CargoConnect January 2016 print by Surecom Media

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VOL VII ISSUE II JANUARY 2016 `20

v a i g a N i t a i h

2016

p p l y u S C

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SPECIAL FEATURE

Roadmap to the Future

Cold Shouldered ‘Gold’ Chain

E-AWB: Cutting Out the Paper Trail

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Contents

Volume VII • Issue II • january 2016

Wishing our readers a very Happy New Year

Editor and Publisher Smiti Suri Executive Editor Samaya Chhabra Assistant Editor Dr Kirti Mudgil Pathak Principal Correspondent Ritika Arora Bhola Roselin Kiro Special Correspondent Joydeep Banik Deepannita Chakraborty

20 COVER STORY

Supply ChaiNavigation 2016

SPECIAL FEATURE Roadmap to the Future

FEATURE

Feature Writer Kiran Sabherwal Director Marketing Ajeet Kumar Manager Marketing Niti Chauhan Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad Marketing Support Suman Kumari Administration Vipin Marwah Lavish Thakur

E-AWB: Cutting Out the Paper Trail ..44

Cold Shouldered ‘Gold’ Chain .....52

NEWS ...........................6-10 & 76-78

GUEST COLUMN

We bring you a wide spectrum of updates

Neelam Singh, Senior Analyst, ARC Advisory Group .............................64 Chander Agarwal, Joint Managing Director, TCI .................................90

that will keep you informed about the industry’s plans, performance and initiatives.

INTERVIEW Martin Roos, MD, India and Bangladesh, DSV Air & Sea Pvt Ltd .........................66

showtime ...................82-83

Johnson MRV, Chief Sales Officer, KION India Pvt Ltd ........................................68

EVENTS .........................84-89

Anand Yedery, Regional Cargo Manager, Cathay Pacific Airways .........................70

supply change ...............74

Dr Rajendra Pratap Singh, Chairman, Yogayatan Group .....................................72

TOTAL PAGES: 92 (inclusive of covers)

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

Multimodal Logistics Park at Visakhapatnam

Government to plug GST loophole

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the exchange of AAI land measuring 11.45 acres at Visakhapatnam Airport with an equivalent area of land offered by Visakhapatnam Port Trust for setting up of Multimodal Logistics Park (MMLP) by CONCOR at Visakhapatnam. Handing over of 98 acres for the Container Corporation of India (CONCOR) project involves exchange of 11.45 acres of land between Visakhapatnam Port Trust (VPT) and Airports Authority of India (AAI). The exchange of land measuring will be beneficial to both AAI and VPT. The land offered for exchange by VPT is in continuation to existing AAI land and will be useful for AAI, in view of future developmental plans for Visakhapatnam Airport. The setting up of Multimodal Logistics Park and other customer related facilities by CONCOR will also help in substantial development of Andhra Pradesh by enhancing the cargo handling capacity and development of an integrated rail-road logistics hub, thereby facilitating a boost in the economy and trade of the state.

The Government is said to be devising a strategy to close off a loophole in the proposed Goods and Services Tax (GST) that could hurt its ‘Make in India’ initiative to turn the country into a manufacturing hub to generate jobs and boost economic growth. Profit margins on imported goods are set to rise as GST would allow a larger share of input credit to importers compared with the current regulations. Indian manufacturers would be at the receiving end and the Indian market will be flooded with imported goods, which will be cheaper than made-in-India goods. This will strike at the root of the ‘Make in India’ campaign. The Government wants to ensure that importers’ margins are kept in check. Senior officials, including Hasmukh Adhia, Financial Services Secretary recently discussed the implications of GST on importers.

Softlink to offer eAWB connectivity to over 90 airlines Logistics management software specialist Softlink Global is offering customers full Electronic Air Waybill (e-AWB) connectivity to over 90 airlines through the Worldwide Information Network (WIN) online platform. Independent forwarders working with Softlink Global’s cloud Enterprise Resource Planning (ERP) software Logi-Sys are participating in e-freight and benefitting from cost savings and enhanced efficiency. Philippines-headquartered forwarder CTSI Logistics Phils is making shipments using the platform. “By switching to Logi-Sys supported by WIN, we have been able to work more efficiently”, says Gerry Inandan, General Manager, CTSI Logistics. Softlink Global CEO and MD, Amit Maheshwari says, “The benefits of Logi-Sys coupled with e-freight in terms of cost savings, increased efficiency and compliance with new advance data manifest requirements are significant.”

CargoConnect - JANUARY 2016

Railways to provide cargo wagons to Coal India The Indian Railways recently signed a memorandum of understanding (MoU) with the Coal India Ltd (CIL) for providing cargo wagons for the exclusive use of the state-run firm. According to the Ministry of Railways, the MoU will lead to the procurement of 2,000 wagons or 33 rakes in the first outgo, which will facilitate in increased evacuation of coal from CIL. Speaking on the occasion, Railway Minister Suresh Prabhakar Prabhu said that this is “a path-breaking agreement which will result into speedy supply of wagons for coal loading in dedicated circuits”. Stating coal as mainstay of the Railways, the minister informed that the two-third of its revenue comes from the coal. The agreement was signed in the presence of Prabhu, Union Coal and Power Minister Piyush Goyal, Union Minister of State for Railways Manoj Sinha, among others. Under the BJP government, Coal India is targeting production of one billion tonne of coal by 2020. The remarkable part of this strategic partnership is that the wagons will be procured by Indian Railways on behalf of CIL.

CWC to invest in storage facility The Central Warehousing Corporation (CWC) is planning to add 1.66 lakh tonnes of additional storage capacity with a financial outlay of `181 crore this fiscal. The corporation has given `20.21 crore as dividend to the Food Minister Ram Vilas Paswan for 2014-15. “CWC has planned to construct storage capacity of about 1.66 lakh MT with a financial outlay of `181 crore,” Paswan said in an official statement. The corporation had achieved another record turnover of `1,562 crore during 2014-15 as against of `1,528 crore achieved in the preceding fiscal. It also plans to commence operations of Private Freight Terminals at its rail-based facilities at Bamanheri in Uttar Pradesh and Nabha in Punjab.

News

‘Make in India’ can’t be realised till logistics costs are reduced: Govt Citing the ‘success stories’ of Europe as well as China in the use of waterways, Shipping Minister Nitin Gadkari said India is lagging behind and outlined how the government is now developing national waterways to cut logistics cost and help developing smart townships along the rivers. Gadkari said that his ministry is working to develop three more major ports besides the existing 12, as the aim is to reduce the logistics cost with a view to promote exports, generate employment, boost tourism and growth. Responding to Lok Sabha members’ questions over funding of ambitious waterways projects, the minister said he is aiming to garner `1 lakh crore through innovative methods, which include `50,000 crore from World Bank, investment of profits of shipping PSUs into a subsidiary company and obtaining dollar loan at cheaper rates, besides seeking funds from the Budget. “Make in India dream cannot be realised if logistics cost are not reduced. So waterways are being given a priority. We will work with cooperation of states,” Gadkari added.

DB Schenker opens 2nd largest warehouse in India Schenker India Pvt Ltd, a part of DB Schenker, the transport and logistics division of Deutsche Bahn AG, has announced the opening of its biggest warehouse in India at Bhiwandi near Mumbai in the western region. The 172,841 sq ft (approx. 16,000 sq m) facility begins the operation with a staff of around 60 people by providing state-of-the-art warehousing operations for palletised and non-palletised cargo to the city and nearby areas. Two other large Schenker Logistics Centres covering 3,62,000 sq ft (33,400 sq m) space are already operational in the area with modern supply chain capabilities. DB Schenker customers in the western region of India will now be served even better with a shorter response time, availability of products and seamless last mile deliveries to the destinations. Strategically located off National Highway no 3(Mumbai-Nashik Highway), the logistics centre features uninterrupted power back-up, advanced warehousing management and distribution system.The new warehouse management system facilitates customers with analysis of product supply, forecast and demand fulfilment, real-time data input, interface capabilities, web order placing, and many other customised functions ensuring better visibility. “The new warehouse will enhance DB Schenker’s supply chain competence for key industries like healthcare, electronics, consumer, retail and aerospace in the western region,” said K Sankar, Director (West India), Schenker India Pvt Ltd.

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News

DMIC, NEC set up logistics data bank

Ethiopian starts freighter operation to Bengaluru

Delhi Mumbai Industrial Corridor (DMIC) Trust and Japanese IT major NEC Corporation recently signed a shareholders’ pact with 50:50 equity participation to establish a logistics data bank (LDB). The LDB will be operated by a special purpose vehicle that DMIC and NEC will jointly run. It will handle the tracking and viewing of container movement across all ports to the inland container depots (ICDs) and end-users. Called DMIC Logistics Data Bank, the LDB is expected to improve competition, reduce transportation lead time and cost by sharing container movement information among all agencies in the supply chain using an IT-based platform. Alkesh Sharma, CEO, DMIC Trust said,“This project would be an overarching solution that will integrate the information available with various agencies across the supply chain to provide detailed real time information within a single window.” The project has been developed after extensive consultations with the stakeholders and support from Ministry of Shipping, Jawaharlal Nehru Port Trust (JNPT), Ministry of Railways, Tariff Authority for Major Ports, National Highway Authority of India, Indian Port Association and the Director General for Foreign Trade, said a press release.

Ethiopian Airlines has announced that it has started freighter flights to Bengaluru, the fourth destination in India, in addition to Mumbai, New Delhi and Chennai. Fitsum Abady, MD, Ethiopian Cargo, said, “Ethiopian is growing fast with cargo a key part of its offering. Our Vision 2025 strategy covers global growth, but our focus is comparatively more to and from Asia, both in terms of frequency and in number of Cargo potential origins to Africa.” Tadesse Tilahun, Regional Director-India Sub-Continent, said, “Bengaluru is an important sector for us since it is a hub of IT and biotech sectors, apart from housing various MNC set ups. Ethiopian Airlines wanted to capitalise on this opportunity by adding Bengaluru as the 4th destination in India in addition to Mumbai, New Delhi and Chennai.”

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SPECIAL feature

Roadmap

to the Future

12 CargoConnect - JANUARY 2016

Special Feature

From traditional ‘godowns’ to smart well-automated ‘warehouses’–warehousing in India has witnessed a great revolution over the last decade. Earlier, warehousing in India was literally a synonym for a

inside Warehousing Industry Way to the future The Growth enabler

typical four-walled structure of sub-optimal size. The traditional ‘godown’ had poor lighting and ventilation, lacked inventory management and racking systems and technology solutions such as RFID and WMS were unheard of. But in modern times, we have smart automated warehouses with world-class technology and infrastructure. CargoConnect talks to experts who feel the industry has a great growth potential and a very bright future

lthough a lot has been said and written about the solutions for the irksome issues and challenges prevailing in the Indian warehousing industry like infrastructure, land acquisition, lack of skilled manpower and market fragmentation, etc., warehousing and logistics experts still foresee a great growth potential and a bright future. According to statistics, the size of the Indian warehousing industry, at present, is USD 19 billion, and is growing annually with over 10 per cent. Experts predict that by the year 2020, the warehousing sector will witness many positive changes – it will be much more organised, technologyfriendly and will have better infrastructure and connectivity. Going by reports, this significant growth in the revenue receipts of the warehousing industry is mainly due to the growth of industrial manufacturing and development, commodity markets and retail industry. Considering the great growth potential, the drivers of the warehousing industry are now looking forward to building their base through Logistics Parks and Free Trade Warehousing Zones (FTWZ) of which warehousing is the key component.

JANUARY 2016 - CargoConnect 13

SPECIAL feature Ramesh Krishnan Business Head-Warehousing & Contract Logistics, Distribution Logistics Infrastructure Pvt Ltd There is great scope for warehousing industry and in fact for entire supply chain industries. There would be great demand for supply chain professionals. Warehouses will go vertical and more sophisticated and it will be like running factories and hotels.

Indian Container Freight Stations (CFS) and Inland Container Depots (ICD) market is also expected to grow in the coming years. The development of dedicated freight corridors are believed to improve the supporting infrastructure for the CFS/ICD industry proving to be a major growth driver in the coming years. E-commerce industry is also likely to get a big boost in the coming years thereby improving the overall efficiency and working of the Indian logistics and warehousing industry. Infrastructure development and

investment will be the key for the booming e-commerce logistics which would require high investments from the companies so as to meet the ever increasing demands. According to a report by Ernst & Young and the CII Institute of Logistics, the size of the Indian warehousing industry, across verticals, is estimated to be around `560 billion. While warehouses dealing with agricultural and horticulture products account for about 15 per cent of the total warehousing industry, cold storages have a share of about 16 per cent. Warehouses catering to industrial and

retail players hold the maximum share, at 55 per cent. ICDs and CFSs, which directly deal with goods that are meant for export and import, account for the rest 14 per cent share. In fact, customs-bonded warehouses play a key role in faster shipment of export consignments or clearance of imported goods. Observing the same, Ramesh Krishnan, B u s i n e s s He a d-Wa r e hou s i n g a nd Contract Logistics, Distribution Logistics Infrastructure Private Limited (DLI) says, â&#x20AC;&#x153;Warehousing and the entire supply chain

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SPECIAL feature K U Thankachen Managing Director, CRWC Logistics is a fast growing industry and contribute substantially to the overall economic growth of the country. But it is still an unorganised industry. With GST, e-commerce and many new drivers coming in, we are expecting high growth.

are currently in its best stage. Till recently, supply chain was nothing more than transportation and godown keeping and was merely part of the commercial function and the only role of commercial guys was to do vendor negotiation, decide on warehouse location and transaction process based on how tax can be saved. With homogeneous products, often from a common source of procurement and hence near same pricing, the differentiator is mainly marketing, branding and supply chain solution, which play a very pivotal role in the products’ success. It is important now to ensure that not only is stock made available to the user at the fastest possible time, but also at the cheapest possible cost.” He stresses that with increased consumption beyond the capacity of city warehouses, increasing real estate cost and new town planning regulations making it difficult to do warehousing in the city, there is requirement for bigger, modern, long term vertical warehouses. “There is requirement of solution design but the commercial team does not understand this and there is need for hard core supply chain professionals in the company who are now calling the shots in board rooms as well. With the entry of modern, organised retails and now big ecommerce companies, we will need more and more of modern warehousing and vastly improved supply chain solutions, and hence the prospect for warehousing and supply chain professionals is extremely bright and will remain in high demand for a long time to come. It is time to upgrade our capability to meet the technological advancement that is going to penetrate this industry and plan a rewarding career for ourselves,” states Krishnan. On a positive note, Krishnan affirms that there is a great scope for the warehousing industry and in fact for the entire

