CargoConnect February 2016 by Surecom Media

www.surecommedia.in

VOL VII ISSUE III february 2016 `20

Postal Registration No.: DL (S)-01/3372/2016-18 Postal at IPMBC on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

SPECIAL FEATURE

Supply Chain:

Demystifying the Building Blocks

t e rk s

a ic m t s r i e g t o f L A o utr e

a n

t g h u o t h r t e A f

M o

Air Cargo Hub: A Distant Dream

Harnessing the Power of IT in Air Cargo

Cargo Theft: Rein the Bane

Contents

Volume VII • Issue III • february 2016

Editor and Publisher Smiti Suri Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks

Executive Editor Samaya Chhabra

Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks Supply Chain Demystifying the Building Blocks

Assistant Editor Dr Kirti Mudgil Pathak

Principal Correspondent Ritika Arora Bhola Roselin Kiro

26 COVER STORY

Aftermarket Auto Logistics: No More an Afterthought

SPECIAL FEATURE

Supply Chain: Demystifying the Building Blocks

FEATURE

Special Correspondent Joydeep Banik Deepannita Chakraborty Feature Writer Kiran Sabherwal Director Marketing Ajeet Kumar Manager Marketing Niti Chauhan Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad Marketing Support Suman Kumari

• Air Cargo Hub: A Dis-

tant Dream ..................44

• Harnessing the Power

of IT in Air Cargo ..........54

NEWS .....................6-10 & 88-96 We bring you a wide spectrum of updates that will keep you informed about the industry’s plans, performance and initiatives.

EVENTS .....................98-100 profile ...........................97 supply change ........84-87

• Cargo Theft: Rein the

Bane .............................64

INTERVIEW Ramesh Mamidala, CEO, Celebi and Sanjiv Edward, Head of Cargo, DIAL ................72 Ashish Asaf, M D, S A Consultants & Forwarders Pvt Ltd ....................................74 Pankaj Mehta, Country Head & Director, Carrier Transicold, India .......................76 Raaj Jobanputra, Director, JWL Cold Store Pvt Ltd .................................................78

GUEST COLUMN .............102

Sameer Khatri, Regional VP Indian Subcontinent & MD-India, UTi .....................80

TOTAL PAGES: 104 (inclusive of covers)

Manojit Acharya, MD, Jungheinrich Lift Truck India Pvt Ltd ................................82

Administration Vipin Marwah Lavish Thakur Designer & Visualiser Shaique Ahmad Ritesh Kumar 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

SURECOM MEDIA

6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 9711383365, 9810962016 Email: cargoconnect@gmail.com info@surecommedia.in Website: surecommedia.in

News

Mumbai airport unveils air cargo app

Greenfield airport to be ready in Sikkim next year

GVK Mumbai International Airport Limited (MIAL) along with technology provider Kale Logistics Solutions has introduced Cargo Mobile App as an extension to its air cargo community platform, GMAX to foster better communication and effective dissemination of information among members of the trade. MIAL said that the app provides important functionalities for the trade, enables end-to-end tracking of shipments, and helps all members of the logistics chain in planning their resources. The GMAX mobile app can be downloaded from Google Play store on all Android mobile devices. The app enables Export General Manifest (EGM) tracking, which can expedite the export incentive realisation process, and provides complete visibility of vehicles/ shipment within cargo terminal. MIAL said in a statement that, “The app provides different levels of authorised access for the Cargo Terminal Operators, customs, customs brokers, airlines, freight forwarders, shippers/consignees and other statutory bodies, thereby offering greater visibility into cargo.” According to Manoj Singh, Vice President and Head of Cargo, MIAL, “Transparency and efficiency are essential in cargo logistics, especially for operations the size we have at MIAL. We achieved both to a large extent with the GMAX portal and have now taken it a step further with the mobile app at every stage of cargo operations.”

A greenfield airport in Sikkim is likely to be ready next year, Union Minister Jitendra Singh said in a statement. The greenfield airport at Pakyong is expected to be ready in 2017 at a revised cost of INR 605.59 crore. Another unique project, the 45 kilometer-long Sevoke-Rangpo railway line will be constructed at a cost of INR 4,190 crore, he said. The railway line will have 14 tunnels and 28 bridges. It will offer an exclusively picturesque and scenic journey while passing through the foothills of Kanchenjunga mountain range and Teesta river valley. Referring to various projects supported by the DoNER Ministry, Singh said under the “Non Lapsable Central Pool of Resources” (NLCPR), 183 projects have been completed in Sikkim at a cost of INR 487.91 crore while additional 41 projects worth INR 721.89 crore are undergoing. The Minister said though Sikkim is a small state, it is very progressive and development-oriented which is evident from the fact that during the 11th Five Year Plan, it recorded an impressive growth rate of 22.8 per cent.

Shipyard industry gets infrastructure status The government has granted infrastructure status to the shipyard industry in a boost to its Make in India initiative. The move is expected to bring down borrowing costs for the industry. At present, companies pay average interest of 14 per cent-15 per cent on their borrowings. “Shipyards industry has been granted infrastructure status. It will create right environment for the growth of shipbuilding industry that would now become globally competitive,” a senior shipping ministry official said in a statement.

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ChPT & CONCOR sign MoU Cochin Port Trust (ChPT) and CONCOR have entered into a MoU for the running of a weekly container train service from Irugur ICD, Coimbatore to ICTT Vallarpadam, Cochin Port. The trains are scheduled to connect the direct shipping services to the Far East, China, Europe and Middle East. CONCOR will provide storage space at very attractive terms and conditions to shipping lines who desire to stack empty containers at Coimbatore. This MoU between CONCOR and Cochin Port will be very advantageous for the EXIM community in and around Coimbatore, stressed a release.

News

GDL starts construction of logistics park in AP Gateway Distriparks Limited (GDL) has started construction of its logistics park at Krishnapatnam Port in Andhra Pradesh after receiving all necessary state government approvals, the company said in a statement. The company said that the park being set up to cater to the requirement of Andhra Pradesh, Telengana, and Karnataka, will offer comprehensive supply chain solutions through a CFS, general warehousing and reefer/cold storage services along with transportation facilities. The facility to come up on 48 acres of land will have world class infrastructure to meet the requirement of the export-import trade. It will have latest technology to maximise efficiency. The company said that the project will have total investment of INR 150 crore. While INR 80 crore has been earmarked for land and construction of the first phase, INR 70 crore will be invested in the second phase.

Ministry of Shipping launches Project Green Port With an aim to make major ports in India cleaner, the Union Ministry of Shipping has launched Project Green Port. The project has two verticals- Green Ports Initiative and Swachh Bharat Abhiyan. The Green Port Initiative comprises 12 time-bound subinitiatives. Some of the monitoring plans, which include acquiring dust suppression system, setting up of sewage/ waste water treatment plants, and energy generation plans will be primarily based on the renewable energy resources, the ministry said. The initiative will also look at the shortfalls of oil spill response facilities, which will prohibit the disposal of garbage at sea. Under the Swachh Bharat Abhiyan, the ports will be made cleaner, the ministry said. The focus will be on cleaning the wharf, cleaning and repairing sheds and port roads, painting road signs and zebra crossings, besides modernising toilet complexes. According to the ministry, the staff will be trained to generate awareness about cleanliness.

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Inland waterways most eco-friendly: Gadkari

India ranks third on emerging logistics index

Union shipping minister Nitin Gadkari said inland navigation would be the most eco-friendly and cheapest form of transportation in India in coming years. It would be based on liquefied natural gas (LNG) and would beat both railways and roadways. Supporting his claim, Gadkari said in a statement, “While road transportation cost per kilometre is `1.50 and for railways it is Regular1, for waterways it will come down to 25 to 30 paise.” He said his ministry is already looking at multi-fuel engines for vessels that can use both LNG and diesel. Gadkari inaugurated the River Information System (RIS) for India’s first national waterway—the Ganga. RIS is a system of tracking traffic and transport processes in inland navigation. It streamlines exchange of information between waterway operators and users. The system is being implemented in three phases. While the first phase costing `26 crore between Sagar and Farakka has been completed, the other two phases will come up between Farakka and Varanasi. In the second phase, the stretch from Farakka to Patna (410km) would be covered at an estimated cost of `15.89 crore; the third phase would cover from Patna to Varanasi (356km) at `14.49 crore.

Climbing two rungs by overtaking Brazil and Indonesia, India ranked third in an emerging markets logistics index for 2016, which rates countries based on business environment. The report, which was released recently, ranked China and the United Arab Emirates first and second, respectively. The index ranks 45 leading emerging markets using three metrics. Size and growth attractiveness make up 50 per cent of the overall index score, while compatibility and connectedness each account for 25 per cent of the overall score.

Amazon expands logistics reach with ocean shipping Amazon.com Inc’s has registered as an ocean freight forwarder, according to the US Federal Maritime Commission, a move that will give it more control over shipping products from Chinese factories to US shoppers. The registration is the latest indication that Amazon plans to expand its logistics reach to cut costs for its retail business and potentially provide third-party logistics services to other industries.

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SPECIAL feature

Supply Chain Demystifying the Building Blocks Supply Chain Demystifyin

Supply Chain

Supply Chain Demystifying the Building Blocks Supply Chain Demystifyin

Demystifying the Building Blocks

Supply Chain Demystifying the Building Blocks Supply Chain Demystifyin

12 CargoConnect - february 2016

SPECIAL feature

ng the Building Blocks Supply Chain Demystifying the Building Blocks

ng the Building Blocks Supply Chain Demystifying the Building Although trends such as Just-in-Time, lean manufacturing, ng the Building Blocks Supply Chain Demystifying the Building etc., have yielded compelling business benefits, todayâ&#x20AC;&#x2122;s ng the Building Blocks Supply Chain Demystifying the Building supply chains have to be more nimble than ever before to ng the Building Blocks Supply Chain Demystifying the Building be Chain able to respond quickly to the slightest changes in ng the Building Blocks Supply Demystifying the Building

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ng the Building Blocks Supply Chain Demystifying the Building Blocks february 2016 - CargoConnect 13

SPECIAL feature

upply chain is the systematic flow of goods from the sourcing of raw materials to finished goods at the consumption point. The importance of a professionally managed, end-to-end supply chain has increased significantly in last two decades and includes forecasting, procurement, production planning, raw material sourcing, labelling and packaging , finished goods inventory managing, order processing, distribution planning, aftermarket support and reverse logistics.

Unravelling the Supply Chain Supply chains include every company that comes into contact with a particular product and are also considered to be complex. For example, the supply chain for most products will encompass all the companies manufacturing parts for the product, assembling it, delivering it and selling it. Prahlad Tanwar, Director, KPMG says that “an inclusive supply chain is the sum of several parts, each with its own unique nature and challenges. As raw materials progress to an intermediate stage and finally up to its end form as a finished good, it is common for the supply chain to extend beyond a single organisation.” He further elaborates it with an interesting example. He takes the example of the “transformational journey of an ore lump to a processed metal sheet to an automobile component involving multiple stakeholders, i.e. the metal manufacturing company, the automobile component supplier and the automobile manufacturer.” It’s not difficult to envisage that any company dealing with multiple products, and therefore, large number of suppliers managing a sizeable and increasing customer base, operates a very complex supply chain. The multilevel network between different entities/systems of business and the flow of goods through multiple modes and channels is what makes the supply chain complex. Samik Chakraborty, East Zonal Head, DIESL opines, ”For any organisation, it’s the supply chain planning and forecasting that has a direct linkage to its business strategies; this is because the customer requirements, expectations and satisfaction are dependent on overall supply chain efficiency. While the logistics is shifting from the supply driven to demand driven model, the requirement of higher efficiency, high degree of coordination and accurate forecasting/planning/sched-

14 CargoConnect - february 2016

uling has made the system more complex than ever.” As most companies have become more cost conscious, only ‘supplying the right material at the right time to the right customer’ is not enough to have a sustainable supply chain. Carrying the minimum inventory level throughout the chain and minimising the cost to stay competitive has become essential. The demand driven supply chain requires a backward integration even up to the manufacturing and sourcing level. Analysing the right trend, manufacturing the demandbased commodities and increasing the speed of production are also the key features to integrate the supply chain to the needs of the customer.

Sharing Information Among Independent Stakeholders “The traditional definition of SCM is the management of the flow of goods and services. That is putting it too simply. The modern definition would include not only selecting the tree to be chopped but putting an electronic system in place to track the progress along all stages—sourcing, procurement, distribution and coordination at the same time as keeping all parties informed of the current status allows the supply chain to adapt fluently”, says Martin Roos, Managing Director, India & Bangladesh, DSV Air & Sea Pvt Ltd. The whole process in the supply chain is an inter-linked chain of end-to-end demand and supply management activities. All these

elements share a common goal and are interdependent for the fulfilment of this goal of supplying goods to the end consumer. Hence the supply chain activities should not operate in silos. Information must be shared—not just across departments and functions within an organisation but also across business partners and other stakeholders to provide a real end-to-end process view. A major challenge in the sharing of information between tiers is the problem of passing data between disparate information systems. Innovations such as cloud computing, data collection and analysis software, etc. are now making supply chain control towers possible. The real-time end-to-end data will enable companies to manage demand signals more accurately to reduce inventory levels, answer customers’ requests faster and more accurately, and smoothen the effects of demand variation. A control tower makes key data available to the partners in a sup-

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SPECIAL feature Samik Chakraborty East Zonal Head, DIESL

"For any organisation, it’is the supply chain planning and forecasting that has a direct linkage to business strategies; customer requirements, expectations and satisfaction are dependent on overall supply chain efficiency."

ply chain facilitating coordination of customer demand with supplier response. For a supply chain control tower model to be successful, processes need to become more collaborative, with data sharing and planning being done across departments as well as between organisations. The modern supply chain is complicated in nature and can only be mastered through comprehensive supply chain visibility and IT support across the entire network. Obtaining real-time visibility across all the companies in the supply chain plays a crucial role in creating and delivering products and can significantly increase speed-to-market, reduce capital expenditures and manage risk. To validate this point, Sushil Rathi, Chief Operating Officer, Mahindra Logistics discusses, “At Mahindra Logistics Limited (MLL), we

have invested in technology and developed IT-integration as a value proposition. We have developed a customisable transport management solution in-house called MILES (Mahindra Integrated Logistics Execution System) based on Oracle Transport Management System (OTM) which can interface with customers’ host system through its middle ware.” He adds, “Other technological solutions developed by us include a Warehouse Management System (to look after stores management, inventory control and order management), Yard Management and Dock Scheduling application (to ensure efficiency in dock operations), Order Management System (to deliver optimised routing and scheduling of orders for in-city distribution) and a Feedback Management System (for customer concern resolution). These systems ensure that we provide end-to-end visibility, consistent business processes, and strategic business intelligence to all our customers. They also become a platform to manage transportation, sourcing and billing activities internally thereby driving up efficiencies.” To sum up, it can be said that using deeply integrated tech-

The modern supply chain is complicated in nature and can only be mastered through comprehensive supply chain visibility and IT support across the entire network. nology solutions allow companies to perform higher-level optimisation functions across the supply chain that are hard to replicate in a manual environment.

Higher Flexibility for Business Needs A strong supply chain involves organisations collaborating together to align and co-ordinate their efforts. Competitive advantage is then gained by the application of lean principles across the whole supply chain. The rise in the level of globalisation has opened the requirement of higher flexibility to adjust with the changing business needs. At the same time,

SPECIAL feature Sushil Rathi Chief Operating Officer, Mahindra Logistics

"At Mahindra Logistics Limited (MLL), we have invested in technology and developed IT-integration as a value proposition."

intense competition entails continuous improvement in product and process quality. To remain flexible and competitive, manufacturers prefer to outsource some jobs to contract manufacturers and OEMs. So establishing a meaningful relationship with the suppliers is must. If chosen rightly, the Supplier can become a competitive edge for any manufacturer with specific and mutual understanding on product specification, cost and delivery lead time. Given the interdependence, it is essen-

tial for the stakeholders in the supply chain to be aware of each otherâ&#x20AC;&#x2122;s status on a real-time, to enable overall success of the supply chain. The cost, quality and delivery requirements of the end customer should be the common objective for every stakeholder in the supply chain. There are various established processes, methodologies and philosophies to drive visibility and accountability across extended supply chain stakeholders. Chakraborty agrees and further states,

â&#x20AC;&#x153;Suppliers play a major role in product development/designing/quality and standard; they also act as a source of real time information from the external market. To choose the right supplier/ partner, a company may assess his adaptability, cost competiveness, commitments, technological advancement, speed of delivery and responsiveness. Establishing a long term, healthy supplier relationship helps an organisation to equate the business risks, provides sustainability and mutual benefit to both the entities.â&#x20AC;?

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18 CargoConnect - february 2016

SPECIAL feature Martin Roos Managing Director, India & Bangladesh, DSV Air & Sea Pvt Ltd

"India may not be the first or the even second choice of global giants when it comes to manufacturing destinations, owing largely to inadequate infrastructure, red tape and bureaucracy issues."

Significance of Just-in-Time Manufacturing In addition to product and quality, manufacturing supply chains in these times are often compared on inventory turns and speed to market. Just-in-Time (JIT) inventory system is all about placing the right material with the right quality and quantity, in the right place at the right time. It is a complex process which covers the areas of a proper layout of the plant, demand based production, scheduling system and manufacturing resource planning. Also the synchronisation of suppliers, workers, processes and planning are important in JIT. When JIT is managed successfully a manufacturer gets the complete benefit of minimising the overall production cost; with a higher productivity and better product quality the firm can remain sustainable for a longer period in the competitive market. Speaking on the issue, Rathi says, “JIT reduces the inventory holding costs and ensure visibility and availability of goods at the right time and place. JIT works on the concept of ‘pull’ and not ‘push’ and hence necessitates transportation only as and when required by the next link in the supply chain. Developing a JIT approach requires sophisticated planning and sharing of production schedules, production data and consumer demand by the logistics user. It is very important to have trust and confidence in your logistics provider if you want to have a Justin-Time supply chain.” Although, adoption of JIT is still limited to certain end manufacturing industries, for instance, automobile manufacturers companies like Toyota, Dell or Harley Davidson recorded successful implementation of the same over the last few decades. Tanwar opines, “The JIT inventory system is critical to the success

20 CargoConnect - february 2016

Reasons for SCM in Business

• Boosts Customer Service: SCM impacts customer service by making sure the right product assortment and quantity are delivered in a timely fashion. Additionally, those products must be available in the location that customers expect. Customers should also receive quality after-sale customer support. • Improves Bottom Line: SCM has a tremendous impact on the bottom line. Firms value supply chain managers because they decrease the use of large fixed assets such as plants, warehouses and transportation vehicles in the supply chain. Also, cash flow is increased because if delivery of the product can be expedited, profits will also be received quickly.

of manufacturing supply chains for products where performance factors such as inventory availability and speed of delivery are critical to customer satisfaction. Efficiency in the supply chain also leads to lower costs, which can help generate greater demand along with process/product development and better profits. Having said that, it must be appreciated that JIT as an efficiency philosophy is limited to certain end- manufacturing industries, for instance automobile manufacturers to enable adherence to deeply entrenched inventory linked principals. In reality and taking a larger view of the supply chain, inventories are often loaded onto the suppliers and vendors.” S V N Prasad, Senior General Manager and Group Head, Production Planning and Control, Hyundai Motor India says, “At Hyundai, we practise Just-in-Time, Just-insequence and direct sequence as part of JIT concept. We adopted JIT concept to reduce the complexity of our in-plant logistics. As

on date, over two hundred category of items are being managed using JIT concept and this number has increased over the years to achieve supply chain excellence in terms of lean manufacturing, operational efficiency, fool proof operations, improving quality index, shop floor space utilisation, avoiding multiple handling, etc.”

Supply Chain Scenario in India Supply chain in India has evolved a lot compared to where it was a few years ago. The competitiveness is directly linked to macroeconomic factors. In India, the logistics cost is 13 per cent of the GDP which is higher than that of the developed countries like USA (8.3 per cent), Japan (10.5 per cent), Germany (9 per cent), and Singapore (8 per cent). The bottleneck in transportation infrastructure, complex taxation policy and regulation and higher inventory carrying cost are the common challenges faced by supply chain practitioners in India.

