VOL VIII ISSUE I december 2016 `20
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Experimental Territory: Logistics in 2016
Time Tabled Goods Train: The new game changer
Kings of the Road
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VOLUME VIII • ISSUE I • DECEMBER 2016
Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent Sana Husain Feature Writer Tariq Ahmed Nicin Varghese
14 COVER STORY
Cold is the New Hot
FOCUS OF THE MONTH
SPECIAL FEATURE Kings of the Road
INTERVIEW Mark Whitehead, Chief Executive, Hactl ....60 Jonas van Stekelenburg, Head, Schiphol Cargo ..................................................62 Mohit Bharti, Associate Director, Michael Page India ............................................64
Demonetisation jams ‘wheels’ of the transportation sector ............................8
Dhruvil Sanghvi, co-founder and CEO, LogiNext ..............................................66
NEWS .................................................72-78 We bring you a wide spectrum of updates that will keep you informed about the industry’s plans, performance and initiatives. Experimental Territory: Logistics in 2016 ...................................46
Upfront ......................................6 GUEST COLUMN .........................68 Shippers SpeaK .......................70 case study ................................79 profile ......................................80 EVENTS ..................................81-85 PEOPLE CONNECT ......................86
Time Tabled Goods Train: The new game changer .......................50
TOTAL PAGES: 88 (inclusive of cover)
Director Marketing Ajeet Kumar Manager Marketing Niti Chauhan Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad Mehuli Choudhury Marketing Support Sheetal Singh Administration Vipin Marwah Lavish Thakur Senior Designer & Visualiser Shaique Ahmad Designer & Visualiser Mayank Bhatnagar
All material printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same. CargoConnect is printed, published and owned by Smiti Suri, and is printed at Compudata Services, 42, Dsidc Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014. Editor–Smiti Suri
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Upfront Nirmala Sitharaman, Minister of State for Commerce and Industry
expressed her concerns over the slow growth in India’s export and said, “I have very clearly stated that logistics costs are increasing and therefore, we are becoming less competitive... We have definitely asked different authorities at different levels. We have asked the Railways and the Finance Ministers to look into this. They are working on it.” Arun Jaitley, Union Finance Minister, is pretty much hopeful
According to an analysis conducted by Information and Credit Rating Agency (ICRA), air cargo traffic in India reported a healthy growth rate of ten per cent in September 2016 as against eight per cent in August 2016.
about the spurt in job opportunities after the implementation of Goods and Service Tax (GST) law in the country. Recently,
The sudden decision of
he said that the country needs to roll out
the proposed GST bill by September 16,
Prime Minister Narendra Modi
2017. The implementation of GST will
had put intense pressure on cash
hopefully lead to the creation of jobs in the formal sector.
management companies. Rituraj Sinha, President, Cash Logistics Association of India hailed
Harsh Jagnani, Vice-President of ICRA Limited said, “Cargo volumes have continued to maintain a positive growth trend over the last twelve months. Both domestic and international cargo volumes reported an improvement in growth in September 2016. Moreover, the growth remained well-spread with 18 out of the top 20 airports reporting positive YOY growth in September 2016.” 6
CargoConnect - DECEMBER 2016
employees of these companies and said, “These guys, the van drivers, the guards, are the real heroes... some have not even bathed for four days. While these guys are stuck at work handling cash, their families are borrowing from others to survive.”
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FOCUS OF THE MONTH
Demonetisation jams ‘wheels’ of the transportation sector
Road transport industry of India rolls primarily on the availability of cash in the economy. The sector requires a whopping INR 1,194 crore in cash on a daily basis to meet its day to day operational cost. But the government’s step of demonetisation has turned this cash reliant sector upside down overnight. Lakhs of trucks and goods carrier vehicles have been stranded on highways across the country due to the scarcity of cash in pockets of truckers. Gaurav Dubey presents a short report on the importance of liquidity in the sector and the adverse effect caused by demonetisation on the road transportation of India
CargoConnect - DECEMBER 2016
FOCUS OF THE MONTH Transport scenario of India Indian economy relies heavily on the transportation business of the country and even a minor change in the economic policy of central government makes a huge impact on this sector. The transportation scenario of the country has witnessed a metamorphic change since the implementation of liberalisation policy in the year 1991. Infrastructure has developed rapidly in every available mode of transportation viz – land, water and air since 1991 in India. Plenty of transportation options is available in the country as Indian subcontinent is well connected with every kind of transportation facility. Despite the availability of several options, land transport largely rules the transport scenario of the country. Road transportation has registered tremendous growth and emerged as a dominant mode of transportation in the country. It carries almost 90 per cent of the country’s passenger traffic and 65 per cent of its freight. In the previous fiscal year, the contribution of the road transport to GDP was 4.8 per cent, which amounted to INR 5, 44,800 crores annually or INR 1,492 crore per day. This mode of transportation is all set to get a major boost as the current government has been coming up with several projects which will enhance the transportation business of the country. The Union Ministry of Road Transport and Highways is planning to construct express ways on all major routes and devolving waterways to achieve its target of raising the contribution of the transport sector in GDP by two per cent. “Our target is that two per cent of the country’s GDP will be contributed by the transport sector with the potential to create 15 lakh jobs,” Nitin Gadkari, Union Minister for Shipping, Road Transport and Highways, recently said in an interaction with media persons.
Impact of demonetisation on transport industry Significance of financial liquidity The entire road transportation industry turned upside down overnight with central government’s sudden move of devaluing the currency notes of INR 500 and INR 1000 on the night of November 8, 2016. The
10 CargoConnect - DECEMBER 2016
business relies heavily on cash as the liquidity of INR 1,194 crore is required on a daily basis by the sector to meet its operational costs. According to a transport association, every truck driver carries at least INR 20,000 in cash with himself and this amount reaches up to INR 40,000 in a case of long route transportation of goods. Carrying cash is a necessity for truckers as they have to pay for all en-route expenses like fuel, toll tax, covering costs for truckers’ boarding, vehicular repairs and payment to loaders and unloaders in cash.
Direct impact of demonetisation on truckers
Pradeep Singal National President, All India Transporters Welfare Association
We totally support this government’s move of demonetisation but government should increase the limit of cash withdrawal for transporters so that our trucks and other carriers don’t get
News of demonetisation spread like a wild fire across the country and all the currency notes of INR 500 and INR 1000 being carried by truckers became pieces of paper in a moment. It derailed the transportation business as transporters became helpless in transporting essential food items, including milk and vegetables, due to the scarcity of smaller denomination of currency and unacceptance of old currency notes by state authorities, toll plazas and laborers. This acute financial crunch paralysed movement of trucks and supply of essential items across the country. Drivers were the people who got directly affected by the demonetisation move, as many of them were en-route of delivering consignments at the time of the announcement of this move by Prime Minister Narendra Modi. Consequently, drivers unexpectedly ran out of cash to purchase even fuel for their vehicles. At least eight lakh drivers and conductors got severely impacted in the wake of delegalizing of INR 500 and INR 1,000 currency notes.
stranded on roads.
Government’s breather to transporters
decision of demonetisation was a heavy blow for the transportation sector which largely depends on cash transactions. This decision temporarily shook the entire sector and lakhs of trucks got stuck on roads in a moment. It created panic among the major transporters and truck drivers of the country as they were totally unprepared for this unprecedented move of the government. The anxiety of transporters was totally predictable as 80 per cent of the transport
Central government’s direction to petrol pump owners of accepting old tender notes gave a breather to the sector and it temporarily solved the problem of refueling trucks and private vehicles. Union Ministry of Road Transport and Highways too came to the rescue of transporters a day after the announcement of demonetisation drive by the Prime Minister for tackling corruption and black money in the country. The ministry on November 9 had an-
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FOCUS OF THE MONTH
nounced that no toll fee would be collected on National Highways till the midnight of November 11 which was later extended until the midnight of November 18. “We reviewed the situation and decided to suspend the collection of fees,” Nitin Gadkari, Road Transport and Highways Minister said soon after the decision of exempting the toll tax. However, these temporary measures taken by government proved as a cumin seed in camel’s mouth in front of such a mammoth problem of transporters.
Brewing discontentment in transport fraternity
President, All India Motor Transport Congress (AIMTC)
PM Modi’s unprecedented move of devaluing notes of higher denominations to siphon out black money stashed in vaults of corrupt fat cats did not go well with the transport business. This move of the government collapsed the entire structure of the sector which runs primarily on continuous cash flow. The central government maintained complete secrecy before the announcement of the decision of demonetisation and took neither the business fraternity nor the opposition in its confidence before scrapping higher value banknotes. Several leading apex bodies of transporters like All India Motor Transport Congress
12 CargoConnect - DECEMBER 2016
The transport sector has been suffering because of the bumpy implementation of demonetisation policy in the country. If the government don’t increase the cash withdrawal limit it could spark furious protest across the country in near future.
(AIMTC), All India Transporters Welfare Association (AITWA) and Delhi Transport Association have been registering their strong protest against sudden demonetisation which has crippled their entire business. These associations have collectively demanded to increase the cash withdrawal limit to INR 20,000 per day in view of inconvenience being caused to drivers. AIMTC which claims to have 93 lakh trucks, 50 lakhs buses, tourist taxis and cab operators under its fold, maintained that the acute financial crunch caused by the step of demonetisation has heavily impacted the movement of trucks, passenger vehicles and supply of essential items across the country. Bhim Wadhwa, President, All India Motor Transport Congress (AIMTC) says, “The transport sector has been suffering because of the bumpy implementation of demonetisation policy in the country. If the government don’t increase the cash withdrawal limit, it could spark furious protest across the country in near future.” The association has also appealed to Finance Minister Arun Jaitely to enhance cash withdrawal limits as drivers across India have been facing grave problems in their day to day operations. Functionaries of AITWA and Delhi Transport Association have also echoed similar thoughts, saying the sector is facing an acute financial crunch as 80 per cent of its operational cost is cash driven and it is severely affecting the supply of essential commodities including milk, vegetables, fruits and medicines. Pradeep Singal, National President, All India Transporters Welfare Association (AITWA) maintains “We totally support this government’s move of demonetisation but government should increase the limit of cash withdrawal for transporters so that our trucks and other carriers don’t get stranded on roads.” Apart from the movement of goods, passenger vehicles have also been impacted as tourist buses and cabs are supposed to pay taxes in cash at state borders. However, transporters associations are pretty much hopeful that the crisis of liquidity will get over by the end of November, but if it doesn’t get resolved then transporters could turn towards the stronger way of protest like strike which would further cripple the life of common Indian citizens.
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Indiaâ€™s cold chain sector is a combination of surface storage and refrigerated transport. The industry has been growing at a Compound Annual Growth Rate of 20 per cent for the three years. The cold chain market in India is anticipated to reach INR 624 billion (US$13 billion) by 2017. Cold stores are the major revenue contributors of the Indian cold chain industry. Tariq Ahmed, with the help of industry experts, gives a detailed overview of the current scenario of infrastructure of cold storages in India and the scope of development they carry with themselves
DECEMBER 2016 - CargoConnect 15
A cover story
facilities in India are currently concentrated in Uttar Pradesh and West Bengal, while other states are facing a challenge with investments from the government and private operators. Organised players contribute only 8 per cent to 10 per cent of the cold chain industry market and 36 per cent of these cold storages in India have capacity below 1,000 MT. At the current capacity only less than 11 per cent of what is produced can be stored. India is one of the largest producers of agricultural products and one of the global leaders in the pharmaceutical sector. Yet, it is known to have a fledgling cold chain, which results in supply chain losses of food and other resources. These losses have been stated to be as high as US$8 to 15 billion per annum from the agriculture sector alone. To
16 CargoConnect - DECEMBER 2016
orage sh t S ar d ol
cold-chain is an environmentally controlled chain of logistics activities, which conditions and maintains the goods (produce o r p r o d u c t) within a stipulated range of parameters that include temperat ure, hum id ity, atmosphere, packaging and other conditions. Importantly, cold-chain is all about end-toend connectivity and hence, above all, be market linked. Depending upon the handling requirements, a typical cold-chain flow may be understood separately for harvested fresh horticultural produce (fruits and vegetables) and processed products (manufactured food items). The holding life of majority of the fresh horticultural and floriculture produce, even when in the cold-chain, ranges from just a few days to a few weeks only. The temporary extension in life, allows the product to remain in a consumable state for a longer period. In the cold-chain, the essential characteristics of agricultural produce remains unaltered as prime activity of preconditioning at a pack-house does not transform the produce but safe-guards the value and makes it more marketable. The key benefit derived from coldchain is in fact, empowering the direct linkage of farm-gate value with consumers. By enhancing the holding life and transportability of the produce, cold-chain allows the scope to reach and capture more markets. Cold chain involves the transportation of temperature-sensitive products along a supply chain through thermal and refrigerated packaging methods to protect the integrity of these shipments. There are several means in which cold chain products can be transported: refrigerated trucks and railcars; refrigerated cargo ships; and air cargo. Currently, India has 6,300 cold storage facilities unevenly spread across the country, with an installed capacity of 30.11 million metric tonne. These are mostly used for storing potatoes. However, the market is gradually getting organised and focus towards multi-purpose cold storages is rising. More than 50 per cent of the cold storage
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The agriculture and food processing sectors in India have been developing and today India is a net exporter of food grains. This is a dramatic transformation from the 70s and 80s when India used to import food grains to feed its population. This has largely been a result of the higher yields achieved as a result of the Green Revolution. Alongside this, there have been significant strides in the production of fruits and vegetables. Cold-chain is now understood as a logistics conduit, linking producing points with consumption centres. The major components that need to be developed for effective integration of the coldchain sector are: 1. Stat ic In f rast r uct ure – i m mobi le infrastructure at farm-gate (modern pack-houses with pre-coolers, value adding units), term based storage (Bulk cold warehouses), and Cold distribution Hubs (Cold stores for last mile access to markets). 2. Mobile Infrastructure – transport units for connecting the static in frastr uct ure - designed for logistical load factors (small volume transit and long haul transits). Additionally, cold-chain extends to last mile retail or point of sale at merchandising platforms. 3. Standards and Protocols – to define a common glossary and procedures for handling a wide array of raw produce and finished products. 4. Skilled Resources – human resources to implement all above aspects.
COLD-CHAIN INFRASTRUCTURE IN INDIA: IN DEMAND address this concern, the government had earlier constituted a National Task Force on Cold Chain in 2008. As recommended by this Task Force, a National Centre for Cold-chain Development (NCCD) has been established to promote and develop integrated coldchain in India for perishable agriculture and horticulture produce including perishable from allied sectors. The main objectives of the centre are to recommend standards and protocols for cold-chain infrastructure, suggest guidelines for human resource development and to recommend appropriate policy frame-work for development of coldchain.
It’s an established fact that there is a yawning gap between the currently existing and required cold-chain infrastructure in India. To manage existing consumption volumes in the country, all types of cold-chain infrastructure would need to be significantly increased. A report, facilitated by the National Cent re for Cold-cha i n Development (NCCD), assessed the need for additional infrastructure by studying cold-chains from the end to the starting point. First, the consumer-led demand for food items was estimated, and then the quantity and quality of cold-chain infrastructure needed was evaluated, based on data received from,
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cover story Gubba Deepthi, Head Communications, Gubba Cold Storage
Yes, the government has been supportive to encourage cold chain business through monetary grants as well as educative support for technology and training. With growing population and increasing food needs of the world, preservation through cold chain has become the need of the hour. The state governments are also seen to be a step ahead in identifying the individual gaps and granting extra support.
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e.g., ministries, agencies, farmers, vendors and market estimates. While the focus was on fruits and vegetables, other products in the chill, mid-chill and frozen categories of cold-chain were also included, but milk, floriculture and some spices were excluded from the analysis. The cur rent demand for d i fferent types of infrastructure was investigated: modern packhouses, short- and long-term cold storage, reefer vehicles and ripening chambers. According to the report, there is currently a high scarcity of all types of coldchain infrastructure in India. The number of modern packhouses should be increased from about 250 to 70,000, ripening chambers from 800 to 8,300, and reefer vehicles from 9,000 to 53,000. In other words, the current unit number of modern packhouses, ripening chambers and reefer vehicles are only 0.4 per cent, 8.9 per cent and 14.6 per cent of those required, respectively. The current cold-chain cold storage capacity is about 32 million tonnes, but even that would need to be increased by approximately three million tonnes to meet the requirements. The fact that there is very high demand
18 CargoConnect - DECEMBER 2016
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for packhouses, ripening chambers and reefer vehicles, but relatively less demand for cold storage space, probably reflects the history of cold-chain development in India. Earlier, cold-chain development efforts used to focus mainly on building bulk storage for single commodities at the production-end of specific crops. However, cold-chain is today perceived as a logistics chain linking production points with consumption centres. According to the report, developing both static and mobile infrastructure, standards and protocols, as well as having skilled personnel, will make the cold-chain sector more effective. When planning improvements to cold-chain infrastructure in India, special attention should be given to building modern packhouses near farms and to acquire transport units of different volumes to connect the sites with static infrastructure.
