CargoConnect December 2017

PAGES 96 inclusive of cover

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VOL IX ISSUE I DECEMBER 2017 `20

Postal Registration No.: DL (S)-01/3372/2016-2018 WPP No.: U(S)-81/2016-2018 Posted at Lodi Road HPO, ND on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

Infrastructure Status Granted: Logistics gets a major boost

Project Logistics: Transporting Heavy Cargo with Ease

Air Cargo Connectivity Transcending Global Barriers

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Contents

Volume IX • Issue I • december 2017

Editor and Publisher Smiti Suri Senior Correspondent Tariq Ahmed Feature Writers Gaurav Dubey Deepashree Banerjee Director Ajeet Kumar

14

Marketing Manager Niti Chauhan Asst Manager Marketing Asad Mohammad

COVER STORY

Cold Chain Gets a Makeover focus

Marketing Executive Mehuli Choudhury Administration Vipin Marwah Accounts & Administration Poonam Gupta Sr Designer & Visualiser Shaique Ahmad

36 SPECIAL FEATURE

Project Logistics: Transporting Heavy Cargo with Ease FEATURES

Infrastructure Status Granted: Logistics gets a major boost ........................8

INTERVIEWS

Prof (Dr) Dewakar Goel, Director, Indian Aviation Academy .........................................68 Sanjeev Khanna, Consultant, Winning Edge Logistics Pvt Ltd (WE)....................................69 Edwin Lammers, Vice President for Commercial and Business Development, Khalifa Industrial Zone Abu Dhabi ..............70 Edoardo Podestá, Managing Director Air & Sea Logistics Asia Pacifc, Dachser .................72

Air Cargo Connectivity Transcending Global Barriers ...............................46

UPFRONT ....................................6 NEWS ..................................74-84 PROFILE ...............................84-85 EVENTS ................................86-92 UPCOMING EVENTS ..................93

The Dynamism of Logistics Service Providers .........................................58

APPOINTMENTS ........................93 PEOPLECONNECT .....................94

GST gives you the opportunity to reduce your inventory costs signicantly. Rather than keeping huge inventories in multiple regional warehouses, keep consolidated inventories at one central warehouse. Now is the time to call Safexpress, the Logistics Experts. Safexpress has India’s largest Logistics network, covering all 22110 Pincodes of India.

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

Nitin Gadkari, Minister of Road Transport, Highways and Shipping tweeted and posted photo of the official gazette notification after logistics got the Infrastructure status

In the run-up to meet rising electricity demand of the nation, Coal India Limited has dispatched 18%

Infrastructure status to the logistics sector, will make it easier for companies operating cold chains, industrial parks and warehousing facilities to raise longterm credit from banks and other financial institutions at low rates, and attract foreign investment.

more coal to power plants in Oct 2017.”

Piyush Goyal, Minister of Railways and Coal shared the success news of his ministry from his tweeter handle

“In 70 years of independence, we had 70 active airports. With UDAN, we will make 80 more airports active within one year.

That’s the power of an idea.

P Ashok Gajapathi Raju

Union Minister for Civil Aviation

Anshuman Magazine

chairman, India and SouthEast Asia, CBRE, chairman, India and South-East Asia, CBRE

“The granting of infrastructure December is one of the busiest months of the year for the majority of businesses, largely due to Black Friday and Cyber Monday.

These two days of intense retail activity can often be the most challenging to logistics companies, given the sheer amount of orders they must process and deliver. In 2014, £810m was spent on Black Friday alone in the UK, showing just how significant an event it is.

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CargoConnect - DECEMBER 2017

status to the logistics sector will result in higher investments, which will drive the revolution of the segment in India… Both cold chain and warehousing facilities are covered in the announcement and will go a long way in strengthening infrastructure development across India.”

focus

Infrastructure Status granted Logistics gets a major boost India has recently granted infrastructure status to its logistics sector, which includes firms operating cold chains, industrial parks, transportation and warehousing facilities. This move has been highly appreciated by the industry leaders. As the logistic sector holds together countless manufacturing and trading activities and bridges the gap between increasing consumption and timely supply, the grant of infrastructure status would provide the necessary platform for development of the sector. Tariq Ahmed explores what this promising move has in store for the sector.

I

ndia’s high logistics cost has always acted as a major impediment to its global competitiveness. High logistics cost reduces the competitiveness of Indian goods both in domestic as well as export market. Keeping this in mind, the government has recently given infrastructure status to logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments. Development of logistics

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would give a boost to both domestic and external demand thereby encouraging manufacturing and ‘job creation’. This will in turn be instrumental in improving country’s GDP. The inclusion of “Logistics Sector” in the Harmonized Master List of Infrastructure Sub-sectors was considered in the 14th Institutional Mechanism (IM) Meeting held on November 10, 2017. It was recommended by the Institutional Mechanism and subsequently approved by the Union Finance Minister, Arun

Jaitley. “Logistics Infrastructure” is included by insertion of a new item in the renamed category of ‘Transport and Logistics’, with a footnote stating that “Logistics Infrastructure” means and includes Multi-modal Logistics Park comprising Inland Container Depot (ICD) with minimum investment of `50 crore and minimum area of 10 acre, Cold Chain Facility with minimum investment of `15 crore and minimum area of 20,000 sq. ft, and/or Warehousing Facility with investment of minimum `25 crore and

focus The logistics sector is a core industry that deeply influences all economic activities. We believe that the infrastructure status will reduce the cost of capital in transportation and warehousing, thereby reducing the cost of logistics. At Mahindra Logistics, we look forward to the infrastructure status getting implemented, for the industry to excel in years to come.”

Pirojshaw Sarkari Chief Executive Officer, Mahindra Logistics

minimum area of 1 lakh sq ft.

It will enable the Logistics Sector to avail infrastructure lending at easier terms with enhanced limits, access to larger amounts of

infrastructure status would help the logistics sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters.

THE GAINERS

1.96% 143.4

2.43% 172.8

Intraday Gain

2.19% 298.2

A Bold Move The definition of logistics includes industrial parks, warehouses, cold storages and transportation. The government has been working on ways to attract more investments into transport and logistics as part of efforts to bolster infrastructure development in the country.

Amending the existing framework, a notification issued by the Department of Economic Affairs (DEA) has widened the category of infrastructure sub-sectors to “transport and logistics” from the earlier sub-head of “transport”. Having the CargoConnect - DECEMBER 2017

1.33% 91.3

Prev. Price (Rs.)

funds as External Commercial Borrowings (ECB), access to longer tenor funds from insurance companies and pension funds and be eligible to borrow from India Infrastructure Financing Company Limited (IIFCL).

10

1.97% 60.05

Development of logistics would give a boost to both domestic and external demand thereby encouraging manufacturing and ‘job creation’. This will in turn be instrumental in improving country’s GDP. Logistics, as per the commerce ministry’s definition, includes industrial parks, warehouses, cold storages and transportation. Realising the importance of logistics sector to promote trade, the government has created a separate special secretary-level post in the commerce ministry to coordinate with all the concerned ministries and departments.

Earlier there was no single department or

ministry to look at all the aspects related to logistics covering various modes of shipment such as sea, roads and railways. Exporters too have time and again demanded a specific department to deal with the issues related to logistics.

According to a report, about 14 per cent of the total value of goods goes into the logistics cost while in other major economies it is just 6-8 per cent. A strategy paper released in 2010 by the commerce ministry had emphasised upon the need to invest billions of dollars in improving infrastructure including logistics to boost exports.

A Move That’s Long Overdue In a study conducted by the government titled Assessment of Quantitative Harvest and Post-Harvest Losses of Major Crops and Commodities in India, it was found that the annual value of harvest and postharvest losses of major agricultural produces at the national level was of the order of `92,651 crore calculated using production data of 2012-13 at 2014 wholesale prices.

This is more than the loan waivers announced recently.

Since this study was done, no further updates have been provided by the government. The huge loss is either borne by the farmers who are unable to sell their produce or by the taxpayer as the government is not able to sell the purchased good in time.

The main reason behind the loss is lack of storage and transportation facility in the country. While the government has been working on improving the road network in the industry, storage and warehousing facilities were not being created at the same pace.

With the announcement of giving logistics an infrastructure status, a major

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focus The first step has been taken but the hard yards need to be collectively taken.

Logistics in India as a industry is going through the same metamorphosis that IT went through almost 20 years back. We need to learn from that experience on how to create a complete eco system around making logistics a successful industry which attracts new and best talent. We are still about 5 to 7 years behind most developed nations in terms of ease of doing logistics business.�

Vikram Mansukhani Head 3PL Division, TVS Logistics Services Ltd

part of the issue is being addressed. The government has granted infrastructure status to the logistics sector, including multi-modal logistics parks and cold chains.

Infrastructure status for cold chains and warehousing facilities will provide a big boost to attracting private investment in this sector as the cost of funding it will be at a concessional rate and the players

more competitive in the international market.

Improved speed of delivery products and other logistical benefits will help companies grow faster and sweat their assets.

The Anticipated Impact Let us try to understand what exactly does this move by the government mean to the logistics sector:

Having the infrastructure status would help the logistics sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters. will have multiple instruments to raise the money through. Money can now be availed with a longer tenure, will have easier terms and can be raised from insurance companies, pension funds, and international lenders.

According to industry body ASSOCHAM, logistics costs in India are one of the highest, at around 14 per cent of GDP. The same in developed countries with better infrastructure is around 6-8 per cent of the GDP. An Assocham-Resurgent India joint study states that India can save up to USD 50 billion if logistics cost is brought down from 14 per cent to 9 per cent.

This saving will make Indian companies

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CargoConnect - DECEMBER 2017

Cheaper, bigger loans K. Ravichandran, Senior Vice President, ICRA explained that infrastructure industries not only get longer maturity loans compared to typical manufacturing sector but the lending terms are typically easier. Logistics companies will now also enjoy the option of refinancing with specialised lenders like IDFC and IIFCL. Moreover, the infrastructure status will give them access to cheaper foreign currency funding through the External Commercial Borrowing (ECB) route.

Lower cost of logistics

The logistics spend in India is almost 13 per cent of the GDP, compared to well below 10 per cent for the advanced countries, claimed Pirojshaw Sarkari, CEO, Mahindra Logistics, in an interview to ET Now. This high logistics cost added to the cost of Indian goods, making them less competitive in domestic and international markets.

But with GST coming in, and the abovementioned easier access to capital and longterm borrowing, large format warehouses will soon crop up across the country. This will eventually bring down the cost of logistics, which, in turn, will boost demand for Indian goods and further the Make in India cause. The domino effect would also lead to job creation.

Will attract further private investment According to the government notification, logistics infrastructure will include Multimodal Logistics Parks comprising Inland Container Depot (ICD) with minimum investment of `50 crore and minimum area of 10 acre, cold chain facilities having an investment of at least `15 crore and minimum area of 20,000 sq ft, and warehousing facilities with investment of a minimum `25 crore and over 100,000 sq ft area. Industry insiders predict that this will attract a great deal of private investment in the sector.

Giving a thumbs up to the announcement, several major logistics firms were trading at a premium in the morning when this effect took place. In afternoon, shares of Allcargo Logistics and TCI Express were up 2 per cent compared to their previous day closing price, while Mahindra Logistics was up 3 per cent and ABC India shares surged by 4 per cent. This certainly means logistics players are looking at brighter days ahead.

cover story

Cold Chain a s t Ge

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r e v o e k Ma

cover story

Contrary to the popular belief, cold chain is not merely refrigeration of perishable commodities. Cold chain is a logistics system that provides a series of facilities to maintain ideal storage conditions for perishables from the point of origin to the point of consumption in the supply chain... This system has been evolving over the years and with the current focus on enhancing the facilities and infrastructure, the sector has received major boost from the stakeholders and is set for mega transformations in the upcoming times.

Tariq Ahmed talks to experts in this sector in an attempt to understand what’s driving this segment.

DECEMBER 2017 - CargoConnect

15

cover story

inside What’s shrouding the cold chain?

Securing the cool chain Selecting the right fit

I

ndia is one of the world’s largest consumers of food and the third largest producer of agriculture, according to 2015 Top Markets Report on Cold Chain by International Trade Administration. India also holds the distinction of being the largest producer of milk in the world and boasts of having the largest livestock population.

According to Indian Brand Equity Foundation (IBEF), the food processing industry accounts for 32 per cent of India’s total food industry and 13 per cent of Indian exports. The industry ranks fifth in terms of exports, production and consumption. Whereas the food processing industry looks promising for India, however, it must be considered that the local markets or farmers often have to rely on inefficient supply chain or middlemen. The farmers, at times, do not have the requisite infrastructure, technical know-how or capital investment to channelise into cold storage and supply chain development.

Add to that, the fragmented infrastructure of cold warehouses, transportation and associated services. This is a major reason why we require integrated logistical support, and in particular, cold chain solutions to enable easy accessibility and smooth flow of produce from farms to table, fresh and safe. It would also enable farmers to extend the life cycle of perishable products, traverse long distances, reach wider market segments and larger consumer base.

The Infrastructure Game All About Compliance The Drug Keeper Trends shaping the life science cold chain Conclusion

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CargoConnect - DECEMBER 2017

What’s shrouding the cold chain?

Third-Party Logistics Companies are betting heavily on the cold-chain technologies and are spending more on equipment, expanding capacity, investing in new and better technologies, and are continuously developing overall process improvements.

It’s a pretty good bet when research shows that approximately $12.6 billion dollars is expected to be spent this year on managing the transportation of temperature controlled pharma products.