16 CargoConnect - JANUARY 2016

supply chain industry. “There would be a great demand for supply chain professionals. Warehouses will go vertical and more sophisticated and it will be like running factories and hotels. Accordingly, the qualities and skills of manpower would also get greatly upgraded. There will be great focus on infrastructure,” he assures. Focusing on the sizes and locations of warehouses, Martin Roos, MD, India & Bangladesh, DSV Air and Sea Pvt Ltd, elucidates, “In terms of the locations, sizes from what DSV has experienced in the last couple of years, I see an increase in the demand for warehouses. Personalised facilities have become the need of the hour. We require skilled labours. We will continue to see a requirement from global players to have big and small warehouses being closer to the consumer. This will give a huge growth to contract logistics.” Talking about smart automated warehouses, Roos adds, “It is something that I have seen within DSV only within Europe and the US. If the warehouses are fully automated, it will cut down human cost but it is worth keeping in mind that it requires a large investment. We have taken this initiative with lots of clients and are hopeful to see if there is possibility to build the same here in India.” Roos believes there are ample opportunities for the Indian warehousing industry. “In the warehousing industry, you have to deal with some kind of consolidation. It’s too fragmented as of now, which means there is not enough control in terms of maintenance, safety, cleanliness. These are the things that make an Indian warehouse different. A better control of warehousing industry will be beneficial for everyone,” he adds. Focusing on the emergence of modern warehouses, Dilraj Gandhi, Director, KPMG highlights, “ In the coming years, significant changes are envisaged in mod-

Exhibit 4: Industrial Warehousing space in India (Mn Sq Ft) 48 0

475

47 0 46 0

450

45 0 44 0 43 0 42 0

420

41 0 40 0 39 0

FY 11

FY 12

FY 13

Source: EY Industry analysis, Crisil Report on Warehousing

ICDs and CFSs, which d i rect l y d ea l wit h goods that are meant for export and import, account for the 14 per cent share. In fact, it’s the customs-bonded warehouses that play a key role in faster shipment of export or clearance of imported goods.

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SPECIAL feature Dilraj Gandhi Director, KPMG In the coming years, significant changes are envisaged in modern warehousing. The vertical heights of warehouses will be used appropriately with the usage of right sensors, identification devices and material handling techniques. It will be multimodal and multi-industry warehouses within the same campus.

transportation of goods and services to the customers will also improve the overall supply chain. Gandhi further shares that the things that restrict the growth of the industry are the issues of land acquisition, lack of skilled manpower and lack of investments. “Industry is not ready to pay. They have to trust on the fact that smart automated warehouses are the future. Apart from this, we need to have skilled manpower and they should be trained and motivated as considering the present scene of the Indian warehousing industry not many are interested in working in the warehouses. Also, getting land is problematic and a very expensive affair. We can have an automated warehouse in Delhi, but getting land in Delhi is not easy and

Exhibit 2: Current warehouse industry size with sub segments in FY13 16 ,00 0 14 ,00 0 Industry S ize (INR bln)

ern warehousing. The vertical heights of warehouses will be used appropriately with the usage of right sensors, identification devices and material handling techniques. It will be more multimodal and multi-industry warehouses within the same campus.” Further explaining multi-utility warehouses, Gandhi continues, “By multi-utility warehouses are a combo of general warehouses and industrial warehouses. They have facilities for perishable products like temperature and humidity control systems. We will see more of inventory management, customised packaging and last mile connectivity and delivery.” Gandhi stresses that technology will grow manifold in the coming years, “There are two types of technol-

12 ,00 0 10 ,00 0

8400 308

8, 000 6, 000

700

4, 000

560

4340

2, 000 0 Inventory Carrying Admin Warehousing Transport

Cold Store Industrial/retail CFS/ICD Agri

Source: EY Analysis, Crisil Report on Warehousing

continues, “Our operations have been limited to the rail side warehouses. Out of 22 terminals allocated under the MoU with the railways, 18 have been made operational. Railways have approved 10 other new terminals with temperature-controlled facilities. It is a huge challenge to plan and execute the new projects. We are also exploring warehousing opportunities in different areas like bulk silos for food grains and cement, handling of steel, automobiles, parcel traffic and cold chain.”

The Growth Enabler ogies – Information Technology and Operational Technology. Operational technology is much more mechanised. It comprises racks, forklifts and other tools which merge with IT and work at its best. Focus is also on providing value-added services. Industry is also expecting Goods and Service Tax (GST) by next year as it will bring many positive changes and things will be more sorted,” adds Gandhi. Gandhi reiterates that emergence of the e-commerce market and quick

expecting the same technology in rural areas is difficult. Therefore, these things need to be worked out.” Meanwhile, K U Thankachen Managing Director, CRWC shares, “Logistics is a fast growing industry and contributes substantially to the overall economic growth of the country. But, it is still an unorganised industry. With GST, e-commerce and many new drivers coming in, we are expecting high growth.” Talking about the operations of CRWC, he

18 CargoConnect - JANUARY 2016

Technology has contributed the most to the growth of the warehousing industry. Increased usage of modern and advanced systems like Automatic Identification and Data Capture (AIDC) technology, Real Time Locating Systems, Adoption of Warehouse Management System (WMS), RFID, Quick Response (QR) Code, bar code has led to better tracking of cargo, seamless distribution of consignments and optimum utilisation of resources in the logistics and warehousing industry. Such technologies have become significant for the collection of applications and automated data that helps warehouse operators keep a track of goods coming in or going out of their warehouses. IT-driven solutions are becoming effective in increasing the competitiveness of the warehousing industry.

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cover story

Supply ChaiNa After observing an influential growth in 2015, the Indian logistics industry is looking forward to another promising year with high hopes, master plans and aspirations. Though the past year was a mixed bag of profit and loss for the logistics sector in India, there are speculations that the New Year will bring in merrier days with positive changes aiding a smart economic turnaround. Roselin Kiro and Joydeep Banik talk to industry stalwarts to know their wish list for 2016 and reveal the secrets of their â&#x20AC;&#x2DC;Crystal Ballâ&#x20AC;&#x2122;

20 CargoConnect - JANUARY 2016

cover story

vigation 2016

JANUARY 2016 - CargoConnect 21

cover story

ogistics is a critical sector in developing economies like ours and its excellence is increasingly becoming a differentiating factor for business e n v i r o n m e n t (s) . Come 2016 a nd India’s logistics sector i s p oi se d for accelerated growth, led by GDP revival, e-commerce penetration, impending GST implementation and other initiatives like the ‘Make in India’ programme. The Union Budget 2015 gave a thrust to the logistics industry. The new government’s presentation of the budget for the year was preceded with high expectations not just for the country, but also for warehousing, supply chain and the logistics industry. There were specific announcements like increasing 24X7 customs clearance at ports and airports with a solid intent to implement Goods and Services Tax (GST) in the coming year. Committing to expeditiously rolling out the GST, Finance Minister Arun Jaitley recently said that the solution to issues relating to

22 CargoConnect - JANUARY 2016

the comprehensive indirect tax regime may be finalised in the current year itself. There are high hopes of bringing about a final solution in the course of this year with the approval of the legislative scheme which enables the introduction of GST. This would streamline tax administration and avoid harassment of business to result in higher tax collection both for the centre as well as for states. ‘Make in India’ programme, which is a buzzword in the logistics sector, is a lion’s step to facilitate investment, foster innovation and build best-in-class manufacturing infrastructure. Rapid urbanisation will present a fair share of challenges and opportunities for businesses to explore new business models and supply chains. Growth in population will be accompanied by a surge in the demand for goods and services, which in turn will create logistics-related and environmental challenges, necessitating economically feasible and sustainable solutions. This feature tries capturing snapshots of the existing best practices in the supply chain arena and the potential trends/drivers and solutions which are set to transform the industry at large in the coming years.

inside What’s in store in 2016 GST-The game changer Make in India: THE LION’S STEP Way Forward

cover story Manu Raj Bhalla Director & Global Head, Contract Logistics & Supply Chain, Freight Systems With the liberalisation of FDI in various sectors, multinational companies will bring their global best practices. So, logistics companies like Freight Systems, who are willing to embrace global supply chain practices with modern infrastructure and advanced technologies, will see huge opportunities.

higher growth trajectory. We will see the launch of PUDO, Local Hyper and Intelligent Parcel Delivery Locker Systems in the country. Network to tier-3 and tier-4 towns will increase. There will be a mega growth in smart phones and the biggest growth will come from orders placed through smart phones. Traditional business models and logistics players will come under pressure and achieve lower growth rates.” Ajit Venkataraman, MD, APM Terminals India Pvt Ltd shares a similar viewpoint, “The online trade and changing consumption pat-

Foreseeing 2016 Industry experts are already talking about several positive expectations in the New Year and CargoConnect is all ears to these new developments, which have all the potential to provide fresh impetus to India’s growth engine. Now, here’s how. ome companies have already formulated new guidelines and policies to conduct efficient business operations and ensure minimum wastage. For example, DTDC is very optimistic about the growth of e-commerce and is making big investments both in B2C deliveries and setting up several e-fulfilment cjjentres in the country. E-commerce is expected to grow at a very fast pace as the consumers are educated and prefer online dealing because of their hectic work schedules and will affect the logistics industry at large. Suresh Bansa l, Director, HeadSupply Chain Solutions and Head of International Business, DTDC comments, “We will see bigger play by the e-

24 CargoConnect - JANUARY 2016

commerce companies in the logistics side. Companies like Flipkart are planning to invest to strengthen their delivery network in the country. We will see new e-commerce logistics companies increasing their networks in the country.” Martin Roos, MD, India & Bangladesh, DSV Air & Sea Pvt Ltd also agrees that “e-commerce is the buzz of the town” at present. Bansal adds, “We will also see traditional e-commerce companies to transform and shift their capabilities to meet increased demand from this sector. Several new delivery models shall be tested and B2C, B2B, B2B2C models will continue to grow. Cross-border, international e-commerce trade will start taking shape and get onto

cover story Martin Roos MD, India & Bangladesh, DSV Air & Sea Pvt Ltd Respect each other and give way to others. Maintain some discipline on the road which will lead to smooth flow of road cargo, as it will reduce traffic.

tern through mobile apps are also transforming the logistics industry. The scale and complexity of the industry is likely to increase exponentially at a time when infrastructure is not keeping pace with the growth. In 2016, we are likely to witness more of this trend. The need to be closer to customers, speed of delivery of services and reliability of services is going to be even more stringent.” Samir J Shah, Chairman, Federation of Freight Forwarders` Associations in India is confident about the development in logistics parks, warehousing, ICD/CFS. He says, “There will be many investments in these sectors and many service providers would start working for these sectors. Mergers and acquisitions will also happen. All these should increase the activity in the logistics industry.” He also pinpoints some sectors which would undergo tough times and predicts, “The main carriers

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cover story Dr P Alli Rani Director (Finance), CONCOR The most significant trend will be the spurt in demand for high quality warehousing, especially with multimodal access. It is likely that specialised transport and warehousing will be more in demand and the emphasis will be on quality more than quantity.

and exports shall continue to shrink or at best maintain the current status, unless the government is able to fast forward the pending policy decisions.” The warehousing sector is also predicted to grow in leaps and bounds in the years to come. Harmonising on the same tune, Dr P Alli Rani, Director (Finance), CONCOR says, “The most significant trend will be the spurt in demand for high quality warehousing, especially with multimodal access. It

is likely that specialised transport and warehousing will be more in demand and the emphasis will be on quality more than quantity.” On the other hand, Ravinder Sethi, MD, R E Rogers India Pvt Ltd believes that “Foreign Direct Investment and opening of the economy in key sectors as railways, coal and defence will be major trend breakers in 2016.” Vikram Mansukhani, Head Business Development & Corporate Services, DIESL has a different tale to tell, “Overall trade and commerce has witnessed a slowdown in FY15-16, so far based on an overall economic outlook that does not see an immediate turnaround, although long term beneficial policies are definitely in the offing. Based on the same, there is most likely going to be a closer interaction between market analytics, product development and supply chain teams to ensure that the changing requirements from customers are being met in record time without the luxury of overstocking at any one location. This will gradually lead to just-in-time transportation requirements right from freight forwarding, primary FTLs, secondary stock transfers to last-mile delivery. As customers are increasingly given the option to reject/re-

turn purchases even in a B2B environment, the requirement of reverse logistics is going to increase manifold. In the B2C segment, emergence of multiple crowd delivery options, drop off locations, hyper local deliveries and omni-channel retailing are going to become the order of the day.” The Indian logistics sector is estimated to have grown at a healthy 15 per cent in the last five years. However, growth in subsectors varies, with the lowest being in basic trucking operations and highest in supply chain and e-tailing logistics.Highlighting the global logistics scenario Sanjay Tiwari, Head of Sales-India & Sri Lanka, Maersk Line India Pvt Ltd says, “The logistics industry is not surprisingly impacted by overall economic growth. What happens to the rate of growth in Europe, Africa, China and South

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cover story Ravinder Sethi MD, R E Rogers India Pvt Ltd Foreign Direct Investment and opening of the economy in key sectors as railways, coal and defence will be major trend breakers in 2016.