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SPECIAL feature Prahlad Tanwar Director, KPMG

"An inclusive supply chain is the sum of several parts, each with its own unique nature and challenges."

The Indian logistics industry is growing rapidly (12.17 per cent CAGR by 2020) and we have seen an upsurge in global outsourcing of manufacturing. This combined with the government support, is opening up a larger scope for supply chain and manufacturing opportunities in India. Indian manufacturers are earnestly waiting to see the impact of two recent initiatives taken by the government–the land acquisition bill and the GST bill. The implementation of both the policies can make India’s supply chain and production more competitive. To this, Tanwar orates, “The advent of GST will create an opportunity for companies to revisit their supply chain model to move towards mega centre supply chain models with automation and use of 3PLs for efficiency. Companies are also redesigning their planning, sourcing, making and de-

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livery aspects for a flexible and agile model.” Most Indian companies are still to achieve the scale and complexity at which some of their global peers operate. The large global operators in their respective fields have built their scale and operations by increasingly focusing on an efficient and advanced supply chain management strategy. As companies in India enhance scale and operating locations, they would also need to consider remodelling their supply chains, including processes, vendors, service providers and manufacturing locations. Supply chain design would need to be re-aligned with global market demand and supplier base. For instance, given the modest scale of business currently, Indian companies have a lot to learn from their global peers. It is the right time for India to focus on supply chain management, as we move towards scaling up businesses and organisations amid increasing globalisation and consumerism. Speaking on the current status of growth and expectations in near future, Roos shares, “India may not be the first or the even second choice of global giants, when it comes to manufacturing destinations, owing largely to inadequate infrastructure, red tape and bureaucracy issues. Despite that, India continues to be a market that by sheer size seems difficult to ignore.” There are also logistical challenges for manufacturers as the transport system in India doesn’t provide optimum productivity and cost utilisation. With a 7500 km long coastline, almost 90 per cent of India’s import (finished goods and raw material) and exports are managed by the ocean ports and approximately 70-75 per cent of the total traffic is being handled by 12 major ports. The remaining 187 ports do not have the required infrastructure to spread the load, so traffic congestion remains a challenge. Waterways are the cheapest mode of transportation, but in India not even 1 per cent of the total inland cargo moves through water due to lack of navigable

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Thermal Management o -30 to 70 C

Lightweight

Customisable Serial Port, RFID, BCR, 3G etc.

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Long Battery Life Upto 18 Hours

FZ-B2

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SPECIAL feature S V N Prasad Senior General Manager and Group Head, Production Planning and Control, Hyundai Motor India

"At Hyundai, we practise Just-in-Time, Just-in-Sequence and Direct Sequence as part of JIT concept. We adopted JIT concept to reduce the complexity of our in-plant logistics."”

waterways and other infrastructure issues. The congestion in highway traffic and interstate documentation process adds to the cost and lead time. On the other hand, rail transportation is majorly used for moving bulk cargo and raw materials; however lack of customisation doesn’t allow other segments to avail rail as mode of material transportation widely. The establishment of ICEGATE, the customs’ EDI Gateway Portal of Government of India which provides a single window integrating customs, excise, and all other relevant agencies involved in EXIM clearances has opened a new ‘gate’ for international trade and commerce. On the plus side, government initiatives to create national waterways, dedicated freight corridors (DFC) and multimodal transportation hubs would definitely make supply chains more competitive for Indian manufacturers in coming days.

In short, the cost of logistics in India remains high due to various factors including a dearth of large specialised, integrated third party logistics firms, ineffective technologies and also inadequacy of infrastructure. This indicates that there is ample scope for Indian companies to streamline their supply chain process and become more competitive. With the growth of India’s soft infrastructure, education, training and policy framework, there will be no limit to be placed on India’s economic growth.

Conclusion To sum up, companies these days understand that it is the supply chain that translates corporate strategy into day-today interactions both within and beyond the organisation. Ultimately, it is the supply chain that satisfies or disappoints their customers. Like Sameer Khatri, Regional Vice President-Indian Subcontinent & Managing DirectorIndia, UT Worldwide (India) Pvt Ltd says, “If your supply

Most Indian companies are still to achieve the scale and complexity at which global peers operate. Global operators have built their scale and operations by increasingly focusing on efficient and advanced supply chain management strategy. chain is effective, if it can create a competitive edge, then you have a success story going; if you do not have a robust supply chain backing you, then you are a failure.” Prasad believes that it is “a long way to go for India, with organised Indian manufacturing sector growing strong on quality and productivity can make the dreams of our ‘Make in India’ come true. We are confident that small and other medium industries can bridge the gap with more exposure on global standards.” Surely, with globalisation, innovation of products, risk of disruptions and more, meeting new demands at lower costs with increased productivity in a competitive environment, is a big task; but our logistics players know how to play it well.

People. Partnership. Performance...

Entrance

Infrastructure & Advantages Custom Bonded Warehouse. 1) Storage of 7000 pallet,15 identical chambers of 432 Import & Export Pallets eachHub. Buffer Yard & Factory Stuff. 2) Temperature range of +25°c to -25°c Cold Storage & Cold Chain. 3) 24x7 Operational Hours Storage area 28,000 sq meter. 4) VAS Facility of Processing, Repacking, Labeling & Direct access to the National Highway 4B leading to the JNPT port. Sorting Ample space for parking of 10000 cargo trucks. 5) Customs Bonded Area 24x7 CCTV monitoring. 6) reach trucks,forklifts pallet CFSOperated Owned equipments4 Top Lifters,&80hand Trailers, 30 movers Forklifts, 2 Empty Handles, 1 Crane. 7) Distance from Dock JNCH Shelters 11 kms. with Dock Levelers. 8) Inflatable Distance Belapur Station 7 Kms. 9) 100%from Power back-up with multi generators Zero Toll Charges, Zero Congestion in the CFS, Zero Carting Charges, 10) Fire- fighting & fire prevention systems Zero Congestion on the approach Road. 11) LED eco-friendly lighting Carting & Stuffing dine in Covered Area. 12) 22000:2005 HACCP Certified Forwarders. IdeaISO Location for Exporters/CHA’s/Freight 13) Reafer Vans & Support Secondary Distribution Prompt Carting of Cargo. Wi-Fi Enable CFS.

Covered Warehousing Facility

Covered Carting & Stuffing Area

Total Protection from Rains; Carting Custom & Stuffing area Completely BondedCovered Area

15-23, National Highway 4B,Panvel-JNPT Highway, Village Padeghar, Panvel 410206. Maharashtra. +91 22 66280700-98 +91 22 66280781 jwrcfs@jwllogic.com raaj@jwllogic.com hema@jwllogic.com mgrops@jwllogic.com

Custom Area

www.jwllogic.com

cover story

26 CargoConnect - february 2016

cover story

Aftermarket Auto Logistics:

N o

M o r e

a n

A f t e r t h o u g h t Spare parts logistics aims at a

demand-driven, cost-minimal provision of the required spare parts for the maintenance of primary products to ensure an optimal level of availability or reliability of the product. Given the fact that aftermarket business creates better margins, aftermarket activities are high on every companyâ&#x20AC;&#x2122;s agenda at the moment in our country. Joydeep Banik talks to experts to know more about the current scenario of spare parts and aftermarket logistics and discusses the measures required to streamline the supply chain with inventory management

february 2016 - CargoConnect 27

cover story

raditionally, the distribution and sa les of spa re p a r t s h a s a lways happened through a wellestablished network of receiving parts from vendors/manufacturing plants into a warehouse, supplied to distributors, in turn to retailers and subsequently to the enduser. The automotive aftermarket has gained increasing attention recently. Companies are nowadays seeking new methods and solutions to provide the best possible service to the customers through the most efficient ways. Efficiently implemented spare parts’ logistics management can differentiate a business from its competitors, lower costs, increase revenues and help firms generate greater value. Firms across different industries now recognise spare parts distribution as a chance to offset stagnation and to increase profits in primary product markets. For instance, the after-sales business in the machine and plant construction industry accounts for approximately 25 per cent of the total sales (with two-thirds from selling spare parts and onethird from services). Aftermarket is seen as a strategic opportunity by large brands as it enables companies to build up loyalty and tight bonds with their customers and create repeated sales on the products they have already sold. Rapid industrialisation has seen the widespread growth of commercial manufacturing enterprise in the Indian automotive industry. Accurate and timely visibility, process expertise and understanding the intricacies involved in managing the physical movement of goods and inventory in the automotive aftermarket supply chain are some of the acute challenges within the aftermarket. This article tries to highlight the important metrics in the automotive aftermarket, that is, standardising activities through stabilising the lead-times, providing a proactive approach to the problems, looking upon inventory as a necessary part of the supply chain to satisfy end-customers and establishing incentives to support the availability of parts where they are needed.

28 CargoConnect - february 2016

More Than Just Nuts and Bolts Spare parts are an important feature of logistics engineering and often, dedicated spare parts management systems are needed to keep production activities streamlined. Direct distribution and sale of spare parts is becoming more and more important for the automotive market, more so, for the Original Equipment Manufacturers (OEM). According to a study, the spare parts market is lucrative, with a huge potential, but the share of OEMs is as low as 15 to 25 per cent. Some examples of OEMs getting into the space is Maruti with Maruti Genuine Parts, and Mahindra & Mahindra with Mahindra E-Spares. Speaking on the issue, R Shankar, CEO, TVSLSL India says, “Spares distribution is very important to OEMs, as service delivery, especially one at an affordable cost is one of the key determinants of the customer’s choice of brand/model. With product differentiation and technological differences getting increasingly blurred in recent times, customer service will be a key deciding factor. And for an automotive OEM to excel in customer service, logistics and availability of spares play a crucial role.” S Natarajan, Head-Logistics and Transportation, Tata Motors agrees, “Firstly, while spare parts revenue is small in proportion when compared to vehicle sales, availability of the parts at various nodes is one of the main drivers for vehicle sales. Secondly, no other link can play an integrator role better than an OEM. Hence, OEM has to assume a bigger role. Else, it will break at a link where it is stressed. It is very important to provide ‘win’ to every link. There has to be win for vendor, warehouse, transporter, distributor, retailer and of course to the end user. There has to be win for OEM as well. If there is no ‘win-win’, there will be either ‘lose-win’ or ‘lose-lose’. ‘Lose-lose’ is an immediate failure and ‘win-lose’ is a failure in the long term, if not today. Visibility of the entire chain is much more to OEM and hence it is the maker or breaker of the chain.” Jasjit Sethi, President and CEO, TCI SCS feels that there is a huge growth potential of the Indian automobile aftermarket as he says, “The Indian aftermarket is a function of the vehicle park for the OEM, the distribution network (both formal and informal) and the response time promised by the OEM

inside Nuts and Bolts and more Warehouse and Inventory Management Meeting Service Level Expectations Managing Complexities Conclusion

to its consumers. While almost all the global companies have a presence in the Indian automotive market, the size is small and not demonstrative of the future potential, given the mobility requirements for 1.3 billion people.” The availability of spares and service can influence the purchase decisions of new automobile owners. Speaking on the issue, Natarajan says, “The company cannot afford to lose sight of the core business. At the same time, it has to make use of the channel partners who are good in their core area of distribution and selling. However, ‘any part anywhere at any time’ can’t be compromised. End-user tolerance over ‘waiting for parts’ is diminishing over a period. He/she switches loyalty. In order to be

cover story R Shankar, CEO, TVSLSL India Spares distribution is very important to OEMs, as service delivery, especially one at an affordable cost is one of the key determinants of the customer’s choice of brand/model. With product differentiation and technological differences getting increasingly blurred in recent times, customer service will be a key deciding factor.

30 CargoConnect - february 2016

Firms across different industries now recognise spare parts distribution as a chance to offset stagnation and to increase profits in the primary

Capgemini Cons ulting

OEM/OES Margin The relevancy of the different elements varies for OEMs/OESs due to the nature of their meaning

OEM/OES Margin

New car sales is relevant for OEMs only. For OESs the equivalent is parts/components sales to OEMs

Service Repairs Appearance Products Accessories

Parts

Lubricants & Tires

Replacement Parts

Financial Services New Car Sales* Manufacturing Logistics Product Development

Telematics/ Navigation

Services

After Sales

Used Car Sales

Recycling

Entertainment

product markets.

Downstream

selling or shutting down plants may take years as resistance builds from local governments and populace. Sushil Rathi, COO, Mahindra Logistics says, “The automotive spares industry has had a unique relationship with the automobile industry. In the recent slowdown of the industry, the spares industry continued to be in demand as end consumers could no longer afford to buy newer cars frequently and had to invest in maintaining their existing cars through spares replacement and repairs. And now, when the Indian automobile industry is witnessing a healthy growth due to various government initiatives, improved consumer sentiment, and increased purchasing power, the automotive spares industry has a booming demand as well.” He continues, “The growth in aftermarket e-tailing has revolutionised the spares distribution process. It has increased the availability of spare parts to the end consumer multifold, and has necessitated higher service levels and faster deliveries. It has also given rise to new network models like direct distribution from suppliers to retailers. With the entry of multi-brand retailers like Mahindra First Choice both online and offline, spares distribution is no longer a monopoly of a select few.” Ma n Si ngh Chau ha n, G enera l Manager, Supply Chain Solutions, Freight Systems opines, “Every vehicle manufacturer knows the importance of aftermarket service. Dealers demand overnight – if not same day delivery; a vehicle off the road means not only an unhappy dealer, but a consumer who might well choose a different manufacturer the next time they replace their vehicle. To provide the necessary quality of aftermarket service, carmakers need to have a well-organised and managed warehouse with the right amount of inventory in the

Upstream

sensitive to the end-user requirement and to be in a position to retain the existing customer base, the supply chain has to be more agile. When an entire range of parts can’t be made available through retailers, the only option available is direct distribution. In our view, this has already gained importance and establishing a direct channel is a matter of time which would complement the existing established distribution channel. This will help the end-user and all linkages in the supply chain.” Gautam Dembla, CEO, Spear Logistics begs to differ because he is “not sure how direct selling of spare parts would work, as reaching each consumer without a dealer or distributor network is extremely challenging.” Neelum Singh, Senior Analyst, ARC Advisory Services renders an elaborate outlook, “Though the vehicles are serviced, it is less likely that they are serviced at an organised service centre with an original part .With the openness insisted by Competition Commission of India (CCI), car companies are compelled to put an effective system in place to make the spare parts and diagnostic tools easily available in the open market for customers and independent repairers. This is an upcoming trend in the spare parts market. From the business perspective, this is encouraging because it: • Brings in competitive advantage. • Provides faster, better and effective service.” The manufacturing models in the competitive market are ever changing.The automotive industry is experiencing significant changes with rising input costs on account of competition and R&D. Car makers are nowadays reducing the number of platforms that their cars are built on and also the installed capacity. However,

Logistics through innovation, dedication & technology...

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Infrastructure & Advantages Customs Notified Area. Customs Bonded Warehouse. State of the art security and surveillance. Covered warehouse facilities of over 4,50,000 sq. feet Under 1 roof with modern racking systems which can house more than 40,000 pallet spaces. 3PL Facilities. Flexi Warehousing. Robust fleet of company owned vehicles, monitored & tracked electronically. 24/7 Operations. Automobile Logistics services. Spread over 40 acres of land. Over 6000 teus per month i.e. 72,000 teus p.a. CFS Owned equipments : 5 Top lifter, 80 Trailers, 30 Forklift, 2 Empty Handles, 1 Cranes. Direct Access to the National Highway 17, from Panvel to Goa. 24x7 CCTV Monitouring. Distance from Panvel Station 6 Kms.

Warehouse

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CFS & Logistic park at same location

JWC logistics Park Pvt Ltd, National highway 17, Panvel Goa Highway, Village Palaspe, Panvel, Maharashtra - 410206 2143- 661952 2143-661900 (100 lines) krutijobanputra@jwclogic.com jwccfs@jwclogic.com raviprasad@jwclogic.com jignesh@jwclogic.com

3PL Admin Building

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cover story S Natarajan, Head-Logistics and Transportation, Tata Motors It is very important to provide ‘win’ to every link. There has to be win for vendor, warehouse, transporter, distributor, retailer and of course to the end user. There has to be win for OEM as well. If there is no ‘win-win’, there will be either ‘lose-win’ or ‘lose-lose’.

Direct distribution and sales of spare parts is becoming more and more important for the automotive market,more so, for the Original Equipment Manufacturers (OEM).

right place at all times – and it takes a tremendous amount of thought, analysis, planning and care to create and maintain the optimum facility.”

Warehouse and Inventor y Management Automotive OEMs work with numerous partners for sourcing of products on the inbound side and with various distributors and retailers on the outbound side. Maintaining a balance between the inbound and outbound part of the supply chain is, therefore, extremely necessary. Highlighting this area, Rathi says, “If inbound logistics exceeds outbound, it will lead to higher inventory levels in the spares warehouse thereby increasing problems like obsolence of stock, increased inventory costs, inefficient utilisation of warehouse space etc. And if outbound logistics exceeds inbound, there is a risk of being out of stock and thus, not being able to meet consumer demand and expectations. Hence, managing the balance between inbound and

32 CargoConnect - february 2016

outbound logistics in aftermarket logistics is of paramount importance.” Singh points out, “Inconsistent supplies still remain a major concern area for most OEMs. Spare parts requirement is often competing with OEM assembly line requirements and adequate vendor capacity. Unless OEMs help its suppliers de-bottleneck its processes, the balance between inbound and outbound cannot be achieved. An integrated supply chain for visibility into the supplier’s inventory and an insight into the downstream demand will create a balance in the supply chain.” Natarajan adds a somewhat different angle to this as he says, “Logistics helps to move parts from one link to the next in supply chain. The role of logistics is very critical as it carries ‘inventory cost’ on the move, if we look internally, and also carries agility and serviceability, if we look from the market perspective. We need to strike a balance between cost and serviceability (balance does not mean compromise on both the pa-

rameters). We try aggregating from suppliers to warehouse and warehouse to regional warehouse and segregating from regional warehouse to channel partners. The essence is not to lose speed-to-market.” According to Shankar, “The suppliers for the spare parts and production parts are most often common–thereby there is joint collection of parts for both the purposes, along with combined consolidation and delivery to the OEMs. In some cases, outbound logistics is managed with the ‘backhaul’ of these vehicles, at least to the regional and state level spares delivery centres. Of course, the network maybe separate for managing the lastmile of distribution of spares to the dealers and distributors.” Speaking on the current market scenario, Chauhan says, “The aftermarket ecosystem is complicated and involves several stakeholders, including OEMs, part suppliers, logistics providers, the dealer network, service points and general spare part distributors. Parts are sourced in bulk from parts suppliers, transported and then stored and managed in central warehouses, often termed ‘mother warehouses’ in India, or ‘source warehouse’ elsewhere. Following dealer orders and inventory management, the parts are then moved to regional hubs in repackaged, ready-to-sell retail merchandise packaging, and transported at the shortest possible time to the needy dealer. Technology plays a vital role by enhancing the visibility in the entire value chain by using advanced and automated warehouse management system like RFID, Bar Code systems.” He believes that “GST implementation will give a major boost to the industry wherein the entire supply chain model will get revamped with relocation of mother warehouses, regional warehouses and satellite warehouses within the country, considering customers’ business model and requirements to ca-

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cover story Sushil Rathi, COO, Mahindra Logistics

34 CargoConnect - february 2016

Capgemini Cons ulting 11%

India China Russia Western Europe

Eastern Europe

18% 15%

36% 25%

20%

40%

60%

20% 80%

62%

51%

30%

43%

10%

Fully Applies

Largely Applies

63%

Rarely Applies

19%

16% 20% 26% 9% 8%

10% 100%

“We are fully prepared for regional market developments”

% of companies

hold parts, it holds the future revenue for the company. It provides a cushion for a steady stream of revenue with minimum loss of opportunity for sale. It provides serviceability strength. Firstly, in a typical food bazaar, the customer picks the desired quantity of what he/she wants and he/she becomes responsible for any wrong pick or short/excess pick. Warehouses, on the contrary, have a team to pick parts on behalf of the ‘next link’. The right quantity and right part is very crucial. If this is missed/ messed, the customer is dissatisfied. Secondly, a warehouse has to be costeffective. When we say cost effective, we aren’t talking about cutting cost. There are various elements in a warehouse. Those elements for which the customer is willing to pay for are ‘cost.’ For rest of the elements, it is a ‘waste.’ Various cost elements are rental (or owned) premises, equipment (technology) and people. Except the latter to some extent, the former two are to be locked over a longer duration. Companies don’t have the flexibility to scale up or down capacity at will or at short notice. The major drivers of these cost elements are size, location and technology to be deployed in and as a warehouse.” Discussing more on the key aspects of spare parts warehousing, Natarajan adds, “Location of a warehouse plays an important role. In our view, we need to be nearer to vendors of parts. This will help to cut down the manufacturing and transportation lead time. Also, this will help in consolidating the load and receive into the warehouse. The warehouse decouples vendor and market place and hence manufacturing lead time is crashed to almost near zero. Thus, by going near the vendor, we are actually going faster to market with a cost advantage which can be passed to market. This can be a clear competitive advantage coupled with other crucial parameters. After finalising the location

E xhibit 9: Companies’ Preparednes s for R egional Market Developments

ter an efficient service levels and reduced transportation lead time.” Sethi realises the significance of inventory management and says, “In common parlance, aftermarket spare parts warehouses work on a model of categorisation of inventory on two metrics – FSN (Fast, Slow and Non-Moving parts) and ABC, which is a categorisation of the highest throughput by a part (part x Qty sold), along with statutory compliances for 7-10 years after the last model is rolled out. In this scenario, the logistics works on a principle of warehouses carrying some stock for the ABC stocks and requisition for more based on sale, a process called ‘replenishment.’ These parts may also be replicated downstream at the distributors and dealers.” He adds, “There may be some barn goods (deep storage for the nonmoving parts) that are present at all warehouses or at any one nearest to the vendor (the supplier). Typically, a supplier will need a Min Order Quantity (MOQ) for providing stocks for any SKU (Stock Keeping Unit). In such cases, there may be a higher inventory of some parts for some time or this may be distributed across the chain. Overall, most OEMs run a balanced network and have evolved their own algorithms for ensuring a balance of stocks.” Right warehousing plays a key role in spare parts distribution. When an automobile parts dealer or a business in the auto service parts retail network places a request to its upstream suppliers for order fulfilment, the expectation is to get the right component at the right place, within the right time frame, at an affordable cost. To provide the necessary quality of aftermarket service, a well-organised and managed warehouse with the right amount of inventory in the right place at all times is a must. Natarajan says, “Warehousing is very critical in distribution beyond a shade of doubt. It does not

Does Not Apply

Now, when the Indian automobile industry is witnessing a healthy growth due to various government initiatives, improved consumer sentiment and increased purchasing power, the automotive spares industry has a booming demand as well.

