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JULY 2012

Publisher

SANJEET Editor

RUPALI NARASIMHAN

)520 7+((',725

Sr.Assistant Editor

RATAN KUMAR PAUL Desk Editor

NEELAM SINGH 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

Assistant Manager -West

MUKESH GAMRE

Marketing Co-ordinator

GAGANPREET KAUR Creative Design

SHIVALI SHAKDHER Advertisement Designer

VIKAS MANDOTIA Production Manager

ANIL KHARBANDA Circulation Manager

ASHOK RANA

Greek tragedy across the globe The bankruptcy in Greece and subsequent turmoil in Eurozone created havoc on the world economy at large. India too, despite its proclaimed firm domestic economy, is feeling the jolt witnessing falling export, manufacturing, GDP, FDI and value of its currency. Add to these, unprecedented increase in prices and costs made consumers and manufacturers/service providers highly cautious against stepping out for new venture.

At this juncture, industry needs firm steps on fast implementation of some long desired industry-friendly policies including GST, FDI policy reforms in areas like civil aviation, multi-brand retail; strong framework for raising funds for infrastructure; fast track implementation of critical policies and projects and addressing the issue of repatriation of black money to mitigate BoP situation. Exporters, especially, require reduction of the cost of lower export credit, which has now moved between 11.5 per cent and 12 per cent with the withdrawal of Interest Subvention.

Majority of the cargo and logistics industry practitioners felt the pinch of slowdown during the year 2011-12, which remained to be flat by and large. Many of them are foreseeing tougher times in 2012-13. Exporters and Commendably, the government of India has announced manufacturers, in particular, have already expressed a number of benefits in the yearly Supplement to the serious concern and sought appropriate measures from Foreign Trade Policy. Remarkably, it has included retail the government to halt further slide of the country’s export in the list of beneficiaries. Industry practitioners, on economy and to bring it back to growth trail. Indian the other hand, are exploring new markets and avenues exporters apprehend that the situation is grimmer now to sustain during these testing times. Logistics services as compared to the previous one. Earlier, emerging and related to eCommerce is one of such emerging areas. It is developing economies exhibited positive growth helping expected that, with concerted and innovative efforts by India to increase its export through market diversification the government and industry players, the country will sail strategy focussing on Latin America, Africa, and Asia. through the fiscal turmoil. However, during this second phase of slowdown, those Rupali Narasimhan emerging markets are also touched by ‘Greek tragedy’. Editor

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DDP Publications Private Limited New Delhi: 72 Todarmal Road, New Delhi – 110001, India. Tel.: +91 11 23731971, 23710793, 23716318, Fax: +91 11 23351503, E-mail: cargotalk@ddppl.com, Website: www.cargotalk.in %UDQFK2IÀFHV Mumbai: 504, Marine Chambers, New Marine Lines, Opp SNDT College, Mumbai – 400020, India Tel.: +91 22 22070129, 22070130 Fax: +91 11 22070131, E-mail: mumbai@ddppl.com Middle East: P.O. Box 9348, Saif Zone, Sharjah, UAE Tel.: +971 6 5573508 Fax: +971 6 5573509 Email: uae@ddppl.com CARGOTALK is a publication of DDP 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 DDP 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 72Todarmal Road, New Delhi – 110001.

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JULY 2012

 Cover Story

&217(176 DEPARTMENTS National News 8 Air Cargo Logistic Promotion Board:Will it push forward the air cargo industry? 20 Envirotainer and TTL sign agreement on cold chain solution in India

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In view of India’s economic growth slipping to a nine year low of 6.5 per cent during 2011-12, wakening of rupee, reducing manufacturing and export growth, huge price hike and fall of FDI, cargo and logistics industry is apparently adopting cautious steps for future. In this Annual Issue of Cargotalk, we are highlighting the performance of FY 2011-12, present market trends and projection for the current financial year by taking views from industry stakeholders.

Airlines News 16 Chapman Freeborn is growing in India



 

 Family Albums 58 A year of building capacity and confidence International Airports 18 Schiphol Cargo:Lifescience Steering Group eyes India in a big way Cargo Performance 36 Airlines wise exim performance from Delhi Airport in May 38 Airlines wise (Domestic) market share (cargo handling and aircraft movement) during 2011-12 New Launches 52 New services in the shelf to expand horizon

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60 BCHAA organises Self Assessment Workshop in Mumbai 61 AGS World Transport celebrates Customer Day in style Shipping & Ports 70 Arshiya inks deal with GATX India for wagon trains 72 ‘Indo-Africa Freight Corridor’: Transocean to expedite exim trade 74 Port of Halifax: Strengthening project cargo facilities

Product Display

56

CAMPISA Dock Levellers from Gandhi Automations

COLUMNS Lead Story

42

Face of the Month

Emergence of eCommerce: Logistics industry gearing up to accept challenges

62 An Aviation Expert Fond of Floating on Water

CEO Talk

Study and Survey 76 Dr CP Joshi unveils second report on road transport in India 78 Export and import time: A cross country analysis

64

Celebi Delhi Cargo Terminal: New CEO to focus on revenue and supply chain management Talking Point 66 Transshipment Warehouse by Kuehne + Nagel: Pharmaceutical logistics to get a push in India

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National News Government Policy

Will it push forward the air cargo industry? In a bid to implement the recommendations of the ‘Working Group on Air Cargo and Express Service Industry’, the Ministry of Civil Aviation, Government of India, has formed an Inter-Ministerial ‘Air Cargo Logistic Board’ headed by the Secretary, Ministry of Civil Aviation. Cargotalk spoke to respective associations of airlines and freight forwarders about the significance of this Board for the entire industry… RATAN KR PAUL $MLW6LQJK

A

nnouncing the formation of the Air Cargo Logistic Promotion Board, Ajit Singh, Civil Aviation Minister, informed that the Board will lay down policy guidelines for setting up of air cargo facilities at airports and will also set performance standards relating to the quality of service in the air cargo logistic supply chain. He also added that the objective of the Board will be to 9LSDQ-DLQ resolve inter-ministerial issues that affect the air cargo operations in the country. It will review, on a continuous basis, the general and sector wise policy regime governing air cargo logistic operations and remove the bottlenecks to efficiency. Earlier, the Ministry of Civil Aviation constituted a Working Group on Air Cargo and Express Service Industry to set a priority of issues and recommend policy initiatives on air cargo express service industry recognising its vital role in the economic development of the nation. The Inter-Ministerial Board has been constituted on the recommendation of this Working Group in keeping with the need to handle increased demand for air cargo transportation and ensure rapid delivery of goods. The Board includes 17 members, with representatives of the level of joint secretary and above from various Central Ministries and Departments, which are directly or indirectly linked to the air cargo logistics. The Board may co-opt representatives of any other Ministry/Department of Government of India, State Governments, Financial Institutions, professional experts and representatives of the industry, as and when necessary.

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FUNCTIONS OF THE BOARD 

To resolve Inter-Ministerial issues that affect the air cargo logistics operations in the country and to achieve better efficiency



To review, on a continuous basis, the general and sector wise policy regimes governing Air Cargo Logistics operations with a view to remove bottlenecks to efficiency



To review and monitor the functioning of Cargo Facilitation Committees that are headed by Airport Directors of AAI and other private/JV airports



To lay down policy guidelines for setting up of Air Cargo facilities at airports, air freight stations/cargo villages including guidelines for the Public Private Partnership model of development of these facilities



To act as a coordinating agency to ensure expeditious clearance of proposals for setting up of air cargo facilities at airports, air freight stations/cargo villages in the country subject to fulfillment of all statutory requirements



To lay down performance standards relating to the quality of service in the air cargo logistics supply chain to be monitored by the Airports Economic Regulatory Authority (AERA) for implementation



To review the progress on development of major gateway airports as cargo hubs through facilitating transshipment



To review periodically implementation of proposals cleared by the Board

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National News Government Policy

According to Bharat Thakkar, president, Air Cargo Agents Association of India (ACAAI), it is encouraging that the recommendations of the Working Group on Air Cargo/ Express Service %KDUDW7KDNNDU Industry are being implemented by forming the Air Cargo Logistic Promotion Board. The Ministry of Civil Aviation has also unveiled other recommendations of the working Group by displaying it on its website. ACAAI played an important role in discussions and finalising recommendations. However, he appealed that these recommendations should be implemented within the time-frame specified. Vipan Jain, chairman, BAR Cargo (NI), said that formation of the Working Group

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followed by Air Cargo Logistics Promotion Board was a crucial step to recognise the importance of air cargo and express service industry, which remained to be a neglected sector.“I believe the Government is now determined to remove bottlenecks and promote air cargo business in India,” he maintained. “As it is going to be an inter-ministerial Board, we trust that this will be a real success as it will have support especially from Ministries of Finance and Commerce besides Civil Aviation,” he further added. He also felt that the assurance that “Air Cargo Policy to be reviewed on continuous basis” is a unique part of the Board, as it is going to be a long-term plan and needs support from all sectors on regular basis. In addition, the Board will lay down policy guidelines for setting up of air cargo facilities at airports and will also set performance standards relating to

the quality of service in the air cargo logistic supply chain. On top of it, accountability is also expected from individual stakeholders to determine the delay (if any). “We have always counted on internal export and import. However, the success factor for all the airports in the world mainly depends on transit tonnage. Unfortunately, transshipment is a major challenge against putting our India on the international map,” Jain observed. Jain raised a very important point that at least one or two important members from all stakeholders (for instance, airlines, agents and airport operators) should remain on the Air Cargo Promotional Board, rather than being part of co-opted or sub-committee group.“This may not get due attention without having experts from field organisations on board,’ he argued.

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National News News in Brief

The United Nations World Food Programme (WFP), together with its major corporate partner TNT organised their annual global walk against child hunger on June 3, 2012, with a call ‘End Hunger: Walk the World’. In New Delhi, the walk started from Lodhi Colony Main Market and witnessed participation from all age groups. Prominent personalities like Bob Hiensch, Netherlands Ambassador to India; Jan Henderson, New Zealand High Commissioner and J K Raman, Head-External Relations & Advocacy – WFP, also participated in the walk. According to Gerry Power, MD, TNT Express, TNT has been a key part as well as the host of the ‘Walk the World’ event every year. “Raising awareness of the fight to end hunger is a constant need. To be a part of an initiative that brings relief to so many hungry children around the world is a humbling and yet empowering feeling,” he said.

The event was participated by government dignitaries, UN agencies, WFP corporate partners, their employees, friends and families across 24-time zones in 24 hours, to raise awareness about hunger and generate money to feed poor school children.

He also informed that “End Hunger: Walk the World” evolved from an initiative of TNT employees in Asia in 2003. Currently in its tenth year, the event has mobilised approximately one million participants and raised funds to feed over 100,000 children in school for one year over the past few years. Each year, on an average, WFP feeds more than 90 million people in more than 70 countries. Since 2002, TNT has been an active partner of WFP and to date has invested over US$50 million in the partnership.

According to DTDC Courier & Cargo

present, DTDC provides services to over

sources, the company has become the

240 international locations through

first Indian Express company to have

various arrangements such as 100 per

Suresh Bansal, director and head of

made an acquisition outside India by

cent subsidiaries, Joint Ventures and

Inter national Business of DTDC,

acquiring a majority stake in the company

International Master Franchises. Apart

informed that post the joint venture,

Eurostar Express of UAE.The joint venture

from the UAE, it also has its own offices in

DTDC’s UAE network has build a team

in Dubai will be 52 per cent owned by

USA, UK, Australia, Canada, Singapore

of 100-odd professionals and a fleet of

DTDC, 33 per cent by the UAE-based

and China.

about 60 vehicles. In the days to come,

Eurostar group and 15 per cent by DTDC’s

products to these markets,” he said.

DTDC will offer same day delivery,

local partner in UAE. Eurostar Express is

Commenting on the acquisition,

pick-up and return services all over the

one of the subsidiary companies of the

Subhasish Chakraborty, CMD, DTDC,

UAE for vital shipments, delivery of

US $500 million Eurostar Group

said that the company will leverage this

shipments between major cities within

headquartered in Dubai.

acquisition to gain greater market share.

the UAE in 3 hours,‘Bullet Service’ to all

“We are also exploring the possibility of

over the UAE within 4 hours and pre-

taking its other value-added, premium

paid services.

The company source maintained that, at

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On the Move Appointments

Recently, UPS has announced the appointment of industrial engineering, human resources, customer Mark Martyn-Fisher as managing director of UPS service, security, finance & accounting, supply chain India. He replaces Mark Khambatta who joins the solutions as well as ocean, air & ground operations. UPS Asia Pacific strategy team. Martyn-Fisher joined UPS in 1999 as managing Martyn-Fisher joins the UPS India team with over director of UPS in Nigeria and in 2001 he expanded 30 years of international management experience, his role to include UPS’s West Africa operations. In the past 13 of which were spent with UPS. In his 2005, he was appointed for entire Sub-Saharan new role, he will oversee UPS’s express and supply Africa. In 2009, he left Africa to become the operations chain operations in India that includes marketing, director of the UPS Turkey, Middle East & Central business development, international trade services, Asia district.

Shantanu Bhadkamkar, chairman, Federation of Freight Forwarders’ Associations in India, has been elected as managing director of the International Federation of Customs Brokers Association (IFCBA) during the recently held IFCBA World Conference in Greece. Acknowledging importance of India in the present global economy the next meeting of the IFCBA will be held in India. The members of FFFAI will be able to interact with the members of the IFCBA.