Megatrends for Logistics and Supply Chain Sector, 2016 • Mergers and acquisitions driving consolidation between big players in the industry • Increasing focus on utilisation of soft infrastructure • Logistics support concepts, structures and government policies to be re-framed • E-commerce penetration into small cities • Service innovations with hi-tech infrastructure in warehousing and supply chain • Emergence of railways and rail-linked logistics parks • Collaboration between stakeholders in transportation and movement of cargo • Entry of more MNCs into the freight forwarding sector with huge amount of investments • Probability of entry of more domestic cargo airline(s) • India to transform to a global manufacturing hub with the implementation of ‘Make in India’ America in a global economy still adjusting to dramatically lower oil prices, will be the key question. North Europe is still struggling with demand, southern Europe is seeing markets such as Spain slowly recover and credit becoming more available. The oil dependent economies of West Africa and South America will continue to experience tough times.” He goes on, “The other ‘megatrend’ affecting the logistics industry has to do with the infusion of capacity and the rate at which that capacity can be absorbed, which in light of lower growth doesn’t look that positive. Consolidation in the shipping industry appears to be underway, albeit on a small scale, with the sale of APL.” Manu Raj Bhalla, Director & Global Head, Contract Logistics & Supply Chain, Freight Systems believes that 2016 will be a year of positive developments “with the coming up of:

30 CargoConnect - JANUARY 2016

• Several mega e-fulfillment centres where the merchandise is stocked and picked at item level. These facilities are typically 5,00,000 sq ft to one million sq ft in size, or even larger. • Parcel hubs/sortation centres which sort orders by zip or post code so that they can be delivered to the relevant parcel delivery centre for final delivery to the customer’s home or designated collection point. • Seamless integrated technology where shopping carts connect via API, web xml or some other connection to a transportation management system. • Greater demand for robust reverse logistics processes and capabilities. • More ‘Mega Cities’ apart from the present metros. • Proliferation of segments of the same product and hence LSPs will have to man-

age greater complexity. • Improved supply chain infrastructure • Improved road networks and modern warehousing, and faster and bigger trucks. • Stronger regional and global connect. • Business Intelligence tools for analytics on predictive demand planning, based on consumer preferences.” Ma rk Ma r t i n-Fi sher, Ma na g i ng Director, UPS India more or less sums up the probable trends likely to affect the logistics industry as well as the overall economic scenario in near future: • “Retail e-commerce growth: Thanks to growing internet access and e-commerce, retailers are able to reach customers across markets and geographical boundaries. E-commerce, which presently constitutes approximately seven percent of organised retail in India, is not only receiving heavy investments but driving online retailers to compete harder on prices, logistics cycles,

Rapid urbanisation will present a fair share of challenges and opportunities for businesses to explore new business models and supply chains.

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cover story Samir J Shah Chairman, Federation of Freight Forwarders’ Associations in India There will be many investments in these sectors and many service providers would start working for these sectors. Mergers and acquisitions will also happen. All these should increase the activity in the logistics industry.

coverage area and developing strong international as well as domestic markets. This will create more opportunities for logistics service providers. • Emerging market growth: Emerging market opportunities will continue to expand. Over the next 15 years, these markets are expected to represent nearly three quarters of global GDP growth and an increasing proportion of global trade. By 2020, the number of middle-class consumers in emerging markets will likely exceed the United States and Europe combined (World Bank). The economies of markets like India, China, Brazil, Nigeria and others are changing, and they will soon tip the scales and become major markets for consumption.Many emerging markets need to focus on building stronger infrastructure and adopting business-friendly policies in order to foster further growth. • Community Social Responsibility: Service to our communities is writ-

ten into the culture of the business, and the best way to give back is to draw upon our collective strengths, linking philanthropy to our logistics expertise, transportation assets and the skills and passion of our global workforce. Innovation and investments in alternative fuel and advanced technology vehicles optimises the delivery routes to reduce emissions and strives to strengthen global communities. • Logistics outsourcing: Outsourcing supply chain management is becoming more prevalent, as customers increasingly view professional management in the operations of their supply chains as a strategic advantage. This trend enables companies to focus on what they do best– produce, market and sell their products, while logistics is taken care of by the experts.”

cover story Sanjay Tiwari Head of Sales-India & Sri Lanka, Maersk Line India Pvt Ltd The announcements by some of the large car manufacturing companies bids fair for the SME manufacturing sector. For the logistics industry, it will translate into increased demand for warehousing, inland transportation and air and ocean services.

GST to Bring in Major Turnaround As the curtains come down on the Winter Session of the Parliament, the much discussed Goods and Services Tax Bill is yet to be passed. Debates and chaos is on, but the ultimate goal of implementation is not far away. But, is the industry ready to witness the sea changes with GST? he Goods and Services Tax is expected to be implemented by fiscal 2016-17. As the GST regime begins in India, inter-state sales transaction will become tax neutral and the whole country will become one single common market without any state borders. Logistics companies will therefore see a major change in transportation of goods and location of warehouses. Another major factor will be the lowering of the overall expenditure for the supply chain sector in India, which is presently ailed and burdened with high logistics costs to the tune of 13-14 percent of the value of goods, as compared to 6-8 percent in developed economies. Research reports by different agencies suggest that implementation of GST could provide an opportunity to dismantle various check-posts and consolidate warehousing; thereby reducing logistics costs and facilitating seamless inter-state flow. It is also surmised that GST will absorb or replace almost all direct and indirect taxes levied by central and state governments on products and services, providing room for companies to acquire more clients. Martin-Fisher believes that “while the functions of the supply chain were previously

34 CargoConnect - JANUARY 2016

viewed as non-strategic cost centres, this thinking has been replaced in the past decade by the recognition that well-managed supply chains are a competitive weapon. Supply chains have the power to drastically lower costs, decrease cycle times in bringing new products to the market, increase customer satisfaction and better manage uncertainty through increased flexibility.” According to him, “External factors like GST are beyond anybody’s control, but having a robust logistics system in place will go a long way in helping companies focus on the one thing that matters most–their business. Whatever the implications of GST, there is always the opportunity to reduce the logistics cost itself. It always comes down to providing options to balance speed and cost, like we do for our customers.” Being optimistic about the implementation of GST and its positive impact on the logistics industry, Bhalla says, “With the liberalisation of FDI in various sectors and focus on new technology investments, the multinational companies that come in will bring their global best practices. So, those logistics companies and service providers who are willing to embrace global supply chain practices with modern infrastructure and advanced technologies will see huge opportunities. However, timely implementation of GST is a pre-requisite to realise the true benefits of this opportunity.” He asserts, “Tax revenue collection is expected to increase, due to a simplified taxation and better tax compliance. Partial to complete roll out of GST would boost GDP growth by 0.7 to 1.3 per cent. Higher growth and improved tax compliance could lower fiscal deficit to 3.0 to 3.3 per cent over 2 years.” Bansal seems worried as he says, “Yes, everyone knows GST is good for the country and long overdue. However, we are still not sure if this will really be implemented by

cover story Suresh Bansal Director, Head of Supply Chain Solutions & Head of International Business, DTDC Companies like Flipkart are planning to invest to strengthen their delivery network in the country. We will see new e-commerce logistics companies increasing their networks in the country.

April 2016. There are all possibilities for further delays. Even when it comes, we feel the original draft and intent of the act has been modified too much and the industry feels that contrary to expectations, the actual contours of the law and the way it will be implemented may not end the industry woes.” Here, Sethi gives another viewpoint, “It’s the implementation from day one which will lay the rules. The challenge is to put into place a system which will be truly federal in content. We need to learn from the shortcomings of the EU, to ensure a fool proof ‘common Indian market’.” Presently, there is too much uncertainty about the nature of the role of GST. Shah seeks transparency on the issue and says, “A quick clarity on the same, backed with robust software and hardware infrastructure development, is desired. Once clarity is received, large scale training and capacity building exercise is needed to make a success out of this initiative.” Anand is quite sure that GST could be a complete game changer in the competitive Indian market. But, he also warns, “The implementation and applicability should be such that it does not add or complicate inter-state or cross-border transactions, which in turn could increase transactional costs.” Venkataraman points out that GST is going to benefit this industry in a significant way through time and cost-efficiency and with its implementation, “warehouses can be set up in optimum locations, thereby reducing the complexity in supply chain. The logistics providers can also leverage economies of scale. Large customers may mandate a single service provider to meet nationwide requirements. This could lead to consolidation.” Roos clearly has a positive impression about GST and opines, “From the taxation perspective it is really good. It will make the truckers’ life much easier. We are really looking forward to it.” Alli Rani takes note that “this will provide the long awaited relief to trade in terms of lowering logistics costs.” Tiwari says, “ As logistics professionals, we have been debating and awaiting this change eagerly. Perhaps the accounting software industry is the only other sector to look forward more to this.” He continues, “The introduction of GST is supposed to lead to a freer movement of goods in the country, larger centralised warehouses, etc. These mega warehouses will attract much larger imports to destinations not previously served. A lot of so-called hinterland locations will become optimal storage and distribution locations for goods to hungry consumers, enabled by e-commerce, alongside other developments.” Mansukhani’s take reminds of the mixed emotions

cover story Mark Martin-Fisher Managing Director, UPS India External factors like GST are beyond anybody’s control. Whatever the implications of GST, there is always the opportunity to reduce the logistics cost itself.

surrounding this much talked about bill. He says, “The bluff has been called. Prior to GST implementation being finalised, the logistics industry hinged all its decisions on the rollout of this decision itself. As soon as GST implementation is on the horizon, new challenges such as order fulfillment SLAs, availability of reliable transporters, packaging constraints, market demand predictability, etc., have emerged as critical metrics in decision-making of how to finalise the supply chain network. While the GST implementation will definitely bring down the cost of goods, extremely prudent supply chain designing only will ensure that this cost reduction is not compromised by significant increase in distribution costs or non-availability of inventory due to conservative planning.”

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Make in India: Wish vs Reality It is high time India gears up to increase its manufacturing potential. The core idea of the ‘Make in India’ campaign is to convert India to a manufacturing superpower with the help of foreign investments. However, this initiative is still in a nascent stage and requires active participation from stakeholders before the ‘Lion’ can ‘roar’ he ‘Make in India’ initiative started off by our Hon’ble Prime Minister is a key ingredient of the Union Government’s plan to revive business sentiments in our country. ‘Make in India’ is the new national programme to develop the economic growth of the country by enhancing and improving infrastructure, boosting manufacturing, easing business through delicensing and deregulation and lastly, opening up Foreign Direct Investment (FDI) in construction, railways and defence. It is designed to transform India into a global manufacturing hub to cater to global needs. However, if India has to make this initiative successful, it is important to scale up our infrastructure to remain efficient and cost effective and to sustain the expected rate of growth. Roos terms ‘Make in India’ as a “big thing today” and believes that with its successful implementation “we could see an increase in exports.” Bansal acknowledges the growing significance of this campaign, “Yes….everyone is hoping. At this moment it is more of a hype. We wish that this will change from hype to reality. There is a big feel good factor and we are seeing some green shoots.” He points out, “Ease of doing business and labour reforms will certainly help in

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cover story Vikram Mansukhani Head-Business Development & Corporate Services, DIESL As soon as GST implementation is on the horizon, new challenges such as order fulfillment SLAs, availability of reliable transporters, packaging constraints, market demand predictability, etc., have emerged as critical metrics of how to finalise the supply chain network.

increasing our manufacturing capabilities. We feel it is too early to see any significant effect now, or even during 2016. The real impact will start some time during 2017, and will accelerate thereafter. Bhalla agrees, “The ‘Make in India’ campaign, even if it does take off in the manner envisaged, will certainly expand demand across sectors and will create new opportunities for the logistics sector.” Alli Rani also nods, “The present intentions of the government, if adequately supported by policy and taxation initiatives, would definitely expand investment and turnover in these sectors that will expand demand for logistics services.” Demand and infrastructure are the two major requirements for a developing economy. Sethi feels that “demand in the logistics sector is bound to grow” .Venkataraman paints the big picture, “Many corporates who have been trying to Make in India for a fairly

40 CargoConnect - JANUARY 2016

long time have tasted a mixed bag of success. Success of ‘Make in India’ is, to a large extent, dependent on the ability to move goods and services in the most efficient manner, both domestic and international. The infrastructure on the ground has to dovetail with aspirations to fulfil the promise. This should be taken up as a priority, as there are several countries in the region competing to attract investments that have better infrastructure than India.” Tiwari tries to analyse, “I think we are still to see concrete evidence of an increase in manufacturing activity, but are eagerly awaiting it. An increase in manufacturing activity results in import of capital goods and an export of finished goods. The announcements by some of the large car manufacturing companies (General Motors, Ford Motor Company and Volkswagen in particular) and the opening of the new Mercedes plant

in Maharashtra bids fair for the SME manufacturing sector as orders will trickle down to OEMs and their tier 2 and tier 3 suppliers. For the logistics industry, it will translate into increased demand for warehousing, inland transportation and air and ocean services. Shah looks into both sides of the coin, “The SME sector in India will fuel the growth. But their limited volumes will hinder them from taking any great concessions in cargo movement or storage. There is place for consolidators and the innovative ones will do very well.” Martin-Fisher elaborates, “Make in India necessitates ubiquitous connectivity and seamless integration with international logistics networks so that exporters may move, store and deliver goods faster and cheaper. The success of the programme is directly related to and heavily dependent on the strength of the logistics industry in the country.We see the ‘Make in India’ campaign as an opportunity to open up new markets for SMEs and bring them closer to their customers by means of a robust, reliable and efficient logistics network.” In the year 2015, ‘Make in India’ campaign has literally become the ‘word-of-themouth’ and gained momentum at every nook and corner of our country’s economic circle. Industrialists across sectors have taken this initiative very seriously and are working towards specific goals. Of late, experts have also engaged in discussing the pros and cons. How the initiative will mould India and in how many years, that still remains a moot point. Anand is a bit confused as he says, “I think, the question here should be whether ‘Make in India’ is possible? Yes, there are certain sectors where this is possible, but penetration in some high-tech or high-end market sectors may not be possible. And specially so, with a ‘short-term’ plan spanning 4-5 years. Planning should be done for 50 to 100 years

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cover story Vivek S Anand President, Mumbai and Nhava Sheva Ship-Agents Association (MANSA) In the foreseeable market, the imports and exports shall continue to shrink or at best maintain the current status, unless the government is able to fast forward the pending policy decisions.

and during implementation of the plan in each phase, it could be revisited to tweak it to suit the circumstances. But it is essential to have a long-term vision to ensure that the basic infrastructure is designed to cater to the growing needs of a growing economy like India.” Mansukhani tells more about how ‘Make in India’ has a transformative role to play in the Indian freight forwarding sector, “From finished goods to components, the transformation in the number of pieces being imported into the country is going to see a tremendous

E-commerce is expected to grow at a very fast pace as the consumers are educated and prefer online dealing because of their hectic work schedules and will affect the logistics industry at large. increase. With the components being more susceptible to damage than the finished goods, additional focus on improving the packaging and the quality of carriage are imminent. The predominant model at this time is to import into one or two major ports and to ship them out to final locations; but with the ‘Make in India’ campaign gaining momentum, large warehouses close to port cities could well turn into assembly lines in addition to the multiple factories being set up in SOP lands across various states. This will further need to be aided by an extremely robust delivery network. Within country movements will also see an improvement in packaging and increase in palletised movement for stock transfers to ensure goods are not damaged. Cross-dock locations will gain prominence as JIT deliveries increase significantly.” The large-scale implementation of this programme has the potential to create numerous jobs, adopt cutting-edge technology, meet domestic consumption needs, as well as to increase exports on a large scale and propel India into the league of developed economies and 2016 will surely look forward to provide a win-win situation for all stakeholders.