However, this does pose some unique challenges that are not just isolated to the cold-chain logistics sector. These challenges such as globalisation, cost constraints and sheer volume can seem daunting enough without taking into consideration the challenges of the cargo itself due its sensitivity and high-value.

Pharmaceutical companies are increasing their development of more sensitive biologics that require very restrictive controls on temperature, time, and security.

Even more, this is being done with products that must meet the highest regulatory and quality standards.

Cold chain primarily transports the two most time and temperature sensitive shipments – food and pharmaceuticals. Both require a precise and impervious logistics setup that is usually technology and capital intensive. Pharmaceuticals, especially lifesaving drugs and vaccines need to be in temperature controlled environment at all times. Re-routing, multi-modal transportation, in transit layovers, storage at warehouses, containers, last mile delivery mechanisms all need to take into account the temperature sensitive nature of the shipment. Additionally, infrastructure and access in each country can be an exacting challenge for the cold

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cover story Operational workers at all levels are often responsible for maintaining the cold chain process while products are stored in the suitable boxes or while they are being transported to places. More and more often it is becoming the logistician’s responsibility to manage the cold chain as a part of the supply chain.

Harpreet Singh Malhotra, CMD, Tiger Logistics India Limited

chain coupled with compliance with local regulatory requirements.

It is important to educate the individuals in the complete cold chain: education that will address the root of the problem.

We have not realised that the mostly uneducated or rather un-aware worker handling the produce is not aware that the frozen food or the fresh food grow bacteria if not maintained at the right temperature.

This needs a holistic approach by the companies providing the cold chain – to spend time and money to educate them on the reasons for a cold chain.

the country. The problem is we do not have an end to end seamless cold chain but have it in bits and pieces resulting in breakdown in the middle. So when we are talking about a cold chain, we need to ensure that the temperature is maintained throughout the chain consistently.

agent, carrier, destination handler, haulier and destination forwarder. Temperature must be maintained, and in the case of pharma and life science shipments which can be rendered useless (or even hazardous to health) by temperature excursions, it must be seen to have been maintained. Not

Outlining the challenges Lack of quality cold warehousing infrastructure:

There is a severe shortage of cold chain warehousing capacity as only 25% of the capacity is available for fruits, vegetables, processed foods and pharmaceuticals, whereas 75% of the capacity is dedicated to potatoes.

Lack of standards and protocols in construction and operation of facilities:

Technical standards followed in India are mostly unsuitable for Indian conditions, which results in lower performance of standard refrigerated systems.

Low awareness of labour in handling temperature-sensitive products:

According to Samit Jain, Managing Director, Pluss Advanced Technologies Pvt Ltd, “Lack of proper connectivity and infrastructure at each point of handling and even the absence of right kind of tools and equipment lead to tremendous delays and improper handling, breaking the cold chain. Having said that, one has to look at full proof solutions simultaneously, since the above problems need not just a social approach by the entrepreneurs but a political will too.”

We not only have issue with Cold Storage, other functional modalities such as facilitating seamless movement of goods via refrigerated vehicles which has done wonders in countries like China is presently best considered to be a far-fetched idea in

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CargoConnect - DECEMBER 2017

In India, the supply chain of most products is long and fragmented. A product changes many hands from source to delivery point. Most workers involved in this are not properly trained in handling temperature-sensitive products resulting in deterioration of product quality before reaching the consumer.

High fuel cost and power cuts:

Fuel costs in India constitute around 30 per cent of operating expenses of cold storage in India as compared to 10 per cent in the West. Further, cold storages are dependent on steady supply of power. Most Indian regions face power cuts. Hence, these companies have to invest in power back-ups, which push up the capital investment requirement.

Mark Whitehead, Chief Executive, Hactl said, “All cold chain shipments, whether of cut flowers (where deterioration is usually visible) or pharmaceuticals (where it is not), require the maintenance of constant temperatures throughout the supply chain. This is a challenge, due to the number of elements in any airfreight supply chain: typically shipper, origin forwarder, third part haulier, handling

all elements of supply chains have invested in the necessary systems, infrastructure and monitoring processes to successfully transport such cold chain shipments, and this is the value of accreditation.”

Harpreet Singh Malhotra, C M D, Tiger Logistics India Limited said, “Operational workers at all levels are often responsible for maintaining the cold chain process while products are stored in the suitable boxes or

cover story While the government has been investing heavily into building India’s infrastructure to world class standards, there is a lot more that needs to be done.

While we boast of a robust road network, the condition of most roads is fairly poor, leading to a decline in operating efficiencies.

Jasmine Singh, Head, Industrial and Logistics Services, India, CBRE South Asia Pvt Ltd

while they are being transported to places.

More and more often it is becoming the logistician’s responsibility to manage the cold chain as a part of the supply chain. The Logistics staff must be trained to both use and manage these materials. This includes having appropriate and efficient logistics mechanisms to manage shipping, fuel, spare parts etc. Without training, the program will be seriously compromised and put at risk.”

Securing the cool chain Perishable goods are both time and temperature sensitive. If either are not right, the goods will spoil. Exporters need to ensure that the destination they

Security measure for perishable air cargo: 1. Ensure if the PER/pharma consignment is ok to accept at the airport. A check sheet / SOP would be a greater option to streamline this.

2. Fit to fly check sheet to ensure the ULD where the freight is loaded is airworthy and in accordance with all safety measurements.

3. Use of seals for ultra-sensitive products and proper recording is essential to identify any breach of security.

4. Screening records and stickers to each consignments to ensure 100% screening to make the freight secure

are shipping to have similar facilities and only work with air and sea cargo carriers that can provide a consistent end-toend cool chain for their produce. It is important these facilities are available

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in the exporter’s entire target market to ensure that their produce reaches shops in a consistent condition, regardless of where they have been shipped to. Yes, multimodal ways of transportation are much beneficial. If chilled food delivery is tricky, importing frozen foods from overseas and then supplying to customers via a domestic distributor can present a logistical headache. There are additional considerations for frozen food SMEs including ensuring their frozen products arrive in perfect condition. When we were food safety audited by our local council in order to be an approved site for production, they offered lots of tips on transport. The real key is maintaining chill chain, to avoid icing melting and chocolate blooming.

“Food has always been big business, but as consumer demand for fine cuisine and international flavours has grown, so have the opportunities for smaller

food companies; however, with them have come the inevitable challenges of transporting fresh, refrigerated, and frozen goods safely to their destinations.

Wherever perishables originate around the world, new technologies will precisely track product inventory, movement, and temperature. While current receivers may record temperatures in only one of an item’s many conveyances, in the next five to eight years active RFID chips will offer seamless temperature records from the point of harvest or production to the point of purchase. Even consumers and certainly retailers will be able to interrogate that chip and see that entire cold chain temperature record,” added Malhotra from Tiger Logistics.

“There is a problem of pilferage in cold chains. Supply chain visibility by leveraging block-chain may be the answer to prevent this. This will reduce the

cover story Speaking from our perspective as a major handler involved in considerable volumes of temperature-sensitive shipments, including pharma and life science, security is vitally important due to the generally high value of goods.

Mark Whitehead, Chief Executive, Hactl

risk to a considerable level. Multi-modal transportation is beneficial as it will be cheaper and faster but sufficient measures should be taken for consistency. To optimise last mile delivery and cost, bulk transportation will be the key. For example, if we are transporting fruits and vegetables, we need to have fewer but larger deliveries,” says Sandeep Chatterjee, Senior Manager, Deloitte.

If a company is able to avoid temperature abuse, it will be successful. Temperature is derivative of machine up time and least a company must do is preventive maintenance of the equipment and vehicles, to avoid

is a must. Processes and technology to keep 24x7 vigilance and controls on temperature in warehouse or on road will help act in time.

Jain from Pluss Advanced Technologies said, “Technologies exist today for security – these are being extensively deployed in the pharmaceutical industries especially in the developed countries because of stringent regulations. In India, because of the lack of regulation and lack of awareness of the worker as well as the consumer, security measures are not used. Passive cold chain technologies like use of phase change materials to provide back up and

and Customer Relationships Ma nagement, Snow ma n Log istics Limited, “Multimodal ways of transport can benefit in case it leads to reduction in transit time, but, at the same time, we must ensure that the container itself is shifted from one mode to another and does not lead to re-handling / shifting of material, which may expose the material to higher temperatures, may result in temperature abuse. Higher volume can optimise the costs. Further, there can be clubbing of similar products to reach the market, which is not prevalent in the current business scenario, as no one wants the competition to know their customer base.”

Selecting the right fit The security aspect of selecting a transport provider within the cold chain should include the following considerations.

Although many of the specific points refer to truck transport, much of the knowledge can be considered good advice among other modes of transport as well:

Does the carrier schedule an appropriate pick up and delivery?

frequent break downs. Further, transit warehousing should always be kept as back up option. The moment there is any failure of reefer on vehicle, the first thing a company must do is to shift the goods to nearest warehouse and avoid temperature shocks to material. Training to staff in terms of operating equipment, food safety,

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RFID tags, QR codes, wireless data logging etc. are available. Costs are a concern but will become economical with wide scale adoption. We in India tend to look at immediate costs than the life time costs of a product!”

According to Padamdeep Singh Handa, Vice President – Business Development

This factor is equally contingent upon the business hiring the carrier as it is on the carrier itself. A truck hauling your shipment is at its most secure when it remains in motion. When a truck becomes a “warehouse on wheels” parked somewhere with your shipment on board, there is a greater risk of theft. Many times a truck is in this situation because of inappropriate scheduling. Sometimes a pick up is scheduled at a time that makes it impossible for the shipment to arrive at its destination when the recipient is still open. In instances like this, the truck becomes parked with

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cover story From temperature mapping, GPS positioning, live temperature visibility etc. the industry is growing towards global standards like BRCs. The organised players are able to meet these norms better than the unorganised section. The regulations and standards are very clearly stated and can be maintained at a certain cost.

Padamdeep Singh Handa, Vice President – Business Development and Customer Relationships Management, Snowman Logistics Limited

cargo. With the vehicle parked, the risk of the driver leaving the shipment unattended increases. This leaves the vehicle at risk of either being broken into or stolen. Even a parked vehicle with an attendant driver is still at risk of potential hijacking.

Does the carrier have a “safe parking” program?

Recognising that having a truck parked with your shipment is a likelihood that can be unavoidable at times. In such instances, does your transportation provider have a “safe parking” program? Ideally, a vehicle would be parked within an enclosed facility. Additionally, such a facility would be fenced off with barbed wire, monitored by closed-circuit TV, have a locked gate and a security guard on duty 24/7. The same attributes that make for an adequate “safe parking” environment are good guidelines for consideration for one’s warehousing and distribution facilities as well.

dialogue with law enforcement.

Does your carrier have a security contingency plan?

Make sure your transportation provider has a security plan and standard operating procedures in place to deal with any needed security levels your shipment requires.

Additionally, make sure they have the capability to implement those security procedures. Are drivers handling secure shipments appropriately trained in those protocols?

Is your transportation provider aware of risks of criminal activity within select areas? This knowledge is not only relevant to the immediate area where the pickup or delivery is occurring, but for the regional area as well. Portions of select metropolitan areas are known high-risk locales for cargo theft and vehicle hijackings. Does your transportation provider have the insight to route around such areas?

Who is handling your shipment?

What is the carrier’s relationship with law enforcement?

Are you provided any advance identification on the driver(s) handling your shipment?

Does your transportation provider have an ongoing relationship with law enforcement?

Much of the knowledge gained about crime in certain areas comes from an ongoing

What security technology and backup systems are in place?

CargoConnect - DECEMBER 2017

The Infrastructure Game The problem which we have is the lack of quality cold warehousing infrastructure.

Warehouse is merely perceived as a storehouse and sufficient measures are not taken in terms of temperature control and sensitivity. Secondly, technical standards

Cold chain which is supposed to be the fulcrum of an effective supply chain infrastructure in dealing with fruits and vegetables remains a grossly ignored area in India.

Is the carrier aware of crime levels in your shipment’s geographic area?

24

technology as satellite tracking of the vehicle, electronic alert button (the driver of the vehicle could push a button that alerts local law enforcement of an emergency) and other such efforts?

Does the carrier have such security

followed in India are mostly unsuitable for Indian conditions, which results in lower performance of standard refrigerated systems. The concepts are borrowed from the west but not contextualised for Indian conditions. We have a long supply chain in India and a product changes hands

cover story Compliance procedures and regulations for food products and pharmaceuticals differ as geographical borders are crossed. The challenge is to anticipate and ensure compliance at every stage, even before the shipment reaches the transit point.

Rachid Fergati, MD Indian Sub-Continent, UPS

Exporters need to ensure that the destination they are shipping to have similar facilities and only work with air and sea cargo carriers that can provide a consistent end-to-end cool chain for their produce.

at multiple points. Sufficient care is not taken to be consistent.

Additionally, fuel costs in India constitute around 30 per cent of operating expenses of cold storage in India as compared to 10 per cent in the West and we do have a problem of lack of uninterrupted power.

Jasmine Singh, Head, Industrial and Logistics Services, India, CBRE South Asia Pvt Ltd said, “Over the past year, India’s Warehousing segment has witnessed an uptick in interest from both domestic and global companies. With the implementation of the Goods and Services Tax (GST), we believe that the Industrial and Logistics Industry can further streamline their operations.

The implementation of GST helps in improving the overall quality of warehousing in India. This includes development of better warehouses that meet international standards. The recent announcement of granting infrastructure status to the logistics industry will result in higher investments, which will drive the revolution of the segment in India. Both cold chain and warehousing facilities are covered in the announcement and will go a long way in strengthening infrastructure development across India.”

