contents April 2012 DEPARTMENTS National News DACAAI Convention 2012: Emphasises on collaborative approach and skill development
Uniworld and GEFCO create 12 single brand across Asia Civil Aviation Minister assures 14 better infrastructure for air cargo
International News Mercator provides low cost cargo 18 management technology Emirates SkyCargo receives 20 fourth B 777 F to strengthen global operations
Trade Opportunities FIEO meets Belgium delegates to 31 explore the ‘Gateway to Europe’
Logistics Services OM Logistics: focussing on full truck 32 express and air cargo Mercurio Pallia to launch 40 ‘Car Compounds’ to comply with post GST regime
Cargo Performance Airlines wise cargo performance 34 from Delhi International Airport for February 2012 Airlines wise cargo performance 35 from Mumbai International Airport for February 2012
Express Cargo UPS announces to buy TNT Express 37
Family Albums ACCD Annual Ball 2012 44
4 CARGOTALK APRIL 2012
Publisher: SanJeet Editor: Rupali Narasimhan Sr. Assistant Editor: Ratan Kumar Paul Associate Editor: Ipshita Sengupta Nag General Manager: Gunjan Sabikhi Deputy General Manager: Harshal Ashar Regional Manager, South: K N Sudheer Regional Manager, North: Rajiv Sharma Asst. Manager, West: Roland Dias Marketing Co-ordinator: Gaganpreet Kaur Designer: Parinita Gambhir Advertisement Designer: Vikas Mandotia Production Manager: Anil Kharbanda Circulation Manager: Ashok Rana 'XUJD'DV3XEOLFDWLRQV3YW/WG 1HZ'HOKL 72 Todarmal Road, New Delhi – 110001, India. Tel.: +91 11 23731971, 23710793, 23716318, Fax: +91 11 23351503, E-mail: firstname.lastname@example.org, Website: www.cargotalk.in %UDQFK2IILFHV 0XPEDL 504, Marine Chambers, New Marine Lines, Opp SNDT College, Mumbai – 400020, India Tel.: +91 22 22070129, 22070130 Fax: +91 11 22070131, E-mail: email@example.com 0LGGOH(DVW P.O. Box 9348, Saif Zone, Sharjah, UAE Tel.: +971 6 5573508 Fax: +971 6 5573509 Email: firstname.lastname@example.org CARGOTALK is a publication of Durga Das Publications Private Limited. All information in CARGOTALK is derived from sources, which we consider reliable and a sincere effort is made to report accurate information. It is passed on to our readers without any responsibility on our part. The publisher regrets that he cannot accept liability for errors and omissions contained in this publication, however caused. Similarly, opinions/views expressed by third parties in abstract and/or in interviews are not necessarily shared by CARGOTALK. However, we wish to advice our readers that one or more recognized authorities may hold different views than those reported. Material used in this publication is intended for information purpose only. Readers are advised to seek specific advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the readers’ particular circumstances. Contents of this publication are copyright. No part of CARGOTALK or any part of the contents thereof may be reproduced, stored in retrieval system or transmitted in any form without the permission of the publication in writing. The same rule applies when there is a copyright or the article is taken from another publication. An exemption is hereby granted for the extracts used for the purpose of fair review, provided two copies of the same publication are sent to us for our records. Publications reproducing material either in part or in whole, without permission could face legal action. The publisher assumes no responsibility for returning any material solicited or unsolicited nor is he responsible for material lost or damaged. This publication is not meant to be an endorsement of any specific product or services offered. The publisher reserves the right to refuse, withdraw, amend or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian and International Advertisements Code. The publisher will not be liable for any damage or loss caused by delayed publication, error or failure of an advertisement to appear. CARGOTALK is printed & published by SanJeet on behalf of Durga Das Publications Private Limited. and is printed at Cirrus Graphics Pvt. Ltd., B-62/14, Phase-2, Naraina Industrial Area, New Delhi – 110028 and is published from 72 Todarmal Road, New Delhi – 110001.
contents April 2012
DACAAI Convention 2012 46
It’s GSTN, not GST now!
Air Cargo Club of 49 Madras Annual Ball Industry Events
The Union Budget 2012-13 has once again refrained to take any concrete step on the much desired implementation of Goods and Service Tax (GST). Instead, the finance minister has announced that the pilot programme in this regard called GST Network (GSTN) would be implemented in August this year. However, experts are skeptical about the possibility of starting GSTN in August because of some ifs and buts still remaining.
Logistics Talent Hunt – 2012: A 50 quest for skilled manpower Cargo fraternity urges for 54 nodal point for growth India Aviation 2012 India 55 will be the third largest aviation market by 2029: ACI
It is worth mentioning that the Constitution Amendment Bill, a preparatory step in the implementation of GST was introduced in the Parliament in March 2011 and is before the Parliamentary Standing Committee. The government is waiting for the recommendations of the committee for drafting of model legislation for the Centre and the state GST in concert with the states. However, in the meanwhile, the structure of GSTN has been approved by the empowered committee of the state finance ministers. Hence, the finance minister is optimistic about its implementation by August 2012.
Shipping & Ports Pradeep Kumar Sinha takes 52 over as secretary shipping Cochin Steamer Agents 53 Association urges for 30% reduction on feeder cost
GSTN will be set up as a National Information Utility. According to the pilot GST programme, GSTN will implement common PAN-based registration, returns filing and payments processing for all States on a shared platform. The use of PAN as a common identifier in both direct and indirect taxes, will enhance transparency and check tax evasion.
Face of the Month Ramesh Agarwal, Agarwal 22 Packers & Movers: Mission is to establish Drivers’ Seva Kendra
Interestingly, the finance minister’s positive intent might not find support from many of the state governments, who have already raised objections against curving states ‘own ways’ of revenue generation mechanism. In addition, there are some gray areas in regards to technicalities and federal norms, barring the finance minister to take a firm step on GST. The result is that the logistics industry has to live with the existing irrational tax regime prevailing across the country, until a ‘common consensus’ is developed for the greater interest of the country!
Wait and Watch: The Air Cargo 42 Policy and its desired results
CEO Talk National Aviation Policy needs a 56 strong implementation plan: IATA
Study Report KPMG Report recommends for Air 58 Cargo Promotion Board
Rupali Narasimhan Editor
Union Budget 2012-13: Industry welcomes ECB initiatives for strengthening logistics infrastructure The Union Budget 2012-13, which has set the guidelines for entering into the 12th five year plan, has largely been lauded by the industry people including the logistics industry. This year’s budget has been commended for its intention of capital generation for the much needed infrastructure building for every sector 6 CARGOTALK APRIL 2012
National News Industry Associations
DACAAI Convention 2012 approach emphasises on collaborative and skill development
he 3 rd Annual Convention of DACAAI was attended by a large number of domestic cargo agents from across the country along with several officials from airlines, airports, terminal operators, ministry of civil aviation and industry experts.
The 3rd Annual Convention of the Domestic Air Cargo Agents Association of India (DACAAI), which was held recently in Hyderabad, discussed about the urgent requirements of the development of air cargo facilities both at metro as well as non metro airports. It also emphasised on joint initiatives of the stakeholders to bring in efficiency. Ratan Kr Paul In his keynote address Kannan stressed the growing importance of time sensitive domestic air cargo movement for the growth of the country’s economy. “Over the years domestic air cargo is growing faster than international cargo in India,” Kannan pointed out. He, however, underlined the challenges including infrastructure,
challenges from surface and rail mode due to multiple handling and excessive dwell time at the airports. “Cargo handling should be simple with proper utilisation of modern techniques and information technology. The process should also be transparent. Transit time should be reduced remarkably,” he appealed.
DACAAI ELECTS NEW EXECUTIVE COMMITTEE At the DACAAI Convention 2012 in Hyderabad the association members have elected a new managing committee for the year 2012 and 2013. Office bearers: Gaurav Ghuwalewala-president; Suraj Agrawal- vice president; Amit Bajaj- general secretary; Inderjeet Sehrawat- joint secretary and Ravijeet Sehrawat- treasurer. Executive committee: Anand Prasad Agrawal, Hari Nair, Rajkumar Ghosh, Sajjan Sharma, Ismail Khan and V. Raghunathan. Arvind Nayak will be actively associated with DACAAI as immediate past president 0.DQQDQDGGUHVVLQJWKHFRQYHQWLRQ
The speakers included Arvind Nayak, the then president, DACAAI, Gaurav Ghuwalewala, the then vice president, DACAAI, M Kannan, economic advisor, ministry of civil aviation, Vikram Jaisinghani, CEO, GMR Hyderabad International Airport, Arindam Banerjee, global head, airport services, Jet Airways, Ivor Llewellyn, CEO, Hyderabad Menzies Air Cargo, Chitra Shinde, COO, Gati and Sumeet Nadkar, CEO & MD, Kale Logistics Solution. 8 CARGOTALK APRIL 2012
regulatory, systems and processes, uses of IT and skilled human resources. He urged for collaborative initiatives from the government and industry stakeholders to fight those challenges. Earlier, Nayak also maintained that the domestic air cargo industry is facing tremendous problems owing to the lack of appropriate infrastructure. He stated that there is no parity of the government policies as far as movement of domestic cargo is concerned. According to Ghuwalewala, air cargo is becoming expensive and facing
Banerjee emphasised on the easy access and seamless cargo movement to and from the airports. “In India I am sure 99 per cent of the domestic cargo is carried by passenger airlines in the belly space. The sooner one realises that cargo can make a vital contribution to route profitability the better the chances of survival of all such passenger airlines. he concluded by adding a crucial perspective in view of the beleaguered airlines industry in India. WWW.CARGOTALK.IN
News in Brief Supply Chain Management
EMIL-SCS meets Future Group discusses retail logistics
ecently, top executives at Future Supply Chain Solutions hosted a visit from Georgia Tech’s Executive Master’s in International Logistics & Supply Chain Strategy (EMIL-SCS), to discuss Future Group’s retail logistics challenges and innovations in India. The visitors included vicepresidents, directors and senior managers of companies such as Dell, Tiffany & Co., L’Oréal, UPS, etc., from USA, Canada, Thailand and Venezuela. Incorporated as a separate company in 2007, Future Supply Chains is India’s first fully integrated IT enabled end-to-
10 CARGOTALK APRIL 2012
end supply chain services provider, with expertise in managing supply chains across categories like fashion, FMCG & food, home, consumer durables, electronics & IT, pharmaceuticals, automotive and general
merchandise. EMIL-SCS is an executiveformat master’s degree programme offered by Milton H. Stewart School of Industrial & Systems Engineering at the Georgia Institute of Technology.
National News Airlines
appoints dedicated official for Cool/td Cool/td-Passive and Cool/td & DG) a wide option for air transport of temperature sensitive cargo.
ufthansa Cargo has announced the appointment of Japneet Makin as dedicated official for its product Cool/td for temperature sensitive shipments for India and the Middle East region. Makin who has been trained in all aspects of the product functionalities and processes. According to the airline sources, Cool/ td targets the needs of the life science and health care industry for airport to airport transportation within defined temperature limits. Under the umbrella of the Cool/td services, Lufthansa Cargo provides a range of additional processes, infrastructure, information and trained personnel to enable
smooth handling of such shipments. Cool/td offers with several variants (Cool/td-Active,
Makin has graduated as Mechanical Engineer from Delhi University and also holds a Masters degree in Business Administration with specialisation in Marketing from Pune University. His career span with Lufthansa Cargo started in 1998 as customer service function till 2006 followed by five years as external sales for northern India. His current tasks include business development and would be a link between the regional market and Competence Center for Temperature Control in Frankfurt.