42 CargoConnect - JANUARY 2016

2016

The Way Forward CargoConnect chats with ‘’Captains of logistics’ to find out the ultimate ‘Logistics Mantra’ nand suggests to “use IT enabled services such as Port Community System, integrating ALL stakeholders, such as port authorities, customs, immigration, insurance, surveyors, classification societies, P&I Clubs, CFS, ICD, rail operators, etc., as this could bring about at least 30 per cent change in ‘Ease of doing Biz’ in India. Instead of the government trying to bring about multidimensional changes, if it could devote resources for speedy implementation, it could bring about a world of change in the ‘Maritime & Logistics’ sector. This is being discussed for the last 15 years or so, but yet not implemented. Numerous countries around the world, and some probably lesser developed than India, are using such a system. However, despite being an IT hub, India is unable to implement this though it would not only increase efficiency, but also weed out corruption to a great extent.” To “‘keep pace with the times” can be the simplest, yet most ef-

cover story Ajit Venkataraman MD, APM Terminals India Pvt Ltd The online trade and changing consumption pattern through mobile apps are also transforming the logistics industry. The scale and complexity of the industry is likely to increase exponentially at a time when infrastructure is not keeping pace with the growth.

fective method, according to Sethi. He says, “The logistics sector must keep pace with the fast changing technical and digital revolution. In addition, most of our domestic transport methodologies are obsolete, as also being very ignorant of quality, sustainability, health and safety. This has to change.” Alli Rani points out, “The intention and initiatives of the government will have to be supplemented by investments in the logistics sector and we have launched ourselves in this direction and will supplement the efforts of the government. We are determined to bring down logistics costs for industry and trade as a percentage of total product cost by consolidating the availability of services at centralised locations, so that a customer does not have to run from pillar to post to avail the various logistics services required to add value to his product.” Being a key player in the EXIM part of the supply chain, Venkataraman feels, “We act as the critical link for ‘Make in India,’ for companies involved with products for both local consumption and exports. We are present at the major ports and also in the hinterland. Our Mantra would be to provide value-added services to our customers to make their product and services in the most efficient manner.” Roos, a Dane by birth, has seen the ‘best of both worlds.’ His mantra is different, but extremely relevant. “Respect each other and give way to others. Maintain some discipline on the road which will lead to smooth flow of road cargo, as it will reduce traffic.” Mansukhani suggests the industry to adhere to the 3 Ps—“PLAN – PROMISE – PROVIDE (Service).”On the same lines, Shah tells, “Stay focused and concentrate on facilitation, growth with good domain knowledge

- money will follow.” Tiwari banks on GST and e-commerce, which, according to him, can “change the face of consumption in India.” He also stresses on the importance of solution providers, saying, “As logisticians we should continue to look for sustainable solutions in the broadest sense of the word; ‘sustainable’ in the sense that the solution should be replicable and not a one-off solution tied together by a piece of string, and also in the sense that negative impact on the environment should be minimised. In that context, I am proud that Maersk Line has helped to bring together a group of Indian companies under the heading of SLICE (Sustainable Logistics Initiative by Conglomerates in Emerging Economies) to jointly promote such solutions.” Days of doing business in traditional ways using old technologies are fast coming to an end. Technology, coupled with logistics capabilities, is the only way to meet customer expectations. Bansal says, “Industry stalwarts must understand the new change is unlike what they have seen so far. This change is no ordinary change. The kinds of customers are changing from B2B to B2C.This new breed of customers do not understand logistics and expect higher level of services of every

single piece and transaction. We need to realise, learn, adapt, invest in new technologies and prepare our teams to face the onslaught of newcomers in the market place. There is no escape.” Martin-Fischer renders a detailed outlook, “Supply chain leaders today focus on ‘time-in-trade’– ensuring that each component of the value chain arrives at precisely the right location, at the right time, in the right condition, and at the most competitive cost. Synchronised commerce, as this is known, is one of the most important business innovations of the 21st century. The future, from our perspective, revolves around the concept of synchronising global commerce. As global trade increases, so does the importance of the supply chain as a source of value and competitive advantage. Synchronised commerce will prove a strategic tool to help companies improve their cash position, reach new markets, differentiate products, improve customer service and enhance productivity.A good supply chain strategy should ensure that facilities for R&D, production, component-making, final assembly, marketing and distribution are located where the best resources are available and where the most value can be added to the end product. Our customers often speak of the need to rethink their business models and the ways in which they interact with their customers, suppliers and partners. We discuss new technologies, emerging markets, and supply chain strategies to reach those markets.” Words of a former US government official sums it all up.”Part of what you need to do in the supply chain is to help your company anticipate events and understand the environment you operate in – physical, political, economic- around the globe.” And to conclude, the outlook this new year is positive, dynamic and full of hope and cheer.

JANUARY 2016 - CargoConnect 43

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In the present day e-environment, Indian air cargo industry still relies heavily on paper documentation for the exchange of information. Developed collaboratively with industry stakeholders, the e-Air Waybill (e-AWB) initiative removes the requirement for a paper Air Waybill (AWB) and is a big stride towards electronic data interchange. Joydeep Banik discusses the current scenario of adaptation of e-AWBs and points out the significance

44 CargoConnect - JANUARY 2016

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n Air Waybill (AWB) or air consignment note is a receipt issued by an international airline as an evidence of the contract of carriage of goods. The term e-Air Waybill is used to describe the interchange of electronic data (EDI) messages, in lieu of a paper air waybill. As the air cargo sector strives each day to move towards electronic freight, e-AWBs replace the paperwork with messages that can be transmitted electronically. In spite of being a new concept in the international freight forwarding sector, it has gained good popularity in the last few years. Agents all over the world are now using their own in-house computer systems to issue airlines’ and freight forwarders’ Air Waybills, which cover transport of cargo from airport to airport in an eco-friendly manner. IATA cargo agents usually hold Air Waybills of several carriers. By accepting a shipment, an IATA cargo agent is acting on behalf of the carrier whose Air Waybill is issued. E-booking and e-billing is gradually gaining momentum with strong initiatives from IATA.

Introduction An e-Air Waybill is a non-negotiable transport document issued by a carrier either directly or through its authorised agent. There are several

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purposes that an Air Waybill serves like: • Contract of carriage • Evidence of receipt of goods • Freight bill • Certificate of insurance • Customs declaration

Current Scenario Electronic messages exist since the 1980s, but unfortunately the Indian air cargo industry still relies a lot on paper and human intervention. Discussing the current scenario of e-Air Waybills in India, Parvinder Singh, Managing Director, Hans Informatic Pvt Ltd says, “Most of the players in Indian air cargo have adopted IT in their operations and accounting systems, but hardly anybody has initiated the adoption of paperless operations. There are a few crucial factors for this kind of discrepancy. First and foremost is the requirement of paper documents by the government and other allied agencies like customs, banks, etc., where the penetration of IT systems is not so deep and the processes are still dependent on paper. Another factor is that the industry itself does not want to spend on the communication cost of data, no matter how minimalist it may be.” He rightly points out, “It’s also about the mindset and the relevance as well as lack of trained personnel. Indians do not want to pay for the perceived extra cost whereas it’s well known that electronic systems reduce costs in the long run.” Air cargo is an important contributor to the profitability of the airlines business. The industry is looking towards tech-driven efficiencies to solidify stability and growth and to face the challenges. From booking to handling, from warehouse management to tracking and tracing, and from revenue management to revenue accounting- all the sectors are somewhat capable of handling electronic messages. However, with respect to interfaces between the various stakeholders of the transport chain in India, there is still a long way to go. According to Puneet Chaturvedi, Consultant-ITES for LSC, “Many carriers servicing the Indian market have not got as advanced IT systems as the major global carriers. Another reason for manual processing could be because there are too many changes from the time of booking to finalisation of booking. 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.”

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Parvinder Singh Managing Director, Hans Informatic Pvt Ltd

“Most of the players in Indian air cargo have adopted IT in their operations and accounting systems, but hardly anybody has initiated the adoption of paperless operations. There are a few crucial factors for this kind of discrepancy.”

Another important task is that small to medium-sized forwarders are going to need an easy way to enter those details. For many forwarders who do not have the capability to send EDI messages to carriers, a web-based solution is an option. At the same time, Indian forwarders are losing market share in their home territory due to intense competition from global players, as the international forwarders all have sophisticated IT systems. Speaking on the issue, Chaturvedi adds, “Forwarders have been trying to encourage their representatives and agents in India to modernise their respective IT systems and use CCS (Cargo Community System) providers. Many Indian companies, however, still use home grown IT products and administrative

48 CargoConnect - JANUARY 2016

systems as well as local software demanded by their clients. These do not easily integrate with CCSs.” It is important to understand that IT solutions are not an overhead cost but a business optimisation tool. The interest in e-communication is increasing but IT has not played an important role in the Indian freight forwarding industry so far. National and state governments have huge modernisation processes underway. However, implementing e-Air Waybills has not been easy till date. Singh says, “India is way behind in electronic bookings and billing as they mostly rely on paper trail and do not want to pay for the perceived extra cost whereas it’s well known that electronic systems reduce costs in the long run. Airlines need to be proactive to encourage e-AWB which in the current scenario is not happening, except for a couple of airlines. The trade can be encouraged by building incentives and costs within the system for having eAWB or not, which will be a great boost for e-AWB adoption. As of now, we do not see much traction on this front.” Chaturvedi agrees, “Compared with many other parts of the world, India is lagging behind, though there are providers who deliver quality e-communication solutions which are robust, cost-effective and at the same time meet international standards and can increase an organisation’s

productivity and competitiveness, but the issue comes if the user’s current technology supports international protocols as defined by IATA. Today, air cargo industry still relies on paper- based processes to support the movement of freight. The average airfreight shipment generates approximately 30 different paper documents – increasing the costs of air freight and lengthening transport times. Also, the next level of efficiency is driven by analysing the required skill sets to key in the data.”

Link to e-Freight E-AWBs and e-Bookings are IATA’s initiative for the air cargo supply chain, and involve carriers, freight forwarders, ground handlers, shippers, customs brokers and authorities. The Indian government and associations are pushing the issue of e-freight to achieve a higher level of transparency with respect to foreign trade activities. E-freight helps to achieve discipline round the clock, build process efficiencies and ultimately helps forwarders and cargo stakeholders. Offering green services to the customers by curtailing paperwork and extensively using e-communication helps to reduce the carbon footprint and provides credibility to the airfreight industry. However, engaging all business partners is a key challenge here. Chaturvedi believes, “It is imperative to understand

Indian government and associations are pushing the issue of e-freight to achieve a higher level of transparency with respect to foreign trade activities.

“Continually Innovative”

feature Steps to implement e-awb

Puneet Chaturvedi Consultant-ITES for LSC Source: http://www.incargonews.com

Forwarders have been trying to encourage their r e p r e s e n t a t i v e s an d agents in India to modernise their respective IT systems and use CCS providers. Many Indian companies, however, still use home grown IT products and administrative systems as well as local software demanded by their clients. that the key word is ‘involvement.’ Many of the parties involved still have significant information exchange issues within their own operations.” Singh agrees, “In the supply chain, unless all stakeholders and partners participate, the adoption of e-AWB is a great challenge. If customs authorities start the process of going paperless, then all other stakeholders have to adapt to a paperless regime. There

50 CargoConnect - JANUARY 2016

is a misperception that adopting e-AWB technology is a lengthy and complicated process. This is especially the case for many freight forwarders that haven’t been exposed much to IT.” Chaturvedi mentions a very interesting example, “I quote here one of a very interesting blog I read a few days back written by a dear friend, ‘Thou Shall Not Share’. It is important that all stakeholders share their part of the information without any incentives, to improve upon the ultimate goal of customer satisfaction. Passenger side of aviation is growing by leaps and bounds with technology and now it is the turn of cargo to make it happen.”

and the competitiveness of airfreight. They not only increase efficiency, but also save time and drive transparency through round-the-clock access to shipping information from the chain of events for a shipment. Also, they are very useful and add value proposition which directly addresses other processes – whether they are administrative, operational, information or management related. A simple truth-this facility is available free of charge from the carriers and it’s a good way to go paperless. In my opinion, sometimes such miniscule processes work as a catalyst for an airline rather than their own sales staff.”

Latest Developments

An e-Airway Bill can limit manual data entry and reduce processing costs. Here are some other aspects why e-AWB is most significant: • E-bills provide better service to the customer and speed up the handling process. • These support regulators’ and customs authorities’ demand for advance electronic information. Though the execution of the application of the e-AWB implies improvement in the speed and security of the air freight shipments, a lot needs to be done towards 100 per cent implementation of e-AWB, thus facilitating total efficiency and accuracy in the system. As Chaturvedi says, “There will be new winners and losers once stability and usage comes into logistics IT systems to drive efficiencies in workflow.”