Spare parts and servicing in automobile business may not in itself be a high margin business, but it definitely impacts the top line. This trend will further grow in India with the impact of GST.

LMJ Logistics Limited

Warehousing space of

4,400,000 sq. ft. all over India

We own and operate 4.4 million sq. ft. warehouse complex across India in major ports and towns. We have about 2 million sq. ft. of additional warehouse complex on long term lease. We offer custom-made warehouses as per customer requirement. Presently we have ready infrastructure at Vishakhapatnam, Delhi, Kolkata, Jodhpur, Panipat, Kandla and other locations.

SERVICES: Warehouse Management 3PL & 4PL | Third Party Procurement | C&F Agent Agro Commodities Logistics M & C Agents | Automotive Logistics | Infra Logistics CFS/ICD/ICD Management

Corporate Office : 54/2&3, Hanuman Lane, Cnt. Place, New Delhi 110 001. Phone : 2336-7203/05, Fax : 2336-7206, Email : ndelhi@lmjgroup.com Head Office : LMJ House, 15B, Hemanta Basu Sarani, Kolkata 700 001. Phone : (+91 33) 2231 0950/51/52, Fax : (+91 33) 2231 2525, Email : admin@lmjgroup.com, web : www.lmjlogisticsltd.com

cover story Man Singh Chauhan, General Manager, Supply Chain Solutions, Freight Systems Best service at lowest cost is the key challenge for all players within the entire spare parts supply chain. Logex Service & Aftermarket Logistics solutions support spare parts and reverse logistics needs. We combine our global coverage, transportation network and experience in spare parts and reverse logistics to provide valuable solutions to our customers.

at macro level, one has to look at micro level issues like road/air connectivity, ease of people availability, social and legal aspects, etc. Technology is another element which plays a key role; do we need high-rise building, do we need automatic storage and retrieval system, what profile of parts are we planning to store, are these fast moving; if all are fast moving parts, do we need to increase the length and breadth of a warehouse rather than going high, do we need pick and put to light, do we need ‘transparent’ warehouse, do we need a green warehouse, how to make process error proofing various decisions have to be made. The tipping point is customer delight at affordable cost.” Singh believes, “Warehousing for spare parts is very crucial in order to be in business and serve customers better. Warehousing for spare parts include location, design, management, transportation proximity and technology usage. According to her, the various factors that influence the optimisation of warehouses are:

Location • Penetration in the local market • Lifecycle of the product sold • Proximity from the nearest market • Managing the warehouse directly vs outsourcing

36 CargoConnect - february 2016

Size • Number of SKUs • Number of distribution centres catered Technology usage • Use of warehouse management software • Use of warehouse automation and controls equipment

• Voice picking, RFID enabled pallets Shankar more or less summarises, “The location of the warehouse must form a balance between the nearness to the final consumption market, the transportation network (to manage and deliver the same within the required TAT times) and the inventory holding norms at the consumption point and the warehouses. Besides location, size plays a crucial role as the warehouses need to cater not only to the current requirements but also have the capacity to expand to meet the requirements for the next ten years at least. Use of technology in warehouses should be appropriate for easy location, identification, retrieval and error free dispatch within the fastest possible time and at economical costs.” Warehousing is often considered as different material handling activities which are

performed in warehouses. These activities include all types of inbound and outbound processes such as receiving, binning, picking and shipping. Dembla enlightens more on technology usage and other innovations in warehouses, “We use technology within the material handling and processing systems at various warehouses based on our customer requirements. The warehouses are designed based on customers’ requirements and will in all likelihood be a dedicated facility. There are huge complexities that have to be considered in designing such facilities such as storage systems, material handling, warehouse management software, number of transactions to be handled, their inventory levels, turnaround, dwell time, etc. Depending on the size of market, each customer would need to think of his distribution centre structures. A luxury carmaker, for instance, may need a DC in say, Mumbai, that can meet its dealer’s requirements, as they would be located primarily in tier 1 cities and concentrated in the west, north and south. A commercial vehicle maker would need a hub-and-spoke model or a regional DC model with at least four DCs across the country. There is a fair amount of automation that is being implemented in aftermarket warehouses in India as well, even though our labour costs are substantially cheaper than the West. Companies realise that it does not make sense to have ‘depots’ in every state as this only increases the inventory and brings in a lot of inefficiencies.”

Meeting Ser vice Level Expectations with New Developments Spare parts logistics is very often viewed as a showcase field. Despite the growing variety of products and their individual parts, spare parts must frequently be provided in aftersales service at a short notice and flexible basis. In the process, special demands are

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cover story Jasjit Sethi, President and CEO, TCI SCS While almost all the global companies have a presence in the Indian automotive market, the size is small and not demonstrative of the future potential, given the mobility requirements for 1.3 billion people.

placed on both the supplier and the recipient. A long and unstable lead time which is a result of bottlenecks in the processes, both in warehouse operations and at the suppliers end, creates instability of the delivery schedules and influences the availability of parts to a great extent. There is a fair bit of confusion regarding the service level expectations of customers in the Indian automobile aftermarket. Dembla clarifies, “We work with a lot of large auto part customers and have never come across any customer who would accept service levels of 80 per cent. As long as I can remember, our customers’ expectations have always been in the high 90s with regard to order fills and delivery and the contract logistics industry can deliver these levels. There are challenges on the delivery side especially in B class towns and rural areas where service levels would fall to about 75–80 per cent. But as far as processing and shipping the parts out of distribution centres goes, I can tell you that service levels are in the high 90s and even close to international benchmarks. There have been a few factors that have brought about this improvement in service quality. Companies, earlier, saw the aftermarket business as a kind of obligation to provide their customers with spares when it was desperately needed. Then they saw that there was an opportunity to make money and thereby improve service levels. This awareness, of course, came when competition increased and forced everyone to play on the same level playing field. Automotive manufacturers now don’t mind paying a bit more to ensure that they have a better supply and delivery chain.” Normally 3PL service providers manage all activities at the spare parts’ warehouses including receiving, put away, binning, picking, packing and dispatch which also include all physical documentation require-

38 CargoConnect - february 2016

ments and management of the entire process through the OEMs IT system or the 3PL’s own IT system. With the increased focus on technology usage, the day is not far when we will see e-commerce playing a major part in the aftermarket, both through platforms such as Amazon or by direct OEMs with the new FDI relations for manufacturers. Singh discusses the major trends affecting the Indian aftermarket at present. • Get into the spare parts business aggressively • Develop a multi-tiered service centre system • Use pull based distribution with an integrated IT operation • Three-dimensional (3D) printing. • IoT enablement. • Augmented reality Chauhan also gives his perspective on the recent market trends in spare parts logistics: • The spare parts business is considered the main driver to enhance customer satisfaction and generate repurchase opportunities: As the proportion of additional sales and replacements has gradually increased, customers have begun paying more attention to the quality of after-sales services, which directly affect their purchase decisions. The importance of after-sales service and spare parts operations to overall automotive sales is becoming increasingly obvious • Along with the rapid growth of the aftersales market, the spare parts business will soon become another major revenue source for OEMs: As the auto market undergoes exponential growth and the market’s average vehicle age rises, revenues contributed to OEMs by services and spare parts business are growing rapidly. Services and spare parts business will comprise a major new source of growth for OEMs. Companies have realised that they should

Product range- Share of products in FY12 (%)

Source: Annual Report ACMA FY12

The automotive industry is experiencing significant changes with rising input costs on account of competition and R&D

cover story Gautam Dembla, CEO, Spear Logistics There are challenges on the delivery side especially in B class towns and rural areas where service levels would fall to about 75-80 per cent. But as far as processing and shipping the parts out of distribution centres goes, I can tell you that service levels are in the high 90s and even close to international benchmarks.

focus on their core strengths and leave activities such as warehousing and distribution to experts. Dembla stresses this point and says, “A number of carmakers choose to use their capital in building state-of-the-art warehouses close to their plants. This works well for the larger volume mass market manufacturers as they then have scale in shipping. But they do not wish to manage these facilities as this is not what is core to their business. They are increasingly outsourcing the management of such facilities, and in most cases, we see that these can be quite successful. There is, of course, a need to be the coming together of both service provider and manufacturer – to think alike – if that doesn’t happen, the consequences can be quite disastrous.”

Managing the Complexities While spare parts logistics has been recognised as a success factor, many firms have inadequate knowledge of the strategy. An assessment of the flow of spare parts within the organisation distribution network and the expectations of customers affecting the organisation in terms of demand is therefore necessary. An ideal situation for an aftermarket auto parts logistics is an error-free movement of millions of individual parts made by manufacturers from across the world to the customers. But given the complexity of the supply chain, this is difficult to achieve. The dealers and repair shops hate waiting. According to Dembla, “Key to service parts business is availability of the part at the right time at the right place. Service promise to the dealer is the main driver. To switch from, say a two-day dispatch from DC to next day, the warehouse needs to change its way of functioning. In our warehouses, we were earlier picking by dealer order. This required us to go to the same stor-

40 CargoConnect - february 2016

age locations multiple times a day. Imagine the manpower that was needed for this. We could not sustain such a model and provide a next-day delivery, so we switched to batch or lot picking, with the batch broken down on the workstations into individual orders. Such examples helped us to reduce our order cut-off time. It helped reduce errors in picking, manpower and costs dramatically. WMS plays a key role, right from receiving consignments to faster and more accurate put away and picks. For instance, optimisation of pick and put away paths for picking and put away help warehouses’ function more efficiently and at lower costs. To achieve economies of scale for one of our customers, we consolidated a warehouse. Some of their bigger dealers who were ordering from various divisions were getting eight different shipments at a time. Keeping track of so many orders was a challenge for the customer and his dealers. By consolidation, we reduced the number of shipments and the number of cases to dealers. There was also a considerable saving in distribution costsas a consequence. We implemented 2D bar code system at our warehouses with the help of WMS. This gave us better speed and accuracy in processing orders. Our dealers get information on contents of each box at the time of dispatch. Such steps help us work in close partnership with our customer.” Natarajan believes that “if a strong process is set, the business becomes simple and can address the so called ‘complexity.’ The crucial thing is how to ‘execute’ the process diligently.” He also stresses on the visibility part and tries to find a solution, “The various challenges are suppliers don’t get visibility of stock of his part supplies, he is given a fixed monthly schedule, he can’t give priority to the parts which are running dry due to lack of visibility. Because of the

• Safe and secure cargo at cargo terminals

• First in paperless transaction for cargo operation through web-based EDI mode

• Automation/Mechanization of cargo handling activities at AAI managed airports.

• Benchmarking parameters for cargo operations vide Citizen Charter of AAI.

• Augmentation of Infrastructure at Chennai & Kolkata Airport with state-of-the-art facilities like Elevated Transfer Vehicle (ETV) for Export Unitized Cargo and Automated Storage & Retrieval System (AS & RS) for import cargo. • Appointed Ground Handling Agency to improve service levels at airports. • Implementation of EDI under Customs ICES 1.5 version at Chennai & Kolkata Air Cargo Terminals. • AAI is in the process of establishing pharma zone at Chennai & Aurangabad Airports. • AAI is in the process of obtaining Regulated Agent (RA) Status and RA3 status for Chennai & Kolkata Airports. • Provision of e-warehouse for e-commerce entities and express cargo handling counter are in the pipeline at various airports. • Commissioned International Air Cargo handling facility at Trichy, Mangalore Airports and proposed at Madurai and Vizag Airports. • Steps initiated towards e-banking/e-payment facility.

• AAI is also exploring the possibility of creating Free trade zone (FTZ) at its airports. • Commissioned Common User Domestic Air Cargo Terminal (CUDCT) facility at Port Blair, Coimbatore, Jaipur, Lucknow (outbound), Vizag, Mangalore, Amritsar (interim), Madurai, Chennai airports and already work awarded for commissioning at Raipur, Indore & Ahmedabad Airports. • Further, during the F.Y. 2015-16, plan to commission CUDCT at Goa, Aurangabad, Bhubaneswar, Kolkata and Trivandrum Airports. • During F.Y. 2016-17, plan to commission CUDCT at Ranchi, Varanasi, Guwahati, Amritsar, Vijayawada, Pune, Lucknow (inbound), Tirupati, Srinagar, Surat, Bagdogra and Rajamundry Airports. • Plan to introduce Air Cargo Community System (ACS). • Plan to commission international courier handling facilities at Trivandrum and Trichy airports apart from the existing facilities at Chennai & Kolkata airports. • Frequency based incentive for Cargo Freighters introduced w.e.f. 01.01.2015 at Chennai & Kolkata airports apart from the existing 20% discount in export TSP charges for lean hour transaction by exporters.

february 2016 - CargoConnect 41

MAKE IN INDIA

cover story Neelum Singh, Senior Analyst, ARC Advisory Services Though the vehicles are serviced, it is less likely that they are serviced at an organised service centre with an original part. With the openness insisted by Competition Commission of India (CCI), car companies are compelled to put an effective system in place to make the spare parts and diagnostic tools easily available in the open market for customers and independent repairers.

fixed schedule, warehouses end up receiving stock though the market demand has changed. Warehouses hold what is not required now and don’t hold what is required. There is an imbalance. Management reviews stock out and seek explanation; buyer procures more parts and ends up with more inventory. Management reviews inventory, and buyers are forced to retract on inventory build-up. Distributors know that company is not agile enough to supply parts, hence, they do some forecasting and place orders. The forecasting can never be accurate. Company is happy to meet the demand and this forces the distributor to carry more stock. Since he has to get cash for business, he sells at a discount. He loses profit. End user gets only fast moving parts and that too, late. He switches loyalty. By creating visibility of stocks at every node, OEM can play an integrator role. Distributors’ team can get consumption from retailers. They can place what got consumed by retailers instantly, rather than batching the ordering. This reduces ordering lead time. Warehouses can supply part to distributor

42 CargoConnect - february 2016

based on their order. The parts consumption from warehouse can be ordered onto vendor. This creates pull in the system. Appropriate stocking can be done at every node, considering consumption rate and lead time elements. We manage complexities by measurement of possible customer concerns before they come up and present solutions to our clients. We have structured MIS and monthly review meets specifically for each of our customers. A specialised team of industrial engineers makes processes leaner and more efficient and makes life easier for us on the shop floor. These are just a few of the steps we initiate in managing better warehouses.” Shankar is of the view that “the product life cycle of spare parts is much longer than that of the vehicles it fits into. Complexity is brought in due to the necessity of handling large SKUs, as every manufacturer promises warranty and service support of about 10 years for their products sold. Additionally, demand for parts is relatively unstable and difficult to forecast. Most of the auto manufactures in India are yet to adopt a robust forecast system for their spare parts. All these factors pose huge challenges in inventory planning, purchasing, ordering, warehousing and logistics operations. Better control on the said challenges comes with a high cost to manage. One of the prominent factors would be supplier delivery adherence, which when not properly managed, will force OEMs to stock more. This, in turn, increases the inventory holding cost that flows through the product cost. Other difficulties include inflexible or inadequate IT system, planning and forecasting capabilities, inefficient and nonflexible warehouse management and field service efficiency.” Rathi feels, “Complexity in spares logistics can be simplified to a large extent with appropriate technology solutions. It may seem like a high cost option initially, but in

the long term, the benefits reaped will justify the ROI. Also, automating tedious, timeconsuming and error-prone manual activities can also make spares logistics more efficient and effective. Another important aspect would be to create a balance between service levels and costs. Different solutions are possible by optimising the mix of both. Other factors like network optimisation and better order planning can reduce the logistics complexity to a great extent.”

Conclusion Winning market share in aftermarket logistics is far from easy, since it entails significant complexity. Large distributors for service parts reduce the cost of managing a complex dealer network across the country. This helps automotive companies to yield even better margins. Nowadays, companies offer many different types of services in the aftermarket like product warranties, service facilities, help desks, spare parts, on-site support and product training, to name a few. Nevertheless, competing in the aftermarket supply chain is a tough task. Spare parts and servicing in automobile business may not in itself be a high margin business, but it definitely impacts the top line. This trend will further grow in India with the impact of GST leading to uniform landing cost and thus, it is beyond doubt, that the aftermarket spare parts business is poised for accelerated growth. When an automobile parts dealer or a business in the auto service parts retail network places a request to its upstream suppliers for order fulfilment, the expectation is to get the right component at the right place, within the right time frame, at an affordable cost and the right cards need to be played to streamline the supply chain.