National News New Launch
Uniworld and GEFCO
create single brand across Asia
On the occasion of the 10th year celebration of Uniworld Logistics, M Prem Kumar, chairman and managing director of the company unveiled the future growth path of Uniworld.The company started its journey in 2012 with its headquarters in Bengaluru. It presently has 30 offices across India as well as Asian countries. Ratan Kr Paul the Uniworld network in Asia aims at bringing GEFCO’s 60 years of expertise in automotive logistics to car manufacturers and automotive suppliers in India. Another key area of focus is global accounts in Europe and Asia,” he added.
p e a k i n g a t t h e 1 0 th y e a r celebration programmme Kumar maintained that Uniworld Logistics has grown beyond the market trend in the last 3 years with a CAGR of 18 per cent to become more than US$ 100 million company. “Uniworld has created a base to take a leap in the next five years. In future, the focus will be mainly on automobiles, pharma and farm fresh cold chain, fashion retail, IT and ITEs and engineering,” said Kumar. He also maintained that tough in freight, Uniworld is open to all sectors across the verticals and with its specialisation in project cargo, the company will be looking forward to participate more in projects in the coming years. Kumar announced that Uniworld has entered into collaboration with GEFCO, a 100 per cent subsidiary of PSA Peugeot Citroen, to create a single brand across
Asia and Europe. “The aim of this brand is to offer a competitive advantage to global customers who need a single provider to deliver integrated solution across the supply chain,” said Kumar. He asserted that GEFCO and Uniworld have complementary networks and expertise in different verticals in delivering freight management, transportation and logistics solutions. “The collaboration, across
He highlighted a few areas which have been earmarked for the next 5 years. The areas include cold chain solutions for pharma companies and e-commerce. “With all the infrastructure and expertise in place, we are also geared up to take assignment for companies who want to redesign their supply chain to ensure that they can make it agile and sustainable to adapt to the ever changing needs of the growing economy of India,” Kumar said. At present Uniworld has a workforce of more than 750 employees and 6,50,000 sq ft of warehouse space. It has CAGR growth of 15 per cent in its freight volumes with an increasing client base.
BLUE DART PRESENTS GLOBAL CSR AWARDS Blue Dart Express recently presented the inaugural Global CSR Awards. The awards recognised corporate social responsibility (CSR) champions across various industries and were part of the first World CSR Day. M Veerappa Moily, union minister of Corporate Affairs, was the chief guest at this event. The World CSR Day/Global CSR Awards were in conjunction with DHL’s first Corporate Responsibility Day in India and comprised of two panel discussions - CSR: The Way Forward and Public-Private Partnership for a Greener Planet. Speaking on the occasion Malcolm Monteiro, SVP & area director - South Asia, DHL Express said, “As a responsible organisation, we firmly believe in striking the right balance between economic benefits and social responsibility.” 12 CARGOTALK APRIL 2012
National News Industry Associations
Civil Aviation Minister assures better infrastructure for air cargo
Recently, speaking to a delegation from ASSOCHAM, Ajit Singh, minister of Civil Aviation reiterated that apart from the proposed Civil Aviation Policy, the ministry will also consider the proposal to work out a separate air cargo policy. It is estimated that some 200 freighter aircraft will be required in the next 20 years to meet the industryâ€™s demand. CT Bureau
ccording to Singh the new civil aviation policy will attract investments and improve infrastructure for the air cargo operations in India. He also maintained that the new policy will position India among top five markets in the world by providing access to safe and affordable air services with a strong regulatory framework and world class infrastructure facilities. Commenting on the present scenario Narayana Rao, chairman, ASSOCHAM committee on Civil Aviation said that upgrading infrastructure, attracting domestic investments and easing norms on foreign direct investments are essential so that the sector can grow annually by eight per cent and raise freight traffic from 23.5 lakh tonne now to 70 lakh tonne in the next ten years. ASSSOCHAM emphasises on
14 CARGOTALK APRIL 2012
Indiaâ€™s potential as global trans-shipment hub. It urges for simplification of procedures like 100 per cent electronic approvals. â€œThere should be inter-linkages with airlines, airport operations and air freight stations, customs, banks, clearing house agents and other allied agencies for greater mobility of processes. Land should
be demarcated for air cargo villages at airports or nearby regions,â€? said Rao. The chamber also recommends that air freight stations should be established in hinterlands to decongest warehouse and offset limitations of space. They should have facilities for palletisation, customs examination and X-ray screening. ASSOCHAM highlights the facts that the dwell time at Indian airports is 40 to 120 hours as compared to international average of 4 to 12 hours. There is need for establishing an air cargo promotional board for further organised growth and deployment of air cargo hubs across the country.
International News Industry Associations / Calendar of Events
AGM of TIACA is in the theme ‘Air Cargo Moscow with in the Rising Economies’
Moscow is situated midway between the Asian and north American markets. It has a thriving air cargo industry of its own. The conference will explore the importance of the Russian air cargo market in the global economy.
With sustained growth momentum supported by a home market of 143 million consumers, rich oil and gas reserves and its imminent membership of the World Trade Organisation (WTO) and its influential
According to Daniel Fernandez, secretary General of TIACA, Russia is already a strong player in the global air cargo industry and the growth and development of Volga-Dnepr Group is one of the country’s great business success stories. “We believe this will be a fascinating event for businesses already doing business in Russia, for those that want to enter the market and for members of the local Russian cargo industry.”
osted by Volga-Dnepr, the Executive Summit and AGM of The International Air Cargo Association’s (TIACA) will be held in Moscow from May 23-24, 2012. The theme of the Summit will be ‘Air Cargo in the Rising Economies: East Balances West’. The event will see business leaders from both Russia and other major global markets discussing the fast-growing opportunities to do business in Russia. 'DQLHO)HUQDQGH]
economies, Russia has become one of the most attractive destinations for air cargo professionals across the world.
Southern Asia Ports Logistics & Shipping – Srilanka
Logistics Transport 2012
Transport Logistic China
Air Cargo China
CILT(UK) Annual Conference
India Maritime 2012
8th Trans Middle Esat Bahrin 2012
April 26-27, 2012 Cinnamon Grand Colombo Colombo, Sri Lanka Tel.:+(60)-(3)-80235352
5-7 June 2012 Shanghai New International Expo Centre Contact : Messe München GmbH Tel.: +49 89 949-20277 e-mail: email@example.com
FIATA 2012 World Congress October 8-12, 2012 Hyatt Regency Century Plaza Los Angeles, CA FIATA2012@vrsevents.com Tel.: 202-373-4174
16 CARGOTALK APRIL 2012
May 9-12, 2012 Helsinki Exhibition and Convention Centre, Finland Contact: Finnish Transport and Logistics SKAL Tel.: +358 9 4789 9336 e-mail: firstname.lastname@example.org
June 13, 2012 TBA, London The Chartered Institute of Logistics and Transport, UK Web site: http://www.ciltuk.org.uk/ pages/logisticsevent
October 17 -20,2012 Panaji, Goa, India Contact: Federation of Indian Chambers of Commerce and Industry (FICCI) e-mail: email@example.com; rishi. firstname.lastname@example.org
June 5-7, 2012 Shanghai New International Expo Centre(SNIEC) Shanghai, China Tel.:+(60)-(3)-80235352
October 2-4, 2012 Georgia World Congress Center 285 Andrew Young International Blvd. N.W. Atlanta, Georgia 30313-1591 Tel.: 1 786 265 7011 e-mail: email@example.com
November 20-21, 2012 Gulf International Convention And Exhibition Centre, Kingdom of Bahrain Tel: +60 87 426 022 e-mail: enquiries@transport events.com
International News Technology
Mercator provides low cost cargo management technology
ercator, part of the Emirates Group, comprising Emirates Airline, dnata and their subsidiary companies and a provider of business technology solutions and services to the global airline industry has signed a pact to offer technology to a LCC carrier (flydubai) for the first time. The solution, SkyChain, enables flydubai to fully automate its cargo operations. In addition, flydubai has also engaged Mercator to provide revenue accounting services, using RAPID, to process and account for cargo transactions. This application will also enable flydubai to automate its Cargo accounting processes,
18 CARGOTALK APRIL 2012
resulting in accurate calculation and analyses of the airline’s data. Commenting on the importance of the solution Duncan Alexander, vice president, Mercator said, “The ability for an airline to be able to capture and analyse accurate and consistent revenue records, and to manage its cargo operations in an integrated and paperless fashion, places it at distinct advantage amongst its competitors.” He also asserted that the company’s technologies are used
to manage the passenger and cargo operations of airlines in 79 countries and flydubai is now the first low cost carrier in the world to implement Mercator’s SkyChain product.
International News New Launch
Emirates SkyCargo receives fourth B 777 F
to strengthen global operations Boeing 747Fs. This will enable us to facilitate even more international trade between points on our expanding route network, further consolidating Dubaiâ€™s position as a global trade hub.â€? Emirates SkyCargo took delivery of its first Boeing 777F in early 2009.
mirates SkyCrago has further strengthened its fleet size by adding one more freighter, Boeing 777F. DAE Capital, the aircraft leasing division of Dubai Aerospace Enterprise (DAE) delivered to the airline the fourth Boeing 777 freighter under a long-term lease. Commenting on this acquisition, Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group said, â€œThe arrival of this Boeing 777F is a valuable addition to our freighter fleet â€“ now comprising four Boeing 777Fs and four
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Elaborating on the reason behind selection of Boeing 777 the chairman maintained that the aircraft is the most technologically advanced freighter in operation, has excellent long-range capabilities and provides increased flexibility to offer customer-centric solutions, specially for the heavy and oversized shipments.
AirBridgeCargo starts services
between northern Europe and China
irBridgeCargo Airlines (ABC) has introduced a new cargo link between northern Europe and China, from Hannover Airport in Germany to Beijing via Moscow. The new weekly Boeing 747-400 freighter service will primarily transport engineering and automotive parts from the industrial region in north Germany to the far East. The global logistics company KĂźhne + Nagel will be the main customer for the new ABC operation. Commenting on the new services Ludwig Hamburger, vice president and regional director EMEA, AirBridgeCargo 20 CARGOTALK APRIL 2012
Airlines said that the airline could include north Germany, northern and northeast Europe in the global distribution of goods through its central hub in Moscow. The airline also recently opened new bases in Asia at Chengdu and Zhengzhou in addition to Beijing. According to Klaus JĂ¤ger, a member of the management team at KĂźhne + Nagel, Central European Air Freight, the company is establishing a door-to-door product with this route. â€œThe launch of the regular cargo link between Hannover and Beijing is an important
sign for all the logistics companies in the region that freight traffic is becoming more important at Hannover Airport â€“ not only from a European point of view, but also across Asia,â€? he observed. WWW.CARGOTALK.IN
Face of the Month Ramesh Agarwal, Agarwal Packers & Movers
Quiet and Firm
Mission is to establish Drivers’ Seva Kendra
garwal acquired his primary and secondary education at government school, Nalwa, and did his graduation from Kurukshetra University. He started his professional career in 1980 as an Airman with Indian Air Force (IAF). During his stint with IAF, Agarwal was conferred with ‘The Best Airman Award’ in Chennai. “From the very beginning I wanted to work with the IAF and serve my nation,” says Agarwal. From a defence background, Agarwal has given a new shape to the country’s logistics and household goods segment, making it an established industry. He has been in the limelight for introducing advanced packing technology and ‘Double Door Home Carrier’ in this segment that has created a niche in the market. After taking his VRS from IAF in 1986, Agarwal started his new journey.