With the process of electronic booking and e-Airway bill, the need for multiple contact points with human intervention and the inherent errors creeping in with these multiple contact points are eliminated. E-AWB removes the requirement for a paper Air Waybill, simplifying the air freight supply chain process. With the e-AWB, there is no longer a need to print, handle or archive the paper bill. According to Singh, “Since systems are always available compared to costly human resource, the process can be initiated any time of the day/night which leads to higher productivity with increased data accuracy.” Chaturvedi looks positive as he says, “These processes replace paper documents with electronic messages, thus reducing costs, improving transit times, accuracy

Conclusion

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COLD SHOULDERED ‘GOLD’ CHAIN

52 CargoConnect - JANUARY 2016

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The Indian cold chain industry is regarded as the â&#x20AC;&#x2DC;Sunrise Sectorâ&#x20AC;&#x2122; since it supports many industries by providing storage and transportation for their raw, semi-processed and processed products to retailers and end-users. However, the current scenario reveals that there still remains a tremendous scope for the development of facilities which form the heart of the cold chain. Stalwarts from the industry inform Dr Kirti Mudgil Pathak the maladies afflicting the industry as well as the panacea for redemption

JANUARY 2016 - CargoConnect 53

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ost of the problems related to the marketing of fr uits and vegetables can be traced to their perishability which is responsible for high marketing costs, market gluts, price fluctuations and other similar problems. At low temperature, the shelf life is increased and thus the importance of cold storage or refrigeration. Ind ia ran ks first in m i l k production and is number two in fruit and vegetables production in the world , with a substantial amount of marine, meat and poultry products. Despite that, per capita availability of fruits and vegetables is quite low since the quality of a sizable quantity of produce deteriorates by the time it reaches the consumer.

one can store other products. The potatoes have a storage requirement for a maximum of eight months only. So the capacity utilisation is also low. However, these stores are still thriving as revenue model here has shifted from the “Warehousing rental model to a trading one.” Rakesh Pachauri, VP Marketing And Sales, ColdEX Logistics Pvt Ltd also says, “Almost 80 to 90 per cent of cold storages are traditional and meant for potato storage in gunny bags. UP, West Bengal, Gujarat and Punjab account for the majority of storage. Almost close to 80 per cent of cold storage space is utilised only for potato storage. These four states also account for 40 per cent of the national potato crop.” Vishal Sharma, Senior VP-Cold Chain Vishal Sharma Senior VP - Cold Chain Division, BOXCO Logistics India Pvt Ltd

"India's greatest need is for an effective and economically viable cold chain solution that will totally integrate the supply chains for all commodities from

Potatoes vs Other Food Products Production is gradually rising due to diverse agro climatic conditions and better availability of package of practices. Although there is a vast scope for increasing production, the lack of cold storage and cold chain facilities are major bottlenecks in tapping the potential. The cold storage facilities now available are mostly for a single commodity like potato, orange, apple, grapes, pomegranates, flowers, etc., which results in poor capacity utilisation. A report of PHDCCI states that a majority of India’s cold storages are fit only to store potatoes and not other food products. Commenting on this, Dr Cosima Klinger-Paul, Managing Director, Lamilux India Pvt Ltd says, “As far as I know, onions and potato storage makes up for the majority of cold stores in India. Although a wide range of cold chain subsidies are provided by the government, it will take some time for a wholly integrated cold chain to be completed.” A major reason behind this is the popularity of potato wafers, which constitute around 80 per cent of the refreshment sales. Dipankar De, Partner, Dun & Bradstreet Tangram Advisory

the production centres to the consumption centres." Services Pvt Ltd also agrees that at present, a majority of the cold storages are only for potatoes if one looks at fresh fruits and vegetables. He analysis, “This is because potato processing is well-developed and a number of corporates such as PepsiCo India and McCain Foods India Ltd have invested in the processing of potatoes. Additionally, due to lack of other components of cold chain apart from cold storages, most of the cold storage capacity is utilised for crops which do not need further cold chain connectivity, e.g. potato, dried chillies, pulses, dry fruits, spices, etc.” Mihir Mohanta, General Manager, Supply Chain, Mother Dairy Fruit and Vegetable Pvt Ltd analysis that in India, 75 per cent of the cold store capacity (22 million MT) is utilised for potato storage and 65 per cent of the cold store capacity is also located in the potato growing areas of Uttar Pradesh and West Bengal. He says “The stores located here are technically designed for potato storage only. These are not multipurpose cold stores, where

54 CargoConnect - JANUARY 2016

Source: TechSci Research

Division, BOXCO Logistics India Pvt Ltd feels, “India’s greatest need is for an effective and economically viable cold chain solution that will totally integrate the supply chains for all commodities from the production centres to the consumption centres, thereby reducing physical waste and loss of value of perishable commodities.”

Factors that Discourage Multipurpose Cold Storages in India Paul is of the view that “Investment costs are high in India and return on investment in case of multipurpose cold storages will only come slowly. Setting up a cold store is also only a part of the cold chain, so the focus is on creating a cold chain from farm to port.”

feature De differs, “We do have multitemperature control cold storages. In fact, if you look at the latest NCCD data, you will see that we have nearly reached the cold storage capacity. Problem is with the usage of the facility. There should be demand from farmers, processors to use the facility. Different types of fruits and vegetables require different temperature and they have different cold chains – the question is, why are other fruits and vegetables not using the cold storage facilities or the cold chains? Why are we not using cold chains for a product such as onion which is seasonal and there is high price fluctuation?” On analysing the commodity wise storage capacity, Mohanta finds a discrepancy. “While potato cold stores at Agra typically remain idle from November till February, during the same period there is the scarcity of stores for apple in Himachal and J&K. Similarly, cold stores of

HP remain idle from March to August. Therefore, it is technology and the availability of commodity that needs to be considered for multipurpose cold stores.” According to Pachauri, the culprits are the cost conscious consumers. He says, “In India, a majority of people still prefer fresh over stored or preserved products. Last but not the least, there is no revenue guarantee even after investing heavily.” Multi-commodity cold storage facilities require different temperature conditions for different products and to fill up these multipurpose cold storages, it requires highly focused marketing efforts to get the desired efficiency. As a result, smaller companies prefer to set up single commodity Rakesh Pachauri VP Marketing And Sales, ColdEX Logistics Pvt Ltd

"In India, a majority of people still prefer fresh over stored or preserved products. Last but not the least, there is no revenue guarantee even after investing heavily."

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feature storage facilities. The cold chain industry consists of several players, both organised and unorganised. However, some of these players are unable to invest much in the technology required to build highquality cold storage facilities. Sharma sums up the “factors that discourage multipurpose cold storages: a) Inadequacy of focused marketing efforts for getting multi-temp products b) High capex requirement c) Non-exposure to available multitemp technologies d) High energy costs with frequent power cuts e) Lack of awareness and knowledge f) Lack of skilled /trained manpower for cold chain.”

Role of the Government The government can play a major role in making this industry more consumer friend ly and several

subsidies have been announced. For example, subsidies of 35 per cent of cost are available for reefer trucks. Large and mid-sized companies give more weightage to lower corporate tax, lower cost of borrowing, implementation of GST (which will lead to hub and spoke model), etc., than to grants. At present, different ministries and departments of the central government give grants for construction of cold storages. However, little attention is given to its maintenance and operation. De says “The government can provide subsidised power. Most important, the NCCD should draw up a list of cold storages with their addresses and contact details. This will enable industry, farmers and other users to know where they are located.” Mihir Mohanta G M, Supply Chain, Mother Dairy Fruit and Vegetable Pvt Ltd

"While potato cold stores at Agra typically remain idle from November till February, during the same period there is the scarcity of stores for apple in Himachal and J&K. Similarly, cold stores of HP remain idle from March to August."

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feature G ove r n me nt p ol ic ie s ne e d to d ist r ibute it even ly across geographies. Mohanta feels the government also “Needs to integrate the cold stores through common software so that at any point of time, there is stock visibility. It would help to control prices.” The government can encourage multipur pose cold storages by “Providing subsidies to dairy, meat, sea food industry and floriculture. At least, the government controlled cooperative da i r ies can be recommended to use such facilities. Storage rates should be subsidised or benchmarked by the government to keep multipurpose cold storages i n good hea lth a nd profitable operation. Even biggest operating cost electricity should be subsidised for such facilities,” suggests Pachauri. High cost of labour, power, bu i ld i n g a nd m a i nte n a nce i s responsible for the lack of interest in investing in a warehouse. To a large extent, this can be resolved only by government intervention. Pachauri opines, “The government has to keep a track that subsidy goes into the right pocket and not misutilised.” De feels, “There is a shortage of skilled labour but that can be trained. Already a number of

The idea of multi product, multi chamber cold stores was introduced in the sixties, with Maharashtra taking the lead. training facilities have come up. This is not a major issue. Cost of power is a big issue and in some states there are power outages for more than eight hours. How can a company run cold storage on diesel generators? There are some technology gaps but the industry is fast picking up with new technologies related to construction. Modern cold storages are trying to be multi-chamber, energy efficient. Maintenance cost is very high. The charges per pallet in cold storage

Source: http://www.slideshare.net

Dr Cosima Klinger-Paul Managing director, Lamilux India Pvt Ltd

"As far as I know, onions and potato storage makes up for the majority of cold stores in India. Although a wide range of cold chain subsidies are provided by the government, it will take some time for a wholly integrated cold chain to be completed." is also very high. Farmers told us that it is cheaper for them to use normal storage and warehouses, even if they take into account the wastage.” Mohanta sums up the issue accurately thus: “High Energy Costs: Operating costs for the cold storage business in India are approximately 80-90 per cubic ft per year as compared to 40 per cubic ft. per year in the west. Energy expenses alone make up about 30 percent of the total expenses for the cold storage industry in India compared to 10 per cent in the west. These factors pose as high entry barriers to potential players in the business. Rising Real Estate Costs: With the rising real estate price, the cost of setting up a cold storage unit is also rising. It constitutes approximately 10-12 per cent of the project cost. Also, as these units are not mobile, choosing the right location becomes a critical factor. Being a capital intensive project, it requires heavy investment in fixed assets like plant

60 CargoConnect - JANUARY 2016

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feature and machinery, building, insulation and panels. Depending on the size of the project and design of the infrastructure, the Capex is derived. Typically, a traditional cold storage of multi-tier walk-in with a capacity of 6,000 tons would cost `5 crore, excluding land.”

that the government has taken initiatives through bodies like NHB, to establish standards for all the arms of the cold chain. Efforts are also being made to evolve a new concept – ‘Green Cold Chain’. Sharma shares, “India is an agriculturalbased economy; More than 50 per cent of India’s land is cultivable, compared to the global average of 11per cent. The total value of the cold chain industry is estimated to be as high as USD 3 billion and growing at 20-25 per cent a year. The total value is expected to reach USD 8 billion by 2018 through increased investments, modernisation of existing facilities and establishment of new ventures via private and government partnerships. Cold chain is a key stakeholder in the modern day global trade of all perishable

Uneven Distribution Surveys show that cold storages storing food items are located in merely a handful of Indian states. Sharma pinpoints the reason, “Cold storages storing food items are highly demand driven. Mostly their presence are in high consumption markets of NCRs due to the perishability, so that the last mile distribution costs remain low. Post implementation of GST, the scenario is likely to very much improve and the cold storage facilities would further penetrate into other far fetched regions of the country.”

Dipankar De Partner, Dun & Bradstreet Tangram Advisory Services Pvt Ltd

"Potato processing is well-developed and a number of corporates such as PepsiCo India and McCain Foods India Ltd have invested in the processing of potatoes."

Future Expectations In February 2013, ASSOCHAM had indicated that the cold storage industry would grow by 25 per cent compounded annual growth and reach `64,000 crore by 2017. Speaking on the current status of growth and expectations in near future Mohanta informs, “Currently, India has 6,300 cold storage facilities unevenly spread across the country, with an installed

capacity of 30.11 million metric tons. The pace of growth is not in the same tune with the demand. The available capacity can hold less than 11 per cent of what is produced in India.” However, with newer materials available in the market, every part of a cold chain becomes amenable for improvement. It is heartening to note

62 CargoConnect - JANUARY 2016

goods. The sensitive nature and increased market demand of temperature and environmental controlled goods have amplified the importance of uncompromised food safety and quality.” India’s greatest need is for an effective and economically viable cold chain solution that will totally integrate the supply chains for all commodities from the production centres to the consumption centres, thereby reducing physical waste and loss of value of perishable commodities. In short, the cold chain industry is in the eye of a revolution. An overview of the cold chain system in India over the past 50 to 60 years shows that the cold storage construction technology of thermal insulation, refrigeration plant technology, automation and material handling have undergone significant transformation and offer much wider scope than in the past. Progressive entrepreneurs are seriously considering energy saving and observing the green cold chain concept. Government agencies like National Horticultural Board, National Horticultural Mission and Ministry of Food Processing have also offered higher financial incentives for new projects as well as for expansion of existing units. However, these projects have to be essentially based on modern and efficient technology. It is a matter worth taking into consideration that a scientifically developed cold chain that preserves the substantial quantity and high quality of food products of the country, has the potential to become a ‘Gold Chain’ for the country.

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guest column

WMS Adoption Poised to Grow in India By Neelam Singh

espite aggressive announcements in the WMS world, ARC’s global market studies have historically shown India to be a minor market when it comes to WMS adoption. Warehouses are still seen as a place of storage rather than a value addition point. The general attitude towards IT deployment is also not so positive because of availability of low-cost labour. Those in the industry have traditionally argued that low-cost labour makes a good ROI of WMS more difficult. Although wages are on the rise, it remains far lower than in the West, which does not justify the costly WMS deployments. Many global and local WMS suppliers have come up with cheaper options of WMS on cloud for the Indian market, but there are other challenges that warehouse owners have to contend with.