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Airlines News Air Cargo Charters

Headquartered in UK, Chapman Freeborn India is a well known name in the air charter brokering industry. The Company is today retaining a billion dollar business with 35 offices in 25 countries. In India, the company has already established its footprints by registering significant growth, year-on-year. CT BUREAU 6KDLOHQGUD6HWK

been with Chapman Freeborn for over five years now, and in the last two years of managing the India office we have seen a substantial growth in this region” According to Seth, Chapman Freeborn India expanded its local team in order to adapt to the increase in business in the country. “Our goal is to continue to expand into the best locations so to ensure that as a company we continue to value our clients’ needs. By strengthening our local base in India, we have already seen a promising start to 2012,” he said. In Seth’s opinion, as India is a developing and emerging economy there is a great potential for large growth in the region,not only for import charters but with India developing into a manufacturing hub for automobile, heavy industries and infrastructure, the spectrum for exporting goods is ever growing. “We are predicting a robust and encouraging growth for the coming months. More specifically, we are experiencing a high demand for heavy and outsized cargo movements to and from India to neighbouring regions,” Seth added.

Chapman Freeborn provides optimum solutions to meet private air charter and cargo handling requirements.

Chapman Freeborn is also renowned for innovative thinking, particularly providing optimum solutions to meet private air charter and cargo handling requirements. In 2011, Chapman Freeborn coordinated more than 8,000 cargo and passenger charters around the world. “In 2011-12 the market has seen a positive growth. In fact over the last two years we have seen a continued demand for aircraft charters throughout the region. To accommodate to this growth, Chapman Freeborn has expanded the local team and relocated to a new office that is located opposite the Indira Gandhi International Airport, New Delhi. Shailendra Seth, director, Chapman Freeborn India, said, “We are delighted with the shift to our new office. I have 16 CARGOTALK

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Seth observed that competition within the market remained fierce, which meant companies like Chapman had to excel in all areas. However, having its presence in India for almost six years has given the company an extra edge as it maintains healthy relationships with all players in the air charter industry. “We are forecasting a significant growth to and from India, particularly for cargo movements.We have seen demand for the movement of cargo from India to neighbouring areas such as Africa and Middle East, with demand for the import of goods from Europe and China to India,” Seth shared. Chapman Freeborn India works in close collaboration with Chapman Freeborn UAE offices that uses their fleet of leased aircraft to operate a fully scheduled service for cargo flights from the UAE to numerous locations in Afghanistan. WWW.CARGOTALK.IN


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International Airports New Initiatives

Schiphol Cargo has decided to put huge impetus on facilitating temperature controlled cargo operation in the airport. Meanwhile, it has formed ‘Lifescience Steering Group’ for this purpose, which was prompted by a recent trade mission from the Netherlands to India. RATAN KR PAUL %DUW3RXZHOV

T

he objective behind the recently formed Lifescience Steering Group is to develop a long-term strategy for the promotion of lifesciences-related activity centred around the Dutch airport. Schiphol Cargo, the dedicated cargo arm of Amsterdam Airport Schiphol has taken the main initiative to form the Group. Schiphol Cargo and representatives of the Amsterdam Life Sciences Platform recently met with the Indian pharma industry and had several discussions on the development of a pharma trade lane between India and Europe, using Schiphol as its distribution hub. In the Lifesciences Steering Group, Schiphol Cargo has been joined by AmsterdaminBusiness, Amsterdamse Innovatie Motor, Bioport Europe, Amsterdam Airport Area, Schiphol Area Development Company and the Holland International Distribution Council. “Some people might be surprised that Schiphol Airport is driving this programme, but it fits in with our objective of supporting our logistics community. We do this by lobbying government, liaising with global industry bodies and market sectors, and staging overseas business development missions,” said Bart Pouwels, business development director, Schiphol Cargo in an interview with Cargotalk. According to him, the main objective of the 18 CARGOTALK

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Steering Group is to create an optimal life sciences environment in the Amsterdam region, where all partners (public and private) have streamlined processes and procedures to best suit the requirements of the life sciences sector. “In addition, the Steering Group aims to optimise pharma distribution flows at the airport by eliminating the bottlenecks that cause temperature excursions and procedures that cause long waiting time,” he added. “The Lifesciences Steering Group will target process optimisation in the lifescience supply chain, assisting stakeholders to establish best practice for handling this traffic. As a key player in this initiative, Schiphol Cargo will do everything possible to support its community in their efforts to maximise the huge potential of this fast-growing market.” Pouwels believes that Schiphol Cargo’s team of experts with its knowledge of multi-modal transportation and logistics, legislation, security, trade, environmental issues and business development methods can facilitate and promote a competitive and efficient logistics marketplace, and act as a neutral intermediary to bring the various parties together. “This benefits our logistics community, and supports the Netherlands’ drive to remain a major player in all forms of transportation,” he asserted. Besides managing the activities at and around the airport, the Steering Group is also facilitating life science trade flows between origin and final

According to Pouwels, the increasing awareness of maintaining a cold chain has led to new facilities at the airport in Delhi, Mumbai and Hyderbad. CSC India has brand new handling facilities in Delhi and Mumbai where they have good cooling facilities. A year ago, Menzies created a dedicated Pharma zone at Hyderabad airport. “But creating new facilities is not the only way to success.The procedures of the involved government inspections also need to be aligned with the operational process. In Amsterdam, we have experienced that success is created by close cooperation between the government and commercial companies,” he observed.

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International Airports New Initiatives

destination by visiting life science companies abroad, and helping them to create a safe and secure supply chain for their time and temperature sensitive products. It also organises dedicated lifesciences air freight meetings and seminars at different continents to commonly identify and solve supply chain related problems and issues. “Our target is to continue increasing inbound pharma traffic by nurturing trade through measures adopted in consultation with our Lifesciences Steering Group. Our expectation is that Schiphol will retain its leading role as the European centre of distribution for Indian pharma

production,” Pouwels said. Asked about the fast connectivity to Schiphol Airport, Pouwels informed that the Airport is now in discussion with its resident carrier partners about enhancing the frequency, quality and volume of freight capacity on major routes from India to Schiphol. Pouwels pointed out that Martinair has recently increased freighter capacity between Delhi and Amsterdam because of strong market demand. “Together with KLM network planning, we are looking at possibilities for additional capacity to serve the increasing market demand from Mumbai and Hyderabad to Amsterdam,” he added.

In Schiphol Airport Pharma has increased from seven per cent of total inbound volumes in 2010 to 13 per cent in 2011. This is already the highest proportion for any of the big four cargo airports in Europe. In 2011, overall annual cargo volume from India to Schiphol was 23,000 tonne, including 9,000 tonne terminating in the Netherlands, and the balance mainly for Germany, France and Spain.

In 2011, export were 8,000 tonne from Netherlands to India (7,000 originating in the Netheralnds), and seven per cent of the outbound volume to India was pharma (as in 2010). Exploratory talks between the Steering Group and Airports as well as handling companies in India have already started. Additional initiatives on collaboration will be determined in the coming period.

Envirotainer, the Sweden based global market leader regarding active temperature-controlled containers and Chennai based TTL Active Cold Chain Solutions (an associate of the TTK Group) has recently signed a partnership agreement to introduce the former company’s cold chain solutions in India in a big way. “The partnership is for strengthening

required facilities for this segment.

the cold chain services in India.It is more

(L-R): Stephen Maietta, and Arun Vasu at a press conference in New Delhi

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than a GSA agreement. Envirotainer is

The focus for the partnership will

an enabler for the air transportation and

primarily be the pharmaceutical

logistics providers and the healthcare

industry. “Some 20% of temperature-

and life sciences industry to ensure the

sensitive healthcare products are wasted

integrity of their temperature sensitive

during transportation due to a broken

products,” said Stephen Maietta, global

cold chain.With this partnership we can

sales director, Envirotainer, speaking

bring world-class freight infrastructure

to Cargotalk in a meeting in New Delhi.

and air transport technology in India to complete the chain,” added Vasu. The

Highlighting the fact that the Indian

partnership will target manufacturers

Cold Chain industry is growing at 25

and logistics service providers regarding

per cent per annum and the cold chain

pharmaceuticals. At present, they will

industry is expected to touch Rs 40,000

concentrate on Mumbai, Hyderabad

crore by 2015,ArunVasu,CMD,TT Group,

and Bengaluru. Their product will be

maintained that this agreement will

introduced in Delhi market in the next

have huge significance for creating the

phase.

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Express Cargo New Initiatives

“The financial year 2011-12 has been a good year for the express logistics industry at large,” said Subhasish Chakraborty, CMD, DTDC. The express segment, the mainstay of DTDC’s operations, is growing faster than others. Driven by international and non-documents, the express industry is estimated to grow at a healthy CAGR of 17 per cent over the next three years.

A

6XEKDVLVK&KDNUDERUW\

ccording to Chakraborty, the quantum leap that could have been provided by clearance of foreign direct investment in multi-brand retail and the implementation of regulatory and taxation changes such as the GST has been delayed. Moreover, rising fuel prices pose a serious concern to the industry. Meanwhile, new opportunities such as warehousing solutions, e-commerce and 3PL services are also coming up. “Over the last few years, we have been building a portfolio of specialised, unprecedented products for new-age customers who place a premium on time. Our Premium Express Products (PEP) range caters to this segment, and we have been seeing phenomenal year-on-year growth in these services,” said Chakraborty. He also maintained that DTDC has identified the potential of these services in the remote parts of the country, from where the company now offers delivery within 48 hours. Another niche need that has emerged in India today is that of E-commerce clients, who require securitised deliveries, higher informational accountability, reliable remittance cycles, reverse logistics and much more from their vendors. “DTDC aims to become the preferred logistics partner for such companies, and is focussing specifically on addressing these needs,” Chakraborty said. DTDC targets to increase its product portfolio further to be able to cater to more specific customer needs. One such product will be aimed at the student community. The company is also working towards expanding the reach and the offering of our retail venture, DTDC New World, which is a one-stop service store providing services such as bill payments, recharges, travel bookings, holiday package offers, 22 CARGOTALK

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parcel and packaging services, printing solutions, stationery and office supplies. Furthermore, DTDC is now focused on consolidating its presence internationally, keeping South Asia and Middle East as the nucleus, thus effectively covering all requirements of an ever-growing NRI community and capitalising on the increased trade between India and these economies. Recently, DTDC also made a foray in the international markets by launching its offices in Canada, Kenya, Australia and expanding network in USA and UK, where the company has been present for over a decade now. In 2011-12 DTDC set up a joint venture in China and made an acquisition outside India, with its acquisition of a majority stake in Eurostar Express of the UAE. At present, DTDC’s market share is 650 cr and the company is growing at over 30 per cent year-on-year. “We aspire to be a 1000 cr enterprise by the year 2014-15,” said Chakraborty.

According to Chakraborty, the current market scenario is marked by high fragmentation and a large number of small, local players in each territory, and that offers great potential for consolidation. Warehousing and 3PL are emerging as the next big opportunities. “Our expectations are apart from implementation of GST and re-thinking the stand on FDI in multi-brand retail, the Government should recognise logistics as an Industry, modernise rail freight, better focus on road safety measures and go for amendment of the Motor Vehicle Act. WWW.CARGOTALK.IN


Cover Story Financial Year Review

PROSPECTS IN FY 2012-13

LOGISTICS

leaders exploring ways to weather slowdown

In view of India’s economic growth slipping to a nine year low at 6.5 per cent during 2011-12, weakening of rupee, reducing manufacturing and export growth, huge price hike and fall of FDI, cargo and logistics industry is apparently adopting cautious steps for the future. In this Annual Issue of Cargotalk, we are highlighting the performance of FY 2011-12, present market trends and projection for the current financial year by taking views from industry stakeholders. RATAN KR PAUL 24 CARGOTALK

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Cover Story Financial Year Review

The domestic as well as export market is in serious trouble. The Government of India and the industry are now putting their heads together to find solutions to arrest the economic slide because of Eurozone crisis, US slowdown and the economic slowdown in India because of policy paralysis. 5DYL.DQRULD

“There has to be a clear recognition on the part of ruling and opposition parties that we are in a crisis situation and all parties need to stand united in order to strengthen the hands of policy makers to take bold decisions and act decisively,” said R V KANORIA, president, FICCI. FICCI said that the current economic problems are largely a result of domestic factors like excessive monetary tightening, delays and uncertainty over key economic legislations, project delays on account of factors including stalled environmental clearances, problems in land acquisition, prolonged pause in reforms and an atmosphere of unwillingness in decision making in bureaucracy. Kanoria stressed the need for strengthening the fiscal situation as the priority for driving growth. “It is difficult to imagine that with such a weak fiscal position we can drive the growth engine,” he said. According to Kanoria, in 2007-08, the Government over-spent its income by approximately one third and financed approximately one fifth of its expenditure through borrowings. Over a period of four years, this situation has worsened. In 2011-12, the Government revenue stood at Rs.7.7 tn while expenses were Rs.13.2 tn. This amounted to a shortfall of Rs.5.2 tn which had to be funded largely by borrowings (Rs.4.4 tn). As a percentage of GDP, the fiscal deficit was 5.9 per cent but as a percentage of revenue, it was 68 per cent. Effectively, therefore, the Government now borrows almost two thirds of what it earns and one third of what it spends.

All parties need to stand united in order to strengthen the hands of policy makers to take bold decisions and act decisively

5DIHHTXH$KPHG

FICCI has recommended a 12 point agenda to revive the country’s economy. The industry body has suggested moratorium on additional expenses; expediting implementation of GST; bringing down interest rates by 200 basis points; stopping the passage of Land Bill in its current form; fiscal stimulus for investments through accelerated depreciation, investment allowance, scrapping MAT for infrastructure; FDI policy reforms in areas like civil aviation, multibrand retail; decontrolling diesel prices; reforms in mining and coal sector by fostering greater competition; strengthening framework for raising funds for infrastructure; increase in productivity and agriculture marketing reforms for food security; fast track 26 CARGOTALK

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implementation of critical policies and projects; and addressing the issue of repatriation of black money to immediately mitigate the BoP situation.