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feature

Air Cargo Hub: A Distant The air cargo market in India definitely has the potential to become an air cargo hub, but inadequate infrastructure and cost efficiency are the major challenges that hinder growth. Ritika Arora Bhola, with the help of experts jots down facts and figures which clearly states the current position of the industry and wonders whether India is actually ready to become a full-fledged air cargo city

44 CargoConnect - february 2016

fter Dubai, Singapore and Hong Kong, major Indian airports are expected to be on the verge of transforming into world-class air cargo hubs. However, becoming the world’s most important ‘Air Cargo Hub’ still remains a far-fetched dream considering the various bottlenecks prevailing in the civil aviation industry, like inadequate infrastructure, lack of skilled manpower, poor connectivity, etc. On one hand, the Indian air cargo industry is witnessing several international carriers like Lufthansa Cargo, Oman Air, Cathay Pacific, etc.,

feature

K S Kunwar Director General, Air Cargo Forum India (ACFI)

“Airports work on cargo

hub and spoke model. It is supported by multimodal

logistics to create a faster and efficient supply chain.”

hovering over the skies with their cargo freighters scouring for a perfect landing to bring in and take back air cargo loads, on the other, consignees are complaining of heaps of potential air cargo parcels lying at warehouses, waiting to be airlifted and flown to their global destinations. Therefore, a strong and collective voice needs to be raised by industry stakeholders in seeking support from government authorities to remove existing bottlenecks, policies and regulations and introduce new progressive policies urgently to pave the way for a long awaited, simplified clearance procedure of EXIM trade at the gateway airports. Currently, India with a GDP of about $1.67 trillion, handles just 2.5 million tons, whereas countries like Hong Kong with a GDP of $230 billion handles air cargo traffic of 4.2 million tons and The United Arab Emirates (UAE) with a GDP of $252 billion sees a total air freight movement of 3.10 million tons at airports. The volume of air cargo is just over 1.5 per cent of the country’s total trade but even then, it constitutes 29 per cent of the trade value. The authorities need to understand that there

46 CargoConnect - february 2016

Source: http://www.steerdaviesgleave.com

is a significant untapped potential for air cargo in India and realise the importance of air logistics in economic growth. The above statement has been proved by the fact that the total volume of about 2.5 MMTA handled by all Indian airports is less than that handled by airports such as Memphis, Hong Kong, Shanghai, Incheon, Anchorage and Paris. A recent KPMG report shows that the average weight load factor of air cargo during the last five years was about 62 per cent, reflecting significant unused capacity. In addition, the transshipment cargo which constitutes as much as 60-70 per cent of the total volume handled by some leading airports, is almost negligible for Indian airports. However, there have been some recent developments. For instance, the government’s 12th Plan estimates the domestic and international cargo to grow at the rate of 12 per cent and 10 per cent respectively, with the total traffic projected to touch 5.9 million tons by 2020, with the share of international cargo at 3.5 million tons. Cathay Pacific recently added a twice-aweek Boeing 747 freighter service. Also, Thai Airways and Blue Dart are offering main-deck through their Boeing 747-400F MD-11F and Boeing 757F freighters. In addition, about 18 scheduled airlines, including 13 international, have cargo bases here in India, operating close to 2,000 flights a week, thus offering ample belly space for

air cargo. The belly space ranges from two to three tons in a 737-type aircraft and 2025 tons in the larger 747-type aircraft. Rajiv Gandhi International Airport in Hyderabad provides a ray of hope. Located at the centre of India’s production theatre with a strong regional connectivity, the airport is speeding along to become the country’s first full-fledged air cargo hub. Its advantage—more than 20 key Indian and other South Asian cities are less than two hours of flying time away and southeast Asian cities like Singapore, Kuala Lumpur, Bangkok and Middle-East cities merely four hours away. But despite this, whether or not India is set to become an air cargo hub, presently remains a moot point. Observing the same, K S Kunwar, Director General, Air Cargo Forum India (ACFI) contemplates, “Almost all the major successful airports round the world are working on cargo hub and spoke model. It is supported by the multimodal logistics to create a faster and efficient supply chain which has changed the pace of growth of the air freight industry the world over, as well as the growth business model of airports and airlines. Under this model, airlines use a hub airport to transfer traffic between destinations that may not be directly connected. Hubbing traffic is mainly the transit cargo, which, in western countries, forms a significant portion

feature

Giam Ming Toh CCO, Vistara

“All major cargo hubs are well-integrated and the ease of doing business is phenomenal; we need to get there if we want India to become a major international hub.”

of its overall traffic. Multiple options of connectivity giving varied and quickest route options to cargo traffic is another feature of hub airports. Such flexible connectivity option is not possible where the airlines are following point to point connectivity model.” He further elaborates, “The hubbing model brings a large number of benefits to all the stakeholders in the air logistics trade. It improves asset utilisation by capturing diverse traffic markets and growth options for saturated Origin and Destination (O&D) markets. For airlines it offers larger connectivity and higher frequencies within a given fleet size and for the EXIM trade it gives them more options (routes and frequencies), competitive prices and enhanced service levels. Major airports in India are to be promoted as air cargo hubs for overall growth and development of air cargo industry in India. These hub airports will boost air cargo growth

Source: http://www.steerdaviesgleave.com

and transform India into a major trade hub which will boost not only Indian trade but trade through India as well and benefit the Indian economy as a whole.” Agreeing with Kunwar, Giam Ming Toh, CCO, Vistara explains, “The concept of integrated multimodal hubs in India is at a very nascent stage. Having a strong cargo- centric approach, we look forward to such initiatives. While our main competitors in the domestic market are trucks and railways, it is important for all transport modes to be integrated by means of mul-

feature

Veli Polat Regional Director South Asia & Middle East, Lufthansa Cargo

“If I were an investor and I want to open a production site, I will look for best infrastructure, connectivity and financial part, like taxation, that has to be there.” timodal hubs to ensure the best possible solution for the end customer. Multimodal hubs also increase efficiency and contribute to the growth of the economy. If you look at all major international hubs for cargo, they are extremely well-integrated and the ease of doing business is phenomenal; we need to get there if we want India to become a major international hub for cargo – and this is possible only by developing hub ports that cater to all modes of transport.” Veli Polat, Regional Director South Asia & Middle East, Lufthansa Cargo asserts, “If you see the map of India, the production sites are somehow not yet identified. India has a lot to offer. India has great potential in terms of human resources and can invite industries from all over the world to invest. But if I were an investor and I want to open a production site, what I will look for is where is the best infrastructure and connectivity and besides, of course, the financial part, like taxation, that has to be there. As soon as this is solved,

50 CargoConnect - february 2016

you need roads, railways, reachability by sea, ports, air and distribution centres for production. So, that kind of infrastructure has to happen and I hope there’s a plan by the government that is being followed. Investment should be done in a smart way and right now we have five major gateways but it should be across India, and not only in some parts of the country. But we need connectivity into the hinterlands of India by better roads, railways and ports.” A rather disillusioned Naveen Rao, Head of Cargo, Aeroflot says, “According to me, there’s no development being done to make an air hub. In fact, the government is not even introducing dedicated cargo airlines. We have Air India as our national airline and that also is not doing well. With ‘Make in India’, there’s still some progress happening. The PM himself is doing the ground jobs, visiting other

countries, which is phenomenal, but teamwise it is not happening. I can’t see progress happening for air hubs. Our exports are dropping continuously for the past many months, 40-60 per cent pharmaceutical exports from India to Russia have dropped. Less demand and high prices of cargo handling are also the reasons much progress is not happening in the project for air hub.”

Points to Ponder Clearly, India has the potential to play a much larger role in the air cargo market, especially with international carriers looking at Asia as a major growth driver for their air cargo business. But the major roadblock is the absence of a full-fledged air cargo hub, backed by strong regional air connectivity and road network for the last-mile transportation.

Current bottlenecks •

•

• •

•

Higher dwell time of import (100hrs), export (48hrs) and transshipment cargo (48hrs) at Indian airports is a major bottleneck which causes high transaction cost and delay. Whereas the dwell time at world class airports is only a few hours (6 to 12 hrs). Rigid and outdated procedures of regulatory authorities cause unnecessary delays in the clearance process and increases transaction costs. EDI is not implemented in its true sense, as there is duplication in filing papers electronically as well as in the form of hard copies. Customs working on EDI mode and a host of other government agencies working in non-EDI mode also add up to delay in the clearance process. Cargo terminal operation is over-regulated by customs in spite of an authorised custodian, fully accountable, but without any freedom in the terminal operation.

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Naveen Rao Head of Cargo, Aeroflot

“With ‘Make in India’, there’s progress happening. The PM himself is doing the ground job, visiting other countries, which is phenomenal.” 1. At leading international hub airports, 55-60 per cent cargo out of the total airfreight handled, constitutes transshipment cargo, whereas in India, the share of transshipment cargo constitutes only two per cent of the total air freight. The intra-Asia potential itself is a major opportunity for India to transform into a successful transshipment hub in Asia, 2. Also, India is well-placed to capitalise on the opportunity to emerge as the preferred transshipment hub for our neighbouring countries Bangladesh and Sri Lanka which have sizeable international trade with Europe and US, but very limited direct connectivity with these countries. 3. Major Indian airports like Delhi, Mumbai, Chennai and Kolkata should be developed as major international and domestic cargo hubs (Tier-1) with a few sub-regional hub airports (Tier-2) of Amritsar, Ahmedabad, Bengaluru, Hyderabad, etc., to feed the major hub airports. 4. Air India should be developed as a strong national carrier at par with its counterpart sister national airlines abroad to provide

52 CargoConnect - february 2016

India, with a GDP of about $1.67 trillion, handles just 2.5 million tons of cargo.

In order to mitigate the bottlenecks of the air cargo industry that prevent India from transforming into an international cargo hub, the Ministry of Commerce and Finance may consider bringing out a new policy ‘Airport Specific Free Zone Regulation’ on the principles of ‘Free Zone Cargo Village.’ This framework provides free movement of international cargo between the stakeholders within the free zone premises duly processed electronically and value additions. In line with the best global practices, the proposed new policy ‘Airport Specific Free Zone Regulation’ shall comprise the following special features: 1. The whole airport or cargo terminal area comes under a free zone and will be considered as foreign land.

pers are duly filed with customs electronically and transfer to the respective CTO. 7. Airlines may uplift the export cargo and file the Export Manifest to customs for their information through CCS. 8. It will be the responsibility of the Free Zone Authority to reconcile the movement of the export cargo and inform customs about each and every export cargo admitted in the Free Zone. 9. Similarly, import cargo is received by the CTOs from airlines as per the Import Manifest filed by them and segregated in their premises and then immediately handed over to the integrators, consolidators, freight forwarders or customs

2. The free commercial zone is regulated by a Free Zone Authority or may be by the airport operator. 3. All cargo terminal operators, freight forwarders, express operators and customs brokers are housed in the free zone and operate from their respective premises allotted by the free zone authority. 4. Safety and security of the free zone area shall be that of the zone authority. 5. All the clearance processes of international cargo (export, import and transshipment cargo) shall be done electronically through a Cargo Community System (CCS) established by the Free Zone Authority duly linked with customs EDI system. 6. Within free zone, freight forwarders are allowed to admit export cargo after pa-

brokers by the CTOs through CCS. 10. Customs clearance of import cargo will be the responsibility of freight forwarders, integrators, customs brokers and then handing over to respective importers also through CCS. 11. Customs shall play its preventive role through system and some time random and surprised checks. This will infuse faster clearance of international cargo and bring down the prevailing dwell time drastically. 12. Processing and dispatching of transshipment cargo to its final destination shall be the responsibility of the concerned airlines that too within CCS system. This will change the existing slow processing of transshipment cargo to a bare minimum.

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feature

Harnessing

the Power of IT in Air Cargo With the advent of advanced technology solutions like mobile-friendly cargo applications to attain information on shipments, online cargo processing, electronic customs declarations, real-time flight information, paperless transactions, etc., it seems Indian Air Cargo Logistics industry is soon going to witness smoother, cost-effective and efficient cargo operations. With the launch of smart technology for the aviation industry air cargo experts foresee a bright future. Ritika Arora Bhola talks to experts and delves into the industry to project a clear picture

nformation Technology (IT) i n the Ind ia n a i r ca rgo i ndust r y has come a long way since its beginning in the 1960s, when the industry first introduced the fully automated reservation system along with a computerised switching centre. This innovation had literally initiated worldwide integration of telecommunications and computers into the air logistics industry and laid the groundwork for the essential role that

54 CargoConnect - february 2016

feature

The most important usage of technology is to bring in visibility in shipment movement as it reduces the inventory costs and brings much better customer satisfaction, as the anxiety or uncertainty gets eliminated due to tracking. Technology also helps in more efficient handling operations. Amar More, Senior Vice President, Kale Logistics Solutions Private Limited

IT continues to play in the industry today. Over the years, Information Technology has brought a revolution in the air cargo logistics industry and still remains a fundamental force for change as it drives efficiencies, improves customer service, creates value, reduces costs and generates new revenue opportunities. Earlier considered as an infrastructure cost, Information Technology has now become an integral part of an airline or an airport as it generates new opportunities like privatisation of airlines and airports etc. Indian aviation industry has now welladopted IT for both passenger and cargo sectors. While several airports like GVK Mumbai International Airport Ltd (MIAL), GMR’s Delhi International Airport Ltd (DIAL), Bangalore International Airport Ltd (BIAL), Air India SATS Airport Services Pvt Ltd (AISATS) etc., have adopted several e-freight initiatives like e-Air Waybill, electronic customs clearance, Multimodal Cargo Community System, online cargo tracking, etc., few of them have also launched mobilefriendly applications for smoother cargo and passenger operations. Recently, DIAL launched a mobile application named ‘flyDEL’ which aims to augment the passenger experience and achieve customer delight at the airport by providing the passengers real-time flight information and access to all passengers’ facilities available at the airport. Through this application, a person can check the flight details, track cargo movement, varied services, navigation, shopping, F&B flights’ information pertaining to allocation of baggage belts, check-in rows and boarding gates. According to reports, CSIA Air Cargo Terminal operated by GVK MIAL has become the first airport in India to achieve the

56 CargoConnect - february 2016

below e-freight compliances. Enlisted are few e-freight initiatives taken by them: • E-reception of goods • Elimination of hard copy of Master Air Waybill at export cargo acceptance and import flight checking • Elimination of Master & House Air Waybill along with House Manifest through obtaining electronic FWB and FHL messages from airlines. These messages are also successfully integrated with customs EDI. Lufthansa cargo is the first carrier to support this initiative at CSIA and these messages are currently received from 15 airlines. • Elimination of hard copy of delivery order at the time of generation of Import consignment delivery permit.

These initiatives are said to have significantly minimised the operational dwell times of export cargo processing, import cargo segregation and delivery at the cargo terminal. Focussing on the role on IT in air cargo logistics, Amar More, Senior Vice President, Kale Logistics Solutions Private Limited stresses, “Since air cargo is very time-sen-

DIAL launched a mobile application named ‘flyDEL’ sitive and there are higher efficiencies and service levels expected, the role of technology gets even more accentuated. Technology is required in air cargo for several purposes. First and foremost being reducing the transit time (the core reason of moving goods via air cargo). Technology is required to make data/ information available for planning purposes so that the goods can move faster as a result of proper planning. It is also useful for reducing the paperwork. An average air cargo shipment is accompanied by 30 types of documents, over 100 copies and around 200 signatures. Most of the data on these papers is the same shipment data. So, technology can definitely act as a first step to reduce paperwork by facilitating re-usability of data; then, if the same data is made available for different stakeholders in a secured manner, the excess paper needed to move air cargo can be easily eliminated.” More further elaborates that this has successfully been done in India with several airports. “Globally, there are paperless initiatives (like e-freight) trying to leverage the potential of technology in reduction of paper. The most important usage of technology is again to bring in visibility in shipment movement. Shipment visibility actually reduces the inventory costs and brings much better customer satisfaction as the anxiety or uncertainty gets eliminated due to tracking. Technology also helps in more efficient handling operations. With appropriate usage of handheld

feature

ICT has been promoted as a means to enhance logistics competitiveness. It is one of the few factors which have been proved to have the capability of increasing logistics competence and decreasing costs simultaneously. Development in ICT has made the integration of supply chains possible between suppliers, producers, customers, and third parties. Parvinder Singh, Managing Director, Hans Infomatic Pvt Ltd

58 CargoConnect - february 2016

e-AWB penetration where legally feasible

Te c h - Fr i e n d ly A i r C a r g o Industry Gone are the days when technology was just considered as an infrastructure cost. Now, the industry has become tech-friendly and the experts are actually content with the benefits it offers and the revolution that has been brought in. As per the reports, with the growing infrastructure and investment in technology, Indian aviation industry is set to become world’s third largest by the year 2020. Satyendra Kumar, Associate Manager, CAPA highlights India as one of the key participants to IATA’s e-AWB initiative and Delhi and Mumbai airports participate in this initiative. “Globally the penetration of

40.00% 508,446 35.20% 35.00%

600,000 500,000 400,000

30.00%

356,677 24.90%

25.00%

300,000

20.00% 15.00%

200,000

10.00%

100,000

5.00%

0.00% December,2014 e-AWB volume

November,2015

e-AWB penetration where legally feasible

Top-10 countries of origin (ranking by e-AWB volume)

Rank 1 2 3 4 8 5 7 8 9 10

Country Hong Kong United States of America Singapore Korea(South) People’s republic of China United Arab Emirates Germany India Netherlands Chinese Taipei Source: CAPA research, IATA

e-AWB is on the rise and is likely to increase in the foreseeable future. It is interesting to note that, India is among top 10 nations as per e-AWB volume. Delhi and Mumbai were ranked 15th and 19th respectively in the list of 50 priority e-airports based on the e-AWB volume over the past 12 months. Mumbai airport recently launched an app for cargo operations, which is in addition to GVK’s Air Cargo Community Portal, which has been operational since December 2013. The mobile app will enable end-to-end tracking of shipment for end users and help all the members of the logistics chain in planning

Top-10 c

e-AWB penetration in %

e-AWB volume in numbers

Global penetration of e-AWB as on November 2015

e-AWB penetration in %

potatoes, but did not like the sand and dust that stuck to them. One monkey discovered the solution of washing the sweet potatoes in the water before eating them and taught this trick to her mother, and slowly many other adult monkeys picked up this habit. As the scientists watched, on a given day, suddenly, all the monkeys on the island were washing the sweet potatoes before eating them. What was startling was that thousands of monkeys across hundreds of islands in the South Pacific were washing the sweet potatoes before eating them. To make the point when only a limited number of November people know Global penetration of e-AWB as on 2015 of a new way, it may remain the conscious 600,000 40.00% property of these people and with just one 508,446 35.20% 35.00% more 500,000 person joining the thought process, it 30.00% 356,677 400,000 becomes a phenomenon. Today, air cargo in25.00% 24.90% dustry300,000 in India has reached a decisive point 20.00% where200,000 digitisation is required to keep15.00% pace 10.00% with the changes in the related industries. IT 100,000 5.00% in air cargo logistics operations should reach 0.00% the critical0 mass to become an accepted inDecember,2014 November,2015 e-AWB volumeshares Chaturvedi. dustry wide practice,” e-AWB volume in numbers

devices, ETV and smart gates etc., handling of goods has become much safer and faster.” Thus, the role of technology in air cargo is of paramount importance in making sure that the mode of transport is efficient, transparent, secured and as paperless as possible. Stressing on how the development of Information and Communication Technology (ICT) has improved the air cargo logistics operations, Parvinder Singh, Managing Director, Hans Infomatic Pvt Ltd opines, “The application and development of ICTs had significant effect on many industries especially in the field of air cargo logistics. Due to ICT, the style of business operations, upstream and downstream partnership and customer relationships have significantly changed. The application of computers, internet and ICT can be seen in almost every sphere in the logistics industry, such as transportation, warehousing, order processing, material management, and procurement. Passing information to all businesses in the supply chains via ICT has improved performances. ICT has been promoted as a means to enhance logistics competitiveness. It is one of the few factors which have been proved to have the capability of increasing logistics competence and decreasing costs simultaneously. Development in ICT has made the integration of supply chain possible, between suppliers, producers, customers, and third parties.” Meanwhile, citing an example from author and lecturer Ken Keyes, Jr.’s book titled ‘The 100th Monkey,’ Puneet Chaturvedi, Consultant-ITES for LSC shares an interesting social experiment conducted in 1952 on monkeys in the South Pacific island and how it relates to the Indian air cargo industry. “Scientists dropped sweet potatoes on the sand for the monkeys to collect and eat. The monkeys loved the taste of the raw sweet

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Today, air cargo industry in India has reached a decisive point where digitisation is required to keep pace with the changes in the related industries. IT in air cargo logistics operations should reach the critical mass to become an accepted industry wide practice. Puneet Chaturvedi, Consultant- ITES for LSC

their resources. In addition, it will provide complete visibility of shipment or vehicles within cargo terminal. The app also enables Export General Manifest (EGM) tracking, which can expedite the export incentive realisation process. Other Indian airports are expected to follow Delhi and Mumbai airports in embracing technology and IATA’s initiatives and make India an efficient place to process air cargo.” In addition, Kale Logistics has created ‘Multimodal Cargo Community System’ as well as ‘Airport Cargo Community System.’ These platforms actually put the concept of data reusability in practice i.e. data entered by one party on these collaborative platforms is reused by the other authorised stakeholder in supply chain, thus making the supply chain more efficient and transparent. More jots down few initiatives taken by the company for overall benefit of the Indian air cargo industry: 1. “On mobile apps developed by us for the airports, the information on shipment is available to the authorised person at fingertips on his mobile. For example, a CHA or a forwarder staff can track his shipment at the airport using mobile. We also provide tracking till destination on the mo-

bile phone in a secured manner. Practical pieces of information such as IGM/EGM no. tracking, monitoring vehicle movement within complex are also supported via the mobile app. 2. We also provide a facility for people to submit electronic customs declarations using mobile phones. This is especially required for trade members who do not have their own warehouses and who get the actual and correct cargo information when the cargo arrives directly at the airport. We have also solicited feedback and suggestions from trade to include more features on the mobile app. However, we are very clear that we will develop only those features that will actually be used on mobile devices. 3. Online Cargo Processing: We have enabled several airports with online portals using which the trade can request for carting permission online, get carting orders online, pay terminal charges, provide advanced shipment information online, generate e-AWB online and send to multiple airlines, generate customs declarations online, generate certificate of origin online, perform the entire tracking of goods online. In fact, the airport cargo processing in India is much more e-enabled than

Development in ICT has made the integration of supply chain possible. its global counterparts. 4. E-customs: India is one of the very few countries in the world where almost 100 per cent of the customs declarations are filed online. Indian customs has also taken several pioneering steps wherein we are now looking at paperless customs clearance. We have recently done a proof of concept of the same with Mumbai airport. Elimination of printing of paper will really improve dwell times and cut red tapism thus reducing overall transportation costs.” Observing the same, Singh shares, “We now communicate more on chats and messages than e-mails. The whole concept of information sharing has moved to mobile apps. Keeping this in mind, DIAL has launched the mobile app version for their online cargo processing. Indian customs is also in the process of making and facilitating the availability of information related cargo as being processed

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Air freight industry is extremely fragmented and a revolution through e-freight initiatives is most unlikely to happen in foreseeable future. One of the reasons for the same is that while airports and airlines may adopt technology, other stakeholders run family businesses and they may not be willing to adopt it. Satyendra Kumar, Associate Manager, CAPA

within customs system. Airlines have already done their bit in facilitating e-freight.”