Ramesh Agarwal, chairman cum managing worker, Agarwal Movers Group, and a humble industry leader, is well known for his social commitments with regard to the development of domestic logistics industry in India. Born on September 6, 1962, in village Nalwa, district Hissar in Haryana, Agarwal today is a man of action, vying for discipline the industry thanks to his solid defense background. Ratan Kr Paul from Chennai to Srinagar, I had to face the daunting task of packing my goods on my own. The problems and trauma I had to face during my shifting compelled me to start a service where people could shift their homes with complete peace of mind. When I shared this idea with my younger brother it went on to become a foundation of a complete new industry i.e. packing & moving of goods. Later on we converted it into a logistics company with total solutions under one roof,” shared Agarwal. According to Agarwal, today 88 per cent of the industry is unorganised but it is gradually getting organised. “Once the companies gain momentum towards adopting and adapting to the best
practices in logistics in order to remain in the business, then sky will be the limit,” he observed. He also showed concerns over the existing infrastructure. “Our infrastructure is not completely ready to fulfill modern requirements. We need quality warehouse, highway security force and proper shelter at National Highways,” Agarwal viewed. Agarwal emphasised on the short supply of skilled drivers. In his opinion, this has been a serious issue. “Save the Drivers, Save the Industry,” is the message that Agarwal
Agarwal started his career in packing & transportation at Hyderabad along with his younger brother Rajender Agarwal. The company, Agarwal Packers and Movers Ltd., soon became a leading name in the business. What prompted him to enter into packing & moving business? “During my tenure in the Air Force, while shifting 22 CARGOTALK APRIL 2012
Face of the Month Ramesh Agarwal, Agarwal Packers & Movers
My vision is to make our company a globally recognised corporation that provides best relocation and logistics solutions wants to convey. “As for trade practitioners, they should take a pledge that no unorganised activity will exist in the logistics industry. There may be initial losses but then there will be permanent relief in the long run,” he argued. He also maintained that government authorities should frame proper policies for toll tax. The journey on National Highways should be made safer and there should be a special ‘highway protection squad’ which should be like a facilitator to the user rather then being an authority. “Goods and Service Tax (GST) should be made applicable as soon as possible and also the driver’s job should be given a work status, as he plays a
24 CARGOTALK APRIL 2012
very important role in the logistics cycle. Moreover the trade should be recognised as a full fledged industry,” Agarwal added.
His devotion “My vision is to make our company a globally recognised corporation that provides best relocation and logistics solutions,” stressed Agarwal. “I try to devote quality time to my children’s learning and be with them at the dinner table whenever I come home early . My area of interest is reading books and sharing experience with new, young entrepreneurs,” Agarwal
informed. Agarwal’s emphasis has always been on innovations – waste cutting and not cost cutting. He firmly believes that unless the last man manning the transport chain is happy and satisfied, the industry cannot flourish. Taking this forward for the development of drivers’ community, a model ‘Driver Seva Kendra’ will be Agarwal’s next milestone. He wants to open up ‘Drivers’ Sewa Kendra’ on the National Highway, at every 150 km, for resting and other welfare activities for drivers. Establishing logistics parks will be next on the agenda. Agarwal is the National President of All India Transporters Welfare Association (AITWA) and represents the transport sector at various government, nongovernment national and international agencies. Agarwal is also known to be active in social, educational and religious activities.
International News News in Brief
Gati and Kintetsu World Express form joint venture company to offer global express services In order to strengthen its global services, the Board of Gati has approved a proposal to form a joint venture (JV) with Japanese global logistic company Kintetsu World Express (KWE) under the name â€˜Gati-Kintetsu Expressâ€™. CT Bureau
company will help us leverage KWEâ€™s global customer base, develop world class infrastructure capabilities, enhance our distribution services and further strengthen our leadership position in India.â€?
ccording to the JV agreement, Gati will hold 70 per cent stake and 30 per cent will be held by KWE in the new company. As a part of the transaction, Express Distribution and Supply Chain (EDSC) business of Gati will move into the JV company through a business transfer agreement. According to the Gati sources, the JV will combine Gatiâ€™s expertise in 3PL and express distribution in India with KWEâ€™s freight forwarding expertise and global customer base. The JV company will support large customer base of KWE who have operations in India, simultaneously strengthening KWEâ€™s distribution capabilities into the Indian market. The sources also maintained that it will also
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invest in high end 3PL facilities, including temperature controlled warehouses. Commenting on the JV Mahendra Agarwal, founder and CEO of Gati said, â€œKWE is one of the worldâ€™s leading logistics solutions providers. Our partnership with this
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Cover Story Budget Analysis
Union Budget 2012-13 Industry welcomes ECB initiatives for strengthening logistics infrastructure The Union Budget 2012-13, which has set the guidelines for entering into the 12th five year plan, has largely been lauded by the industry people including the logistics industry. This year’s budget has been commended for its intention of capital generation for the much needed infrastructure building for every sector. An analysis. Ratan Kr Paul
n his budget speech Pranab Mukherjee, finance minister made it clear that there should be no room for complacency, keeping in mind India’s growth story. “We will be misled if we ignore the ground realities of the world. The global crisis has affected us,” he cautioned. India’s Gross Domestic Product (GDP) is estimated to grow by 6.9 per cent in 2011-12, after having grown at the rate of 8.4 per cent in each of the two preceding years. Though India has been able to limit the adverse impact of this slowdown on our 26 CARGOTALK APRIL 2012
“India’s GDP is estimated to grow at 6.9 per cent in real terms in 2011-12. The growth is estimated to be 2.5 per cent in agriculture, 3.9 per cent in industry and 9.4 per cent in services. There is a significant slowdown in comparison to the preceding two years, primarily due to deceleration in industrial growth, more specifically in private investment. Rising cost of credit and weak domestic business sentiment, added to this decline. Taking a bird’s eye view of the entire economy and keeping in mind the difficult global environment, I expect India’s GDP growth in 2012-13 to be 7.6 per cent, +/- 0.25 per cent.” – Finance Minister
economy, this year’s performance has been disappointing. But it is also a fact that in any cross-country comparison, India still remains among the front runners in economic growth. “We are now at a juncture when it is necessary to take hard decisions. We have to improve our macroeconomic environment and strengthen domestic growth drivers to sustain high growth in the medium term. We have to accelerate the pace of reforms and improve supply side management of the economy,” said the finance minister. Mukherjee underlined that the country is about to enter the first year of the 12 th Five Year Plan which aims at faster, sustainable and more inclusive growth. The plan has to be launched with the Budget 2012-13. The finance minister
identified five objectives for the fiscal year 2012-13. These are: Focus on domestic demand driven growth recovery, creating conditions for rapid revival of high growth in private investment, addressing supply bottlenecks in agriculture, energy and transport sectors, particularly in coal, power, national highways, railways and civil aviation, intervening decisively to address the problem of malnutrition especially in the 200 high-burden districts and expediting coordinated implementation of decisions being taken to improve delivery systems, governance and transparency and addressing the problem of black money and corruption in public life.
Export Scenario Mukherjee pointed out that the developments in India’s external trade
in the first half of the current year were encouraging. During April-January 201112, exports grew by 23 per cent to reach US$ 243 billion, while imports at US$ 391 billion recorded a growth of over 29 per cent. Remarkably, India has successfully achieved diversification of export and import markets. The share of Asia, including ASEAN, in total trade increased from 33.3 per cent in 2000-2001 to 57.3 per cent in the first half of 2011-12. This has helped the country weather the impact of global crisis emanating from Europe and to a lesser extent from USA.
Goods and Service Tax Mukherjee also pointed out that the Constitution Amendment Bill, a preparatory step in the implementation of Goods and Service Tax (GST) was introduced in Parliament in March 2011 and is before the Parliamentary Standing Committee. The government is waiting for the recommendations of the committee. As a result, the drafting of model legislation for the Centre and the state GST in concert with the states is under progress. It may be recalled that the structure of GST Network (GSTN) has been approved by the empowered committee of state finance ministers. Mukherjee maintained that GSTN would be set up as a National Information Utility and would become CARGOTALK
Cover Story Budget Analysis
operational by August 2012. The GSTN will implement common PAN-based registration, returns filing and payments processing for all the states on a shared platform. The use of PAN as a common identifier in both direct and indirect taxes, will enhance transparency and check tax evasion. I solicit the support of all my colleagues cutting across party lines for an early passage of these landmark legislations.
Capital Investment During the year 2011-12, the government took a series of steps to deepen the capital market and encourage investment in the infrastructure sector. These steps included raising
for companies to issue IPOs of ` 10 crore and above in electronic form through nationwide broker network of stock exchanges. â€œLack of adequate infrastructure is a major constraint on our growth. The strategy we have followed so far is to increase investment in infrastructure through a combination of public investment and Public Private Partnerships (PPP). During the 12 th Plan period, infrastructure investment will go up to ` 50 lakh crore. About half of this is expected to come from private sector,â€? said Mukherjee. The minister informed that for the year 2011-12, tax-free bonds for ` 30,000 crore were announced for financing infrastructure projects. He proposed to double it to raise
to set a target of covering a length of 8,800 km under NHDP next year. The allocation of the ministry has been enhanced by 14 per cent to ` 25,360 crore in 2012-13. To encourage PPPs in road construction projects, the minister proposed to allow ECB for capital expenditure on the maintenance and operations of toll systems for roads and highways so long as they are a part of the original project. The airline industry is facing financial crisis. The high operating cost of the sector is largely attributable to the cost of Aviation Turbine Fuel (ATF). To reduce the cost of ATF, the Government has permitted direct import of ATF by Indian carriers, as actual users. To address the immediate financing concerns of the civil aviation sector, Mukherjee proposed to permit ECB for working capital requirements of the airline industry for a period of one year, subject to a total ceiling of US$ 1 billion. He also highlighted that a proposal to allow foreign airlines to participate upto 49 per cent in the equity of an air transport undertaking engaged in operation of scheduled and non-scheduled air transport services is under active consideration of the government.
Ease of Taxes *DXWDP$GDQL
of FII investment limit in long-term infrastructure bonds, corporate bonds and government securities. The limit on External Commercial Borrowings (ECB) was also raised and qualified foreign investors were allowed to invest in specified Indian mutual funds and directly in equities. In the Budget 2012-13 the finance minister proposed to take the next steps in deepening the reforms in Capital market by (a) Allowing Qualified Foreign Investors (QFIs) to access Indian Corporate Bond market (b) Simplifying the process of issuing Initial Public Offers (IPOs) and (c) lowering their costs and helping companies reach more retail investors in small towns. To achieve this, in addition to the existing IPO process, the minister proposed to make it mandatory 28 CARGOTALK APRIL 2012
` 60,000 crore in 2012-13. This includes ` 10,000 crore for NHAI, ` 10,000 crore for IRFC, ` 10,000 crore for IIFCL, ` 5,000 crore for HUDCO, ` 5,000 crore for National Housing Bank, ` 5,000 crore for SIDBI, ` 5,000 crore for ports and ` 10,000 crore for power sector.
According to the finance minister, disbursement of taxes that go into the export of services has been an irritant for long. Accordingly, the finance minister has announced a new scheme that will simplify refunds without resorting to voluminous documentation or verification. As an added incentive, such refunds will also be admissible for taxes on taxable services that have been exempted.
Roads and Civil Duty Exemption The finance minister has declared Aviation that full exemption from import duty on The Ministry of Road Transport and Highways is set to achieve its target of awarding projects covering a length of 7,300 km under NHDP during 2011-12. This would be 44 per cent higher than the best ever length of 5,082 km awarded in 2010-11. Of the 44 projects awarded during 2011-12, 24 projects have fetched a premium. The finance minister proposed
specified equipment imported for road construction by contractors of the Ministry of Road Transport and Highways, NHAI and state governments is being extended to contracts awarded by metropolitan development authorities. According to him, India has the potential for establishing itself as a hub WWW.CARGOTALK.IN
back the economy on higher growth track. Despite current economic situation coupled with domestic political compulsions and challenges like elevated inflation, the government has tried to tread the path of fiscal consolidation with prudent macromanagement, said Rajkumar Dhoot, president, ASSOCHAM.
for third-party Maintenance, Repair and Overhaul (MRO) of civilian aircraft. To actualise this potential, he proposed to fully exempt from basic customs duty parts of aircraft and testing equipment imported for this purpose.