There seems to be a thrust in these segments by the government today. What should have been done in the last 70 years is being started now – what we need to see is prompt action. The worry remains – on the implementation and the quality. The speed at which some infrastructure projects are being conceived is good; but the speed of implementation needs to ensure that “quality” is not compromised. We need not reinvent the wheel in many cases and need to award projects to reputed infrastructure companies who will deliver, monitor quality during construction and have the wherewithal to stay abreast of the latest technologies.

“Primary infrastructure requirement varies from industry to industry. From temperature mapping, GPS positioning, live temperature visibility etc. the industry is growing towards global standards like BRC’s. The organised players are able to meet these norms better than the unorganised section. The regulations and standards are very clearly stated and can be maintained at a certain cost,” said Handa from Snowman.

All About Compliance Shipping temperature-controlled products is a risky business, but armed with the appropriate information, you can mitigate the risks and successfully ship your products through the cold chain.

The market’s perception of the quality of your product is based largely on the end user’s experience with it. Did it arrive in good

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CargoConnect - DECEMBER 2017

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cover story If a product needs a specific stowage temperature to be kept and if not, it could directly affect the integrity of the product based on the tolerance time as assigned

by QA. The product could be damaged or rejected by the consignee.

Ashish Sharma, Cargo Manager, China Eastern Airlines

condition? Is it safe to use? For temperaturecontrolled products, these perceptions are highly dependent on the quality of your cold chain and your ability to get the product to your customers without excursions in temperature that would render the product useless, or even dangerous.

officials all provide a necessary service in the process, but they don’t necessarily place the top priority on your company’s interests.

The cold chain should fully support your product with the right facilities, technology, and operating procedures, whether you buy these things from another provider or rely

to follow that has been a hurdle. This is because several small players are not even aware, or given that there is a market for products at every price range, coupled with the cost cutting that every one wants to do today - has allowed all types of products and companies to flourish. In the cold chain and refrigeration sector too – because of cost cutting primarily, each person is trying to do things on their own. Refrigeration is a science and an art. If the insulated body on the truck is not built the right way, using the right insulations, it will never provide

For the best reception of your product, you need to achieve maximum confidence in your cold chain while minimising the risk that a failure will occur.

For the best reception of your product, you need to achieve maximum confidence in your cold chain while minimising the risk that a failure will occur. If all of the links of the cold chain were always under your complete control and money was not a constant concern, this would be easy.

Unfortunately, to be cost-effective on a global scale, you need to rely on people and processes that are outside of your direct control to deliver the product. Freight forwarders, shipping vendors, and customs

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CargoConnect - DECEMBER 2017

on a cold chain that is entirely your own.

Each link in the cold chain requires a wellplanned design that has been qualified and validated internally and with your external partners.

In ter ms of reg ulations and standard isation Ind ia faces a huge challenge. We have not been able to do it for simple things when like plugs and sockets or even the right kind of wires – in terms of quality. ISI standards exist on paper – but the lack of willingness of the people

the right temperatures or may consume a lot of energy even if you have put the right compressors for instance.

Rachid Fergati, MD - Indian SubContinent, UPS said, “Compliance procedures and regulations for food products and pharmaceuticals differ as geographical borders are crossed. The challenge is to anticipate and ensure compliance at every stage, even before the shipment reaches the transit point.

The state of infrastructure and level of accessibility also differs from place to place, making adaptability in transitioning to different modes of transportation whilst maintaining the quality of the shipment, a necessary requirement.”

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cover story Given the conditions in India, it is naive to assume that we will have a seamless availability of power all through to maintain the right temperature. Newer technologies like the use of the right phase change materials that provide thermal backup will go a long way to curb the problem of inefficient storages.

Samit Jain, Managing Director, Pluss Advanced Technologies Pvt Ltd

The Drug Keeper The cold chain pharmaceutical market, currently estimated to be in excess of $13.4 billion in 2017, continues to be one garnering specific interest within the logistics space. New therapies such as regenerative therapies and gene therapies as well as a shift toward temperaturemanaged shipments are currently of significant focus. This is due to the fact that many of the most innovative therapeutics, like regenerative medicines and other advanced cell-based therapies, are close to commercial launch and need to be shipped under very exacting temperature conditions. This shift is contributing to the growth of temperature-controlled products at more than twice the rate of non-temperature-controlled products.

M a ny c o m p a n ie s h av e t u r n e d their focus on three primary areas to respond to certain requirements; namely enhanced, reusable packaging, real-time data monitoring, as well as advanced informatics systems to support in transit logistics considerations. Each of these focus areas require their own specific know how as well as state-of-the-art advancements to support the enhanced scrutiny. We will discuss each of them independently.

Packaging There has been considerable focus on the development of packaging equipment with improved properties over conventional insulated packages. Significant efforts have been made on improved vacuum insulated panels, on-demand systems that do not require pre-conditioning, as well as flexible, actively temperature managed solutions that are now emerging, each with their own strengths and weaknesses,

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CargoConnect - DECEMBER 2017

The temperature-controlled market heats up

T

he rise of biologics, which have replaced sma l l-molecule d r ugs as the industr y’s top sellers, has led to the g reater need for cold chain logistics. They are protein-based drugs that are derived from living cel ls and cultured in a laboratory, meaning that they are incredibly sensitive to temperature.

R heumatoid arth r itis treatment Humira, one of the most lucrative drugs in the pharmaceutical industry, reaping sales of $16.1 billion in 2016, is a biological drug.

With over a th i rd of drugs in late-stage development being biologically based, this means there is already a h igh dema nd for temperature-controlled transport. In addition, the rise of biosimilars, particularly in Europe but also now gaining ground in the US, should only see the dependence on cold chain logistics increase. The biotech industry slowed down br ief ly as a result of

P r e s i d e n t Tr u m p’s election amid blusterous talk of cracking down on the pharma industry, but has since bounced back with investment recovering, perhaps best represented by Gilead’s recent $11.9 billion bet

on biotech, Kite Pharma.

This sign of confidence i n the a rea is set to boost investment and there are signs that the biotech boom the US has experienced could soon be better translated to the slow-to-develop European

market. Funds are now taking their money from the US to back European biotechs; for instance, the recent fund launched by Medicxi looks to funnel $300 million into biotech start-ups to help bring their products through drug discovery all the way through to the market.

This builds on a trend already occurring that has seen the number of heat-sensitive products increase by 45 per cent from 2011 to 2017, with s uch me d ic i ne s now accounting for one in every two products, according to a report by Evaluate Pharma. The pharma cold chain market, as a result, is reported to be set to grow to be worth $16.6 billion by 2021.

cover story The problem is we do not have an end to end seamless cold chain but have it in bits and pieces resulting in breakdown in the middle. So when we are talking about a cold chain, we need to ensure that the temperature is maintained throughout the chain consistently.

Sandeep Chatterjee, Sr Manger, Deloitte

as well as a shift away from outdated solutions such as dry ice toward cryogenic distribution. The common feature with many of these newly emerging technologies is the fact that these shipping systems are reusable and require well developed reverse logistics as well as cleaning procedures to ensure that there is no outside or crosscontamination which poses its own challenges.

specifications in near real time such as location, temperature (inside and out), shock, orientation, anti-tamper, humidity, and pressure.

Informatics It has become clear that effective cold chain logistics management is vitally important to preserving the efficacy of valuable cold chain dependent medicines

The cold chain pharmaceutical market, currently estimated to be in excess of $13.4 billion in 2017, continues to be one garnering specific interest within the logistics space.

Trends shaping the lifescience cold chain Increased patient-centric approach within the pharma industry As biologic and specialty pharma continue to evolve and patients take more control of their treatments, we’ll continue to see an increase in a patient-centric approach by the pharma industry. Sometimes called “patient-centric treatments,” this is the next step within biologics pharmaceutical development and these are primarily genebased therapies, blood derivatives, etc.

With many of these biologics requiring rigid/tight temperature control, expect to see increased consideration of the patient impacting all areas of treatment delivery, including logistics

Continued consolidation of the carrier market On the heels of some recent 3PL acquisitions of specialty couriers by carriers, expect to see continued activity by other companies with the goal of gaining both expertise and market share in the lifescience industry. There are other players that fit into this industry as well and they could be acquired by a carrier to round out their offerings in 2017.

Data monitoring As mentioned earlier, in 2018, one out of every two pharmaceutical products will be thermo sensitive and will require to be temperature monitored from point of manufacturing to ‘last mile’ delivery. The DSCSA is also pushing companies to adopt newer technologies for chain of condition and chain of custody adherence. Next generation data loggers are now readily present and can track an entire range of

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Continued consolidation of the cold chain shipping and packaging industry and for risk mitigation. Unfortunately, most compa n ies do not i nteg rate logistics planning early enough in their clinical trial design, it is often an afterthought once the product is nearing commercialisation. Adding complexity, such as adding more links to a supply chain as seen in regenerative therapy programs, increases the steps and/or temperatures that must be controlled and increases risk of a temperature excursion.

As key players look to expand offerings and presence in new markets, expect 2017 to yield more consolidation in the cold chain shipping and packaging industry.

For example, companies that excel in providing parcel-size packaging will likely try to introduce other sizes or technologies, just as those who hold market share in one location will likely look to merge with or acquire companies allowing them space in new markets.

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cover story The primary step to prevent breakdown of the cold chain is creation of cold chain infrastructure on a war footing. Hub and spoke model of distribution would also help create backups so that within 4 hours materials can be shipped to a cold store else cross docked.

Colonel Arvind Gangoly (Retd), CEO, Schedulers Logistics India Pvt Ltd

Maximisation of reusable and single-use packaging based on purpose

It has become clear that effective cold chain logistics management is vitally important to preserving the efficacy of valuable cold chain dependent medicines and for risk mitigation.

Although reusable packaging is becoming increasingly common, utilising that aspect in single-use shippers is being more closely evaluated. Businesses are seeking to develop the services needed to support a model involving the flexibility of both single-use and reusable temperature-controlled packaging.

Expect stakeholders to try and balance their packaging by lane, by using a combination of reusable and single-use packaging in the new year.

Savvy companies will look for competitive Total Cost of Ownership (TCO) Measuring a good TCO on both single-use and reusable temperaturecontrolled packaging will become increasingly important as the cold chain logistics horizon changes. Freight and storage cost considerations will cause companies to re-evaluate good volumetric efficiency of payload to outer dimensions and weight of packaging. As companies begin to calculate TCO through actual costs of shipping and storing, look for them to reexamine their current strategies.

Conclusion Cold chain which is supposed to be the fulcrum of an effective supply chain infrastructure in dealing with fruits and vegetables remains a grossly ignored area in India. What could have turned out to be a huge asset for national economy keeps on lingering as a serious weak spot. We not only have issue with Cold Storage, other functional modalities such as facilitating seamless movement of goods via refrigerated vehicles which has done wonders in countries like China is presently best considered to be a farfetched idea in the country.

Cold Chain Management deals with efficient control and organisation of production and logistic regarding temperature. It comprises planning and implementation of single processes and process steps as well as implementation of instruments and methods of process monitoring and control. The principal aims of Cold Chain Management are optimisation of product quality and product safety and minimisation of wastage.

In a practical way cold chain management often means temperature monitoring at each step within the production, storage and transportation chain on inner- and inter-operation levels. The chain needs to start at the farm level – post harvest, pre-cooling etc. – and reaches to the consumer or at least to the retail outlets. A well organised and efficient cold chain reduces spoilage, retains the quality of the harvested products and guarantees a cost efficient delivery to the consumer. A significant aspect of the system is that if any of the links is missing or weak, the whole system might fail.

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CargoConnect - DECEMBER 2017

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special feature

Project Logistics Transporting Heavy Cargo with Ease 36

CargoConnect - DECEMBER 2017

special feature

M Super heavy and odd-sized cargo cannot be moved with conventional assets and equipment. In these cases the role of ‘Project Logistics’ comes into play. The biggest challenge which LSPs face is in the designing of the supply chain, for the movement of non-conventional and heavy cargo. Even the slightest mistake in the supply chain could have a potentially disastrous outcome.

Gaurav Dubey talks to the industry professionals and tries to figure out challenges LSPs face and the risks involved in project logistics business.

ovement of overweight nonconventional cargo consignments that are over dimension and cannot be handled using conventional assets and equipment comprise the project logistics market of India. Considering the huge demography of the country, several heavy and huge consignments need to be transported to remote locations with limited transportation infrastructure access using single or multimodal transportation services.

Opportunities in the project logistics sector is expected to grow significantly as the government has been focusing more on developing infrastructure and expanding manufacturing activity in the country through projects like Make in India.

These potential opportunities could be utilised only when project logistics service providers could clearly understand the preferences of the end-user industries.

The government’s flagship program, Make in India, aims to boost domestic manufacturing via private participation, and is expected to bolster demand for heavy construction. India’s breakbulk and project cargo imports historically have exceeded exports. The country’s economy continued to expand while the 2008 financial meltdown battered much of the world. India’s GDP has grown more than 7 per cent annually in the last three fiscal years, and most forecasts call for growth to accelerate.

In the fiscal year ending March 2016, Mumbai had the most breakbulk vessel calls of any Indian port, with 656, up from 608 the previous year. Kandla was next with 454, up from 371, followed by Chennai with 382, down from 426 in fiscal 2014 to 2015. India’s major public ports together handled 28.11 million metric tons of breakbulk cargo in the last fiscal year, a 6.3 per cent increase from the previous year.

Appropriate road infrastructure also plays a crucial role in transportation of non-conventional cargo consignments.

The Government of India recently announced outlay of `6.92 trillion for building an 83,677 km road network over the next five years.