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Heading the list is the complicated taxation system. The current dual governance structure with central level taxes in the form of Central Sales Tax (CST), customs duty, service tax, and excise duty, and state level taxes in the form of Value Added Tax (VAT), stamp duty, land revenue, Luxury tax, and state excise makes the Indian taxation system very complex. In order to save taxes, logistics companies are forced to locate small warehouses in all the states where they do business. The cost of adopting WMS may be offset by locating small warehouses which can be managed manually. This complexity can be simplified by the implementation of Goods and Service Tax (GST). GST will lead to the abolition of almost all the indirect taxes incurred by companies and customers. Further, companies would no longer be required to have warehouses in every state just to facilitate stock transfers and to avoid indirect taxes. But GST is yet to be implemented in India. Poor road infrastructure comes second because it hampers the free flow of goods. However, a lot of work is underway in this sector. Projects such as north-south and east-west road corridors, the Golden Quadrilateral and other NHAI projects, and the development of multi-modal and inter-modal transportation are being promoted to enable better connectivity. In addition, an ambitious National Highway Development Programme (NHDP) has been established. Approval for foreign direct investment (FDI) played a bigger role in building good infrastructure. In 2012, Government of India approved 51 percent FDI in multibrand retail (like Walmart) and 100 per cent in single brand retail (like Swarovski where every product in the store carries the Swarovski brand). Many foreign retailers in the wholesale business (such

as Tesco & Tata) have started investing in various activities like setting up warehouses, working with the government to make land available at reasonable rates, and engaging in private-public partnerships. These foreign retailers have already been adopters of best WMS software and would replicate the success in India, too, to ensure that their investments are safe. The public private partnerships (PPP) policy initiatives have led to an interest among private Indian players such as GATI, Blue Dart and Adani Logistics. E-commerce is also growing at a faster rate in India compared to all other Asian countries which calls for a robust WMS in place. WMS is fast becoming a basic requirement to improve store-level inventory accuracy, and expand order and fulfilment options. Many retailers that sell direct to consumers through a corporate website are also purchasing WMS to support their integrated distribution initiatives. In conclusion, adoption of WMS in India’s price-sensitive market is proceeding at a slow rate due to availability of lowcost labour. However, through research on the ROI of WMS, ARC has found that most companies grossly underestimate how many mistakes–in the form of any deviation from the perfect order–cost them. Automation in the form of RF enabled WMS can drive almost perfect picking accuracy–99.9 per cent. Organised sector has seen success by using WMSs and the outlook is changing in the unorganised segment as well due to the awareness and subsequent development. Now, warehouses are adopting new technologies and the focus has shifted from reducing costs to increasing profits. The coming years will represent a critical inflection point in the growth of efficient warehousing in India. (The writer is the Senior Analyst, ARC Advisory Group)

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Interview

“We create unique solutions for our clients” DSV made a footprint in India in the year 2006 with a goal to deliver cargo safely, securely and on time, anywhere in the world by air, sea or road. Within this short span, the company has established its roots in the country. They are the experts in moving luxury vehicles like Lamborghini, Ferrari and McLaren, to name a few. General Motors voted DSV Supplier of the year, twice. With an enormous global appetite for acquisitions, the company is optimistic of spreading its wings even more globally. Martin Roos, MD, India & Bangladesh shares his experience with DSV Air & Sea Pvt Ltd, the company’s vision and future expansion plans in a one-onone with Deepannita Chakraborty

You decided to start a base in India in the year 2006. How has the journey been so far?

I was relatively young back then and it was a continuous process of learning in a completely different culture, it still is. As a leader of the industry, it took us time to settle but we learnt from our mistakes and here we are a decent decade later, competing at par with the best. The journey has been overwhelming.

What is stated to be your USP?

Our USP is that we are flexible in terms of our services and that we are hands on in

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the day to day business, from top to bottom. We spend a considerable amount of time with our clients, discussing their needs, continuously aligning expectations seeking performance improvement, even if we feel we perform well. With a straightforward and open approach it becomes easy to scale your approach to smaller, medium or larger businesses and we adapt and create unique solutions for each of our clients, treating all equally regardless of size.

Tell us about your products and services. What is the main domain

in your portfolio e.g. pharma, automobile, retail, etc.?

DSV is a global supplier of transport and logistics services. We have offices in more than 70 countries and offer a wide range of services comprising of surface transportation, air freight,and sea freight from door to door. Over the last four years, we have opened up several warehouses on the subcontinent and see a growing need for contract logistics solutions just as we see a good growth in larger project movements. Lastly, we have a few backup functions in India that serves our local as well as global clients. We always try being an

active partner in India to ensure that the network grows.

DSV has recently acquired the global supply chain and logistics provider, UTI. What was the reason behind this merger and what business synergies can we expect from this combination?

I will have to correct you a little here as it is still too early to say anything in concrete on this particular topic. The entire deal is still subject to shareholders’and regulatory approvals. All I can comment is that if the acquisition goes through the combination of UTI and DSV will be very strong. At DSV we have always believed that consolidation is the way ahead and to bring us into the next league, we have to look at larger acquisitions. Historically we have been very aggressive in terms of acquisitions so you can say it runs in our blood, be it smaller or larger transactions. What is unique is that we have a strong belief in ourselves and that implementing strategic volumes can be made profitable, still maintaining the DSV philosophy of being close to our clients offering flexible solutions.

What are the infrastructural developments that India needs to take forward to improve the logistics sector in India?

Obviously India has its logistical challenges and it is evident there is a lot left for imagination when it comes to the roads, the connectivity and particularly the quality. I truly appreciate the government’s efforts to revitalise the logistical infrastructure namely air and sea ports, but a chain is no stronger than its weakest link. Building a port is one of those many links and the stress point should, in my opinion, be to focus on strengthening the supply chain in its entirety. I am aware it is a broad statement, but I ask myself what good is a state-of-the-art building if the supporting warehouse or handling is mediocre and still operating underolder principles that worked fine earlier with lesser throughput? Individuals and activities involved also need to be ‘upgraded’ to cope and grow with the regulators and their visions. A simple example is the traffic patterns and the mentality on the roads of India. The government could with relative ease

take measures towards betterment of traffic conduct by looking at the requirements for acquiring drivers licenses, commercial and personal. I know as I have a local driver’s license in addition to the one from EU. I understand it is a cultural thing that has been adapted and accepted during the course of centuries, but one should never stop improving even when it works well (which the sheer number of vehicles and cargo tonnages moved, could suggest it does). Put a ban on the pointless use of horns constantly. Honking rarely gets you from A to B faster. Enforce rules for material quality which obviously serves greater purposes: Safety and environment. Road quality; How can it be accepted that some corn fields offer more even surfaces than many roads? How can the Government accept paying for roadworks and improvements year after year, when a solidly built road should last a decade at least? A few obstacles play in, such as

Our USP is that we are flexible in terms of our services, so that we don’t have an assembly line. We sit down and discuss our client needs and solutions. weather, but with skilled labour and planning the quality could be increased. I think it also boils down to a financial aspect and on the face of it the investment might seem more expensive to raise quality, but it will certainly pay off when you total the investment after 10 years. Another bonus is that the workforce spending time repairing the same roads year after year could then be utilised in other areas to further develop India’s growth.

Indian logistics sector is poised for accelerated growth with initiatives like ‘Make in India.’Comment. ‘Make in India’ is one of the best initiative so far. Many people outside India have a hard time understanding that India is a consumption- driven economy, having

more import than export. With initiatives as ‘Make in India,’there is a strong focus on increasing exports by attracting manufacturers to set up in India. Foreign companies expect red carpet treatment and not red tape bureaucracy, so the drive is spot on! As is the case with infrastructural improvements, quality of the manufactured commodities will be a key factor in whether it will provide the desired boost in exports or not. If so it could be a game changer for the logistics industry and for India.

What is your clientele in India? Our clientele is very varied. DSV has a very large and versatile network that has allowed us to build a healthy portfolio within most commodities and sectors, thus geographically well dispersed. We provide our services to all from smaller and more transactional based importers, to huge conglomerates and multinationals with enormous and more regular volumes. There are many well-known brands but also completely unknown partners. I am proud of this versatility and firmly believe itshows our true colours, that DSV can cater to any type of clients.

Tell us about the new products and services that your company will be introducing in India. Share with us your future plans and expansion details. Right now it is business as usual with a clear focus on serving our clients best, which is why we devote considerable efforts towards improving our own performance and becoming better at what we do. Expectations are never constant and we find it appropriate to be on the forefront and well-prepared. We obviously wish to continue our current growth trends by offering solid and dependable best–in-class services one can rely on and plan a supply chain around. In terms of investments,then we are currently upgrading our IT infrastructure as well as strengthening our own skills and knowledge via internal trainings,constant process reviews and improvements.

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Interview

â&#x20AC;&#x2DC;Value for Moneyâ&#x20AC;&#x2122; Key USP of KION India KION India designs, manufactures and distributes palletised material handling equipment like diesel and electric forklifts and a range of warehousing equipment under the brand name Voltas. With the total acquisition of Voltas in 2012, Kion Group now has a strong service network across India to cater to the needs of an ever modernising industry. Johnson MRV, Chief Sales Officer, KION India Private Limited in an interview with Joydeep Banik discusses the strategies, market share as well as the current scenario of their organisation

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Tell us about the nature of your products and value-added services. What is your USP?

We offer a range of material handling equipment, meant for unitised material handling such as counterbalance forklifts of capacity from 1.5 to 16 tons. We also supply warehousing equipment such as battery operated pallet trucks, stackers and reach trucks suitable to handle palletised materials. Apart from offering standard maintenance services for the above equipment, we are known in the market for handling Fleet Management Contracts (FMCs) for major customers with commitment towards pre-agreed machine uptime. Our key USP in all our products is the orientation towards ‘Value for Money’ concept which is our key sales driver.

the Indian market, but the rate of transformation is not good enough to create attractive market growth as yet.

What are the different power options available for forklifts and Discuss the market share of KION which one is more popular in Group in Indian MHE market as India? Well, petrol, diesel, LPG and batterycompared to Europe. Well, during the year 2014, KION, as an Indian entity, holds the leading 30 per cent plus share in the Indian MHE market, out of LINDE, STILL,BAOLI & VOLTAS brands. On very similar lines, KION Group again holds the leading market share player status in the European market, for the last many years.

based forklifts are available in general. The most popular power option in the Indian market for forklift is diesel driven – which is currently 60 per cent of the total forklift market and the rest are mainly battery based ones.

standardisation which enables lower cost realisation by the users. During the last one decade, there has been considerable progress towards palletisation in

ing to customer requirements. Our company is fully geared up to upgrade diesel forklifts, to BS IV norms, as and when it is applied.

What is the current overall demand supply scenario for forklifts from small/medium/and heavy duty forklifts?

Indian market is still considered to be very small (currently at 9000 units per annum) as compared to any of the developing economies due to its unique structure and a set of limitations that we confront. Most of the Indian manufacturers have installed capacities for supplies far beyond the market requirements which creates additional pressure on imported players. In terms of product mix, the market requirement for heavy duty forklifts ( 5 tons and above) is just around 10 per cent of the total forklift market and the rest is dominated by standard three-ton capacity forklifts.

What is the capacity range offered by your forklifts? Also tell Palletised material handling us how fuel-efficient and environequipment is the need of the ment friendly are these? We have forklifts of various capacities hour. Discuss. After the acquisition of Voltas in In order to obtain higher throughput starting from one ton capacity going up to and the desired efficiency in a material 16 tons in diesel version, which currently 2012, what are the innovations handling system, palletisation is one of satisfies BS III regulations and fitted with and developments introduced by the key catalysts and a requirement for best in class fuel-efficient engines suit- Kion group?

We have forklifts of various capacities starting from one ton capacity going up to 16 tons in diesel version, which currently satisfies BS III regulations and fitted with best in class fuel-efficient engines suiting to customer requirements.

Since 2012, when the complete acquisition of material handling business of VOLTAS in India was completed, KION had introduced many new products to the market such as 3T & 5T best in class fuel efficient Automatic transmission forklifts, most energy savvy 2T & 3T Battery based forklifts, modern looking Battery operated pallet trucks, stackers & Reach trucks – which contributed to our market share growth story since then. Currently, KION Group is a full product range player in the Indian market with the four leading brands, piloting technology fit products for every price point, which is critical for our dominating market position, in a unique market like India.

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Interview

“2016 will be better in terms of growth” Cathay Pacific recently announced the expansion of its freighter network with the launch of a new service to Kolkata. It has been one of the prime carriers for EXIM trade with China and Hong Kong. Anand Yedery, Regional Cargo Manager-South Asia, Middle East & Africa, Cathay Pacific Airways in an interview with Roselin Kiro shares the current market scenario of the airline with respect to cargo handling and the growth opportunities of India’s total trade, with imports from China and Hong Kong together being as high as 20 per cent of India’s total imports .Cathay Pacific has been a prime cargo carrier in the trade of both these countries. India has, and will continue to be a healthy contributor to Cathay’s overall cargo revenue and thus a significant market for our freighter capacity expansion. In March 2015, we also launched our twice-weekly freighter services to Kolkata, our sixth freighter port in India. We will continue to look for new ports that offer opportunities on the air freight front.

What is the quantum of cargo that Cathay Pacific and Dragonair have carried this year? What kind of growth are you expecting in the coming year?

We carried close to 27,700 tons in the first half of the year. We are optimistic and hopeful that 2016 will be better in terms of growth We are optimistic and hopeful that 2016 will be better in terms of growth We are optimistic and hopeful that 2016 will be better in terms of growth, especially for our exports as compared to 2015.

How has the journey and growth of Cathay Pacific been so far?

The overall outlook for air cargo in 2015 globally has been quite challenging with economic uncertainties around the world. Likewise, Indian air cargo, especially exports, has been affected leading to negligible growth, but with a largely grown cargo capacity in and out of India. However, for Cathay Pacific, India continued to be a hot lane with the increasing demand for air imports from Hong Kong and China leading to a double digit growth. Our air exports on the other hand remained flat, with the drop in overall exports and increased capacity in the market.

