Airport, where we have maximum number of airlines available for customers. Together, we are committed to offer more innovative and enhanced experience to our customers for an optimum model for air exports from Delhi Airport. Way forward, we will also consider offering such services for imports to enable customers to have a facility for custom clearance of shipments at their respective locations to save on cost and resources.
You have a dedicated fleets of several thousand trucks plying ever yday and are one of the most prominent players in this segment. What are the major anticipated changes in the trucking segment? After the roll out of GST, I feel with abolition of state borders, we would be in a position to cut down on inefficiencies related to turnaround time of vehicles on any specific route. This would in turn help us save some cost for our customers. We would be in a position to have the maximum output from a machine, which was not optimally utilised on grounds of such inefficiencies. Further, state borders were one of the major challenges for a trucking organisation in
India. It was creating issue of wastage of time and money that I feel would be a breather for Indian economy and organised players in the industry.
Tell us about the milestones that you have achieved in the surface logistics segment. We have been constantly trying to reduce transit time for our customer’s shipments with in-depth focus on our driver’s safety on the road as well. We have introduced multiple multimodal service offerings to our customers with a single window solution to all elements of supply chain. Our practice for our surface logistics customers is focused on inventory cost reductions and deliverables.
We always try to optimise our cost for our customers to ensure that they pay only for what they use and should not be asked to pay for something which is born out of inefficiencies in the model. Our primary focus is network expansion in India and we are committed to expand with a minimum of 20 branch offices yearon-year which we have been achieving since last three consecutive years. We have introduced trucking services to Nepal for our customers with post formation of a 100 per cent owned subsidiary in Nepal, to enable them to have a single window solution. Similarly, we will be initiating trucking services to Bangladesh as well very shortly.
After the roll out of GST, warehousing sector will witness marginal transformations with the introduction of centralised warehousing. How will these centralised warehouses differ from the traditional distribution centres? After GST, there will be some consolidation
in warehousing requirements as customers will not consider having state-wise warehouse setups for taxation purpose. Hence, these central/zonal warehouse requirements will increase. The difference will be confined to size of warehouses that would be needed; all operations activities will be in line with the current requirements. Such consolidation to me will be a cost saving model for customers as they would be saving on administrative cost of managing multiple warehouses and moreover will lead to better controls and inventory management. This would further catalyse ease of doing business and a transparent business model for everyone in the value chain. I think to say that all warehouses would be consolidated will not be a right step, as this would be a business driven model and every industry/company will plan their own model considering their business requirements and criticalities. Hence, I feel we have to wait and watch the GST implementation before arriving to any conclusive business plan.
What are the value added services that are offered under your warehousing services across different cities in India? We provide customised solution to our customers as far as warehousing is concerned. This may include JIT/Kitting/ Binning/DI/Kanban etc. The value addition needed is also industry/customer specific and varies as per requirements.
Give us an outline of your vision about your work across various verticals in the logistics sector. Only endeavour that Om Logistics has is commitment to achieve “CUSTOMER FIRST”. - We want to be a technology driven organisation that we have been in the past. - Want to bring in all possible innovations in our approach of providing solutions to our customers. - We always prefer to be flexible for service offerings to our customers. - Adaptive to any change, which is in favour of Om Logistics and our Customers. - Want to be the best and preferred logistics solution provider. - Try to reduce on cost with enhancement of services for our customers. - To have sustained and profitable growth YOY.
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Interview
Bridging the Gap between Demand and Supply 62 CargoConnect - june 2017
IndoSpace is the pioneer and the largest provider of industrial and logistics real estate in India. As a leader in warehousing space, it is ready to spark speedy growth wave in logistics and warehousing. Sheena Sachdeva in a candid conversation with Abhijit Malkani, Managing Director of Indospace Capital Advisors, highlights the further growth plans and company’s journey towards being a leader in the industry.
Please tell us about the genesis of your operations. How has the journey been so far? In the last ten years, IndoSpace’s journey has seen it move from being a pioneer of modern industrial real estate in India to the largest investor, developer and manager of industrial and logistics parks in India - by a large margin. This company was formed to cater to the huge gap in the demand and supply of grade A industrial and logistics infrastructure. Following is a timeline of our operations:
Journey 2007-2010 • Everstone and Realterm launched IndoSpace—The Everstone Group is a premier India and South East Asia focused private equity and real estate firm with over US $3.3 billion under management. Realterm is an industrial real estate firm that manages over US $2.5 billion across over 300 operating and development properties in North America, Europe and India. • IndoSpace raised US $240 million – IndoSpace Logistics Park I (April 2009) • First land parcel acquired in Chakan, Pune
2010-2013 • Breaks ground on first development 1.7 mm sqft in Chakan; Completed portfolio reaches 1 mm sqft • Land bank exceeds 500 acres
2013-2016 • Completed portfolio reaches 5 mm sqft • IndoSpace raises another USD 344 million – IndoSpace Logistics Park II (April 2014)
2017 • Completed portfolio 9 mm sqft, under development 14 mm sqft, planned 7.7 mm sqft Current portfolio includes 18 parks across India • Land bank exceeds 1000 acres
As rates in warehousing and logistics park space are expected to rise with the proposed rollout of Goods and Services Tax, how will the rollout of GST overall affect the logistics industry? The Hub and Spoke model to rule: There is growing demand for larger hubs/regional distribution centres as well as smaller spokes in cities. There will be consolidation of smaller
warehouses to larger boxes by various large users across India to increase efficiencies. IndoSpace with its large, modern and best in class industrial parks is well positioned to take advantage of the need for larger warehouses and the hub and spoke model, especially as GST rolls out this year. There will be more organised players in the infrastructure business as demand and rental rates will increase and IndoSpace, being the largest and most modern player in industrial real estate in India, has a head start in providing modern large warehouses to companies in need of this service.
IndoSpace parks integrate the most innovative and superior technology available to best serve our clients. There will be an increase in 3PL and 4PL services. The use of technology and supply chain management systems to increase management efficiencies. For instance, technology and systems that IndoSpace has installed in its world-class warehouses/ industrial parks such as efficient spacing, standing seam roof, skylights, T5 Lighting, pre-cast walls, passive ventilation, customised warehousing solutions. These systems, which are provided to clients will be the differentiators between the winners and those who get left behind.
As IndoSpace has been receiving various awards like “Industrial / Warehouse Developer in India” in 2016 along with Warehousing Excellence Innovation Award along with the Warehousing Company Of The Year by the prestigious Euromoney magazine, for the second year in a row. What are the key strategies that makes you a market leader? One reason is our national presence which extends from East to West, North to South, from key locations in the hinterland to nearby crucial sea-ports. Just look at our industrial parks in Luhari in Haryana, Oragadam in Chennai, Khopoli and Chakan in Maharashtra, as well as Bommasandra around Bengaluru. Other reasons for the recognition we have
received and our success in India include our well-established land banks across the country. On top of that, we have a large pool of committed capital to develop infrastructure on a national basis—our investors Everstone and Realterm are committed to IndoSpace and the India economic story for the long-term. Our strong reputation as the pioneer of modern industrial and logistics real estate in India and service record has allowed us to attract great companies as clients/ tenants such as Amazon, L’Oreal, Procter and Gamble, Nissan, PepsiCo, DHL, Ericsson, Bosch and Asian Paints. Moreover, we have state of art infrastructure such as standing seam roofs, pre-cast walls and energy-saving T5 lighting to five ton super flat floors and inventive use of natural light and ventilation. Overall, IndoSpace parks integrate the most innovative and superior technology available to best serve our clients. On top of that, we have the most experienced and largest development team across India with around 120 number of professionals. And finally, we have both ready and built-to-suit facilities available which allows us to address the different needs of our clients and potential tenants.
Ministry of transport has been pushing to boost the infrastructure in terms of logistics parks. According to you, how will it be beneficial for the logistics parks? • This will create better infrastructure in the country which will allow movement of goods from large warehouses to where they have to go more efficiently. • This will improve the ease of doing business. • This will create more business opportunities as there will be better infrastructure which, in turn, will allow more SMEs to come up as well as allowing for better connectivity within the country.
Can you please elaborate about your warehouse management services and storage solutions? IndoSpace designs and builds warehouse facilities which are equipped with various storage solutions like floor loads, heights, technology-enabled, 24-hour security, ample truck parking and mezzanine racking and shelving systems with in-rack sprinkler systems.
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Interview
JWR Logistics Pvt Ltd, JWC Logistics Park Pvt Ltd and JWL Cold Store Pvt Ltd are major companies leading the industry in an exceptional way through years. Talking about the dynamics in logistics and understanding it better, Sheena Sachdeva brings an exclusive interview with Raaj Jobanputra, Director of JWR Logistics Pvt Ltd, JWC Logistics Park Pvt Ltd and JWL Cold Store Pvt Ltd. As a young leader representing the group, he has been creating manifold improvements not only in the ways of approaching but also how to work towards bringing a change in the industry.
A s rates in warehousing and l o gi s tic s p ar k in g s p a ce ar e expected to rise with the proposed rollout of Goods and Services Tax, how will the rollout of GST overall affect the logistics industry?
Making a Benchmark in the Industry 64 CargoConnect - june 2017
India is finally starting to address obvious areas of need, the Indian logistics industry is expected to grow steadily, led by e-commerce penetration, economy revival, proposed GST implementation and government initiatives like “Make in India” and “Ease of doing Business” etc. Besides optimising the production and distribution of goods and services, the GST Bill will also help speed up cargo movement. Rise in rates due to GST is a short-term view on the systemic large scale change that is being brought in our country. We should look at the medium to long-term benefits of the GST rollout. In medium term, the direct benefit will go to road transport companies and warehousing companies by way of voluminous business. However, the long term benefits will accrue to the economy as a whole. In long term, the overall inefficiencies of the logistics industry shall be removed and the economy should grow at a substantial rate. The logistics industry shall be the keystone
for this change and in-turn will emerge as a large contributor to the GDP of India.