It is commendable that the Government has already started a stimulus programme for encouraging export from India, through recently announced Supplement to the Foreign Trade Policy. “We have persisted in providing a stable policy regime through our Foreign Trade Policy which has provided a measure of confidence WWW.CARGOTALK.IN


and continuity for our exporting community,” said Anand Sharma, the Minister of Commerce & Industry, while addressing a seminar on FTP in New Delhi. According to him, new markets have been added in the new Policy. He further said that the domestic procurement process too, has been made transparent. This year’s Annual Supplement of FTP has added 14 new markets under different schemes. The minister asserted that the extension of interest subvention and the expansion of its coverage have been well received by the industry. The extension of zero duty EPCG scheme by another year and the enlargement of its scope has also found resonance as it catalyses a technological upgradation. “Our exports to Asia, Africa and Latin America in 2011-12 amounted to US$ 188 billion, comprising 62 per cent of the total export basket which is indeed a significant development,” he said. Commenting on the announcement made by the Commerce & Industry Minister, M RAFEEQUE AHMED, president, FIEO said that in the wake of

contraction of global demand and Eurozone crisis, the support extended by FTP is tremendous and will help in imparting competitiveness to exports. According to Ahmed, the extension of interest subvention to include processed agricultural products, readymade garments and toys & sports goods besides carpets, handicrafts, handloom and SMEs till March 2013 is a great relief to export sectors. “Post export, EPCG will help in reducing transaction and an additional window may be availed by large number of companies who are averse to managing large documentation related requirement of EPCG,” he observed. Ahmed welcomed domestic sourcing under status holder incentive scrip and agri incentive scrip which will help in utilisation of these benefits and simultaneously provide level playing field to domestic manufacturers. He also welcomed the support given to eCommerce by extending exports benefits for shipment through Delhi and Mumbai and formation of a Committee to look into various aspects of eCommerce, which 5DDMHHY%KDWQDJDU

has great potential and can provide a direct selling platform to MSME exporters.

According to RAAJEEV BHATNAGAR, chairman, UFM, the financial year 2011-12 was a mixed bag for the cargo and logistics industry in India. Some of the vertical showed growth both in terms of tonnages as well as value of

There is a need for strengthening the fiscal situation as the priority for driving growth

27

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Cover Story Financial Year Review

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exports and some of the vertical were down in comparison. Slowdown in USA and Europe did impact the exports and industry as overall volumes were either flat or lower than last year. “For us at UFM, growth was as per plan. During the FY 2011-12, we opened up our operations in Chennai, Hyderabad and Mumbai, which provided us the right platform to grow our business. We had a very rewarding and satisfactory year. With support of over 250 clients, our business grew for both Air & Ocean and Exports & Imports. We have been very fortunate to have support of our valued clients across India which has helped our business to grow manifold,” he said. VINEET KANAUJIA, vice president, marketing, Safexpress, appeared to be satisfied with the performance by the logistics industry in India and Safexpress, in particular. “Despite challenges, the year 2011-12 was ‘reasonable’ for the logistics industry in India. We have witnessed lots of ups and downs in this segment. At Safexpress, however, we were well-prepared to deal with any possible slide. Accordingly, we were

relatively better-off vis-à-vis most other players in the industry,” said Kanaujia. Safexpress’ major achievement in the financial year 2011-12 was the launch of a massive Logistics Park at Indore, which has more than a million sq ft area. “We had initiated the 3PL revolution over three years back, which culminated to a new high af ter the launch of our Indore L ogistics Park. Another Logistics Park at Nagpur also has an area of more than a million sq ft. Both facilities, given their strategic locations, will play a very critical role in shaping up the economy around central India. Moreover, given the central location of these places, their impact on the rest of the country’s economic growth would also be significant,” he explained. CMA CGM Logistics Park (CCLP), Dadri, witnessed a 20 per cent growth in FY2011-12. According to CAPT. VIREN BAWA, CEO of CCLP, this performance was better as compared to FY2010-11. “We have generated maximum revenue for Indian Customs from this ICD,” he said. CMA-CGM has 30 per cent JV

Despite challenges, the year 2011-12 was ‘reasonable’ for the logistics industry in India

28 CARGOTALK

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Cover Story Financial Year Review

The FY 2011-2012 has also seen phenomenal growth in exports of gems, jewellery, special chemicals and high value pharmaceuticals apart from usual commodities such as garments, carpets, machine parts, fruits/vegetables, etc.

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share in ICD Dadri. The container terminal started its operation in 2007 and is serving all major clients and shipping lines. It has a capacity of 75,000 TEUs per annum. In 2007, the terminal handled 15,500 TEUs. In the current financial year, the company expects 25 per cent growth in this terminal with an expectation to handle 65,000 TEUs in 2012. PRAKASH TULSIANI, MD, APM Terminals Pipavav, maintained that the year 2011 has seen low growth of 9 per cent for west coast ports in India. However, Port Pipavav has grown by 31 per cent in container volumes and recorded our first full calendar year (2011) of profitability. “We have increased our container yard space for 8,50,000 TEUs per annum, built two new railway sidings and an engineering workshop to handle the ongoing maintenance in house. We also inaugurated a brand new employee housing facility and a new Customs House.

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G BALARAJU, MD, Sindhu Cargo Services, observed that though the economy is affected by global recession, companies with widespread customer base are not affected much. Either they will have a flat or minimum growth. However, sector specific operators may find a drop in numbers. The company has built a Logistic Park at Bengaluru which has 80,000 sq.ft office area, 30,000 sq.ft transit warehouse and transport office and 40,000 sq.ft warehouse with state-of-the-art facilities. Interestingly, for V-Trans, the year 2011-12 has been one of the best years in the 53-year-old history of the company marked by an “unprecedented march towards qualitative growth and excellence”, shared MK SHAH, MD, V-Trans.

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V-Trans has taken some major initiatives and important among them are launching of two most ambitious projects: the Super Hub at Vapi and the Next Day Parcel Delivery Service between select stations in Gujarat and Maharashtra. UMESH TIWARI, chairman, Perfect Group of Companies, informed that the company has registered an increase of 25 per cent in volume and 12 per cent in turnover in 2011-12 as compared to the previous year.

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31

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Cover Story Financial Year Review

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The company has achieved 4,000 tonne in last quarter of the FY. According to SUNIL KOHLI, MD, Rahat Cargo, the financial year 2011-12 has witnessed an encouraging growth in air cargo export though not as high as anticipated. In fact, air cargo trade has overtaken the ocean freight market. The FY has also seen phenomenal growth in the exports of gems, jewellery, special chemicals and high value pharmaceuticals apart from the usual commodities such as garments, carpets, machine parts, fruits/vegetables, etc. “The Indian logistics industry has also seen its growth momentum during 2011-12. In fact, this industry has been witnessing a consistent annual growth of 8-9 per cent,” he perceived. GS CHAWLA, MD, Ocean King Shipping Services, however, maintained, “The year behind us was indeed a tough year and it rationally meant a year of consistent and persistent effort to derive maximum performance from existing inhouse resources and to make sure that no stone is left unturned while venturing into new ideas.”

Endorsing Chawla, YASHPAL SHARMA, director, Skyways Air Services, also viewed that the year 2011-12 has been extremely challenging for the cargo and logistics industry. “The year saw the industry again getting a feel of the 2008 downturn. The recovery of late 2009 and early 2010 was again sliding backwards leading the industry to get into a cautious mode,” he said. “Logistics industry is suffering from recession in India mainly in terms of traditional commodities and air export business. At the same time, new industrial products are growing (such as food, pharma, automotive, engineering, earthmoving, infrastructures), which are mainly controlled by MNC companies/service provider,” said RAM TIWARI, director, marketing, Shine Logistics, to add a vital aspect. DMITRY GRISHIN, vice president, sales, Ruslan International, supplemented Tiwari, “The market environment remains challenging.” However, project cargo business is picking up. There’s more and more O&G and other energyrelated projects are growing that require extensive outsize airlift. Afghanistan, so far, remains a major driver of charter activity on the region.

DP Singh, ED, C&CCP&MS, Airports Authority of India, highlighted some hard facts. According to him, the year 2011-12 was a harsh year for air cargo that witnessed a drop of 4.8 per cent in domestic and 1.9 per cent in international air cargo traffic from India. Worldwide it decreases by 2.7 per cent in international and 1.7 per cent in domestic sector. He also maintained that the projection about the current financial year is not good, because of external and internal economic factors. “It is

“Nevertheless, we see reverse of the flows and more cargo being redeployed from the area which goes into DWC for transshipment by sea. We can see this tendency to continue within next 6-12 months,” he underlined. Another growing business was bonded trucking. DILEEPA BM, CEO, Bonded Trucking, Shreeji Transport Services, informed that in FY 20112012, the company’s bonded trucking movement from Hyderabad 32 CARGOTALK

JULY 2012

very difficult to predict about future air cargo market scenario. It may take 3-4 years to go back on the growth trail,” added Singh. He, however, was quite optimistic about long-term future of the air cargo industry, which is evident from the traffic forecast by AAI for next 20 years. “Accordingly, the Government of India and industry players are investing heavily on aviation sector as a whole and air cargo infrastructure, in particular,” he maintained. By 2020, India will increase its airports up to 200.

increased drastically. KARTHI BASKAR, executive director, KWE India, was of the view that the overall market situation was sluggish due to slowdown in European & US economy. “The transportation and logistics sector continues to be highly cyclical. European debt issues, a tepid US recovery and a hard landing in emerging markets, among other factors, could provide macroeconomic shocks. Still, many catalysts are expected to drive deal activity over the rest of 2012,” he said. WWW.CARGOTALK.IN


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Cover Story Financial Year Review

The Government of India and industry players are investing heavily on aviation sector as a whole and air cargo infrastructure, in particular .DUWKL%DVNDU

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Kanaujia maintained that Safexpress is fully committed to contribute to the country’s logistics infrastructure as well as the economy by investing significantly for this cause. Meanwhile, the company has invested more than Rs 300 cr for creating 17 Logistics Parks across the country and will invest another Rs 300 cr for creating 15 more Logistics Parks, which will be operational in the near future. “As a market and knowledge leader, we have a long-term plan for a sustainable growth. In fact, by way of developing our warehousing infrastructure, we are supplementing the government’s infrastructure projects for the logistics industry, ahead of demand,” he asserted. In the current financial year, Safexpress will further strengthen its Logistics Parks projects on a pan-India basis. In addition, IT and manpower development will be other areas of concentration. At present, the company is offering training to and certifying its own employees as well as employees from various enterprises at its Safeducate Learning Centers in Indore and Delhi. “We would be intensifying this Training & Development venture of ours in this financial year and expecting a massive response from the entire supply chain & logistics segment,” Kanaujia shared. In the year 2011-12, Safexpress achieved double digit growth and expects better performance in 2012-13. He, however, expressed concern about the pressure on profitability in the

34 CARGOTALK

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logistics industry in this financial year owing to huge fuel price hike and slide in the country’s overall economy. “At this moment, the government as well as the industry should take some pragmatic steps to reduce costs,” he said. Bhatnagar was of the opinion that the market will continue to be very soft and flat. “Weakening of rupee is not helping and is a cause of worry. With flat and/or no growth in Europe is adding adversely to the already soft growth. We, at UFM, feel that the market would be slow for another quarter or so,” he stressed. “Though it is difficult to predict numbers for the current financial year, we have plans to bring in at least 10 to 15 per cent top line growth. Sindhu Cargo’s goal is to have a centralised documentation at Bengaluru for our operations all over India with an aim to maintain accuracy, standardise documentation across locations and rationalise manpower,” shared Balaraju. CCLP is planning to expand its terminal further by acquiring more land. “Establishing a second warehouse and a second container yard will be our prime focus in the days to come. We have already approached Concor to allot land for this purpose,” said Bawa. CMA-CGM is also planning to offer air cargo-related services from this (Dadri) terminal in a big way. A customs bonded Air Freight Station along side the Container Freight Station will be the area of concentration for enhancing

multimodal cargo operations for its customers. Air freight will be carried by the company’s own bonded trucks to nearby Delhi airport. This facility will be crucial in view of the proposed airport near Mathura in Uttar Pradesh. The company is targeting all kinds of air cargo from western UP and Noida area, especially pharmaceuticals and other perishable products. For this, CMA-CGM will invest heavily in cold chain systems. Sharma informed that Skyways will continue to grow horizontally. “We would hope to have two more offices in India and one in overseas this year. Our strategy is to grow other verticals like imports, ocean freight, brokerage, fairs & exhibitions while trying to keep a small consistent growth of 10-12 per cent in our strong-hold product – airfreight exports. The total growth in our Group is expected to be around 25-27 per cent this year,” Sharma aired with confidence.

However, SAMIR SHAH, partner, JBS Group, made a serious caution, “It is going to be a tough year ahead. I expect a lot of shippers and importers defaulting on payments or delaying beyond acceptable limits. The strain on the forwarders due to reduced business as well as financial hardships is going to result in unreasonable suicidal competition. I hope, the forwarders maintain their sanity as well as reasonableness and stay together as a group.”

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Cargo Performance Export/Import

All wt. in mt.