ILL EFFECTS OF POOR INFRASTRUCTURE India is the largest producer of fruits and the second largest producer of vegetables in the world. But contrary to this, the food inflation rate gallops high in India on a
daily basis. One of the major reasons for this inflation is wastage of fruits and vegetable products due to inadequate facilities of cold storage in our country. Gubba Deepthi, Head Communications, Gubba Cold Storage says, “Primary gap is in the maintenance of cold chain to ensure that the food remain fresh at every point of collection and distribution. It is crucial to maintain the temperatures in the cold room according to the specifications of the product. Wastage of the product and in turn inflation can be controlled when the safety of the product is assured. Introduction of tamper proof data loggers in the cold storages is a brave move to arrest temperature fluctuations. Cold storages with racking facilities and MHE operations can save manpower and time and eventually cost of operations. Safety is one of the prime indicators of an efficient cold storage. Inducting processes to ensure safety of man, product and infrastructure has to be made mandatory.” One of the main reasons for galloping rate of food inflation in India is the lack of supply chain for food, in which cold chain plays an integral part. Robust cold chain is the need of the day to benefit from larger production capacity and passing it on to consumers in the form of reduced prices as well as producers in terms of reduced wastage. Shedding light into the food inflation rate issue, P S S Prasad, President, Apollo LogiSolutions said, “There is a lot that needs to be done to augment the cold storage facilities in the Indian warehousing sector. These have a direct correlation with the food inflation rates in India and in effect the economy. According to a report by PwC named ‘Building Warehousing Competitiveness’, integrated cold storage warehousing has huge potential in India. The cold storage system, when supplemented with temperature-controlled transportation connecting farm-level storage facilities,
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cover story Dileep Naik, Managing Director, Reema Transport Pvt Ltd
The various bodies of the government of India have been set up to assist the entrepreneurs in investing in the cold chain segments to scale up the development of cold infrastructure. While this move is commendable, its implementation is not visible across the segment and most of it has more or less remained on papers. The center must seriously look to implementing the proposed schemes and ensure that it does not remain just a proposal on paper.
processing units and distribution outlets will not only improve efficiency but will also solve our problem of wastage of agricultural products. The cold chain market is dominated by private players despite the presence of stateowned players.” He further added, “Though the government has provided various incentives in tax and duties to encourage cold chain players, the results are yet to be seen. In addition, cold chain and container-handling facilities should also be augmented at major sea and airports to target global markets.” Talking about how the poor infrastructure causes inflation, Rajesh Goyal, Secretary, Federation of Cold Storage Associations of
India says, “Central and state governments should promote and give more subsidies for construction of multi chamber and multi product cold storages in those areas where there is lack of storage facilities in compared to production Awareness programmes should be organized for imparting knowledge regarding storage techniques of various fruits and vegetables. Semi processing, processing and packaging of agricultural products to be promoted at farm levels to avoid damage of products in farms. New designs of cold storages are required to be constructed to store various types of fruits and vegetables.” Cold storage does not only ensure quality of the produce
and keep it fresh but also extends life of the produce. The absence of cold storage facilities also forces farmers to sell goods at lower prices while consumers are forced to pay more for low quality produce. Thus it is critical to build a strong infrastructure network and support the growth of cold storage facilities which in turn leads to the overall development of the commodity market ecosystem. Tarun Arora, Director, IG International asserts, “Indian Ports get congested during peak season. We face huge traffic jams and blockages at both Nhava Sheva and Chennai Port. Having a cold store for pre-cooling and packaging near the port premises can help in increasing the
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cover story Rajesh Goyal, Secretary, Federation of Cold Storage Associations of India
We welcome the decision of Finance Ministry to cut down the import duty rates to promote reefer vans but lot of work still remains to be done for favourable results. The farmer and trader should be well aware of technical and financial importance of use of reefer vans. To get the things started, the logistics fares of reefer vans should be kept at par with normal vans.
importance of cold chain Harvest
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22 CargoConnect - DECEMBER 2016
shelf life of the cargo as well as reduce the turnaround time. Also, the government should work on improving the road infrastructure near the ports as it will help in better traffic management.” Rotting of perishable products can be attributed to lack of proper cold storage facilities. This problem is also compounded by the fact that cold storage facilities are usually available only for single commodity items like potato, orange, apples, grapes or flowers. This leads to poor utilisation and many perishable items which also needs cold storage facilities perish and die even before they enter the market. This shows the huge potential that is still waiting to be tapped. Rahul Agarwal, Director, Kool-Ex Cold Chain Ltd holds the view that, “The Ministry of Food Processing, Govt. of India has earlier stated that there is wastage of more than 25 per cent of Fresh Produce in India due to improper storage and transportation networks, especially in the cold chain. The Government is also offering subsides to the Private Sector to push the growth of such Infrastructure. Recently Yes Bank, in coordination with the MOFPI has released a detailed booklet giving minute details on the geographical source points of such commodities across the country. They are also funding infrastructure companies on fast track basis in this sector. The gaps can be ideally filled up by – • Mapping the areas of concentration of growth • Mapping the seasonal supply/ availability of such commodities • The optimum capacities required to manage the same • To build required infrastructure to support the same” The need of the hour is to create economically viable cold chain solutions linking production centers to consumption centers, thereby reducing physical wastage of perishable commodities and in turn leading to
the development of processed food industry. Speaking on the infrastructure issue and the rising inflation due to it, Vivek Pandey, CoFounder and CTO, Ecozen Solutions says, “India being in the top spots of production of fruits and vegetables, is mainly contributed by the technological advancements and improved scientific way of farming, but the irony is we lack prominently in the post-harvest management of the produce, effect of which is reflected on the prices of food. The lack of refrigerated transport and inadequate high quality cold storage facilities for both food producers and food sellers (retailers) have been widely cited as the primary reason for food wastage in India. In-spite of being the one of largest producer of fruits and vegetables, globally we stand 15th when it comes to export and we occupy just one per cent share of it. One of the major reasons for this is lack of modern facilities like pack-houses and cold rooms at the farm level to pre-cool and also reefer transport to ensure these commodities reach the consumption point in the right condition. Pack-house development which is the key post-harvest point and prepares the fresh farm produce to enter the cold chain conduit is required greatly. Also, pack-house is the main decision maker for routing the agriculture produce to fill the demand-supply gap in the nearby markets/mandis.” He further adds, “Major gaps are lack of cold storage on -farm, in-transit (affordable mini reefer trucks) and at the exchange level (mandi level) where actual transaction between buyer and seller takes place. Development of coldchain infrastructure is the need of hour that is formed by cold-storage infra, transport/ reefer vans infra and development of infra at the point of consumption where the losses are all time high. Having a smart and sustainable cold chain will ensure that the supply demand imbalances are evened out thereby leading to better income for the producer and lower inflation for the consumer.”
cover story Tarun Arora, Director, IG International
Though government bodies have proved to be significantly helpful to entrepreneurs but the procedural delays and lack of funds end up delaying the projects and escalate overall cost of the project. If this can be linked to smooth delivery of subsidies and clear technical specifications of sanction of subsidy it will really help in boosting confidence of entrepreneurs applying for subsidies.
Retail cold chain Will it work in India? Food waste USD
Billion Annually in India
Present situation in India 6300
30.1 Million Metrics
11% Perishable Produce in India
How to make it work?
Roadblocks Lack of cold storage facilities Absence of suitable refrigerated transport modes
POLICIES AS A BOOSTER In this year’s budget, the Finance Ministry in order to promote the use of refrigerated containers, proposed to reduce the basic customs and excise duty on them to five per cent and six per cent respectively from ten per cent and 12.5 per cent. This move would boost the back-end infrastructure that is required to bridge the gap between farm and retail food business. Speaking in a positive tone, Arora says, “The retail food sector in India is currently the hotbed of economic growth. This sector has made noteworthy progress over the last two decades, with rise in disposable earnings, shift in youth populous and an attitudinal shift in consumer preferences. India is a domestic consumption driven growth story and therefore this support and encouragement to the retail trade will surely further drive consumption, which in turn will help manufacturing sector and in job creation.” Being positive about the move, Pandey also says, “This move from the Finance Ministry is a positive step towards developing the backend infrastructure, which will make these more affordable for the traders/wholesalers, especially to send local produce to farther
24 CargoConnect - DECEMBER 2016
•High Operating Cost (Per Cubic Meter) USD 60 in India
Build facilities near to source Technology interventions
USD 30 in West
•Huge Infrastructure Cost
markets with quality and conditions; thereby, reduce the wastages happening during transportation. Right distribution from source to sink happens with this measure.” Prasad puts his point forward by saying, “The Union Budget 2016-17 gave a push to the cold storage segment of the logistics sector. The current five per cent basic customs duty rate offered for projects importing cold storage and cold room was extended to include cold chains. Decreasing the customs and excise duty on the refrigerated containers has given a huge advantage to strengthening the backend infrastructure in the food supply chain in India. This has enabled the efficient and effective upgrading of the cold storage warehousing in India at much lower costs. This will not only mean addressing an essential link in the economy, and ensuring benefits to the farming and the retail community in terms of increased business but, this also benefits the economy by avoiding wastage and pilferage of perishables like fruits and vegetables. As this ensures a resultant lower farm to retail price spread, the benefits of which can reach the end consumers in form of lower retail prices of retail food items.” Goyal asserts, “We
Leveraging Govt Incentives
welcome the decision of Finance Ministry to cut down the import duty rates to promote reefer vans but lot of work still remains to be done for favourable results. The farmer and trader should be well aware of technical and financial importance of use of reefer vans. To get the things started, the logistics fares of reefer vans should be kept at par with normal vans.” Dileep Naik, Managing Director, Reema Transport Pvt Ltd has a different view altogether. He asserts, “Though we do not envisage any direct impact of the reduction in basic customs and excise duty for the import of reefer containers, we are of the firm opinion that this move will certainly bring in competition from outside and will lead to drastic improvement in quality and content which will impact the cold chain segment as a whole in the country.” On the other hand, Agarwal says, “Reduced cost of infrastructure will help faster scaling up and controlling costs at the same time, making it more viable for farmer/ supplier to use such infrastructure, thereby reducing wastage.” The Indian government is taking steps to improve the cold chain infrastructure, by recognizing the cold chain industry as a sub sector of infrastructure
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cover story Rahul Agarwal, Director, Kool-Ex Cold Chain Ltd
The Ministry of Food Processing, Govt. of India has earlier stated that there is wastage of more than 25 per cent of Fresh Produce in India due to improper storage and transportation networks, especially in the cold chain. The government is also offering subsides to the private sector to push the growth of such Infrastructure.
in the union budget and creating an additional budget to construct new cold storage facilities. In addition, the private sector is being encouraged to develop the cold chain industry further, by implementing the latest and most effective refrigeration technology solutions available today. Reacting in a positive manner to the budget, Gubba asserts, “The proposition of the reduction of basic customs to five per cent and excise duty to six per cent can be a boost to the cold chain industry. In the sense of an opportunity for new entrepreneurs to venture into cold chain as well as for the existing entrepreneurs to add value to their existing
fleet. Indirectly, it’s an incentive to boost the economy where effective distribution leads to an increased consumption of cold chain preserved products.”
THE RIGHT PUSH FOR DEVELOPMENT The cold chain infrastructure in India is being rapidly upgraded with the assistance of very generous grants from the Government of India through its arms like National Centre for Cold-Chain Development, National Horticulture Board etc. These bodies have, in a way, assisted the entrepreneurs in investing in the cold chains in order to provide scaling
heights to the development of cold storage facilities in our country. For private players the high level of initial capital required to construct a cold chain unit continues to be the biggest challenge. But if the government pitches in with a clear plan and promotes more PPP initiatives in this field, we could see a momentum growth in the cold chain industry in India. Gubba rightfully asserts, “Yes, the government has been supportive to encourage cold chain business through monetary grants as well as educative support for technology and training. With growing population and increasing food needs of the world, preservation through cold chain is the
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cover story Vivek Pandey, co-founder and CTO, Ecozen Solutions
The lack of refrigerated transport and inadequate high quality cold storage facilities for both food producers and food sellers (retailers) have been widely cited as the primary reason for food wastage in India. In spite of being the one of largest producer of fruits and vegetables, globally we stand 15th when it comes to export and we occupy just one per cent share of it.
need of the hour. The state governments are also seen to be a step ahead in identifying the individual gaps and granting extra support. All these initiatives encourage new blood into the various verticals of cold chain market to enhance the service experience and adding new technology and employment opportunities. With more fleet added to cold chain logistics industries like dairy, farming, floriculture and processed food can benefit enormously by expanding their operational areas, creating more revenues.” Speaking on the same lines, Pandey says, “Alse, one
of our esteemed customer from Parbhani, Maharashtra, is a progressive farmer and he uses modern ways of cultivation. For better quality yield, he is now using Ecofrost (solar cold room by Ecofrost Technologies) to safeguard fruits and vegetables from onfarm post-harvest loss by storing them in it. He availed the subsidy on Ecofrost through National Horticulture Board under NHM scheme and was benefitted. He also availed the bank loan from states owned banks under this scheme after he received NHM/NHB letter of intent. In Toto, his efforts yielded good results through support of NHM/NHB under the aegis of Ministry of Agriculture.
28 CargoConnect - DECEMBER 2016
With now MNRE also promoting cold rooms under its subsidy scheme, like Alse, many others have shown interest in owning Ecofrost to arrest farm losses. We feel role of NCCD and NHB combined with innovative products and models will be critical in driving development in this sector.” With a large number of global food and retail chains targeting the India markets, FDI in retail is just around the corner and is likely to be implemented soon. Then government is also promoting the food safety and security bill which would further demand storage and cold chain facilities in order to reduce the amount of food wastage. With the expected future development in road and rail infrastructure, along with the changing lifestyle of the Indian consumer – Indian cold chain industry is expected to grow at a CAGR of 28 per cent over the next three years and reach a market size of $13 billion in 2017, although it is largely unorganised in nature. Thereby, presenting a great opportunity for foreign players. But for this to happen, the government will have to play a very important catalyst role. Goyal feels, “NCCD, NHM, NABARD and NHB all have supported a lot in the last 15 years and so a sizeable storage capacity is there all over India. Now, we need their support in modernising and upgrading of existing cold storages so that they can survive in global arena. Advanced studies and researches of storing methods according to our requirements is the need of the hour.” The main objectives of the NHB are to improve integrated development
of horticulture industry and to help in coordinating, sustaining the production and processing of fruits and vegetables. Through these bodies, government is in the process of providing financial assistance to entrepreneurs for setting up food processing industries which will help avoid wastage of perishable products. This scheme has the potential to encourage farmers to become entrepreneurs and start their own food processing or cold chain transportation ventures. The development of cold chains will exponentially increase farmers’ incomes, reduce waste, and further strengthen the agri-supply chains. Naik mentions, “The various bodies of the Government of India have been set up to assist the entrepreneurs in investing in the cold chain segments to scale up the development of cold infrastructure. While this move is commendable, its implementation is not visible across the segment and most of it has more or less remained on papers. The center must seriously look to implementing the proposed schemes and ensure that it does not remain just a proposal on paper. To make this happen, the government must involve all the beneficiary segments of the economy including the agro and manufacturing fraternity such as pharma, logistics and warehouse sector and all concerned who have a direct stake.” On the other hand Agarwal feels, “As per the records of the MOFPI, such bodies have helped entrepreneurs in scaling up. However, the private sector is still wary of approaching such bodies due to the long and cumbersome processes and time involved in availing such grants”. While Arora asserts, “Though it has proved to be significantly helpful to entrepreneurs but the procedural delays and lack of funds end up delaying the projects and escalate overall cost of the project. If this can be linked to smooth delivery of subsidies and clear technical specifications of sanction of subsidy it will
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cover story P S S Prasad, President, Apollo LogiSolutions
Solar powered cold storage is a new concept in the Indian market, but is slowly gaining credence and usage. The application of this natural energy source, on account of it being renewable and being a never ending energy supply source, makes it very cost effective and highly energy efficient. In the Indian context, this will further aid in bringing cost effectiveness as even though usage of solar as an energy source is a new concept, the volumes to be addressed are high.
really help in boosting confidence of entrepreneurs applying for subsidies. Sometimes there can de deductions later on in approved subsidies which are approved by technical committee but subject to final approval of the deputy directors at the time of final inspection which can significantly cut subsidies on same design approved by technical committee. So if such lacunas are communicated to entrepreneurs at the time of issuance of LOI than it can be clear to him before going ahead with the project.”