Ministry of Transport has been pushing to boost the infrastructure in terms of warehousing and multimodal hubs. According to you how will it benefit the industry? We are fortunate to have a trade-friendly government. Steps to improve infrastructure, relieve bottlenecks and elimination of regulations that complicate and hinder business are essential to our country. Growth would be driven by infrastructure based investment such as Ports, Special Economic Zone (SEZ), Free Trade Warehousing Zone (FTWZ), Inland Container Depot (ICD), Cold Chain, Freight Corridors, Multi-Modal Warehousing hubs etc. resulting in rise in domestic demand and increase in trade. Companies in the E-commerce industry, Automobile industry, Pharmaceutical industry, FMCG etc are riding on ideas such as multi-modal warehousing hubs to cater to the demands of large consumption geographies of the country. With all this, there is immense potential to create large employment opportunities, which will further develop our nation. Further, with India being the next manufacturing hub in sectors such as automobile, pharmaceutical etc, trade with other countries will increase, which will raise demand for the logistics services. The initiative acts as a catalyst increasing the growth for both the public and private logistics players.
In the advent of automation in warehouses, how do you think can the shift of manpower to other processes of the supply chain be managed? As Indian economy evolves, sophisticated logistics and warehousing systems would be a key trigger. With a significant push on the improvement of infrastructure, adoption of newer and improvised technology will help boost the process of handling cargo. This will further contribute to the growth of the industry. We are blessed with reasonably priced manpower, this should be looked at as our intrinsic strength and should be capitalised upon. Automation will help us reduce operational costs, give us real-time inventory information, improved storage space capacity, reduced product damage, reduced injuries and claims etc. Having said that we have employed significant level of automation
at all our facilities. Specially designed conveyor belts for perishables and automated printers with picking and packing machines, unique trolley for de-stuffing of cargo, forklift based cargo movements, integrated ERP based solution which interacts with customers’, mobile applications to provide real time information to all our clients. However, there are many customised services in which artificial intelligence cannot replace man. Hence, we try to make the best of the resources available, contributing to our nation’s growth.
What innovative and technological measures have you adopted in your companies in order to achieve the dream of a seamless supply chain network? Technology and innovations help increase efficiency and productive in the system. We strongly believe in adopting and adapting to innovative, cost-effective methods. We strive to learn and make the most of all the resources we are blessed with in our country. Natural systems such as Solar Systems, Rainwater Harvesting, Effluent Treatment Plants etc are essential aspects that have been adopted by us. Further, we believe in upgrading our systems constantly. Hence, we have invested in a robust ERP system and integrated it with our own mobile application to bring about transparency and efficiency to the end used. With facilities such as live camera viewing, live inventory and temperature monitoring systems that are shared with all the business associates. Our facilities are GDP, ISO and C-TPAT compliant. There are more plans in our kitty and you will see them soon.
As JWL Logistics has different verticals from cold chain to logistics services to logistics parks, how do you plan to synergize all the verticals to become a market leader? We believe that “doing things differently leads to something exceptional”. We strive to create a business model with its fundamental purpose well defined. We have always focused on how we can create a wider service portfolio. Each of our companies is unique and complement each other in the operations. This also helps each business gain focused identification in the industry. Our businesses are divided in four firms :• JAC Air Services Pvt Ltd - Focuses on Air Cargo Ground Handling activities. • JWC Logistics Park Pvt Ltd – Container Freight Station (CFS) focusing on Full
Container Load (FCL), DPD Yard and 3PL warehousing and distribution. • JWR Logistics Pvt Ltd – Container Freight Station (CFS) focusing on Less Container Load (LCL) CFS at JN Port, Nhava Sheva. • JWL Cold Store Pvt Ltd. – focuses on Cold Chain Warehousing and distribution. Each of the above lends to the other a marked advantage by way of ability of cater to import, export, domestic or perishable logistics solutions. Each brings a new flavor by itself and offers a complete one stop solution for any domestic or international company.
While dealing with various areas and verticals, you must be facing some hardhitting challenges? How do you deal with it in order to get best results? Even though India being a low-cost service provider, the logistics cost remains an alarming factor due to the regulatory and tax structure challenges system in the country. On one hand, the increase in the number of unorganised players, aging infrastructure and inefficient usage of technology has been impacting the mechanism of logistics service providers. Moreover, another challenge that I have seen the industry face is that of bureaucracy. With the new government implementing steps to reduce bureaucracy, we expect and hope to be able to overcome this challenge in the future.
According to the industry trends, most of the 3PL players are slowly converting into 4PL.What are the benefits and drawbacks which shall affect the companies looking for logistics solutions in the coming future? The basic concepts of 3PLs are here to stay (specifically the assets-based providers) and the evolution to extend services such as 4PL will be the deciding factor logistics companies to become a larger contributor to the overall supply chain. A 4PL company takes over the logistics section of a business. This could be the entire process, or a side business that’s imperative to have as part of the main business. This enables the company to focus on their core competencies and the 4PL solution provider can help that company in doing so. In India, companies are yet to see the benefit to outsource to a 4PL solution provider – mainly due to absence of a uniform tax regime– GST is poised to change this. Our group is firm to take up the responsibilities of a 4PL service solution provider and we see a great future ahead.
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Interview
Passion and Commitment Delivered... 66 CargoConnect - june 2017
time:matters, expert in worldwide special speed logistics and timecritical spare parts logistics, is automating the tracking process for its shipments. Information on the status of the shipment, which until now had to be compiled manually, will soon be automatically generated. Still operating as an independent concern since Lufthansa Cargo took complete ownership of the company, the expert for Special Speed Logistics offers each of its clients customised logistics solutions for particularly urgent or complex special logistics assignments, enabling worldwide delivery within just a few hours. Franz-Joseph Miller, Managing Director of the time: matters Group, in an exclusive interview with Tariq Ahmed, shares the main highlights of the company, future projections and much more. Here are the excerpts:
Tell us about the genesis of your operations. Also, what are the core values of the company? In 2001, I joined Lufthansa Cargo as a Managing Director and in the same year, I was responsible for the fastest product in their portfolio. In 2002, time:matters was founded as a spin off from Lufthansa Cargo. Ever since then, we were trying to make the impossible happen for our customers delivering special speed and quality any time. What makes time:matters special to our customers is also part of the company’s DNA. We are passionate and committed to service and excellence. We are accepting responsibility, especially when things go wrong. And most importantly, we enjoy what we do. This special mix makes us unique.
What are the USPs of time:matters that provide it an edge over other express cargo and courier companies in its segment? We have globally positioned very good partners, such as the Lufthansa Group, KLM, Air France, Air Berlin, Eurowings and Deutsche Bahn, so that we have access to an international network in the air, on the rails and on the road. Unlike other CEP providers, we do not operate any standardised transport systems. Therefore, in addition to speed and coverage, we can also offer a significantly higher degree of flexibility in order to accommodate specific customer requirements. This means that every transport solution is planned, personally supported and implemented for each individual customer. Additionally, we are also operating our own courier terminal at Frankfurt Airport. This central point for courier and express handling provides direct access to the apron and facilitates shipment tracking.
time:matters ended 2016 with a nine per cent annual increase in revenue. This was a huge leap compared to previous years. To what would you like to attribute this marginal growth in revenue? What are your projections for 2017? We are convinced that this is due to our business model, meaning the mix of technology platform and our focus on service excellence. We are fully focusing on customer solutions instead of asset management. We are having a Net Promoter Score of 70 and this is unique in the logistics branch. We are growing because our customers are extremely satisfied. In 2017 also, we are already having double-digit growth.
In the last two years, we strongly expanded our network by integrating further airlines to the platform. Because of that, it is much easier for customers from different countries to use time:matters as we now have more direct flight connections. In addition, we developed special industry solutions always focusing on quality and maximum speed. Basically, we are a technology platform and we added worldwide transportation partners. We are using free capacities of the market and developing a high performance product for our customers with special processes adapted to their needs. We are ensuring the quality with our own network management. We want to further expand this platform and make it easier for our customers at the same time. We want to directly integrate our customers’ systems into our order management system so that they can place emergency orders seamlessly. As we do not have the same order flows every day, not all processes are standardised. Many offers are coming on an ad hoc basis from different pick up locations to different destinations. The more we are digitising our solutions, the better our services become.
Please brief us about time:matters airmates. How do you plan to add value to your operations with the launch of this service? The On-Board Courier or hand carry service is used for highly sensitive or urgent shipment needs. We already are offering this service since ten years. What is new about airmates is the complete digitisation of the service for the couriers and the customers. Within less than a minute the customer receives a complete offer which is online bookable right away. By having the complete courier network digitised, we can identify the best fitting courier immediately by checking its geo position, available passports and visa. This was a manual process in the past which took 30 to 90 minutes compared to one minute with time:matters airmates. During this time, customers used to place their request with several providers. By offering the solution the fastest way the customers are able to book immediately. In addition, we can offer them the best price as our system is checking hundreds of flight connections within seconds to find the best flight. time:matters airmates is easier, faster and cheaper.
You have been quoted as saying that in 2017, you will focus on further digitising your transport solutions and processes.
What innovative and technological advancements are you looking at in 2017 for a seamless supply chain network? We will of course further develop time:matters airmates. For example, we want to add a courier rating system and we plan to have certified airmates available at the 300 most important business centres worldwide by mid-2017. In addition, we want to add a flight ticket broker to the system so that tickets for the courier are bookable automatically. Besides airmates, we are working on expanding our platform with automated bookings for express airfreight shipments. Currently, we are able to offer automated bookings to 175 stations within Europe for shipments up to 200kgs. Our goal is to be able to book all shipments worldwide without weight and size limitations via this online booking channel.
Indian Government is presently quite proactive in terms of Foreign Direct Investments. Also, India is one of the most emerging markets in recent times. Do you plan to intensify your operations in the Indian markets in the coming years? You are right. We observed the same. Also according to IATA’s Airline Industry Forecast, India will be amongst the top 10 largest international freight markets by 2018. The demand is on rapid expansion mode, which shows a big potential for the logistics market. Therefore, we are currently intensifying our activities in India.