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 56 57 58 59 60 61 62 63 64 65 66 67

Jet Airways Cathay Pacific Emirates British Airways Lufthansa Cargo Airline Thai Airways Singapore Airlines Fedex Express Corpation Air India Etihad Airways Qatar Airways Malaysian Airline System Swiss World Cargo(India) Kalitta Air KLM Uzbekistan Turkish Airlines Martin Airline Virgin Atlantic Air France Finnair Saudia Japan Airlines Unitop Airlines Aeroflot Cargo Airlines Austrian Airlines China Eastern Airlines Philippine Airlines United Airlines Air China Aerologic Ariana Afghan Airlines Gulf Air Indigo Cargo Blue Dart Dhl Express Mahan Air China Air Ethopean Airlines Kam Air Eva Air Asiana Airlines Oman Air Aerosvit Safi Airways Sri Lankan Airlines Ltd China Southern Airlines Air Arabia Air Mauritius Jetlite Kuwait Airlines Air Astana Aero Space One Biman Bangladesh Pakistan International UPS Air Shagoon Royal Jordanian Airlines Turkmenisthan Airlines Hercules Aviation Pvt Ltd Flywell Aviation Pvt.Ltd Air Shagoon Druk Air Kingfisher Airlines Ltd. Elal Israel Air Air Shagoon Axios Aviation Services

Total Cargo handled in Mayâ&#x20AC;&#x2122;11 % VARIATION

Export(MTs)

Export Perishable Cargo (MTs)

Export (with Peri.) (UPL)(MTs)

Import

Total Cargo

% of Total

1313 844 821 879 706 310 584 873 295 489 372 349 471 387 473 424 440 183 307 329 301 213 128 0 214 155 145 96 200 128 14 94 121 117 114 0 107 54 15 95 26 24 64 53 77 42 39 68 46 9 4 30 29 17 10 0 16 14 11 11 0 2 1 0 0 0 0

189 2 1066 141 42 60 17 5 373 44 116 32 42 0 60 47 22 40 3 23 16 130 0 0 34 16 0 11 0 13 0 0 24 1 1 0 0 0 4 6 0 0 25 23 0 2 0 6 12 4 29 1 0 5 1 0 0 0 4 0 0 0 0 0 0 0 0

1502 846 1887 1020 748 370 600 878 668 533 488 381 512 387 533 470 462 223 310 353 318 343 128 0 248 172 145 107 200 141 14 94 145 118 115 0 107 54 20 101 26 24 89 76 78 44 39 73 58 13 33 30 29 21 11 0 16 14 14 11 0 2 1 0 0 0 0

2177 2147 552 823 826 1100 817 370 392 409 354 396 263 382 151 175 151 322 223 177 156 12 224 316 63 135 140 177 82 135 175 83 3 26 8 120 4 54 81 0 67 66 1 7 0 33 36 0 1 42 15 0 0 3 14 16 0 2 0 0 6 3 1 0 0 0 0

3679 2993 2439 1843 1574 1469 1417 1248 1060 942 842 777 775 770 685 645 614 545 533 530 474 355 352 316 311 307 285 284 282 276 189 176 148 145 124 120 111 108 101 101 93 90 90 83 78 77 75 73 59 55 48 31 29 25 25 16 16 15 14 11 6 5 1 0 0 0 0

11.88% 9.67% 7.88% 5.95% 5.08% 4.75% 4.58% 4.03% 3.42% 3.04% 2.72% 2.51% 2.50% 2.49% 2.21% 2.08% 1.98% 1.76% 1.72% 1.71% 1.53% 1.15% 1.14% 1.02% 1.00% 0.99% 0.92% 0.92% 0.91% 0.89% 0.61% 0.57% 0.48% 0.47% 0.40% 0.39% 0.36% 0.35% 0.33% 0.33% 0.30% 0.29% 0.29% 0.27% 0.25% 0.25% 0.24% 0.24% 0.19% 0.18% 0.16% 0.10% 0.09% 0.08% 0.08% 0.05% 0.05% 0.05% 0.05% 0.03% 0.02% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00%

13752 16014 -14.13%

2691 2628 2.37%

16443 18643 -11.80%

14517 16948 -14.35%

30959 35591 -13.01%

100.00%

## Cargo Handled at Centre for Perishable Cargo

36 CARGOTALK

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(Including TP Cargo)

WEIGHT IN TONNES 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

Jet Airways Emirates Cathay Pacific Lufthansa Singapore Airlines British Airways Air India Etihad Airways Air France Qatar Airways Swiss Intl. Airlines Saudi Arabian Airlines Turkish Airlines Thai Airways Federal Express Malaysian Airlines Ethopian Airlines Delta/KLM Airlines Korean Air UPS Kuwait Airways Kenya Airways Gulf Air Fin Air South African Airlines Air Mauritius United/Continental Airlines Oman Air Air Arabia Blue Dart Indigo Air EL-AL Airlines Charters Srilankan Air Bangkok Airways Yemenia Airways Iran Air Pakistan Airways Baharin Airlines Egypt Air Qantas Royal Jordanian Airways Kingfisher Airlines Air China NorthWest Airlines Others

GRAND TOTAL

Export General

Export Perishable

Total Export

Import

Total Exp+Imp

1675.94 1373.38 1144.30 640.07 749.53 663.04 292.70 746.19 499.60 243.07 466.63 678.94 442.01 229.20 411.32 377.02 623.75 64.22 328.28 122.41 97.12 282.73 78.72 271.34 218.05 168.42 52.78 117.82 42.19 102.89 120.18 43.63 0.00 61.99 58.86 38.47 24.99 30.78 39.31 23.67 6.10 4.77 6.70 1.68 0.00 221.36

1731.48 1675.19 68.47 561.14 466.00 399.14 963.00 158.43 230.61 433.28 117.36 229.60 118.38 160.28 53.55 85.16 5.03 134.07 4.91 0.00 182.97 1.89 199.14 4.09 8.59 17.76 0.22 50.36 121.96 0.00 7.76 9.25 0.00 7.81 0.11 17.96 26.54 6.75 0.00 0.02 0.00 0.00 0.00 0.00 0.00 24.97

3407.42 3048.57 1212.77 1201.21 1215.53 1062.18 1255.69 904.62 730.21 676.35 583.99 908.54 560.39 389.48 464.87 462.18 628.78 198.29 333.18 122.41 280.09 284.62 277.86 275.43 226.63 186.18 53.00 168.18 164.15 102.89 127.94 52.88 0.00 69.80 58.97 56.42 51.53 37.53 39.31 23.69 6.10 4.77 6.70 1.68 0.00 246.33

2856.66 935.19 1870.37 1699.10 1146.42 671.98 323.40 507.42 633.64 378.42 429.02 89.56 347.14 426.59 337.05 260.94 4.72 180.33 42.34 250.86 27.11 13.22 1.35 0.00 16.27 2.39 133.32 1.81 0.45 44.40 12.76 71.05 92.49 20.49 3.29 0.86 0.47 2.79 0.00 0.45 7.00 2.86 0.00 2.36 0.00 738.87

6264.08 3983.76 3083.14 2900.31 2361.95 1734.16 1579.09 1412.04 1363.85 1054.77 1013.01 998.10 907.53 816.07 801.92 723.12 633.50 378.62 375.53 373.27 307.19 297.84 279.21 275.43 242.90 188.57 186.32 169.99 164.60 147.29 140.70 123.93 92.49 90.29 62.26 57.29 52.00 40.32 39.31 24.14 13.10 7.62 6.70 4.04 0.00 985.20

13886.13

8283.21

22169.34

14587.20

36756.54

15150.65

34287.20

EXPORT/IMPORT CARGO TONNAGE HANDLED IN APRIL 2012 Cargo Handled in Aprilâ&#x20AC;&#x2122;12

11820.60

7315.95

19136.55

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CARGOTALK

JULY 2012


Cargo Performance Domestic Air Cargo

QUARTERLY REVIEW OF TRAFFIC

AIRLINEWISE QUARTERLY MARKET SHARE - DOMESTIC FREIGHT

(Percentage Share)

2011-12 S.No

Airline

I Qtr.

1 2 3 4 5 6 7 8 9 10 11 12

Blue Dart Aviation Air India Kingfisher Airlines Jet Airways Indigo Airlines Spicejet Jet Lite Go Air Kingfisher Red Deccan Express cargo Pawan Hans Jetkonnect Other Non-Schd Operators Total

20.34 14.01 17.34 15.36 11.95 10.92 4.84 3.47 1.70 0.00 0.03 0.00 0.03 100.00

II Qtr. 20.46 14.66 16.16 13.74 14.09 10.44 4.65 4.00 1.56 0.00 0.04 0.00 0.20 100.00

III Qtr. 17.03 17.51 14.42 14.24 15.00 10.80 4.60 4.61 1.63 0.07 0.02 0.00 0.05 100.00

IV Qtr. 15.05 18.69 10.83 15.24 16.89 12.38 4.59 5.43 0.74 0.07 0.02 0.00 0.07 100.00

A I R L I N E W I S E Q U A R T E R LY M A R K E T S H A R E D O M E S T I C A I R C R A F T M OV E M E N T S

Overall 18.20 16.24 14.66 14.63 14.51 11.13 4.67 4.39 1.41 0.03 0.04 0.00 0.09 100.00

(Percentage Share)

2011-12 S.No

Airline

1 2 3 4 5 6 7 8 9 10 11 12

Jet Airways Air India Indigo Airlines Kingfisher Airlines Spicejet Jet Lite Go Air Kingfisher Red Pawan Hans Blue Dart Aviation Jetkonnect Deccan Express Cargo

I Qtr.

Other Non-Schd Operators Total

II Qtr.

III Qtr.

20.75 15.22 15.24 17.76 10.92 6.13 4.65 3.72 1.58 1.00 0.67 0.00

20.67 16.49 15.15 16.70 11.28 6.54 4.34 3.23 1.87 1.01 0.68 0.00

22.20 17.90 14.88 12.37 13.79 6.27 4.59 2.75 1.61 0.93 0.73 0.02

22.86 18.04 16.64 8.83 14.87 6.67 4.67 1.81 1.73 0.91 0.66 0.02

21.63 16.94 15.47 13.87 12.74 6.40 4.56 2.87 1.70 0.96 0.69 0.01

2.35 100.00

2.04 100.00

1.97 100.00

2.28 100.00

2.16 100.00

Dragonair has decided toadd its second destination in India by launching flights between Hong Kong and Kolkata. Subject to government approval, and the opening of the new airport terminal, the service to Kolkata will commence in winter schedule this year with four flights a week operated by an Airbus A320. The airline currently operates a daily service to Bengaluru.

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38 CARGOTALK

JULY 2012

IV Qtr.

Overall

launch of this new service to Kolkata marks an important step in building Dragonairâ&#x20AC;&#x2122;s presence in the Indian market. â&#x20AC;&#x153;India is one of the major economies in Asia and the country has an increasing influence on the world stage,â&#x20AC;? he added.

â&#x20AC;&#x153;This will be the second city in India for Dragonair, which together with our sister carrier, Cathay Pacific, will soon offer services from a total of five destinations â&#x20AC;&#x153;With its services, Dragonair offers a diverse international here. This tangibly emphasises our belief in the potential network and an unrivalled network into Mainland China. of the Indian market,â&#x20AC;? said Tom Wright, general manager The airlineâ&#x20AC;&#x2122;s network today covers 37 destinations across â&#x20AC;&#x201C;South Asia, Middle East & Africa, Dragonair. Kolkata will the Asia-Pacific region, including 19 in Mainland China,â&#x20AC;? be the seventh destination to be launched or resumed by said PatrickYeung, CEO, Dragonair.According to him, the Dragonair this year. WWW.CARGOTALK.IN


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Cargo Performance Air Cargo Forecast

YEAR

Aircraft Movements (in’000)

Passengers (in million)

Freight (in ‘000 M.T.)

INT’L

DOM

TOTAL

INT’L

DOM

TOTAL

INT’L

DOM

TOTAL

300.20

1093.66

1393.86

37.91

105.52

143.43

1496.24

852.20

2348.44

7.4%

8.7%

8.4%

8.0%

12.0%

11.0%

10.0%

12.0%

10.7%

2011-12

322.41

1188.81

1511.22

40.94

118.18

159.13

1645.86

954.46

2600.33

2012-13

346.27

1292.23

1638.51

44.22

132.36

176.58

1810.45

1069.00

2879.45

2013-14

371.90

1404.66

1776.56

47.76

148.25

196.00

1991.50

1197.28

3188.78

2014-15

399.42

1526.86

1926.28

51.58

166.04

217.61

2190.64

1340.95

3531.60

2015-16

428.98

1659.70

2088.68

55.70

185.96

241.66

2409.71

1501.87

3911.58

2016-17

460.72

1804.10

2264.82

60.16

208.28

268.44

2650.68

1682.09

4332.77

6.0%

8.0%

7.6%

7.0%

10.0%

9.3%

9.0%

11.0%

9.8%

2017-18

488.36

1948.42

2436.79

64.37

229.11

293.48

2889.24

1867.12

4756.36

2018-19

517.66

2104.30

2621.96

68.88

25202

320.89

3149.27

2072.51

5221.78

2019-20

548.72

2272.64

2821.37

73.70

277.22

350.91

3432.71

2300.48

5733.19

2020-21

581.65

2454.45

3036.10

78.86

304.94

383.79

3741.65

2553.53

6295.19

2021-22

616.55

2650.81

3267.35

84.38

335.43

419.81

4078.40

2834.42

6912.82

5.0%

7.0%

6.6%

6.0%

8.0%

7.6%

8.0%

10.0%

8.8%

2022-23

647.37

2836.37

3483.74

89.44

362.27

451.71

4404.67

3117.86

7522.54

2023-24

679.74

3034.91

3714.65

94.80

391.25

486.05

4757.05

3429.65

8186.70

2024-25

713.73

3247.35

3961.08

100.49

422.55

52304

5137.61

3772.62

8910.23

2025-26

749.42

3474.67

4224.09

106.52

456.35

562.88

5548.62

4149.88

9698.50

2026-27

786.89

3717.90

4504.78

112.91

492.86

605.77

5992.51

4564.87 10557.37

5.0%

7.0%

6.7%

6.0%

8.0%

7.6%

7.0%

2027-28

826.23

3978.15

4804.38

119.69

532.29

651.98

6411.98

4975.70 11387.69

2028-29

867.54

4256.62

5124.16

126.87

574.87

701.74

6860.82

5423.52 12284.34

2029-30

910.92

4554.58

5465.50

134.48

620.86

755.35

734108

5911.63 13252.71

2010-11 (BASE YEAR) GROWTH RATE

GROWTH RATE

GROWTH RATE

GROWTH RATE

9.0%

7.9%

2030-31

956.47

4873.40

5829.87

142.55

670.53

81308

7854.96

6443.68 14298.64

2031-32

1004.29

5214.54

6218.83

151.10

724.18

875.28

8404.80

7023.61 15428.41

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Lead Story Market Trends

The fast emergence of eCommerce in India has opened a new vista for logistics companies across the country, especially for the express logistics companies. Preceded by retail, it is now e-tail to determine the fortune of many of the logistics service providers in India. Cargotalk spoke to a few leading companies who are prepared for a different ball game (primarily a B2C channel) and plan big to grab the opportunities to stay ahead of the competition. RATAN KR PAUL According to the industry estimate, the current eCommerce market in India is around USD10 billion and it is growing at an average rate of 70 per cent per annum. Moreover, the domestic eCommerce market has the potential to grow between US$ 125 billion and US$ 260 billion by 2024-25. Said Abhik Mitra, MD, Startrek Logistics, “The emergence of eCommerce in India is welcoming and gives customers a new channel to experience and purchase from. The opportunity for the logistics industry is significant. However, the logistics industry has to gear up to be able to deliver effectively the needs of the consumer as well as the eCommerce companies.”