The road construction push includes the Bharatmala Pariyojana with an investment of Rs 5.35 trillion to construct 34,800 km of roads. In addition, `1.57 trillion will be spent on the construction of 48,877 km of roads by the state-run National Highway Authority of India (NHAI) and the ministry of road transport and highways.

This is a proven fact that movement of heavy lift cargo is itself a mammoth task to accomplish. CargoConnect’s reporter Gaurav Dubey interacted with the industry professionals and asked them about the major challenges they face in project logistics, factors which affect movement of heavy cargo; and last but not the least, whether India have proper infrastructure for the smooth transportation of heavy lift cargo.

DECEMBER 2017 - CargoConnect

37

special feature "In recent years, the government has made great effort to develop infrastructure and ease the transportation of heavy lift cargo in and out of the country. The National Highways are now well equipped however, focus has shifted to upgrading port capacities, uplifting capacities of bridges and road connectivity to the industrial sites."

Sanjeev Sharma, Country Head- PROM (Project, Oil and Gas, Marine Logistics), Kuehne + Nagel India

keep everything on track. Kuehne + Nagel has contingency plans ready to execute in case of any unforeseen challenges or emergencies.”

Role of infrastructure in smooth transportation of cargo

Sanjeev Sharma, Country Head- PROM (Project Logistics, Oil and Gas logistics, Marine Logistics, Rig and Maritime Logistics), Kuehne + Nagel India praised the efforts made by the government towards development of the infrastructure and ensuring the smooth transportation of heavy lift cargo in and out of the country. Following are his responses on various issues:

Challenges in transportation of heavy cargo “Transporting heavy lift cargo has always been a unique and experimental exercise requiring the highest precision. Each project needs individual planning and presents its own unique challenges. All possible risks must be identified, from investment in new equipment to protecting the cargo from damages during transit. In addition, to move heavy cargo through national highways, bridges, railway crossings, overhead obstacles, high tension powerline and tree branches special permissions must

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CargoConnect - DECEMBER 2017

be obtained and complied to. The slightest mistake can lead to huge and unexpected costs and delays.”

Factors which affect transportation of project cargo “Smooth transportation could be ensured only when the customer provides accurate dimensions and weight of their cargo and conduct a detailed survey.

“The dimensions and weight of the cargo play a pivotal role in the success of any project. They are used to plan the route, attain permissions as well as decide what type of loading and transportation equipment will be used.

“Infrastructure is also a major factor to contend when planning the best route, especially in India where the landscape is forever changing, with new bridges, route diversions, road restrictions etc. It is important to conduct a route survey upfront.

The route needs to be in constant review and experienced professionals are required to

“In recent years, the government has made great effort to develop infrastructure and ease the transportation of heavy lift cargo in and out of the country. The National Highways are now well equipped however focus has shifted to upgrading port capacities, uplifting capacities of bridges and road connectivity to the industrial sites. Popular alternative methods such as inland waterways are also currently under development.

“With pre-planning and mapping of facilities and resources, Kuehne + Nagel can ensure smooth transportation of heavy lift cargo throughout the country.”

Dr Sharmila H Amin, Managing Director – South Asia India, Bertling Logistics India Pvt Ltd, said, “In India, the project logistics industry is still in its growing phase, as compared to the developed countries. Scope of growth of project logistics vertical in India is immense but lack of adequate state-of-art infrastructure is one of the major stumbling blocks in the growth path of the sector.”

Following are her responses on different topics related to project logistics in India:

Movement of project cargo requires meticulous supply chain design “Some of the biggest challenges still lie on the side of the government. Generally, high number of complaints are received and a separate department is required to address the infrastructural issues. When it comes to the movement of project cargo, designing of supply chain also pose a major challenge.

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special feature "In India, the project logistics industry is still in its nascent stages, as compared to the developed countries. The scope for growth is immense.

One of the critical road blocks in efficient functioning of this sector is the lack of adequate and state-of-art infrastructure."

Dr Sharmila H Amin, Managing Director South Asia India, Bertling

Logistics India Pvt Ltd Unavailability of infrastructure in terms of transport vehicles, smaller or old bridges, narrow roads, poor connectivity at the project site etc. are other challenges which LSPs have to face in movement of nonconventional cargo. Too many compliances and unavailability of single window clearance is also a major challenge.

“It is a very fragmented industry and it consists of multitude of small fleet owners. It is characterised by a lack of professionalism, severe wastage costs, low labour qualification, and lack of technology adaption. Moreover, it is an industry that is

safety procedures in consultation with sector exports as well as cargo owners and manufacturers. Sometimes, we build “for the purpose” equipment to manage such operations. We also cover cargo under the insurance ambit to mitigate risks.”

Nascent state of Project Logistics in India “In India, the project logistics industry is still in its nascent stages, as compared to the developed countries. The scope for growth is immense. One of the critical road blocks in efficient functioning of this sector is the lack

Harpreet Singh Malhotra, Chairman, Tiger Logistics (India) Ltd, opined that our country’s road infrastructure is very tricky and when it comes to transportation of unconventional and huge sized cargo a proper road survey could be the only key to success. Future of the logistics sector depends not only on the continued development of infrastructure and technology but also on the attitude and determination of the service providers in adapting themselves and making optimal utilisation of available resources.

He also talked about the Government’s role in development of the logistics sector and how meticulous planning can save losses of millions of dollars. Here are his excerpts on different issues impacting project logistics in India:

Careful planning can mitigate transportation risks

dominated by a single overriding factor that is cost. However, these challenges are short term in nature and I believe in the long-term growth story of the country. Commitment of the present government towards investment and continuous thrust on infrastructure development would add impetus in the growth story of the logistics industry in the coming years. Also, we still have not achieved the maturity and technical sophistication that is a norm in many logistics efficient countries.”

Extra safety measures taken “We follow pre-defined safety measures and procedures in order to avoid any untoward incident. In addition, we also design extra

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CargoConnect - DECEMBER 2017

of adequate and state-of-art infrastructure.

“The Government has to either build infrastructure like jetties or allow private investment on a BOO basis for using waterways. India is also at the threshold of becoming a major manufacturing hub.

Large industries should focus building their infrastructure along the coast and the logistics industry should gear up to meet these challenges and opportunities to support the Make in India initiative. The other most important challenge is safety which is only possible if the manufacturing industry understand this need and gives due consideration to the best practices and not best prices.

“Project cargo or heavy lift cargo comes under the category of critical items and it requires special attention during its transportation, careful assessment and detailed planning of the operations for the transport to the load-port, loading, stowage, securing and discharge of the cargo is required at every stage.

“Cargo types that may fall within the definition of a critical item may include - Oil and Gas equipment for onshore and offshore infrastructure or for refinery, petrochemical plant equipment, renewable equipment for onshore and offshore infrastructure, modules and pre-assembled units, port handling equipment, port construction, floating cargo, rolling stock, heavy machinery, power plants and power generation equipment.

“The costs involved in project cargo damages or loss can be very large, often running into tens, possibly hundreds of millions of dollars. The risks involved can be

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special feature "The future of the logistics sector depends not only on the continued development of infrastructure and technology but also on the attitude and determination of the service providers in adapting themselves and making optimal utilisation of the available resources."”

Harpreet Singh Malhotra, Chairman, Tiger Logistics (India) Ltd

largely mitigated with careful planning and attention, before the cargo is received for shipment. In more difficult financial times, the pressure to reduce costs is very high and since the cost of shipment is essentially an overhead, there is a natural desire to reduce the shipping costs as far as possible. The use of unsuitable vessels for the cargo, poor quality or inadequate securing and dunnage, poorly trained crew and a lack of detailed planning can all lead to damage to or loss of the cargo.”

Damage of project cargo may cost millions of dollars “Cargo or equipment that might require specialised stowage, lifting and handling may consist of high value or critical items and typically consists of a quantity of goods connected to the same project are considered into project logistics and some specific heavy cargo comes under Heavy Lift Cargo. These criteria may include the replacement lead time, the value of the cargo (individually or in total), the size or footprint, weight, the center of gravity and whether specialised transport, lifting and securing is required.

“Heavy lift cargo requires special attention during their transportation.

Careful assessment and detailed planning of the operations is required for the transport to the load-port, loading, stowage, securing and discharge of the cargo. The consequence of a loss or theft or damage of a heavy lift cargo will involve a claim against the cargo or liability insurance and potentially for the delays to the project (e.g. Delay in Start Up).

With many other parties involved and the consequential costs high, these claims are often complicated and may result in lengthy and costly litigation. Damage to project cargo during transportation can cost many millions of dollars, cause extensive delays and potentially lengthy and expensive litigation.”

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Government initiatives “The logistics sector in India is witnessing a remarkable growth. The government has been declaring several projects and there are a lot of potential for logistics companies to harness these opportunities.

“Project implementation gets delayed due to issues like lack of latest technology, huge paper work, absence of better road, sea and rail connectivity etc. Expansion of existing

“Indian government has recognised the value of domestic logistics industry in improving its performances. Launch of GST, Make In India and PPP model are positive signs from the government’s side.

At macro level, it helps in propelling the country’s economic growth. In order to have an efficient multimodal transport and logistics operations, the government has been working closely with the private sector

In India, the project logistics industry is still in its nascent stages, as compa red to t he developed count ries.

The scope for growth is immense.

public sector units and other greenfield projects are yet to be seen.

“India’s road infrastructure is very tricky.

In order to safely transport your cargo, a proper road survey needs to be done to avoid any unexpected bottlenecks during transportation. The future of the logistics sector depends not only on the continued development of infrastructure and technology but also on the attitude and determination of the service providers in adapting themselves and making optimal utilisation of available resources.

on capacity building in multimodal transport operation, management and operation of container terminals. A coordinated approach is required from an empowered government body to oversee all infrastructure projects spanning road, rail, air, coastal shipping, and inland waterways. This will not only speed up things, but also brings in transparency.

Antonov Airlines, the subdivision of Antonov company, is specialised in transportation of international cargo.

Antonov was the first airlines which successfully performed charter air

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feature "For project cargo, there is a real desire to minimise the trucking distances as trucking of outsized pieces is a complex task to accomplish. Our flight department sends experts out to study airports, where necessary, to ascertain the suitability of the airport to receive the large airframes we fly."”

Oleg Orlov, Vice President, Antonov Company

Trucking of outsized pieces is a complex task

Infrastructure is also a major factor to contend when planning the best route, especially in India where the landscape is forever changing. transportation of large size and extra heavy cargo which ultimately opened the way of an entire new segment of the transportation of super heavy cargos through air. Oleg Orlov, Vice President, Antonov Company talked about how Antonov with its expertise in handling project logistics puts their best foot forward in every project. Here’s what he said under different heads:

Turning complex tasks into ‘Everyday procedures’ “Antonov Airlines was the first to offer the AN-124 to the commercial market in 1989.

So, now with 28 years of experience and unparalleled technical support from all our divisions, we have turned complex tasks into ‘everyday procedures’.

“We have also carried out seemingly impossible flights. Once our customer had given us an 80T piece (an oil and gas Christmas tree) with the condition that we cannot rest the piece on its base and we

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cannot lash the piece from its sides due to concerns about normal flight G-forces. Then we found a technical solution of this and flew the piece half way around the world on time.”

Safety matters the most “It is all about process. For larger, heavier items, we request drawings and other technical data from the customer in advance.

We perform on site cargo inspections as well. Our engineers work with the customers’ engineers to ensure that the cargo gets prepared properly for efficient loading in the aircraft on the day of the flight. Such solutions include the design and fabrication of special frames to ensure proper lashing and weight distribution within the aircraft. On request, we can take on the design and fabrication tasks of such frames. In all cases, our engineers must approve all loading solutions to ensure flight safety. We do have an exemplary safety record.

Other tasks to address include proper planning of routes including checking and approval of airports of origin and destination. For project cargo, there is a real desire to minimise the trucking distances as trucking of outsized pieces is a complex task to accomplish. Our flight department sends experts out to study airports, where necessary, to ascertain the suitability of the airport to receive the large airframes we fly.

We fly ad-hoc charters worldwide and permits are applied for through, 24*7 and 365 days, operations planning departments in Ukraine and UK. We carry many different types of project cargo including class 1 dangerous goods. It is important to keep the customer advised accurately of lead times needed for each packing list and route. Where applications are needed through diplomatic channels, the customer is advised from the outset. Each country amends its application procedures from time to time, and so it is important for us to stay up to date. We have a worldwide network of operational support in the form of trusted handling agents and, where necessary, permit agents.

Undoubtedly, transportation of heavy and non-conventional cargo is a herculean task to accomplish but LSPs have achieved perfection in project logistics, through astute professionalism and meticulous planning and designing of the supply chain, over the time. However, unavailability of world-class highways and roads, lack of latest technology, huge paper-work, the absence of better road, sea and rail connectivity, etc. still pose big challenges but the industry professionals overcome these glitches with an excellent planning framework and transport super heavy cargo with ease.

feature

Air Cargo

Connectivity Transcending Global Barriers With world getting closer and more trade-friendly, various steps are being taken to promote air cargo and its connectivity to make the countries viable for each other. While IATA stated various facts, Vladimir Zubkov, Secretary General, TIACA also during his meet at Africa emphasised on prioritising air cargo connectivity across the globe. Working on similar lines, Sheena Sachdeva informs about the practices and initiatives being taken in the similar path.

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feature

G

rowth of air cargo transportation in international sector is an indicator of growth in trade and economic development of a nation. More than onethird of the merchandise in terms of their value moves by air and this volume itself is an indicator of the importance of air cargo transportation in international trade.