Tell us briefly about your further plans that are in the pipeline. We are going to further invest into digitisation and automation. These are the key factors for scalability and therefore, more efficiency. Another important topic is our focus on specific industries, especially automotive, life sciences, high tech and semicon, aviation, med tech, machinery and components. We will further develop specific industry solutions to be able to support the needs of these industries at the best. In addition, we will keep on extending our network to be able to better serve our customers’ needs. We will keep on adding further airlines and expand our geographical reach to Asia and the US, besides Europe. Besides that, we of course are further focusing on high quality and customer satisfaction.
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Interview
Providing Solutions for a Better Network Backed by strong funding, Minerva Integrated Logistics Pvt Ltd is all set to foray into all the major verticals of logistics, be it FTZ, Cold Chain ICD/CFS, General Warehouses, International Freight Forwarding, Coastal Shipping etc right from the very start. In fact, they already have an FTZ up and running in Chennai. A hopeful and positive Nihar Parida, Director, Minerva Integrated Logistics Pvt Ltd shares his vision about his new venture in an exclusive interview with Tariq Ahmed.
Tell us about the genesis of your organisation. Also, brief us about the gamut of services offered. Minerva Logistics was started by me along with K Selvam, with a vision to change the way logistics is being done and perceived in India. Both of us have always been keen to come up with logistics solutions to make our clients’ supply chain more agile and adaptive while saving cost and time to ensure the market is serviced better and smoothly. While designing solution, we want to give them the infrastructure and service support in all spheres of logistics. We have come up with our FTZ Unit in Chennai with a cold chain to help traders do major consolidation and value addition. We have a CFS in Chennai and are looking forward to bonded facilities in major ports where we would like to set up cold chain facilities. We have plans to set up ten lakh sqft of warehouse space equipped with the modern equipment in six major cities to take forward our concept of park and pay. We are also into freight forwarding, domestic air cargo, coastal shipping, transportation, project cargo handling and will be setting up an express cargo vertical in future. The company aims at covering the critical parts of supply chain with solutions.
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You have had quite a long stint in different companies before you decided to move out and start your own supply chain company. W hat innovative practices are you bringing in to be at par with the major players in this segment?
Post the roll out of GST, warehousing sector will witness marginal transformations, with the introduction of centralised warehousing. How will these centralised warehouses differ from the traditional distribution centres?
The major players today are focused on providing services which are required by the customers and as per the preconceived notions of the customers. We, in fact, would like to discuss and be a part of the innovation or change right from the beginning. We want to create solutions which will be sustainable and result driven. We want to be a part of them. With the Government pushing the Idea of MAKE IN INDIA, we would like to be the drivers of our home grown companies to bring them at par with their global counterparts.
This is a very generalised view. The supply chain of different products and different companies depends heavily on the policies and their strategies. What is evident till now is that the tax barriers of each state will be no more there. This will definitely help in moving goods from one state to the other. As far as warehousing or other things are concerned, it is still being looked into and its effects are still being studied. We would not like to talk of its effect right now. Yes, we are definitely working closely with several of our customers to redesign their supply chain post GST.
Could you please brief us about your existing and upcoming FTZ facilities? We already have the Chennai FTZ up and running. We have just initiated a unit in Panvel. We are considering Hyderabad as a cold chain FTZ to help the pharma industry. We also plan to venture into the West for major agricultural exports to different parts of the world.
Logistics industry is anticipated to grow at a highly accelerated rate in the next few years and will create a huge demand for freight forwarders. How is Minerva Logistics readying itself to cope up with this demand? You are right by saying that the logistics industry is going to grow at a tremendous pace but that doesn’t mean only in freight forwarding. EXIM is just a part of it. To promote or expedite EXIM, the country has to gear up with all related services right from sourcing. Minerva is gearing up with all the related services required to be a part of this growth and give an end to end service to its customers. Minerva is contemplating to open its offices abroad or having an exclusive tie up with likeminded business houses in parts of the world.
Initiatives like 100 per cent FDI are attracting a lot of MNC players into the market, which will surely create tremendous competition in the Indian market. What strategic policies are you adopting to wade through this competition? Are you looking at any collaborative ventures? The major FDI coming into this sector is on infrastructure. Our experience is in creating solution and give services. We will need infrastructure back up to provide these services. We are not averse to collaborations when it comes to building infrastructures. We would like people to come in and invest in India through us.
What are your future plans for expanding your arms in the logistics sector in the coming years? The plans are big. We want to be one of the major players by 2022. We have very less time with us and we are ready to work relentlessly towards achieving our targets. We want to be present in every part of a clients supply chain where ever he is. We want to expand beyond India starting next year.
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Shippers Speak
“Back-End Supply is Managed through a Huge Network of Outsourced Manufacturers...” How important is warehousing for the overall scheme of your business? Logistics is a back bone of the retail business. Efficiency or inefficiency of logistics has a significant impact on our business. Availability of goods on time, in the retail stores is a key driver of sales and consumer satisfaction. Also, the logistics cost as a percent of total sales is a key factor to organisational profitability.
How do you ensure smooth coordination between suppliers, transporters and other departments in your supply chain?
In November last year, Aditya Birla Fashion and Retail Ltd (ABFRL), formerly known as Pantaloons Fashion announced its tie-up with Ted Baker to bring the UK fashion brand to the country. The company said Ted Baker has more than 500 stores across Europe, the US, Canada, Australia, China, South Africa and West Asia. Mahesh Khetan, Assistant Vice President - Supply Chain Management, Aditya Birla Fashion and Retail Ltd, in an interview with Deepashree Banerjee, throws some light on the USPs and innovative practices used for a seamless supply chain.
70 CargoConnect - june 2017
IT systems and dedicated teams ensure smooth coordination between various stakeholders in the supply chain. Suppliers submit the request to pick up a consignment through a web based vendor portal, which, after approval by one of our departments, gets auto flown to the transporter. A dedicated team monitors the timely pick up of the consignments and tracks till delivered to the destination. Dashboards support performance monitoring and coordination for deliveries, debits and payments.
Are there any unique or innovative strategies that you have adopted for the better supply of your products? Better partnering with our partners had been resulting in better supply of our products. We organise regular vendor meets to share each other’s concerns, deploy SPOCs for each set of vendor partners, and adopt their recommendations in areas like packaging and labelling.
How do you manage back-end supply? Back-end supply is managed through a huge network of outsourced manufacturers across the geographies, a set of specialised logistics service providers which have expertise in particular type of movements in a particular geography and our network of distribution centres.
What percentage of your logistics work is outsourced? What functions are performed by your logistics partners and what are controlled internally?
Entire transportation is outsourced, for both inbound (manufacturers to warehouses) and outbound (warehouses to retail stores) movements. Warehousing is majorly handled by our own teams, though we outsource small seasonal warehousing requirements which are ad hoc in nature.
Tell us about the most common problems faced by your company during its supply chain process. What steps do you take to overcome these? • Delay in manufacturing of the products by outsourced suppliers – dependency on a single supplier or a small set of suppliers is risky, if delay takes place due to any external factors. To mitigate the risk, we have created a huge supplier base of outsourced manufacturers across the geographical regions within and outside India. • Delayed deliveries by transportation service providers – some of the steps to overcome these include regular performance reviews with the transporters, transfer of business in challenging regions to the transporters who specialise in such geographies and having more than one transporter for each lane in a geography. • In-transit pilferages – a series of packaging solutions have been incorporated to overcome this problem along with process excellence initiatives.
How do you manage your supply chain during peak times such as festivals and promotional sales? Apparel retail is a seasonal business with peaks appearing during season launch and end of the season sale. Peak time loads are 2-3 times higher than the regular loads. Effective capacity planning plays a key role in managing peak demand. Multi-shift operation at warehouses, dedicated vehicle movements from distribution centres to retail outlets and capacity building at transporters’ hubs ensure efficient management of supply chain during peaks. For promotions, dedicated warehouses are outsourced for a short period to handle gift articles.
Shippers Speak
“Demand Forecasting and Inventory Plays Major Role in Coordination” How important is logistics for the overall scheme of your business? Minda Corporation Limited is Auto Anxillary and catering to all 2 wheelers OEMs in India and globally. For Auto Industry Logistics is extremely important factor as delay in supplies will make the entire plant stand still. Logistics cost will erode all our margins the moment it comes to premium freight. Logistics cost for us is approx two per cent which typically is minimum five per cent for auto industry.
The Gurgaon-based auto component maker Minda Industries Ltd had recently signed a joint venture agreement with Taiwan’s Tung Thih Electronic Co Ltd (TTE) to develop, manufacture, market and oversee the sale of driving assistance products and systems (DAPS) and safety systems. Mayank Aggarwal, Head Corporate Sourcing, Security Systems Division of Minda Industries Ltd, in a conversation with Deepashree Banerjee, reveals the secret behind a seamless supply chain. Excerpts follow.
72 CargoConnect - june 2017
How do you ensure smooth coordination between suppliers, transporters and other departments in your supply chain? Demand forecasting and inventory play a major role in coordination. In today’s market where fluctuations are extremely high and there is always a high risk of obsolescence which directly hits the bottom line of company, proper and timely schedules to suppliers and maintain minimum and maximum level with continuous monitoring plays a very vital role in smooth coordination.
Are there any unique or innovative strategies that you have adopted for the better supply of your products? Since we are an auto component industry, 100 per cent material availability at customer’s end for all 365 days is only criteria to be in business. Penalties are so huge for non supply of material that it may erode all the profits. We have to ensure daily material readiness at our suppliers end and pickup of material from logistics partner and dispatches at required locations. We are generating schedule bar code to ensure optimum utilisation of space in the vehicle.
which are mainly in toolings.
What percentage of your logistics work is outsourced? What functions are performed by your logistics partners and what are controlled internally? We make yearly contract with our logistics suppliers. Role of third party logistics service provider is becoming very important because of demographic locations of OEM and components suppliers. As we are assembly units, all the child parts have been outsourced. Proper scheduling is controlled internally where as regular pick up of material and delivery of material as per contract. Moreover, serviceability plays a major role because prices are more or less the same.
We have to ensure daily material readiness at our suppliers end and pickup of material from logistics partner and dispatches at required locations. Tell us about the most common problem faced by your company during its supply chain process. What steps do you take to overcome these? Sometimes, we have faced the problem of material not getting connected with desired airlines. To overcome this problem, we are now only working with established players in this field. TNT, Express Cargo , DHL are some of the big names.