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Malcolm Monteiro, CEO, South Asia, DHL Express, maintained that India is on the threshold of emerging as a key player in global eCommerce space.Owing to its large population and rapid growth in the number of internet users, the potential of eCommerce in India is enormous. He underlined, “Some industry statistics indicate that the eCommerce industry has been growing at a CAGR of close to 55 per cent since 2007 and last year, it clocked a growth of over 85 per cent.”

The emergence of e-commerce in India is welcoming and gives customers a new channel to experience and purchase from

Gati has already invested heavily in the industry leading IT platform to provide realtime track and trace and electronic POD. The company’s services have supported COD for freight payments for many years and we have translated this into eCommerce collections with daily remittances to e-Tailers with supporting transactional level

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He also highlighted the recently announced Supplement 2012 to the Foreign Trade Policy, which unveiled special benefits to the eCommerce related exports from India. “This will be a big boost for the

order and shipment data.“Our web-based WMS platform is available at all of our locations pan-India and is supporting our rollout of e-fulfilment centres in targeted cities,” said Buckthorp. According to him,Gati will deploy additional capacity dedicated to servicing the

eCommerce market. These services will deploy Gati’s existing technology as a backbone and will be further integrated to our e-Fulfilment and online service capabilities. This vertical will be managed as a separate product category due to its unique requirements.

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Lead Story Market Trends

industry and the potential and impact on logistics service providers will be huge. As the eCommerce industry matures, logistics support will play a crucial role in its growth and sustenance. We are ready to embrace the opportunity,” he said.

It is estimated that almost 57 per cent of eCommerce sales come from small towns,while the eight metros account for the remaining

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“DHL and Blue Dart together offer unmatched reach globally and are already engaged with e-tailers, both budding and established.This gives us the experience and advantage of keeping in pace with this industry growth in India,” said Monterio. He also maintained that growth in the eCommerce landscape is not restricted by demographic challenges anymore,thanks to the internet.Hence, it is imperative to have a wide network, both domestic and international, to meet the growing

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Monterio pointed out that there has been an increase in the number of entrepreneurs that are springing start-ups using the eCommerce platform. From traditional business establishments who are venturing into this space, to increase reach and competitiveness to global brands, eCommerce is a solution that many are adapting. Hence today, right from Indian traditional apparel, books, artifacts, carpets, electronic goods, to stamps and coins— a long list of commodities are being distributed through this domain. “However, in our experience,the major commodities are Indian traditional clothes, books and electronic goods,” he shared. Rakesh Shalia, MD - marketing and communication, FedEx Express - Middle East, Indian Sub-continent & Africa, said, “We, at FedEx, believe that the eCommerce industry offers numerous opportunities to propel the growth of the express logistics industry in India.” Highlighting the industry estimates on the potential of this segment, he emphasised on the fact that the growth is not attributed

demands of eCommerce. Secondly,the eCommerce business is a B2C model which requires intrinsic solutions to requirements like return logistics,delivery pre-alerts to consignee, upfront visibility of destination regulatory charges, etc.“Most express players in the market can only cater to the B2B model but with our product portfolio, we are well poised to comply with this industry’s growing demands,” added Monterio. Also,the sustainability of the eCommerce business model is based on discounted formats to secure

only to urban areas, but also to tier II and tier III cities. It is estimated that almost 57 per cent of eCommerce sales come from small towns, while the eight metros account for the remaining. “This growth presents huge prospects for the logistics industry. With more and more people willing to transact online, the logistics industry plays an important role to move the products from the producer to the end-user with speed, reliability and convenience,” he pointed out. Shalia observed that non-travel eCommerce in India has started to evolve rapidly as it is evident from the surge of eCommerce websites in the country today. Initially online spending was limited to buying of travel plans and holidays. However, a recent report says that urban Indian consumers are now confident enough to make online purchases of up to Rs 25,000, from Rs 2,000- 5,000 in the recent past. Indian consumers are now showing a greater appetite to transact online and so the variety of goods transacted online has also increased. “We anticipate growth in this industry coming from various sectors such as luxury products, household appliances, telecom, personal and healthcare products, etc.,” he felt. Shesh Kulkarni, president & CEO, UFM, maintained that eCommerce would be a significant business

repeat business, low pricing, cash on delivery and nearly always free shipping. Hence, the focus was to find service providers based on price only.“But this is changing as e-tailers and customers demand efficiency and reliability for their goods and that is what we deliver at DHL,” said Monterio. Currently, DHL is offering logistics support to a lot of big and small e-tailers.“We are also in active discussions with some large eCommerce platforms to offer a more industry-friendly solution,” he added.

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opportunity in the years ahead. He, however, maintained that at this moment, while eCommerce sector is definitely gaining momentum, there are a few Indian companies which are leveraging as much. Nevertheless, both Indian service providers and consumers are coming to terms with this new opportunity. “At this point of time, eCommerce business is not a focus area for us. Our priority is still B2B. Hence, our company is not worried 5DNHVK6KDOLD that we are losing out on anything big, but in the years ahead, we have plans for it,” he said.“At UFM, we have both short-term and long-term plan. And, eCommerce business is a part of the long-term plan. By long-term we mean 3-5 years from now,” he further clarified.

Startrek Logistics has the basic network that can deliver e-commerce logistics. “We are in the process of strengthening our IT System and other operating processes to be able to offer the services with high levels of service quality,” Mitra informed. Startrek Logistics will build a B2C delivery model by 2013, which will be focussed on the domestic market. “We already have a network but will need to supplement with additional distribution centres, warehouses, etc., which we are in the process of mapping and creating,” Mitra added.

Kulkarni made it clear that in next couple of years, UFM’s business plans include focussing on acquisition.“So we do see ourselves acquiring a specific or certain niche distribution companies with strong regional or national presence. It is little too early to talk more on this, but we have plans,” he shared.

Another leading logistics company, on the other hand, has already started the eCommerce venture from a service provider’s point of view. According to Femina Prem, director, Uniworld Lifestyle, eCommerce is the beginning of another revolution, which is changing the way consumers buy and sell products and services. There is a growing awareness among consumers in India about the opportunities and convenience offered by eCommerce.“The future does look very bright for eCommerce in India. In the next three to five years, India will have 30 to 70 million Internet users which will equal, if not surpass, many of the developed countries,” she maintained. Femina also pointed out that in eCommerce logistics plays a key role, be it backend and frontend logistics. Eighty per cent of success for eCommerce rides on the speed and reliability of its Order Fulfilment. This is where Logistics plays a very crucial role in eCommerce. Femina observed that since eCommerce is essentially a makeover of logistics of supplying goods, logistics industry will witness a huge growth because of it.“Supply chain efficiencies and systems are going to be one of the differentiators of any eCommerce business. Therefore, better technology at logistics front and more eCommerce centric services like return management and handling of cash on delivery are the need of the hour,” she said. She also reiterated that given the topography and the market size of India along with the ever growing usage of internet the last mile fulfillment of orders will be very crucial. “Presently Uniworld Lifestyle’s major focus will be to have a descent market share in the domestic market. The company will offer following services like prepaid delivery, cash/card on delivery, reverse logistics, bulk freight movement, expresses delivery in metros (delivery within six hours of order is placed) and warehousing services with/without VAS,” said Femina.

Eighty per cent of success for e-commerce rides on the speed and reliability of its Order Fulfilment

According to Chris Buckthorp, chief strategy & managed services, Gati-Kintetsu Express, the penetration of eCommerce within India can only be seen as a positive driver of change for the logistics industry. In order to be successful in this space, the focus of the logistics company shifts from being low cost to true customer service. This requires operational precision, scalable processes and continuous engagement with upstream and 45

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Lead Story Market Trends

downstream customers. 6KHVK.XONDUQL

In his opinion, in the traditional areas of warehousing and distribution, eCommerce is already driving change. Warehouse operations need to adapt to high volume, single piece picking requirements. The ‘Fulfilment Centre’, including its dependence on technology and complex processes, is supporting both the development of advanced operational capability in India and promoting the use of the facility as a mechanism to flow inventory rather than store it. The associated high levels of inventory and order picking accuracy will also help establish new benchmarks in India. He also maintained that the exercise pertaining to eCommerce operation would have a positive impact on the existing B2B distribution practices. “The focus on reliable delivery lead times is forcing service providers to re-examine their networks and implement stronger controls.These developments, when translated across to the B2B side of the business will work to reduce lead time variability and support improvements in inventory planning,” he explained.

Better technology at logistics front and more e-commerce centric services are the need of the hour

According to Shalia,FedEx provides express delivery service support to more and more businesses across the country, with fast and reliable connectivity and access to key global markets through its air and ground services such as air express, domestic ground and va l u e a d d e d - s e r v i c e s , i n c l u d i n g warehousing, logistics solutions and 3PL. National coverage for the complete FedEx domestic product portfolio has expanded to 880 destinations covering 7151 pin-codes across India. “The successful acquisition of AFL businesses last year further strengthened our position in the e-commerce sector. Within the eCommerce vertical we primarily serve customers in the following segments:

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He stressed on the fact that order fulfillment requires the best track and trace capabilities the industry can offer at the moment. Moreover,

Business to Consumer, Shopping, Online Retail and Home Commerce,” highlighted Shalia. He asserted that the portfolio of services that FedEx offer suits the needs of the eCommerce industry perfectly.“The main reason for this is the value proposition that we offer, which is speed and reliability on which the success of any eCommerce model depends” he stressed. At present,FedEx provides‘Cash on Delivery’ service which perfectly meets the needs of the e-commerce segment. To tackle return management,FedEx has invested in a robust IT architecture that enables the company to monitor and manage seamless returns and

exchanges on behalf of e-commerce shippers. On-line track and trace, electronic data interchange (EDI) and other solutions enable FedEx to connect with e-commerce shippers and improve efficiencies in the network and in carrying out deliveries. “Hence, our portfolio addresses diverse needs of varied customer profiles including time definite shipment services, cost effective solutions and customised industry solutions,” Shalia added. He informed that FedEx has been the partner for eCommerce activities of various companies across the world. In India too, the company has tied up with some of the leading e-tailers.

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Lead Story Market Trends

moving to the ability to manage the customer buying experience ‘from order to delivery’ will require a broader supply chain visibility approach. Hence, the deployment of owned services or location specific delivery services should be taken by the broader logistics industry as a clear message that we need to improve. The organised sector has the ability to invest in and deploy capacity. In addition, shared services in order to increase asset utilisation and reduce overall order fulfilment costs, would help online retail model, which depends a lot upon minimising the cost to serve for each order.

(Top): Chris Buckthorp (Below) Femina Prem

To meet the demand owing to eCommerce, Uniworld will focus on the domestic market, and look at the international market post two fashion seasons. Uniworld plans to offer services like unexpected customer service,an extremely user -friendly and quick site navigation with express delivery option, student discounts, comparison screens to assist final selection, fast & easy checkout, multiple payment modes, shipment tracking facility, facilities of high quality gift wrapping and gift card with a printed personal message and offering of latest fashion and gift ideas from India and overseas. According to Femina Prem, director, Uniworld Lifestyle, apparel for men, women and children and fashion accessories for these three categories, and gifts that are novel and trendy will be the major items to be delivered in the e-commerce arena. Femina maintained that eCommerce is the beginning of another revolution, which is changing the way consumers buy and sell products and services. Femina pointed out that,there is a growing awareness among consumers in India about the opportunities and convenience offered by eCommerce. “The future does look very bright for eCommerce in India. In the next three to five years,India will have 30 to 70 million Internet users which will equal, if not surpass, many of the developed countries,” she maintained. Femina also pointed out that in eCommerce logistics plays a key role, be it backend and frontend logistics.Eighty per cent of success for eCommerce rides on the speed and reliability of its Order Fulfilment. This is where Logistics plays a very crucial role in eCommerce. In her opinion, backed with Uniworld Logistics’ established end to end supply chain solution the back up support will be tremendous. When Uniworld Lifestyle concentrates on the platform MIRAISTORE.COM, Uniworld Logistics will take care of the logistic needs. “Presently Uniworld Lifestyle’s major focus will be to have a descent market share in the domestic market.The company will offer following services like prepaid delivery, cash/card on delivery, reverse logistics, bulk freight movement, expresses delivery in metros (delivery within six hours of order is placed) and warehousing services with/without VAS,” said Femina.

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New Launches Year 2011-12

In 2011-12, the logistics industry has seen a number of new launches and initiatives. Cargotalk published them regularly, however, a few have left uncovered. In this issue we are presenting some of them……

Rhenus Logistics

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Though, Rhenus Logistics is a new entrant (2010) to the highly challenging logistics space in India, the company did have a major success story in China-India and Europe-India trade lanes. It focussed most of its energies in developing these trade lanes. “Aggressive sales focus, quality sales and customer service hiring, opening new offices in satellite towns, D2D solutions, value added services of 3PL, custom clearance, contract logistics and domestic transportation were some major initiatives that led to our doubling of turnover and

100 per cent growth rate in 2011-2012 over 2010-11,” informed Ashok Parija, director, sales & marketing, Rhenus ProLog Logistics. He also informed that Rhenus Logistics has launched its own Customs Clearance SBU that enhanced the company’s service portfolio. “Now we are able to provide a complete range of logistics services including foreign trade management services, EOU, STPI, EHTP, consultancy-cum-advisory and other value added services,” he added.