It is believed that higher the international air cargo connectivity and movement of cargo, the better the trade index of a nation.

Domestic cargo has registered a growth of 8 per cent at a CAGR during FY07-17, whereas international cargo grew at 6.2 per cent annually during the same period, according to an ASSOCHAM-Yes Bank joint study. In India, air trade to GDP ratio has doubled from 4 per cent to 8 per cent in last two decades. Air cargo contributes about 20 per cent of airlines revenue and involves a wide variety of service providers and

employs nearly 70,000 persons in the country, reveals the joint study on ‘Civil Aviation’ released today at New Delhi. Air cargo should be treated at par with other logistics sector like roads which is subject to 5 per cent tax rate. It is recommended that air cargo tax rate may be reduced from 18 per cent and considered for a lower tax bracket. Indian express cargo industry provides fast, reliable, on demand, integrated and door to door (including customs clearance and duty and tax payments) is likely to grow manifold in the coming years. Growth of the industry will be driven by current major customer segments, namely auto components, banking and finance, garments, pharmaceuticals, IT hardware and mobile phones, E-commerce etc.

As per IMF forecast, India’s GDP is expected to grow at an average of 7.5 per cent to 8.2 per cent during FY18-FY21 and thus air cargo could be at the centre of supply. In order

DECEMBER 2017 - CargoConnect

47

feature There is vital and quantitative link between a country’s air cargo connectivity and its participation in global trade. A small increase in air cargo connectivity could be an enabler associated with a sizable increase in a country’s total trade. Air cargo is a key in supporting the current global trading system.”

Keku Bomi Gazder Chief Executive Officer, AAI Cargo Logistics and Allied Services Company Limited (An AAI Subsidiary)

to promote growth in air cargo by way of cost reduction, efficiency improvement and better inter-ministerial coordination, Air Cargo Logistics Promotion Board (ACLPB) and AAI Cargo Logistics and Allied Services (AAICLAS) have been formed.

AAICLAS focus is on three verticals (a) air cargo handling and allied services, (b) warehousing and contract logistics and (c) air cargo road feeder and air freight stations.

Company Limited (An AAI Subsidiary) informed, “There is vital and quantitative link between a country’s air cargo connectivity and its participation in global trade. A small increase in air cargo connectivity could be an enabler associated with a sizable increase in a country’s total trade. Air cargo is a key in supporting the current global trading system.

It is in the economic interest for governments to promote and implement policies for the

Annual GDP growth 2011-2030 South Asia

7.1

China

7.0

Asia Pacific

4.7

Africa

4.4

Southeast Asia Latin America Middle East

4.4 4.2 4.1

CIS

3.4

World

3.3 2.8

Oceania North America

2.7

Europe Northeast Asia

2.0 1.3

Creating AAICLAS would bring multiple advantages as there is lot of activities on the cargo front.

Importance of Air Cargo Connectivity Keku Gazder, Chief Executive Officer, AAI Cargo Logistics and Allied Services

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Source: IHS Global Insight

efficient facilitation of air cargo.”

The key policy changes and industry modernisation plans are very important for the improvement of air cargo connectivity in the country. Facilitating trade with efficient air cargo processes requires a strong partnership between governments and

industry. Governments have the important role of implementing global standards and agreements to facilitate trade and make it possible for airlines to modernise processes. In turn, the industry needs to embrace these opportunities to improve competitiveness and provide customers with enhanced shipping quality, service and better deliverables. Hence, the more connected you are with the world, the greater your ability to engage in trade.

Facilitating trade with efficient air cargo processes requires a strong partnership between governments and industry.

Governments have the important role of implementing global standards and agreements to facilitate trade and make it possible for airlines to modernise processes.

In turn, the industry needs to embrace these opportunities to improve competitiveness and provide customers with enhanced shipping quality, service and better predictability.

Sanjiv Edward, Head Cargo, Delhi International Airport Limited further informed, “In a recently concluded study

by IATA, it has been established that Air Cargo connectivity directly affects the trade relations across the globe. There is a clear link between air cargo connectivity and trade growth. It has been found that 1 per cent increase in air cargo connectivity is associated with a 6.3 per cent increase in trade. The study has also developed two indexes - Air Trade Facilitation Index (ATFI) and the e-Freight Facilitation Index (EFFI). Countries that performed better on these indexes also were more integrated into Global Value Chains (GVCs). The role of air cargo is even greater for trade in advanced industrial, high value goods, and other sectors that rely on rapid, reliable and secure transport.”

Continental Carriers, one of the wellknown freight forwarders residing in the capital city. Vipin Vohra, Chairman and

feature Growth in international trade is essential for any nation to grow economically and prosper. While sea freight offer connectivity limited to between ports, necessitating road/rail transportation to the final destination at extra cost and time, air freight has direct access to hinterland stations through operational airports.”

Vipin Vohra Chairman and Managing Director, Continental Carriers Pvt Ltd

Managing Director, Continental Carriers Pvt Ltd says, “Growth in international trade is essential for any nation to grow economically and prosper. While sea freight offers connectivity limited to ports, necessitating road/rail transportation to the final destination at extra cost and time, air freight has direct access to hinterland stations through operational airports.

Important Facts on Air cargo traffic Worldwide airport cargo increased 4per cent in 2016 to 110 million metric tonnes, with mixed levels of growth across all six regions.

Hong Kong (HKG) and Memphis (MEM) take the first and second ranks respectively for the busiest air cargo airports with 4.6 and 4.3 million metric tonnes in 2016.

Airports in the Asia-Pacific region handled the largest amount of air cargo during 2016: Asia-Pacific (43.4 million metric tonnes, up 5.4 per cent over 2015) North America (30.8 million metric tonnes, up 2.4 per cent over 2015) Europe (20.1 million metric tonnes, up 5 per cent over 2015) Middle East (8.8 million metric tonnes, up 2.7 per cent over 2015) Latin America-Caribbean (5.1 million metric tonnes, up 0.9per cent over 2015) Africa (2.1 million metric tonnes, up 1.3 per cent over 2015)

The world’s fastest-growing airports handling over 250,000 metric tonnes of air cargo during 2016 are: Moscow (SVO) (256 thousand metric tonnes, up 28.8 per cent over 2015) Doha (DOH) (1.76 million metric tonnes, up 20.8 per cent over 2015) Hanoi (HAN) (566 thousand metric tonnes, up 18.2 per cent over 2015)

The world’s busiest airports in international freight traffic are: Hong Kong (HKG) (4.52 million metric tonnes, up 3.2 per cent over 2015) Incheon (ICN) (2.60 million metric tonnes, up 4.5 per cent over 2015) Dubai (DXB) (2.59 million metric tonnes, up 3.4 per cent over 2015)

The world’s busiest airports in domestic freight traffic are: Memphis (MEM) (3.80 million metric tonnes, down 6.1 per cent over 2015) Louisville (SDF) (1.91 million metric tonnes, up 3.3 per cent over 2015) Beijing (PEK) (1.14 million metric tonnes, down 1.2 per cent over 2015)

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Of course, there is a need for more operational airports in remote areas, in addition to gateway airports to act as cargo hubs. India, as a fast developing nation, is well poised with over 120 airports capable of offering connectivity for air cargo.”

Challenges and Steps to be Taken Air cargo industry engages, directly or indirectly, about 2 million people globally and contributes 12 per cent to global airlines revenue. The Indian air cargo scenario appears still looks better as it contributes around 20 per cent to the airlines revenue, as compared to global average of 12 per cent and 70000 in employment in India. Air cargo is registering phenomenal growth and the past ten years witnessed a CAGR of 8 per cent in domestic and 6.2 per cent in international cargo trade.

The opening of economy, entry of new airlines, new routes, reforms in government policies, advanced technology has helped Indian air cargo to grow. But air cargo sector in India is still fragmented and faces certain challenges which are due to air traffic in the country which is mainly concentrated at only a handful of airports. The challenge lies in connecting cargo volumes of tier 2 and tier 3 cities with major cities for air transportation, which lacks appropriate cargo infrastructure.

In order to provide scope of capacity addition to the existing cargo players, it is necessary to integrate airport infrastructure with air cargo facilities. Dedicated unused infrastructure at airports may be marked to air cargo operators. The inbound freight demand is not very strong and is not enough to fill up the aircraft but that is not the case with exports which see much higher utilisation. As a result of intense competition, the export rates have been low.

Hence, airlines are finding it tougher to make profit to keep India on their route.

Further, substantial investment is needed to develop dedicated on-airport cargo terminals, air freight stations, to handle air cargo across the country. Advances in technology and the implementation of security systems also need to be pursued. Indian airports enjoy a geographical advantage, owing to their strategic location. But the transshipment route has not been fully exploited. In order to develop transshipments, customs and security policies and procedures for transshipment need to be standardised at various airports.

feature Since this year cargo growth has been stable both globally and India. The cargo growth in India has been double-digit, more from the export side.

This also reflects on the global market, indicating that the overall global growth has steady.”

Keki Patel Cargo Manager India and Nepal, Emirates SkyCargo

India is placed in a better position as compared to global growth trend. With the fleet size is anticipated to grow manifold in the next two decades, projected economic growth at over 6 per cent, surging demand for ‘express cargo’ service and various Government initiatives, the Nation is poised for a quantum jump in domestic and international trade through better matching and need based air cargo connectivity. Many trading partner countries are likely to emulate the Chinese an Indian success stories, in the coming years.

Initiatives aimed at supporting the cause Air cargo is key in supporting the current global trading system, with an estimated 35 per cent of value of global trade carried by air, even though it covers less than 1 per cent by volume.

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As global share output, trade is now at about three times the level it was in the early 1950s. In 2015, airlines transported 52.2 million metric tons of goods valued at $5.6 trillion or US $15.3 billion worth of goods every day, representing about 35 per cent of global trade by value.

Roger Samways, Vice President, Cargo Sales, American Airlines Cargo said, “Modernising the industry through increased automation and improved efficiency (such as greater e-AWB adoption) and also the creation of improved processes and collaboration are the way forward. We’re delighted with the way 2017 has progressed so far. Specifically for, us we’ve listened to our customers and introduced product enhancements, invested in our people and equipment, and improved the customer experience–all of which has worked together to result in more freight on our aircraft. If

there’s more freight on our aircraft, then that’s a great sign we are meeting the needs of global trade. Some of our trade lanes like Europe to the US and beyond have been especially good so far this year.”

Regional Connectivity Scheme, under UDAN, is aimed at offering connectivity to and from remote airports, hitherto remained un-served or under-served. Under this scheme, operating airlines get the benefit of ‘viability gap funding’. Though the focus is on passenger traffic, small volume cargo, into and out of the areas covered, can also be accomplished. Demand of local commodities for export or consumption in metropolitan cities will, in turn, improve the quality of products and boost the region’s economy.

This will further pave way for movement of cargo, in the form of raw materials or consumer goods and hardware, into the region, creating demand for balanced outward as well as inward cargo movement.

Demand for cargo space will outclass the capacity in near future.

Setting up and operationalising of ‘Air Freight Stations’ in the hinterland and industrial hubs, as envisioned by the Government, for better and direct cargo linkage to gateway airports and to decongest them, is the parallel workable solution for better rural connectivity. Government should encourage and promote setting up of Air Freight Stations and make its running viable and sustainable for the private entrepreneurs.

Airfreight is mirroring the improvement in global trade, says IATA, in a recent report.

Adding to this, Keki Patel, Cargo Manager India and Nepal, Emirates SkyCargo opined, “Since this year cargo growth has been stable both globally and in India. The cargo growth in India has been double digit, more from the export side. This also reflects on the global market, indicating that the overall global growth has steady. This has been good for

feature Modernising the industry through increased automation and improved efficiency (such as greater E-AWB adoption) and also the creation of improved processes and collaboration are the way forward.”

Roger Samways Vice President, Cargo Sales, American Airlines Cargo

Proportlon of global trade transported 40

USD 6.4 Trillion

34.6%

35 30 25

Value

20

Policy level changes:

15

• •

10 5

largest hubs for transit of cargo, Sanjiv Edward informed, “Despite the sluggish trend in airfreight, DEL Airport witnessed the cargo tonnage growth of approx. 8 per cent on YoY basis during the last 3 to 4 years, due to the emphasis given by DIAL on promoting airfreight business by investing in cargo infrastructure , supporting airlines to develop a strong network, working closely with stakeholders and regulators to facilitate trade.”

IATA released a study identifying a quantitative link between a country’s air cargo connectivity and its participation in global trade. The study suggested some initiatives to be undertaken on Key Policy level changes and some Facilitation level changes to improve countries’ air cargo connectivity.

0.5%

Volume

0 Source: The Colography Group19, Oxford Economics

Facilitation level changes: • •

Emirates SkyCargo, in terms of sustained demand and utilisation of our large capacities. It also gives us more opportunity to bring in more freighters and service the exporters.

To promote and support the growth, the industry along with the government requires taking initiatives towards transparency at all levels; the export trade needs to be diversified in terms of networks across the globe, friendly policies towards free trade and initiatives like bilateral agreements between countries will be able to aid the industry.”

However, as per IATA 2016 report, against ICAO’s forecasted growth of 4 to 4.5 per cent in world airfreight, it has witnessed marginal increase of 2.2 per cent in 2015 as compared to 2014 due to sluggish GDP growth and slowing trade development, especially in Europe and Asia Pacific. Middle Eastern carriers registered the highest growth rate with 11.3 per cent in 2015 and airlines from the Asia-Pacific Region, which accounts for 39 per cent of world airfreight traffic expanded moderately by 2.3 per cent. Air Carriers in Latin America registered an air traffic decline of 6.0 per cent in 2015, partly due to uncertain political situation and deteriorating economic condition in Brazil.