How do you manage back-end supply?
How do you manage your supply chain during peak times such as festivals and promotional sales?
We are in Auto components business and in assembly. Majority of our SCM is at back end to feed our assembly setups. We ensure long contracts for major commodities with our supplier. We also assist to suppliers on case to case basis to manage efficiency in their system. We analyse capacity of suppliers based on budget quantities and work for bottle necks
Keeping in view of festivals and promotional sales, we build extra inventory at all the three locations i.e in-house, logistics service provider warehouse and supplier premises. As we are a component industry, we have to act as per the OEM projections. We may have to work through sleepless nights, but at the end of the day, requirements have to be met.
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guest column
Supply Chain Cost Optimisation for SMEs Post GST By Vikash Khatri
T
he country is heading fast towards GST, which is primarily a tax reform but having significant impact on the Supply Chain function of the companies. This is because the Tax Structure would move away from state specific structure to federal structure. This move enables a Supply Chain Network that can focus only on the Supply Chain costs and efficiencies rather than on tax laws. New structure of Supply Chain Network would be tax-neutral. Abundance of reports, data and information is available on topics like how economy will get benefited from GST/Impact on GDP/ Impact on supply chain. For the Supply Chain world, first statement we hear that post GST supply chain cost will reduce. At very high level everyone in supply chain is clear with mentioned statement and some of them are also aware of detailed impact. But most of the supply chain professionals specially in small and medium scale industry are not sure about the beginning point for GST readiness and optimisation. In the first part of the article we will discuss the impact areas of GST on supply chain and in later part we will touch on the optimisation approach. (A) Impact of GST: Introduction of GST will impact
74 CargoConnect - june 2017
supply chain at various touch points and activities: warehousing, distribution, inventory and sourcing. Coordinated optimisation activity between these sub function will yield cost reduction and efficiency improvement. Warehousing: Current tax structure mandate for state specific warehousing or supplies under CST which ultimately increases the cost of distribution. In GST state boundaries will not be constraints and one warehouse will be able to cater across state borders. The warehouse location selection will be based on cost efficiencies and customer service level. For example, as of now a consumer electronics company operate with approx 28-30 warehouse location, pharma company with 32 warehouse location and fast moving consumer company with 36 warehouse location. In post GST scenario these numbers will be between 12 to 20. Distribution: With the changed warehousing network, distribution network will also get realigned. Due to larger warehouses, the replenishment lot size and frequency of replenishment will increase. Average transit time will also reduce with removal of check posts and introduction of e-waybill/RFID based e-waybill. Based on revised warehouse locations, the network for secondary distribution will also take new shape. Companies will have to define some new rules in supply chain about transit time, replenishment norms, replenishment location etc. Inventory: With the reduction of warehouses, there will be significant impact on inventory holding and its cost. As
per square root law of inventory, average inventory increases/ decreases proportionally to the square root of the number of locations in which inventory is held. With the consolidation average cost of inventory will get reduced. Sourcing: Sourcing and supply chain go hand in hand. Along with focusing on distribution and warehousing, businesses also have to deep dive the cost of procurements. So that cost and overheads of procurement can be optimised. In sourcing decisions some points of consideration will be: • Option of sourcing from out of state competitive vendors due to attain better procurement pricing in a border less environment. • Avoidance of procurement from un registered vendors, as there will be no benefit of input tax credit • No set off restriction on Input tax credit in case of goods and services both. • Elimination of cascading of taxes like CST • Change in lead time and procurement lot size (B) Optimisation approach: Network optimisation is quite comprehensive process which incorporates end-to-end supply chain cost, including procurement, production, warehousing, inventory and transportation. Right approach of network optimisation can be executed with the mathematical modeling tools, which comprises of complex algorithms. But access to such tool and models is not very common with SMEs. Even in absence of such models, SMEs must attempt for network optimisation. Although such optimisation might not
yield best result due to various constraints and complexity but these can yield positive results up to an extent. Under such scenario, supply chain analyst can skip the option of manufacturing location optimisation, as it is a long term capital intensive decision involving multiple stake holders. A good start point for analyst will be detailing of cost headers and consideration for the supply chain design. The following considerations for the Supply chain design would be: • Mapping of demand location and volume • Warehouse Locations choice • Supply catchment area based on desired service levels (300 Km/500 Km/connectivity from warehouse) • S i z e a n d c a p a c i t y o f warehouses (based on catchment area and volume to be catered) • Inventory Strategies such as Replenishment Cycle and Safety Stock at warehouse • Choice of Mode of transport for primary transportation (9 tonner vs. 15 tonner vs. 20 tonner) and Rail (Half Rake, Full Rake) based on consolidated volume • C h o i c e o f M o d e l f o r secondary transportation (milk run, dedicated delivery, delivery to one customer from multiple warehouses etc) With detailing of above cost headers and optimising each separately, with same constraints and riders, can help the supply chain professional in a big way, instead of waiting for ideal scenario to run the optimisation tool. (The author is a Director at Aviral Consulting Pvt Ltd. He can be contacted at vikash@aviralconsulting.com)
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Government to construct 35 multimodal logistics parks: Nitin Gadkari
The government will develop 35 Multimodal Logistics Parks (MMLPs) in the country, which will bring down the logistics costs to a great extent and help the country’s economy, Union Minister Nitin Gadkari said. The Minister of Road Transport, Highways and Shipping was speaking at the inauguration of the India Integrated Transport and Logistics Summit (IITLS), which aims to facilitate constructive dialogue for the development of multimodal infrastructure in the country. “We have identified 36 ring roads in the country that will have logistics parks. We have also consulted several stakeholders for the
projects,” Gadkari said. According to the minister, MMLPs will serve 50 per cent of the freight movements, enable 10 per cent reduction in transportation costs and 12 per cent cut in CO2 emissions. For the MMLPs, land parcels have been identified and pre-feasibility studies initiated at six of these locations, he said. The parks will be developed jointly by the National Highways Authority of India (NHAI), the National Highways Infrastructure Development Corporation (NHIDC), other parallel participants and the respective state governments, Gadkari said. “The government is also working to formulate a uniform policy for the development of MMLPs,” he added. The three-day summit saw different agencies, both public and private, mooting multimodal infrastructure in the country through close coordination between various agencies involved in planning and developing transport infrastructure. Talking about the set-up of several new ports and utilisation of rivers for waterways to reduce the logistic cost, Gadkari said the government has decided to convert 11 rivers into waterways. A statement from the ministry said that the global summit provided a platform to logistics service providers, concessionaires, end-users and investors to discuss the modalities for bringing about a transformation in the logistics and transportation scenario in India.
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News
DHL to invest 45 million Euros in India
Major ports in India to expand satellite ports
Deutsche Post DHL will invest around €45 million in India over the next three years. Its focus will be mainly in the new developments, upgrading the infrastructure and boosting its retail. “India’s integration into the global economy has been accompanied by economic growth and progressive policy initiatives. With the country emerging as a global trade hub, India remains a critical growth market for us and we will continue to invest proactively to support the business here,” Frank Appel, CEO of DHL said, addressing the media and other guests at the inauguration of DHL Centre in Mumbai. The new DHL Express Service Centre uses solar-powered panels that cut down the electricity consumption by 30 per cent. This green technology paves the way for increased use of alternative energy sources in current and new facilities going forward, the company said in a statement. The service centre will make the pickup and delivery network capacities much better for DHL in Mumbai.
Ports in Chennai, Paradip and the Jawaharlal Nehru Port Trust (JNPT) in Mumbai are developing satellite. A satellite port either already exists or will be created near a port that is reaching capacity. Satellite ports help resolve problems such as limited land availability and draft adequacy, i.e., depth of water to which a ship sinks according to its load. Chennai and Pondicherry ports signed an agreement on 14th March to convert the Pondicherry Port into a satellite port for Chennai. There also a plan to expand the Outer Harbour Paradip Port as a satellite port for Paradip port. Similarly, Mormugao Port in Goa may also be expanded and developments may be made to construct a satellite port at Betul in Goa. JNPT is in the process of acquiring Vadhavan Port in Maharashtra
news
MoUs worth `2 lakh crores signed at IITLS
Rajasthan ready to be India’s logistics hub: CM Raje
Thirtyfour MoUs amounting to about `2 lakh crores w e r e signed in the threeday India Integrated Transport and Logistics Summit, said an official release by the GoI. Some of these MoUs are between Government agencies while others are Government to Business and Business to Business. The Summit was attended by around 3000 delegates from India and abroad, which included central and state government organisations, international organisations like World Bank and ADB, delegates, global transport and supply chain experts and representatives of private companies. The sessions focused on six major themes that included Multi-Modal Logistics Parks, New developments in Urban Transportation, Freight Corridors for Economic Development, Supply Chain TransformationStorage Innovations, GST and Role of Digitisation for Decongestion and Standards and Skills for Logistics.
Projecting Rajasthan as a growth engine, its Chief Minister Vasundhara Raje called upon investors to come for a ‘fruitful handshake’ with a state that is emerging as India’s logistics hub. Addressing the India Integrated Transport & Logistics Summit, Raje said Rajasthan, bordering prosperous northern and western regions of the country, is implementing highway projects worth `40,000 crore both by the Centre and the state. She said it has the highest National Highway length of 29,500 km in the country and is well connected with air and road infrastructure offering “tremendous opportunities to investors for a fruitful handshake”. Raje said the state has a road network of 2.2 lakh km and is geared up to construct 2,000 kms of border roads under Bharatmala - the Centre’s ambitious umbrella programme for roads. “Rajasthan plays an important role in logistics. Forty per cent of the freight corridor passes through the state,” she said adding that this gave the state tremendous scope of development.