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DBC Logistics refurbished the complete facility in terms of infrastructure developments, systems upgrade, human resources, and equipment. “We created our products & services in a very simple yet effective way. We had extensive drives to reach the end-customer who would benefit from our new product and created a superior brand in the market where the customer gets the true value for money,” said Mahendar Puri, MD, DBC Port Logistics. According to him the company’s initiative of reaching out to direct customers have reduced the overall supply chain cost for many customers by over 50 per cent.“In fact, shipping lines who have signed a contract with us are being benefitted because of our initiative as they are getting repeat business from their existing customers as well as new customers we are nominating. Our company has regained its lost position in Nhava Sheva market due to this initiative,” Prakash claimed.

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“Though FY 2011-12 has been challenging for the entire industry as such, however, the team at Majha took the challenge very positively and we are pleased with the results. For instance, not only did we take up the challenge of partnering with the new ICD at Kanpur (KLPL) for road transportation movement, which historically has been one of the toughest markets, but we also have tried to turn the cold-chain market with an aggressive push into being able to control the transit time from NSA to NCR. The transit time was as long as two weeks. Now, it has been reduced to a more reasonable 3-4 days,” said Gagandeep from Majha Transport. In the retail segment Majha entered by catering to BhartiWalmart with an aggressive push for last mile

deliveries in northern India. “This operation has been extremely challenging and demanding,” he informed. “We are glad that we have managed to live up to our past growth rate even in these very challenging times. Our compounded growth rate is still continuing at more than 30 per cent. However, because of new initiatives, we have managed to really push up our profit margins and attract new talent,” Gagandeep Klaire, director marketing, Majha Transport added. With more skilled workforce joining Majha and with the addition of new offices and better resource deployment, the company has managed to substantially increase its bottom-line.

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New Launches Year 2011-12

In FY 2011-12, there was a massive development in the air cargo technological front. Paperless air cargo transaction took a significant headway thanks to the initiative taken by Kale Logistics Solutions and ACAAI.

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“At Kale, we are already on the same page with our UPLIFT & WIN initiatives to make paper redundant in both India’s domestic and international air cargo supply chain,” said Vineet Malhotra, SVP, global sales & marketing, Kale Logistics Solutions.

150+ Forwarders & Custom House Agents on board along with major airlines using the solution. Most of the Top 10 cargo carriers of India are now exchanging EDI messages through UPLIFT. An additional 85 global airlines will soon go live on UPLIFT.

UPLIFT & WIN have witnessed a very encouraging response from the global logistics community. Within a year of its inception, UPLIFT which is India’s first Cargo Community System developed in partnership with ACAAI, the largest body of IATA approved air cargo agents, has accomplished a significant mark by getting

Pioneered with the vision to be a catalyst for business transformation, UPLIFT is a multi-modal web-based electronic communication platform which is being subscribed by 1,400+users, who have exchanged 3,50,000+messages for shipment delivery to over 300 global destinations; within one year of operation.

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A major initiative taken by Apeejay Infralogistics and Apeejay Logistics Park in FY 2011-12 included building a world class Infralogistics facility at Haldia (WB) and Kalinganagar in Odisha. The company is creating the infrastructure for Container Freight Station in Haldia and Inland Container Depot in Kalinganagar with export, import and bonded warehouse facility. Covered warehousing facility for domestic cargo (both bulk and containerised cargo), open storage for bulk and project cargo, facility for consolidation/deconsolidation, bagging, packing and repacking, weighbridge, empty/loaded container yard along with container repair facility and advanced material handling equipment for handling every type of cargo will be the focus area. “Both of our facilities are Eastern India’s first integrated logistics facilities which will provide an end-to-end logistics support for customers. It will also facilitate the hinterland connectivity and efficient distribution operation,” informed Ajay Sing Bamel, COO, Apeejay Infralogistics. Both logistics parks will be operational by July 2012.

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Image Logistics has started its Hong Kong office’s full fledge operation with the Indian staff to look after the work. According to Amit Chakraborty, MD, Image Logistics, “In FY 2011-12, the company started for the first time in India the Import Consol Services by the name of Image Air Transport. In this year, the company achieved a financial growth of over 25 per cent.” Image Logistics has a great expectation in the FY2012-13 and it is focussing on value added

services like warehousing and third country movement. Moreover, Image Logistics is now developing its domestic market. The company is planning to open office in Nepal and Bangladesh. New sectors like Latin and South America, Africa and commodities like Pharma will also be the company’s focus area in this year. Image Logistics has a target to increase its business by more than 50 per cent by this financial year.

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Product Display Dock Levellers

According to Gandhi Automations sources, an electro-hydraulic dock-leveller is not simply ‘a bridge for connecting a vehicle’. Since the invention of the hydraulic dock-leveller, very poor design improvement has been implemented by its manufacturers, and the result is an old concept–products with poor characteristics in terms of safety in work and installation. CAMPISA Dock-Levellers have been manufactured since 1975. However, in 1983 a completely different concept was applied to satisfy different customer needs, offering new advantages at cheaper costs. The most advanced concept of the CAMPISA dock-leveller is to have the whole drive unit contained in a wall box, which is installed on a wall inside the warehouse, at eye level, which allows for easy and economical maintenance, without the necessity to manoeuvre under the platform or inside the pit, whereas traditional Power Packs and controls are usually installed. “A wide study of previously installed power

units motivated us to design the MULTIPLE CONSOLLE. Depending on the type of installation, it can hydraulically power several dock-levellers with only one CONSOLLE (drive unit). Each dock-leveller is controlled separately by its own control pad,” said the source. The dock levellers can also work simultaneously. The company also asserted that these solutions are economical as they optimise the function of the single part so successfully that they had practically eliminated, the possibility of any repair intervention for next several years. “Another economical achievement is obtained by reducing the electric mains supply points to one per CONSOLLE instead of one per dock-leveller,” it said. According to the Gandhi Automations, the reduction is about 65 per cent in dock-leveller installations and about 75 per cent in dock-leveller and powered sectional door installations. This reduction further economises the result when installing the mains distribution box. “Consequently by reducing the number of motors there is a dramatic saving on electricity costs,” it claimed.

It allows the dock to connect with the truckbed, therefore, making it possible to drive directly on and off with fork-lift trucks, roll containers, etc. Loading and unloading operations become quick, safe and economical. CAMPISA dock-levellers can be easily positioned.They come with the most secure safety devices. They are built in conformity with the EN 1398

These are ideal for connecting vehicles unable to drive near to the dock (e.g., sea containers, side loading railway wagons, etc.), or where it is imperative to reach a longer total length of the dock-leveller itself. These types can be supplied with a lip extending up to 1m.

Platform and lip in almond anti-slip steel Single effect lift cylinder, double effect lip cylinder Safety stop in case of accidental departure of the vehicle Maximum pressure valve Side foot protection steel sheets Rubber bumpers 300 mm x 55 mm x 60 mm Wall CONSOLLE containing the whole drive unit Control with low-level conduit protection or motor underneath

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Family Album Glimpses of 2011-12

The year 2011-12 was a mixed-bag for cargo and logistics industry in India. Despite feeling the pinch of slowdown in domestic and international markets, the industry adopted some commendable steps to cope with future challenges and ventured out for new business avenues through collaborative initiatives. Conferences and social gatherings remained effective means of exchanging views on future challenges and opportunitiesâ&#x20AC;Ś.. 1

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2 1. Announcement of cargo operation by Nasik Ojhar Airport 2. ACAAI-WR seminar on Airway Bill and Liability 3. 10th ACLM Convention in Kolkata 4. A press conference by ACAAI and BCHAA in Mumbai regarding problems at Mumbai Airport 5. AMTOI AGM in Mumbai 6. AGM of ACCD for 2011-12

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7. Celebration of 50th Year of Indian Customs 8. Emirates SkyCargo’s Best Performance Award to its India team 9. Launch of Delhi-Manila flights by Philippine Airlines 10. Introduction of Carbon Offset Charges by DHL and Blue Dart 11. Book release on Development of EDS by OUP in New Delhi 12. 38th Annual Convention of ACAAI in Amritsar 13. 20th Biennial Convention of FFFAI in Udaipur

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14. Annual Meet and Top Agents Award function in New Delhi by Lufthansa Cargo 15. PL Shipping & Logistics’ integration with M+R Spedag Group 16. Silver Jubilee Celebration by Bangalore Customs House Agents Association 17. Dutch Minister for Infrastructure’s visit to Delhi 18. Safexpress’ Logistics Park inauguration at Indore

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Family Album Meeting & Workshop

Recently, Bombay Customs House Agentsâ&#x20AC;&#x2122; Association (BCHAA) in association with the Custom Department organised a Self Assessment Workshop, attended by over 200 members of the Association and all three chief commissioners of Mumbai Region along with various other senior officers of the department. R Radhakrishnan, Mark Fernandes, Nimesh Shah, all past presidents, BCHAA and Anand Sheth, chairman Training Committee, BCHAA, were present on the occasion to welcome the guests.

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Family Album Get Together

AGS World Transport has recently celebrated its Customer Day at Powai in Mumbai on completion of the companyâ&#x20AC;&#x2122;s seven years in India. Addressing the gathering, Ajit Biswas, MD, AGS World Transport (India) thanked patrons and associates for their support. The event was also attended by Terry Tzaneros, executive chairman, AGS Group along with AGSâ&#x20AC;&#x2122; top global directors to express their commitments to this market. The get-together saw the trade turn up in large numbers.

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Face of the Month Dinesh Keskar-Boeing

RATAN KR PAUL

D

inesh Keskar, vice president-sales, Asia-Pacific & India, Boeing Commercial Airplanes, is a world renowned aviation professional and expert. A Gold Medalist in Mechanical Engineering from Nagpur in 1975, he started his professional career as a research associate in the Flight Dynamics and Control Division at NASA Langley Research Center. Keskar joined Boeing in June 1980. Keskar has a great vision for the aviation industry in India. A mechanical engineer by qualification, he is avidly involved in technological and marketing researches for aviation management. Moreover, his keen interest in the development of the aviation industry in India added value to the country’s aviation growth story. His responsibilities further enhanced when he took over as the chairman of the Federation of Indian Chambers of Commerce and Industry’s (FICCI) civil aviation committee. However, he appeared to be worried about the present scenario of India’s airlines industry in particular. With a firm conviction that the industry will be back on its growth trail, he advocates adopting some urgent steps by respective governments and industry stakeholders in the days to come. While majority of Indian airlines are passing through financial turbulence, it is high time to adopt some pragmatic antidotes to fly high. Speaking exclusively to Cargotalk, Keskar strongly recommended adequate corrections which should be applied from within the airlines community in the country. Keskar said, “A viable price mechanism and a rational capacity deployment should be a two-pronged strategy that the airlines must adopt to stop bleeding.” According to Keskar, in view of the escalating aviation fuel price hike with additional tax burden on the airlines industry in India, there is no other effective alternative to remain in the business. On the other hand, there is a mismatch between demand and supply. Presently, supply (capacity) is more than demand. As a result, cost remains on the higher side as compared to the revenue earned. He, however, maintained that decrease in capacity is already taking place—though not deliberately. For instance, one of the major airlines has grounded its flights and some have squeezed their services because of dwindling revenues on certain routes. “At this moment, the viable option is to increase the ticket fare and freight rate in

ACADEMIC PROFILE Born on July 25, 1954, in Rajkot, India, Keskar received his Bachelor’s degree in Mechanical Engineering from Nagpur, India with a Gold Medal in 1975. He received his Master’s and Doctorate degrees in Aerospace Engineering from the University of Cincinnati in 1976 and 1978, respectively. Further, he completed his MBA from the City University in Seattle in 1987 and was a recipient of the President’s Honor Roll. In 1994, he attended the Berkeley Executive Programme at the University of California, Berkeley.

a proportionate manner to offset the increasing expenses,” emphasised Keskar. When asked about safeguarding the consumers’ interest at these testing times for the aviation industry as a whole, Keskar unequivocally maintained that it is always desirable to see the aircraft flying rather than grounded. It would not be a good thing for the country’s economy to imagine that the aviation industry is struggling for its survival. “Yes, there would be less traffic by air. However, it is always welcome that this industry grows at a low rate in terms of profitability, instead of so-called ‘remarkable growth’ at the cost of huge losses,” he explained. Commenting on international services offered by Indian carriers, Keskar maintained that fleet modernisation and acquisition would be some major factors to compete with foreign carriers. In his opinion, it would automatically add value and increase market share of Indian carriers as they are in the process of fleet acquisition. “We are bullish about the prospect of Indian carriers,” he said. Presently from India, Boeing has some 113 direct orders that include B-787 and B-737. In addition, more than 100 aircraft would be delivered on lease to Indian carriers. Worth US$ 15 bn, all the aircraft will be delivered in next 4-5 years. According to Boeing’s current Forecast Report about India, the country would be requiring 1,320 aircraft (worth US$ 150 bn) by next 20 years. There might be slight changes in the Boeing India Forecast, which will be unveiled in mid-July this year.

views on air cargo in india Sharing his views about air cargo operation in India, Keskar maintained that to realise tremendous possibilities of air cargo traffic within, to and from the country, India has to create strong hubs. “The Nagpur Hub project in this regard is an encouraging step. However, the Hub and Spoke concept can be developed in some other strategic areas in the country, with a special focus to bring

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in more freighters,” he informed. However, he maintained that the market for all cargo flights by Indian carriers is not mature at this time. “It would be very difficult at this moment because Indian carriers are not ready to compete with the huge network of foreign carriers. It should be remembered that majority of cargo that the foreign carriers are operating are transshipment cargo,” he

explained. Nevertheless, both domestic as well as exim air cargo will see a robust growth owing to the projected growth of the country’s economy, he said. In that case, multi-modal hubs and strong networks in both domestic and international markets would be beneficial for Indian carriers, as far as the share of cargo traffic is concerned.