Successful Implementation of E-freight Expressing concerns over the industry adopting e-freight initiatives, Chaturvedi whines, “Our industry has been slow in adopting the best practices and technological innovations that will modernise air cargo. Despite the benefits and regular push by IATA, we, in India, have still to catch up a lot. In today’s connected digital world, technology is changing every day and no one is going to wait. The interest in e-communication is increasing but IT has not played an important role in the Indian forwarding industry so far. I feel that our industry is undergoing a technological transformation which can improve efficiency by designing an effective shared data platform that allows for the seamless sharing of data globally. The industry should be in agreement that as a whole they need to do a better job of sharing and reusing large portion of shipment data. We believe the industry should develop a platform that facilitates such exchanges, which would significantly boost efficiency.” Agreeing with Chaturvedi, Kumar says that the air freight industry is extremely fragmented and doubts that a revolution through e-freight initiatives is most unlikely to happen in foreseeable future. “One of the reasons for the same is that while airports and airlines may adopt technology, other stakeholders—freight forwarders/shippers, warehousing companies, logistics providers, etc., are family run businesses and they may not be willing to adopt it,” reiterates Kumar.

Future of Technology in Air Cargo The future of Indian air cargo industry depends completely on the technology. Experts literally live by the fact that IT companies—both private and government will continue to provide innovative technologies and services in the coming years. Though the air cargo industry has made the best use of technology available at present, IT still remains critical for airlines and airports to scale up services to match the changing market environment and industry needs in times of increase and decrease in demands. Observing the same More avows, “Indian customs is already working on upgradation of ICEGATE. Several airports have

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People are investing in e-freight technology

already upgraded their core handling systems and several others are working on doing the same. Airports have also invested in creating common collaboration platforms for airport stakeholders. These platforms are actually transforming the whole transportation process. People are now investing in e-freight technology. Airlines and forwarders are adopting different e-AWB tools. The chambers of commerce are developing online certification of origin platforms. We are glad to be working with most of these entities on creating industry wide automation. With Indian Government’s focus on ‘Digital India’ and ‘Make in India’, we believe the new era of high tech air transport in India is not too far.” Chaturvedi concludes by saying, “Air cargo is an important contributor to the profitability of the airlines’ business. We are moving into a world where the movement of the data is as important as the movement of the goods. Industry is looking towards tech-driven efficiencies like web-based communication protocols, XML messaging and data management services based applications that allow widespread access and data management in multi-party transactions to face the challenges. The Indian government is pushing the issue of e-freight to achieve a higher level of transparency with respect to foreign trade activities. However, it is still some way to go. National and state governments as well as most major cities have huge modernisation processes underway which will embrace logistics.”

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Cargo Theft: Rein the Bane

Cargo theft continues to plague global supply chains despite being a universal problem and a menace to world economy. Very few countries have succeeded in their effort to track, analyse and take remedial measures to check the menace. Dr Kirti Mudgil Pathak, with the help of those who are familiar with the industry inside out, contemplates on how this issue can be resolved so that those concerned with the supply chain and logistics can heave a sigh of relief and feel confident about the safety of their goods

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argo theft has been an international problem ever since time immemorial. But in the current scenario of global economy, when raw materials are produced at one place and outsourced to another to bring out the finished product, the problem is even more acute. Besides, crime has evolved along with cargo transportation methods. Trucks have replaced horse-drawn carriages, and bandits are organised into international crime syndicates. As such, in addition to inflicting financial damage on shippers, carriers, manufacturers and consumers, cargo theft has even more alarming repercussions and results not only in the loss of goods, but often in violence too, leading to grievous injuries or even loss of life. FreightWatch International, a global logistics security solutions provider, in one of its reports noted that even though cargo theft is a universal problem, very few countries take the effort to check the menace. According to reports, Asia as a region is safe compared to the west and presents moderate levels of risk to the supply chain operations. However, cargo theft is prevalent here also and difficult to control in at least some of the countries and regions. Although India, one of the fast growing cargo markets, is not without cases, some of them serious, it does not have any evolved system of either documenting the cases or suggesting / taking remedial steps, aver industry professionals .Incidents of cargo theft happen frequently but it is very rare that cases are taken up to the very end in right earnest. Understanding the way cargo thieves plan and accomplish their attacks can help shippers protect themselves against such crimes.

Indian Roadways: Safe Haven for Cargo Thieves In India, as in other countries, the risk of cargo thefts is increasing as more and more goods move in and out and through the country. Poor infrastructure is equally to blame. Cargo thefts are possible on all transport frontsroads, highways, railroads, seaports and airports. Of all these , the country’s roadways are mostly at risk of cargo thefts since 65 per cent of freight is transported via roads. Therefore, truckers and their cargo are at maximum risk, specially during night hours. Sudhanshu Pachisia, Director, Navigators Logistics Pvt Ltd opines, “The existing infrastructure has to be improved as maximum movement of the cargo is via national highways which are not in the best of condition; if this improves along

66 CargoConnect - february 2016

with certain other sectors, it will definitely minimise the losses.” India’s rapid growth has put extreme pressure on the country’s infrastructure. Narrow roads and low traffic capacity causes congestion in cities, while in rural areas, roads are not designed to withstand the elements with fortitude. Pachisia also feels, “The highway is the most risky route of transportation as the vehicle can be stopped and overpowered. The waterways and railways is the best route as per me and the safest.” As per V Raju, Vice President – Logistics Parks & 3PL Contract Logistics , Adani Logistics Ltd, “The safest mode among all transport fronts is the railway. In India, over 70 per cent of the total cargo movement within the country is by road and balance 30 per cent is of railways. Transport sector being still unorganised, and with numerous private operators with varying sizes of fleet operating, the roads become an easy target for highway thieves and robbers. These occur due to poor security procedures and vulnerability of small operators. Organised gangs, in collusion with protection agencies and with the support of organised network, attack vehicles and manage to rob them. Many of the thefts are also classified as opportunistic. The defenceless drivers and cleaners driving these vehicles often succumb to such anti-social elements.”

Most Vulnerable States Some states and areas have been pinpointed as being the maximum vulnerable to cargo thefts in the country. Raju confirms, “The central and north central regions of the country, especially UP and MP states account for most of the thefts that occur. This is mainly happening on road transport vehicles that move with cargo from factories, warehouses and ports to the customers’ location. In addition, we have had instances of trucks being diverted from main routes, taken to nearby illegal warehouses and the material stolen and substituted.” Punjab too, does not lag far behind. Pachisia however, feels, “This is there, everywhere.” The number of reported cargo thefts increased significantly in 2012. However, this increase is more likely caused by improvements in the rate of reporting in India than by a drastic increase in cargo thefts. A vast majority of reported cargo theft incidents till a couple of years back were nonviolent, with criminals having largely opted for stealth rather than more aggressive or truly violent methods. This most commonly was seen in burglaries at warehouses and factories, and also in thefts

Global economy suffers a setback with the thriving black market that gives a boost to cargo thieves. Organised cargo thieves aid terrorist outfits such as Al Qaeda and Hezbollah to fund future attacks. Cargo theft is often perpetrated by insiders. Rigorous pre-employment screening will help. Cargo theft has posed a threat to economy since ancient times

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feature V Raju Vice President-Logistics Parks & 3PL Contract Logistics, Adani Logistics Ltd

"A large proportion of the patterns of cargo theft in India and abroad are opportunistic and involve a significant measure of collusion with the transporters as well as security and enforcement personnel."

from trucks parked at truck stops and logistics yards. However, thieves in the known hijacking cases employed highly aggressive, and at times, lethal tactics. With the rapid growth of the economy, an emerging middle class and an increased focus on infrastructure development, India will continue to be an area of potential profit as well as risk for the supply chain, with cargo thieves lurking everywhere.

Goods Mostly Eyed by Cargo Thieves Any product is potentially a target during shipment, but cigarettes, pharmaceuticals and especially computer/electronic components are current high-value favourites being re-sold in the black market. As per Pachisia, “High value items in the pharma sector , metal and chemicals and electronics are also at risk of theft as there is a ready market to dispose them. Technical or a low- value cargo is generally not at risk of theft.” Raju feels, “Commodities and products like iron, ferrous scrap, copper , medicines, agro chemicals, electronics and textiles / readymade garments are usually common targets. In addition, international thefts like piracy on large ships involve entire containers that become easy targets. Asian waters have emerged as the most troubled and dangerous areas for international transhipment of cargo wherein the piracy mostly occurs.” Cargo thieves are also known to target food and drinks. In the United States, the most highly sought after shipments are pharmaceuticals, consumer electronics, apparel and food. When the price of metals such as gold, platinum, copper or steel rises, their rate of theft increases. With the current economic crisis, food and other necessities such as bottled water have seen a sharp increase in reported thefts. The truth is that any product can be stolen, but these commodities are reported stolen most consistently. It results in the government

68 CargoConnect - february 2016

potentially losing out on the needed revenue through sales tax on those items.

Loopholes Giving Cargo Thieves a Free Hand Though their methods vary in sophistication and execution, understanding the way cargo thieves plan and accomplish their attacks can help shippers protect themselves against such crimes. India is one of the fastest growing markets but it does not have any evolved system of documenting the cases or suggesting remedial steps. Raju comments, “A large proportion of the patterns of cargo theft in India and abroad are opportunistic and involve a significant measure of collusion with the transporters as well as security and enforcement personnel. Corrupt officials often derail the process of documentation that need to be initiated at the time of recording the theft and when cases go unreported, then the entire system goes for a toss. Criminal organisations engaged in high profile thefts and robberies have also substantially benefitted as a result of the jurisdictional quarrels that exist between states and legal loopholes in national and international laws as a result of which the agencies that are involved in the robbery or theft escape. National laws often term them as insignificant to warrant attention of law making agencies at state and national levels. Today many cases go unreported, many cases are closed mutually, many cases are never resolved by police stations and finally the claims are settled by the insurance companies. In addition, after considerable time elapses, even the case papers are lost in some offices and cases closed.” Pachisia is confident that a solution to the malaise is round the corner. “They are studying various remedial options and I am sure we will have a solution in the near future which will reduce this,” he opines.

In California, violent gangs such as MS-13 (also known as Mara Salvatrucha) finance their activities through cargo theft.

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feature Sudhanshu Pachisia Director, Navigators Logistics Pvt Ltd

"The existing infrastructure has to be improved as maximum movement of the cargo is via national highways which are not in the best of conditions; if this improves along with certain other sectors, it will definitely minimise the losses."

The demand for contraband products fuels cargo theft, smuggling, counterfeiting, and product piracy. Negative public perception is a strong reason why most cargo theft goes unreported. This is so because a carrier fears it would lose current or potential customers who would become wary that the company does not have proper security standards and protocols in place. Retailers too, may not want to acknowledge that they were victims of cargo theft since this would be considered a weakness in the supply chain which could give competitors a strategic advantage. It is common knowledge that some transportation companies do not report a theft, preferring instead to absorb the losses in order to avoid damage to their reputation and increases to insurance rates. So the true scale of the losses is not known.

Preventing Cargo Theft Companies can take a number of actions to improve facility and vehicle security. From implementing security devices and technologies to creating common-sense security practices, can help prevent and mitigate losses. Raju suggests measures to minimise the losses due to cargo thefts. “In most of the cases wherein theft occurs, one will always find a common denominator that is the basic reason of the theft- this is human carelessness, deviation from laid down processes towards protection or movement of the said cargo from one place to another. The other measures that can prevent cargo thefts and minimise losses are: a) Go high tech with GPS tracking of the cargo b) Apply a variety of locks – king pin locks , air brake valve locks , hand locks , bottle seals on the vehicle used for movement and con-

70 CargoConnect - february 2016

tainer that carries the cargo, etc. c) CCTVs across the length and breadth of the facility or asset. Alarms and control rooms to be set up for guarding during night hours. d) Top line watch and ward staff along with surveillance systems. Reference check on the security agencies and their track record to be cross-checked. e) Complete knowledge about the carrier and driver schedules along with routes that your cargo shall follow while moving out. f) Basic safety practices while deployment of men and vehicles, rules of basic safety practice while vehicles are loaded and sent out to customer locations. g) Response time from the control room monitoring sites of operations. h) Screening and training of employees being selected. Technology plays an integral role in securing shipments. Logistics companies in India need to be technology- enabled when it comes to securing cargo. Raju says, “Indeed over the last few years, with advancement in technology and the logistics companies becoming extremely professional in all their operations, devices such as GPS tracking, offices enroute important stations, strict control room monitoring, mobile

phone connectivity, etc., have been introduced in securing shipments moving to various locations. While movement on road is banned by several organisations during night, warehouses and cargo yards are also now becoming extremely technology sensitive in securing the cargo that is stored. While the CCTV still plays an important part, alarms installed at different points in these warehouses and yards help in preventing thefts. Vehicle parking areas are also now more sanitised and drivers, cleaners and other staff are always trained in securing the cargo by using different mechanisms. This trend will certainly increase in the coming years as new technology starts getting implemented by different companies country wide.”

Rein the Bane To accurately measure the scope of the problem, cargo theft must be consistently reported and tracked. Trucking companies, insurance providers and law enforcement agencies need to unite to reduce cargo thefts across the globe and find solutions for this growing problem. This can be achieved by improving the accuracy of cargo theft statistics by raising awareness among transportation professionals, insurance providers, law enforcement agencies and even the government.

Interview

Delhi Poised to Become Pharma Hub In a recently conducted pharmaceutical workshop Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India Pvt Ltd and Sanjiv Edward, Head of Cargo, DIAL, along with pharma manufacturers from across India, discussed about Delhiâ&#x20AC;&#x2122;s potential to become a pharma hub, the infrastructure and facilities, the bottlenecks as well as the staff at the airports and terminals. Excerpts: right up to the time the shipment is loaded into the aircraft. We are the first airport in the country to have cool dollies. We are most geared up to support the pharma industry. We have seen that the pharmaceutical industry is recognising it and thatâ&#x20AC;&#x2122;s the reason the industry is witnessing growth.

Bottlenecks

Ramesh Mamidala Delhi as a Pharma hub Mamidala: From the Celebi point of view, we are equipped with the best infrastructure and technology of international standards and well-prepared for becoming a pharmaceutical hub. We have always, and will continue to invest more money in world-class technologies like cool dollies and white cover. We are happy to bring in high quality equipment and innovations. As a ground handling company, we have the expertise and world-class facilities at the terminals. Edward: We are the only airport in the country which has more than 50,000 sq ft of space which is dedicated for perishable handling, including pharmaceutical products. We have got the best infrastructure where we can handle all different temperature zones. We have also invested in making sure that the entire integrity of temperature is maintained

72 CargoConnect - february 2016

Mamidala: Most of the challenges that we have are related to the cargo handling part. Ground handlers, trucking companies, manufacturing companies should know about the temperature that we maintain and any compromise with it will lead to a disastrous impact on the entire supply chain. This needs to change and it is taking time. We have the right infrastructure to manage the shipments. With more awareness and frequent interactions with the manufacturing companies, trucking companies and service providers we are moving in the right direction.

When this happens more frequently, the attitude of people will change. Edward: Really we need to move on from a culture where the industry sees the pharmaceutical products as a piece of cargo. Itâ&#x20AC;&#x2122;s not just a piece of cargo; it could mean life for ten people or life for hundred people. So while handling pharma, one must be careful. We, at DIAL and Celebi, also anchoring

Sanjiv Edward environtainers over here, it gives us the stability to maintain temperature integrity and deliver it to the shippers. There are also some movements where we could actually get into SEZs and transfer cargo in reefer trucks. Also, with the road shows that we have organised in the past, we have been successful in creating awareness and the end-users should also come forward and contribute to it.

Trained Staff Mamidala: We do have well-trained staff members at the ground level and they are trained on a regular basis about the new technologies and innovations. Also, we have world-class airports like Hyderabad airport and Bengaluru airport that have done a great job. I see it as an opportunity and lot needs to be done in this sector.

Interview

“We want to be a ‘one-stop-shop’ for all logistics needs” With earnest dedication and hard work, he has taken his organisation to altogether a different level. Young and dynamic Ashish Asaf, Managing Director, S A Consultants & Forwarders Pvt Ltd, in an interview with Ritika Arora Bhola discusses about the genesis of their cargo operations in India and abroad, USP and projects in the pipeline. He also talks about issues like higher dwell times and complex customs clearance procedures and demands industry recognition for the freight forwarding sector

Please tell us about the genesis of your cargo operations in India. How has the journey been so far? S A Consultants & Forwarders Pvt Ltd was established by my father, Asaf Ali, in the year 2000. He had an illustrious career spanning over four decades and is well-known and respected in the cargo fraternity. Under his guidance, the company secured the leading

74 CargoConnect - february 2016

position among cargo consolidators in India. It was only in 2010 that I was bestowed the responsibility to lead the organisation and it’s been a learning experience ever since. We are ranked among the top IATA agents with all major airlines and have seen a growth of almost 200 per cent over the last few years. We have managed to post year-on-year growth, with focus on imports consolidation, project cargo, overseas network development, etc.

What is the USP of your company? I would say the USP is most certainly our employees. ‘If everyone is moving forward together, success takes care of itself’ – Henry Ford. This holds true for our organisation, where we have a dedicated workforce with a very wide range of experience. It has helped us focus on core areas of business for expansion, financial discipline and customer satisfaction.

Our key area of strength is air freight consolidation We believe in commitment. Whatever we commit, we deliver. This company was built by my father based on high morals and professional ethics and we are following his footsteps. This helped us successfully establish ourselves as one of the leading freight forwarding companies in India.

Please elaborate on your cargo operations in India and abroad. Our key area of strength is air freight consolidation. Europe has been our prime lane for many years, but now things are evolving. For the past two years, USA has become the biggest trade-lane for us. We are the leading consolidators in terms of tonnages and we handle sizable volumes for CIS countries, Middle East and other parts of the world. We have branch offices in Mumbai, Cochin, Chennai and Srinagar

and a very strong overseas Agency Network, which gives us the reach into global markets. We regularly handle Project Cargo and full charters for defence forces, apart from doing flight handling and airport handling for them. We also have a travel company and a full-fledged customs clearance office and offer CHA activities to our customers. In a nutshell, we strive to be a ‘one-stop-shop’ for all logistics needs.

where forwarders have suffered a lot in this regard.I wish an association should be formed within the freight forwarding community to deal with it and secure the interest of the forwarders. Apart from this, our government is doing a great job and has shown great vision in developing the logistics and supply chain, with key focus on improving infrastructure. I strongly believe our trade should get an Industry status. It’s the need of the hour as logistics and supply chain forms an integral part of every organisation.