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Cargo traffic at 12 major ports up by 6% to 56 MT in April
Govt plans common IT platform for air cargo stakeholders
Boosted by pick up in demand, India’s 12 major ports saw cargo traffic increase by 6.27 per cent to 55.75 million tonnes (MT) in April, the first month of the current fiscal year. These top ports under the Centre had handled 52.46 MT cargo in April 2016. Increased demand from sectors like iron ore, coking coal and container traffic resulted in higher movement of cargo last month to 55.75 MT. Iron ore traffic volumes were up 40 per cent to 5.37 MT during the month as against 3.82 MT in April 2016 while coking coal volumes surged by 15 per cent to 4.61 MT. Container traffic was up by 9.78 per cent to 7 lakh TEUs (twenty food equivalent units) while POL (petroleum, oil and lubricants) volumes too surged by 7 per cent. Kandla port handled the highest traffic volume at 9.32 MT during April this year followed by Paradip Port at 7.33 MT, JNPT Port at 5.75 MT, Mumbai at 5.33 MT and Visakhapatnam at 4.92 MT, the data revealed.
The government is working on a common IT platform for stakeholders in the domestic air cargo segment, which is projected to see increased growth in the next few years. The country’s domestic air cargo sector has been growing at 7 per cent, while the international air cargo segment has been clipping at 12 per cent. The work has started on a common IT platform for air cargo stakeholders and once it is in place, movement of air cargo would be far easier. Civil Aviation Minister, Ashok Gajapathi Raju, said the domestic air cargo sector is projected to grow at over 9 per cent in the next few years. Noting that various initiatives are being taken in the aviation sector, Raju said the regional connectivity scheme would help in continued growth of the air cargo sector. The first flight under the scheme, known as UDAN (Ude Desh ka Aam Naagrik), was launched in May. The scheme seeks to connect unserved and under-served airports as well as make flying more affordable.
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Commerce Ministry in talks with World Bank for Logistics Performance Index The World Bank is likely to help the Commerce Ministry in building the Logistics Performance Index (LPI) to rank states with an intention to improve internal as well as international trade. The LPI ranking would encourage states to work and improve upon their logistics infrastructure. “We are working on this index. The ministry is in talks with the World Bank for this. We would identify the bottlenecks and suggest ways to improve those,” an official said. During the second meeting of the Council for Trade Development and Promotion in January, the Commerce Ministry had planned to develop this index. Exporters’ body FIEO Director General Ajay Sahai reflected upon the high cost of logistics cost in and on the impending need to work on this LPI parameter. The World Bank is already helping the ministry in ranking states in terms of simplification of doing business. Indian exporters have been demanding large reductions in railway freight rates to help them to compete in terms of price in the global markets as export costs are very high in India.
News
Waterway project in India gets US $375mn from World Bank
Container ships use Indian heavy cargo for growth
The World Bank’s board approved a $375 million loan to assist the Inland Waterways Authority of India to develop the state-of-theart infrastructure and navigation facilities required to utilise the full potential of the waterways — known as National Waterway 1. This will bring into existence an efficient logistics artery for North India, while interfering the least with the natural navigability of the rivers. The water transport fairway will be on a 1,360 km-stretch of the Ganga River between Varanasi and the seaport of Haldia. Cargo industry shall benefit immensely in the form of thousands of new jobs and transport facilities. “This project will allow India to move goods seamlessly between road, rail and water, and bring down logistics’ costs. Importantly, this Project will help IWAI put in place environmentally-sustainable strategies for inland navigation that can be replicated on other waterways in India and other countries,” said World Bank country director of India Junaid Ahmad.
Container ship operators to an d f r o m I n d i a are exploiting breakbulk or heavy cargo opportunities to cover the deficit of a long decline in global container markets. Seeing this, DP World-operated Nhava Sheva (India) Gateway Terminal at Jawaharlal Nehru Port Trust (JNPT) last week handled an oversize shipment weighing 79 metric tons, which is said to be the heaviest-ever lift at the country’s busiest public container harbour. The out-of-gauge cargo was loaded on the Maersk Guayaquil operating as part of the Danish carrier’s Europe-Middle East (ME1) service. NSIGT has made many achievements in operations during the past year. The most remarkable of this was the berthing of the 13,000-TEU MSC Cristina on 1st of April in 2016. This was the largest container ship that ever called on Indian coast To further increase its productivity, the private terminal last month moved onto an optical character recognition technologybased gate processing system.
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DP World signs MoU to develop India logistics infrastructure
Afghan-India air cargo routes to start in two months
Dubai’s DP World and the National Investment and Infrastructure Fund (NIIF) will collaborate to develop logistics infrastructure in India, as per a MoU that the two organisations have signed. The MoU was signed during the recent India Integrated Transport and Logistics Summit 2017. His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces of the United Arab Emirates, and Sultan Ahmed bin Sulayem, DP World group chairman and CEO visited India in February 2016 and the MOU was signed following discussions that began during that trip. Sultan Ahmed Bin Sulayem, DP world’s group chairman and CEO said, “We have been a part of India’s growth story for nearly two decades now, and we are delighted to further strengthen this relationship with the National Investment and Infrastructure Fund (NIIF). The NIIF plays a crucial role in financing India’s infrastructure, and we welcome their approach to encouraging development in the sector.”
Draft plans for the Kabul-Delhi route and the KandaharAmritsar route have been prepared and the routes will start within two months, announced Afghan Ministry of Commerce and Industry (MoCI) on Tuesday. This comes as Afghanistan’s peak export season of fresh fruits and vegetables is about to start. Afghanistan suffers millions of losses during this season when Pakistan shuts down commercial crossings. The Afghanistan Chamber of Commerce and Industry (ACCI) hope that the launch of Afghan-India cargo routes would resolve the nation’s export problems. “Our trade problems with Pakistan are not yet resolved. We need to look for alternative routes if Pakistan continues to close trade routes,” said ACCI spokesperson Sayam Pesarlay. Acting director for the commercial department of MoCI, Mohammad Qurbanaqjo, said Afghan businessmen would be provided with a specific cargo plane if ground routes close. He added that air and ground taxes would be the same.
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Multimodal transport policy on the anvil
Air cargo sector likely to grow at 9% in next few years
The Centre will soon frame a policy on integration of various modes of transport aimed at smooth transition of cargo, Road Transport, Highways and Shipping Minister Nitin Gadkari said. “Till date, we have been working in silos,” he said, while inaugurating the India Integrated Transport and Logistics Summit. “We will frame a policy for an integrated approach for our transportation network. We will take stakeholders’ views, hold meeting with the Prime Minister’s Office and if necessary, go to the Cabinet,” he said. Railway Minister Suresh Prabhu proposed a single company for multi-modal transportation of cargo. “We have discussed in the past the idea of one integrated company that can provide end-to-end logistic solution to our customers,” he said. “We need the integration of roads, ports, waterways and airways.” He added that the Railways is targeting an increase in freight traffic on routes beyond 400 km. “Different modes of transport need to complement each other rather than dealing with them individually,” Commerce Secretary Rita Teaotia said that dependence of cargo on roads is ‘disproportionate’.
Civil Aviation Minister Ashok Gajapathi Raju said the air cargo sector is likely to grow at nine per cent over the next few years. Raju said this while delivering the key note address at the India Integrated Transport & Logistics Summit 2017. He disclosed that the sector had grown by seven per cent in the last decade. The minister elaborated that erection of logistic parks and regional connectivity scheme (RCS) will be key growth drivers for the air cargo sector. Further, Raju said that the country has seen a significant growth in domestic air traffic and infrastructure development. On creating cargo handling infrastructure, R.N. Choubey, Secretary in the Ministry of Civil Aviation informed that ‘Common User Cargo Terminals’ would be created at 17 airports. Choubey pointed out that a “Common Framework” for the sector will be created in a year’s time so that freight operators, airlines, security and other stakeholders can be brought under “one system”.
Students of JBS Academy excel in ‘Regulation 6’ examination 40 per cent students from JBS Academy Ahmedabad, passed with flying colours in the Regulation 6 Examination. The Regulation 6 Examination is the mandatory qualifying examination for aspiring Custom House Agents, conducted under the Customs Brokers Licensing Regulation 2013. Four students from JBS have scored 60+ in the examination that was held on January 20, 2017. Nationally, approximately 18 per cent of the total number of students who appeared for the exam has passed the examination. This feat has enlisted yet another achievement in the record books of the prestigious institute. Almost every student testimonial following the best performances of the candidates indicate the rigorous quality training imparted by the institute as one of the major factors behind their individual success.
JNPort and JNPCT achieve record monthly performance JNPort and JNPCT have achieved record performance for starting month of the financial year-201718. JNPort handled 416,436 TEUs for the month of April, 2017, which is highest monthly handling till date, registering 0.59 per cent growth over March, 2017 and 12.64 per cent YoY growth. The previous highest monthly handling was 3,99,419 TEUs in March 2014. Jawaharlal Nehru Port Container Terminal(JNPCT), one of the four terminals at JNPort which is directly managed by Port authority, handled 139,953 TEUS in April 2017, which is also record monthly handling till date surpassing last record of 136,408 TEUs of Nov 2016. JNPCT registered 8.62 per cent growth over March 2017 and YoY growth of 6.06 per cent in cargo throughput. For the financial year ending March 2017, JNPT achieved an all-time high container volume of 4.5 Million TEUs and JNPCT, the container terminal directly operated and managed by JNPT, achieved the highest ever volume of 1.53 Million TEUs container traffic, since its inception in 1989.
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news International
TVS supply chain gets AEO certification by UK TVS Supply Chain Solutions (TVS SCS) is awarded AEO Certification by UK Government HMRC, indicating that its role in the international trade and supply chain is secure, efficient and is Union Customs Code compliant. The introduction of AEO status had been the European Community’s response to the need to secure International supply chains, the introduction of Customs-Trade partnership against terrorism in the USA and the development of the SAFE framework of standards by the World Customs Organisation. The possession of AEO status is expected to make it easier for businesses to apply to use such simplifications throughout the EU. Andrew Jones, TVS SCS Europe CEO said: “This award is a testament to how we operate as a business and continually strive to be the best at what we do and significantly positions us as a Trusted and Compliant Global Service Provider and fosters greater customer and supply chain confidence.”