On behalf of Delhi International Airport, which is one of the

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1999 Montreal Convention to enable countries to adopt e-freight World Trade Organisation (WTO) Trade Facilitation Agreement and World Customs Organisation (WCO) revised Kyoto Convention to implement smart border solutions that reduce complexity and costs

• • •

Facilitation of electronic processing through e-AWB and efreight Implementation by governments of “single window” processing-ultimately enabling submission of all regulatory documents for trade via one channel Coordinated border agency procedures to reduce duplicative controls Implementation of risk management controls at borders to combat illicit activities and facilitate compliant traders Implement processes to approve release of shipments in advance of their actual arrival

Air Cargo and Global Trade With the introduction of GST in India, octroi has been removed, which will propel the demand for cargo movement through roads.

Thus, in order to protect air cargo from the negative impact emanating from the new developments in the competition sectors, it is recommended that a connectivity plan should be laid down to connect rail cargo with air cargo. With the implementation of GST framework, airlines in the country have been hit hardly. Under GST structure, while airlines can claim input tax credit on all inputs (excluding ATF) on the business class; for the economy class they can claim input tax credit only on input services. However, there is

feature There is a clear link between air cargo connectivity and trade growth. It has been found that 1 per cent increase in air cargo connectivity is associated with a 6.3 per cent increase in trade. The study has also developed two indexes - Air Trade Facilitation Index (ATFI) and the E Freight Facilitation Index (EFFI).”

Sanjiv Edward Head Cargo, Delhi International Airport Limited

no clarity if the existing exemptions would continue or not under GST structure.

IATA’s chief economist, Brian Pearce explains: “Air cargo is a key in supporting the current global trading system. In 2015, airlines transported 52.2 million metric tons of goods, representing about 35 per cent of global trade by value. That is equivalent to

Montreal Convention to enable countries to adopt e-freight; and the World Trade Organisation (WTO) Trade Facilitation Agreement and World Customs Organisation (WCO) revised Kyoto Convention to implement smart border solutions that reduce complexity and costs.

IATA’s global head of cargo, Glyn Hughes

Forces and Constraints for Air Cargo Growth Industry relocation

Trade quotas and restrictions

New commodities

Export promotion Currency revaluations

Widebody freighters, and lower holds Airline market research

New trade relationships

World and regional GDP growth

National development programs Environmental regulations

Directional imbalances

Airline market and shipper education Shipper utilization

“ Open Skies ” & new air services agreements

Proliferation of points served

Deregulation Express market

Lack of airport access

Surface competition

Airport curfews

"Just in time" concepts Terrorism/ armed conflict

Air and surface labor stoppages Source: www.icao.int

$5.6 trillion worth of goods annually, or $15.3 billion worth of goods every day. We now have quantitative evidence of the important link between air cargo connectivity and trade competitiveness. It is in the economic interest for governments to promote and implement policies for the efficient facilitation of air cargo.”

Key policy level and practical industry modernisation priorities to improve countries’ air cargo connectivity identified in the study include legislative priorities include the ratification and implementation of the 1999

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Oil/fuel prices and availability

adds: “Facilitating trade with efficient air cargo processes requires a strong partnership between governments and industry. Governments have the important role of implementing global standards and agreements to facilitate trade and make it possible for airlines to modernise processes.“In turn, the industry needs to embrace these opportunities to improve competitiveness and provide customers with enhanced shipping quality, service and better predictability.” However, IATA has been working on in order to overcome limitations

against the potential of air cargo.

IATA has been working on in order to help air cargo professionals to overcome these limitations. Stephane Noll, Regional Cargo Manager Europe at IATA told about IATA’s e-freight Project, which aims to build an end-to-end paperless transportation process for air Cargo mode possible with regulatory framework, modern electronic messages, and high quality of data. He also talked about the e-AWB (electronic air waybill) project which is a part of the e-freight initiative and aims at encouraging air cargo players to use the e-AWB, instead of its paper version. Noll stressed the importance of digitisation as a key for air cargo connectivity. Noll also mentioned that air cargo is essential for integrating into global value chain by giving numbers from a study conducted by IATA. According to this study, countries with more developed air cargo connections and smarter borders are more integrated into global value chains. Most importantly, it was identified that an increase in air cargo connectivity can have a dramatic impact on a country’s global trade. The study concluded that a 1 per cent increase in a country’s air cargo connectivity was associated with a 6 per cent increase in GDP growth. To conclude, Noll stressed that aviation is critical for our modern life by giving examples from our daily lives. He also stressed that air cargo customer experience through Istanbul will be critical to connect the global markets to power Turkish economy. To summarise the importance of cargo once again he listed the following numbers: In 24 hours, over 80,000 flowers, 200 race horses, 140,000 tonnes of cargo and 1,1 million smartphones are transported, 898 million letters are sent, and 6,849 lives are saved by air cargo. Thus, creating a priority for air cargo across the countries, the priority should also be on facilitating new people along with usage of proper infrastructure.

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The Dynamism of Logistics Service Providers In the past few decades, the number of companies outsourcing their logistics service has been increasing and at the same time the LSPs have been developing core competencies in two main fields, i.e. the range of service they offer and custom made solutions for customers.

To understand the dynamics and changes prevalent in the industry, Yukti Malhotra digs deeper into the subject.

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I

Need and Importance Traditional role of LSP Change in role The Impact Look into the future

t has been proven time and time again why manufacturers, distribution companies and those with supply chains need to outsource to third party logistics providers. Third-party logistics providers are typically those who specialise in integrated operation, warehousing and transportation services which can be customised according to the customers’ needs, based on market conditions, such as demand.

Many Third-party service providers go beyond the traditional role of Logistics Service Providers and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain as part of their system.

LSPs play a great role in the supply management function. The main thought behind it is the management of a business processes within a company and across B2B companies to develop competitive supply chains. In the past few decades, the number of companies outsourcing their logistics service has been increasing and at the same time the LSPs have been developing core competencies in two main fields, i.e. the range of service they offer and custom made solutions for customers. The target of logistics service is to merge and organise all the activities in acquiring, converting and distributing good and raw material in a cost efficient manner. Through LSPs companies can not only enhance their performance but also focus on their core competencies.

As manufacturing companies grow and expand, getting products to growing numbers of customers domestically or even globally becomes an ever-greater logistical challenge. Logistics is its own discipline, subject to changing transportation regulations and fluctuations in demand. In today’s world, creating a product is not important but the aftermath of it reaching the customer holds a great relevance.

Therefore in a nutshell, third party logistics firms specialise in managing all aspects of shipping goods from manufacturers and distributors to their customers, wherever they may be. The 3PL firm can operate their own fleets or those of their customers, reducing the manufacturers’ liability and cost related to payroll, taxes and workers’ insurance. A 3PL carrier may even cover the cost of cargo insurance.

Need and Importance

Different logistics service providers have different capabilities and offerings. Some of the LSPs specialises in the specific function whereas Conclusion some LSP provide end-to-end logistics services. Depending on the customer’s requirement the LSP responsibilities changes, overall it includes transportation, warehousing, inventory management and distribution solution. The LSP also offer value added services such as track and trace, package and labelling, excise duty cross-docking or specific packaging on the basis customer’s requirement.

Third party logistics service providers can also help to integrate supply chain i.e. from supplies of raw material till supplies to end consumer. When it comes to supplies of raw material for plant, the production house also require every material on time because they can’t bear a delay of even single minute to optimise its production level up to maximum level. Only when the production unit will deliver the finished goods on time that will be supplied to warehouses on time by third party logistics service providers, then equally it will be supplied to end customers to achieve customer satisfaction.

But these aren’t the only advantages 3PL offers. The world of logistics is constantly changing in addition to it they also help in cost saving and then they are also experts in industry best practices as well. They are capable of advanced reporting, inventory management and provide visibility to monitor the entire process. Now consider a Garment company for instance, how would it be able to focus on core competencies and get caught up in this web of responsibilities equally important for the company.

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feature Huned Gandhi Managing Director Air & Sea Logistics India & Bangladesh, DACHSER India Private Limited

"At Dachser, our business model is built on security, reliability, strong customer relationships, and trust. People will always be the determining factor, whether in the warehouse, the transit terminal, as drivers or in contact with customers."

Traditional role of LSP Once upon a time it was all about moving boxes, putting products on the ships and travelling the world. When we look into the history of logistics we see how it has evolved with the advancement of time and technology. It was only back then that the industries of trucking, warehousing, international shipping and IT solutions were all different departments and sectors of the industry, with companies individually working on each of them.

Companies that shipped products managed each of these functions independently, from origin to delivery.

Needless to say that with disintegration came a lot of challenges and setbacks in the industry back then. Third-party logistics providers faced a tough time while they were working individually as 1PLs or 2PLs. It was only after they transformed themselves into agile and innovative entities – working in collaboration with their customers and stakeholders.

According to Satish Lakkaraju, Chief Commercial Officer, Agility, “The

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traditional role of LSPs was to provide services for the movement of goods. Back then the number of documents required to execute a shipment were far more. Plus there was no or

Different logistics service providers have different capabilities and offerings.

Some of the LSPs specialises in the specific function whereas some LSP provide end-to-end logistics services. limited use of computers for documentation, so most of it was done manually. It was a very time consuming activity. With the evolution of technology, speed of execution has improved significantly. Plus, the number of licenses and documentation for execution of a shipment has reduced and it’s easier to do business.”

However, as logistics services have matured, opportunities to further optimise logistics operation surface. In fact, many

have similarly transformed over the past two decades. The 3PL’s value proposition has morphed from exclusively cost reduction to also include change management. Huned Gandhi, Managing Director Air and Sea Logistics India and Bangladesh, DACHSER India Private Limited said, “A few decades ago, in the 1970s, logistics was still mostly in-sourced. Transportation, handling and warehousing were executed by the manufacturing companies themselves, also known as 1PLs (First Party Logistics Provider). Cargo owners started outsourcing these activities when business became more and more international during the 1980s.

Hauliers, railroad companies, ship owners or airlines, also known as 2PLs (Second Party Logistics Providers), handled transport based upon their own assets, really owning the means of transport.”

Technological advancements built upon the widespread expansion of the internet opened the doors for logistics providers to offer solutions to connect disparate functions within the supply chain.

Companies like Dachser developed further into 3PLs (Third Party Logistics Providers) who do not only handle the transport and information flow comprehensively but also offer multiple, integrated logistics services.

The 3PL owns a network of branches, IT systems and operational experience to run the supply chain. The direct access to transport and warehouse assets is essential, allowing the 3PL to design processes actively for customers. This differentiates a 3PL from 4PL companies, who offer to steer the processes but don’t own any assets at all. A Third Party Logistics Provider offers multiple, often integrated logistics services.

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feature Satish Lakkaraju Chief Commercial Officer, Agility

"With the passage of time and increase in competition, the plain vanilla service is not enough to serve the customers. We have to offer them multiple and customised solutions. At times, we need to develop ‘out of the box’ solutions to cater to our customer."

companies today, logistics providers started to integrate inventory management, transportation and logistics and order management functions with strong technology platforms. Gandhi from Dachser believes, “The logistics industry in India is currently in a transformation phase to meet international standards. Upgrading our infrastructure, warehouses and IT landscape help to adapt to constantly changing consumer needs. The development of the infrastructure in India will lead to a high level of cost competitiveness. However, the industry is steadily growing, technology is playing an important role.” Thus at Dachser they offer reliable solutions to cover the needs of our global customers at competitive costs.

3PLs have been leading manufacturers and retailers in new directions as well. The external pressures have forced companies to seek counsel beyond the enterprise. Shippers today don’t want data they need information.

As China’s economy exploded in the 2000s, and U.S. companies began looking offshore for cheaper labor, they needed help making inroads into new sourcing markets where they had no infrastructure or connections. Today, that paradigm applies on the sell side as well. Global e-commerce is revolutionising retail.

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“With the passage of time and increase in competition, the plain vanilla service is not enough to serve the customers. We have to offer them multiple and customised solutions. At times, we need to develop ‘out of the box’ solutions to cater to our customer.

So, it’s safe to say that in the current scenario,

Technological advancements built upon the widespread expansion of the internet opened the doors for logistics providers to offer solutions to connect disparate functions within the supply chain. whoever offers a most unique and cost effective solutions will grow,” says Lakkaraju.

The Impact Historically, 3PLs provided traditional logistics services, such as transportation and warehousing management and nothing more than that. However the increase in volume and high customer expectation demanded 3PLs to change their role. Today, the supply

chains are in perfect coordination with their customer’s supply chain management activities. Changes in transportation landscape, advancements in technology and globalisation are urging businesses to analyse their operation and obtain new levels of efficiencies. Not only to minimise risk but also to strengthen their hold in the market. The new technologies like mobile apps, cloud computing, Big data, Internet of Things, 3D printing, driverless vehicle, drone delivery and augmented reality are likely to change the face of 3PL service providers.

Some of these technologies like mobile apps and 3D printing while others are still in testing phase.

“Internet-based applications have their origin in one of important milestones of the digital evolution which was the broader use of the Internet protocol TCP/IP and the World Wide Web starting in the mid-1990s.

Information exchange among computer systems then became increasingly easier, and both email and web browsers swiftly developed into the new dominant humanmachine interface. This created a new distribution and communication channel that most companies, including DACHSER, took advantage of. The development of mobile computers and applications such as laptops,

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tablets, and smartphones in the first decade of the new millennium marked another milestone of the digital revolution. This technology once again harnessed the power of the internet and digitalisation. Technology as an enabler helps to exchange data better and faster when it comes to logistics-related data worldwide,” said Gandhi.