Industry’s Reactions M Rafeeque Ahmed, president, FIEO expressed his disappointment over nonextension of Interest Subvention Scheme for exports particularly when there has already been over 50 per cent increase in interest cost for exports. Ahmed added that he was expecting an announcement of some firm date for GST as well which could have given some hope to the export sector for zero rebating so as to impart competitiveness to export. However, he said that the focus on infrastructure will benefit manufacturing as well as exports. Target of covering a length of 8,800-km under NHDP next year, full exemption from basic duty
provided to certain fuels for power generation, tax free infra bonds and reduction of tax on ECBs in power, roads, airlines will benefit the export sector. The setting of two new mega cluster one to cover Prakasam and Guntur districts in Andhra Pradesh and another for Godda and neighbouring districts in Jharkhand and strengthening of existing ones will boost exports of handloom textiles and leather. The concession give to cold chain facilities will help in backward integration and will ensure adequate surplus of food products for exports. The reduction of customs duty on textile machinery like shuttleless loom will help the sector to withstand competition from Bangladesh, Sri Lanka, Vietnam, Turkey. “The clarity on export of services would reduce the litigation. Services exclusively used for exports should form part of the negative list of services should be notified shortly,” Ahmed suggested. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said the Union Budget for 2012-13 is well-balanced and proactive with well-defined measure to bring
“The Budget attempts to improve subsidy deliveries with direct transfers to bank accounts for targeted distribution. It also emphasises the need for fresh investments for capacity creation and infrastructure building on the PPP model. It enlarges the scope for external commercial borrowings in several areas including civil aviation. This should encourage flow of funds from overseas in key infrastructure sectors,” said Dhoot. Rajiv Kumar, secretary general, FICCI, also added that there has been no revival of investment allowance, no restoration of tax exemption on dividend income or capital gains for infrastructure capital fund/company and no hike in the depreciation rate. These had been expected as fiscal steps for improving investment. However, the reduction in withholding tax on interest payable on External Commercial Borrowings (ECBs) in certain sectors and extension of concessional tax treatment on the repatriation of overseas dividends, are indeed welcome features. The raising of the ECB limit for infrastructure sector will also encourage investment in the sector. According to GVK Reddy, chairman and managing director – GVK Power & Infrastructure, the Budget 2012-13 is a balanced budget during the challenging times. “It is positive, broad-based and an inclusive budget that endeavours to address crucial reforms for development. Overall, the budget is growth-oriented and aimed at sustaining the growth impetus seen in 2011, while giving main emphasis to sectors such as agriculture and industry. This, according to me is integral to support India’s development ambitions in the long term,” said Reddy. Gautam Adani, chairman, Adani Group, maintained that the budget is close to realism and still exudes cautious optimism. “The finance minister has made CARGOTALK
Cover Story Budget Analysis
candid statement on fiscal situation and clearly articulated directional intent on containing the subsidy. Tax concession for retail participation in equity market will broaden retail equity participation. â€œEligibility for viability gap funding is extended to wider set of projects. This will boost infrastructure investment in several areas hitherto non-viable for private sector,â€? he said. He also pointed out that the reduction in withholding tax from 20 per cent to 5 per cent on ECBs would enhance ECB flow to the infrastructure projects. According to Anil Khanna, managing director, Blue Dart Express, from a logistics perspective, the decision to boost the road infrastructure with 8,800 km of roads being added during the coming fiscal is noteworthy. The proposal to allow domestic carriers access to ECBâ€™s up to US$ 1 billion for a period of one year and active consideration of allowing 49 per cent equity participation by foreign airlines, will give some respite to the cash-strapped aviation sector. Also, with direct import of ATF by airlines termed as end user consumption there has been some much needed relief from state VAT which ranges from 3 to 33 per cent. Sushil Jiwarajka, president, Infrastructure and Logistics Federation of India (ILFI) said that the Budget has a strong infrastructure focus. 100 per cent increase in tax free bonds committed to financing infrastructure projects, relaxation of viability gap funding under the scheme for support to PPP encouraging external commercial borrowing (ECB) for capital expenditure for roads and highways, airline industry, etc. would go a long way in toning up the infrastructure sector. However, he felt that the muchawaited proposal of allowing foreign airlines to participate upto 49 per cent in the equity of an airport undertaking should have been announced in the budget rather than postponing it to a future date. â€œThe airline industry in India is at very low ebb and a financial support would have eased the pain for this vital sector. The budget to some extent has belied the expectations of the industry. 30 CARGOTALK APRIL 2012
â€œWe naturally looked forward to have the roll out of Direct Tax Code and GST in the budget announcement. However, given the current political environment there was not much leeway for the finance minister,â€? maintained Jiwarajka. In his opinion, GST needs a strong infrastructure backbone and it is not very clear whether the government can put in place a system before the cut off date for the launch of the GST by August 2012, as mentioned in the budget speech by the finance minister. He also pointed out that increase in the service tax rates from 10 to 12 per cent and bringing in all services in the service tax net barring the 17 items in the negative list will adversely affect the savings of the household sector.
estimates are that this may save 150300 basis points for working capital loans for airlines. Key challenges would be the banksâ€™ reluctance to lend to the sector and the hedging costs,â€? he said. â€œThe finance minister expects Indiaâ€™s global trade to grow. This will be good for the air cargo sector, which expects new-rise sectors like mobile phones, electronics, automotive, pharma and perishables to be the key growth drivers,â€? Dubey added, In conclusion Tushar Jani, chairman, SCA Group of companies termed the budget a â€˜Neutral Budgetâ€™. According to him, within his ambit the finance ministerâ€™s efforts are welcome in respect of the development of logistics industry in the country, especially for ports, airports, ICDs and AFSs. He appeared to be optimistic that the budget proposals on the negative list of service tax and ECB programme for the benefit of infrastructure development would pave the way for a new journey.
J Krishnan, immediate past president, ACAAI lauded ECBâ€™s initiative to meet working capital needs of domestic airlines. He also commended viability gap funding extended to warehousing and CFS, introduction of advance pricing arrangements for tax certainty and simplified service tax refund Statement about ownership and other particulars about newspaper mechanism for exporters. &DUJR7DON WR EH SXEOLVKHG LQ WKH ÂżUVW LVVXH HYHU\ \HDU DIWHU WKH However, Krishnan expressed ODVW GD\ RI )HEUXDU\ some areas of concerns 3ODFH RI SXEOLFDWLRQ 7RGDUPDO 5RDG that include increase of New Delhi - 110001 indirect taxes increase and 3HULRGLFLW\ RI LWV SXEOLFDWLRQ 0RQWKO\ no fixed time frame for 3ULQWHUÂśV 1DPH 6DQ-HHW GST implementation and 1DWLRQDOLW\ ,QGLDQ concerns about negative list $GGUHVV 7RGDUPDO 5RDG in service tax. New Delhi - 110001
Amber Dubey, director, Aviation, KPMG opined that it is very positive that 49 per cent FDI for foreign airlines is under active consideration of the finance minister. â€œThis is good news. Though, the industry was expecting that this to be announced as accepted policy,â€? he said. He also hailed the ECB announcement. According to him, allowing an ECB limit of USD one billion for working capital for airlines is a welcome gift from the finance minister. â€œPreliminary
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Trade Opportunities Export and Import
FIEO meets Belgium delegates
to explore the ‘Gateway to Europe’
he seminar was addressed by Pierre Vaesen, ambassador of Belgium to India, Ajay Sahai, director general & CEO, FIEO and P Ratna Rao, vice president, BLBA. Besides, senior global logistics experts from Belgium Ports like Antwerp, Zeebrugge and Liege and a large
Recently the Belgium Embassy, in association with Federation of Indian Export Organisations (FIEO) and Belgian-Luxembourg Business Association (BLBA), has organised a seminar in New Delhi to focus on the scope and opportunities being offered by Begium to Indian exporters. CT Bureau India and EU will be concluded by the end of this year. Ajay Sahai observed that EU is an important trading partner of India and as a region EU is one of India’s largest trading partner in the world. India’s trade with EU grew at a CAGR of over 15 per cent during
EUROPE-INDIA OPPORTUNITIES Europe today is a continent undergoing tremendous changes Impact on society of globalisation; immigration is huge Indian industry is faced with continuous high internal growth and yet it is ambitious to become a global player The wind is blowing more and more from the East in Europe Countries, regions and private industries should be prepared for this new global trend Belgium is ready to welcome India
number of senior representatives from leading SMEs and logistics companies were also present at the seminar. Speaking at the seminar, Vaesen said, “Belgium is located at the very centre of purchasing power in Europe and acts as the access gate to Europe for Indian goods.” He invited Indian companies looking to invest in Belgium, which is the fourth largest recepient of FDI, to make use of the new trade and opportunities as the Broad-based Trade and Investment Agreement between
the last decade from US$ 21 billion in 200001 to over US$ 91 billion in 2010-11. He highlighted that today, EU has a share of nearly 15 per cent in India’s total trade of US$ 620 billion. Although, the growth of trade has been sluggish in comparison with India’s trade with regions like LAC, West Africa and WANA where Indian trade recorded a CAGR of over 30 per cent in the last decade, but the trade consistency and rising trade volumes between India and EU brings back the
Belgium is at the heart of ‘Blue Banana’ and surrounded by airports Belgium is an ideal location from where whole of the European market can be served Setting up strategic partnership in Europe is the key to success for Indian companies
confidence for a deeper trade partnership between the two in future. CARGOTALK
Logistics Services New Initiatives
OM Logistics focussing on full truck express and air cargo
oon the company will introduce full truck load express services and put more emphasis on air cargo traffic for the domestic as well as international markets. Akash Bansal, head logistics, Om Group informed that the company is now gearing up to cope up with the present market trends and future challenges. He appeared to be bullish about the company’s success
Om Logistics has decided to enhance its product range by adding more express services in its content. Ratan Kr Paul of attaining the group’s turnover target of ` 1,000 crore plus by 2014. At present Om Group’s turnover is ` 850 crore per annum and Om Logistics’ contribution in the total turnover is ` 600 crore. According to Bansal, Om Logistics, the flagship company of Om Group, has been instrumental in providing innovative and value added solutions for Indian corporate and multinationals. It has been primarily dealing with the automobile industry a nd has pioneered in transportation, warehousing and logistics support to the sector. However, the company is now all set to offer services to other segments as well. In Bansal’s opinion, through its innovative and cost saving methods, Om Logistics has consistently added value for its customers, which can be complimented by its competence. “Presently, our aim is to offer fast and cost effective services for our customers, to make their bottomline solid. We should keep it in mind that despite our input cost is increasing day by day, we cannot pass it onto our customers. Rather we should introduce innovative
32 CARGOTALK APRIL 2012
logistics methods for win-win benefits,” explained Bansal. Elaborating further on the innovative methods Bansal maintained that Om Logistics is using its assets (eg. trucks) at the optimum level by creating new means of delivery, hub and spoke network, proper utilisation of space in both ways and efficiently managing the whole operation. “We do regular analysis about the fault lines, train operational staff including drivers, so that they can manage the cargo operation skillfully and add value,” shared Bansal. He also informed that Om Logistics cargo operation is completely IT enabled and trucks are GSM-based GPS connected. Currently the company has 3,000 plus trucks plying across the country to connect more than thousand destinations all over the country. It has 446 own offices in India. Besides, it has its own offices in New York, Toronto and Shanghai apart from representative offices in Thailand and Japan. The company is also planning to open offices in Detroit (USA) and Dubai in the near future. WWW.CARGOTALK.IN
Cargo Performance Import / Export
DELHI INTERNATIONAL AIRPORT CARGO DEPARTMENT, IGI AIRPORT, NEW DELHI
(AIRLINE-WISE IMPORT/EXPORT CARGO PERFORMANCE F O R T H E M O N T H O F F E B RUA RY 2 0 1 2 )
S. No. Airlines
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
Export Perishable Cargo (MTs)
Export (with Peri.) (UPL)(MTs)
All wt. in mt.