Cargo Partner completes a decade of operation in India On the occasion of completing ten successful years of operation in India, Cargo Partner, a global transportation and integrated logistics provider, held a small client acknowledgement event at Aerocity, New Delhi. All the company Global Board Members and India Senior Management team hosted the event for our prestigious clients, airlines, shipping lines and other associate partners who have been with us in this journey of ten years. All these respected associates were made aware of and acknowledged the tremendous growth in the company. Stefan Krauter, Chairman, Vikram Paul, Regional Managing Director and Board of Directors were present to welcome our associates and to thank our clients for their business with us. Our India organisation has mainly focused on innovation through digitisation, along with providing strong solutions and proposals for our ‘Make in India’and GST development in the country. In the distinguished presence of this group, the celebration was aimed at recognising and developing long-term bonds and relationships with our clients and associates; and committing our on-going interest and investment in the Indian market.
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Bahrain attracts increased FDI by investor-friendly measures
Bahrain received US $280 million of new FDI in 2016 from 40 new companies, the Bahrain Economic Development Board said. The total amount of foreign direct investment (FDI) was double that of 2015, when FDI stood at US $142 million invested by 22 companies. Manufacturing and logistics accounted for 15 percent of the total investment in 2016. Khalid Al Rumaihi, CEO of the EDB, said: “We are proud of what has been achieved during 2016. Our success in doubling the
investments during last year comes as a result of unifying our efforts with various government bodies to ensure Bahrain is truly business-friendly. Today, investors in Bahrain enjoy an attractive business environment that offers cost-effective operations, advanced physical and soft infrastructure as well as the abundance of an experienced bilingual workforce.” In order to make Bahrain investment friendly to the foreign businesses, the government has taken many steps. The most important among them is devising a relaxed tax regime that is said to be the most favourable in the world. This includes only 10 per cent municipal tax on rent and no taxes on corporate income, personal income, no wealth tax on capital gains, no withholding tax and
no restriction repatriation of capital, profits or dividends. Bahrain has also made its BIIP cheaper than Jebel Ali business hub of Dubai. Overall, the total cost of doing business in
Total Costs associated with operating a financial services firm in Bahrain, Qatar and Dubai: Bahrain US$ 846,860/Qata US$ 1,091,350/Dubai US$ 1,163,510/Dubai and Qatar is significantly higher (30 per cent and 40 per cent respectively) than that of Bahrain. Further, Bahrain has forged strong bilateral relations with more than 60 countries which include promotion and protection of investments, avoidance of double taxation and reciprocal exemption of international air transport. Countries, with whom Bahrain has trade and economic agreements, including China, France, India, Singapore, the UK and the US.
Dachser gets a new location at Banani in Dhaka
Siemens Global Logistics Headquarters in Dubai
Dachser Bangladesh has moved to a new location in Banani, Dhaka’s modern commercial area. The new premises enable the company to accommodate future opportunities. Syed Sadaquat Hossain, Managing Director Air and Sea Logistics Bangladesh said, “The new, state-of- the-art office provides a collaborative working environment for our team to enhance growth in the coming years. It supports our approach to delivering high quality logistics services to customers overseas and in Bangladesh.” Dachser has been serving the country since 2009. The family -owned logistics provider keeps extending its activities based on its long-term oriented strategy. The new office in Dhaka will strengthen air and sea freight services, contract logistics, custom clearance and project logistics for customers in Bangladesh.
Siemens the German giant said it will set up its global logistics headquarters, including its portfolio for airports, cargo infrastructure and ports, in Dubai, after the city’s Expo 2020 event. For Siemens, the focus will be on complementing the local government’s development programmes. Dubai’s priority is a potential move into the technology and logistics industries as it struggles to break free of its petroleum-based economy. Dubai has organised an Expo 2020 to expand its infrastructure and attract tourism. Its organisers hope that involving big companies such as Siemens will demonstrate how the United Arab Emirates is pulling out of the economic slump in property prices and industrial growth during the 2009 global financial crisis. “Siemens wants to further expand its operations in order to be close to key customers and markets,” said Siemens’ managing board member and chief technology officer Roland Busch. Siemens noted that, with the global logistics market growing at a compounded annual growth rate (CAGR) of 7.5 per cent, the UAE’s logistics sector is expected to grow at a CAGR of 5.7 per cent between 2015 and 2020.
Corrigendum: With reference to the special feature in the May 2017 issue “Logistics Taking Exhibitions to a Whole New Level” on Page 44, the first line in the last paragraph mistakenly went as “Shirish from UBM adds” instead of Yogesh Mudras, MD, UBM India. The error is deeply regretted.
june 2017 - CargoConnect 85
INTERNATIONAL CONNECT
Bahrain:
Prospective Location for Logistics Entrepreneurs and Manufacturers Bahrain is a member of the GCC, together with Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The Bahrain International Investment Park (BIIP) is a business park developed by the Ministry of Industry and Commerce for businesses seeking a world class business park location for their West Asian operations. It caters to companies wanting to establish export-oriented manufacturing and international services operations in the West Asia.
“The Bahraini government has created world-class infrastructure, greatly benefitting companies and businesses are increasingly realising the logistical and economic benefits of locating here.” Zayed R Al Zayani, Bahrain’s Minister of Industry, Commerce, and Tourism
The park offers ∙ Highly subsidised serviced industrial land ∙ Pre-built industrial and office units
Incentives
∙ 100 per cent foreign ownership ∙ 0 per cent corporate tax (with a 10 year guarantee) ∙ Duty free trade agreements across GCC region ∙ Free trade agreement with the USA ∙ Duty free imports of raw materials and equipment ∙ Industrial land at competitive rental rates $2.66/m²/year ∙ 100 per cent repatriation of capital and dividends ∙ Renewable 25 year leases ∙ No recruitment restrictions for the first five years
Projects chosen for the Park are on the following criteria
a. High quality foreign direct investment projects and export oriented domestic projects b. High value added projects c. Projects capable of creating high quality employment and wealth
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d. Projects with export focused activities and internationally traded services
Creating High Quality Jobs Creating high quality jobs suitable for Bahrainis is a key objective of the BIIP. Each project will be evaluated on the basis of achieving this objective including ensuring that each employer has a comprehensive training plan in place.
• Focused Internationally The BIIP is designed for companies that are focused internationally. Companies focused on the Bahraini market, which would cause displacement of existing manufacturing capacity, will only be considered where there is a clear strategy for increasing the size of the market or where there is a significant focus on export activity.
• Value Added Projects Value added projects not only contribute to the economy of Bahrain but stand the best chance of meeting Bahraini employment criteria. The extent of the value added in the project will be measured by the percentage of jobs paying above an agreed benchmark
level and the number of supervisory skilled and graduate staff employed.
• Sustainability Projects must have long term sustainability. Projects established for short term objectives will not meet BIIP criteria. This will be determined by an assessment of the outline business plan, past financial performance and 3 year financial projections.
• BIIP Park and Building Control Guidelines Investors will be required to comply with the BIIP Park and Building Control Guidelines in order to ensure the development of a high quality business environment. The total building area, as a proportion of land area, will vary from a minimum of 40 per cent to a maximum of 60 per cent, depending on the zone and on the activity proposed. In order to optimize the use of valuable land each proposal will be considered on the basis of its ability to maximise the number of jobs provided.
• Utilities A project’s utility requirements must be in line with the available resources.
• Emissions In keeping with the plan to develop a Park suitable for international investment activities all projects must meet Bahraini national standards with regard to air emissions, effluent disposal and noise.
Location of Bahrain International Investment Park
Source: Kingdom of Bahrain, Ministry of Industry, Commerce and Tourism
Investment Cost in Investment Parks/Cities in GCC Countries 3.61
2.33
2.65
3.55
3.54
3.65
3.54 2.90
BIIP
2.49
2.48
2.47
JAFZAK
IZAD
AK FTZ
Minimum Costs
3.55 2.79
2.48
SAIF ZoneR
4.24
Sohar FTZ
3.32
3.64
2.66
KAEC
Kuwait FTZ
SMSIA
Maximum costs
Investment Cost in Free Trade Zones in GCC Countries 1.51
1.45
1.25
1.21
1.27
1.44 1.25 1.08
1.03
0.98
0.93
0.83
BIIP Source: KPMG
JAFZAK
IZAD
SAIF ZoneR
AK FTZ
Minimum Costs
Sohar FTZ
1.15 0.97
KAEC
1.12
1.11 0.93
Kuwait FTZ
0.94
SMSIA
Maximum costs
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Expert Panel suggests Corridor – Wise SPVs for developing Dedicated Freight Corridors India Integrated Transport & Logistics Summit (IITLS) took place in New Delhi. The 3-day Summit began on 3rd May 2017 and was attended by around 3000 delegates from India and abroad, which included central and state government organisations, international organisations like the World Bank and the Asian Development Bank (ADB), delegates, global transport and supply chain experts and representatives of private companies. The sessions were devoted to six major themes that included Multi-Modal Logistics Parks, New Developments in Urban Transportation, Freight Corridors for Economic Development, Supply Chain Transformation- Storage Innovations, GST and Role of Digitisation for Decongestion and Standards and Skills
for Logistics. Addressing the concluding session of the summit, the Minister for Road
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Transport and Highways and Shipping Nitin Gadkari said, “There is an urgent need to bring down logistics cost in the country to globally comparable rates if we hope to achieve double digit growth figures and ensure the welfare of the weakest sections of society.” A special session at the India Integrated Transport & Logistics Summit (IITLS) discussed the key issues related to the development of such corridors. The Union Minister of State, Commerce and Industry Mrs. Nirmala Sitharaman addressed the session that was chaired by NHAI Chairman Shri Yudhvir Singh Malik and co-chaired by Shri. Vinayak Chatterjee, Chairman, CII National Committee on Infrastructure and PPP and Chairman, Feedback Infra Ltd. India has invested heavily in developing its road network over the last 25 years. India has a network of about 5.25 million km of roads, accounting for about 60 per cent of total freight movement. However, National Highways, the most important links in the Indian road network carrying 40 per cent of total traffic movement, account for just 2 per cent of the total road network. The government has taken steps to improve the national highway network by setting up of six corridors (4 legs of Golden quadrilateral,
North-South and East-West corridors). These corridors carry 35 per cent of total road freight. In his presentation, Jose Luis Irigoyen, Senior Director, World Bank Transport and ICT Group emphasised on physical planning, adequate institutions and governance,and apt policy instruments as key enablers for development and management of economic corridors. Anil Devli, CEO, INSA talked about the need to enhance the share of waterways in transport of cargo . Mr. H.F.W. de Leijer Partner, STC NESTRA, Netherlands presented a theoretical framework for the development of economic corridors and showcased the role of inland ports. internationally adopted best practices.
events
transport logistic 2017 marks record participation transport logistic, the industry’s premier biennial logistics exhibition reported record attendance this year, which took place from May 9 to 12, 2017 in Munich, with 2,162 exhibitors from 62 countries showcasing their products and services at the industry´s leading international trade fair. It is one of world’s leading exhibitions in the field of logistics, transportation, information technology and supply chain. The biennial exhibition brings together a plethora of companies and businesses in the logistics and transportation sectors and provides a platform to view innovative products and the latest systems and technology. In 2015 approximately 55,000 visitors from 124 countries attended the exhibition which included a packed programme and a forum with 200 international sector experts.