Experts in the air cargo industry complain of higher dwell times and complex customs clearance What are the other projects in the procedure. What’s your take on it? pipeline? Our facilitators like CELEBI, Cargo Service Centre (CSC) and DIAL, etc., are working really hard on reducing dwell times. I believe there is still scope for improvement on the services from these agencies, considering the charges being paid are very high. Another area of concern for freight forwarding companies is the customers who leave behind ‘bad debts’. Exporters often take advantage of the situation and of late, there have been cases

We have plans to expand into sectors like warehousing, road transportation, wherein we provide tailor-made supply chain services to our customers. We also look into niche market segments like pharmaceuticals, luxury goods, exhibition cargo, to increase our customer base. We will soon open branch offices in Bengaluru, Hyderabad and Ahmedabad. Expansion is a continuous process and only sky can be the limit.

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Interview

“We have designed products for challenging Indian conditions” The sun never sets on Carrier Transicold’s parts coverage. With more than 600 dealers, distributors and parts depots worldwide, the company provides all the parts and related service support needed to keep customers moving across roads, rails and waterways around the world. Pankaj Mehta, Country Head & Director, Carrier Transicold, India, shares with Dr Kirti Mudgil Pathak the vision of the company and the factors that make it so unique, especially in the Indian context

What strategies have been adopted by your company to remain the country leader in the field for more than four decades? Carrier Transicold is an industry leader for refrigerated transportation equipment that helps to protect and preserve fresh and frozen food, pharmaceuticals and other perishables during road transport in trucks, trailers and vans. We manufacture, sell and

76 CargoConnect - february 2016

service intermodal transport, van, truck and trailer refrigeration systems for overthe-road and rail applications and container refrigeration systems and generator sets for ocean-going vessels. Our products cover the complete range of customer requirements and integrated cold chain management from the smallest distribution van to large 12-meter trailers, and are designed to operate in ambient temperatures ranging from -30 degree Celsius to +50 degree Celsius, in both single

temperature and multi-temperature versions. Our Citifresh™, Citimax™, Viento™, and Xarios™ truck ranges are commonly used for chilled transportation in India and are fitted to run from the truck engine. All of these products are designed to provide strong, reliable performance in hot, dusty ambient conditions and offer superior pull down and cooling efficiency. Carrier Transicold’s strong warranty policy supports the reefer unit, and the customer is provided with

training in operation, best loading practices and basic troubleshooting. The company also conducts refresher courses for the customers’ drivers and operators on best practices to ensure optimum operating performance for reefer equipment Carrier Transicold India has an efficient service dealer network includes more than 45 service centers spanning all major cities in India, primarily along the main highway routes and transport hubs. Our teams of experts have many years of experience in the field of transport refrigeration. This team ensures that routine services and emergency break down situations are handled effectively to the satisfaction of our customers. We conduct several training programmes for our channel partners, customers, drivers and technicians who operate or service truck refrigeration equipment. All of this continues to make us leaders in the field of transport refrigeration.

Please tell us about your new product-Supra 1150. How does it help the industry? We understand that India needs specific models capable of effectively cooling long body rigid trucks, operating in high ambient conditions. So, we launched the high capacity Supra TM diesel drive range for India. The Supra 1150 and 1250 models are new generation units which cater to the requirement of high capacity and higher airflow. These units have proved extremely successful especially for large frozen applications. The higher airflow ensures faster pull down and quicker temperature recovery. With improved electronics, on-board diagnostics, electrically driven fans, independent of engine speed and a smart diesel engine, it is more fuel efficient and comes with the security and peace-of-mind of an extensive aftermarket service network. Overall, low cost of ownership has made this unit popular amongst our customers.

How do you ensure that you provide all the parts and related service support needed to keep your customers moving across roads, rails and waterways around the world? Carrier Transicold provides environmentally sound direct-drive and diesel truck units and trailer refrigeration systems as well as

container refrigeration systems and generator sets, improving transport and shipping temperature control with a complete line of equipment and services for refrigerated transport and cold chain visibility. Carrier Transicold is a part of UTC Climate, Controls and Security. We serve nearly every major shipping line in the world, and has sold more than 1 million refrigerated container units since 1968. Carrier Transicold has manufacturing operations in Athens, USA, Rouen, France; Shanghai, China; and Singapore. Carrier Transicold also provides an extensive network of aftermarket services and components for its products, with more than 45 authorised service centres and parts depots in India.

How cost effective is investing in Carrier Transicold products as compared to other counterparts? Carrier Transicold understands the customer’s application and provides solutions to the challenges of temperature-controlled transportation. We have designed products for challenging Indian conditions including harsh roads, dusty environment and high ambient temperatures. Recently, we have launched segment and application specific products like CitimaxTM and CitifreshTM, which are cost effective units catering to the transportation of fresh and frozen cargo using a direct drive compressor, and have been very well accepted by our customers in India.

You have a history of solving problems on a global level to drive new industries. How do you constantly sustain this achievement? Carrier Transicold constantly strives to develop solutions to meet the constantly evolving and challenging operating conditions across the globe. We saw a challenge with low engine speed on last-mile delivery vans moving across congested city roads, which led to direct drive compressors not achieving enough cooling capacity. To meet this requirement, Carrier Transicold introduced the Pulsor™ refrigeration unit for light commercial vehicles, featuring E-Drive™ all-electric technology which eliminates the road compressor and replaces it with a small electric generator, which powers a hermetic compressor delivery constant rpm. This also led to reduced refrigeration charge for delivering a similar capacity and

our customers can now manoeuvre through the traffic without worrying about the cooling performance. Carrier Transicold India works with all stakeholders-- including the large logistics companies, leading truck manufacturers, insulated box manufacturers and end-users at every stage to offer new solutions, integrate the reefer equipment with the vehicle and to install and commission the equipment.

What special technologies do you use to retain the high standards in fuel efficient refrigerated container, truck and trailer systems? We have a strong R&D team that focuses on delivering products that make the world a better place to live. Our equipment helps to ensure that the global food supply is transported and preserved for safe consumption. Based on the Indian market requirement of smaller capacity units that can operate directly off the vehicle engine, we introduced the Viento™ range, which is an ideal solution for city distribution delivery vans catering to the fast growing chilled product category of fruits and vegetables, pharmaceuticals and processed foods. Also, there is significant opportunity to deliver fresh and healthy food throughout India. The recently introduced Citifresh range is ideal for transporting chilled products on mediumto-large commercial vehicles with a loading capacity of 16 to 55 cubic meters. All of these products are designed to provide strong, reliable performance in hot, dusty, ambient conditions and offer superior pull down and cooling efficiency. Carrier Transicold also manufactures a range of sophisticated refrigerated equipment for trailers and rail cars, and we are poised to introduce this equipment in India as the industry grows over the next few years.

What innovations do you plan to introduce in near future in this fiercely competitive domain? Carrier Transicold India continues to utilise the research and development strength of UTC Climate, Controls & Security, a part of United Technologies Corp.(NYSE:UTX), to bring the latest product innovations into India. No matter how demanding the application, Carrier Transicold India will specify, design, install and service the right customised equipment.

february 2016 - CargoConnect 77

Interview

â&#x20AC;&#x153;We aim to provide holistic solutionsâ&#x20AC;? JWL Cold Store Pvt Ltd provides endto-end logistics solutions for cold chain segment. Within a year of its inception, JWL has become a preferred partner for both cold chain warehousing and refrigerated transportation requirements. Raaj Jobanputra, Director, JWL Cold Store Pvt Ltd in an interview with Joydeep Banik discusses the nature of their services and the emerging trends in the cold chain scenario of the country

Tell us about the nature of your services and your journey so far. JWL Cold Store Pvt Ltd (JWL) started its operations in 2014, and within a short period of 18 months of its commencement of business, it has succeeded in establishing itself in the business of cold chain management in the Mumbai Port Region. In this short span, we have more than

78 CargoConnect - february 2016

doubled our capacity from 6,800 pallets to 14,200 pallets, due to the huge demand of value-based cold chain capability of JWL. JWL aims to serve the food and pharmaceutical industries for which it has specially designed food and pharma hubs dedicated for these industries. Our value-based services model has been a runaway success in the perishable cargo business. JWL Food

Hub is FSSAI approved and ISO 22000: 2005 certified and Pharma Hub is FDA approved. JWL boasts of temperature ranges from -25OC to +25OC. In our journey so far, JWL has created a strong partnership with its customers such as Ferrero India, CIPLA, Haagen-Dazs, Mondelez India, etc., to name a few. By virtue of these partnerships, we have been able to inculcate the best practices in the pertaining industries

into our DNA.

Cold stores have become an important link in the distribution between manufacturers/processors and consumers. Explain. Organised cold store is growing at a very high rate due to various factors. Growth in organised retail is one of the key factors driving the growth of the organised cold chain segment. The share of the organised market in retail, which is at 10 per cent in FY15, is expected to grow to 30 per cent, with food being the least penetrated segment and poised for high growth. Similarly, the Indian food processing industry, which is at a nascent stage, is expected to grow at more than 17 per cent. With most of the processed categories requiring cold chain services, demand is expected to increase at a higher rate. Besides, the Quick Service Restaurants (QSR) segment is expected to witness a 30 per cent growth over the next three years on account of changing consumption habits and increasing presence of QSRs and restaurants in India. This will create a huge demand for storing perishable food items. Growing GDP, increasing population and improving per capita consumption of food items are other enablers for higher cold stores

unit, thereby creating a feedback/fail safe mechanism. In order to have an adequate power supply, both food and pharma hubs are equipped with two diesel generators each. In the cold chambers, latest thermostat and temperature and humidity sensors have been strategically located, which are constantly monitored by our Quality Team. A dashboard facility is also provided to our customers wherein they can monitor and record the temperature of the chamber in which their cargo is stored.

Buil ding C ont ainer Freight Stations near customs bonded cold stores is the need of the hour. Discuss. JWL is strategically located adjacent to a CFS (JWR Logistics P Ltd- an associate company). This gives JWL an advantage by way of approval from the customs department to operate a custom bonded cold chain facility. Bonded cold store facility was unheard of in India-JWL is one of the few cold chain companies which operate a custom bonded cold store. In India, cold chain facilities are till date predominantly in the unorganised sector catering to the low value cargo – especially domestic produce.

Temperature control and monitoring form a critical Key Performance Indicator (KPI) for JWL. It has proven reregistration systems along with 100 per cent standby arrangements. space demand. Growth in the organised retail and the food processing sector drives the cold chain market in India. Rising demand for cold storages in the pharmaceutical sector is also driving growth in the cold chain market.

What are the different temperature-control measures adopted in your warehouses? Temperature control and monitoring form a critical Key Performance Indicator (KPI) for JWL. It has designed its facility where it has a dedicated cooling unit and a standby

When JWL was being conceived, the promoters’ huge experience in logistics, especially EXIM, played a critical role in envisaging JWL as a custom bonded facility. The need gap was identified as temperaturesensitive cargo, would at times be plugged in at port/CFS for days, incurring huge demurrage changes. In order to provide a costintelligent solution to temperature-sensitive cargo importers, the custom bonded cold chain was born. In our bonded cold chain, an importer can store cargo before paying custom duty – by paying JWL charges for this service. This has

three- fold advantages: a) Savings to the importer by way of huge demurrage charges at CFS. b) Healthy working capital management c) Operational efficiency by way of requirement based stock dispatch

What is the capacity of JWL Cold Store and what are the products handled? JWL started operations with an operational capacity of 6,800 pallets. Within a short span of 10 months, JWL was operating at an astounding capacity utilisation of 95-100 per cent. This level of acceptance of a cold chain facility which was specially designed to cater to the higher value perishable cargo was unheard of. Not to lose momentum, JWL embarked on an aggressive expansion plan by increasing its capacity to 14,200 pallets. The CAPEX was started in March 2015 (within 12 months of operations) and completed within a record six months. The newly developed facility was designed to cater to the pharmaceutical industry. JWL,, hence, had capabilities to handle both food grade cargo and pharma grade cargo within 18 months of its commencement of operations. Currently, JWL handles cargo in the following two categories: a) Food hub: Pasteurised products, chocolates and confectioneries, meat, ice cream, ready to cook products. b) Pharma hub: All pharma grade products – APIs, finished products.

What are the eco-friendly technologies used in your machine room for efficient cooling? Freon- based cooling system which has been deployed at our cold stores are known as nonpollutants. In addition to this, the use of LED lighting and eco-friendly garbage disposal are few of the eco-friendly technologies used in our cold stores.

Where do you want to see your organisation in near future? In five years, JWL aims to emerge as the best cold chain, delivering value-based solutions in India. We aim to expand into domestic distribution and preservation of perishable business. We also aim to provide holistic solutions including food processing and grain storages which would help save on total agriculture produce of the country.

february 2016 - CargoConnect 79

Interview

UTi: A Growth Story Year-on-Year Like other segments in the global supply chain, there has been a significant impact on the demand for contract logistics in India over the past couple of years. UT Worldwide (India) Pvt Ltd, a nonasset based logistics company, is a formidable organisation from the contract logistics perspective. Sameer Khatri, Regional Vice President-Indian Subcontinent & Managing Director-India in a conversation with Deepannita Chakraborty talks about the company’s experience in contract logistics, freight forwarding, customs brokerage, distribution and other aspects of supply chain management pretty much entrenched ourselves into the logistics sphere of the Indian sub-continent market. Also if you see our ocean products, in the last three years we have more than doubled our ocean volumes. We have also enhanced our footprint in the supply chain and logistics network. It’s been a growth story year-on-year.

units, and ease of attracting investments in India for making it a success. History proves that we have not done these things well in the past and I hope this time it’s a chapter and we

Our vertical focus has largely been on pharmaceuticals, fashion and automotive. Recently we have begun working andon and making our presence felt in defence and its projects.

and currently it’s with the shareholders of both the companies. The merger is slated to happen in the first quarter of 2016, and once the shareholders and the regulatory bodies approve, we would be a merged organisation. We all are looking forward to it. There are huge business synergies from this merger. Both DSV and UTi have a huge footprint globally. Hence, we will be able to cater to the clients in a lot more comprehensive manner.

are able to execute this pretty well.

UT Worldwide recently had a tie-up with DSV. Tell us more about this Tell us about your products and merger. What business synergies services. What is the main domain can we expect from this synergy? Yes, there has been a proposal with DSV in your portfolio?

UTi’s contract logistics solutions are considered to be one of the Indian logistics sector is poised for best. Where in India are your CL accelerated growth with initiatives resources mainly focussed on? like ‘Make in India.’ Your comment. We focus mainly in west India and South India. But our contract logistics’ client base is spread all across India.

UT Worldwide is a global specialist that has decades of experience in the logistics industry. How has the journey been so far in India? Well, it’s been a pretty enriching journey. UTi is among the top freight forwarding companies and it has stayed for a long time as the number one in India. So we have

80 CargoConnect - february 2016

I think it’s a very good initiative by our PM. What is important is to execute. There were lot of initiatives taken in the past. The focus today needs to be utilising and optimising the current infrastructure in place. While it is important to develop new infrastructure to keep pace with the country’s development, it is just as important to maintain, up-grade and optimally utilise the current infrastructure. So, coming to the point on ‘Make in India’, I think we should have policies and regulation around this initiative to provide ease of business, ease of creating manufacturing

You are one of the very few MNC logistics service providers who possess customs brokerage operation. Tell us something about it. Customs brokerage is a USP for us. There are multinational companies who have shied away from operating their brokerage license in India and they have their own reasons for doing so. We saw it as an opportunity for giving an endless service to our clients.

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Interview

Right Solution for Every Application The leading German company, Jungheinrich, has set its benchmark internationally in fields like material handling equipment, warehousing and material flow engineering sectors. Jungheinrich Lift Truck India, being a subsidiary of Jungheinrich AG, started its operations in the Indian market in 2012 and has made it big during the course of time. Manojit Acharya, Managing Director, Jungheinrich Lift Truck India Pvt Ltd, in an interview with Joydeep Banik elaborates on the present portfolio of the organisation in India and discusses the current opportunities of the MHE market

In Europe, Jungheinrich is the leading supplier of warehousing technology. What is the market scenario in India and other Asian countries? Jungheinrich is one of the worldâ&#x20AC;&#x2122;s leading companies in intralogistics and a leading supplier of warehousing technology in Europe. The Indian market basically started with the utilisation of diesel forklift as the material handling equipment for all applications. At present, the scenario has changed and customers have started using various material handling equipment depending upon their application. Although, in comparison to the size of our economy, the present market size of MHE is relatively small; the long-term growth

82 CargoConnect - february 2016

potential is good with a projected CAGR@ 15 per cent. The market for warehousing trucks in India is increasing since a decade or so. Jungheinrich has benefited from this market change as customers in India are now looking for better quality and more efficient trucks. The growth in e-commerce, cold storage, pharma, food and beverage sectors shall act as a driver for the growth of MHE market in India.

How has the journey been so far in India and what is the USP of your company? Our pan-India sales and service network, customer focus and strong product portfolio

have helped us in growing faster than market. We will continue expanding our sales and service footprint in India to serve our customers better. We are also extremely focussed on the business of rental of MHEs.

Palletised material handling is the need of the hour. Comment. The reason for hitherto small MHE market in India in comparison to our size of the economy is due to the low level of palletisation. Even today, 70 per cent of the material is handled manually due to cheap labour cost. Over the last decade, there is a change in the thought process in the industry with the customers looking for better efficiency,

We are currently evaluating the market demand of automated warehouses in India. reliability and productivity. The customer is willing to explore new solutions available in consultation with our team. Customers are willing to invest in the utilisation of vertical space with palletised material. The utilisation of vertical space will accommodate more number of pallets as well as the material to be stored in the warehouse. The trend is now to have a large warehouse with high vertical stacking .The productivity of the warehouse depends on higher throughputs of pallets by industrial trucks.

What are the different power options available for forklifts and which one is more popular in India?

There are four different power options available in our forklifts: • Electric • Diesel • LPG • LPG + Petrol (dual fuel) Jungheinrich electric forklift trucks are more popular in India and we take immense pride in the feature of our batteries giving longest performance for a single charge.

variants. We are the recipient of ‘International Forklift Truck of the Year’ award three years in a row from 2013 to 2015, which is testimony of our passion for high quality, reliability and customer focus. Jungheinrich is constantly eyeing on the future market demand of warehouse trucks. We also take feedback from our key account customers for the future development of our products.

From reach trucks to counterJungheinrich cares for constant balance trucks to order pickers, design improvisations and deliv- forklifts, conveyers and cranes ers innovative, high quality mate- Jungheinrich offers comprehenrial handling equipment. How do sive solutions for the MHE indusyou justify the claim? try in India. What next? Globally we have 60 years of legacy in warehousing and intralogistics solutions. We are present in more than 100 countries with production and product development centres in Germany, China and USA. We rank among the world’s leading companies in the field of industrial trucks, racking and logistics systems. We have the right solution for every application with more than 600 truck

Jungheinrich has executed lot of turnkey projects in Europe and is gearing up to offer complete logistics system solutions in Asia. We are currently evaluating the market demand of automated warehouses in India. Depending upon the developments of the market, we will plan accordingly for the provision of the equipment and automation solutions of warehouses in near future.

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In India logistics industry still waits for a better and more suitable infrastructure and policies, says Neeraj Rana, DGM,

â&#x20AC;&#x153;A mediocre service at a lower cost can never win a customerâ&#x20AC;&#x153; Importance of Logistics for Growth

Ensuring Coordination

Smooth

Intex Technologies (I) Ltd is a leading consumer electronics company, having four manufacturing plants, seven OEM suppliers and 40 warehouses. Role of logistics at Intex is critically important to provide speedy delivery of 2,500 tons of material every month from 13 distribution centres to 40 selling locations and from these 40 warehouses to 1,800 channel partners spread across the nation. Logistics at Intex has not only ensured the fastest and safest deliveries in the industry, but also has kept logistics costs, both fixed and variable, very much in control. Since a majority of our distribution is catered through air mode, logistics has contributed magnificently to 1000 per cent growth of Intex group in the last five years by keeping freight costs in control constantly.