% of Total
Jet Airways 1175 285 1460 1725 3185 11.25% Cathay Pacific 812 6 818 1421 2239 7.91% Emirates 685 894 1579 383 1962 6.93% Air India ................................ 404 ............. 379 .............. 784 ..............772 ..............1556 ......... 5.50% British Airways 732 39 770 734 1505 5.31% Singapore Airlines 602 28 631 647 1277 4.51% Lufthansa Cargo Airline 550 18 568 603 1172 4.14% Fedex Express Corpation 834 33 868 278 1146 4.05% Thai Airways 182 48 229 822 1052 3.71% Kingfisher Airlines Ltd. ............ 343 ...............30 .............. 373 ..............507 ............... 880 ......... 3.11% Etihad Airways 488 28 516 298 814 2.88% Qatar Airways 429 125 554 211 765 2.70% Swiss World Cargo(India) 437 27 464 221 685 2.42% Malaysian Airline System 239 82 321 352 673 2.38% Turkish Airlines 484 27 511 107 618 2.18% Virgin Atlantic ................................335 .................... 0 .................. 335 .................213 ...................548 ............1.94% Uzbekistan 332 33 365 182 547 1.93% Air France 341 18 360 174 533 1.88% Finnair 321 9 330 184 513 1.81% KLM 242 45 288 177 465 1.64% Aerologic 67 0 67 296 363 1.28% Austrian Airlines .............................183 .................. 15 .................. 198 .................154 ...................352 ............1.24% Air Asiax 156 12 168 164 332 1.17% Saudia 141 151 292 22 313 1.11% Japan Airlines 61 2 63 243 306 1.08% Air China 207 2 209 90 299 1.06% American Airlines Cargo 172 2 174 102 276 0.97% Aeroflot Cargo Airlines 129 25 155 70 224 0.79% China Air ..........................................95 .................... 1 .................... 96 .................123 ...................219 ............0.77% China Eastern Airlines 71 3 74 132 206 0.73% Continental Airlines 123 4 126 41 168 0.59% Eva Air 42 7 49 85 134 0.47% Gulf Air 115 14 129 2 131 0.46% Ariana Afghan Airlines 81 1 81 49 130 0.46% Blue Dart 122 0 122 5 127 0.45% Kuwait Airlines .................................33 .................. 71 .................. 104 .................. 18 ...................122 ............0.43% Sri Lankan Airlines Ltd 54 4 58 33 90 0.32% Mahan Air 75 5 80 10 90 0.32% Air Mauritius 50 22 72 2 73 0.26% Aerosvit 45 6 52 12 63 0.22% Oman Air 55 6 61 2 63 0.22% Air Arabia .........................................56 .................... 1 .................... 57 .................... 1 .....................58 ............0.21% Ethopean Airlines 8 4 12 36 48 0.17% China Southern Airlines 25 0 25 20 45 0.16% Asiana Airlines 19 0 19 22 41 0.14% Air Astana 30 1 30 2 32 0.11% Pakistan International ........................ 5 .................... 2 ...................... 7 .................. 12 .....................20 ............0.07% Turkmenisthan Airlines 8 9 17 0 17 0.06% Royal Jordanian Airlines 8 0 8 2 10 0.03% Jetlite 3 2 6 0 6 0.02% Druk Air 1 0 1 0 1 0.00% Deccan Express Log .......................... 0 .................... 0 ...................... 0 .................... 0 ...................... 0 ............0.00% Indian Airlines 0 0 0 0 0 0.00% Royal Nepal Airlines 0 0 0 0 0 0.00% MIS 880 16 896 921 1817 6.42%
Total Cargo handled in Februaryâ€˜11 % VARIATION
2544 2251 13.00%
15630 16647 -6.11%
12683 12980 -2.29%
28313 29627 -4.64%
## Cargo Handled at Centre for Perishable Cargo
34 CARGOTALK APRIL 2012
MUMBAI CSI AIRPORT EXPORT/IMPORT CARGO TONNAGE HANDLED I N F E B RUA RY 2 0 1 2
(Including TP Cargo)
WEIGHT IN TONNES Export General
S. No. Airlines 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 45 46 47 48 49 50
Jet Airways 1311.39 Emirates 1187.62 Air India 748.09 Lufthansa ..................................... 496.03 Cathay Pacific 820.68 Singapore Airlines 687.85 British Airways 747.26 Etihad Airways 710.72 Air France 344.56 Kingfisher Airlines ...................... 326.62 Qatar Airways 226.42 Swiss Intl. Airlines 306.32 Turkish Airlines 398.45 Thai Airways 210.17 Federal Express 363.89 Malaysian Airlines....................... 376.16 Ethopian Airlines 574.10 Saudi Arabian Airlines 323.04 UPS 88.23 Korean Air 181.16 Kuwait Airways 69.47 Qantas 103.22 Air Cargo Germany......................... 0.00 Delta Airlines/KLM 61.08 Kenya Airways 214.08 South African Airlines 196.58 Oman Air 100.44 Austrian Airlines 0.00 Gulf Air 52.31 Charters .......................................... 0.00 Continental Airlines 69.30 EL-AL Airlines 48.34 Blue Dart 78.05 Air Mauritius 120.08 Fin Air 112.90 Indigo Air ...................................... 50.65 Air Arabia 25.88 Srilankan Air 63.12 Bangkok Airways 67.28 Pakistan Airways 24.56 Yemenia Airways........................... 28.33 Iran Air 18.06 Baharin Airlines 26.27 Egypt Air 16.48 Royal Jordanian Airways 7.32 NorthWest Airlines .......................... 0.00 Airasia 0.00 Jade Cargo 0.00 Others 35.90
Export Perishable 968.40 1325.06 1517.08 ............. 467.61 36.15 177.88 412.95 33.33 183.17 ...............31.89 345.03 131.82 66.85 126.18 107.96 ...............39.38 12.92 74.13 5.87 31.90 155.54 4.65 .................0.00 15.20 0.00 2.37 85.18 9.68 129.78 .................0.00 1.80 1.93 0.00 0.33 9.02 ...............26.02 82.17 4.62 0.48 32.77 ...............10.73 8.66 0.00 0.80 0.80 .................0.32 0.00 0.00 86.92 6765.35
2279.79 2357.23 4637.02 2512.68 843.06 3355.74 2265.17 692.93 2958.10 ............. 963.64 .............1453.78 ........... 2417.43 856.83 1260.37 2117.20 865.73 940.74 1806.46 1160.21 630.32 1790.53 744.05 498.80 1242.85 527.73 465.01 992.75 ............. 358.51 .............. 609.53 .............968.04 571.45 329.81 901.26 438.14 440.22 878.36 465.30 276.21 741.51 336.35 401.57 737.92 471.84 258.51 730.36 ............. 415.54 .............. 263.51 .............679.05 587.02 7.55 594.57 397.17 122.09 519.26 94.10 273.00 367.11 213.05 30.60 243.66 225.01 14.91 239.92 107.87 131.93 239.80 ................. 0.00 .............. 229.48 .............229.48 76.28 148.36 224.65 214.08 7.74 221.82 198.95 11.73 210.68 185.62 1.03 186.65 9.68 176.90 186.58 182.09 1.73 183.82 ................. 0.00 .............. 156.07 .............156.07 71.10 81.92 153.02 50.27 81.91 132.18 78.05 51.39 129.44 120.41 5.98 126.39 121.93 0.00 121.93 ............... 76.68 ................ 38.62 .............115.29 108.05 0.94 108.99 67.74 23.36 91.10 67.76 3.61 71.37 57.33 12.06 69.40 ............... 39.06 .................. 0.82 ...............39.89 26.72 1.36 28.08 26.27 0.00 26.27 17.29 1.06 18.35 8.12 0.63 8.74 ................. 0.32 .................. 0.00 ................ 0.32 0.00 0.00 0.00 0.00 0.00 0.00 122.81 751.21 874.02 18783.81
EXPORT/IMPORT CARGO TONNAGE HANDLED IN JANUARY 2012
Cargo Handled in Januaryâ€™12
Cargo Performance Indian Airports
INTERNATIONAL FREIGHT Freight (in Tonnes) For the Month S. No. Airport
(A) 11 International Airports 1 Chennai 2 Kolkata 3 Ahmedabad 4 Goa 5 Trivandrum 6 Calicut 7 Guwahati 8 Jaipur 9 Srinagar 10 Amritsar 11 Portblair Total (B) 6 JV International Airports 12 Delhi (Dial) 13 Mumbai (Mial) 14 Bangalore (Bial) 15 Hyderabad (Ghial) 16 Cochin (Cial) 17 Nagpur (Mipl) Total (C) 11 Custom Airports 18 Pune 19 Lucknow 20 Coimbatore 21 Mangalore 22 Patna 23 Trichy 24 Bagdogra 25 Chandigarh 26 Varanasi 27 Madurai 28 Gaya Total (D) 18 Domestic Airports (E) Other Airports Grand Total (A+B+C+D+E)
For the period April to December
23131 3411 936 343 4341 1959 0 6 0 774 0 34901
25264 3822 1068 330 2912 1622 0 13 0 275 0 35306
-8.4 -10.8 -12.4 3.9 49.1 20.8 -53.8 181.5 -1.1
211412 34216 9046 1417 33854 18235 0 161 0 5170 0 313511
223179 33879 10211 1410 28930 15822 0 359 0 3765 0 317555
-5.3 1.0 -11.4 0.5 17.0 15.3 -55.2 37.3 -1.3
29101 38182 12236 3782 2468 53 85822
30128 38229 11893 3476 2390 31 86147
-3.4 -0.1 2.9 8.8 3.3 71.0 -0.4
279200 355888 105693 33156 27002 288 801227
292774 351041 98760 31171 23954 237 797937
-4.6 1.4 7.0 6.4 12.7 21.5 0.4
0 44 32 0 0 92 0 0 0 0 0 168 0 0 120891
0 9 18 0 0 94 0 0 0 0 0 121 6 0 121580
388.9 77.8 -2.1 38.8 -0.6
0 575 347 0 0 1633 0 0 1 0 0 2556 0 0 1117294
0 447 284 0 0 1319 0 0 0 0 0 2050 76 0 1117618
28.6 22.2 23.8 24.7 0.0
ETIHAD INTRODUCES LIGHTWEIGHT CARGO CONTAINERS Etihad Airways, along with its Unit Load Device (ULD) partner Jettainer, has embarked on a program to replace 3,000 containers from the original aluminium ULD fleet with environmentally friendly lightweight versions. The new lightweight containers are manufactured from a range of composite materials including Kevlar, the material used in making bullet-proof jackets. This composite is tougher and much lighter with an average weight saving of 17kg per ULD or over 200kgs per average wide-bodied flight. This weight reduction will lower fuel consumption, costs and CO2 emissions. It is estimated that the implementation of the new containers will cut emissions by approximately 5,000 tons in 2012. According to David Kerr, vice president cargo, Etihad Airways, The introduction of these lightweight units into our cargo operations is evidence of our innovative approach to sustainable logistics and ensures that our cargo services remain among the best in the world.
36 CARGOTALK APRIL 2012
Express Cargo Current Development
Mergers & Acquisitions
UPS announces to buy TNT Express
nited Parcel Service(UPS) has decided to buy Netherlands-based TNT Express for $6.77 billion in a cash deal. The deal was unveiled at a press conference in Amsterdam. UPS is considered as the world’s largest delivery company, while TNT, headquartered in Hoofddorp, Netherlands, is considered as the second-biggest express mail company in Europe behind Germany’s DHL. According to the company sources, the combination will have 4,75,000 employees worldwide and increase UPS’s international sales to around 36 per cent of its total from 26 per cent at present.
Commenting on why UPS wants to expand in Europe at a time the continent is facing economic hardship due to debt crisis, Kurt Kuehn, chief financial officer, UPS said, “It shows the company’s long-standing commitment to Europe.’’ He also maintained that the deal will add to earnings per share in the first year and that by 2015 the companies will save at least Euro 440 million annually from combining operations, including air fleets, as
well as software and logistics systems. The deal will now have to wait for the regu l at o ry appro val . H o w e v e r , U P S has declared that it would award TNT Euro 200 million if the deal fails to win regulatory approval.