The exhibition consists of a number of different sectors, such as forwarding agents, airlines, airports, express services, cargo handling companies, logistics providers charter brokers, general sales agents, organisations and trade associations, security services, air cargo industry services, logistics systems and products, DP systems for logistics, transport and airline management and equipment and control systems for airlines and airports. The digital revolution was the prime topic at transport logistic 2017. Another much-discussed topic of the discussions was rising national protectionism which is a risk for international trade. The world´s largest sector gathering for the transport and logistics sector attracted a record number of participants.
Çelebi launches bonded trucking services Çelebi has recently launched its customs bonded trucking service using Delhi as its hub while connecting Ludhiana, Roorky- Haridwar belt, Kanpur, Ahmedabad, Durgapur, Jaipur and Indore. For this service, Çelebi has partnered with Om Logistics. Arvind Aggarwal, Senior Manager, Business Development, Çelebi Delhi Cargo Terminal Management India Pvt Ltd emphasised on some of the highlights of this first of its kind service which includes no minimum weight limits and assured daily departures. Çelebi is also offering dedicated arrival truck dock at Çelebi warehouses. The service
further features a GPS enabled app on mobile devices for live tracking of cargo. Last year, as a part of their constant endeavours to improve the cold chain infrastructure in the terminal, Çelebi Delhi Cargo Terminal announced the commencement of Envirotainer Stocking Station at the terminal itself. The initiative was taken to benefit the trade community and extend easy access of Envirotainer cool containers to the customers at the Delhi Station. The coming products of Çelebi include ULD Repair Station and BBIN RFS Corridor.
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4th Rail Convention organised at PHD House, New Delhi
PHD Chamber’s Railways Committee organised its 4th Chapter of the PHD Global Rail Convention 2017 titled “Indian RailwaysGati se Pragati in the Climate of Change”on April 26, 2017 at PHD House, New Delhi. Mr. Ravindra Gupta, Member, Rolling Stock, Railway Board, Ministry of Railways while addressing the gathering on behalf of the Union Minister of Railways, Dr. Suresh Prabhu, invited the Indian industry to partner with Indian Railways for its complete transformation. Ms Namita Mehrotra, IRAS, Executive Director Finance (RM), Railway Board, Ministry of Railways in her remarks shared about Indian Railways initiatives,
progress and vision forward while also sharing the mega projects initiated by Indian Railways. Ms Claire Thuaudet, Minister Counsellor and Deputy to the Ambassador of France while appreciating PHD chamber for organising this timely conference, was also happy to see a number of French companies participating in the convention. She shared that this further embodied the strength of Indo-French co-operation in the railway sector. She emphasised that Speed, Station Renovation and de-carbonisation are also significant areas of collaborations. H.E Mr Milan Hovorka, Ambassador
of Czech Republic complemented PHD Chamber for conceptualising very appropriate focus area for the convention. He said that there was a huge opportunity for collaboration with international partners including Czech Republic on regulatory issues, safety, modernisation of rolling stock and infrastructure as Czech Republic has very solid institutional framework, intergovernmental agreements on economic cooperation. Gopal Jiwarajka, President, PHD Chamber said that the proactive and progressive action of Indian Railways has started yielding results.
Deep Blue Express launches One2Many Express Shipment
Accolades for AVG Logistics Pvt Ltd
DEEP Blue Express, a WCA-approved, ecommerce certified international courier and cargo company, has announced the launch of its One2Many Express Shipment. This service, targeted at e-commerce companies in the fashion and retail space, enables them to send a single consolidated shipment from India meant for multiple customers in the US. The consolidated shipment is deconsolidated in the US and Europe and shipped directly to end customers, without sharing any invoice details. This enables retail-oriented companies to save on cost, improve response time and achieve efficiency in their supply chain and distribution. Apart from cost optimisation, the shipper gets benefits under government schemes such as Duty Drawback. Speaking at the launch of One2Many, Mr Anil Mantri, Deep Blue’s Director Sales and Marketing, said: “One2Many enables Indian e-commerce companies to penetrate the US and European markets faster, without bothering about warehousing and distribution network there. This service will also help them improve customer satisfaction ratings.”
AVG Logistics Pvt Ltd has been awarded the “Emerging 3PL, Warehousing and Logistics Company” Award at the inaugural Global Logistics Excellence Awards, organised by Tata Strategic Management Group in association with India’s CNBC and TV18 network in Mumbai on April 18, 2017. The awards ceremony was part of The Economic Times Global Logistics Show that was organised from April 17 to 19, 2017 at Bombay Convention and Exhibition Centre.
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events
Saudia Cargo makes its mark at Munich in more ways than one... In the Air Cargo Europe 2017, Saudia Cargo is dedicating a section of its booth to the importance of temperature controlled facilities and equipment like ULDs to keep perishables—fresh fruits and vegetables, seafood, among other things—in their natural state. Nabil Khojah, CEO of Saudia Cargo, said
Cargo’s specialties having been based in the Kingdom of Saudia Arabia where the weather can be extremely hot during certain months of the year. Rainer Mueller, Executive Director Commercial of Saudia Cargo, said there is no escaping technology in the digital age and by
the company unilaterally decided to adopt the new booth concept to show its capabilities to handle different types of cargo, particularly time sensitive and delicate ones. “We are happy to participate in the latest edition of Air Cargo Europe. This time, we’re showcasing some of Saudia Cargo’s latest equipment in handling high-value, time-sensitive goods. Quality and safety are paramount in our operations and we make sure that our customers get the best value for their money, hence, we have invested heavily on equipment that best serve their interest,” said Khojah who continues to promote innovation in the way they do business. Handling critical cargo is among Saudia
embracing it, customers will benefit more in terms of speed, reliability and accuracy. “In today’s modern business world, we need to embrace technology to keep up with the times. There are pros and cons but there’s no denying we need to adapt to the changes. Saudia Cargo is among companies that continue to strive for excellence and invest in knowledge and skills as part of our commitment to our customers to serve them better,” said Mueller noting that Saudia Cargo has invested on specialised containers with varying temperatures suited for goods being transported. Messe Munchen has hosted the Air Cargo Europe 2017, the world’s leading trade fair
for logistics, mobility, IT, and supply chain management. Industry Achievement Award Saudia Cargo also won the Industry Achievement Award at the at Air Cargo Europe 2017 event. On behalf of Saudia Cargo Executive Director Commercial Rainer Muller received the award in Air Cargo Week World Air Cargo Awards during the four-day Air Cargo Europe 2017from May 9-12. Saudi Nights at Air Cargo Europe 2017 Saudia Cargo showcased on May 9th at Air Cargo Europe, in a small private gathering especially created for its industry partners, the age-old Bedouin traditions and the Kingdom of Saudia Arabia’s virtue of generosity with the theme “Saudi Nights.” On the occasion, Saudia Cargo treated guests with some mouth-watering Arabic delicacies. Arabic coffee and tea was generously served. Before capping the night, guests also got a special gift from Saudia Cargo as a token of appreciation for their continued support to the company. “Saudia Nights is especially created for our industry partners who continue to support us through the years,” said Mr. Nabil Khojah, Chief Executive Officer of Saudia Cargo. “This is a time for us to get together and learn more how we can work best. Great hospitality is deeply rooted in our culture and we want our partners to experience that first-hand from us as we participate in Air Cargo Europe.”
Apollo LogiSolutions launches first EXIM Train from ICD Kashipur Kashipur Infrastructure and Freight Terminals (KIFTPL), a Joint Venture between Apollo LogiSolutions Limited (ALS) and Indian Glycols Limited (IGL) launched first EXIM (Export-Import) train from Inland Container Depot (ICD) Kashipur on April 26, 2017. Shri. Ajay Tamta, Minister of State for Textiles, Government of India flagged off the train covering connecting Kashipur with Mundra port. The EXIM train will be servicing all gateway port/ports like Mundra and Pipavav. The state of art private Freight Terminal in Kashipur, Uttarakhand, is spread over 41 acres of land, to cater the logistics requirements of region. Nearly 84rakes of domestic transportations equivalent to 15000 TEUs of throughput has already taken place from this terminal since its operation. This event marked the commencement of the EXIM business through a state of art project in this region. The EXIM train will cater to the requirements
of all industries present around this belt including chemical, paper, textiles and food grains. Commenting on the development, Raaja Kanwar, Vice Chairman and Managing Director, Apollo International Limited said, “It is a historic occasion for us to flag off the first EXIM train in this region in the presence of Shri. Ajay Tamta, Minister of State for Textiles, Government of India. This is a significant step towards building integrated logistics capabilities to provide better facilities to our hinterland customers in the near future.” U S Bhartia, Chairman, IGL, said, “We are delighted at the commencement of this state of art project with the ALS team. With the help of ALS’s expertise, we are hopeful that railway transportation will prove to be beneficial in terms of cost savings and will prove advantageous in terms of environment friendliness.”