Further, the main goal of these technologies will be to enable 3PL companies to connect, collaborate and engage with

our end to really tailor an effective solution.

In such a scenario, the customer is willing to even pay a premium as they understand value of solution.”

their clients seamlessly in order to improve the speed and quality of service. Imagine the day when packages will never become lost or misplaced and customers will be able to monitor the progress of their shipment in real time. According to Lakkaraju, “With the advent of internet and email the speed of doing business has increased rapidly. Plus with the arrival of business automation we are no longer wasting time doing repetitive tasks. The LSPs need to understand the customers need before offering solutions.

Sometime it requires a lot of homework at

distribution helps businesses in maximising profitability through combined knowledge and resources.

Competition is heating up to serve the increased demands of customers to know the whereabouts of their products. Thus Lakkaraju adds “We are foreseeing a future where more and more business activities will get automated. IT solutions will enable improved visibility, tracking and tracing solution, fast and reliable transportation. “ On the other hand a major thing to taken into account for the future is that the

CargoConnect - DECEMBER 2017

Look into the future There are many benefits that companies gain by outsourcing supply chain management to a value-added 3PL. Third party logistics ability to offer an all in one solution for assembly, packaging, warehousing, and

heart for the logistics works remains the physical movement and storage of goods.

Even though we have most advanced of IT solutions, at the end of the day the cargo will still have to move on the same roads, and move internationally on a ship / airport.

So, the key to better future for our industry is to focus on developing and improving the basic infrastructure. Gandhi added to this by saying, “Logistics business models cannot be completely digitalised. It is our

task to make progress with new technologies where this makes sense but also to recognise where the digital world is limited. A sense of perspective also allows us to realise that we have been working on digital concepts for three decades even though no one ever recognised it as such up to now.”

Conclusion An interesting scenario is under construction; the industry continues to expand and then contracts. Technology and human talent have become competitive differentiators. The rise of 3PL has been driven by manufacturers, importers and exporters (shippers), outsourcing warehousing, transportation, inventory management, and freight forwarding. Many manufacturers who have their own inhouse shipping departments that manage warehousing and local transportation are now working with freight forwarders and 3PLs to manage shipment of their goods by road, air and sea. Shippers are realising the benefits of outsourcing their logistics operations to specialist providers, enabling them to downsise or close their own shipping department and deliver considerable savings.

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Interview

A Legend in his own Right

What motivated you to be a part of the aviation industry and how has your experience been so far?

I studied in a small town of Moradabad and my father was a senior IPS Officer. My childhood days had seen aircrafts that were part of the police department. Aviation was close to my heart as my maternal uncle was an Air Marshall in the Indian Air Force. When I qualified for SSB in 1982, aviation was still in my mind. But I had never imagined that for 30 long years, my life would revolve around and only around aviation. What motivated me after I found myself in the aviation sector is that I became an institutional manager in real sense. Not just as an HR Manager; I also went to meet the cargo people working in different airports. In a nutshell, I started having a seat at every table in my organisation.

How has the industry changed since the time you stepped in? Highlight some of the major transformations that you have witnessed.

There has really been a sea change in the industry since the time I stepped in. Today, India is among the leading countries in this sector, indicating a growth of 21 per cent.

When I started, there used to be only 4 flights from Bombay to Delhi. I had never imagined myself to be able to witness of such a drastic

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change. Another major transformation in the aviation sector came at the onset of the Open Sky policy which was introduced by the then government. It marked the inception of many airlines that started operations with a small fleet. So, in a nutshell, I can say that I had the privilege to witness this burgeoning growth of the aviation industry.

What, in your experience, have you considered to be the biggest challenge till date?

The biggest challenge probably would be streamlining the recruitment system in the country. It was a big challenge to come to the online system from the offline system. The introduction of GATE was another challenge.

I say it with great pride that I have been quite instrumental in streamlining the recruitment process to a great extent hiring best of people from prestigious management institutes and engineering colleges.

How do you see the graph of the aviation industry moving in the coming years?

What major transformations do you foresee?

I foresee tremendous growth by 2021.

Companies like Airbus and Boeing are experiencing huge demands from airlines like Vistara, Indigo, Go Air and Spicejet. The

As a pioneer in the aviation industry for more than 30 years now, Prof (Dr) Dewakar Goel is probably the most recognised name in the industry. Dr Goel, who was appointed as the Director of the Indian Aviation Academy last year, is regarded as a ‘recycled teenager’ by his students for his ‘young at heart’ attitude. Dr Goel, in the year 2010, acquired INDIAICAO Fellowship. As a trainer, he specialised in instructional techniques from IATA and has conducted numerous training programmes and workshops in India and abroad. Tariq Ahmed, in a tête-à-tête with Dr Goel, talks about his experiences and his life’s biggest highlights. aviation industry is growing by leaps and bounds. Another booster for growth in the aviation sector is the National Civil Aviation Policy, 2016. The Regional Connectivity Scheme of the government is paving the way for another 150 regional airports in the coming years. Another area that is going to get bigger in the years to come is the Aviation MRO industry. I foresee a day when we will be assembling aircrafts in India giving boost to MRO.

What are your other interests apart from work?

I have a penchant for writing and teaching.

I am a visiting faculty at many renowned institutions apart from being a PhD guide. I have also authored 14 books till date, with my next book already in the pipeline. These are in Hindi, English, Tamil, Bangla, Malayalam, Urdu and now in Telugu.

What message do you have for the aspirants who are trying to make a mark in the aviation sector?

I would advise the young crowd to have a little patience. Quick success never lingers for too long. Also, in the field of aviation, multiple skills are required. Therefore, one has to be open about learning about the various facets of it.

Interview

“Importance of logistics is unquestionable” How important is logistics for the overall scheme of your business?

There are probably only a handful people in India like Sanjeev Khanna who has seen the logistics industry from such close proximity.

He is considered to be a supply chain guru and is a regular visiting faculty to many valued Management institutes and has been awarded and recognised by media and industry alike for his contributions to the Indian logistics industry. What makes him this immense personality is his experience of more than 30 years in various MNCs and Indian corporations like Honda, Samsung Electronics, ITC Ltd, BigBasket.com, Patanjali Ayurved Ltd and many more.

Currently, he is working as an independent supply chain and logistics consultant at Winning Edge Logistics Pvt Ltd (WE). In an interview to Tariq Ahmed, he shares the streaks of his experience over the years in the field of supply chain management. Excerpts follow:

Efficient logistics operations are an integral and the most critical component of a strong supply chain. So, its importance for business is unquestionable. In the simplest terminology, logistics encompasses all that happens when material moves, from the point of origin to the point of consumption. I look at it as three parallel flows – (1) material flow, (2) information flow and (3) document flow.

These three flow in an interwoven manner to make logistics operations happen. So, it’s not an exaggeration that in today’s business world it’s not the product but the marketing (brand management and after-sales service) and supply chains that compete and decide the fate of any business.

How do you ensure smooth coordination between suppliers, transporters and other departments in your supply chain?

First and foremost, the supply chain must be designed in an exhaustive manner, mapping all the three aforesaid flows to identify and establish the role of each internal or external stakeholder – vendors, service providers and internal interfaces. Next, each step should be elaborated in detail with the help of SOP (Standard Operating Procedure) and SLA (Service Level Agreement), while clearly articulating the key deliverables, primary and terminal responsibilities to complete a task, in mutually agreed timelines. The automation of this whole process of mapping of document and information flow helps in bringing much needed speed and transparency for error-free processing.

Are there any unique or innovative strategies that you have adopted for the better supply of your products?

Though I won’t be able to share detailed specifics here, in my almost 30 years of experience in managing different supply chains, with different industry verticals – Honda in automobile, Samsung in white goods, ITC in lifestyle, Reliance in retail, Metro cash and carry in wholesale, BigBasket in e-Commerce and Patanjali in FMCG –

one of my key learning has been that, the real challenge and excitement of managing different supply chains is to understand your core business, market and competition and do a SWOT analysis. The next step is to design and implement a model which can integrate all key components in the most seamless manner. The focus should be to make the whole process as ‘idiot-proof’ as possible and have possible automation to bring required speed and visibility of data-mapping.

What functions are performed by your logistics partners and what is controlled internally?

In today’s business scenario, almost all logistics operations like warehousing, manpower, security, MHE and transportation management are outsourced by most of the corporate. A few organisations are outsourcing software support of WMS and TMS through their LSP or outsourced ERP solution providers, while many other corporates are having their own in-house WMS and TMS. The supply chain planning, integration, implementation and performance monitoring is what most corporates do in-house, to understand the areas of Gaps and Overlaps, to do the RCA (Root Cause Analysis) for necessary process correction or improvement.

How do you manage your supply chain during peak times such as festivals and promotional sales?

It’s a lesser challenge in a running and wellestablished business but for a start-up or a young company, it could be a challenging issue. In all cases, the key is the readiness for such seasonal fluctuations by better planning and better coordination with all internal and external stakeholders. The pre-alignment with LSP for the indicative buffer capacities helps to a large extent. Having said that, it’s equally important for the other internal functions like purchase, production and sales etc. to understand that it’s not only a logistics challenge, rather it’s an organisational challenge and all have to complement to handle it as efficiently as possible.

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Interview

“We aim to be a catalyst for India’s economic growth“ 70

CargoConnect - DECEMBER 2017

As per the reports, in March this year Abu Dhabi Ports, the master developer, operator and manager of the Emirate’s ports and Khalifa Industrial Zone, had announced a major expansion plan for its Khalifa Port Free Trade Zone (KPFTZ) to accommodate more industries. To become a global leader in logistics, it is important to attract global players.

How far do you think During the threeAbu Dhabi’s day(3-5th November) logistics World Food India meet industry is in New Delhi, which open to the saw participation global cargo from 60 countries investors? including the US, the Where do you UAE, Germany, the see the graph Netherlands and France moving in the and over 50 global CEOs coming years? announcing big amount The UAE is of investments in the among the country’s food processing world’s top three countries sector, Edwin Lammers, in terms of Vice President for attractive Commercial and markets for Business Development infrastructure at Khalifa Industrial investment. At Zone Abu Dhabi in an the same time, exclusive chat with the logistics Deepashree Banerjee industry is one talks about UAE’s that is of great current focus on India to importance script business success, to the UAE new opportunities for government Indian investors in Dubai and with the and a lot more. Excerpts.

support of the UAE leadership, the logistics and port industry promise to be key drivers for economic growth. In fact, container port traffic in UAE is expected to reach record level of 28.4 million twentyfoot equivalent units by 2021.

This makes the UAE an attractive destination for investors in the logistics industry. Indeed, we are seeing heightened interest from Chinese entities who are capitalising on the vast opportunities in Abu Dhabi. This year alone, we have signed a 50year agreement with the Jiangsu province for investment in our industrial zone as well as ainking a further agreement with COSCO Shipping Ports Ltd. for the region’s largest Container Freight Station.

We hope that in the coming years, progress continues to be made – especially

with our recent intense focus on India.

Reportedly, 40 companies currently operate in the free trade zone in a range of sectors including industrial, trading and services. It was also announced that the new free trade zone will be connected to the future rail network for the transport of goods. Please throw some light on the (if any) developments taken place in this segment.

Our free trade zone has attracted customers across an extensive range of sectors including aluminum, food packaging and polymer conversion. Over the course of our time in India, we are exploring the option with Indian developers and investors for the launch of a potential Mega Food Park at Khalifa Port FTZ to enhance our food manufacturing cluster offering.

The Khalifa Port FTZ was carefully planned to have close and easy access to Khalifa Port, UAE airports, the GCC road network, as well as to be strategically located for connection with future rail.

Once the rail network enters phase two, we stand ready to offer our customers the benefit of close proximity to all transport infrastructure.

Several case studies showcase Dubai as a future hub for logistics investments and expansions. Also, several Indian companies have expanded their operations in the country. What could be the impact of this on Indian economy?

The UAE is home to a large population of Indian expats. As Indian businesses flourish in the country with the support of UAE infrastructure and logistics, we are keen to expand on successful business relationships.

Our team recently attended the UAEIndian Economic Forum held in Dubai this month to talk about new opportunities for Indian investors and the potential for partnerships to promote growth within the two economies. We aim to be a catalyst and support for India’s economic growth through returns on Indian investment in the UAE logistics industry.

Where do you feel the logistics industry fall in Abu Dhabi’s Economic Vision 2030?

Under the Vision 2030 Abu Dhabi aims to expand to become a logistics hub for businesses and industries in the region. The

government plans to continue to capitalise on its strategic geographical position and excellent transport infrastructure.

Currently its focus is to facilitate the logistics industry with support for development of Khalifa Port, our flagship port, expansion of the airport and the road and rail network. Transportation and trade is seen as an important contributor to sustainable economic diversification.

Please throw some light on how Khalifa Port, KIZAD, and its free zone (KPFTZ) are all supporting companies to grow and access more markets from this strategic location.

Khalifa Port, KIZAD, and its free zone (KPFTZ) are strategically placed to allow efficient transhipment options across the entire Gulf Region, the Indian Subcontinent, the Red Sea, East Africa and other neighbouring countries. The port is connected to 70 international ports – resulting in extensive reach for companies looking to expand.

Khalifa Port Free Trade Zone, provides companies with an efficient and fast–track business formation process and dedicated investment support to facilitate set-up and growth of operations. Currently, we are investing in the construction of 35 new free zone warehouses and 75 Prebuilt Light Industrial Units (LIU) to meet increasing demand and support our growing customer base.