Cargo Performance Indian Airports
DOMESTIC FREIGHT Freight (in Tonnes) For the Month S. No. Airport
(A) 11 International Airports 1 Chennai 2 Kolkata 3 Ahmedabad 4 Goa 5 Trivandrum 6 Calicut 7 Guwahati 8 Jaipur 9 Srinagar 10 Amritsar 11 Portblair Total (B) 6 JV International Airports 12 Delhi (Dial) 13 Mumbai (Mial) 14 Bangalore (Bial) 15 Hyderabad (Ghial) 16 Cochin (Cial) 17 Nagpur (Mipl) Total (C) 9 Custom Airports 18 Pune 19 Lucknow 20 Coimbatore 21 Mangalore 22 Patna 23 Trichy 24 Bagdogra 25 Chandigarh 26 Varanasi 27 Madurai 28 Gaya Total (D) 20 Domestic Airports 29 Bhubaneswar 30 Indore 31 Agaratala 32 Visakhapatnam 33 Jammu 34 Vadodara 35 Imphal 36 Raipur 37 Udaipur 38 Ranchi 39 Bhopal 40 Aurangabad 41 Leh 42 Rajkot 43 Dibrugarh 44 Jodhpur 45 Tirupati 46 Silchar Total (E) Other Airports Grand Total (A+B+C+D+E)
38 CARGOTALK APRIL 2012
For the period April to December % Change
7104 6970 1454 447 132 13 557 530 185 6 252 17650
8180 7501 1388 452 105 9 598 763 175 10 203 19384
-13.2 -7.1 4.8 -1.1 25.7 44.4 -6.9 -30.5 5.7 -40.0 24.1 -8.9
63404 61984 11173 2990 1015 143 6234 4971 1836 63 1751 155564
70219 63748 11466 3076 1177 238 6588 6271 1469 147 1708 166107
-9.7 -2.8 -2.6 -2.8 -13.8 -39.9 -5.4 -20.7 25.0 -57.1 2.5 -6.3
18013 16407 7371 2993 801 418 46003
18052 18317 7846 3432 616 355 48618
-0.2 -10.4 -6.1 -12.8 30.0 17.7 -5.4
149768 143794 62861 26087 6369 3609 392488
155006 150432 66584 27586 6548 8012 414168
-3.4 -4.4 -5.6 -5.4 -2.7 -55.0 -5.2
2316 291 569 24 271 0 171 219 28 77 0 3966
2307 317 571 18 299 0 108 90 55 59 0 3824
0.4 -8.2 -0.4 33.3 -9.4 58.3 143.3 -49.1 30.5 3.7
17237 2934 5613 204 2728 0 1230 1396 274 595 0 32211
21282 2478 4896 226 2507 0 832 367 333 410 0 33331
-19.0 18.4 14.6 -9.7 8.8 47.8 280.4 -17.7 45.1 -3.4
165 386 516 44 105 240 299 249 0 145 70 102 136 75 34 7 3 34 2610
245 441 574 56 164 209 479 200 0 122 118 145 137 85 23 2 0 50 3050
-32.7 -12.5 -10.1 -21.4 -36.0 14.8 -37.6 24.5 18.9 -40.7 -29.7 -0.7 -11.8 47.8 250.0 -32.0 -14.4
1679 3731 5301 698 873 1620 3896 2102 0 1281 618 985 1100 549 246 37 24 419 25159
2053 4117 5311 583 1071 1586 4447 1773 0 909 891 1540 1106 736 219 16 6 357 26721
-18.2 -9.4 -0.2 19.7 -18.5 2.1 -12.4 18.6 40.9 -30.6 -36.0 -0.5 -25.4 12.3 131.3 300.0 17.4 -5.8
Logistics Services Get Together
Atlas Logistics Global SBS Group focusses on Meet 2012 India to offset slowdown in Japan
Recently, Atlas Logistics organised its Global Meet in Goa. Along with the company officials, Digambar Kamat, the then chief minister of Goa, Pramod Kamat, law secretary, Goa and several customers attended the gracious event, which was addressed by Venkatesh Rao,chairman & managing director, Atlas Logistics and Masahiko Kamata, president, SBS Holdings. CT Bureau
t may be recalled that Atlas Logistics became a member of the Japanese company, SBS Group, by the way of the acquisition of 80 per cent of issued shares in Atlas Logistics in October 2011. SBS Group looked at this acquisition as a part of its long-term strategy to substantially capture overseas market in logistics. The group expects to make inroads into the Asian market and become an international thirdparty logistics business group. The Japanese group also has plans to provide their know-how and expertise in land transportation, warehouse business and third-party logistics services to all Atlas Logistics Group members globally. “In just a few months’ time we are well on our way to reap full rewards of the acquisition. During the short period since the formation of the new entity we have successfully created an environment that is extremely conducive to reap wide-ranging benefits,” said Rao. Kamata maintained that since in Japan, the economic growth is currently sluggish, Japanese companies are continuously moving their business bases to other countries such as Asia. “I was always thinking about entering the overseas business in order to earn 20-30 per cent of our total sales from the international logistics activities by considering the
current situation in Japan. Especially, I believe the Indian market is one of the most important by following the economic growth of China,” he said. Rao, however, expressed concerns over the present infrastructure, which creates hindrances for the logistics industry in the country. “India’s logistics infrastructure is lagging behind when compared to the
global standards. To make the sector more vibrant and cost-effective, infrastructure projects need to be given a boost besides encouraging private participation in infrastructure development,” maintained Rao. According to him, as of now the sector is handicapped by the lack of facilities for interconnectivity and integrating business processes with sophisticated technologies. CARGOTALK
Logistics Services New Initiatives
Mercurio Pallia to launch ‘Car Compounds’ to comply with post GST regime Mercurio Pallia Logistics, the 50:50 joint venture company between Pallia Transport Logistics and Gruppo Mercurio SPA, is planning big for the financial year 2012-13.With a target to grow by 25 per cent, as compared to the previous financial year, Vipul Nanda, managing director, Mercurio Pallia, unveiled the growth plans in an interview with Cargotalk. Ratan Kr Paul
ercurio Pallia is all set for a great leap forward in the near future. The recent developments in the company and the country’s economy as a whole, has made Vipul Nanda confident enough to chalk out some ambitious projects, to ensure 25 per cent year-on-year growth for the next couple of years. With more than 50 years of experience in the transport logistics domain, Pallia Transport has now its own niche in the automobile logistics arena. The company formed a 50:50 40 CARGOTALK APRIL 2012
joint venture company with an Italian partner, Mercurio, in 2009. Mercurio has global dominance in the automotive logistics sector and is expected to make a difference in the automobile logistics business in India. Significantly, recently Mercurio has tied-up with another logistics major in the world, viz Gefco Group, by offloading 70 per cent stake to it. As a result, the takeover will have an impact on the services of Mercurio Pallia, both in domestic market at present as well as the proposed international expansion plans. Gefco Group, is a worldwide automotive
logistics provider with a global turnover of Euro 3.5 billion. Automobile transportation is the core function of Mercurio Pallia. In the financial Year 2012-13, the company is expecting at least 25 per cent increase in business. “The year 2011-12 witnessed several challenges, like tsunami in Japan, strikes in Maruti and high rate of interest. These factors are now no more affecting the automobile logistics. This sector will see a significant growth in 2012-13,” said Nanda confidently. In addition, thanks to the infrastructure strength and the combined experience of Mercurio Pallia and Gefco, there would be a consolidation in the market, i.e, more customers will be included in the company’s fold. The company will also be expanding its service portfolio in the days to come. “In the year 2012-13, our first focus area will be on two wheeler business, including Hero Honda Scooter, Mahindra two wheeler and other customers. The second focus will be transportation of heavy commercial vehicles by trailers (Ashok Leyland) and the third focus area will be starting transportation of cars in containers through railways,” shared a quiet and firm Nanda. Meanwhile the company has signed a memorandum of understanding with ETA Freightstar, which is one of the leading private container train operators in India. The objective is to offer multimodal connectivity to automobile manufacturers or OEMs (Original Equipment Manufacturers). The operation will start in the second quarter of 2012. Mercurio-Pallia is preparing to become GST enabled. After the introduction of the proposed GST, the company is expecting a quantum jump in long haul goods movement in the country. To tap the logistics and warehousing market in post GST era, the company has decided to launch ‘Car Compounds’ to cater to the demand of car storing at different regions in India. The first one is likely to be either in east or north India. MercurioPallia is also planning expansion of its operational area globally, initially with south and southeast Asian countries viz Nepal, Bangladesh, Thailand, Indonesia and Vietnam. Already the company has a liaison office in Singapore, to explore
business opportunities in that region. The company will strengthen its fleet size by adding 100 more trailers by the financial year 2012-13. At present, the company has 400 trailer trucks plying across the country. In addition, it has 200 subcontractors’ trailers to fulfill the demand from customers. The present yearly turnover of the company is ` 120 crore and Nanda is expecting 25 per cent yearon-year revenue growth in the ensuing 4-5 years. It is worth mentioning that prior to the formation of the joint venture (Mercurio-Pallia), Pallia Transport’s yearly turnover was ` 25-30 crore. The JV company, Mercurio-Pallia, since its inception in India in 2009, has covered considerable ground in terms of increasing volume, pan-India presence, adding new clients and expanding as per the future automotive logistics trend in India. Its major clients include Mahindra&Mahindra, Tata Motors, Maruti Suzuki, General Motors, Nissan, Honda, Toyota (through Transystem), Hyundai (through Glovis) and Renault. Mercurio Pallia also developed transpor
Mercurio Pallia Autoworks According to Nanda, future business prospects in India include multiuse stockyard, PDI and multimodal transportation. In view of this, the
company has set-up a trailer fabrication unit, through a new 100 per cent subsidiary company called Mercurio Pallia Autoworks, for its own requirement as well as for markets in India and abroad. Mercurio Pallia Autoworks is built on a 4-acre campus in Rewari (Haryana), which is 40 km away from Mercurio Pallia’s Gurgaon office. It has a manpower of about 100 skilled workers and has put adequate emphasis on research and development, value engineering, prototyping & testing, field failure analysis and new concept designs, to offer multiple choices to its customers. For instance, MercurioPallia will be able to offer services to two wheelers and four wheelers at the same trailer whenever required, without compromising the load factor. “We are also keen to manufacture reefer container trailers in view of the burgeoning demand of transporting perishable cargo and pharmaceuticals,” added Anand Khattar, CEO, Mercurio Pallia Autoworks. He also maintained that Mercurio Pallia Autoworks is open to manufacture tailor-made trailers for any transport operators or logistics company. “Presently we have a capacity to manufacture one trailer a day, which can be further enhanced if required. We have a huge capacity now and have the option to expand further,” he said. CARGOTALK
View Point Air Cargo
Wait and Watch
The Air Cargo Policy and its desired results
ndia is one of the fast emerging economies of the world and air cargo industry is matching the economic growth. Our dominance in the world is best illuminated in the acquisitions of large industrial houses world over; automobile, telecom, pharmaceuticals, hospitality amongst others.
Any cargo facility is the economic window to showcase the capability of a country. First impression of a country is created by the airports. Bharat Thakkar, president, Air Cargo Agents Association of India (ACAAI), however appears to be critical of present state of affairs. He says that though there are certain airport-related developments in the recent years, they may not be adequate to propel India to the next level of growth. Ratan Kr Paul yield management, putting in place costeffective logistics outsourcing mechanism. For fast cargo clearance our airports have
to be decongested. For instance, Air Freight Stations (AFSs) have to be introduced near all our major airports. ACAAI has
Air cargo is a growing sector in spite of the economic down trend visible in several countries and the existing market uncertainties, which have dampened business since Sept 2011. There are new lanes that have developed for Indian exports. The trade agreements and cooperation between India, Africa and South America will see exports grow. Indian forwarders will have to focus on costs and
42 CARGOTALK APRIL 2012
ENHANCE FACILITIES Almost all major Airport Cargo Terminals across the country have the problem of short supply of equipment, manpower, and storage capability and of course system. During peak hours it is common practice that the users scramble for manpower and equipment which are always under short supply. As a result efficiency comes down and unethical practices go up. Air Terminal Operators should split the entire activity in to different components, fix responsibility for each activity, add a definite time frame for all actions and make this document transparent for the users to know the process, procedure and the time it would take We are yet to break out of the shackles of manual interventions as our mindset is more on policing than on trust based acceptance.We should create a proper interlinked EDI platform capable of handling without human involvement. Such a system should be allowed function independently Most of the system, be it hardware or software are stand alone architectures – be it Customs, Carriers or Custodians or other users. In the absence if a nodal agency to oversee the entire development of a comprehensive EDI platform these stand alone systems serve a limited purpose. Effort should be to move to a complete / comprehensive mode of safe / secure data transfer that can be shared by the different players of the air logistic chain. always been espousing for off location cargo processing centres i.e. AFSs and cargo villages. Commendably, Chennai and Mumbai have already implemented the regulations to make the AFSs working at these two metros, with an aim to decongest airports. All airports should be well-equipped to meet the growing demand for imports and keep transaction cost down, in view of the rapid annual growth which is over 20 per cent. Significantly, the ministry of civil aviation, has made commendable progress by announcing a Working Group on Air Cargo /Express Industry, under the chairmanship of M.Kannan, Economic Advisor to MOCA, by inviting stakeholders to participate in the meeting to draft a policy on Air Cargo/ Express Industry, which will be first of its kind in India, in the 100th Year of Indian Civil Aviation. Dr. Nasim Zaidi, secretary, MOCA, recently announced in Mumbai that the chairman of working group had finalised its draft report for submission and the Air Cargo Policy will be announced soon. We await its announcement and positive outcome with an aim towards long-term benefits.