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Logistics associations jointly organise seminar on GST
Ecommerce supply chains event on ecom retail logistics
On May 5 FFFAI, AMTOI, CAI and ACAAI jointly organised a Seminar on Compliance of GST Rules. The seminar was conducted by renowned Advocate and Tax Consultant from Chennai K Vaitheeswaran. Vaitheeswaran is an expert in the field of Indirect Tax and has provided inputs to the CBDT on various Tax Reforms from time to time. The seminar was attended by about 200 participants from the above associations. In his presentations K Vaitheeswaran maintained that GST would be the game changer for manufacturing, EXIM, forwarding and logistics sector. Both government and industry are keen to implement GST from July 1, 2017. “It is a win-win situation for all. Central and State Governments are considering increasing the tax base and tax collections through GST. At the same time, Industry wants GST to eliminate the cascading effect of taxes by implementing GST,” he pointed out.
The 3rd edition of CII “ecommerce supply chains 2017” called for a renewed look at ecommerce supply chains after historical demonetisation drive in India and after the implementation of GST. More importantly, it highlighted on the need for regulatory reforms and improving logistics efficiencies. It also reflected on a range of key factors related to ecommerce supply chain effectiveness such as information technology, warehouse automation, new business models and skill development. Broad session topics included GST Impact, Automation and Logistics for Omni Channel Fulfilment, Ecommerce 2.0 - Infrastructure and Logistics Readiness, Emerging Payment Models and Predictive Analytics. Challenges with GST include choice of suppliers, subcontractors, outsourcing partners and availing Input Tax Credits (ITC). The impact will be clearly on cost, pricing and margins. E-commerce retail and marketplaces have been defined in the GST act and its implications should be assessed.
ET Global Logistics Show 2017 witnesses heavy footfall The second outing of Global Logistics Show from April 17-19, 2017 was a very successful convergence of 106 exhibitors, 2760 visitors, 292 conference delegates and 91 eminent speakers. It was a three days of networking, learning and conversations which are expected to translate into big business transactions. Co-located with the exhibition were four focused conference sessions on Supply Chain
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Management, Supply Chain Technology, Perishable and Temperature Controlled Logistics and AgriLogistics which saw industry experts discuss and debate on issues of interest to the sector, identify new growth opportunities, understand the associated challenges and identify strategies to overcome them. The international expertise and support was provided by global sector leaders ISCEA
–USA, SCLG-UAE, Demand Driven Institute, USA. Tata Strategic organised a master-class on Growing Sales through better Supply Chain Management and Demand Driven Institute of USA organised a workshop on Demand Driven Material Resource Planning. Both were very well attended as these are two areas that supply chain professionals in India are keen to learn and follow.
events
CSC launches dashboard and mobile app for air cargo business
International Automotive Supply Chain Conclave 2017 organised
Cargo Service Centre has launched a mobile app and a dashboard to do business in the air cargo industry and to bring all the stakeholders onto a single platform at Delhi Cargo Service Center, Cargo Terminal 2, I.G.I. Airport. The mobile app named “Turant” has been launched as a part of CSC’s on-going campaign ‘Redefining Customer Experience’. The mobile app was officially launched by Sanjiv Edward and Tushar Jani in the presence of around 150 members from trade bodies, representatives from airlines and industry stalwarts for the benefit of air cargo industry in India. The process for downloading and functionality of the application and dashboard were explained by Venugopal Bangera, CEO-Delhi Cargo Service Centre Pvt Ltd.
Confederation of Indian Industry (CII) organised ‘International Automotive Supply Chain Conclave 2017’ (IASC Conclave 2017) at Hotel Le Meridien, New Delhi. The Conclave aimed to highlight some of the emerging Supply Chain trends in India and Globally in the Automotive Sector. Girish Shankar, Secretary, Ministry of Heavy Industries and Public Enterprises, Government of India said that three aspects of automotive supply chain – Product Development, Operations Management and Supply Chain are key areas that directly benefit from the advent of smart technology. He further added that the role of suppliers is noticeably increasing and OEMs will also have to deal with rising productions volumes. Mr D K Sethi, Chairman, International Automotive Supply Chain Conclave 2017 and Executive Director (Supply Chain), Maruti Suzuki India Ltd said that in today’s environment a superior supply chain helps in creating a competitive advantage for the automaker. The Conclave marked the presence of speakers from Rane, Bosch, Fiat India, Delphi, Volkswagen, HeroMotocorp and was well attended by over 300 delegates.
FIEO discusses the impact of exports
5th edition of “Clearance through Indian Customs” published In a Press Interaction organised by FIEO to discuss issues related to trends happening in the export industry mainly around the impact of Exports and its growth, Achieving Export Target, Foreign Trade Policy, GST, Rupee value, India’s current and future trade scenario and various important issues related to Trade and Commerce. GK Gupta, President and Ajay Sahai, DG and CEO, FIEO gave a brief about the country’s export and it’s share percent in GDP. Further, he informed about the share of Indian global exports i.e. 50 per cent. He also emphasised that the country needs to focus on exports of top 200 tariff lines. India’s global share in top 200 products is 1.43 per cent and all products is 1.62 per cent. As GST is around the corner, the main problems that will be faced by exports were discussed during the meet.
JBS Academy Pvt. Ltd., Ahmedabad’s premier institution for skill-training in Logistics, has recently rolled out the 5th edition of Clearance through Indian Customs, written and edited by Mr. Samir J. Shah, Chief Mentor and Director. A handy-guide for professionals belonging to the logistics sector in India and abroad, the book has come to be in huge demand and has witnessed sale of more than 2000 copies. The encyclopaedia of Logistics has been acclaimed especially for its comprehensive illustration of all customs clearance regulations through simple grammar with minimal technical jargon. Apart from Clearance through Indian Customs, JBS Academy is also credited with publishing various other books for the international logistics sector domain.
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PEOPLE CONNECT
Hardwork, Passion and Determination are Key for Success‌ Skyways Group has been one of the leading logistics groups in India spanning various spheres of Logistics. Yashpal Sharma, Managing Director, Skyways is seen as a young and enthusiastic leader of the future. He joined Skyways back in 1995 and has been the driving force of the company and since then the group has expanded into over 20 cities in India and overseas. Sheena Sachdeva talks to him as the future visionary, in a candid conversation about how has been his journey till here and his future prospects.
What motivated you to be a part of the logistics industry and how has your experience been so far?
observed in the industry in terms of technology, manpower, practices, government regulation etc?
As a second generation person from the founding family, I happened to be here accidently. Initially, I came into Skyways to get a glimpse of how an office works but soon got intrigued by the versatility the industry has and fell in love with this industry within six months of being here. Logistics is a versatile, innovative, exciting and intriguing industry where something or other is happening at every point of time. As an active industry, one can choose how much one wants to work because logistics industry never stops. There is some part of the world which is always working. The work makes you travel and meet people around the world making you know different cultures. The industry has huge space for innovation and lets one bring in new ideas. Two decades down, I can only say I am more than glad to be here and enjoying every moment.
Back in 1995 when I joined, the MNCs were just entering and taking small steps in the Indian economy. They brought in different and newer practices which were subtly but surely changing how the freight is handled. Some of the Indian companies like us began to learn and evolve to cope up with these practices and challenges. The companies who showed rigidity to change saw a big decline in their business. The industry was smaller and had a lot of personal touch. Over the years, people have become more technologydependent. I have seen technological advancements in the way goods are moved, equipments have got better, airports and ports have seen various infrastructural improvements. Even government and other regulaters have brought many positive changes to cope with the increase in EXIM trade.
How has the industry changed from the time you stepped in? What major transformations have you
What is the biggest challenge that you have faced till date?
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The biggest challenge is resistance to
change which is prevalent not just in our company or this industry but even other industries across the world. The challenge has been to keep the teams motivated and positive while guiding them to embrace this constant changeprocess. As a service industry we are as good as our team and all successful companies are the ones which are swift in bringing about constant improvement in its processes.
Where do you see the graph of the logistics industry moving in the coming years? India is in a very exciting phase currently and is set to grow at substancial pace over the next decade and maybe beyond. The Government of India is making the right moves enabling trade to florish in the country. Lots of investments are being made by Indian and foreign companies in India and these will create lots of opportunities for Logistics industry. I am extremely bullish about the possibilities in our industry and we at Skyways are also investing hugely in infrastructure, training and technology to have a sizable share of this growth.
A Trusted Name in the Domain of Logistics for More Than a Decade The EXTRA EDGE • • • • • • • • • • • • • • • • • • •
Certified weigh bridge within premises, for SOLAS (VGM) compliance. Scheduled rail service between ACTL & Nhava Sheva/Mundra/Pipavav Dedicated Railway Siding equipped to handle EXIM as well as Domestic Cargo. State of the art infrastructure for reefers containers with plug in points andpower packs. Shortest Transit Time from NCR to Nhava Sheva. QC facility within Bonded Area. Special dust free enclosure for GOH in the export warehouse with provision of temperature control. CTPAT Compliant and AEO Certified. Bonding of Import Cargo in warehouse as well as containers. Provision of clearing and consolidating air cargo. Security: CCTV surveillance, intruder alarms and motion sensors. Online tracking of shipments. Value adds like Palletisation, shrink wrapping, Sorting, Segregation, Snakeloading, Bar coding, etc. All equipment owned and operated by ACTL. EDI, Bank, Dedicated Customs teams. Customized daily reports for customers via email. Impeccable cargo handling. Provision for customs clearance on Sundays/holidays. Door-to-Door delivery/handling of cargo.
Terminal
: ICD, Sector 59, Faridabad, Haryana, Phone: 0129-4259300 Fax: 0129-4259311, E-mail: info@actlindia.com Corp. Office: M-26, Main Market, Greater Kailash–II, New Delhi–110 048. Phone: 011-49488900/ 901, Fax: 011-49488910, E-mail: info@actlindia.com Mumbai : 16 Friends Society, 227 P.D'Mello Road, Fort, Mumbai 400001. Phone: 022-22616170, E-mail: mumops@actlindia.com, E-mail: www.actlindia.com
@TheJSWGroup
www.jsw.in
JSW Jaigarh Port India’s modernised greenfield multi cargo environment friendly deep water port regularly servicing capesize vessel
Creating world-class maritime infrastructure to 200 MTPA by 2020
JSW Jaigarh Port is poised to service:
400,000 tonnes
350,000 tonnes
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Very lArGe Crude CArrIerS