COLD STORAGE GETS SOLAR In a bid to boost the use of solar powered cold storages, the Ministry of New and Renewable Energy has extended its subsidy scheme to solar refrigeration units as well. Most solar powered items, including solar lamps and solar heating systems, enjoy 30 per cent subsidy under different MNRE programmes. There are barely ten solar cold storages being used
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in the country so far, the first having been installed about three years ago. Costing around INR 30-40 lakhs, they are manufactured by a handful of private companies such as Ecozen Solutions and Promethean Power Systems. They mostly use phase change material as insulation to trap solar energy for refrigeration purposes, along with battery backup. The cost of operating cold chain storage or a vehicle is high. Nowadays concept of solar powered cold storage is gaining pace in the Indian Market. Taking about the integration of solar power in cold chains, Prasad has a very interesting point to make. He said, “Per various estimates, in India, 30-40 per cent of the harvest produce is lost due to lack of cold storage facilities from the point of produce to consumption. These, and even the available mobile cold storage units, are power intensive giving rise to higher prices of agri products when they reach the end consumer. Solar powered cold storage is a new concept in the Indian market but is slowly gaining credence and usage. The application of this natural energy source, on account of it being renewable and being a never ending energy supply source, makes it very cost effective and highly energy efficient. In the Indian context this will further aid in bringing cost effectiveness as even though usage of solar as an energy source is a new concept, the volumes to be addressed are high, with majority of India being an agri based economy. This means that the potential uptake of solar powered cold storage can be expected to be high among the primary users, i.e., farmers and other stakeholders in the agri supply chain thus bringing down costs.” Talking about the same, Pandey says, “Ecofrost Technologies has developed an innovative solar powered cold room system called Ecofrost for storage of fruits, vegetables, flowers and other perishables. Ecofrost incorporated several breakthroughs, patent pending technologies that made this product suitable for a reliable operation in the field. Ecofrost harnesses solar energy from PV panels which is fed directly to the compressor via a drive that works on algorithms developed by us. This ensures maximum utilisation of solar power generated while accounting for variations in solar insulation, variations in load inside the cold room (depending on time of day, amount of produce loaded, location, etc.) and user’s set points. The innovative thermal storage technology provides backup up to 30 hours during non-sunshine hours. The passive thermal storage design that we used allows for efficiency close to 100 per cent and works on radiant cooling than forced convection alone. The system is completely portable and can be shifted from one location to another with great ease. Idea of portability is to utilise the unit for different
5 steps for Farm-To-Fork Connectivity Transport
Point of origin
Prepare and pack for travel
Ship to destinations Back-end 1
Select and Pre-condition after harvest
seasonal crops grown across different regions. The system also has the capability to charge itself completely with just five to six hours of grid power. It automatically detects critical conditions, i.e., it will switch to grid to charge the system in case of poor sunshine days. To answer precisely, solar is cost competitive with respect to diesel. Soon it will be cost competitive with respect to grid power as well. Importantly it is a more sustainable and efficient way to build the cold chain and demonstrates long term vision for infrastructure development. Apart from cost effectiveness it also acts as an enabler in regions where grid power is not available or not reliable.” On the other hand, Arora feels, “India’s cold chain is at a very nascent but fast growing phase and international players with large investment appetite and gestation period can play a pivotal role in developing modern infrastructure for the Indian market. This initiative is really beneficial as it can operate at temperatures as low as -40°Celsius and cuts energy cold stores costs by at least 75 per cent with solar power energy in combination with LED lighting cold storage. There are barely ten solar cold storages being used in the country so far, the first having been installed about three years ago. Government support should enable many more to be set up.” Goyal, on the other hand, said, “Putting up solar power projects in cold storages is
32 CargoConnect - DECEMBER 2016
Prepare and pack for travel
discussed in every meeting. We are waiting for effective solar power policy by both central and state government. The project cost still seems to be high despite of the prices going down considerably in the last six months. We are also hoping for the best appropriate and specific design for cold storages.” Speaking in a positive tone, Agarwal says, “We are currently running four cold rooms on solar power since 2013. While there is an initial capital investment, the life of the solar plant can go up to 25 years thereby giving a payback in seven to eight years and onward ROI. Since this is a clean and efficient source of energy, it will work to the advantage of the infra development, provided the capital cost can further reduce and if government supports the same by grants/ subsidies to SME segment.” Meanwhile Gubba is of the view that, “The potential of the solar energy is beyond assessment. It is environment friendly and generates power without depleting resources for our next generations. Installation of solar power in cold storages is anywhere between INR 20-30 lakhs. Considering the shelf life of a solar powered cold storage is around 15 years, the return on investment is achieved in around 10 years. While setting up a conventional cold storage costs half of solar powered ones, but requires grid power which scale up their running costs. India definitely needs to optimise its cold chain efficiency. Government here needs to step up by educating about its grants
and subsidies to the cold chain players and encourage in choosing solar power by giving better opportunities.”
THE WAY FORWARD Globally, cold chains have now become an integral part of supply chain management for the storage and transportation of temperature-sensitive goods. The focus has now shifted from increasing production to better cold storages and transportation of food produce. The utilisation of cold chain logistics includes both cold storages and refrigerated transportation and is used to increase the shelf life of food produce. With 35-40 per cent of agricultural produce in India being wasted due to lack of proper cold storage facilities, it is immensely important that a focused effort is required on part of the government to encourage the use of cold chain among market participants. The key factor that will decide how the cold chain sector grows over the next few years would be how strong, and how sustainable, the investment flowing into the sector is. Increasing investments from large business houses to create a backup for their interests in the retail sector, as well as increasing willingness on the part of consumers to pay a premium for higher quality of food products, and thus helping in equitable distribution of the cost of a strong cold chain infrastructure, will drive the growth of the industry.
Kings Road of the
Since the early 1900s, trucks have played a very important role in helping countries develop and prosper, in particularly helping create a fairer distribution of wealth and jobs between urban and rural areas. Their flexibility meant that producers, businesses and people could live and work almost anywhere. Tariq Ahmed takes the long route to understand why the road transportation sector is still the most preferred mode for the movement of freight across the country, while collecting insights from industry experts on the way
34 CargoConnect - DECEMBER 2016
n an average, road transport today carries more than 80 per cent of inland freight volume. Mor e t h a n 6 ,0 0 0 bi l l ion tonne-kilometres of goods are transported each year by road in the EU, USA, CIS, China and Japan alone. In modern economies, 85 per cent of road freight tonnage is carried over distances of 150km or less – along routes for which no other form of transport would be realistic. Less than one per cent gets carried over 1,000 km. Road transport is vital to the economic development and social integration of our country. Easy accessibility, flexibility of operations, door-to-door service and reliability have earned road transport an increasingly higher share of both passenger and freight traffic vis-à-vis other transport modes. According to a Working Group Report on Road Transport for the Eleventh Five Year Plan, transport sector accounted for a share of 6.4 per cent in India’s Gross Domestic Product (GDP). The composition of various sub-sectors of the transport sector in terms of GDP is given in the table below.
that have a share of the freight transport of the country. Measured in billion tonne kilometers (btkm), rail and road account for 86 per cent of the freight transport while the other modes account for 14 per cent. One of the major concerns of transport i n frastr uct ure pla n n i ng is the nonavailability of authentic data, especially in the road domain. The last attempt at a scientific sample survey based study on freight transport was conducted in 2007-08 at the behest of the then Planning Commission by RITES. It is time that we put together a mechanism for a more scientific and periodic collection of road data. It should be noted that this information is electronically available with a large number of trucking companies and shippers. The cost of transport by road per tonne kilometre isn’t the cheapest but it’s still preferred because of multiple reasons. Points that are taken into consideration include: nature of the cargo (since there are many items that cannot be carried in any other modes or must not be handled at multiple points), time of transit (because we forget
Share of Different Modes of Transport in GDP Sector
1999-00 2000-01 2001-02 2000-03 2000-04 2000-05 As Percentage of GDP (at factor cost and constant prices)
Transport of which:
*Services incidental to transport.incidental to transport.
Amongst all the modes, rail and road transport are the most significant ones. The modal share between these two has changed over the years, from the 80 per cent rail share in 1950-51, to the road share becoming 65 per cent in 2011-12. Road overtook rail in the early 90s (Figure 1). This shift was a consequence of the inability of the Indian Railways to provide the required capacity or to meet the expected customer service, while road transport could provide door to door service. Further, during the last two decades, road infrastructure expanded rapidly on account of focused policies and investments. However, it is important to note that apart from rail and road, there are four other modes
to account for the time needed to transport cargo to the destination from a port, or the time required for clearance by the port authorities, etc.) and overall cost (which is usually quite high when we involve multiple modes of transport simply because of the cost of shifting from one mode to another and cost in terms of time delays and control/ checks due to the extra handling required). So it’s confirmed that for short distances only road transportation works and it’s debatable that the other modes are good for longer distances but that requires thorough planning and costing for all possible things. According to Praveen Somani, Director, Inland Logistics, most customers use road
transportation because of its simplified processes, a nd due to the last m i le connectivity it provides. “It offers multiple choices for shippers from small to large loads and light to heavy, plus all product categories can be used. Also, there are other factors like fewer barriers to entry, so many competitors bringing the cost down, low capex commitment towards infrastructure for service provider or shipper. It has been able to offer large employment opportunities even to the lesser skilled population. Moreover, multiple value additions are possible,” he was quick to reiterate the pros of road transportation. The features that make road transport a preferred mode for transport of goods are: -Less capital investment as compared to other modes of transport like railways and air transport. The costs for constructing, operating and maintaining roads are lesser than railways. - Road transport involves warehouse to warehouse deliveries which in turn reduce cartage, loading and unloading expenses. - Road transport is most suited for carrying goods and people to and from rural areas (which are not served by rail, water or air transport) and ensures last mile connectivity between large towns and small villages. - It is a transport option which ensures more flexibility in terms of routes and timings, as these can be adjusted and changed to individual requirements without much inconvenience. - Road transport is a faster and economical option when it comes to transporting goods over short distances. Also, delays in transit of goods on account of intermediate loading and handling are avoided as there is a single point loading of goods involved which are then transported to the end destination. Further
DECEMBER 2016 - CargoConnect 35
The transport and logistics sectors are fundamental to development of any country. To maintain this robust growth in services and manufacturing industries, there has to be adequate development in the logistics sector. The elements of logistics cost are transportation, inventories, losses, packaging and warehousing activities. The road freight industry in India is worth about INR 1.50 trillion and is growing at about eight per cent year on year which leaves no option but to improve our transportation and logistics system to support this growth. Ajay Khosla, DGM Delhi, Jaipur Golden Transport Co Pvt Ltd
country. To maintain this robust growth in services and manufacturing industries, there has to be adequate development in the logistics sector. The elements of logistics cost are transportation (35 per cent), inventories (25 per cent), losses (14 per cent), packaging (11 per cent) and warehousing activities (9 per cent). The road freight industry in India is worth about INR 1.50 trillion and is growing at about eight per cent year on year which leaves no option but to improve our transportation and logistics system to support this growth.â€?
Figure 1: Freight Traffic: Roads Overtake Rail 1,600 Traffic Carried by Rail
Billion Tonne Kms
Traffic Carried by Road
1,200 1,000 800 600 400 200 0 1950-51
100 90 80 70 60 50 40 30 20 10 0
Percentage Share by Rail Percentage Share by Road
when it comes to shorter transport routes and single point loading and unloading, there is lesser risk of damage, breakage, etc. of goods which usually happens in transit.
motor transport is less. The actual cost is less because surface transport saves in packing costs and the expenses of intermediate loading, unloading and handling charges.
-The time taken to transport goods through the road route is lesser than railways or water transport. Additionally, when it comes to transportation of goods through the railways or in waterways, lot of time is taken in booking the goods and taking delivery of the goods.
-Last mile connectivity, whether it is the beginning of the goods journey or the end is provided by roads. Surface or road transport act as feeder to the others such as railways, ships and airways. On similar lines, Ajay Khosla, DGM Delhi, Jaipur Golden Transport Co Pvt Ltd, said, â€œIndian industries are witnessing tremendous growth; the economy is growing at above eight per cent and has become one of the fastest growing economies in the world. The transport and logistics sectors are fundamental to development of any
-The cost of operation and maintenance is also comparatively less in road transport. Even if the rate charged by motor transport is a little higher than that by the railways, the actual effective cost of transporting goods by
36 CargoConnect - DECEMBER 2016
Loopholes lurking around While road movement is preferred to rail, road movement has its own set of challenges. They are: 1. Road network coverage- Freight movement in India is dependent on national highways. While NH constitutes only about two per cent of the road network of India, they carry 40 per cent of total traffic. As a result, most of these highways are severely congested resulting in freight travelling only a third of the distance as compared to the developed countries. 2. Poor road quality- The road quality in India, on the NHs as well as the roads is improving but is still poor in many locations. Estimates suggest that motorable roads are still less than ten per cent of the total road network. 3. Expressway network will take time to develop- In many developed countries, expressways have been developed to facilitate high speed freight movement through linking of important cities, ports and industrial centers. In India, the expressway network is still largely at a planning stage with a target of development of around 15000 kms of expressway only by the end of 13th plan period. 4. High level of fragmentation of the
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Both central and state governments are taking steps to reform the transport sector. These include increasing funding to strengthen the surface transportation mechanism, speeding the development of National Highways and accelerated development of interconnecting road network in India. There is still a lot to be done before results can be seen to improve the logistics infrastructure in India. PSS Prasad, President, Apollo Logisolutions
trucking industry- The trucking industry in India is largely fragmented and in the hand of small truck operators. Estimates suggest that nearly 70 per cent of the truck owners in India own between one to five trucks. Due to this, there is fierce competition amongst operators leading to truck owners resorting to overloading to recover investments. 5. Multiple checkpoints- Trucks in India have to pass through multiple check points in their journey. Trucks have to stop at state borders, for payment of toll taxes, for RTO inspections, etc. In recent years, various efforts have been made by the central government to brace the national highways and also to improve rural road connectivity. Despite this, the road network remains inadequate in many respects. Indian national highways are the foundation pillars of country’s infrastructure and India has one of the largest road networks in the world with approximately five million kms length but the quality of road infrastructure is still worse as compared to the other developed countries and stoppage of truck at state border check posts create a shoddier scenario. It’s estimated that 40 per cent of the transit time lost are due to these avoidable stoppages.
The road quality in India, on the NHs as well as the roads is improving but is still poor in many locations. Estimates suggest that motorable roads are still less than ten per cent of the total road network.
Bh av ya s sh A ga r wa a l , D i r e ctor, KargaIndia Roadways Pvt Ltd said, “Problems in the infrastructure definitely increase the cost of the users, as the transport companies have to incur extra costs because of depletion in the life of vehicles, heavy wear and tear, wastage of fuel, increase in turn around period, etc., all of this causing the transporter to keep an extra inventory of vehicles and man power.” Apart from infrastructure issues where development is already ongoing, there is scope of substantial improvement and of which many are being tackled by the government and should show results in the years to come. GST implementation next year is going to ease the stoppages at check post, reducing the transit time
for vehicles. e-Toll has already been introduced and various possibilities like Fastag has been made available. Shortage of driver and employees are being tackled with skill development approaches. However, what remains important is the mechanism to guarantee payments from shippers, which have impacted the balance sheet of many small service companies. Sumit Sharma, co-founder, GoBolt has a similar view on this. He adds, “Availability of drivers is a major challenge in this sector. Also, different tax structures in states leads to long waiting time at the borders, which leads to overall lower asset rotation in trucking industry and overall cost increases.” Certain other inefficiencies that hinder the road transportation sector in India are listed
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Proper lanes and special road engineering, keeping in mind commercial vehicles, parking spaces, equally distributed fuel stations, less paper work at state borders will definitely help. Apart from this, a way of matching of supply and demand at various locations across India will help reduce the overall turnaround time. At Kargaindia Roadways we’re working on a technology based solution for this, which could help reduce the transport freights by a minimum of 25 per cent easily and hopefully make this industry more reliable and efficient. Bhavyassh Agarwaal, Director, KargaIndia Roadways Pvt Ltd
A factor which is a hindrance in the faster development of road freight transport is that it is highly fragmented and run mostly by private operators most of whom own few trucks. below for your understanding. -When it comes to transporting goods in the rainy season, rail is a safer mode of transport than roads. The safety factor holds true when we consider that there are more chances of accidents and breakdowns in case of motor transport. -Surface transport is unsuitable and costly for transporting cheap and bulky goods over long distances. -Road transport has the limitation of being slow in uneven and difficult terrains. -Surface transport sector is comparatively less organised, irregular and undependable. The cost system is also unstable and unequal. A factor which is a hindrance in the faster development of road freight transport is that it is highly fragmented and run mostly by private operators most of whom own few trucks. Indian trucking industry comprises large number of smaller players who are sometimes different from operators, forwarders, booking agents,
40 CargoConnect - DECEMBER 2016
brokers, private financiers, etc. It is mostly an unorganised sector with majority transporters with fleet smaller than five trucks, accounting for over two-thirds of the total trucks owned and operated in India and make up around 80 percent of revenues, according to sources from India Logistics Outlook.
For a better network of roads The Ministry of Road Transportation and Highways is working on widening of single and double lane highways into four lanes or six lanes as per the international norms. In last financial budget, finance minister announced a budget that laid considerable emphasis on infrastructural development of transport and logistics sector; an allocation of INR 70,000 cr. to expedite the opening out of highways, in addition to an investment of INR 27,000 cr. to build-up rural roads with an added investment from the respective state governments. Government also provided clear road map for
GST implementation to rationalise the overall tax regime and drive growth in the industry. P S S P r a s a d , P r e s i d e nt , A p o l l o Logisolutions, tries to paint a clear picture of the initiatives taken by the central and state governments. He said, “Both central and state governments are taking steps to reform the transport sector. These include increasing funding to strengthen the surface transportation mechanism, speeding the development of National Highways and accelerated development of interconnecting road network in India. There is still a lot to be done before results can be seen to improve the logistics infrastructure in India. Also, government functioning needs to be fastened further to remove the bottlenecks that exist in long route freight transportation through the road route. One is the multitude of taxes and duties which need to be immediately replaced with a uniform Goods and Services tax.” Bhavyassh expressed his views by saying, “Proper lanes and special road engineering, keeping in mind commercial vehicles, parking spaces, equally distributed fuel stations, less paper work at state borders will definitely help. Apart from this, a way of matching of supply and demand at various locations across India will help reduce the overall turnaround time. At Kargaindia Roadways we’re working on a technology based solution for this, which could help reduce the transport freights by a minimum of 25 per cent easily and hopefully make this industry more reliable and efficient.” Sumit lists down certain things that can bring about a change to this sector. They are: 1. Smooth implementation of GST 2. I mprove me nt of so cio-e colo g ic a l conditions of drivers (e.g. working hours, salaries, health, food, sanitation, etc.) 3. Penetration of technology to bring efficiencies in the sector.