Please share the current Indian Tell us about the cargo operations of market scenario of Cathay Pacific. the sister airline Dragonair in India. India has always been one of the key strategic markets for Cathay Pacific Cargo from the point of view of both imports and exports. India’s biggest trade partner, China, constitutes almost 11 per cent

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Dragonair, in India, currently operates passenger flights into two ports, Bengaluru with daily frequency (operating A330-300) and Kolkata with six flights per week (operating A320). The available

belly capacity is approximately 18 tons per flight ex Bengaluru and 2 tons per flight ex Kolkata. Our sister airline Dragonair complements Cathay Pacific Cargo freighter services operated in these two ports, thus offering a range of options to our customers in these markets.

What are the various stations that Cathay Pacific and Dragonair serve in India? Do you have further plans to set up more stations?

We operate freighter services from six major airports in India with 27 weekly freighters. We operate 10 weekly freighters from Delhi, seven from Mumbai, five from Chennai, two from Bengaluru, one from Hyderabad and two from Kolkata. In addition, we operate 48 passenger flights a week from India to Hong Kong, which carry cargo in the aircraft belly. This makes Cathay Pacific one of the largest freight carriers in India. India remains a prominent market and we will continue to explore viable opportunities for expanding further.

What are the various products that are being exported and imported through Cathay Pacific and in India?

We have a wide range of products that include Wine LIFT, Pharma LIFT, Priority LIFT, DG LIFT, Fresh LIFT, Live Animal LIFT, Secure LIFT, Courier LIFT and Expert LIFT. Our superior quality products are designed to ensure safe arrival of all shipments at their destinations. These include odd dimension shipments such as helicopters and drilling equipments and even crates of India’s finest wines to name a few.

Interview

Diverse Business Key to Yogayatan’s Success Since its inception in 2000, the Yogayatan Group has successfully established partnerships with customers, industry and government bodies, setting a benchmark in business innovation. Dr Rajendra Pratap Singh, Chairman, Yogayatan Group in a tête-à-tête with Deepannita Chakraborty, shares his motives and ideas behind setting up the Yogayatan Port and the road ahead major ports due to various constraints. Yogayatan Port will commence commercial operations by April 2016.

of EXIM cargo mainly has to be by using sea transport through the ports. Yogayatan Port, therefore, with planned capacity of about 10 million tons per annum will contribute significantly to the country’s economy.

Traffic congestion is a big problem faced by almost all the ports. How do you plan to tackle What different techniques in terms of cargo handling, container movethis problem? The proposed Yogayatan port is infact a ment and turn around vessels do solution to decongest the road traffic of you have to match with internationtruck/trailers on dockyard/Mumbai Port al standards? roads by shifting part of Mumbai Port cargo leading towards northern/eastern suburbs of Mumbai.

Tell us about your journey so far? Yogayatan Group has an experience of more than 15 years in the industry. The group has successfully ventured into multifarious businesses, viz. Exports, Ports, Petroleum, Power, Construction, Infrastructure, to name a few. Yogayatan is involved in a number of award winning and high profile projects and today the Group is a rapidly growing business house in India.

Give us an overview about the Yogayatan port. When do we expect the Port to commence its journey? The port is located within a distance of about 15 km from two major ports viz. Mumbai Por t Trust (MbPT) and Jawaharlal Nehru Port Trust (JNPT). It can act as a feeder port for these two major ports and handle cargo which needs to be discontinued from these two

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What are your plans for the road ahead?

Tentative timelines for various project expansion activities is as follows, subject to required approvals from government/ associated departments. • Commencement of initial commercial operations by April 2016. • Commencement of additional berths by October 2017. • To have rail connectivity by April 2019. • Star t offshore fabrication yard by October 2019. • Start captive power plant by April 2025. • To reach cargo throughput of four million tons per annum by the year 2020.

Since an all-weather port is the first of its kind in India, how do you think that this feature will help in the economic development of our country?

The port infrastructure plays a vital role in the economy of any country as the handling

There are different techniques for cargo handling as per the nature of cargo, rate of loading/unloading required and distance from berth to the storage areas. The rate of loading/unloading can vary from 500T/hour to 2500T/hour or more, to match the rate of loading/unloading required as well as from consideration of optimal use. All the machineries, equipment and technology will be as per international standards with upgradation.

‘Make in India’ campaign is to bring in more productivity and efficiency and make India a ‘hub of manufacturing.’ What is your take on it? How will it be beneficial to the shipping industry?

The proposed Yogayatan Port will go a long way in making India a manufacturing hub as part of ‘Make in India’ campaign. The Port will offer manufacturers and potential port users efficient, economical and speedy cargo handling and evacuation facility which will improve the overall performance of manufacturing industries.

sUPPLY CHANGE

“Mobile technology can transform every logistics process” While Panasonic equips companies with business solutions, supply chain management is also important for the overall growth of the company. M Ravindra, Associate DirectorLogistics, Panasonic India in an interview with Joydeep Banik talks about the importance of the logistics network, ensuring smooth coordination between stakeholders and other important aspects

Importance of Logistics for Growth As a global industry leader, supply chain management is crucial to the growth of our overall business. As new economies open up, our demand-driven supply chain is contingent upon reducing lead times and making on-time deliveries across our global routes. We find customer demands to be a meaningful challenge and driver to gain market share and have adopted an end-to-end supply chain management system based on data on true demand. Demand-oriented solutions have closely integrated our marketing and supply chain initiatives and improved visibility.

Improving Supply Chain Effectiveness With point of sale systems becoming increasingly mobile, mobility technology has emerged as the interface between supply chain stakeholders, from determining routing to delivery, and delivering more flexible and responsive fleet management. The Internet of Things (IoT) has connected physical devices and GPS-enabled tracking allows us to optimise shipping distances, times and costs.We have also adopted supply chain business intelligence (BI) tools for their ability to analyse the array of data that has become available through logistics technologies and supply chain execution systems. While access to data is key, being able to find, understand, and use

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that data for supply chain effectiveness. Data analytics help identify negative trends in cost and performance and to conduct analyses to evaluate the service and cost trade-offs of different transportation strategies and tactics.

Expectations from LSPs The expertise and networks of third party LSPs have a huge potential to transform the systems and processes of companies that choose to outsource their logistics requirements. LSPs and LLPs play a vital role in the entire supply chain of a company. Their core competencies can lead huge benefits to an outsourcing company like ours. Our expectations from LSPs are wide, ranging from core warehousing as basic services to niche services which focus on a specific set of processes and strategies. Flexible manpower along with lower operating costs in warehousing, distribution and transportation form the key expectations from the LSP and LLP.

Integrated Logistics Solutions We are unique in our industry as a provider of integrated logistics solutions, providing both advanced hardware and software solutions for the control and management of logistics and supply

chain. We leverage our deep domain expertise in-house, to operate in all four logistics fields of procurement, production, distribution and disposal.

Warehouse and Inventor y Management Through our logistics solutions, our labour management tools are built and implemented to capture data from warehouse management and time systems. We conduct distribution logistics with inventory and warehousing and have implemented a vendor-managed inventory (VMI) solution. Inventory distribution is aligned with consumption, which has proven to be a successful model with customer availability soaring to nearly cent percent.

Significance of Regional Logistics Centres We use ocean and air route for imports into India. Typically RLCs play a major role in the ‘hub-and-spoke’ system. Strategically RLC location is either a port of import or a point of consolidation for locally manufactured goods in the four regions. 30 per cent of locally manufactured goods are stocked at these RLC to meet the surge in demand within the region. RLC ensures that the demand is met within 24-36 hours from the time of indent.

News

Gateway Distriparks undergoes change in shareholding pattern Gateway Distriparks Ltd (GDL) has undergone significant changes in its shareholding pattern and board composition, following complete exit of Singapore shareholders from all the Gateway group of companies and its board. Prem Kishan Gupta, the sole promoter of the company has taken over the position as Chairman of Snowman Logistics Ltd. Gupta is already the CMD of GDL and Gateway Rail. Commenting about the major changes in the shareholding pattern, Gupta said, “Gateway Distriparks has always rewarded its shareholders through a mix of regular dividends and growth. Going forward too, our endeavour will be to meet shareholders’ expectations on both the parameters-performance of the company and maintaining high standards of corporate governance.”

DHL gears up to convert India to tech powerhouse With the current optimistic market outlook for India’s technology sector, DHL is geared up to meet the expected growth as India is poised to become the world’s next technology powerhouse. According to research and consultancy organisation Gartner, the market for electronic devices in India is expected to grow a strong 5.7 per cent until 2019, with mobile phones seeing the strongest increase at 8.1 per cent. Investments in Data Center systems will reach 2.9 bn USD in 2016. At a recently organised industry conference jointly organised by CII and DHL, regional industry leaders, logistics experts and senior government officials gathered to discuss growth in India’s technology sector and critical issues required to support this growth. Speaking on a buoyant note, Rob Siegers, President of Technology, DHL said, “The strong momentum in India will make the crucial difference to business development going forward. The government’s constructive initiatives on GST and ‘Make in India’, together with the increasing consumer demand for electronics, will provide attractive growth opportunities for technology companies.”

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MANSA seeks berthing facility for break bulk cargo at Mumbai Port In order to reduce congestion and lower the transaction cost, Mumbai and Nhava Ship-Agents Association (MANSA) have sought berthing facilities at the Offshore Container Terminal for higher dimensional vessels carrying large parcels of pulses, steel and general cargo. Substantiating the rationale behind the move, Captain Vivek Anand, President, MANSA, said in a statement, “Mere creation of port infrastructure is of no use until it is effectively and efficiently operated. Berthing charges for vessels calling at Indian ports are 5-6 times of those charged in the developed countries, making it an expensive proposition for the trade and the economy here.” Promoted by the Gammon group, the Offshore Container Terminal is the first and single largest container terminal project in the Mumbai Port under Build Operate and Transfer (BOT) scheme, comprising 700 meters quay length in the first phase extendable to 1050 meters subsequently. It is expected that the effective usage of the OCT for over dimensional vessels to reduce congestion would go a long way in cherishing the Indian government coveted objective of ease of doing business.

Govt to set up logistics park at Mihan Backward regions of Vidarbha and Marathwada were accorded special treatment by the Maharashtra government with a host of announcements on the last day of the winter session. Replying to the discussions under Rule 293 on industrial backlog, Finance Minister Sudhir Mungantiwar announced a logistics park and hub at Mihan that comes under Chief Minister Devendra Fadnavis’ south-west constituency. “Works like packaging and repackaging could be done at the hub and industries could save two per cent central sales tax if they used the facility. Our government is first trying to improve basic facilities like power, infrastructure and good road connectivity to attract industries,” the minister said in a statement. The Minister announced a grant of 9,500 crore to 19 districts for laying and development of roads network.

Govt to amend Major Port Trusts Act, 1963 The Government has undertaken an exercise to amend the Major Port Trusts Act, 1963 with a view to secure greater operational freedom to the Board of Trustees of Major Ports in tune with present day requirements and also giving flexibility in fixation of user charges to service providers in Major Port Trusts. The Maritime State Governments and other stakeholders have largely supported the proposals.

(FORMERLY GUJARAT STATE EXPORT CORPORATION LTD.)

AIR CARGO COMPLEXES AT AHMEDABAD, INDORE & VISAKHAPATNAM FACILITIES

Adequate Storage Facility Efficient Custom Clearance Modern Equipment Cold Storage Computerized Operations Bonded Trucking Office Space for Service Providers Connectivity with International Destination

Regd. Office: 2nd floor, Gujarat Chamber’s Building, Ashram Road, Ahmedabad – 380009, Gujarat, India Ph: +91-79-26554100/ 26575757 / 26585757 Fax: +91-79-26584040, Email: info@gsecl.co.in

Soon common users domestic terminals at Raipur and Indore

Operations: Ahmedabad: Air Cargo Complex, Old Airport Ahmedabad – 380012 Ph: +91-79-22864747 / 2323 Fax: +91-79-22864646

Indore: DABH airport, Indore. PH: 0731-2629200 / 2629300 / 2629400

News

CeMAT 2016: Spotlight on digitisation

The lead theme for CeMAT 2016 is ‘Smart Supply Chain Solutions’. The show, which will run from May 31 to June 3 in Hannover, Germany, will highlight the pivotal role of logistics in today’s increasingly digitised and integrated industrial value chains. Wolfgang Pech, Deutsche Messe’s Senior Vice President in charge of CeMAT explains, “Logistics is growing in importance because accuracy and flexibility of supply are fundamental to the growing industry trend.” With its lead theme of ‘Smart Supply Chain Solutions’,CeMAT 2016 will present automation and integrated control solutions for tomorrow’s intelligent, digital logistics processes. The scope will extend far beyond mere logistics optimisation solutions because the digitisation trend is revolutionising entire value chains and creating completely new business models.

Myanmar National Airlines appoints HACTL Hong Kong Air Cargo Terminals Limited (HACTL), Hong Kong’s largest cargo handling agent has been appointed by Myanmar National Airlines to handle its newly-launched services from Yangon to Hong Kong. Myanmar National Airlines is the state-owned national flag carrier of Myanmar, and flies to 26 domestic destinations, which is the most extensive domestic network of any airline. Myanmar National Airlines’ four times weekly B 737800 services to Hong Kong represent the airline’s second international route. Vivien Lau, Executive Director, HACTL said, “This new service is part of the exciting developments in Myanmar as a whole. It’s a country with huge potential for international trade, and we are pleased and proud to play a part in the creation of its links with the world.”

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Amazon wants planes for air freight operation Amazon.com Inc. has held discussions with air cargo companies to lease airplanes and establish its own freight operation, with the goal of reducing its reliance on traditional carriers.The Seattle-based online retailer has said it is seeking as many as 25 aircrafts from companies including Atlas Air Worldwide Holdings Inc. and Air Transport Services Group Inc. Amazon could begin building out the service early next year. Amazon has told the air cargo firms, which typically provide flying crews and maintenance services, that it hopes to phase the planes into operation over the next three years, the people familiar with the matter said in a statement.