Since logistics has to deal with suppliers, transporters, customers and other departments within t he orga n isat ion , a se a m le ss coordination is one of the most important factors that determines t he succe ss or fa i lu re of a l l strategies and planning. Chances of com mu n ic at ion gaps a l s o increase with a growth of business and an increase in the number of stakeholders. The biggest challenge most organisations start to face is an increase in the number of unresolved issues and incomplete tasks. To avoid such possibilities, we have kept a number of check points in the form of reports which are circulated to all stakeholders and escalated to the next level if due action is not taken within the stipulated timelines.

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Ltd. He shares with Deepannita

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multimodal logistics in this era

84 CargoConnect - february 2016

Managing the Network In today’s world, the customer pays for quality services and don’t mind paying an extra penny if they are given the best services to enjoy. We firmly believe a mediocre service at a lower cost can never win a customer. All customers, whether end-users, reseller or our sales team, need the best services at whatever cost. And we strive to deliver the best available options in term of ‘saffastest’ deliveries at a very economical cost. Direct deliveries from manufacturing plants and suppliers to avoid multiple handling, keeping an eye on stock levels at warehouses, region wise, state wise, even tow n w ise a nd pl ace me nt o f t r a n s p or t e r s a r e s ome fundamentals we strictly follow to keep our customers satisfied.

a huge margin, but new air freighters have not been injected into the system. The other option left, passenger aircrafts, already used to have limited space allocated for cargos. This creates a troublesome situation for organisations like us. To make sure we don’t get choked because of this, we have shifted all possible locations for dispatches through dedicated vehicles, and joined hands with service providers owning maximum air space in the industry.

Scope for LSPs An LSP is a very important driver to ensure the success of strategies and planning, as the success of these depend on the selection of LSPs and their placement for their strongest locations. By using the right LSP for the right location, we can not only reduce the transit time but also operational costs and various other issues like pilferages, damages, etc. Nowadays, everyone is speculating on GST and its impact on supply chain management. As per the initial draft and early hints also, I believe that the scope for LSPs irrespective of their size is very positive in future.

Managing Back End Supply Product, purchase and logistics, all work together to achieve the desired level of SKU wise inventories availability at all warehouses. The month is split into four different brackets with their defined inventory levels. All important factors like seasonal impact on supplies, supplies’ lead time, overseas and domestic transit time also, are taken care of in formulating inventory norms.

Challenges At present, the biggest challenge to achieve timely deliveries is shortage of space in air cargo. We know that in the past five years, the total air cargo volume has increased with

placed simultaneously in the system. Few of these, for example, are mapping of channel partners from correct warehouses, opening warehouses in new cities, strategic alliances with transporters and cargo service providers and conducting regular training programmes for the in-house logistics team.

Routes in Supply Chain Process We focus on expanding our network in a way that distance and transit time from our suppl iers to our customers is reduced. This basically gives us direction to opt for direct deliveries from source to POS, to avoid stock transfers within points of sale, to evaluate new cities for more warehouses, having alliance with regional level service providers who are strongest for specific locations, etc.

I m p o r t a n ce o f Re g i o n a l Logistics Centres (RLC)

Significance of Multimodal Logistics In such volatile times when competition is so vast, margins are squeezed and tolerance limits are minimised, an organisation cannot survive with fixed and rigid practices. Adoption of multimodal logistics is essential to cater to the maximum of locations if less transit time is on the wish list.

Product Distribution Strategy Process of growth for any industry demands availability of materials and services at the right place at the right time. And with our kind of sensitive products categories because of fast technological changes, customers’ interest and multiple options available in the market, it becomes most important for us to ensure availability of stocks at its desired locations. It is not just one particular strategy or technique that enjoys the whole credit but a number of various activities

In India, logistics industry still waits for a better and more suitable infrastructure and policies, in the absence of which, all organisations and LSPs are struggling. As mentioned above, in the last five years air cargo volume has tripled but cargo space has not expanded comparatively enough. So is the condition of surface mode. Train mode has sufficient space but most organisations are reluctant to use it because of more chances of pilferage and damage. To overcome this, the only solution left is to establish a regional distribution centre that concentrates on supplies and deliveries of a specific sector. RDC also helps to minimise TAT, and operational costs to face exigencies.

Collaboration and Consolidation We have a culture of using the term ‘Partner’ for all our external stakeholders like suppliers, vendors, distributors, OEM manufacturers, etc. Business plans formed for the next financial year is shared with these partners and we also share our action plan to achieve the business target, our assessment of their infrastructural strength and areas of improvement and our requirements from them. This gets all stakeholders in sync with our business plans and it results in their active participation to achieve our targets.

february 2016 - CargoConnect 85

sUPPLY CHANGE

Spicing Up the Logistics for Growth Importance of Logistics

Spice Mobiles has seen a significant growth over the years since its inception and logistics plays a major role in the growth of the company. Hitesh Bansal, Head Logistics and Commercial,

Spice Mobiles is one of the fastest growing mobile internet devices company in India. With a customer base of over 20 million and an annual volume of over eigth million devices, we have a market share of nearly 4-5 per cent of the Indian mobile devices market. Well-acknowledged for our product innovations, we were the first company in India to launch a smartphone with a 5MP Wide Angle Front Camera, the Pinnacle Pro, for which, we won the prestigious Golden Peacock Innovation award in 2014. We were also the first Indian brand to launch a full high definition smartphone, the Pinnacle FHD. The company has to its credit several firsts including the Dual SIM phones â&#x20AC;&#x201C; across GSM, CDMA, Triband and Touch Screen PDA and smart devices on Android platform. At Spice, logistics function is viewed as a business enabler and a differentiating factor which sets us apart from the competition. In the handset industry where the customer reigns supreme, and amongst cut

throat competition, distribution assumes a very critical role. Unless we can deliver the right products in right quantities at the right time, every time, value from a sale cannot be realised.

Unique/Specific Strategy Adopted for Better Supply Chain In the past nine months we have done significant work in enhancing the transportation leg of our logistics network. We have started multimodal transportation of handsets and to further reduce the IBT costs, we have also started clubbing product loads of geographically close locations into dedicated vehicles instead of reaching out to individual locations via air mode. Not only have we been able to reduce the primary shipping costs by up to 40 per cent, we have also managed a marked reduction in cases of transit shortages and damages.

Smooth Coordination Clear and concise communication is the key to our departmentâ&#x20AC;&#x2122;s efficiency. At Spice, we believe

Spice Retail Limited in an interview with Roselin Kiro shares about the importance of logistics network, ensuring smooth coordination and the innovative strategies taken by them for the smooth flow of supply chain

86 CargoConnect - february 2016

Spice Mobiles takes customer delight very seriously and works towards achieving the same. we conduct regular reviews of our vendor performances.

shipments are currently getting routed by both surface (Road & Train) as well as air mode, including the combination of the two.

that clear accountabilities lead to clear results. We have defined SPOCs for our partners including transporters, suppliers and warehousing agents. The same is communicated to the partner as well. We have defined escalation matrices through which the partners can get their matters sorted out. We also emphasise that a close nit working relationship between the department and the vendor base. Regular meetings are conducted for planning future innovations, cost control and TAT reduction.

Routes Involved in Supply Chain Process Supply chain at Spice comprises Imports, Demand Planning, Order Processing, Inventory Control, Order Fulfilment and Spare Parts logistics. There is a seamless integration between these sub functions within the supply chain. We work on SAP as our ERP and the business decisions are driven through research and analysis of data.

Creating Value for Customers Supply chain, especially logistics has to be really agile in responding to the changing market conditions and customer demands since it acts as an interface between sales and manufacturing. We manage our network proactively rather than reacting to situations. Spice Mobiles takes customer delight very seriously and towards achieving the same we conduct regular reviews of our vendor performances. Our supply chain is configured to automatically choose the best possible vendor for a specific route. We have equipped all our DCs with the flexibility to choose between various modes of shipments. The deliberately inculcated redundancy in all of the transportation lanes, both in terms of partners as well as modes enables us to respond to business contingencies and need of customers at an optimal cost.

Scope for LSP’s Undoubtedly there is a big scope for LSPs in the mobile handset industry given the fact that handset penetration in India is still quite low as compared to developed economies. More players are entering and will continue to enter Indian market as the Indian consumers gradually shift to upper spectrums of the product lines. Hence there are ample opportunities for LSPs to partner with established players to serve the market, but in the long term only those LSPs which are able to deliver committed SLA without giving huge escalations in associated costs to the customers will survive and prosper.

Managing Back-End Supply We have a strong vendor base in Hong Kong which supplies handsets to Spice Mobiles in India as per indents but we are scaling up our local manufacturing capabilities in a big way. We have started manufacturing around 1–2 lakh handsets per month in India under

Importance of Regional Logistics Centres for Multinationals the Indian government’s ‘Make in India’ programme. Final assembly of SKDs within India gives us the agility to respond to market demand with a much tighter control over TATs to end customers.

Overcoming Problems In handset industry, given the nature of the material it is of prime importance that there is no damage to the packaging/ contents of the product. A damaged gift box becomes unsalable even if the contents of the box are intact. Given the maturity of the transportation infrastructure in India, Spice takes the initiative to educate the vendor about such concerns. More importantly, we continuously measure partners on such concerns and include this performance parameter in the KRA of the partner. As a failsafe measure, during the planning cycle of NPD itself, safety stock is indented for the packaging and spares to counter such situations.

Significance of Multimodal Logistics in Overall Supply Chain Process Multimodal logistics in the current business models is no longer a luxury or a matter of choice. It has become a necessity in order to stay abreast of the competition and to deliver to the customer as per the timeline committed. This is even more relevant for the handset industry given the fact that the shipment size is usually small but the value is quite high. Spice has already implemented multi modal linkages in its transportation network. Our

The major role of Regional Logistics Centres (RLC) is to establish a stock point closer to the market from where the goods can be shipped to the end customer quickly and at economical cost. The other important function is from the taxation point of view. But with the advent of GST this scenario will drastically change in a very small amount of time. Businesses will retain only certain RLCs around high demand clusters that can serve customers across state boundaries in a cost effective time bound manner. The concept of having at least one warehouse in each state will be no longer be true with GST coming in. Though some RLCs will eventually be closed down, the remaining ones will become much larger as compared to their earlier scale. Industry as such will move towards fewer, bigger and more mechanised RLCs with the capability to handle huge volumes and transactions.

Steps to Improve Collaboration and Consolidation in the Total Supply Chain Process What I have seen as a business professional over the years of my experience is that valuable results can be obtained by empowering the right people in the right manner. A function overall must always comply with the processes to achieve the results in the right way but flexibility must be allowed within sub functions of a function so that the speed of execution is not compromised with. At Spice we are working with a judicious mix of both centralised and decentralised structures. Key business decisions are taken in a centralised manner whereas execution is done in a decentralised fashion.

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News

World Bank to be anchor investor in Rail Development Fund Railway Minister Suresh Prabhu has said that the World Bank would be the anchor investor in the new Railway Development Fund, which would be used to fund the modernisation of Indian Railways. “We have decided to work with the World Bank on creating a Railway Development Fund. This was already initiated. But now, we have taken it forward,” Prabhu said here yesterday after his meeting with World Bank officials in a statement. Noting that the World Bank would be anchor investors in this new fund, along with other co-investors, Prabhu said, “This fund would be kick-started soon as there is unanimity in the World Bank leadership”. However, Prabhu did not divulge the size of the fund, but indicated that it would be the largest ever provided by the World Bank to the Indian Railways.

Railways eye e-commerce to shore up freight revenue Indian Railways is looking to cash in on India’s booming $4 billion e-commerce industry to boost revenue from its freight operations. In the upcoming Railway Budget, the Union government may soon look to tap into various “sunshine sectors” of the economy including automobile sector, e-commerce industry and the fast-moving consumer goods (FMCG) segment to deliver goods, senior ministry officials said in a statement. The Indian Railways is also exploring ways in which it can help in door-to-door transportation of goods. It may soon use ‘Road Railers’, capable of movement on road as well as rail, to provide last mile connectivity. Other delivery mechanism which the Indian Railways may look into include RO-RO (roll on, roll off) through which loaded trucks can be carried directly on railway wagons between two destinations, an official said in a statement.

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India and US to ink deal on logistics support Three major military pacts which could elevate Indo-U.S. relations to a new strategic level are being pursued afresh under the Narendra Modi regime after being shelved under the UPA government due to political compulsions. Of these, both sides are one step short of reaching an understanding on the Logistic Support Agreement (LSA), which gives US forces access to Indian bases for logistics support and vice versa. The three “foundational agreements” guide U.S. high technology sales to other countries.

Cargo demand jumps by eight per cent at Turkish Turkish Airlines saw its cargo volumes jump by more than eight per cent than last year as it added several new freighter routes. The airline saw cargo tons carried increase by 8.1 per cent year on year in 2015 to 704,570 tons. Cargo demand on flights to and from Africa recorded the largest percentage increase, jumping by 61.2 per cent on the previous year to 97,024 tons. Last year, it added freighter flights to Dakar and Kinshasa with A330F flights. Its largest business area was once again Europe, despite demand declining by 1.7 per cent on 2014 levels to 212,527 tons. Volumes to the Far East also declined, sliding by 0.2 per cent to 198,557 tons, while demand on North America routes was up by 17.6 per cent.

Road transport ministry seeks `13,000 crore soft loan The road transport and highways ministry is seeking a soft loan of `13,000 crore from multilateral agencies for its highway projects. It has approached Japanese International Cooperation Agency (JICA) for a long-term untied loan of `6,000 crore to part fund its National Highway Development Project (NHDP), an official said in a statement, adding that the remaining amount has been sought from Asian Development Bank (ADB) . “We need support for certain projects under NHDP from external agencies. The projects we would be undertaking are not high traction ones.” the official said in a statement. A soft loan from JICA means the roads ministry can get funds at 0.5 per cent interest rate for a period of over 25 years.

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Reliance to set up naval facility in Vizag

India Post opens shipping counters for eBay sellers

The Reliance Group will set up a world-class naval shipbuilding facility for strategic platforms at Rambilli near here with an investment of INR 5,000 crore. The group, which has hinted at a total investment of up to INR 10,000 crore in this segment, entered into a Memorandum of Understanding (MoU) with Andhra Pradesh Government. The memorandum of understanding to build the facility was signed between Reliance ADA Group Chairman, Anil Ambani and AP Chief Minister, N. Chandrababu Naidu. This was announced by its Chairman Anil D Ambani at the inaugural session of the AP Partnership Summit. Ambani said in a statement that “It will complement our existing facility at Pipavav in Gujarat, with a clear focus on building strategic assets for the Indian Navy.”

In yet another move to capture e-Commerce space, India Post has opened up exclusive counters at the Business Post Centres in Gurgaon and Faridabad exclusively for eBay India sellers. Through these exclusive shipping counters, eBay India sellers will be able to ship their international as well as domestic parcels. eBay India has over 65,000 sellers in India. India Post recently announced that they have clocked a revenue of over `1000 crore purely from eCommerce Cash Deliveries in first 9 months of current fiscal and are targeting `1500 crore by the end of the year.

Forbes & Co to sell CFS, logistics Shapoorji Pallonji Group firm Forbes & Company said in a statement that it will sell two container freight stations and logistics business to Transworld Group Singapore, on slump sale. “Under the current economic situation and industry outlook, the Board has accordingly granted its approval to the company to sell, transfer or dispose of its two container freight stations,” Forbes & Co said in a BSE filing.

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news

Snapdeal to invest in logistics

Work on Western DFC begins

Indian online marketplace Snapdeal, will spend more on logistics and technology to better compete with Flipkart and Amazon’s Indian unit, its co-founder said in a statement. Shopping online is becoming more popular in India due to the rising use of cheaper smart phones and e-commerce firms are struggling to cope with the growing demand and make faster deliveries in different parts of the country. The e-commerce market in India is expected to grow to $220 billion in the value of goods sold by 2025, up from an expected $11 billion this year, Bank of America Merrill Lynch said in a recent report. One area Snapdeal will focus on is to cut delivery times by investing in better data analytics and demand forecasting,” Rohit Bansal, Co-founder said in a statement. “We have done over 10 acquisitions and investments in the last one year, almost all of them in the field of technology or supply chain and payments,” he added.

Tata Projects Limited has commenced work on the `4328 crore project to build the 320-kilometer stretch of the western dedicated freight corridor, a dedicated freight line connecting Delhi and Mumbai. Tata Projects, along with Ircon International Limited and Mitsui & Co Ltd. of Japan will utilise automated track laying machines to complete the work quickly and efficiently. Segregating freight traffic from passenger traffic shall pave the way for high speed movement of freight, and is one of the most important Infrastructure projects taken up by Indian Railways. Implemented by the Dedicated Freight Corridor Corporation of India, the dedicated freight corridor is an ambitious programme of the Ministry of Railways to construct two corridors; the Eastern dedicated freight corridor from Ludhiana to Dankuni, and the western dedicated freight corridor from Dadri to Jawaharlal Nehru Port, Mumbai.

DB Schenker celebrates 20 years of operations in India DB Schenker India Pvt Ltd recently celebrated 20 years of successful operations in India. The company has introduced a new structure for regions to serve the customers even better through a centralised approach. It also integrates the last mile delivery components into their network for a seamless door-to-door global supply chain. Part of their commitment to the Indian market will be investing further in resources and bringing in the best practices in the supply chain, thereby remaining committed to customers by offering them the best solutions for their respective markets in automotive, aerospace, chemical, consumer, electronics, healthcare, industrial, marineparts, solar and semicon and retail through our global and regional competence centres. Oliver Bohm, CEO, Schenker India Pvt Ltd said, “India has and will continue to play a pivotal role in the growth of DB Schenker as an organisation. We have been flexible enough to offer customised solutions to customers in India, and we owe our success to them for the last two decades. I am thankful to our employees and senior management for their commitment, hard work and dedication, as we realise the vision of DB Schenker in India.”

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Flipkart ties up with dPronto Flipkart, a leading e-commerce marketplace, has tied up with dPronto, a start-up in the last-mile delivery space, to leverage the latter’s solutions in last-mile delivery across the country. This tie-up serves a dual objective for Flipkart, namely, offering dignified jobs to underprivileged youth in rural areas, through dPronto and it’s a group company, Empower Pragati’s network. Empower Pragati provides an uninterrupted supply of freshly trained logistics staff across 600 towns of India. These youth are from economically weaker sections of society and by gaining respectable employment in logistics with a definitive skill set which brings them a steady income, they are able to transform their own and their family’s lives. E-commerce logistics market in India is pegged to reach $ 5.1 billion by 2020.

AAI to promote cargo business at Chennai To promote cargo business, the Airport Authority of India has announced an incentive scheme in Chennai. “The incentive scheme launched by AAI would reduce the operating cost of the airlines when they operate cargo freighter aircraft. The scheme would go a long way in boosting the growth of cargo at airports and in reducing the cost of operating cargo freighters,” the officials at AAI said in a statement.

news

Railways reports fall in cargo traffic

Air cargo hub in Chennai likely

Freight traffic performance of Indian Railways (IR) remained weak for the second consecutive month in December 2015. It carried 94.6 million ton (mt) of revenueearning freight as compared to 95.5 mt in December 2014, translating into a year-on-year fall of 0.9 per cent. This resulted in a hit on the Railways’ freight earnings in December, which stood at INR 9,442 crore, down 3.4 per cent y-o-y. Last month, freight traffic stood at 87.6 mt, a slide of around 4 per cent from November 2014. Indian Railways saw a fall in volumes of most commodities. The sharpest fall of 9.9 per cent was witnessed in fertiliser freight. Railways handled 4.4 mt of fertiliser cargo during the month. Freight traffic of coal, the largest commodity carried, declined by a minuscule 0.3 per cent. The commodity’s freight volumes fell to 48.8 mt during the month. Coal traffic to thermal power plants grew by 0.5 per cent to 34.1 mt. Cement freight stood at 8.7 mt as against 9.1 mt in December 2014, decreasing by 4.2 per cent.