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Infrastructure & Advantages Customs notified area. Customs bonded warehouse. State of the art security & surveillance. Covered warehouse facilities of over 4,50,000 sq. ft. under one roof with modern racking systems which can house more than 40,000 pallet spaces. 3PL facilities. Flexi warehousing. Robust fleet of company owned vehicles, monitored & tracked electronically. 24/7 operations with CCTV monitoring. Automobile logistics services. Spread over 40 acres of land. Over 6000 TUEs per month, i.e. 72,000 TUEs per annum. CFS owned equipment: 5 Top Lifter, 80 Trailers, 30 Forklift, 2 Empty Handles, 1 Crane. Direct access to the National Highway 17, from Panvel to Goa. Distance from Panvel station: 6 Kms.
Covered Warehousing Facility
CFS & Logistic park at same location
JWC logistics Park Pvt Ltd, National highway 17, Panvel Goa Highway, Village Palaspe, Panvel, Maharashtra - 410206 2143- 661952 2143-661900 (100 lines) email@example.com firstname.lastname@example.org email@example.com
3PL Admin Building
As bulk of the freight movement is done through national highways, their development would lead to reduction in transit time, which in turn reduces the inventory cost, ultimately reducing the cost of goods to the end consumer. Also, better infrastructure would further increase the share of transportation through road, thereby leading to more jobs created in the sector. Sumit Sharma, Co-founder, GoBolt
4. Infrastructure development (freight corridors, smarter warehouses) 5. Skill development in trucking sector (training and development of drivers/ logistics managers etc to improve efficiency of the sector)
Initiati ves taken by the Government The government is on its way to make 44 highway stretches totalling 27,000 km to be developed as economic corridors for seamless movement of cargo vehicles, reducing delays, deepening economic activities and creating jobs. This will further help in decongesting 30 top cities in the country as it will involve building ring roads and logistics hubs along these corridors. These stretches pass through and connect major hubs of economic activities such as manufacturing clusters and ports, and have been identified as economic corridors. The new plan is expected to be completed in six years. “This network is expected to carry 80 per
42 CargoConnect - DECEMBER 2016
cent of the country’s freight and will ease the burden on the existing road network in India. This programme called the ‘Bharat Mala’ programme is a highway project that will enable seamless connectivity by linking ports, logistic hubs, border areas and will aid in boosting cargo movement and increase exports,” said Prasad. It is a very welcome step from the government to improve the efficiency in the sector. As bulk of the freight movement is done through national highways, their development would lead to reduction in transit time, which in turn reduces the inventory cost, ultimately reducing the cost of goods to the end consumer. Also, better infrastructure would further increase the share of transportation through road, thereby leading to more jobs created in the sector. Better roads would also lead to lesser enroute damages of the goods, thereby having an overall effect in the profitability of all sectors. Bhavyassh added, “This is definitely required and will help the industry in
more than one way. This along with the government’s efforts to promote waterway transport along the southern coasts will definitely bring about a huge difference in the cost of transport that the users have to pay for right now. Though it’s all dependent on how fast and efficiently it’s all implemented. I personally feel the government should use the set of experienced transport and logistics business owners to help speed up these things; we could be of real support in the process.” Ajay reaffirms that India is already prepared for a shift to the next level of logistics growth trajectory, the need of the hour is for the government to bring about the necessary infrastructural changes and announce regulatory policies and measures to chalk out a roadmap for the logistics sector in the coming years. The new initiatives are bold and will have a significant impact on the industry as many of these routes are the most used trade routes. However, what needs to be understood that any of these new developments will take a minimum of ten years to take shape and start working towards the betterment of the industry.
In the wake of GST Apart from the planned infrastructural reforms mentioned in the previous points, government efforts to finally introduce legal and taxing reforms such as GST are major positive moves for this sector. Apart from cost reduction, faster turnaround and more optional warehousing networks and manufacturing locations, GST will reduce paper work and the many problems connected with it. Most of our crew are more skilled/experienced than educated, thus additional paperwork along with having to deal with authorities at state borders is a bigger burden than actually managing the
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GST has been the much awaited bill for the seamless movement of trade. This will definitely ease multiple bottlenecks. Shippers have started redrawing their supply chain charts towards improved efficiency. However, the transition form old to new is always painful and we look forward to further guidelines to access real impact. Praveen Somani, Director, Inland Logistics
cargo in transit. This move of abolishing various indirect taxes and implementing Goods and Services Tax will automatically bring a sense of positive impetus to the industry players. Praveen said, “GST has been the much awaited bill for the seamless movement of trade. This will definitely ease multiple bottlenecks. Shippers have started redrawing their supply chain charts towards improved efficiency. However, the transition form old to new is always painful and we look forward to further guidelines to access real impact.” Prasad points out to certain reports on the subject of GST that talks about its impact post its implementation. He pointed out, “A new report by CARE Ratings on the Logistics industry titled ‘Impact of proposed GST on Indian Logistics Industry’ says that the industry is expected to clock a CAGR of 15-20 per cent in the period 2015-16 to 2019-20. This means that with application of GST, the logistics costs will come down by up to 20 per cent. In addition to passage of the GST bill, it is equally important to implement measures as introduction of dedicated freight corridors, effective warehouse management, development of consolidated warehouses at strategic locations, skill training
44 CargoConnect - DECEMBER 2016
pertaining to the logistics industry and a supportive business environment for the emergence of the e-commerce industry. But, it is the passage of the proposed GST bill that will have the biggest positive impact on the logistics industry in India. It will ensure that India becomes a major manufacturing hub, create jobs, lead to corporatisation of the logistics sector and fasten the process towards making India an economic superpower. GST would lower the requirements of warehouses as industries such as FMCG historically had put warehouses for primarily stock transfer purposes (to take benefits of CST). With GST putting a common regime, such requirements would reduce, thereby lead ing to consolidation of warehouses. Additionally, lesser warehouses would shift the focus to reliable road transportation, thereby increasing the reliance on professional service providers. This would ultimately lead to consolidation in this sector, with professional transporters holding a bigger share in the industry.
Conclusion To conclude, we draw upon a ‘five S’ framework which helps focus on the key priorities of any transport system, including the trucking sector. The transport system should be driven by speed with sustainability, safety, security and stresslessness. • Speed: The primary need of the trucking sector is speed. While vehicle technologies are moving in this direction, infrastructural and regulator y bottlenecks remain. There was a push on infrastructure last decade which has slowed down. Attempts are being made to re-
energise this. • Sustainability: Rail and coastal t r a n s p or t a r e t h r e at s t o t he trucking sector due to their better environmental impact. This can be combated by better technologies, maintenance and driving practices. There are efforts to limit the age of the vehicles and use improved fuel. • Safety: Indian roads kill the maximum number of people globally, in a country wise comparison. Road engineering, s i g n a ge s , d r ive r t r a i n i n g a nd licensing, driving practices and vehicle maintenance need significant attention. Post-accident support is also critical to minimise loss of life and limb. This would be addressed by better roadside support for emergency assistance. While the government is trying to arm itself with a new Transport and Safety Bill, a lot can happen even without it by focused action at the grassroots. Truck based video cameras and a ‘black box’ should be considered for better analysis of the causes of accidents. • Security: There are many situations where truck and cargo thefts happen. Vulnerable areas need to be identified for better security support. ICT, including truck based video cameras, can be used more effectively to bring in visibility. • Stresslessness: Studies have estimated that the economic loss due to damages on the road, vehicle and cargo would amount to two per cent of GDP. In addition, the driver is often stressed out, which also could be a cause of accidents. High quality road infrastructure, improved truck cab design for driver comfort and scientific cargo loading practices need the right amount of emphasis.
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Experimental Territ A
Logistics: the strong are getting stronger Looking back over 2016, the evolution of the logistics and supply chain industry might, at first glance, appear to have been imperceptible. Spend a little more time looking at all that has happened and it becomes clear that the pace of development and change has been, and continues to be, more rapid than one might realise.
Market domination First, the strong are getting stronger, with large players such as Amazon and DHL continuing to dominate the market. Indeed, Amazon’s dominance only seems to be growing. It has taken more and more space while continually looking for new opportunities to offer more services and own a larger part of its supply chain. Only last month, Amazon launched a free one-hour restaurant delivery service in a bid to outdo rivals Deliveroo and UberEATS.
Same day pays Secondly, same-day delivery and same-day click & collect are no longer a ‘nice-to-have’ - they are a ‘need-to-have’. Many of the traditional retailers continue to recognise the need to provide more and more convenient ways to marry customers with their groceries. Indeed, both Sainsbury’s and Tesco are rolling out same-day click & collect programmes, while Amazon, with its Prime members, has also launched its Dash touch-button technology.
Foreign investment continues to pour into the UK, highlighting the muted impact Brexit has had to date. While it would be
Foreign financial firepower Thirdly, foreign investment continues to pour into the UK with both new overseas e-tailers and investors entering the market. All highlighting the relatively muted impact that Brexit has had on the logistics sector to date. Companies such as China’s 4PX and US firm Wayfair have both leased major sites, while Korean, Singaporean, Malaysian, US and many other international investors have made significant acquisitions.
wrong to describe 2016 as a year of dramatic change, the nature of the logistics market is that it is in a perpetual state of evolution.
Location, location, location Finally, a focus on location has gained prominence. This has not just been about creating efficiencies, for example being located in the Midlands’ ‘Golden Triangle’, offering access to 85 per cent of the UK market within a four-and-ahalf-hour drive. It is also about sourcing suitably qualified employees in sufficient numbers from the area immediately surrounding a site. New technologies continue to have an impact on shopping habits and the expectations of the consumer are rising so fast that they create something of a barrier to new, smaller players trying to get into the market. With drone and driverless technologies just around the corner, and with the potential to raise the bar even higher, 2017 should be another interesting year.
46 CargoConnect - DECEMBER 2016
ory: Logistics in 2016 B
Trade and business uncertainty won’t hold back investment for APEC
Over half the businesses in APEC’s 21 economies (53 per cent) surveyed by PwC, plan to increase their overseas investments. This is despite reporting fragile confidence in the broader economic outlook and disappointment with progress on free trade. PwC surveyed over 1,100 CEOs in 21 APEC economies, in the run up to the APEC CEO Summit in Lima, Peru (November 17-19). Long term, it is good news for APEC economies, with over two thirds (69 per cent) of the increased investment expected to stay within APEC economies. China, the US, Singapore and Indonesia are set to attract the most. On average, APEC businesses surveyed invest in seven other APEC economies. Overall, just 28 per cent of all APEC business leaders remain very confident about revenue growth over the next 12 months. It’s the second year in a row CEOs have had a subdued outlook for revenue growth. Business leaders in APEC’s youthful, faster-growing economies have higher levels of confidence in near term revenue growth than before. These include the Philippines (65 per cent very confident in revenue growth), and Vietnam (50 per cent very confident). While more CEOs reported seeing significant momentum on free trade than before (22 per cent significant vs 15 per cent in 2015), the majority (53 per cent) still see progress as slow. At the same time, competition in APEC economies is intensifying. CEOs say the threat is rising from multinationals in emerging economies, and regional leaders in APEC economies. The biggest competitive threat remains multinationals from developed economies. Roger Kerr, PwC Treasury Advisory, says: “The US election outcome has resulted in greater uncertainty and concern for us around international trade deals. Our ongoing relationship with one of our biggest trading partners is up in the air and we don’t as yet know the full extent of the shift in their trade policies. Early indications are that trade policies will suffer from a more inwards looking Trump administration and New Zealand businesses exporting to the US will want to watch this space very carefully.”
Scenario A: Stock Transfer Sale Supply Chain Point
Landed Cost (in Rs.)
Margin (in Rs.)
Input VAT Credit (in Rs.)
Price Before Tax (in Rs.)
Total Tax (CST+VAT)
Final Price (in Rs.)
Scenario B: CST Sales to Distributors Supply Chain Point
Landed Cost Margin (in Rs.) (in Rs.)
Input VAT Credit (in Rs.)
Price Before Tax (in Rs.)
Total Tax (GST)
Final Price (in Rs.)
DECEMBER 2016 - CargoConnect 47
APEC CEO confidence fragile
Views on prospects for near-term revenue growth
15% Not very confident
Automation Leads the Way
• The Transportation Management System: More Prevalent, Yet Affordable Historically, shippers were unable to take advantage of a TMS unless the shipper processed an extraordinarily high volume of shipments. For many smaller shippers, utilising a TMS was simply out of the question. However, the rise of the cloud has changed that. The rise of software-as-a-service, or SaaS, applications will further level the playing field between large and small to medium-sized shipping companies. Essentially, today’s TMSs tend to focus more on cloud and web-based systems, which can be accessed by nearly any applicable party, while previous TMS systems were located on site and only capable of minimal communication.
• The Use Of Autonomous Vehicles and Drones Will Increase Think about what happened when Amazon announced that it was planning to eventually use drones to deliver products within an hour, if not minutes, of when the consumer places the order. Over the past few years, the use of drones has become increasingly common. As explained by Robert J Hall, president of Track Your Truck, Prime Air will eventually deliver products within 30 minutes of being ordered. Ultimately, this logistics technology is not yet ready for roll out on a massive scale. However, Intel recently set a world record for having the most unmanned aerial vehicles, which is simply the technical term for drones, flown in a single location, at the same time.
• Increase in the Use of Robots in Warehouses, Loading, Unloading, and Delivery in 2016 The GreyOrange Butler robotic systems take the legwork out of the picking process by bringing shelves to the pickers, and Fetch Robotics Freight has developed a mobile base and a mobile picking robot to make the physical workload of manually picking items and placing them in a given tote simpler and less strenuous. There are many other types of robotic systems in development, and more are being created to make the logistics industry run more efficiently. 2016 observed an increase in the use of robotic technology in more warehouses, when loading shipment and freight on tow trucks, when unloading shipment at distribution centers, and possibly when the item is delivered at the doorstep.
48 CargoConnect - DECEMBER 2016
Compiled by sana husain
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Being on time is great. Following this motto, the Indian Railway has come up with the new time tabled freight trains. Being Indiaâ€™s biggest bulk freight carrier, the railway industry is optimistic about the newly introduced freight trains which follow strict time schedules. With the help of industry experts, Nicin Varghese delves into this novel concept
50 CargoConnect - DECEMBER 2016
People. Partnership. Performance...
Infrastructure & Advantages Infrastructure Advantages 1) Storage of& 7000 pallet,15 identical chambers of 432 Custom bonded Pallets eachwarehouse. Import & Export hub. 2) Temperature range of +25Â°c to -25Â°c Buffer yard & factory stuff. 3) 24x7 Operational Hours Cold storage & cold chain. 4) VAS Facility of Processing, Repacking, Labeling & Storage area 28,000 sq. m. Sorting Direct access to the National Highway 4B leading to the JNPT port. 5) Customs Bonded Ample space for parkingArea of 10000 cargo trucks. 6) Operated reach trucks,forklifts & hand pallet movers 24X7 CCTV monitoring. CFS owned equipment: 4 Top Lifters, 80 Trailers, 30 Forklifts, 7) 2 Empty Handles, 1 Crane. 8) Inflatable Dock Shelters with Dock Levelers. Distance from JNCH: 11 Kms. 9) 100% Power back-up with multi generators Distance from Belapur station: 7 Kms. 10) Fire- fighting & fire prevention systems Zero toll, congestion & carting charges in the CFS. 11) LED eco-friendly lighting Zero congestion on the approach road. 12) ISO&22000:2005 HACCP Carting stuffing dine in coveredCertified area. 13) Reafer Vans & Support SecondaryForwarders. Distribution Ideal location for Exporters/CHA's/Freight Prompt carting of cargo. Wi-Fi enabled CFS.
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Total Protection from Rains: Carting Custom & Stuffing area: Completely BondedCovered. Area
15-23, National Highway 4B, Panvel-JNPT Highway Village Padeghar, Panvel-410206, Maharashtra +91 22 66280700-98 +91 22 66280781 email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org
Covered Warehousing Facility
he Indian Railway system is one of the largest transportation and logistics networks in the world. It operates around 19,000 trains daily, including 7,000 freight trains, over 65,000 kilometers of routes across 7,146 railway stations. In many ways, it is the lifeline of this country for both passengers and freight. Indian Railways have the distinction of being one of the four railway networks globally that carry more than a billion tons of freight annually. IR carries the entire gamut of goods, ranging from parcel traffic and small consignments, agricultural products, raw materials like iron ore and petroleum, and finished goods like automobiles. Over the last few decades, IR has made an effort to move away from small consignments or piecemeal freight, and to increase the number of block rakes where a shipper contracts for an entire rake assigned to carry a shipment. These are more profitable for IR as the rake does not have to be split up into or amalgamated from individual wagons going to or coming from different points, saving on marshalling time, transit time, and scheduling. Most of IR’s freight revenue now comes from such block rakes carrying bulk goods such as coal or cement.
Types of Freight Trains Departmental trains - Trains run for internal purposes of the railway, such as track maintenance or conveying equipment. They may be ballast trains or other material trains. Breakdown trains and other special-purpose trains for dealing with accidents are also considered to be departmental trains. Work trains - Trains used for short-distance movements of freight, especially small packages trans-shipped from long-distance freight trains. Shunting trains - They are used for moving wagons to different stations in a section, and are involved only in attaching and detaching such wagons. They are also known as section trains and pick-up trains . They are known as pilots if they run for a very short distance, for just a few stations. Road Vans - Trains with wagons that are actually loaded or unloaded with smalls at various stations are called Road Vans, transship trains or smalls quick transit. Road vans are a vanishing breed these days with the widespread use of block rakes and container traffic and increasing reliance on transshipment of goods from freight terminals to road transport for onward delivery rather than transporting smalls by rail.