Air cargo as an economic indicator The PPP (Public Private Partnership) model was a turning point in the Indian
history of economic growth, especially in the case of ports and airports. Thanks to this PPP model, we have privatised ports, container terminals and airports and air terminals. Be it green field like Bangalore or Brown filed like Delhi and Mumbai, significant changes have been brought in by PPP models., There is a consistent double digit growth of cargo year-on-year despite the global meltdown. To move on to challenges in infrastructure and our perspective, the goal should be simple: Reduce dwell time, improve efficiency, enhance facilities, provide better procedures and move over to a system-driven process. Dwell time is the cumulative result of various factors, some even before arrival of the aircraft – primarily the triggering point for dwell time is the filing of IGM or Import General Manifest with Customs. ACAAI has been advocating that this can be from the point of ‘wheel up’ of the aircraft at the origin airport (like followed in US and most of the EU). Despite statistics being produced that operation take few hours, reality is that this activity consumes about a day. In developed countries, there is a clear benchmarking that it should take 4/6 hours to complete the entire operation; flight landing to cargo ready for delivery even for charter flights. We do not have benchmarking nor do we endeavour to make the cargo available within hours of landing–this is an area of
concern which is possible to address with right equipment, manpower, machinery and monitoring mechanism. We need to take a new look at the entire customs process which should be driven by systems. Non traceability and damage to cargo increases dwell time and both are controllable if proper system is in place and is monitored. One more challenge is restricted / congested approach both inside and outside the air terminals for vehicular movements that slows down clearance process and increases dwell time. Proper and smooth movement of vehicle is needed.
Improve Efficiency Even if half of what is suggested to reduce dwell time is implemented then automatically efficiency will improve. Further efficiency would be the cumulative result of output of all activities covering cargo handling; even if one link is weak the whole system will tend to be delayed– hence there should be a monitoring system to ensure that the output at every stage is measured against a predetermined target. Today there is no time bound / time determined operations and hence it is difficult to measure performance levels. There should also be training and orientation to the filed formations to improve their performance and to make them understand the value of a customer. CARGOTALK
Family Album Club Function
ACCD Annual Ball $1(9(1,1*,1e/$1 The recently held Annual Ball of the Air Cargo Club of Delhi (ACCD) in New Delhi was a great opportunity to interact with the who is who of the air cargo industry.The club members and their spouses enjoy the evening in a big way thanks to fabulous arrangements of dance and music.
44 CARGOTALK APRIL 2012
Family Album Glimpses
DACAAI Convention 2012 '20(67,&&$5*267$.(+2/'(560((7$7+<'(5$%$' The 3rd Annual Convention of the Domestic Air Cargo Agents Association of India (DACAAI), which recently held in Hyderabad, brought the industry stakeholders to discuss the issues for mutual benefits and the growth of the domestic air cargo industry in India. Apart from business sessions, DACAAI also organised a cultural function in the evening.
46 CARGOTALK APRIL 2012
Family Album Glimpses
Itâ€™s celebration time 81,:25/'/2*,67,&6&203/(7(67+<($5 Uniworld, the leading logistics player in the country, recently celebrated its 10th year of operation. Hosted by M. Prem Kumar, chairman and managing director, the company organised a spectacular function in Bengaluru for its customers, business partners and special guests on this occasion.
48 CARGOTALK APRIL 2012
Family Album Industry Events
Air Cargo Club of Madras $118$/%$//,1&+(11$,:,7+81/,0,7(')81 Recently, Air Cargo Club of Madras organised its annual ball in Chennai. The function was attended by a large number of air cargo agents, airlines, air cargo terminal operators and airport officials. Amidst full of delight the gathering was welcomed by G Muralidhar, president, ACCM.
Industry Events Conference and Awards
Logistics Talent Hunt – 2012
A quest for skilled manpower
he primary objective of the programme is to address the serious mismatch between requirement and availability of talent in logistics cadres. Speaking at the curtain raiser ceremony for the ‘Logistics Talent Hunt-2012’, Amit Shankhdhar, director, T2P Consultants, informed that in this programme, management students in the form of team will participate to prepare the projects on certain topics related to logistics industry. The topics include Green Logistics The Indian Route; Logistics, the Indian Solutions; Future of 4 PL in India; Popularising Study of Logistics in India and Careers in Logistics. Some 50 teams from various business management institutes teaching logistics and supply chain are working on these topics to prepare projects. These teams
Supply of skilled manpower for logistics industry seems to receive a boost, thanks to the motivation programme called ‘Logistics Talent Hunt – 2012’ that has been initiated by T2P Consultants and Chartered Institute of Logistics & Transport (CILT) on April 7 in New Delhi. CT Bureau
will submit their projects to the jury for evaluation. Out of these 50 teams the jury will select five teams one from each topic. Winning teams will give a presentation on their projects at the ‘Logistics Talent Hunt-2012, International Conference & Awards’ function to be held in New Delhi. The curtain raiser ceremony was attended by top professionals like CMD,
CEO, MD, and logistics heads & HR heads of the logistics industry and leading management institute of northern India along with member of National Council of CILT-India. Dr. PK Goel, secretary general, CILT-India, emphasised on the requirement of education in logistics. Also present on the occasion were Prem Prakash, Sanjay Priye, directors of T2P and Lt. Gen. (Retd.) DV Kalra, jury chairman and vice chairman, CILT. Kalra highlighted the present scenario of logistics industry in India and the difficulties in hiring qualified personnel, to comply with the rise of demands such as regulatory compliance, security initiatives and constantly changing industry standards. He emphasised on the importance of supply chain and logistics sector and its ability to attract younger generation as logistics professionals. This award is also recognising the logistics professional’s individual achievements.
50 CARGOTALK APRIL 2012
Industry Events Logistics Services
‘Futurallia’ comes international B2B forum to IndiatoThe benefit logistics companies
peaking to Cargotalk, Vijay Goverdhandas Kalantri, president, All India Association of Industries (AIAI), vicepresident, World Trade Centre Mumbai and a member of the board of directors, World Trade Centres Association, New York, informed that World Trade Center Mumbai and AIAI had participated in six Allia events in Canada, Qatar, Burkina Faso, Poland, USA and France and were therefore convinced of the potential of this event. “That is why we have decided to organise ‘Indiallia’ for the first time in India as it is a strategic location between the East and the West.” He also maintained that after 20 years of international experience and having successfully organised 80,000 individual business meetings, it is being held with the view to connect Indian industries with overseas partners so that strategic alliances can be formed. According to Kalantri, Indiallia 2012, a B2B forum, will help over 600 Indian and international companies from over 30 countries to forge business alliances with each other in Mumbai. ‘Indiallia’ is based on the concept of ‘Futurallia’, the fastest and most efficient globally recognised forum, to provide companies the opportunity to grow in newer markets worldwide. The forum will facilitate business alliances from various sectors such as
Come April 23-25, 2012 and Indian logistics players will witness the first ever event, ‘Indiallia 2012’ in Mumbai.The organisers of the event, World Trade Centre and All India Association of Industries, have informed that the event will benefit the logistics companies in the country immensely. Ratan Kr Paul
agribusiness, food processing, auto components, services, hospitality, chemicals, pharmaceuticals, infrastructure, vocational training, electrical, energy, environment, gems, jewellery, ICT, biotechnology, metallurgical, textiles, logistics and trade promotion organisation. It would connect large, medium and small scale industries and has so far been receiving overwhelming response. “We are expecting a good number of participants from logistics sector, both from India and abroad. Some of the countries who are bringing delegations in the logistic industry are Canada, France, Cameroon, Nigeria, China, etc,” said Kalantri. He pointed out that the logistics sector in India has been identified as the one
with the largest potential for growth in India; from agro to manufacturing and services. Indian logistics market is likely to cross $ 200 billion figure by 2020, fuelled by the consistent growth of the eco n o m y an d k ey i n du s t ri e s s uc h a s automotive, engineering, pharmaceuticals and food processing. The countries participating in Indiallia 2012 are Argentina, Algeria, Australia, Burkina Faso, Cameroon, Canada, China, Colombia, USA, France, Hungary, Iran, Italy, Lebanon, Mauritius, Mexico, Nigeria, Nepal, Netherlands, Poland, Qatar, United Kingdom, Russia, Senegal, Sri Lanka, Turkey. Indian Companies besides the SMEs and officials from corporation such as Maharashtra Industrial Corporation (MIDC), Madhya Pradesh, Karnataka, Gujarat and Andhra Pradesh would be participating in the forum. CARGOTALK
Shipping & Ports News Update
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Martin Sieg appointed as Damcoâ€™s global head for ocean freight Recently, Martin Sieg has taken over as the global head, ocean freight, Damco. He will be responsible for more than 6,00,000 TEU of ocean freight that Damco manages every year. Prior to this Sieg was the managing director at German logistics company SDV Geis and has previously held several managing positions with Hapag-Lloyd. He is a Diplom-Kaufmann from the University of Hamburg.
Cabinet Committee approves deepening and widening
of Mumbai Harbour and JN Port Channel
he Cabinet Committee on Infrastructure has approved the project of deepening and widening of Mumbai Harbour Channel and Jawaharlal Nehru Port Channel (Phase-I) of Jawaharlal Nehru Port Trust (JNPT) at an estimated cost of ` 1571.60 crore. The Mumbai Harbour Channel and JN Port Channel will be deepened and widened
to handle vessels up to capacity of 6,000 TEU and upto draught of 14 metre by using the tidal window. The channel length will be increased from existing 29 km to 33.54 km to meet the natural water depth of 14 metre at sea. In addition, the width of the channel will also be increased to maintain a minimum width of 370 metre from the present dimension of 325 metre in the straight reach.
Completion period of the work is 25 months including mobilisation period after awarding of work.