A Detailed Project Report (DPR) is being prepared by RITES Limited – a government of India enterprise for establishing an international air cargo hub at the Chennai airport. The Ministry of Civil Aviation had earlier nominated RITES Limited to prepare the DPR for cargo hubs in Delhi and Chennai and the report is expected to be submitted to the Ministry by January 15 this year, according to a statement. According to the Draft National Civil Aviation Policy, 2015, though air cargo had a high employment potential especially for semi-skilled workers, currently its volumes in India are extremely low as compared to other leading countries due to high charges and high turnaround time.

China to support India’s ‘Logistics hub’ China has expressed keen interest in extending support to Chhattisgarh government for developing India’s ‘Logistics Hub’ in the state. State Commerce and Industry Minister Amar Agrawal, had suggested Consul General of People’s Republic of China, MA Zhanwu that owing to its location in the heart of the country, Chhattisgarh state can be developed as ‘Logistics Hub of India’. The Minister discussed with delegates about the scope of Chinese investment in Chhattisgarh. The Consulate General said that a team of investors related to aforementioned fields will be sent to Chhattisgarh, who will study various aspects of industry and commerce. He also sought support from Chhattisgarh government for starting direct air service between China and Chhattisgarh. In the meeting, they discussed about positive impacts of Goods and Service Tax (GST) on India’s economy and investment. The delegation praised the state government for creating a favourable environment in Chhattisgarh for industrial development.

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Logistics cost must be lowered: VPT Chairman The logistics cost in India is too high at 18-19 per cent of the product cost and has to be brought down to the international average of 7-8 per cent for Indian goods to be competitive in the international markets, according to Visakhapatnam port Chairman, MT Krishna Babu. He said in a statement that the Andhra Pradesh Government was planning to establish a number of new ports along the coast to stimulate economic growth, but connectivity with the hinterland should also be improved. Evacuation of cargo from the ports was of the essence, he pointed out. He said Visakhapatnam port had undertaken a number of projects to augment its capacity and efficiency and the PPP projects were under progress.

India Kazakh freight link in pipeline A multimodal freight link between Kazakhstan and India through Iran can technically be operational since the sanctions on the Islamic Republic are now lifted. Ambassador of Kazakhstan to India, Bulat Sarsenbayev, said in a statement that the rail link until the Iranian port of Bandar Abbas was already established. However, he said, there were certain bottlenecks that were needed to be removed. “Kazakhstan railway authorities have given mandate to Adanis to work for two terminals at Mundra and Bandar Abbas. They are now doing the due diligence on the proposed projects,” he said.

news

Permit SEZ in the domestic market: Commerce Ministry The Commerce Ministry, in its Budget proposal, has asked the Finance Ministry to permit SEZ units to sell in the domestic market by paying concessional import duties in line with what is paid by India’s Free Trade Agreement (FTA) partners, sources said. In view of the steady increase in de-notification of SEZs and increased delay in implementation of projects, the Commerce Ministry has also asked the Finance Ministry to lower the Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) on units and developers in the forthcoming Union Budget.

Govt floats tenders for 3 new ports

WWL earns ‘Partner-level Supplier’ recognition Wallenius Wilhelmsen Logistics (WWL) has recently earned recognition as a Partner-level supplier for 2015 in the John Deere Achieving Excellence Programme. The Partnerlevel status is Deere & Company’s highest supplier rating. The Norway-based company was selected for the honour in recognition of its dedication to provide products and services of outstanding quality as well as its commitment to continuous improvement. Suppliers who participate in this programme are evaluated annually in several key performance categories, including quality, cost management, delivery, etc.

New PFT in Viramgam

The government will float tenders for three new major ports in Maharashtra, West Bengal and Tamil Nadu by March, entailing investment of `20,000 crore. Union Minister Nitin Gadkari said in a press statement. “I can assure you that we will issue tenders for these three projects which require an investment of `18,000-20,000 crore, by March and the work on the projects like breakwaters will begin by April-May.”

Multimodal logistics player Continental Warehousing Corporation (NhavaSeva) Ltd inaugurated a new private freight terminal at Sachana, Viramgam in Ahmedabad recently. The facility is a new logistic hub with three dedicated rail sidings capable of handling both containerised and bulk cargo. The terminal is capable of handling 125 to 130 trains a month. Warehouses aggregating to almost five lakh square feet, equipped with gantries and other handling equipment, offer significant storage options.

Maersk Line may resume services to Iran

UPS ties up with First Flight

Maersk Line has plans to resume services to Iran after the lifting of economic sanctions by the US and EU on the Persian Gulf country last week, reports quoted an official statement. However, it has not yet decided when, the statement added .As per the statement, the line is looking into how and when it can resume container transportation services to and from Iran.

UPS recently announced that First Flight Courier will become its authorised shipping outlet in India. This agreement will expand the reach of UPS’s international express delivery service through FFCL’s network in metropolitan and urban centres across India. This agreement will expand the reach of UPS’s international express delivery service through FFCL’s network in metropolitan and urban centres across India. “With FFCL becoming a UPS authorised shipping outlet, Indian customers will be able to book international shipments with FFCL, who will in turn make use of UPS’s global shipping network. This service expansion will support market growth by helping clients connect more quickly to global markets,” it added. “Demand for international express delivery service is on an upswing in India, with increasing penetration in cities and towns,” said Mark Martyn-Fisher, Managing Director, UPS India.

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news

Etihad launches green temperature-controlled dolly system

India’s top ports see 38 per cent decline in iron ore handling

Etihad Cargo has teamed up with the Masdar Institute of Science and Technology to launch a new design of temperature-controlled and energy-efficient air cargo container cool dolly system. The carrier says that the diesel-powered cooling systems on dollies used at many airports and ground handling operations use too much energy, are expensive to operate and often often have poor performance. The new design uses a custom made power bank that can be attached to solar panels for recharging; the temperature can be properly regulated while minimising power consumption. It also features thermo-electric module technologies and modified compressor units. The new cool dolly is designed for cargoes such as pharmaceuticals, livestock and perishables that need to be transferred between the aircraft and cargo warehouses.

Iron ore shipments handled by India’s top 12 major ports witnessed a sharp decline of 38 per cent to only about 8 million tons (MT) in April-December period of the current fiscal. The Centre-owned ports had handled 12.67 MT of iron ore in AprilDecember period of the last fiscal. Indian Ports Association (IPA), which maintains the cargo data handled by these 12 ports, in its recent report said that “percentage variation from previous year” in iron ore handling was as high as “37.94 per cent” in the first nine months of the current fiscal. According to the Association, the iron ore handled by these ports in the first nine months stands at 7.86 MT as against 12.67 MT in the same period of the previous fiscal.

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Supreme’s Thermal Insulation Division offers efficient solutions Supreme’s Thermal Insulation Division offers solutions in the following areas: • Ducting insulation in hospitals, shopping malls, airports, PEBs, IT/BPO, etc. • Pipe insulation for split AC tubings, chiller piping, drain pipes, chilled water lines, etc. • Floor insulation in server rooms, data

centres, medical and diagnostic centres, and control rooms for petrochemicals. • Underdeck insulation in PEBs, textile units, malls, airports, etc.

• Overdeck and wall insulation in commercial buildings, residential buildings, cold storages, etc. ‘INSUreflector’ offered by Supreme is made of polyethylene Air bubble film (ABF) laminated with aluminum foil on one or both sides. The bright surface of the aluminum foil reflects 96 to 99 per cent infra-red radiation received by the surface of a heated slate roof. It protects the building from undesirable heat gain. The thin reflective foil having low emissivity and high reflectivity when installed with an air space restricts the transfer of far-infra red radiation, making it an ideal material to be used for underdeck application. ‘INSUshield’ is a non-fibrous, fire retardant, closed cell, tri dimensional, chemically cross-linked polyethylene foam XLPE. An ideal environment-friendly insulation material, with a perfect solution for all your insulation needs for ducts, roofs, pipes, vessels, etc. The divergent advantages

of ‘INSUshield’ are ease of installation, low thermal conductivity and good moisture and vapors resistance preventing microbial growth and optimum condensation protection.

Reflective insulation differs from conventional mass insulation in the following: 1. Reflective insulation has very low emittance values ‘E-values’ (typically 0.03 compared to 0.90 for most insulation), thus significantly reduces heat transfer by radiation 2. A reflective insulation does not have significant mass to absorb and retain heat

Gandhi offers High Speed Doors Gandhi Automations Pvt Ltd offers sturdy and dependable High Speed Doors. Designed and manufactured by Gandhi Automations, these doors are the ideal solution for medium and large entrances. The doors are manufactured with European collaboration and technology with innovative and creative engineering. Fast moving functional and reliable doors are needed in industrial and commercial contexts. Gandhi designed and manufactured High Speed Doors are versatile and solid ensuring long-lasting reliability. The modular structure of the curtains, assembled and joined by anodised aluminium extrusions, provides for a wide range of polyester sections available in a variety of colours. Wide, full-width window panels ensure a safer traffic and allow more light in. Their fast and easy replacement, in case of accidental tearing, saves money and time. The alternating metal tubular structure inserted ensures high wind-resistance. Prime High Speed Doors are the ideal solution for internal and external entrances and effectively operate in any situation, even when strong winds are blowing and in rooms with high volume traffic. Sturdy and dependable, prime is the intelligent door for medium and large entrances. High Speed Doors for external entrance are equipped with spring steel wind lock in curtain pocket that ensures silent door travel, higher wind loads and curtain stability.

february 2016 - CargoConnect 97

FORTHCOMING EVENTS Keep your dates free on February 18, 2016 for the PHD Aviation Summit 2016 to be held at PHD House, New Delhi.

Participate in AIR CARGO INDIA exhibition going to be held on Feb 23-25, 2016 at Grand Hyatt Mumbai, India.

Break Bulk, Heavy Lift & Project Forwarding exhibition is going to be held on February 18-19, 2016 at Hall VI, Bombay Exhibition Centre, Goregaon Mumbai, India.

Book your tickets for Manufacturing Supply Chain Summit 2016 going to be held on February 18-19, 2016 at Westin Mumbai Garden City, Mumbai, India.

The India Logistics Asia Exhibition will be held at Bombay Exhibition Centre, Goregaon (East), Mumbai from May 19-21, 2016.

The ‘India Warehousing Show’ is scheduled to be held from June 8-10, 2016 at Pragati Maidan, New Delhi.

The Frost & Sullivan Sustainability 4.0 Awards will be held on May 27, 2016 at the Hyatt Regency, Mumbai.

Chennai is going to witness the Logistics, Storage, Warehousing and Material Handling Expo on June, 24-26, 2016 at Chennai Trade Centre.

Come Setpember and we can be a part of WLS Expo 2016 at Bombay Exhibition Centre, Mumbai, which will be a platform for manufacturing and distribution buyers and dedicion-makers.

98 CargoConnect - february 2016

events

Lufthansa Cargo gets EMS recognition Lufthansa Cargo gets recognition for Environmental Management System (EMS) . The company has received the worldwide acknowledged ISO14001 certification. Lufthansa Cargo has already been ISO certified at all German stations since 2010, and has now achieved worldwide certification. “As an airline, we have a special responsibility to our environment. We live up to this responsibility through our ambitious environmental targets. For example, we want to reduce our specific CO2 emissions by 25 per cent by 2020. Global certification of our EMS is another milestone in this. We are on the right track and won’t let up in our efforts,” said Dr KarlRudolf Rupprecht, Board Member Operations, Lufthansa Cargo.

DTDC starts ‘Last Mile with a Smile’ DTDC Express Ltd has launched ‘Last Mile with a Smile,’ a smart track app. Through this initiative, the top ‘C’ level management will be leading the DTDC delivery line-up from the front to personally deliver packages to consumers every month. The announcement was done amidst flagging off this initiative which will enable delivery persons to effectively manage tracking of the packages throughout the delivery cycle. The Smart Track app will generate near-instant delivery updates and shipment tracking to all stakeholders including franchisee, DTDC managers & customers.

events

ACCD organises its most awaited event of the year Air Cargo Club of Delhi (ACCD) recently organised its annual ball in New Delhi with an overwhelming turnout of a large number of people from the cargo fraternity. The glittering event was packed with dazzling music and dance performances by renowned artists, along with immaculate arrangement for cocktails and dinner, which gave the event an out-of-the-world feel. Guests and club members who attended the annual ball along with their spouses were seen enjoying the evening. Winners of the lucky draw took several expensive items home as well and many won air tickets to spectacular destinations. The club which was formed in 1977 has regularly been conducting the annual ball.

february febuary 2016 - CargoConnect 99

events

Tripath Logistics awarded

CRWC publishes Shabdawali

Tripath Logistics recently won the New Enterprise of the Year (International Logistics) at ‘LEADERS AWARDS 2015’ .Winning such an award during the very first year of its inception itself speaks volumes for the achievement of the company. The award was conferred on the company at a function organised by 24 MRC and IBN7 news channel on January 23, 2016 at Hotel Ashok, New Delhi.

The Union Minister of Consumer Affairs, Food & Public Distribution Ram Vilas Paswan, recently released ‘CRWC Shabdawali’ published by Central Railside Warehouse Company Limited, (CRWC). The Shabdawali contains technical terms pertaining to the logistic industry, along with information about CRWC in both English and Hindi. On this occasion, senior officials of the ministry and CRWC were also present.

Maini participates at CII MHE Summit 2015 in Mumbai Maini Materials Movement recently participated and exhibited its material handling and warehousing solutions at CII MHE summit 2015 at Bombay Convention and Exhibition Centre (BCEC) in Mumbai. Yale Maini Reach truck and Diesel forklift truck along with the Armes Maini storage and racking modules were on display showcasing comprehensive warehousing solutions to the visitors. The group has a strategic alliance with the NACCO Materials Handling Group (NMHG); USA for the sale and marketing of the Yale brand of counterbalance forklift trucks, reach trucks, order pickers, very narrow aisle equipment and the manufacture of the RCF series and MR series in India. This partnership is the pathway to the amalgamation of latest technology and manufacturing practices in the field of materials handling equipment in India. Armes Maini (JV between Maini Group and Ferretto Group, Italy) offers comprehensive storage solutions for a large spectrum of storage requirements across industry verticals and is a leading brand in Indian storage industry.

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Chief Guest

Aviation

Mr. Ashok Gajapathi Raju Pusapati Hon’ble Union Minister of Civil Aviation, Government of India

Summit-2016

Guest of Honour

Indian Civil Aviation -Benefits beyond Borders February 18, 2016 @ 9.30 a.m; PHD House, New Delhi

Mr. Rajiv Nayan Choubey, IAS

Secretary, Ministry of Civil Aviation Government of India

Airlines could be goodwill ambassadors to bring nations and people together! FOCUS AREAS & TARGET STAKEHOLDERS I.

Regional & Remote Connectivity:‐ Key Drivers & Initiatives:‐ • States Perspective • MOCA & Airports Authority of India (AAI) • Airlines Perspective ‐Full Service Carriers & Low Cost Carriers • Impact on Tourism Growth

II. Global Best Practices ‐ Practical Solutions:– • • • • • •

Airlines Perspective International Aviation Associations Original Equipment Manufacturers (OEM's) Manufacturers & MRO Industry Aircraft Acquisitions & Fleet Management Companies Other Relevant Stakeholders

OBJECTIVES OF THE SUMMIT:

III. General Aviation Key Issues:‐ National Civil Aviation Policy‐NCAP2015 • • • •

NCAP2015 ‐Impact on the Industry Suggestions from the General Aviation Sector Scheduled & Non‐ Scheduled Operators Impact on the Industry & Tourism Sector

IV. Cargo Sector: Vital Role • • •

International, Domestic & Cargo Sector Perspective E‐ commerce Sector Perspective Scope of Future Business Opportunities

Supported By

Outdoor Media Partner

Media Partner

For Registration & Sponsorship please contact : Bhavna Singh (M): +91‐98110‐27759; (E): bhavna.singh@phdcci.in Narender Singh Jakhar (M): +91‐70655‐09000; (E): nsjakhar@phdcci.in PHD CHAMBER OF COMMERCE & INDUSTRY

PHD House, 4/2 Siri Institutional Area, August Kranti Marg, New Delhi – 110016 Ph: 011‐26863801‐04, 49545454, 49545400, Fax: 011‐26855450, 49545451, E‐mail: Phdcci@phdcci.in Website: www.phdcci.in

The PHD Aviation Summit‐2016‐ “Indian Civil Aviation ‐Benefits beyond Borders” aims to provide a mega platform for both Indian and global players to tap the immense opportunities arising in the fast growing Indian aviation market and for Indian players to interface with their global counterparts. The programme has been tailored to foster solution based discussions among all aviation stakeholders, i n cl u di n g a ir po rts , air line s , regulators, investors, OEM’s,MRO Industry and much more. The Summit will address business‐ critical issues and solutions, new regulations and policies, latest developments and issues of General Aviation, while providing innovative thinking for future developments.

guest column

Logistics Industry: Present Scenario & Expectations By Prahlad Tanwar

he year 2015 was a landmark one for the Indian transport and logistics sector with the industry gaining prominence due to the dawning recognition of its role in the growth of e-commerce retail segment and optimism around the imminent GST rollout. Logistics emerged as a topic of discussion across boardrooms and drawing rooms, with this spotlight enabling the wider communities to appreciatethe challenges faced by the operators and stakeholders associated with the sector.The enhanced visibility and understanding of the sector among a wide range of communities is expected to significantly catalyse support and innovation to drive the evolution of the Indian logistics sector in the coming years. The past year witnessed the announcement of several transformational projects by the Indian Government, for example, Union Minister for Road Transport and Ports, Nitin Gadkari unveiling the investment plans worth INR 10 trillion in various projects and initiatives up to 2019, which is expected to amplify the scope of this sector.

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Roads The government announced an investment of INR40,000 crore for roads in the 2015â&#x20AC;&#x201C;16 Union Budget, including plans for the completion of one lakh kilometre of roads currently under construction, plus approving and building another one lakh kilometre of road to connect all unconnected habitations.The government plans to develop a total of 66,117 km road i.e., constructing 30 km a day from 2016 under the National Highways Development Project (NHDP), Special Accelerated Road Development Programme in Northeast (SARDP-NE) and Left Wing Extremism (LWE) schemes. Maritime The maritime industry gained prominence in 2015 with various initiatives taken up for the development of the segment. The government plans to develop 10 coastal economic regions as part of the Sagarmala project and is further taking measures to develop inland waterways as a mode of water transport. The government has estimated an investment of INR 35,000 crore over the next two years on the 101 additional inland waterways to be developed as National Waterways for navigation. Inland waterways transportation offer game-changing opportunities in the Indian context, especially to meet the demand for bulk transportation to nearby areas, along the coast vis-Ă -vis other modes of transport. Additionally, the government has taken measures to improve operational efficiency through mechanisation, deepening the draft and speedy evacuations. Railways Various initiatives have been proposed including increasing annual freight carrying capacity, developing 400 new railway stations and the introduction of a centrally managed Railway Display Network in over 2,000 stations by 2017. Further, revamping

the existing network by introducing highspeed trains and increasing the existing speed of railway corridors are on the anvil. The government is also looking at developing heavy-duty, high-speed, extra-wide and doubly stacked dedicated freight corridors. Aviation The growing emphasis on international trade and regional connectivity, advanced IT interventions, relaxation in FDI regulations and increase in e-commerce is driving the growth of the Indian aviation sector. India aims at becoming the third largest aviation market by 2020 and the largest by 2030. The government has projected a requirement of about 500 brownfield and greenfield airports by 2020. Further, the government is increasing the participation of the private sector in the construction of airports via various PPP models, where the states support by financing, offering concessional land allotment and other incentives. As India prepares to evolve to the next level of the logistics growth trajectory, the regulatory policies and infrastructure investments could be enhanced to keep pace with the changing dynamics of the economy. While it is imperative for the policymakers to accelerate implementation, other stakeholders, including service providers, users and industry bodies,would be required to work in collaboration to prepare a roadmap in advance to provide the required impetus to the sector. Looking at 2016 and beyond, the proposed goods and services tax regime, and the boom in e-commerce are expected to alter the landscape in warehousing, supply chain management and third-party logistics business. While the outlook for the global logistics market for 2016 appears to be challenging, the Indian market presents a relatively optimistic picture for the forthcoming year. (The writer is the Director, Transport and Logistics, KPMG in India)