Through goods trains - They are freight trains transporting goods from one goods yard to the next without stoppage at intermediate points. Long-distance goods- Also known as solid trains include various special long-distance freight trains that get precedence, such as the Freight Chief or other Express Goods trains with timetabled operations and guaranteed delivery time. Ordinary Through - The remainder of the through goods trains, which run at lower precedence, are known as Ordinary Through trains.
The Present Analysis Indian Railway’s overall share of freight has come down from 86 per cent percent in 1950–51 to 30 per cent in 2015–16. In the recent years, pipeline has captured significant share in Petroleum, Oil and Lubricants (POL) movement and coastal shipping has emerged as a potential competitor for IR. Due to lower prices, some bulk traffic like coal, iron ore, POL and even cement is now moved by coastal shipping. IR’s freight policy, where freight subsidises passenger segment, has had two major implications. On the one hand, it makes railway’s competitors in the
Indian Railways carries the entire gamut of goods, ranging from parcel traffic and small consignments, agricultural products, raw materials and finished goods. 52 CargoConnect - DECEMBER 2016
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feature Samir Kumar, Director (FM), Railways
Time tabled goods train are going to be the game changer. We are moving in the direction where we can assure some kind of transit time.
freight business more competitive even if they do nothing because railways have priced themselves out. On the other hand, low passenger fares result in greater demand for rail services reducing capacity for freight movement. Above all these, the non availability of a pre-scheduled time table for freight trains also keeps the customers away from railways.
The Major Solution The Minister of Railways Suresh Prabhakar Prabhu proposed three solution sets for reversing the trend of declining modal share of freight trains – expanding the freight basket of Indian Railways, rationalising the tariff structure and building terminal capacity. Introduction of time tabled freight trains will reduce the unpredictability on the arrival of goods. “Typically people used to think when will the goods train reach. You required an astrologer and needed to be lucky. Now we are sure it will reach in particular time. We are taking responsibility and this is going to reduce the time by almost half”, Railway Minister Suresh Prabhu said during the launch of service. The Minister flagged off the first time tabled freight train on June 15 of this year. The container train named ‘Cargo Express’ ran between Domestic Container Terminal in
54 CargoConnect - DECEMBER 2016
Okhla (Delhi) and Bengaluru. Another train is also introduced to connect between Delhi and Chennai. The transit time for both the services is of 70 hours on each side. The new venture is an attempt to attract incremental volumes of container traffic to rail mode. CONCOR estimates the volumes of containerised traffic in this sector to improve by 25-30 per cent with the introduction of assured transit times which would be improving by 45 per cent from present levels. According to Samir Kumar, Director (FM), Railways, time tabled freight trains will make revolutionary changes. “Time tabled goods train are going to be the game changer. We are moving in the direction where we can assure some kind of transit time. There are different varieties of cargo which need time bounded transportation. For example, perishable products, they are time sensitive products. And to that extend, time tabled goods train can be a game changer.”
A Boon for the CTOs? Container train operators (CTO) have been demanding trains with assured transit time for many years now. A few years ago, the Railways had launched assured transit time trains on certain routes with higher freight charges than those on which it did not
charge any premium. This time, the Railways launched time-tabled train for containerised cargo without charging a premium on existing freight charges. Kamlesh Gupta, President, Association of Container Train Operators (ACTO), explained their problem area. “What we need are fixed transit times. There should be less deviation in usual journey time taken by trains between two points,” Gupta shared. He added that an assured transit time in a domestic circuit will help a limited number of customers, while a similar offer in an export-import route will help create a land bridge between the two ports, helping them widen the customer portfolio by serving shipping lines. “The customers can send goods/parcels in such trains through the services offered by Container Train Operators on payment of the charges for transportation of their goods. Railways has also opened up good-sheds for container train operators, subject to certain conditions.” says N Rama Krishna, General Manager - Sales and Marketing, Kribhco Infrastructure Ltd.
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feature N Rama Krishna, General Manager-Sales and Marketing, Kribhco Infrastructure Ltd
In my opinion, aviation holds a small share of India’s freight market. Air freight is very expensive in India in comparison to Road and Rail. Such freight trains are not confined only to one Zonal Railways, but they traverse over a number of Zonal Railway systems.
railways have more accessibility all over the country. But unfortunately railways do not show much progress in cargo handling when compared to other modes. What could be the possible reasons for this? And, how far will the time tabled goods trains help to overcome this scenario? Dinesh Goyal, Head - Rail Division, Darcl Logistic Limited answers this query; 1. “Unsafe, insecure and uncertain transit time mainly attribute to the reasons of poor progress in market share of railways compared to airways.
The time tabled running of goods train will mainly address the transit time issue but other issues will need proper maintenance, up keeping of rolling stock.
56 CargoConnect - DECEMBER 2016
2. Besides, Railway’s policy to virtually dis-own the responsibility of any loss of material, loss of quality and heavy delays in settling the refund claims makes the Railways to be a non-preferred transport, especially for high valued and time sensitive cargo. 3. The time tabled running of goods train will mainly address the transit time issue but other issues will need proper maintenance, up keeping of rolling stock. 4. The corrective measures such as settling of refund claim in a pre-defined
time frame work with Railways taking its own initiatives to make refund at its own without waiting for customers to lodge the claims only can help restore customers’ confidence and railway’s market share.” On the other hand, Kumar has a totally different view on the same. “I will not say that railways cargo handling is anyways comparatively not going as much as airways or seaways. Essentially the character of the cargo handling of railways and airways is different. Railway is essentially a bulk mover of cargo, travelling long distances and reaching almost all the areas of the country. Railway mainly carries commodities such as coal, petroleum products and cement. So, it is inappropriate to say that we are not moving as much as airways or seaways. Indian railway is a government organisation and we do not believe in competing with airways or any other mode of transportation. At the end of the day, railways cannot go to the doorsteps of a cargo client if there is a need for last mile delivery occurs”, he said. Agreeing to Kumar’s views, RamaKrishna pointed out, “In my opinion, aviation holds a small share of India’s freight market. Air freight is very expensive in India in comparison to road and rail. Such freight trains are not confined only to one Zonal Railways, but they traverse over a number of Zonal Railway systems.”
Reduced Charges to Save Rail Freight During the 1990s and the first part of the 21st century, the high availability and low cost of transportation services relative to the cost of holding inventory encouraged organisations to emphasise fast, frequent delivery to customers through such means as just-in-time delivery.
feature Dinesh Goyal, Head - Rail Division, Darcl Logistic Limited
The time tabled running of goods train will mainly address the transit time issue but other issues will need proper maintenance, up keeping of rolling stock.
But things have changed dramatically in the last decade, and companies increasingly are calling such long-standing strategies into question. The “game changers” are volatile, escalating oil prices and an imbalance of supply and demand for freight transport services. These realities have led to high transportation costs—high enough to cause companies to make transport-driven shifts in their supply chain strategies. But, the increased transportation cost in railways forced the end users to move away from railways and think about alternative transportation options. This has made a huge impact on the freight volumes in Indian Railways. And, that is how the government decided to bring down the freight charges and also the surcharges such as port congestion charge, busy season surcharge etc. Railway has removed the existing ten per cent port congestion surcharge and reduced tariffs for the ‘merry-go-round’ scheme. Kumar believes the reduced fright charges will definitely help the rail freight sector. He says, “The economy is not growing as fast as
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it would had been in the past and globally the oil charges are coming down. As a result, the transportation cost via roadways is also coming down. So, railways could not stand in isolation. We are a government initiative and we are not here to make profit. And we also found that there were also so many surcharges line port congestion charge, which are not required. So, we avoided such charges and thus the total cargo charges are brought down. In this way, we believe we have done justice to the industry and also to our customers. “
The Challenges Ahead Introducing time tabled freight train itself was a big challenge for the railways as the system work in such a way that the freight trains and passenger trains share same corridors for journey. But railway is in the hope that the introduction of new dedicated freight corridors will resolve this issue and will also help the smooth running of the time tabled freight trains. Goyal points out two important challenges faced by railways regarding this.
• “The over saturation of track capacities will remain a constraint for prioritising the train movements for Indian railways move its own fleet on priority over container trains. • Second, the terminal capacity(s) too will have its detrimental effect on keeping pace with the assured transit time commitments. The idea of out sourcing the maintenance of Rolling stock, using idle/ underutilised rail sidings of all descriptions i.e. private, assisted, PFT, railway yards for sure can add to the capacity building and improve the railway performance and thereby make this venture making good headway to success. This is BIG task”, he said. But Kumar seems positive about the future of the time tabled freight trains. According to him, Indian Railway is ready to take up the challenges. “Sooner or later, railway had to move towards a time tabled system for freight. So, even if there are challenges we have to overcome that. The biggest challenge is anyways the dedicated freight corridors. But, we are happy to say, in an year or two we will be having our own dedicated freight corridors. The biggest constrain we faced for time tabled goods trains is the lack of separate path for freight trains. The freight trains and the passenger trains had to use the same path for travel. So, there was a massive demand and pressure for the lines. We are already in the process of building dedicated freight corridors. Now there are two lines for trains. We are making it into four, two for passenger trains and two for freight trains.” Together with Kumar, CARGOCONNECT also hopes that the railways will overcome the challenges on its way and the new time tabled freight trains will be the new game changer in the Indian rail freight industry.
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Hong Kong Air Cargo Terminals Limited (Hactl) is expecting to beat last yearâ€™s tonnage throughput total in 2016 thanks to a late spike in demand. Mark Whitehead, Chief Executive, Hactl said that he expected the terminal operator to end the year with total cargo volumes of around 1.8m tonnes compared with last yearâ€™s 1.75m tonnes. In an interview with Sana Husain, he optimistically spots out reasons, while talking about many younger economies that are becoming wealthier, fuelling demand for the bigticket items that form the core of air freight traffic, given the boom in e-commerce
Compass of Greenest Air Cargo Terminal 60 CargoConnect - DECEMBER 2016
At this year’s Payload Asia Awards, Hong Kong Air Cargo Terminals Ltd (Hactl) – the largest cargo handler at Hong Kong International Airport – and its added-value logistics subsidiary, Hacis, have once again walked away with honours. Would you like to throw light on how Hactl continues with its strong efforts to reduce the environmental impact? Hactl and Hacis are strongly dedicated to integrating environmental responsibility and sustainability into their daily operations. Over the years, this mind-set has served as a compass, guiding us to adopt green initiatives in many facets of the business, with the aim of being a world-leading green air cargo terminal. Some of our key green initiatives are: (1) Carbon reduction: Adoption of bio-fuel, e.g. biodiesel (B5) for all ramp tractors; use of solar panels for supplying external lighting, etc. (2) Energy saving: de-lamping, motion sensors with LED lighting, chiller optimisation, etc. (3) Air quality improvement: zero emissions concept through use of electric forklifts, ramp saloon cars, etc. (4) Greening: roof gardens, office greening, etc. (5) Waste management: “Reduce” and “Reuse” are primary focuses with a high recycling rate; where waste compressing machines are provided to minimise waste volume, etc. Hactl and Hacis have both been recognised for their achievements, with regional and local eco awards. We take these measures without any contractual or mandatory requirements, solely because we want to contribute to a green globe. Our passion extends to supporting local green groups in promoting green and sustainability together. We are running our very first Green Week from Nov 7-11, 2016.
Hong Kong Air Cargo Terminals Limited (Hactl) – Hong Kong’s largest cargo handling agent – has broken two records for its ramp handling operations. The company handled 2,242 full freighters in November, beating its previous monthly record of 2,232 set in November 2014. Do you follow a specific strategy for achieving such phenomenal growth figures? Hactl has been working hard to develop
its ramp handling operations, and is Hong Kong’s largest ramp handler of freighters. We leverage our unique ability to provide a one-stop-shop service combining ramp handling and terminal handling, and this is increasingly appealing to airlines looking for simplified and seamless, streamlined operations. In addition to that, our recent streamlining of our ramp ops through the use of mobile computing, and the enhancement of our COSAC-Plus cargo management system, means our customers have real-time access to an unprecedented level of information on the status of their flight operations.
As one commodity market matures, and moves towards surface freight, another invariably takes its place as an air freight user. The only certainty about airfreight is uncertainty and that in itself is a fundamental driver of the industry. This spells opportunities as much as threats. The air cargo industry finally has reason to celebr ate as mar ket conditions strengthened in September and there are hopes of fur ther improvements in October. According to Air Cargo News ar ticle dated November 2, 2016, Van de Weg and Mark Whitehead, Chief Executive of Hong Kong Air Cargo Terminals Ltd (Hactl) suggested that there had been a bit of a boost caused by shipping line Hanjin going bankrupt. Looking further ahead, Van de Weg said he was “cautiously optimistic” about demand in 2017. What’s your take on this? The world population and economy will continue to grow, admittedly at a slower rate than in the past. Many younger economies are meanwhile becoming wealthier, fuelling demand for the big-ticket items that form the core of air freight traffic, given the e-commerce boom. The world population is living longer and this is increasing demand for medication that is under pinning pharmaceuticals’ growth. So, there are many reasons to be optimistic, apart from supply chain disruption through port strikes and the Hanjin collapse, resulting in temporary demand for faster transportation. Putting that into figures, a modest growth of two to three per cent for 2017 is quite realistic.
Hong Kong Air Cargo Terminals Limited (Hactl) has again handled 64 of the world’s most valuable horses, competing at the Longines Masters of Hong Kong. As in 2015, the official carrier for the event was Emirates Airline, for which Hactl is the cargo handling agent in Hong Kong. Emirates transported the horses from Liege via Dubai World Central to Hong Kong, arriving on February 15. In logistics support to the entertainment industry, whether the product is a movie, music, video game, or computer software, the issues facing the entertainment supply chain are common: short production windows, hard-to- forecast sales, high street-value products, and the looming specter of digital distribution promising to change it all. What do you think? Changes to the music industry, resulting in less physical distribution, have already made their mark on air freight. But, our industry’s history has always been opening up supply chains and satisfying frontline demand for time-sensitive new launch product lines – only to see later, large-volume re-stocking revert to cheaper and slower alternatives. As one commodity market matures, and moves towards surface freight, another invariably takes its place as an air freight user. The only certainty about airfreight is uncertainty – and that in itself is a fundamental driver of the industry. This spells opportunities as much as threats.
The task of transporting pharma products comes with a number of regulatory approvals. Give us a brief idea about the kind of regulations or recommendations that the companies handling pharma products specifically need to comply to? The first widely-demanded standard was WHO GDP (good distribution practice). But, the increasing number of sectors of the manufacturing community that are now seeking from their supply chain partners is what is felt by some to be the more comprehensive IATA CEIV standard. Hactl was the first handler in Hong Kong to achieve GDP, after considerable investment in new equipment and streamlined processes. Actually, we have vastly over-specified our operations to achieve GDP. So, obtaining CEIV, which we are now working towards, as part of a Hong Kong International Airport community initiative, will present no challenge.
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“Want To Be a Frontrunner in Aviation” 62 CargoConnect - december DECEMBER 2016
Shift To Air Cargo: Saving Time And Reducing The Carbon Footprint
Amsterdam Airports’ Schiphol Cargo will back further projects as part of its Smart Cargo Mainport Program, aimed at finding innovative schemes to improve cargo flow through the Amsterdam hub, underpinned by transparent data exchange. Pushing for tangible innovation push for members of the Schiphol cargo community, Jonas van Stekelenburg, Head, Schiphol Cargo discusses the growth of the air freight sector with Sana Husain, holding strong views over efficient planning
Let growth be growth. I am not against economic growth or against doing this. I hope that we can agree to work towards innovation. I think we should step up our efforts to innovate. I’ve faith in our ability to get rid of nasty things. When we talk about the greenhouse gases and other diseases in the world, as part of a worldwide effort, it worked out fine and we got rid of it. Similarly, carbon needs to be treated. So, we need to have plans that are far more efficient, right from electrification to buying fuel. “To go for this innovation” will be my answer to this and how that will go, I don’t know. Regarding shift to air cargo mode, I don’t think in India it will, but in Europe there’s train development and sea development and then for the air freight development I’m not seeing concentration of air freight in Europe. But, there’ll be growth and maybe for India that works differently. But, as I have said it’s easier to grow through the air segment, than elsewhere, where long term infrastructure is required. I don’t forbid or restrict the shift to air cargo. One should always allow everything to happen.