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It is quite interesting that an aviation professional-cumexpert is equally passionate for water ways. He loves to float on water whenever he gets time to escape from his hectic schedule. And, as is obvious, his favourite tourist destinations are Goa and Maldives. Also, he loves to visit Mahabalipuram, in Tamil Nadu. Located right on the Coromandel Coast, Mahabalipuram is a sea port established during the 7th and 10th centuries of the Pallava dynasty. Keskar serves on several boards and organisations, including the national board of directors of the American Society of Engineers of Indian Origin; former chairman and current member of Amcham India, chairman of the Federation of Indian Chambers of Commerce and Industry’s civil aviation committee; the advisory board of the College of Engineering at the University of Cincinnati and

US-India Business Council Board Member Emeritus. In June 1999, Keskar was honoured with the‘Distinguished Alumni Award’ by the University of Cincinnati for meritorious achievement, recognised stature and conspicuous success in the imaginative blending of engineering education with highly productive endeavours in the industry. In September 2006, he received the ‘Outstanding Achievement Award’ from the American Society of Engineers of Indian Origin. Keskar’s other areas of interest include reading, listening to Hindi and Marathi music and watching theatre. He also enjoys corporate golf by taking part in it. Keskar is happily married to Medha, a former air hostess of Air India. Their son Mahesh is now working with Yahoo in USA.

Keskar was appointed in the present capacity in February, 2012 Before joining Boeing in 1980, Keskar worked as a research associate in the Flight Dynamics and Control Division at NASA Langley Research Center Presently, he is responsible for the Boeing business relationships with airline customers in Asia Pacific & India From March 2009 until his present assignment, Keskar was vice president of Boeing International and president of Boeing India Keskar developed the techniques to conduct flight tests and analyse flight test data to obtain airplane math models for the 737,747,757 and 767 flight simulators

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CEO Talk Terminal Update

Recently, Rajesh Goel has been appointed as the chief executive officer, Celebi Delhi Cargo Terminal Management India, which is operating the Brownfield Cargo Terminal at IGI Airport in New Delhi. A thoroughly experienced logistics professional, Goel elaborated on his primary focus pertaining to the new assignment and shared perspective on logistics industry in India. RATAN KR PAUL

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“In addition to our current investments, we are planning to grow and are looking at opportunities to expand further in India as well”

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he time when Goel has taken over the charges of the Brownfield Cargo Terminal at the IGI Airport, New Delhi from his predecessor, Murat Bas, was not a moment to cheer up. The falling air cargo volume, rising costs and tremendous pressure on profitability for last couple of months have already cautionedtrade parishioners in India and several other countries. However, Goel is quite optimistic that the turbulence will see an end in the near future for the companies who are seasoned and resilient enough. Said Goel, “The air cargo industry in the Indian market saw remarkable growth in the last decade.The volume of air cargo traffic in the country stood at around

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2.3 million tonnes in 2011-12. However, the scenario changed towards the end of 2011 when the demand for air cargo started to fall owing to the financial crisis and reduction of production due to the Eurozone crisis. In addition, there was tremendous hike in fuel prices which resulted in airlines reducing number of flights.” Goel is optimistic that Indian freight industry is likely to improve, as the industry is expected to grow at 10 per cent per annum by 2014, and the air freight sector is set to expand by 8.5 per cent per year for the next 5 years. Commenting on the Celebi’s cargo handling at the IGI Airport, Goel maintained that the company’s cargo facilities in India and globally will continue to strive towards excellence. “Customer satisfaction is the key goal for us. Hence, we ensure that all our endeavours are focussed on bringing about developments and improvements in every aspect of our work that helps us handle the ever increasing demand of air cargo efficiently,” he said. Goel admitted that the recent global recession has impacted the company’s tonnage performances, which had a slight impact on its revenue realisations. “However, going by our past trends, when we were able to strike back to remarkable numbers after the earlier global recession during 2009, we are confident of overcoming the current situation,” he said. According to Goel, with the modernisation process in its conclusive phase at the Brownfield Cargo Terminal, Celebi expects an impressive capacity enhancement in the terminal which, in turn, would increase the throughput and revenue yields. He asserted that Celebi has undertaken the entire renovation of the cargo complex at the IGI Airport in Delhi and is bringing in state-of-the-art equipment and technological advancements to ensure customer satisfaction. “India is like a second home to Celebi. In addition to our current investments, we are planning to grow and are looking at opportunities to expand further in India as well.We expect a 50 per cent year-on-year growth in revenue from ground handling operations in India and hope to maintain our growth figures for this year for our cargo operations,” Goel added. In his new role at Celebi Delhi Cargo Terminal Management, Goel’s focus will be to provide strategic and tactical direction for further enhancing the business operations in India. “Apart from this, I would continuously render my support to P&L (profit & loss) management, supply chain management and logistics management. I will also oversee operations with regard to warehouse administration, service operations, resource planning and control, profit centre operations and budgeting. WWW.CARGOTALK.IN


Goel shared that Celebi has been keen on expanding its operations in India and making its presence felt in other Indian cities. “We are the only Turkish investor in India so far and, in fact, the largest FDI investor in India and will definitely evaluate all opportunities that come up in India and then analyse the potential it holds for us,” he said. Goel informed that they have submitted their bid for winning the contract for ground handling services at Kochi airport in Kerala and still awaiting the status on the same. In the cargo sector too, the company envisages spreading its wings in India, and is bidding for the cargo terminal at Mumbai and exploring other relevant proposed cargo projects with the authorities.

According to Goel, the Indian logistics industry is currently plagued with poor infrastructure, high costs, and government regulations, etc. However, it is going to turn around riding on the back of robust GDP growth, globalisation, FDI in logistics and increasing government support. “Despite the existing constraints, the Indian logistics industry is growing at 20 per cent vis-à-vis the average world logistics industry growth of 10 per cent. Since the organised sector accounts for merely one per cent of the annual logistics cost, there is immense potential for growth of the sector.

In his opinion, there is a growing interest among entrepreneurs to venture into logistics business in India. On the other hand, Indian shippers are gradually becoming more aware of benefits of logistics outsourcing.They are now realising that customer service and delivery performance are equally important as cost to remain competitive in this global economy. “As the Indian logistics scenario looks promising, these MNCs are expected to play a bigger role, probably forming wholly-owned subsidiaries or taking the acquisition route,” he added. He, however, maintained that Indian logistics companies are prepared to fulfil the demands from the international market by virtue of expanding organically and inorganically in meeting up to international standards. Commenting on the bottlenecks before the logistics industry, Goel viewed that the primary objective of all stakeholders should be to establish best industry practices, which would help them in going a long way. In his opinion, stakeholders of the trade should look at improving asset utilisation. Shippers working with carriers and forwarders should work together to achieve better pallet cube efficiencies. In addition, there should be transparent practices, greater communication and visibility among all stakeholders. “From the regulators and the government point of view, favourable and liberal policies will help in smooth functioning and efficiency in the industry.An Indian economy on a solid growth trajectory and ongoing liberalisation of the aviation sector will be the key driver which will also support the country to emerge as a cargo hub, he concluded.

Rajesh Goel has over 20 years of experience in the logistics industry having worked with eminent organisations in India and abroad like Agility Global Logistics, BDP International, DHL Worldwide Express, Samsonite and Airborne India Express. Prior to joining Celebi Delhi Cargo Terminal Management India, he was associated with Elite Integrated Services in Dubai as a Consultant. He started his career as a Management Trainee with Gateway Services, where he subsequently moved up to the position of General Manager, Project Logistics (Middle East & Africa). Goel’s core competencies include strategic & tactical planning,P&L management,supply chain management,logistics management,warehouse administration, service operations, resource planning & control, profit centre operations & budgeting.

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Talking Point New Initiatives

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Despite a softening world economic environment, Volkmar Mueller, managing director, Kuehne + Nagel India is buoyant about the growth of the company. Speaking to Cargotalk, he explained Kuehne + Nagel’s strategies and products on the shelf to make a difference at these testing times.

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ueller unveiled the other side of the slowdown (both in international and India’s domestic markets). According to him, the logistics industry is feeling the pinch of slowdown because of the economic situation in the Eurozone on one hand and unprecedented fall of Indian currency, decline of export and manufacturing on the other hand. Customers will look for cost-saving initiatives. This time effect of the slowdown might be much more intensive as compared to the previous one (2008-9), as far as the impact on India is concerned. “This, in turn, provides ample business opportunities for Kuehne + Nagel to demonstrate its capabilities by adding value to its customers’ businesses. We follow a flexible and market-oriented policy. For example, we are focussing more on India’s domestic market, pertaining to distribution and warehousing logistics business,” he said. Commenting on the present trends in the logistics market, the seasoned campaigner for Kuehne + Nagel observed that the major change over the past few years is that Asian countries are concentrating more on the huge potential within their domestic market which could significantly counter balance their dependence on export activities.

GREEN LOGISTICS While setting up its projects in India, the company puts adequate emphasis on Green Logistics causes. “We follow Kuehne + Nagel’s worldwide environmental management policy to promote sustainable economic development in all the regions, business units and industries,” he said. According to the company’s policy, Kuehne + Nagel in India measures the impact of activities on the environment and

improves the results in terms of their environmentfriendliness. “We lessen the consumption of natural resources by re-use, recycling or reduced use of materials, and using products that are recyclable or come from sustainable sources,” said Mueller. The company offers environment-friendly product alternatives (in transport and warehousing) so as to enable customers to meet their own sustainability obligations.

benefit due to its global logistics capabilities,” Mueller maintained. The consequence of such trend is that individual customers will purchase more and more manufactured or sophisticated products in a more rational way. That’s why we are seeing the development of modern trades in emerging countries as well as heavy investment from the FMCG or hightech manufacturers in order to introduce and promote their global brands. This is particularly the case in emerging countries not just in India, but also in China, Vietnam, Malaysia, Indonesia and the Philippines, where the priority has been to cope with the growing demand. On top of it, there is a growing tendency for companies to outsource complex logistics management functions in order to add values to their supply chains. “Overall, the driving force for growth in logistics will remain the trend towards outsourcing to a single provider, from which Kuehne + Nagel will 66 CARGOTALK

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He was of the view that during the time of softening economic situation, customers are conscious of supply chain efficiencies and values creation. In order to maintain market competitiveness, they have to focus on their core competencies and to outsource non-core activities such as logistics management. “As a result, this will provide opportunities for Kuehne + Nagel to demonstrate its capabilities in global supply chain optimisation,” he explained. Under the global strategy of the Kuehne + Nagel Group, India is considered as one of the emerging countries for investments in the development of activities, besides China and Brazil. Mueller, however, refrained to make any comment on how much of investment the company is going to make in coming years. WWW.CARGOTALK.IN


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Talking Point New Initiatives

Intra-Asia Transpacific CIS, Eastern Europe and Africa Industry-specific solutions – Pharma & Healthcare Reefer and perishables logistics Niche products – Aerospace, hotel, marine, expo, event, oil & gas as well as emergency & relief logistics, etc. Integrated logistics solutions

“Our investment will be in warehousing for pharmaceutical logistics, reefer vans/ trucks and IT systems,” informed Mueller. Integrated logistics, industry-specific solutions, niche product development, i.e., a broadened range of end-to-end solutions, automotive competence centre, lead logistics competence centre and pharma competence centre will be of advantage for the company. India is one of the major operating subsidiaries of the Kuehne + Nagel Asia Pacific organisation, which consists of around 170 locations in 21 countries in Asia Pacific. At present, the company has 43 offices and 1.7 million sqft warehousing space at 38 different locations in India under management. During last 18 months, Kuehne + Nagel India has increased its manpower and has achieved significant growth of volume handled during the same time. The company added new verticals like Domestic Component Centres in Pune, Retail Desk comprising specialists from retail and buying house background and above all pharmaceutical logistics (company’s recent and global initiative). “India is a strong market for pharmaceutical logistics service providers. We are all geared up for meeting the customers’ demands in this sector. We are implementing our international pharma product called ‘KN PharmaChain’ in India, with an expectation of positive market acceptance,” said Mueller. Meanwhile,

Kuehne + Nagel has introduced this new airfreight product in India since June 2012. The use of active wireless sensors is a major achievement in the segment of seamless airfreight cold chains for pharmaceutical products. Generally, security rules prohibit the active use of mobile sensors during the air transport. However, together with a number of airline partners, Kuehne + Nagel thoroughly tested low-emission devices which can stay active during the flight so that the temperature is being constantly measured and reported practically in realtime. With this offering, the Kuehne + Nagel Group set new standards in the handling of pharmaceutical products in India. Key benefits include temperature data available at destination; proactive

action possible due to realtime and even alarms; less temperature deviations; less cost of lost product; no reverse logistics needed due to cost-effective onetime sensor use; temperature control during the whole supply chain; tailored packaging solutions, etc. In the unlikely event of a supply chain disruption (e.g., flight cancellation, delays, improper handling, etc.) contingency measures previously defined and outlined in the SOP are immediately executed to minimise any disruption within the supply chain, and/or temperature deviations. These contingencies can range from moving the shipment to another flight, re-icing, cool zone storage, etc., while automatically notifying all predefined stakeholders of the issue and explaining the action taken to resolve it.

Kuehne + Nagel India has been appointed by an international charity organisation to handle their aid and relief-related medicines from India. Interestingly, Kuehne + Nagel’s logistics solution is not all about temperature controlling. “More than temperature, proper cooling for sensitive life-saving drugs and vaccines can be maintained by scientific packaging and adoption of multiple temperature controlled tools,” he added.