The key benefits Â‡ +DQGOLQJ ELJJHU VL]H YHVVHOV XSWR a draught of 14 metre by using tidal window Â‡ $WWUDFWLQJLQWHUQDWLRQDOFRQWDLQHUYHVVHOV and enabling JN Port to develop as Hub Port on the west coast Â‡ ,QFUHDVHLQIXWXUHWUDIILF Â‡ 6 D Y L Q J V L Q V K L S Z D L W L Q J F R V W D Q G ocean freight costs per TEU due to larger volumes Â‡ $YRLGLQJFRVWO\DQGWLPHFRQVXPLQJ feedering operation Â‡ 2SWLPXPXWLOLVDWLRQRIFDSDFLW\ Â‡ )DVWHUWXUQDURXQGRIODUJHUYHVVHOV Â‡ , Q F U H P H Q W D O U H J L R Q D O H F R Q R P L F development and spin-off economic benefits including employment generation
52 CARGOTALK APRIL 2012
Shipping & Ports Industry Associations
Cochin Steamer Agents Association
urges for 30% reduction on feeder cost
In view of the crises being faced by the container shipping industry due to the European recession, the Cochin Steamer Agents Association (CSAA) has urged the Kochi port management to extent 30 per cent concessional tariff to feeder vessels till March 2013.The plea was made at the association’s recently held 3rd Annual General Meeting. Ratan Kr Paul
ccording to Santosh Kumar, president, CSAA, the current economic situation has forced many mainlines to terminate unviable services. He also maintained that about 302 feeder vessels had called Kochi port during April 2010 and March 2011, whereas it has reduced to 289 during April 2011-Feb 2012. However the arrival of mainline vessels to the International Container Transshipment Terminal remained unchanged at 61 ships. Remarkably, with a view to attract main line container vessels to ICTT Vallarapadm port management decided to offer 60 per cent concession in vessel related charges till migration of operations to ICTT Vallarpadam. On July 5, 2010 the port management regularised this concession in the board meeting and extended the concessional period till September 2011 thereby leaving the regular feeder vessel operators with a very steep increase to their vessel operational cost. “Now if we review the vessel call statistics for 2010-11 compared to 200910, it may be noted that there was almost 1.72 per cent drop in the number of vessel that called Kochi port with almost 8 per cent drop in feeder vessel calls. During 2009-10 the port reported that
390 container vessels had called Cochin whereas in 2010-11 this has dropped to 363 vessel calls,” Kumar pointed out. Kumar pointed out that container shipping industry is going though a very tough phase due to the European recession with many main lines deciding to terminate unviable services. Accordingly, it is the need of the hour that port management should consider to extend the 30 per cent concessional tariff to feeder vessel calling at ICTT till March 31, 2013. Interestingly, various steps initiated by Kochi port after commissioning of ICTT Vallarapdam is a clear indication that
the port management has attached value to their Exim customer and is willing to give an all out support by providing adequate infrastructural to meet the customers requirements. According to Kumar, relaxation of the ‘Indian Cabotage Law’ is another important issue, to turn around ICTT Vallarpadam to boost the economy of Kochi as well as India. “The port management has already taken drastic steps to get this matter resolved through various ministries including shipping, commerce and finance. We are optimistic that port management will be able to get this matter resolved by April 2012,” said Kumar. CARGOTALK
Industry Events India Cargo Summit
urges for nodal point for growth
Recently, the Confederation of Indian Industry (CII) hosted a conference in New Delhi called ‘India Cargo Summit’.The objective of the summit was on the issue of Infrastructure & Logistics. CT Bureau
he summit discussed on the issues pertaining to ‘Warehousing infrastructure & Global Supply Chain Efficiency’, ‘Empowering Logistics through Reforms in the Road Transport Regulations’, ‘Rail Reforms: Providing Impetus to Investment’, ‘Ports and Airports: Process Simplification for Maximising Efficiency’ and ‘Domestic Cargo Movement: Implications of GST’. 5RXQG7DEOH,PSDFWRI*67RQ'RPHVWLF&DUJR0RYHPHQW
The summit was addressed by a number of speakers representing the industry and the Government of India. Setting the tone of the summit, Tushar Jani, chairman, SCA Group of Companies, highlighted the gradual development of the infrastructure for cargo movement in the country. He however, stressed on the fact that the country has miles to go to attain global standard as far as logistics and supply chain management is concerned. Cumbersome procedures and exorbitant cost transaction have put India into a disadvantageous 54 CARGOTALK APRIL 2012
position, despite its potential to be a cargo hub in the region. “Who is responsible for this? Is it the custodians, the carriers, the service providers or the Government. We will have to take the common responsibility for this lacking. We will have to work hand in hand for the greater interest of the country’s economy,” said Jani. He pointed out that the logistics industry has employed two million people in India and has enormous potential to grow. “Logistics industry has to be recognised by the Government of India by creating a nodal point (separate board) under the aegis of the Prime Minister of India for it, so that it can function without any hassle,” advocated Jani. Making the theme presentation Manish Puri, CEO, Quant Partnership, highlighted the impact of economic liberalisation on the country’s infrastructure. Accordingly, government has also changed its mind set by inviting private players to build the required infrastructure through PPP mode. He however, suggested, “In an ideal environment PPP should shift the onus of successful outcome to the private sector partner through its superior project management and
efficiency skills, while providing adequate reward commensurate with the risk to which the private sectors get exposed in the process of infrastructure development.” He also pointed out the positive impact of private sectors participation, especially in the port sector. “Private sector participation in port sector re-positioned the port services as market-driven, cost sensitive and operational standards-driven business activity benchmarked to globally accepted norms of market competition and efficiency,” he maintained. He also raised some issues that are yet hindering the growth of port sector. These include multiplicity of concession agreements, policy guidelines (changed goal posts), uncertainty over tariff setting philosophy, coordination between central and state governments, hinterland connectivity, etc. Puri identified the key challenges to infrastructure development in India as government policy, institutional capacity, regulation, project development, land acquisition, financing and equity investments. WWW.CARGOTALK.IN
Industry Event Report
India Aviation 2012
India will be the third largest aviation market by 2029: ACI
afael Echevarne highlighted the growth trajectory of aviation in India during the last five years in which the country improved its rank from 101 st in 2007 to 12 th in 2010 in terms of airport maintenance and traffic handling.
Speaking at the ‘India Aviation 2012’, Rafael Echevarne, director, economics and programme development, Airports Council International (ACI) said that India is likely to emerge as the third largest aviation market by 2029. The 3rd civil aviation show recently organised at Hyderabad by the ministry of civil aviation, government of India. CT Bureau Amber Dubey, director aviation, KPMG, which is the knowledge partner of India Aviation 2012 said that the initiatives like formulating an air cargo promotion policy, proposal to set up a full-fledged aviation university, investments in MRO hubs are positive steps taken by the Government of India.
He said that the growing interest in the flagship aviation event was a reflection that India was fast becoming an aviation hub. “The global economy faced rough weather in 2011 with rising fuel costs, European debt crisis, etc. European airlines will be hit the hardest in 2012 and Aisa-Pacific (APAC), specifically Indian and Chinese markets, would provide the boost,” he added. The government, he stated, was committed for the development of the sector and was introducing several policies and regulations to encourage private sector participation and investments. “Our government has been expressing itself forcefully in the infrastructure area both on the ground and in the air,” he said.
In order to sustain this, India would require to put in place a regulatory framework that encourages investment, ensures safety and facilitate the development of tourism. Tony Tyler, director general and CEO, IATA made the key note address at India Aviation 2012. He recommended for infrastructure expansion, rationalisation of airport charges, investment policies which enable 49 per cent direct investment by foreign carriers.
At this conference Nasim Zaidi, secretary, ministry of civil aviation released two Knowledge Reports on Indian Civil Aviation Industry titled ‘India: The Emerging Aviation Hub’ by KPMG and ‘Economic Benefits from Air Transport in India’ by Oxford Economics. Earlier, Ajit Singh, civil aviation minister inaugurated the show at the Begumpet Airport in Hyderabad in presence of a large number of government representatives and industry stakeholders.
He also maintained that the civil aviation ministry is formulating an Air Cargo Promotion policy which will be discussed with the industry. The Airports Authority of India is gearing up, to meet the challenges of rapid growth in aircraft movements. To bridge the shortage of skilled personnel in aviation sector, the government proposed to set-up a fullfledged aviation university which would enhance the supply of trained pilots and other skilled personnel. CARGOTALK
View Point CEO Talk
National Aviation Policy needs a strong implementation plan: IATA According to Tony Tyler, director general and CEO, IATA, Indian aviation has tremendous potential to drive economic growth in the sub-continent. But to realise this, India needs a common vision for aviation, expressed in a National Aviation Policy strongly linked to an implementation plan. CT Bureau
n Tyler’s opinion the proposed ‘National Aviation Policy’ would need to re-build competitiveness by addressing the difficult issues of tax, cost, investment and infrastructure. “Aviation is responsible for 0.5 per cent of India’s GDP and supports 1.7 million jobs. Aviation’s contribution to the India economy could be much more,” said Tyler.
air transport industry for over a decade. It is now clearly recognised by all that fuel taxes are sucking the life blood from the Indian aviation sector,” he cautioned.
by and let this happen. It must intervene with a broader context. This should take into consideration the long-term development of Indian aviation at its hubs,” observed Tyler.
Tyler highlighted the need for capacity expansion in Mumbai. “Mumbai is bursting at the seams. The first phase was meant to open in 2014 but construction has not even begun. Land acquisition is not yet complete. We need a coordinated effort across all government ministries to facilitate success without further delay,” Tyler suggested.
Tyler urged the positive consideration of MOCA proposals to allow up to 49 per cent direct investment by foreign carriers in Indian airlines. “This would allow strategic tie-ups with foreign airlines similar to the arrangements that have successfully strengthened airline groups in other parts of the world,” he said.
Aviation is responsible for 0.5 per cent of India’s GDP and supports 1.7 million jobs. Aviation’s contribution to the India economy could be much more 7RQ\7\OHU
Tyler suggested a four pillar agenda to build competitiveness i.e. taxes, infrastructure, cost and investment policies. Tyler highlighted the damaging effects of jet fuel taxes in India. All fuel is subject to an 8.24 per cent excise duty and domestic flights face state fuel taxes of up to 30 per cent. As a result, fuel represents an average of 45 per cent of operating costs for India’s airlines, compared to a global average of 32 per cent. “The high cost of jet fuel has been hijacking the competitiveness of the Indian 56 CARGOTALK APRIL 2012
Tyler urged MOCA to intervene in the discussion of proposed charges increases at Delhi International Airport. “The new terminal and third runway have been a much needed boost. But if the 340 per cent increase in charges over the next two years is implemented, it will make Delhi the most expensive airport in the world and destroy its competitiveness,” said Tyler. According to him, given the broad economic implications that this would have, it is important that the government takes immediate action. First, 340 per cent increase of airport charges by next two years is unacceptable. “The ministry cannot stand
, made it clear that merely allowing foreign airlines to invest in Indian aviation will not solve the purpose. Without addressing the other three pillars - costs, taxes and infrastructure - it may only be a theoretical exercise. “Under the current conditions, the odds are stacked against any investor making a positive return on investment in the Indian aviation sector. And no one is likely to come forward unless they see themselves making a profit,” Tyler argued. He expressed optimism and believes that India has a promising aviation future if these issues can be addressed. WWW.CARGOTALK.IN
Study Report Air Cargo
KPMG Report recommends for Air Cargo Promotion Board
The KPMG study report, which was released at the recently held ‘India Aviation 2012’ in Hyderabad, underlines the huge potential of air cargo industry (both domestic and international) in India. It also emphasised on some crucial tasks before the government as well as the industry people to make India an air cargo logistics hub in this region. CT Bureau
he study points out that in India total cargo throughput has increased by more than 50 per cent over the last five years. While the domestic cargo throughput has increased by 12.1 per cent CAGR, international cargo throughput has grown by 10.3 per cent. International cargo tonnage is almost 64 per cent of the total cargo handled.
domestic cargo to around 2.4 MMTPA by FY 2020.
The international cargo is projected to reach around 3.5 million metric tonne per annum (MMTPA) and
Key reasons behind these include, lack of enabling infrastructure, complicating procedures, inadequate technology
However the study says, Indian air cargo industry faces a magnitude of challenges. These include high dwell times, congested cargo terminals, inefficient use of belly cargo capacity, missing/damaged/non-traceable cargo, manual processing, etc.
and shortage of skilled manpower. In view of this scenario, the study report recommended a few short term and medium term actions.
Short term and medium term actions: Establish an Air Cargo Promotion Board (ACPB) Develop of Air Freight Stations (AFS) Promote professional training programmes for air cargo Ensure 24X7 customs operations in phases Extend Risk Management System (RMS) facility for exports Ensure flow of information between airports, airlines and operators Standardise and simplify transshipment procedures Allow ramp to ramp transfer for pre sorted containers cargo Promote e-freight
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Published on Apr 2, 2012