Impact Of Resurgence Of Air Logistics On Supply Chain I am not a specialist on India. At Schiphol Airport. what we see is that air freight for an airline is very important. So, an airline connected to the world would majorly contribute towards the economic development. Schiphol Airport forms one fourth of the total airports. It can be equated to billions of euros, with staff contribution being 60,000 people alone. Looking at India, I think with more than a billion people, it will go through a similar phase of affording stuff, to opening a bank account, focusing on travel, etc. After living in Indonesia for four years, from 2004 to 2008, what I saw was 25 per cent growth of the airport, specific to banking and accounting. It isn’t that the economy in Indonesia grew by 35 per cent. It grew by five per cent or so, where suddenly 100 million people could afford themselves all these things. As per my expertise, India is getting richer on the air freight part. I think there’ll be tremendous growth of logistics and air freight, by not just 5-6 per cent, but more than 20 per cent. Then, the question remains that, when it will grow and for how long? But, there’ll be times with 25 per cent growth. What I think is that India is not behind China or Indonesia. In fact, it’s much ahead, given the huge population figure. For a country like India, it seems difficult for
it to go through a phase of developing long term infrastructural parts. To have all the good roads and trains, with all the best services, including hygiene and urban planning, formation of all these infrastructural parts happen to be difficult in India. What’s easy are mobile phones, locals travelling and air freight where there’s lesser infrastructure requirement. I believe that in the coming years, there’ll be a lot of growth, especially in these things, that need long-term infrastructure planning, like aviation, mobile industry, for it to be userfriendly. How that’ll appear on the logistics side is that one will get a mature market in the airlines segment, while handling companies, during forwarding and then the things you’ll ship will define India’s strength. In the information infrastr ucture or ICT (Information and Communication Technology) kind of things; it’s pharma, which is most likely to head the way. At Schiphol Airport, we hope to be a part of that. We work with Jet Airways, KLM France to be really connected with India and maintain close relationships regarding trade.
Forecast Of The Significant Air Cargo Trends For now, in India it’s all about ICT and pharma. But, there’s also an uptake of e-commerce in India. So, this is a sign of the whole population getting richer, which can be seen as a big thing. So, for Schiphol, flowers are very important, which isn’t the case with India. Also, we’re very much in the fine chemicals segment. So, I don’t see a very large uptake in air freight. For all the other industries, it’s more difficult to predict, except for pharma, ICT and e-commerce.
Need For Carbon Offsetting Scheme To me, the future of the world is close to everybody’s heart as well as mine. Aviation industry as a whole isn’t a frontrunner, while dealing with the climate change drive. So, we are lagging behind other industries. We aren’t the worst industry, but I think we should be the frontrunners, by doing more and have more efficient plans. This industry involves burning the fossil fuel and we are in the midst of it. In my view, we need to be very responsible, which isn’t the case. Previously, I have invested a lot in that, like electrification of handling equipment and electrification of trucking. These are the things that we need to do. We should step up our effort as this isn’t enough. So, everybody should play their part. At the end, as a whole, we need to strive towards a world with less carbon emission.
DECEMBER 2016 - CargoConnect 63
“Retaining the best in the war of talent”
With the Indian government approving pro-foreign direct investment (FDI) policies, demand for professionals with global logistics experience (including import/export, customs clearance and trade compliance) are predicted to increase. Due to the fluid external environments that are dependent on consumer spending patterns and government policies, talented strategists rather than pure play execution-oriented staff are being courted for their ability to lead key initiatives and projects leading to operational efficiency. Mohit Bharti, Associate Director, Michael Page India, discusses with Sana Husain the factors that influence the current hiring scenario of the procurement and supply chain industry
“Workplace sentiment and confidence rank very high in India right now. The majority of job seekers foresee progression in their career.” What are the major reasons behind making this statement? There are multiple reasons for that. Indian economy is going through a spurt of growth and at the same time we also see that the global economy is slowing down. Specifically, if you look at the larger economies like China. What it means is that a lot of MNCs are eyeing India as their next big market which will compensate for the boom which is coming from the other markets. What happens is that one happens to invest in such markets, especially in the case of an MNC. Employees working in these organisations would be directly impacted in terms of progression in their career. At the domestic front, a lot of new sectors of the industry are coming up. Over the last four to five years, we have seen how e-commerce has come up in a big way, along with a plenty of others. All these sectors ensure rapid development of small scale infrastructure, whether it’s for road, air transport or water transport. As a lot of opportunities are generated, within a small workforce, one marks a progression in career.
Nearly 84 per cent of workers in India are increasingly optimistic that they will get the chance to develop and upgrade relevant career skills in the next 12 months. Does this figure provide an overall picture of the skilled and unskilled sectors of logistics in India?
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Tracking the skilled sector, when we talk about any opportunities that are coming up for the talent in the Indian market, there somewhere exists a war of talent. It’s not just about getting the best on board. It’s about retaining that particular talent, which is becoming increasingly important for every organisation. To retain that particular talent, one needs chances to consistently develop and upgrade their career skills. If that doesn’t happen, then probably they will move out for better opportunities. Then, one can see a lot many functions which require technology integration. Speaking of digital marketing and social media at this point in time, it’s never available in the industry as no one used to talk about it few years back. What you have to do is develop talent internally. Similarly, in logistics, it’s primarily integrating technology and it’s only the organisation that can do it, unlike expecting it from the management schools from where the talent’s mainly procured.
As per a recent survey, the scope of working overseas option has risen from 64 per cent to 68 per cent. What factors do you think contribute to its increase?
are heavily betting on the Indian market and talent. Indian talent is impressively getting more recognised all over the globe. If they’re recognised, certainly they have lot more opportunities lined up for them. To add to that, many organisations allow the exporting of Indian talent. At one point of time, we used to consider India as a cheap talent pool. But, now these organisations do not underestimate the cheap talent pool in the Indian market, which offers scope in other markets too. Here, they’re only talking about the skill to skill comparison, instead of the cost comparison. They have acknowledged the fact that India is the best market, where they can hire the best quality talent and send it across to the globe, in different regions to companies across different functions. That’s the reason why we see that the working overseas option has risen significantly. “Hiring across functions” is more of a generic statement for me. Functions could be logistics, procurement, which is highly trending. What organisations have done is set up a centre of excellence in India. By setting them up, Indians get to experience a global exchange, for instance in the marketing sector, we can find such things shaping up.
A couple of reasons can be attributed to this increase. Firstly, as I’ve answered that India’s becoming an increasingly important market for MNC. So, India’s like a blue-eyed boy. At this point of time, a lot of organisations
Due to the brimming startup culture in India, what’s the ratio of pros and cons in your view that impact the current hiring scenario of the procurement and supply chain industry?
There are definitely a lot more of pros than cons because of the startup culture in India. The Indian supply chain industry is highly unorganised and quite underdeveloped, with numerous operational inefficiencies. That means that there are very high operational costs in the logistics sector in the Indian market. Here, startups by integrating technology are trying to provide solutions to India’s logistical challenges. Startups seem to be helping organisations in automating warehouses or we have truck aggregators who are coming up, that help in improving the low operational inefficiencies. It leads to reduction in costs, wherein lies the opportunity for them. If I talk about the Indian and the global numbers, I think the amount of expenditure that we have for the logistics is twice of the
While referring to the “corporate”, they aren’t just the multinational corporate class. They also include domestic corporates that are doing well. There’s certainly a very fine line over there, in understanding the scope of both. developed markets. Certainly, that’s where the scope is fairly high, for all to integrate technology and ensure working out better operational efficiency. These startups are slowly and gradually getting more professionalised. So, various organisations that started from scratch are
now at par with some of the best corporate out there. Certainly, there are startups that fail and form the con part. If one has to come up, one has to see a lot many domestic players coming up and solving this problem, rather than having multinationals to solely deal with all of it. While referring to the “corporate”, they aren’t just the multinational corporate class. They also include domestic corporates that are doing well. There’s certainly a very fine line over there, in understanding the scope of both.
In the procurement and supply chain industry, are the companies supposed to ensure that they hire more women? Please justify your answer. Women diversity is something which has been in hype for almost four years. Organisations prefer women talent at the top level, across many different functions, where procurement and supply chain is more different. But, somewhere it’s a function of what’s available in the market and where you can employ that particular talent as well. If I talk about my MBA days, in a batch of 300, I observed strength of 20-25 women. Over the last few years, you see that the ratio has gotten much better. You have companies where you have 30-40 per cent women in the overall batch size whereas at one point of time was just five to ten per cent. With that, many women are stepping into the market and working on more job opportunities. Yet, somewhere, this market has been orthodox in certain sectors. Procurement and supply chain is one sector for sure. You might need talented women in functions like planning, which is more of a desk job. But, while referring to logistics or warehousing, one will definitely find women, but the talent capacity in the market is comparatively less, unlike its high demand. Procurement includes a lot of travelling and meeting a lot of truck unions. Some organisations feel that they’ve to provide proper security arrangements to women employees, which they’re really working on. But, they lack women employees with that skill set. How many women would go to campuses say that we’d want MBA in operations or supply chain sector? Honestly, no one. But, yes there’s intent in organisations to change that. They say that they should have more women as far as the overall proportion of the
backend is concerned. Then, with the advent of the startup segment, which is conceived to be glamorous as compared to the orthodox sector, you see a lot many women ready to take up these particular opportunities. But, numbers are increasing as I feel that there’s a long way to go.
Foreseeing megatrends for 2017, in your view, kind of leaders does the logistics industry need? Does age play a major role in determining that? To begin with, we need leaders who can integrate technology with business a lot more. Everything is getting linked with technology, whether it’s for the setup that’s been there in logistics for the last 23 years, or about how everything has to be online. Secondly, I believe that we need those who are a lot more strategic than the current breed of leaders in the prevalent system. We need people who can come up with different solutions to solve different problems of logistics industry like operational inefficiencies or reducing the cost which is fairly on the higher side. At the same time, people who are willing to get their hands dirty today, in order to go down to the junior most level and execute functions are more preferable. This sometimes is very difficult to find in the traditional setup, when we might have senior most people in the strategic position and women who are execution-oriented. Secondly, I don’t think the age should play a vital role because only the talent counts. However, with people, who can integrate technology, it’s a psychological phenomenon. Individuals falling in the age bracket of 30 are the ones who can do their part a lot better than those who are in the late 40s or early 50s. We need energetic leaders to integrate business with technology. They must bring in that kind of charisma that can inspire their team. Sometimes, one feels that young leaders tend to perform better because they can slog out a little extra hours, get down to the ground level and get the work done which isn’t possible for those who have 25 years of work experience. Having said that, it’s a bit difficult to generalise. One can have a talented individual, who’s at the higher side of age and is still willing to do that task very efficiently. Yet, somewhere there’s an inclination towards hiring a younger workforce, hailing around 12-15 years of experience.
DECEMBER 2016 - CargoConnect 65
“Dependence on cash is an expensive habit” “The sudden demonetisation has been quite a blow to the economy. While the end-users have been perturbed by limited cash flowing in the economy, the e-commerce companies are also suffering,” says Dhruvil Sanghvi, co-founder and CEO, LogiNext. He also adds that the market would require minimum three months to re-emerge from the present state of shambles and hence, the Great Online Shopping Festival or the online sales around Christmas and New Year may have to suffer this time. In an interview with Ritika Arora Bhola, the expert also talks about their strategies to meet the global and domestic needs and other projects in pipeline Please tell us about the genesis of your operations, your clients and services in India. The idea of LogiNext solutions started at a Starbucks in Manhattan when we were discussing the plausible solutions to logistics still being complex and unorganised in emerging markets. Since we are techies at heart, we saw the solution in the Internet of Things and Big Data to optimise delivery networks, internal operations, and other logistics services. This led us to create our first product- Mile, post which, there has been no looking back for us. Today, we have initiated a wide range of solutions, including Mile, Haul, On Demand, Force, and Reverse. Companies having an extensive feet-on-street model with hundreds of people running operations on the ground are the ones using our products. We have served a wide gamut of industries, covering major sectors like retail, transportation, e-commerce, banking, insurance, manufacturing and various kinds of on-demand services.
What’s your USP? Our focus on building real-time technologies using powerful location data analytics and our presence across multiple verticals is our unique strength. We cater to all the models of logistics and movements from the first mile to last mile, city distribution to long haul transportation, on-demand to reverse logistics, and field services to remote workforce management. These products, all at one place, are currently unavailable in the global SaaS ecosystem. Although companies always had services like routing, tracking and analytics at their disposal, we make the same information available in real-time, hence enabling our clients to adhere to a more pro-active approach than reactive. Serving to the varied clientele further makes us unique. Owing to the experience and diversity, we are able to collect the vast and accurate data points for our predictive analysis.
How has PM’s note ban initiative affected e-commerce market? Although, we are in favour of a cashless economy, the sudden demonetisation has been quite a blow to the economy. While the end-users have been perturbed by limited cash flowing in the economy, the e-commerce companies are also suffering, since cash-on-delivery amounted for more than 60 per cent of all orders. The market would require at least three months to re-emerge from the present state of shambles and hence, the Great Online Shopping Festival
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or the online sales around Christmas and New Year, which achieved record-breaking traction before, may have to suffer this time. However, for any economy, dependence on cash is an expensive habit. The demonetisation has urged users to go cashless and customers will start using e-wallets like Paytm. With our expertise in Big Data Analytics and mobility optimisation, we can leverage this data and optimise the operations and revenue models for our associates.
Please elaborate on LogiNext’s strategies to meet the global and domestic needs. We currently enjoy the top-notch position in domestic markets and are positioned third amidst the international markets. The competition is raising and that only inspires us to develop an objective and rational approach towards growth and expansion. Since our expertise lies in emerging markets, we shall identify other economies observing the same set of challenges and growth trends. Focused at ASEAN, MENA, Europe, India and US markets, we have already started acquiring new customers and endeavor to emerge as the leading solutions providers in these economies before the conclusion of next year.
How do you foresee e-commerce and retail growth in the coming years? We expect major growth in the e-commerce and retail segment in the coming years. The year 2016 has already witnessed an increased attention and penetration in tier II and tier III towns and cities and we expect the same trend to continue. India is on the verge of becoming a mobile-first economy, with smartphones often providing users their first ever experience with the internet. Following the emergence of new manufacturers in India, the cost of owning the smartphone will reduce, hence bringing more people on mobile and connected devices. Besides, with the Indian Government focused at spreading Digital Literacy, as part of their Digital India initiative, the e-commerce and retail sector has a lot of potential to benefit from.
What are the projects in pipeline? We are looking forward to expand our business internationally. We have already expanded into ASEAN and MENA countries and are steadily gaining traction. Besides, Europe has emerged as one of our key focus points, inspiring us to launch our full-fledged efforts in this direction.
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Packaging –Uncovering Personality By Devangshu Dutta
The global trends are moving towards sustainable packaging given the ecological resource wastage it creates, the garbage the packaging material produces and the air and the ground water pollution the landfills create.
ackaging of products, is undoubtedly, an extremely strong means of conveying the essence of the brand, its ethos and its personality. Packaging is not only a vehicle to endorse the identity of a brand in a consumer’s mind, but also the growing need for sophisticated packaging also results from many lifestyle needs such as ease of transportation, storage, usage and disposability sought by convenience seeking and time pressed consumers. But, increasingly, it also reflects the brand’s responsibility and sensitivity towards the nature and its resources. If we, as consumers, were to reduce or optimise packaging in our daily lives, especially for food and beverages, the processes involving our purchase and usage will have to be redesigned. It will also to a larger degree alter the systems and processes of organisations whose distribution and retail is integrally dependent on packaging. Original Unverpackt, a concept grocery store in Berlin, Germany operates without food packaging that would later turn into garbage. The idea around which it is built is to bring one’s own containers and have it weighed. The supermarket will label your containers. After one shops and gets to the till, the weight of the containers is subtracted and one has to pay for the net weight of the groceries. The label is designed to survive a few washings so one may come back and skip the weighing process for a few more times. In this way, not only do the food products shed their familiar identifiers (brand colors, packaging structures, and bold logos) but the ways they move from shelf to home becomes radically different. While shoppers are encouraged to bring their own bags and containers with them, a range of re-usable jars and containers are also available for purchase onsite. As much as possible, produce is sourced locally. At this point of time, it may seem difficult to adopt this framework in entirety. However we should remember that just a few short decades ago we followed similar practices such as engaging biodegradable, recyclable, reusable materials for packaging, making use of one’s own containers and bags and filling them in with quantities as per the requirements from the bulk containers. Singapore’s National Environment Agency (NEA) will be introducing mandatory re-
68 CargoConnect - DECEMBER 2016
quirements for companies to use sustainable resources in packaging and reduce packaging waste very soon. It is still being decided in what forms the regulations could be developed, but the preliminary ideas include requiring companies to submit annual reports on how much packaging they use, to develop waste reduction plans, or to meet recycling targets. Belgium on the other hand has been championing the cause of waste management by maximising recycling and reusage. The global trends are moving towards sustainable packaging given the ecological resource wastage it creates, the garbage the packaging material produces and the air and the ground water pollution the landfills create. Earth Overshoot Day, which marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year, is arriving progressively earlier, indicating that the humanity’s resource consumption for the year is exceeding the earth’s capacity to regenerate those resources in that year. Another very grim consequence witnessed was the frightening and highly visible impact on marine life. From the beginning of this year more than 30 sperm whales have been found beached around the North Sea in the United Kingdom, the Netherlands, France, Denmark, and Germany. After a necropsy of the whales in Germany, researchers found that four of the giant marine animals had large amounts of plastic waste in their stomachs. Although the marine litter may not have been the only cause of them being beached, it had a horrifying consequence on the health of these animals. Given the serious consequences and the growing sensitivity towards these consequences, it is imperative for product manufacturers, raw material manufacturers and equipment and technology providers to design packaging with solemn intent to address sustainability. The best time to reduce the use of packaging was 50 years ago. The next best time is now. (The writer is the Chief Executive with Third Eyesight (www. thirdeyesight.in), a specialist management consulting firm in consumer products and related sectors. It also is liaison for FoodTechHolland, a consortium of diverse companies from the Netherlands that provide a range of technologies and solutions for improving performance in the food and agri-business sector.)