Railways in talks with World Bank The Railways is in talks with World Bank to set up a Rail India Development Fund (RIDF) in order to finance projects, PV Vaidialingam, Adviser (Finance), Railway Board, said at a FICCI conference. The Railways has already spent `22,000 crore of the `40,000 crore gross budgetary support in the current fiscal, he added.

Shipping Ministry eager to resolve congestion at Chennai Port The Shipping Ministry is firm to resolve the congestion problem in Chennai Port for which the following steps have been taken: • Two road projects namely ‘Ennore Mannali Road Improvement Project’ and ‘Elevated Four Line Road Projects from Chennai Port to Maduravoyal’ have been conceived for reducing the congestion problem. • Chennai Port has entered into a MoU with Southern Railway for providing two additional railway lines from the Port to the National Railway System (NRS).

Eicher consolidates reefer segment The leading brand from VE Commercial Vehicles, Eicher Trucks & Buses has strengthened its presence in the cold chain logistics sector through the expansion of its product portfolio and showcasing of a series of reefer trucks in the Pro 1000 and 6000 category. These include the introduction of Pro 1059XP reefer, Pro1110XP reefer & Pro6025 reefer. With these, Eicher is now ready to provide fully built ready to use solutions for cold chain logistics.

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Participate in CHEMLOG INDIA 2016 International Conference on Logistics and Supply Chain for Chemicals and Petrochemicals on January 29, Nehru Centre, Worli Mumbai.

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

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

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

aDVERTORIAL

Achievement of cargo directorate at AAI airports Introduction Airports Authority of India operates 126 airports and 329 airstrips, including 16 international airports and 89 domestic airports and is maximising the non-aeronautical revenue by cargo operation, particularly after the merger of IAAI and NAA. It has appointed Ground Handling Agents under the GHA Act-2007. AAI has been undertaking the international cargo handling operations at Chennai, Kolkata, Lucknow, Coimbatore, Trichy, Amritsar, Guwahati, Mangalore airports departmentally, and Trivandrum, Varanasi, Bagdogra, Bhubaneswar, Calicut, Vizag, Jaipur, Ahmedabad, Indore and Goa airports through O&M model. Similarly on the domestic front, AAI, has identified 24 airports across the country for the creation of Common User Domestic Air Cargo Terminals (CUDACT),

Innovative Programmes 1. Cargo Infrastructure Development • AAI has been focussing on the creation of international cargo handling facilities so far. The domestic cargo operation at the remaining airports have presently been entrusted to the operating airlines till such time as the CUDACT are established at seven more airports viz. Kolkata, Ahmedabad, Pune, Bhubaneshwar, Goa, Aurangabad and Trivandrum airports during the FY 2015-16 and at Guwahati, Srinagar, Ranchi, Varanasi, Calicut, Surat and Trichy airports during FY 2016-17. 2. Facilitation of Air Freight Station (AFS)

• AAI & MoCA are envisaging decongesting airports and encouraging Air Freight Stations activities parallel to the existence of ICD/CFS facilities for sea cargo. MoCA has already issued guidelines and all airports are required to create a separate corridor for the movement of stuffed containers and AFS operators are required to create infrastructure including screening of export cargo in their facilities so that the upliftment of the same at the airport is seamless. 3. Development of Air Cargo Hub/Aviation Hub • Ministry of Civil Aviation has already proposed the creation of air cargo hubs at the six major airports at Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad and an agency has been appointed by MoCA for carrying out a study across the country and to submit suggestions. 4. Upgradation of Technology • AAI has been managing air cargo terminals with its well known Integrated Cargo Management System (ICMS) at Mumbai (JVC), Delhi (JVC), Chennai and Kolkata airports since the year 1999. AAI has also upgraded its existing Integrated Cargo Management System(ICMS) based on the new requirements including implementation for e- freight compliance, web-based feedback system including mobile application and IT for domestic cargo handling. Chennai and Kolkata airports have been upgraded with Elevated Transfer Vehicle (ETV) facility for handling of palletisation/ULD handling and the

CORRIGENDUM: In the interview with S Ravichandran, ED, TVSLSL (Dec issue, page 98), it is erroneously stated that the annual turnover of TVSLSL is USd 7 billion. The correct figure is INR 4000 crore. The error is regretted.

import cargo wings have been provided with Automatic Storage & Retrieval System (AS&RS) for its enhanced handling capacity and modernisation. • AAI is gearing up to meet significant growth of both passenger and cargo traffic from as well as to Indian airports. Recently, AAI also enhanced its handling capacity at Chennai and Kolkata airports by installing ETV facilities for handling of export cargo and AS and RS for handling import cargo operations. The existing annual handling capacity will suffice the growth rate of cargo operations at Indian airports even beyond the FY 2019-20. In addition to above, AAI is also gearing up for the following: • Introduction of EDI & online web towards paperless operations • Introduction of customer satisfaction survey • Bonded trucking operation • Appointments of consultants • Establishment of e-commerce facilities • Incentive scheme for cargo freighters at Chennai and Kolkata airport • Formation of taskforce committee • Setting of Free Trade Zone AAI firmly believes that infrastructure drives growth in the air cargo. Growth in volume would also attract larger investments. Ultimately, an efficient air cargo environment will support inward investment to promote ‘Make in India’ with its ability to seamlessly integrate with global supply chains and furthering the ‘Ease of Doing Business’ in India.

CORRIGENDUM: The company name of Umesh Bhanot in the feature “Opting for the Right Track” in the Dec issue (page 46) has been printed wrongly. The correct name is APLL Vascor Automotive Pvt Ltd. The error is regretted.

OUR SERVICES International Courier & Cargo | Freight Forwarding – Air/Sea (Import/Export) Custom Clearance – Air/Sea (Import/Export) | Domestic Transport – Air/Train/Road Export – Import Business Consultancy | International Trading & Product Sourcing Merchant Exporter | Buying & Indenting Agent | Legalization from Embassies Handling Personal Baggage / Excess Luggage / Travel & Ticketing | Money Transfer House Hold Goods

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Showtime

CargoConnect organises India’s leading logistics industry magazine, CargoConnect recently organised a conference with the theme, ‘Warehousing Connect: The Road Ahead’ conference 2015’, coinciding with the CeMAT Material Handling Show on December 10-11, 2015 in Pragati Maidan, New Delhi. The two -day conference saw informative and valuable networking with delegates present from the warehousing industry. There were panel discussions along with

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Showtime

Warehousing Connect a few presentations by the industry experts. The first day saw discussions on topics such as ‘Warehousing-Future Prospects’, ‘IT and Technology Solutions in Warehousing and Supply Chain’ , ‘Pre-Engineered Buildings: Smarter Option for Warehousing’ whereas the second day witnessed discussions on ‘Pharma Warehousing’, ‘Material Handling Megatrends’ and ‘Warehousing Solutions to Prevent Damage of Food Crops,’ etc.

JANUARY 2016 - CargoConnect 83

events

India Cold Chain Show 2015 held in Mumbai The fourth International Exhibition and Conference, held from December 16-18, 2015, at Bombay Exhibition Centre, Mumbai saw cold chain industry under one venue. The three day conference was informative. Visitors from all over the country participated in the exhibition and obtained information on cold stores, reefer trucks, temperature control, refrigeration and storage and distribution.

‘CII E-commerce Retail Logistics Conference–2015’ The recently held CII E-commerce Retail Logistics Conference, 2015 comprised of four key sessions, each emphasising specific areas and stakeholders of the e-commerce retail ecosystem. The sessions focused on market perspectives, opportunities, challenges and way forward for this emerging industry.

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events

GST Awareness Programme organised by ACFI In its series of awareness programmes recently, Air Cargo Forum of India recently organised an ‘Awareness Programme on GST’ for the members of air cargo logistics industry at the conference hall of Celebi Cargo Terminal at IGI Airport, New Delhi. 34 ACFI members attended this programme. Uday Pimprikar, Partner, Ernst & Young LLP gave an insightful presentation on the current position of Goods and Services Tax (GST) proposal.

ACFI ‘Open House’ deliberations ACFI recently organised an open house discussion with the theme ‘ACFI InSync’ for all the ACFI members in the Capital. More than 40 members attended the open house comprising members from all the streams of air cargo logistics trade and industry from various parts of the country i.e. Delhi, Bangalore, Mumbai and Chennai etc.

Connect India ties-up with CSC and United Parcel Service Connect India, a last-mile delivery company recently announced their tie-up with United Parcel Service (UPS) and CSC e-SPV, a special purpose vehicle formed by the Government of India.

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events

Ninth Edition of CeMAT held in Capital Hannover Milano Fairs India Pvt Ltd recently organised the ninth edition of three-day CeMAT India Material Handing Show in the Capital for the experts from varied industries like material handling, warehousing, storage systems and logistics services to name a few. The main attraction of the fair was a complete range of products and services, from hydraulics and pneumatics to electro-mechanical transmission, automation components to process and factory automation systems, materials handling equipments to logistics infrastructure systems, surface technology products to electroplating and surface engineering techniques and much more. Coinciding the exhibition, a conference was organised by the CargoConnect Magazine with the theme – ‘Warehousing Connect: The Road Ahead.’ The exhibition was very well attended on all three days.

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events

ACAAI organises 42nd Annual Convention in Vietnam The Air Cargo Agents Association of India (ACAAI) recently organised its 42nd annual convention in Ho Chi Minh City, Vietnam, known for its beaches, rivers, Buddhist pagodas and bustling cities. The conference saw airport officials, airlines, cargo agents, forwarders from across the country and abroad. The inaugural session and lamp lighting ceremony took place on the first day of the conference. Hemant Bhatia, President ACAAI and Sunil Arora, Chairman, Convention also released the convention souvenir in the presence of Her Excellency Preeti Sara, Ambassador of India to Vietnam and Vo Huy Cuong, Deputy Director General, CAA of Vietnam. The special address was given by Rajeev Kumar Jain, CEO, Mumbai International Airport Ltd while keynote address and Vote of Thanks were given by NR Bhanumurthy, Professor, National Institute of Public Finance and T.A. Varghese, Vice President, ACAAI respectively. The three-day-conference not only focused on the issues concerning the Indian air cargo industry but also worked on improving India-Vietnam trade relations. The main subjects discussed at the conference were ‘Make in India-New Logistics Arena, Evolving Customer Mandates’, ‘Digital India – Embracing Technology’, ‘Air Logistics – Performance Par Excellence’, etc. The important people present at the event were Neera Rawat, Executive Director-Cargo, Airports Authority of India (AAI), S L Sharma, Immediate Past President and Member Board of Advsiors, ACAAI, D Murali, Executive Director, Cargo, Air India, Pradeep Kumar, Senior Vice President, Jet Airways Cargo, Do Xuan Quang, Vice President Cargo, Vietjet Air, Vietnam to name a few. The convention which was organised on a large scale like every year promised to bring fruitful results for air cargo industry in the coming years.

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guest column

Role of Air Cargo in Express Delivery Logistics By Chander Agarwal

he express logistics market is growing by leaps and bounds. The fast growing e-commerce market has given a new lease of life to the logistics industry. To thrive and grow in the logistics industry, players need to be well-equipped to handle the diverse requirements presented at home and overseas. With the idea of making the most of this opportunity, TCI XPS delivers to over 13,000 delivery locations in India and to over 200 countries across the world. Door-to-door delivery and time definite express delivery across the country and abroad, however, means we are more dependent on the air route. The domestic air express business is at the cusp of a major take off. According to a study by the International Air Transport Association (IATA), India is expected to grow into one of the ten largest international freight mar-

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kets by 2018. It is estimated that in 2015, 35 per cent of the world trade by value will be transported by air. At TCI XPS, 6-9 per cent of the total volume in express delivery is shipped through air. Air cargo is the most vital link between domestic and international market. Increased trade activity between India and the Asia-Pacific region, coupled with the relocation of trade epicentres to China, Southeast Asia and Africa is expected to open fresh opportunities for the air cargo industry in India. We, at TCI XPS, have recently introduced our international express delivery unit to capitalise on the evergrowing express delivery requirements. The domestic air cargo logistics business is witnessing a rapid growth. Strong macroeconomic fundamentals, rising levels of disposable income and expansion of domestic air network is heavily contributing to the growth and expansion. We can see that express cargo companies are extending the reach of end-to-end solutions to customers on a multi-mode distribution model to stay up to speed. There is a continuous increase in demand from new time sensitive verticals like e-commerce, pharmaceuticals, wireless telephones (mobile phones), and automotive spares. Each industry calls for customised solutions to their complex supply chain needs. E-commerce is primarily driving the air cargo industry. As per the estimate, the current share of e-commerce in India is around one per cent of the total retail business and is estimated to grow seven times in the next ten years. E-commerce companies are making a commitment of 24-36 hour service from order booking to delivery. Common user domestic cargo terminals need to be developed so the additional volumes expected from e-commerce growth can be handled efficiently. We

need a proper guideline for the frequent mounting air cargo costing by airlines. Consequently, the express logistics industry is constantly presented with its own set of challenges. There is a high upwards volatile air pricing structure in airlines. Operations get regularly impacted by the surge or drop in fuel prices. We also face sector specific space constraints. Offloading at airports and poor handling of cargo at terminals are quite common. There are external factors like environment, bad weather and temperature that impact the operations. Every now and then, there are cases of non-traceable or missing cargo or damaged cargo. The cargo processing time at airports is lengthy which tends to defeat the purpose of express delivery itself. Air cargo growth rates are directly linked to the GDP growth. We can say, air cargo sector could be a barometer of economic growth in the near future. Air cargo infrastructure planning should be medium and long term based on volume anticipation. The current infrastructure is woefully inadequate and overloaded. Domestic air cargo terminals should adopt the international benchmark for mishandling rate of 0.015 per cent (i.e. 1.5 for every 10000 shipments) which is currently much higher. There should be a proper loading or unloading area along with proper truck parking and adequate covered areas for holding cargo for departure or arrival. We at TCI XPS intend to get the most out of the booming e-commerce industry and high value express business. Currently, we are focusing operations around the e-commerce sector so that the right operational flexibility can be created and prospective of hyper growth in express logistics business is successfully achieved. (The writer is the Joint Managing Director, TCI)

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