Proper cooling for sensitive life-saving drugs and vaccines can be maintained by scientific packaging and adoption of multiple temperature controlled tools

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Mueller also shared that the pharma logistics chain will be operational at major metro cities including Hyderabad, Mumbai, Bengaluru and Delhi. For this, the company will set up transshipment cold storage nearby the airports. The reefer vans/trucks will be operational on short haul routs—from manufacturers’ units to warehouses and then to airports. Mueller hoped they would get the adequate infrastructure and policy supports from the government. WWW.CARGOTALK.IN


Shipping & Ports Products and Services

The deal marks the entry of US based GATX in the railcar leasing segment in India, wherein the local private container rail operators can now take the lease route for rail acquisitions to ward off capital costs and interest rates as the domestic credit market is compressing. ANITA JAIN

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lagging off a new trend in the container rail industry of India, Arshiya Rail Infrastructure (ARIL), part of Arshiya International Ltd, has signed a deal with GATX India (GIPL), a subsidiary of US based GATX Corporation. GATX, one of the world’s largest rail lease financers, is the first foreign entity to get registered under the Indian Railways Wagon Leasing Scheme and provide lease financing of wagons to container rail operators. According to the deal announced, GATX will procure 10 BLC rakes, each having 45 flat box wagons, from India for about Rs 130 crore and lease them out to Arshiya for 10 years for a fixed lease amount. The leased rakes will be manufactured in India and the design will be approved by the Research Design and Standards Organisation (RDSO). This deal has also opened a new financing window for Indian private container rail operators. An augmented rail capacity through its relationship with GIPL is planned to be deployed at its new state-of-the-art terminal at Khurja (NCR) which will act as a hub and will offer integrated and cost-effective solution to ARIL’s customers across major Indian cities for domestic and exim cargo. Exuding confidence from the deal, Ajay S Mittal, Group Chairman & Managing Director, Arshiya International Ltd, said, “This is a strategic tie-up for both the companies for the rail space in India. GATX Corporation is a specialist in this area with strong technology leadership in US and Europe.” Adding further, Mittal said, “Annually, about 3.5 billion tones of freight movement happen in India of which 65 per cent moves

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Ajay S Mittal (extreme left) and Brain A Kenney, (extreme right) along with other officials at the press conference

on rail. Moving freight through railways can bring down the supply chain cost tremendously. Our railway business contributed Rs 272 crore to our turnover of Rs 1,054 crore in last fiscal, and we see this share growing in this fiscal.” According to him, sharpening focus on railway business is a part of Arshiya’s strategy to mature from a service-driven business to an assetdriven company.

Kenney, President & CEO, GATX Corporation; emerging rail markets like India, China, Hong Kong, South Korea and Singapore provide growth opportunities for the company over the longer term. Talking about India being the launch-pad in the Asian market, Kenny said, “We believe the Indian rail space holds great promise and we look forward to long-term business prospects in this market.”

Given the current slack in the US economy, GATX’s strategy is to purchase railcars at a lower market price and lease it on a short-term period during market downtrend, allowing it to capitalise more on the current market scenario in the rail freight market. According to Brain A

GTAX Corporation, with a market capitalisation of nearly USD two billion, is a global leader in railcar leasing with nearly 164,000 railcars owned and managed across North America and Europe. Asia is now a target market for the company. WWW.CARGOTALK.IN


Shipping & Ports Trade Lane

TransAfrica, a dedicated ‘Indo-Africa Freight Corridor’ service, has been recently launched in Mumbai by Transocean Express Logistics and Omega Logistics (Africa). The new service is a distinctive concept and is positioned as a dedicated freight corridor in the ever growing Indo-Africa trade lane.

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ransocean Express Logistics is one of the leading companies dealing with freight forwarding and SCM services in India. According to Alok Kumar, CEO, Transocean Express Logistics, the company has 20 branches across the country at all strategic locations and present in all important verticals like – road freight, warehousing, freight forwarding, packaging and cold chain. “The idea is to provide integrated solution to our customers on doorto-door basis. The complete logistics solution is going to be a seamless solution with SPOC (single point of contact),” he informed. Omega Logistics (Africa) is a Group Staymain enterprise, having leadership position in hinterland & reverse logistics to landlocked destinations in African regions. The company is experienced in serving conference & tramp carriers, global freight forwarders, shippers, merchant consignees & UN military aid missions. Omega specialises in a complete range of impor t-expor t services from shipping, customs clearance, port handling, transportation, projects, warehousing and redistribution. “We command a forefront position in almost all projects and support logistics operations in east and central African regions due to its captive resources spread across strategic corridors of freight movement,” said Manish Srivastava, MD, Group Staymain. Omega is a dominating player in East Africa with presence at eight locations. They have strong reach at hinterland and equipped with 72 CARGOTALK

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Alok Kumar (6th from left) and Manish Srivasatva (7th from left) along with other officials of both the companies at the launch programme

heavy movers to cater ODC shipments. Omega caters most of the top customers in Eastern Africa including UNO and MNCs. The new venture TransAfrica’s basic idea is to intensify presence among the existing customers and provide them a seamless African service at this corridor. “We have a plan to execute about 3000 containers in 2012 and about 30 per cent increase in the volume year-on-year. Major products likely to be handled include machinery, pharma, construction equipment and project cargo, etc. Commenting on the connectivity between

India and those African countries, Kumar maintained that since volume is going to be huge and most of the cargo would have odd dimensions, they would be able to manage the same by Ocean freight. “However, small shipments on urgent basis are going to be catered by air freight,” he added. According to him, sea cargo would be 80 per cent. He also informed that main transshipment point would be Dar E Salaam & Mombasa. On marketing part, Kumar updated that the company has appointed special team at place to do marketing for TransAfrica. In addition, Trade Lane managers from Omega visited all major Indian cities to generate business. WWW.CARGOTALK.IN


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Shipping & Ports Products & Services

The Port of Halifax has diverse cargo handling capabilities and has expertise in breakbulk handling. With major infrastructure upgrades set to be complete within the next year at Richmond Terminals, the Port’s capacity to handle breakbulk cargo will be expanded further in a big way. With this project in mind, the Port of Halifax displayed its existing and forthcoming facilities for breakbulk cargo handling at the recently held Breakbulk Europe 2012 in Belgium.“This conference provided a prime opportunity to meet with influential cargo movers and to position Halifax as a capable, growing breakbulk port for European product,” said George Malec, vice president of Business Development and Operations at the Halifax Port Authority. According to him, breakbulk cargo at the Port of Halifax has experienced growth recently with total breakbulk volumes at the Port – including commodities such as telephone poles, machinery, steel and rubber – growing in the first quarter of 2012 by over 100 per cent compared to the same quarter of 2011.

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“We have robust cargo handling capabilities at our two breakbulk terminals and efficient stevedoring companies moving the product, so we’re well positioned in long-term to handle more imports and exports,”added Malec.He maintained that the growth in breakbulk and the increase in breakbulk terminal capabilities indicate that it’s an area of potential for Halifax and, accordingly, the Port is developing this line of cargo aggressively. Wim Van Erck (Port of Halifax – European Representative), Bernard Moyson (Managing Director ACL Benelux) and Patrick Bohan (Port of Halifax) at the BreakBulk Europe show in Antwerp.

The recently launched South India Gulf Express(SGE) service from Indian Subcontinent to Middle East made the maiden call at the International Container T r a n s s h i p m e n t Te r m i n a l ( I C T T ) , Vallarpadam in Kochi.The service has a port rotation of Kochi-Colombo-Jebel AliKochi with a transit time of eight days to and

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Meanwhile, the Port is receiving good volume of breakbulk cargo from India,which are predominantly agri and timber products.

from Jebel Ali and is a weekly service calling Kochi every Monday.The vessel MV Sea Bright, which berthed at the ICTT June 18, had an exchange of 434 TEU with 124 TEU imports and 310 TEU exports.DPWorld Cochin,the operator of ICTT,welcomed the vessel at berth by organising a function on board the vessel in the presence of

Lin Sheng-Chia,president,Evergreen Line; Paul Antony, chairman, Cochin Port Trust and K.K.Krishnadas,CEO,DPWorld Cochin. According to Krishnadas, the service is in addition to the two other mainline services calling ICTT to Europe and China.With this service, ICTT has eight direct calls to Jebel Ali every Month.

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Study Report Road Transport

Recently, Dr. C.P. Joshi, Union Minister for Road Transport & Highways released the “2nd Report on Operational Efficiency of Freight Transportation by Road in India” –the joint study by TCI and IIMCalcutta. The key findings of the report were based on surveys across high volume routes of India with special focus on Delhi-Mumbai and Delhi-Bangalore. CT BUREAU

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peaking on the occasion, Joshi said that his ministry will succeed in achieving the target of constructing 20 kms road per day by 2013-14 as investments in road sector are very encouraging. Applauding the Report, he said that this may be very useful in formulating national policies. Expressing his deep concern on over-loading of vehicles, he asked the transporters to pay great attention to it as it leads to increasing road accidents besides damaging the quality of roads. Joshi also maintained that his Ministry was very actively working on improving the Toll Plazas on national highways to make them more fuel efficient and time saver for vehicles. Transport Corporation of India (TCI) had commissioned the joint study with the Indian Institute of Management (Calcutta) to assess the operational efficiency of freight transportation by Road in 2008-09 and recently followed it up with a sequel in 2011-12. The objectives of the survey are to compare the route statistics for 2011-12 to 2008-09, identifying any major changes, make an overall assessment of operational efficiency of freight transportation by road and recommendations for its improvement. The study also focusses on a comprehensive analysis of Public-Private Partnerships (PPP) in road projects, Electronic Toll Collection (ETC), access-controlled expressways and logistics parks/hubs. To compare the route statistics with 200809 and 2011-12 survey on Delhi-Bangalore Highway, it is found that on an average the toll stoppage delay is 67 per cent with an increase of 18 per cent from the last survey report of 20082009. The report also estimates that the annual cost to such delays to the economy has increased to Rs. 40 billion as compared to 30 billion earlier. The study also reveals that on Delhi-Mumbai

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(left to right): D P Agarwal, VCMD, TCI, Dr. C P Joshi, Union Cabinet Minister, Road Transport and Highways, Professor Subrata Mitra, IIM- Calcutta and Vineet Agarwal, JMD, TCI

Highways it took approximately three days to cover a distance of 1,380 kilometers at an average speed of 17 km per hour. The annual cost of such delays to the economy was to the time of Rs. 30 billion. The study highlights that though India’s road freight volumes are increasing at a compounded annual growth rate (CAGR) of 9.08 per cent and the population of vehicles (all types) is increasing at a CAGR of 10.76 per cent, the road length is increasing at a CAGR of only 4.01 per cent, indicating the paucity of roads. The Indian Trucking sector contributes about 4.5-5 per cent of India’s GDP and is the lifeline to the country’s economy, transporting goods from one point to another on a 24/7 basis. However, even though India has one of the highest road densities in the world, growth in road lengths has not been commensurate with the growths in freight and vehicular traffic, resulting in

congestion, long delays and substantial costs to the environment and the economy. According to Subrata Mitra, professor, IIM Calcutta, India needs to adopt the same techniques for road development and maintenance projects as in China and other developed Asian countries. He highlighted that vehicles waste most of their time on electronic toll collection, which is one of the biggest challenges and can adversely affect our economy. “We should set up an independent regulatory authority to assess costs / benefits, service levels, safety measures and tariff structures at the earliest,” Mitra suggested. Speaking on the occasion DP Agarwal, vice chairman & managing director, TCI, said, “India needs to build large-scale logistics parks and scale up the existing parks to compete with countries like Hong Kong, Shanghai, Singapore and Dubai for international cargo.” WWW.CARGOTALK.IN


Study & Survey Customs Clearance

Recently, FICCI, Research and Information System for Developing Countries and Centre for WTO Studies (CWS) jointly organised an international seminar in New Delhi on ‘Facilitating Trade in South Asia: Challenges and the Way Forward’. At this seminar a study on ‘Trade Facilitation in Asia and the Pacific’ was released by SK Goel, chairman, Central Board of Excise and Customs (CBEC). In this issue we are highlighting an analysis on cross country export and import time…. CT BUREAU

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he study unveiled that the length of time required for completing export and import procedure varies between countries. While this is in large part due to differences in products and partner countries, there are also slight differences in scope of procedures and in methods of payments across countries.

office. As shown in the graph, the time required for preparation of documentation is generally the main component of export and import time. However, the time required for inland haulage and terminal handling are also very significant in determining the overall time required for the completion of export procedures. Document preparation is also typically the largest time component in the import process.

Thus, export and import times were re-calculated using the World Bank’s DBD approach. For exports, this means measuring from the time of the signature of contract to the time the products are loaded on the ship at the nearest port. Under this approach, therefore, the time required to complete export and import procedures excludes the time for contract negotiation and signature (buy process) and payment delays (pay process) as shown in the graphs.

Some Facts on Document Preparation Time: The time required for the completion of documentation for the export of shrimp from Bangladesh (to Japan) and vegetable ghee from Nepal (to India) is 22 and 33 days, respectively. In contrast, the document preparation for export and automobile parts from Thailand to India takes just two days, which is found to be the lowest times among the countries considered in this study.

Also, the various steps involved in the export and import processes identified by the ARTNeT, researchers in their studies are grouped into four standard components: 1. document preparation, 2. inland carriage and handling, 3. customs and 4. ter minal handling. The ‘customs’ components actually includes health, quarantine and technical control (and any physical inspections) as well, some of which may be under the responsibilities of agencies other than the customs 78 CARGOTALK

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SK Goel (3rd from Left) along with other dignitaries releasing the study report on “Trade Facilitation in Asia and the Pacific”

Customs Clearance Time: Highlights Fo r e x p o r t f r o m I n d i a t o Bangladesh, customs and other control agencies take four days to clear an export consignment. In contrast, it takes one quartet of a day or two days to clear an export consignment in the other developing countries examined in this study. For import, consignments are generally cleared by customs within the time frame of between half of a day to two days. WWW.CARGOTALK.IN


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