“Efficient management of logistics facilitates overall growth of business” W hat is the imp or t ance of logistics in overall growth of your business? Management of logistics is an essential part of supply chain management and in it we plan, implement and control the flow of storage of goods and services in order to meet the requirements of our customers. Logistics management plays the vital role in the success of any company’s operations and has a direct impact on the bottom line.
Macleods Pharmaceuticals Ltd has been leading the pharmaceutical industry from last two decades by its sincere commitment of providing quality healthcare to people across the globe. The company has registered an average growth rate of over 22 per cent in the past five years. Macleods is recognised as the fastest growing pharmaceutical company in India and its thousands of dedicated employees work diligently to develop new medicines every day. Sathyapal Bhandary, Senior Manager Distribution, Macleods Pharmaceuticals Ltd, in an interview with Gaurav Dubey, discusses the growing importance of logistics in the present competitive world of pharmaceutical industry
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How do you ensure smooth coordination among different depar tments involved in the supply chain? We leave no stones unturned in striking smooth coordination between suppliers, transporters and other departments of our supply chain. We ensure it by implementing the latest technology in our supply chain. I think smooth flow of right information and its transference plays significant role in striking smooth coordination.
How do you manage back-end supply? We explain how dynamic models may help to connect planned investments to expected improvements in the customer’s perception of the product critical attributes and thus increase sales, revenue, and market share. With the same effort we can importantly educate our customer demand forecast, and get a much better input for subsequent integrated supply chain planning models. In a second part of the paper we review and discuss the operational and financial effectiveness of existing virtual tools used in supply chain integration. We discuss how dynamic modeling may help to obtain a comprehensive model of supply chain integration. A modeling effort that can be used for the analysis of the effectiveness of various levels of integration, as well as for the assessment of the importance of the
sequence in which virtual collaboration tools a re adopted i n supply cha i n integration. In a third part of the paper, we discuss and explain experiences in modeling different types of supplier contracts to accomplish varying degrees of security and flexibility. We focus our attention on business dynamics based on current best practices in portfolio management, as evidenced by leaders in volatile hightechnology businesses.
How ef f icient supply chain management helps in creating value for customers? Supply Chain Management (SCM) is an essential component for ensuring operational efficiency. SCM impacts customer service by making sure the right product assortment. A firm values its supply chain manager because he can decrease the ideal time. Also, an efficient SCM helps in streamlining everything on day-to-day basis.
Which qualities you seek in LSP partners? We at Macleods take services of around five to six logistics service providers (LSP). And before choosing our LSP partner, we check the services and qualities they provide to their clients as LSPs play a very important role in a supply chain.
How implementation of GST will affect pharmaceutical companies? Many pharmaceutical companies have to maintain their warehouses in different states in order to avoid Central Sales Tax (CST) of different states. Now with the implementation of Goods and Service Ta x (GST) from the next financia l year, companies don’t have to maintain warehouses in different states as they have to pay only single tax.
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Airport waives charges for cargo custodians Bengaluru Customs has now waived Cargo Customs Service Provider (CCSP) charges to cargo custodians-Menzies Aviation Bobba (Bangalore) Pvt Ltd and Air India SATS Airport Services Pvt Limited (AISATS) at the Kempegowda International Airport-Bengaluru. This, the airport claimed, is a first for this airport from when it began cargo operations in 2008. “The waiver will give cargo operators a competitive pricing advantage that will boost the cargo and courier business at KIAB. This reduction was effective from April 1, 2016,” said a statement.
New perishable hub at Indore airport The union cabinet recently approved a perishable cargo hub at Indore airport as a state-of-the-art facility to be managed in public-private partnership mode. Towards this end, the cabinet approved leasing out 1,500 sq metres of land from the Airports Authority of India to Madhya Pradesh Warehousing Logistics Corporation. The facility will serve as an exit point for perishables from transit airports and provide jobs for locals, an official statement said. The move comes in the backdrop of a huge demand for export of pharmaceuticals, poultry, and horticulture products in the Malwa region of Madhya Pradesh, the statement added.
Ethiopian expands operations in India Betting big on India’s booming aviation market in terms of domestic passengers traffic growth, Africa’s leading carrier Ethiopian Airlines plans to expand its operations in India with new flights and aircraft upgrade. The pan-African flag carrier currently operates a daily double service to New Delhi and Mumbai from capital city Addis Ababa. It also operates freighter services to Chennai, Bengaluru, New Delhi and Mumbai. The airline is currently in talks with the Indian civil aviation authorities including the Directorate General of Civil Aviation (DGCA) in this regard, Gebremariam Tewolde, CEO Ethiopian Airline. Ethiopian Airlines is already operating 14 flights per week to Delhi and Mumbai each, he added. India and Ethiopia had signed a pact last year, allowing the carriers of two sides to scale up weekly flight entitlements.
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VOL VII ISSUE VIII JULY 2016 `20
HANDLING THE SUPER HEAVIES RIGHT
Finance Ministry, Railways working to cut logistics cost
Logistics companies have faced an up to 20 per cent decline in volumes from their e-commerce business in the past one week, as cashon-delivery payments were almost eroded by e-tailers following the government’s demonetisation move, said company executives and industry watchers. Blue Dart Express, the Indian logistics and courier company owned by DHL Group has faced a dip in volumes, Charles Brewer, DHL e-commerce, CEO, said, “There is a short-term pain. The volumes are lower. E-tailers aren’t sending some of these COD (cash-on-delivery) shipments.” He added that the next month or so will be “painful” from the profitability perspective.
The Finance and Railways ministries are working on ways to cut logistics costs which make exports uncompetitive, Nirmala Sitharaman , Minister for Commerce and Industry said. The Minister also said that she has discussed the increasing logistics costs with the Finance Minister. Worried over slow growth in exports, the Commerce Ministry has pitched to enhance the logistics competitiveness of exporters. The department of commerce has suggested to the Railways Ministry that it needs to clearly distinguish between consignments for exports, imports and general, in terms of freight rates. It was also suggested to the railways to work on ways to reduce the delivery time of consignments providing traders more predictability and reliability.
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Demonetisation: Logistics companies feel the pain as e-tailers take it easy
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DHL releases Global Connectedness Index
Sagarmala to optimise logistics services in India
DHL, the global logistics leader, released the fourth edition of its Global Connectedness Index (GCI), a detailed analysis of the state of globalization around the world. The 2016 report shows that global connectedness, measured by cross-border flows of trade, capital, information and people, surpassed its 2007 pre-crisis peak during 2014. Currently available evidence suggests that the world was about eight per cent more connected in 2015 than in 2005. The information pillar measured by international internet traffic, telephone call minutes and trade in printed publications showed the strongest growth over the reporting period (2013-2015). The gain in capital and people flows have been more modest, while the decline in the proportion of goods traded across borders which began in 2012, accelerated in 2015. The research on the GCI was led by internationally acclaimed globalisation expert Pankaj Ghemawat, who highlighted how emerging economies still lag behind on global connectedness. “Advanced economies are about four times as deeply integrated into international capital, five times on people, and nine times on information flows,” Ghemawat commented.
The Central Government’s programme for the port-led development - Sagarmala - is all set to optimise India’s logistics services in coming years, said PL Haranadh , Deputy Chairman Visakhapatnam Port Trust . In a conference which was based on the theme ‘Cost, Finance, Taxation and Accounting: Issues and Challenges in Logistics and Supply Chain Management’ organised by Gitam School of International Business, Haranadh said that logistics plays an important role in country’s economy and if we reduce logistics cost then ultimately it will have positive impact on GDP growth.
India-Myanmar-Thailand trilateral agreement The dream of a seamless travel in Southeast Asian countries will soon be reality with India all set to sign a strategic trilateral highway agreement connecting India-MyanmarThailand via road which is expected to give a big boost to trade and economy in ASEAN countries. According to the Ministry of Road, Transport and Highways (MoRTH), the India-MyanmarThailand (IMT) Motor Vehicle Agreement (MVA) is almost ready and will be signed soon. The agreement was to be signed last year but it was delayed due to elections in Myanmar. “Various rounds of negotiations were undertaken by India, Myanmar and Thailand on the text of MVA and protocols. After a meeting of focal points in Bangkok in September, 2015, the contracting parties of IMT MVA broadly agreed upon the text of framework agreement. Negotiations on the protocols to implement the MVA have been under way,” said a MoRTH official. Enhancing connectivity in southeast region is a key component in Prime Minister Narendra Modi’s “Look East” policy. The IMT trial run under the aegis of proposed IMT MVA was held during December 9-14, 2015 from Imphal in India to Mandalay in Myanmar. Thereafter, Thailand proposed the Mae sot- Phitsanulok route for plying of vehicles while Myanmar suggested extending the route up to Bangkok.
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GoM concerned over declining efficiency of freight transportation Group of Minister (GoM) holding transport portfolios met at Thiruvananthapuram in Kerala to chalk out strategies for improving operational efficiency of freight transportation in the first week of November. The GoM expressed their concerns on the declining operational efficiency of freight transportation, and gave stress on the development of a comprehensive IT backbone to facilitate seamless inter-state transport for reducing delays. The details of which will be chalked out in the next meeting, said Minister for Transport and PWD in Rajasthan and chairman of GoM, Yoonus Khan. Re-registration process of private vehicles crossing state borders will also become a hassle-free process, if the recommendation of GoM gets accepted by the Central Government. The ministers agreed on exempting private vehicles from subsequent taxation during re-registration if they are more than three years old and the value is less than INR ten lakh. Such vehicles do not need no-objection certificate from police and address proof of new location.
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Jet Airways opens new service in Tiruchi-Abu Dhabi sector Tiruchi is poised to have direct flight connectivity to yet another West Asian destination which is expected to further perk up overseas passenger and international freight movements. The daily flight service in the early morning hours in the Tiruchi â€“ Abu Dhabi sector would commence from February 2nd, 2017. The Jet Airways on its website recently announced its plans for further boosting its connectivity to the United Arab Emirates from India. As part of this initiative, the airline would introduce a daily flight service from Tiruchi to Abu Dhabi to capitalise on the strong traffic flow between southern India and the Gulf and beyond, the website further said. The travel industry in Tiruchi has publicised the introduction of the new service to Abu Dhabi along with the flightâ€™s departure timing. Online bookings for the proposed new service are said to have begun, the sources said.Abu
Dhabi would become the third major West Asian destination to be directly connected to Tiruchi after Dubai and Sharjah once the new service is launched. The State-owned Air India Express presently operates daily flight services to Dubai and Sharjah from Tiruchi.Although Air India operated a direct flight to Abu Dhabi from
Tiruchi a few years ago, it was withdrawn in 2012. Direct service to Abu Dhabi would also enable onward connectivity to various other overseas destinations from there, said an official. Tiruchi also has direct connectivity to Colombo, Singapore and Kuala Lumpur with Sri Lankan Airlines, Tiger Airways, Air Asia and Malindo Air operating flights to these destinations.
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CLADDING YOUR WAREHOUSE WITH RIGHT MATERIAL.. By Mahendra Pingle
ndia has witnessed significant strides in the e-commerce business in the last few years. The logistics chains and warehousing facilities across the country are a backbone to support this e-retail and e-commerce revolution. World class retailers derive their efficiencies from their warehousing and logistics capabilities that are very critical to their business. Ensuring your goods remain safe inside the building is the top most concern for every warehouse owner. Therefore, how you build your facility, with the right selection of material is extremely critical. Roofing and wall cladding is one of the principle building component that provides longevity of the building and protection of goods during rainy season and extreme weathers. Hence, it is highly imperative to select the right material that would ensure longer life, low maintenance, greater thermal comfort, high flexibility on design and aesthetics for your facility. If you are planning on renovation of your exiting building or building a new warehouse; the following checkpoints would help you choose the right cladding material: Metal cladding is the most preferred material for Roof and Wall Cladding application over other material. When you choose metal cladding, check the following norms. • Base metal thickness for the cladding material over total coated thickness: Structural stability is a function of base metal thickness and steel grade. It is strongly recommended to mention the required BMT. Reputed manufacturers produce the base steel material and provide chemical and mechanical test certificates for each coil mentioning the yield strength of base metal (i.e. minimum 550 MPa or 300 , 340 MPa as per specification). Base steel determines the strength of the roofing and base steel with varied yield strength is required depending on the roof curve. • Metallic coating type and its mass: Galvanised (zinc coating) and Zincalume (55
per cent Al-Zn alloy coating) are used in Roof and Wall Cladding application. Zincalume steel is preferred over galvanised steel product and most of the buildings use Al-Zn alloy coated steel either in unpainted form or pre-painted form. The corrosion resistance performance depends on its metallic coating mass and not majorly the paint coating. The higher the metallic coating provides longer corrosion resistance. In 55 per cent Al-Zn alloy coating should have AZ150 (i.e. min. 150 g/m2 coating on both side) and it provides up to four times more life than galvanised (Z275) steel. Other than AZ150, higher coating mass product i.e. AZ200 for 200gsm on both side are also available for extreme environmental condition (severe coastal or industrial application). • Luster (Surface treatment) property: In case of an unpainted product, ensure that the manufacturer confirms surface finish with anti- darkening property of passivation and separate layer of resin coating. Tata BlueScope Steel confirms the surface finish of Zincalume steel with anti-darkening properties. • L o n g t e r m a e s t h e t i c s / C o l o r performance: Long term aesthetics of buildings depend upon the type of paint system used for manufacturing cladding material. Paint consists of Resin, Pigment and Solvents. The pigments’ purpose to provide color and hiding ability to finishes and resin forms the desired film and binds the coating to the substrate, providing the weatherresistance and durability properties desirable in an architectural coating. Stable super durable polyester resin system with inorganic pigments are preferred paint system. Inorganics pigments have superior color stability and chemical resistance but are expensive than the organic pigments. Lead pigments are carcinogenic hence it is not recommended in any paint system. COLORBOND steel is tested and proven product offers long term durability and aesthetics to your building.
• Thermal reflectivity of cladding material: Average temperature around the world has increased over the last few years. The frequency of hot days and nights have increased and will likely to continue to be so. It is creating stressful, unhealthy, and unproductive working conditions. These conditions are more common in cities, where urban heat islands (UHIs) are caused by the intensity of non-reflective, high mass materials that absorb a comparatively larger proportion of solar radiation. There is a need for alternatives to mechanical aircooling solutions to reduce energy demand and related greenhouse gas emissions. Thermatech™ technology is a solar reflectance technology incorporated into COLORBOND® steel without changing its appearance. It lowers surface temperature by absorbing lesser heat from the sun. In other words, COLORBOND® steel with Thermatech™ technology is able to reflect more solar heat, thereby keeping both roofs and buildings cooler. Reduced heat stress also means greater durability for entire roofing systems and superior ROI. Most of the buildings uses bare/ unpainted product on roof as it is not visible from the ground and have some cost benefit initially. Since Tata BlueScope Colorbond steel has THERMATECH™ solar reflectance technology, suggest you to use COLORBOND® steel as a roofing material. It reduces the temperature inside the building by up to 6ºC in hot weather (depending upon the level of insulation already installed), thus reducing the need for air conditioning. In moderate to hot climates, it can reduce annual cooling energy consumption by up to 15% compared to roofing materials of similar colour with low solar reflectance. (The average reduction is about 5 per cent: results will differ depending on the level of insulation, building shape and function). (The author is Dy. General Manager – Market Development at Tata BlueScope steel Limited)
DECEMBER 2016 - CargoConnect 79
Cover to Cover by DuPont
Profile Cargo covers, thermal blankets, thermal sleeves, thermal covers, thermal quilts, insulating blankets and pallet covers are just some of the names used to describe the flexible protective envelopes that are becoming increasingly synonymous with the temperature protection of controlled room temperature (CRT) pharmaceuticals. Although, basic cargo covers for the protection of thermally sensitive pharmaceutical merchandise have been around for many years, the latest developments in specially designed covers have largely been driven by two key factors. While giant strides have been taken in recent years to improve the integrity of the pharma cold chain, there remain a number of weak points in the logistical process. The most alarming of these is the time that a pharma shipment is potentially exposed to uncontrolled external environmental variables, such as solar radiation, rain and ambient temperature swings at airports during the loading, unloading and apron transfer stages. TM
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Pont™ Tyvek® range of lightweight cargo covers provide vital rmal protection to pharmaceutical shipments used in the ort-term storage and distribution of temperature-sensitive armaceutical products. These covers are designed to provide reliable and affordable means of protecting pharmaceutical pments that must be kept within common CRT (Controlled om Temperature) bands, such as 15°Cprotection to 30°C or 15°C to 25°C, Shipment accordance with prevailing regulations.
plays an important m the standard Tyvek® Solar™ W10 Cargo Cover to the new h-protection Tyvek®role Xtreme™ in W50 theCargo Cover you can rely the quality, performance and value you would expect from the tinguished Tyvek® brand. pharmaceutical coldchain. tted with a proprietary insulative layer,Recent Tyvek® Xtreme™ W50 argo Cover retains the reflective and permeability characteristics the Tyvek® productdevelopments while extending bothin its hot and cold mperature performance span. It has properties of heat reflection, cargo covers have eat insulation, weather protection and inherent breathability roviding dependable not protection from rain, snow and wind. only brought a new product to . DuPont India Pvt. Ltd. market, but have h Floor, Tower C, DLF Phase - III bergreens, Sector 25A also highlighted what urgaon - 122002 specifiers need to : +91 124 4091818 x: +91 124 2540889 be considered when ww.cargocovers.dupont.com choosing an optimum solution
cargo cover materials are air bubble films and multi-foil membranes, both of which include ‘low-e’ radiant barrier sheets. The laminating of bubble foil packaging material to foil-faced film to impart a measure of conductive insulation was the first step and this was quickly followed by the appearance of multi-foil constructions comprising sheets of thin plastic foam or bubble sheet separated by foil layers. Such products initially found favour in the European and U.S. construction industries where they were hailed as a “miracle” insulation panacea, being fast to install and relatively lightweight and spaceLightweight thermal fleece provides conductive insulation efficient compared to dense fibrous and foam solutions.
Reflective outer surface minimises solar heat gain
Single-Use or Multi-Use? Low-e metallic coating reduces thermal transfer to cargo
Breathable structure permits evacuation of excess moisture and condensation
Different Approaches The ideal cargo cover for pharmaceutical applications is strong, light, compact, solar reflective, weather-resistant, recyclable, breathable, particulate impassable, X-ray penetrable and easy to fit and remove. If low temperature protection is required, the cover will also need to display adequate thermal insulation properties. Together, these demands present a tall order for any membrane-type material.
ht © 2016 DuPont. All rights reserved. The DuPont Oval Logo, DuPontTM, For Greater Good™ and Tyvek® are trademarks or registered trademarks of E.I. du Pont de Nemours and Company or its affiliates.
80 CargoConnect - DECEMBER 2016
Two media that have found favour as
Cargo covers can be either single- or multi-use. While reusable covers might seem at first sight to be the most efficient solution, things are not as simple in practice. The long-distance return logistics involved with reusable covers can quickly wipe out any perceived environmental benefit, while the possibility of cover damage and contamination increases significantly.
The Way Ahead Cargo covers have a very important role to play in the maintenance of stability for many environmentally sensitive medical products during transportation, and the new generation of breathable, high-performance covers represents a step-change in across-the-board performance.
ICCS 2016 reiterates as the Power Center of Cold Chain Industry in India India’s premier event on cold chain industry, the fifth India Cold Chain Show 2016 concluded on 17-18-19 October 2016 at Bombay Exhibition Centre in Mumbai having exceeded expectations in attracting a turnout 6,986 high quality trade visitors with 80 per cent top management and decision makers, 150+ conference delegates and 164 exhibitors from more than 6 countries. Once again the show saw an impressive line-up of international and national companies from various sectors such as horticulture, material handling, humidifier and dehumidifiers, freezing and chilling systems, air curtains, cold storage doors, compressors, packaging and others. These sectors cater to horticulture, pharma, FMCG, seed, seafood, chemicals, frozen products, processed food etc. The show also had two new pavilions – China and Holland respectively. Representing a 35 per cent increase in exhibitor participation compared to 2015, this annual exhibition received a positive and outstanding feedback for attracting a relevant and targeted audience from cold chain industry from private and public sectors. “India Cold Chain 2016 presented a comprehensive range of equipment, machinery, services and solutions catering to the needs of domestic and international audience. Visitor number grew by 39 per cent compared to the last edition. This growth is a clear testament to the
importance of the exhibition and demand of cold chain in the country”, said Anuj Mathur, Managing Director, Reed Manch Exhibitions. The only event dedicated to cold chain sector, India Cold Chain is incontestably the show that showcase new products and technologies. Tata Motors, the largest manufacturers in Indian automotive industry has launched its Reefer and Mini Trucks for the first time in any exhibition. These trucks are custom made for transportation of perishable frozen foods such as ice cream, fisheries, dairy products, meat and pharmaceuticals. Similarly, many companies such as Yes Bank, knowledge partner of the show launched a white paper on ‘Innovations in Cold Chain – The Dairy Value Chain Perspective.’ This will helpful to initiate a seamless exchange of knowledge amongst stakeholders involved in the dairy cold chain domain including the industry as well as policy makers. Ideal Fogging System, Kahan Controls, Isuzu were some of the other names that also launched their products in the show. It took place once on the theme ‘Taking Cold Chain Business to Next Level: Opportunities and Challenges’ on 17-18 October 2016. It was inaugurated by Dr A K Sharma, Managing Director, National Horticulture Board along with several dignitaries from APEDA, NCCD and Cold Storage Federation of India.
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Recognition of Prior Learning Program launched by Honorable Union Minister, Rajiv Pratap Rudy Safeducate, specialist in supply chain and logistics training, launched Recognition of Prior Learning (RPL) program under Pradhan Mantri Kaushal Vikas Yojana (PMKVY). This is a skill certification program of the Ministry of Skill Development and Entrepreneurship (MSDE). The Chief Guest for the launch was Honorable Union Minister of State, Skill Development and Entrepreneurship, Rajiv Pratap Rudy. The grand launch ceremony took place at Safexpress Logistics Park – NCR. Speaking at the inauguration ceremony, Honorable Union Minister of State, Skill Development and Entrepreneurship, Rajiv Pratap Rudy, said “Through Recognition of Prior Learning (RPL) scheme under Pradhan
Mantri Kaushal Vikas Yojana (PMKVY), the government focuses on reaching out to people in the informal sector. Under the RPL program, we plan to assess and certify over one million people. These people are engaged in unskilled jobs, earning low wages and are often underpaid. The government’s motive is to provide them recognition for their skills and ensure that they can move on to higher skill job roles. RPL will help them refine their existing skills and find more satisfactory and fulfilling employment opportunities. I would like to congratulate Safeducate for taking this wonderful initiative. I sincerely hope that Safeducate will continue to strive towards bridging the skill gaps prevalent in the country.”
Emirates SkyCargo clinches top recognition at Global Freight Awards 2016
Krishnapatnam Port unveils its ‘Port command and control Center’
Emirates SkyCargo has been named Air Cargo Carrier of the Year at the 20th edition of the Global Freight Awards ceremony held in London. The award was accepted by David Taylor, Sales Manager-Key Accounts, Emirates Cargo in front of an audience of more than 500 guests from the global transport and freight community at a gala dinner held in London at the Lancaster London Hotel on November 3, 2016. The Global Freight Awards, supported by the 164 year old freight publication Lloyd’s Loading list, is held annually to recognize and reward innovative ideas and achievements that have set a benchmark for excellence in the freight industry. Emirates SkyCargo was awarded the much coveted Air cargo Carrier of the Year title for 2016 at the end of a two stage voting process open to readers of Lloyd’s Loading List. Overseen by the editorial team of the publication to ensure transparency and independence, the award represents the voice of the industry and that of Emirates SkyCargo’s customers. Emirates SkyCargo is the largest international airline cargo operator with a fleet of over 250 wide bodied aircraft, including 15 dedicated freighters-13 Boeing 777-Fs and two B747-400ERFs.
In sync with the new age initiatives by the government, Krishnapatnam Port has established a centralized State of the art Command and Control Center. Shri Hansraj Gangaram Ahir–Minister of state for home affairs visited the port to inaugurate the center which was followed by his participation in the Sapling Plantation, an initiative taken up by the port to make Krishnapatnam Port a Clean and Green Port, aligning to the Swachh Bharat Abhiyan initiative. With several close watch centers placed around the port, it is imperative to have a well-founded, centralized command center to supervise the working around the port. The Command Center uses the latest technologies to monitor port security and operations. Equipped with several screens, the centre displays information on a real term basis which includes - port channel and berth activity, port railway sidings activity, warehouse stock information, RFID and advance vehicle tracking system among others.
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FFFAI attends the first NCTF meeting; urges for proper implementation of all the existing systems The first meeting of the recently constituted National Committee on Trade Facilitation (NCTF) was called by the Cabinet Secretary, Government of India on October 28, 2016 to design the structure and working pattern of NCTF. From Government of India, the meeting was attended by Secretaries of different departments and ministries. Industry associations were represented by the Freight Forwarders’ Associations in India (FFFAI) and other chambers. From FFFAI, Samir J Shah, Chairman and S Ramakrishna, Vice Chairman attended the NCTF meet. In his speech at this meet Shah complimented the Government on great
“GST & ME” Summit
India Importers’ Council (USIIC) and U. S. Commercial Service (USCS) organized a Summit “GST and ME”, which focused on one of the most current affair topic ‘GST’. The Summit was open to the public and saw a gathering of Company Directors, General Managers, Business Owners, Consultants, Accounting, Taxation and Finance Professionals from over 90 organisations. The attendees shared their opinions, thoughts & suggestions for consideration during the upcoming GST launch in India. USIIC Chairman and MD of Sunil HiTech India Infra Pvt Ltd, C. Venkataramana who flagged off the discussions, spoke of the role of USIIC in maximizing US-India trade engagement and the enormous prospects going forward. Rahul Shah, Sr. VP and MD, AAR Corporation was introduced and inducted as a Member of the esteemed USIIC Board of Directors.
initiatives on trade facilitation. “Wonderful work had been done by various Departments in bringing about a change. All the initiatives were noteworthy and welcomed by Industry. It is however, to be noted that the change is not seen by all users and hence it appears that the implementation of the changes has not taken place. There is a gap between the intent of the government and reality on the ground,” Shah said. In his opinion, while infrastructure would take time to develop there should be a target on proper implementation of all the existing systems and uniform operations across the country.
Mega Maldives Airlines launches nonstop flight connecting Delhi and Male Mega Maldives Airlines hosted a launch party on November 24, 2016, at Shangri-La’s Eros Hotel, New Delhi announcing the commencement of its passenger service ex-DEL, into Male with effect from November 18th,2016. The route will be serviced with equipment B737-800. Acumen Overseas, a Group Concorde Company has been appointed as the Total Cargo Management partner for Mega Maldives Airlines network wide excluding MLE/CMB and JED. The event started with a presentation given by George Weinmann, CEO, Mega Maldives Airlines. He also explained about the network of the airline. Subsequently Mifzal Ahmed, Vice President, Strategy and Development spoke about their expansion plans and the beauty of Male that awaits the passengers. Later, a Lucky Draw session took place in which SL Sharma, MD, Skyways Group won a package of a three night stay in Shangri-La Hotel, New Delhi. In the end, the floor was open for dinner and networking. The Routing details are as follows: Routing DEL–MLE
Flight No. LV-305
Days of Operation 2, 5, 7
Aircraft Type B737-800
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Gati Kausar inaugurates its first Refrigerated Express Distribution Center
Gati Kausar, the temperature controlled supply chain solutions vertical of Gati Ltd, an industry leader in Express Distribution and Supply Chain Management, inaugurated its first temperature controlled warehousing facility in India, near Delhi, on October 27, 2016. It is a state-of-the-art facility developed with superior technology and high quality design elements, in line with ISO 22000 standards. The new facility is spread over four acres, and currently has a capacity of more than 5000 pallets. It has multiple chambers that cater to temperature requirements ranging from -25 to +25 degree Celsius. This facility will serve the needs of varied industry sectors including dairy, pharmaceutical, frozen food, quick service restaurants, ice creams, confectionaries, and fruits and vegetables. Gati Kausar, with its fleet of
CCA unveils future roadmap The Car Carrier Association has passed three crucial resolutions at the recently held Second Conclave in Gurgaon with the goal of making their position strong vis-a-vis OEMs as well as state authorities. The Resolution No.1, passed unanimously after a healthy debate at the Second Conclave, insists upon all CCA members becoming CMVR compliant. It is pertinent to note that the Ministry of Road Transport and Highways, Government of India, issued the Notification (Annexure A) on October 7, 2010 specifying the vehicle dimension of car carriers which should be implemented from April 1, 2017. This was the ticklish issue for car carriers that caused a lot of heartburn since the pre-Notification CMVR norms did not specify vehicle dimension of car carriers thus leading to high level of extortion or corruption by various state authorities as the carriers move across pan India from various automotive OEMs. Come April 1, 2017, CMVR-compliant car carriers (read 18.75 m length) will not be chalaned or penalized because they will become legal to ply on Indian highways. Hence the Associationâ€™s insistence on becoming CMVR compliant. The debate among members was over the time at their disposal to get their existing vehicles that are beyond 18.75 m resized. Their demand was for more time, but at the end of discussion, they agreed to become CMVR-complaint as early as possible.
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220 refrigerated vehicles along with 5000 Gati Fleet, already provides high-quality logistic services to many popular brands in the country. This new cold store facility is part of a pan-India network that Gati Kausar is planning to develop to provide end-to-end, integrated cold chain solution for different industries. Mahendra Agarwal, MD and CEO, Gati Limited said, â€œSince the time of its inception, Gati has successfully established presence across various segments of the domestic supply chain business. A network of such Refrigerated Express Distribution Centres across the country will help us introduce another differentiated, logistics service innovation of time-definite cold chain services to customers across industry sectors.â€?
Independent cargo subsidiary company AAI Cargo Logistics and Allied Services Company Limited (AAICLAS) launched Shri P. Ashok Gajapathi Raju, Hon’ble Union Minister of Civil Aviation launched AAI Cargo Logistics and Allied Services Company Limited (AAICLAS) on October 25, 2016 at Hotel Taj Palace, New Delhi. The AAICLAS is an independent cargo subsidiary company by corporatisation of AAI’s cargo department. Neera Rawat has been appointed as the MD of the subsidiary and BK Mehrotra would be Chief Executive Officer of AAICLAS. The vision of the company is to become the foremost integrated logistics network operator in India with primary focus on air cargo handling and allied services. This new subsidiary will be allowed to develop its own distinct culture, organisation structure and business model while at the same time draw upon the strength of its large parent origination, Airports Authority of India. All the activities currently being carried out by the cargo department of AAI will be merged into the new company and the department will no longer be functioning with AAI. The company will be shortly initiating comprehensive discussion with all the stakeholders to ensure smooth transition of all cargo activities to the new company. Creating AAICLAS by AAI would bring multiple advantages as there are lot of activities on the cargo front from the AAI in the period ahead. AAI already has vast reservoir of human resources in cargo handling who possess the requisite expertise and experience in handling cargo operations which would be gainfully utilised for the organisational benefits. The efforts are being taken by Airports Authority of India in establishing regional connectivity through air cargo movement across the country.
Smart cargo mainport program sparks innovation Program to reinforce Schiphol as a smart hub gains momentum, with University and Government backing, a successful pilot scheme leading to new services, and new backing from partner Fresco Flowers. Schiphol Cargo will back further projects as part of its Smart Cargo Mainport Program, aimed at finding innovative schemes to improve cargo flow through the Amsterdam hub, underpinned by transparent data exchange. The Program, which has a steering committee including Schiphol Cargo as Chair, KLM Cargo, Dutch Customs, and Cargonaut, has already attracted EUR375,000 of Dutch Government funding, participation from leading companies in the airport community, and the backing of the University of Delft and Hogeschool van Amsterdam. A pilot scheme is currently underway, bringing together all sectors of the supply chain to work collaboratively towards improved services through the hub, and the newly formed Holland Flower Alliance’s data transfer initiative is one of the first to successfully consider and implement Smart Mainport Program elements in its operations.
CRWC Ltd contributes to “Swacch Bharat”
Central Railside Warehouse Company Ltd, a Public Sector Undertaking under the Ministry of Consumer Affairs, Department of Food and Public Distribution Contributed Rs Eleven Lakhs Thirty Seven Thousands to ”Swacch Bharat Kosh” by the Government of India. The initiative was a part of its ongoing corporate social responsibility projects. K.U.Thankachen, Managing Director, CRWC, handed over the cheque to Dr Vivek Joshi, Joint Secretary, Ministry of Finance in presence of other officers from CRWC.
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Success Cannot Be Measured in Numbers
Becoming a father of two at a relatively late age, Edoardo Podestรก, Managing Director, Air and Sea Logistics, Asia Pacific, DACHSER Far East Ltd, loves to spend quality time with his family. In a candid conversation with Nicin Varghese, he talks about his experience and expectations about the logistics industry
What motivated you to be a part of the logistics industry and how has your experience been so far? My family has associated with the shipping industry since a very long time. Moreover, when I was young, I wanted to travel the world. I guess these were the two main factors that brought me to this industry. I started my career with this industry almost 30 years ago. I have been living and working in seven different countries and ever since I joined this industry, I have realised that it was the right one for me.
How has the industry changed from the time you stepped in? Also, what major transformations have you observed in the industry in terms of technology, manpower, practices and government regulation? The changes have been huge. The world has changed drastically during the last 30 years but I would say that the biggest changes have been on the technological side. With IT, how we communicate and work, both internally at DACHSER and externally with customers
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and suppliers has changed a lot.
What was the biggest challenge that you have faced till date? There have been a number of tough challenges like the 1997 financial crisis, the SARS year in 2003 or the recession in 2008. But the greatest challenge has always been to keep pace with the growth of business in the region and that was not a bad challenge at all!
Where do you see the graph of the logistics industry moving in the coming decade? It is clear that the future will belong to the emerging countries. Toretain and secure its position in the world economy, China will keep on playing a major role but it has already almost reached maturity. Countries like India, Vietnam and Indonesia and Bangladesh will offer plenty of opportunities.
What are the specific beliefs or value that you live and work by? And how do you define success? I believe that loyalty and integrity are
the most important universal values and no one can really be successful without them. Success in business can normally be measured with numbers but I think beyond that. Really successful people are the ones who manage to find opportunities, capitalise on them, create something valuable and lasting for all different stakeholders, including their customers.
Apart from work what are your other interests? I got into this profession because I wanted to travel and I still enjoy it but since I became a happy father of two at a relatively late age, my family now takes most of my free time. Now my kids- a seven old and a four year old- take most of my energies when I am not working.
Do you have any message for those who aspire to work in the logistics industry? Yes, those who aspire to work with the logistics industry should go for it. I believe, it is a great industry to work with.
Published on Nov 30, 2016