The Khalifa Port FTZ also builds tailored free trade zone business policies such as 100 per cent foreign ownership, no restriction on repatriation of capital and profit, duty free import and re-export etc. that create a competitive environment for operating companies.

How do you believe investors in food processing industry can benefit from Kizad’s multi-modal transportation infrastructure?

Through its close proximity to Khalifa Port (fastest growing deep-water port in UAE), four international airports, an excellent road network, KIZAD offers the food processing industry fast and efficient transhipment of cargo. In time, this multimodal connectivity will be enhanced through the planned railway network.

Facilitated by this infrastructure, investors for the food industry have outstanding access to the UAE itself, the wider region and international markets.

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Interview Dachser, one of the world’s leading logistics providers, generated EUR 5.71 billion in revenue and handled 80.1 million shipments with a volume of 38.2 million metric tons. At the newly created ‘DACHSER Enterprise Lab’ in Dortmund, Dachser employees will be working together with researchers from Fraunhofer IML on specific research and development projects that flow into Dachser’s two business fields of Road Logistics and Air and Sea Logistics. Edoardo Podestá, Managing Director Air & Sea Logistics Asia Pacific discusses with Tariq Ahmed in an exclusive interview what it has in the store for the Indian subcontinent and how Dachser is ready to tackle any capacity crisis. Here are the excerpts:

Handling Bottlenecks with Ease 72

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Recently, Dachser has entered into a partnership with German research society, the Fraunhofer Institute for Material Flow and Logistics. What is this partnership aimed at?

Evolutions like digitalisation and Industry 4.0 increase the need for research and development activities. The partnership is aimed at the further development of pioneering technologies for comprehensive application in practice. For many years now, collaboration with a range of universities and development partners has been a mainstay of our corporate strategy. At the newly created ‘Dachser Enterprise Lab’ in Dortmund, Germany, Dachser employees will be working together with researchers from Fraunhofer IML on specific research and development projects that have a positive impact on Dachser’s two business fields of Road Logistics and Air and Sea Logistics.

The DACHSER Enterprise Lab adds key competencies to our internal research and development capacity, and gives us flexible access to specialists. By this initiative, Dachser contributes to shape the digital revolution and to prepare for the future.

In August this year, Dachser released a press statement saying that there will be capacity bottlenecks on the Asia-Europe trade and transatlantic trade in the upcoming peak season.

What contingenc y plan are you adopting to tackle these issues?

Fluctuating markets and scarce capacities are a daily reality when handling worldwide supply chains, especially during peaks seasons. Capacity bottlenecks currently mostly affect air freight on both, the AsiaEurope as well as transatlantic trade lane.

At Dachser, our network-based processes are the basis to respond adequately to differing market situations. In terms of air freight, we started offering additional services at an early stage before the peak season started. This proactivity has been highly appreciated by customers.

Our charter rotation service between Europe and Asia, for example, makes extra capacity available. Seven rotations in November and December provide the space that customers need to reach their markets in a timely manner. Our dedicated teams at the North China and Frankfurt Air Freight Gateways assure proper handling and realisation as per schedule. They also arrange local procurement and distribution, among others via our Dachser European Logistics

network: 363 branches cover the complete European continent including the hinterland – a reliable and seamless set-up.

Temperature excursions, customs delays, packaging breakdowns, incorrect shipping, and packing choice are all risks inherent in transporting pharma shipments. What steps have been taken by you in order to reduce such risks?

India is the third largest manufacturer for pharma and biotechnology products in the world. These products are highly sensitive and improper handling can have far-reaching consequences on living beings. To cope with the industry’s high standards, Dachser offers holistic and detailed logistics services for such products. The centrally steered Dachser Life Science & Healthcare quality system is setting the standards and guidelines as part of our Life Science & Healthcare concept.

A crucial success factor is maintaining the required temperature range. Thus, seemingly simple tasks like the choice of the suitable

Dachser is offering a broad range of product and process specific value-added services, like relabeling, product assembly, quality checks or special packaging, to name just a few.

Outsourcing these activities to a specialist helps our customers to streamline their processes and efficiency. transport mode and packaging become an utmost priority. On top of this, customers expect reliable and fast deviation reports on temperature excursions, including a set of corrective and preventive actions. In addition, specific pharma market know-how is just as important when it comes to customs issues, e.g. import licenses, certificate of analysis, restrictions on ingredients etc.

Dachser’s dedicated team in India is therefore constantly trained according to the newest industry standards. Our employees are skilled to consult customers considering product-specific requirements and well experienced in relevant transport and logistics aspects to mitigate any potential risk. Constant re-evaluation of our transport processes, especially at critical control points,

help Dachser to maintain transparency and control throughout the supply chain to ensure the integrity of the product for the benefit of the customer.

Indian Government is presently quite proactive in terms of Foreign Direct Investments. Also, India is one of the most emerging markets in recent times. Do you plan to intensify your operations in the Indian markets in the coming years?

The government’s Ease of Doing Business initiatives trigger ongoing improvements in areas like business launch, cross-border transport or infrastructure. This attracts FDIs and leads to constant growth. At the same time, India is catching up in terms of worldwide competitiveness.

With 21 branches and approximately 540 employees in India and Bangladesh, Dachser is an established player on the Indian subcontinent. We are constantly developing our extensive network, most recently by moving our Dhaka, Chennai and Delhi branches to larger facilities. Implementing our worldwide transport management system Othello in both countries will set another milestone to increase efficiency and transparency for our customers.

What innovative and technological advancements are you looking at as we step into 2018 for a seamless supply chain network? Highlight some of the projects in the pipeline.

We are now in the final phase of rolling out our worldwide transport management system for air and sea freight, Othello, to harmonise process management on an international level. However, in today’s digitised world, customers expect full transparency not only for specific transport modes but across the complete supply chain. Based upon our inhouse developed IT systems Domino (road), Mikado (warehousing) and Othello (air and sea freight), Dachser is capable to provide seamless tracking and tracing not only for air and sea shipments but also including road and warehousing. This capability reduces effort for our customers who get all the information they need on one single platform.

When it comes to supply chain planning, we are continuously enhancing our capability to offer holistic solutions for our customers.

Advanced technology, like our Supply Chain Design Tool, enables us to analyse big data and to come up with the most beneficial logistics solutions.

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news

Rlwys plan to do away with diesel engines in five years

Cabinet sanctions approval for MoU between India and Poland

The Ministry of Railways has decided to do away with diesel locomotives and replace them with electric engines in next five years. The move will reduce carbon emissions and help railways save around `11,500 crore annually, said Railway Minister Piyush Goyal at a FICCI event.

“We don’t want to burden our passengers and freight customers by raising costs. Through bringing efficiency in the existing system, we can reduce operational costs and provide better services to our users,” Goyal said. “We’ll only use diesel locomotives for backup.”

The decision has, however, cast a shadow on GE’s Marhaura diesel locomotive project in Bihar, where the company is setting up a factory at an estimated cost of `2,052.58 crore. The project was planned for over a period of 10 years, whereby, GE was to supply 1,000 diesel locomotives of 4,500 and 6,000 horsepower with high-level performance guarantees. However, the Railways Ministry had limited equity contribution in the project.

The union cabinet sanctioned its approval for signing the Memorandum of Understanding (MoU) between India and Poland for the Promotion of Civil Aviation Cooperation for a term of five years.

The objective of the MoU is to recognise the mutual benefit of cooperation in the field of civil aviation having particular significance in establishing and improving regional air connectivity in India.

Besides, both countries would recognise mutual benefits of environmental testing or approvals, such as flight simulators monitoring, aircraft maintenance facilities, maintenance personnel, and aircrew members.

The key areas of the MoU are to promote and support the civil aviation market by reviewing legal and procedural issues, which may adversely affect cooperation between India and Poland.

Further, the MoU is said to foster collaboration in research and studies on aviation safety, conduct training programmes on aviation safely, safety oversight, airworthiness, flight operations, licensing, legislation and enforcement.



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Pristine strives to mirror a ‘Pristine Credo’ in its actions, thoughts and ethos. We like to call it the “Credo of 3 Cs”

 of innovative solutions | of cost and time efficiencies | of value chain | of long term relationships

We dream to let loose your instincts in creating value and free your time and effort in matters of moving the things that you create. And, we dream, most importantly, of earning your trust. More than anything else, it is about living our dream: to recalibrate levels of excellence, redesign protocols, bring back your hunger of doing business, rekindle the excitement and fun of making in India and galvanize the essence of creativity in producing and trading and selling.

As for us, we give you “passion on move”

PRISTINE LOGISTICS & INFRAPROJECTS PVT. LTD. (PLIPL): Third Floor, Wing-B, Commercial Plaza, Radisson Hotel Delhi, National Highway No. 8, Mahipalpur, New Delhi-110037 | Ph: +91-11-47235800, 46772223 / 24 / 27 | Fax: +91-11-4 6772228 | E: athar@pristinelogistics.com

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ACAAI had filed a complaint against IATA before CCI in 2012 The Air Cargo Agents Association of India (ACAAI) had filed a complaint before the Competition Commission of India (CCI) in December 2012 alleging anti – competitive activities of International Air Transport Association (IATA) in India. CCI referred the case for investigation to the office of the Director General Investigation (DG). After receiving the DG’s investigation report, CCI issued its Order in June 2015. ACAAI was aggrieved by this Order as it was erroneous on both facts and law and the issues raised by ACAAI were not adequately taken cognisance of by the CCI. ACAAI therefore, preferred an appeal against the CCI Order before the then Competition Appellate Tribunal (COMPAT) in August 2015.

In November 2015, the former COMPAT issued its Order regarding ACAAI’s appeal, wherein it stated that the DG had committed quite a few serious procedural errors in not adopting the due processes for investigation of all aspects of the ACAAI allegations of abuse of dominant position and consequential violation of both Sections 3 and 4 of the Competition Act by IATA. The COMPAT inter alia stated in its Order after detailed analysis of the submissions made by both sides that the Commission had failed to take cognizance of all ACAAI’s issues and set aside the impugned Order of CCI. The COMPAT remanded the matter back to the DG for a fresh investigation of all aspects of ACAAI’s original allegations which formed part of the information before the CCI. Accordingly, the DG’s office has initiated a fresh investigation in this matter.

This matter is currently sub judice and under active investigation by the DG.

ACAAI recently learned that while the entire issue is sub judice before the DG post order of “remand” by the former COMPAT, as stated above, a fresh complaint had been filed by IATA against ACAAI before the CCI on 7 June 2017. The timing of this fresh filing

by IATA against ACAAI, though seemed a well calculated strategy, but finally proved untenable in law as the CCI rejected the same by a final Order. The copy of the final Order in Case No. 29 of 2017 is available on the website of the CCI. IATA attempted to make untenable allegations to the effect that ACAAI was in violation of the provisions of the Competition Act by compelling its members not to sign up for the CASS programme which IATA seeks to enforce in India. This allegation was considered on merit by the CCI and the CCI was pleased to reject the same by passing a final Order under Section 26 (2) of the Competition Act. The relevant extracts from the Order dated 12 September 2017 of the CCI are given below.

“14. The Commission also notes that the Informant has not produced any evidence to establish that OP 1 has taken coercive action against any of its members who have agreed to participate in the CASS implementation. The Informant has merely stated that OP 1 is controlling the free will of its constituent members without any direct or indirect evidence suggesting that it is forcing its member agents to follow its dictates.

15. The Commission notes that the Informant has itself admitted in the information that there is an overwhelming response from member agents of OP 1 in support of

introduction of CASS and various cargo agents came forward voluntarily to get their enrolment done for the training program.

The Informant has also submitted that after the introduction of CASS on 01.06.2015, there has been a phenomenal increase in the number of participating cargo agents with more airlines and agents actively participating in CASS of their own volition.

It is also an admitted fact that 14 airlines and more than 416 agents have received training to work on the CASS program. All these indicate that there is no collective boycott on the part of member agents of OP 1 and the member agents are taking independent commercial decision to participate/not to participate in the CASS program.

17. The Informant has itself admitted in the information that the consequences of not participating in the boycott call are not known. The Informant claims that perhaps, member agents were forced to send out such letters to the two-member airlines of the Informant under the possibility of threat of suspension or even expulsion from the membership of OP 1.

19. The Commission notes that the Informant has failed to furnish any material that could prima facie suggest an agreement amongst the OPs, in contravention of Section 3(3) (b) read with Section 3(1) of the Act. The Commission, therefore, is of the view that no prima facie case of contravention of the provisions of Section 3 of the Act is made out against the OPs. Accordingly, the matter is ordered to be closed in terms of the provisions of Section 26(2) of the Act.”

AAI Cargo to invest outside India The AAI Cargo Logistics and Allied Services Company, a subsidiary of AAI, is open to investments outside India.

“We will invest in other airports and facilities worldwide,” Keku Bomi Gazder, CEO, AAI Cargo Logistics and Allied Services Company, said. The firm is working on investment possibilities in the country and abroad to provide cargo handling and allied services. “A five-year vision document with details of our verticals, a blueprint on how and where the company will go

forward along with the quantum of investment and timeline is being worked on,” he said. The company plans to unveil international courier handling at Tiruchi and Thiruvananthapuram airports in the last quarter of this financial year. An international courier terminal is different from an international cargo terminal in terms of the size and contents of the consignments handled. The weight limit for courier/express material (individual packages) for exports and imports is fixed at 70 kg.

DECEMBER 2017 - CargoConnect

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news

Air traffic movement expected to increase at B’lore Intl Airport

Infrastructure status granted to the Logistics sector

B a n g a l o r e International Airport Limited (BIAL) has now commenced the winter schedule 2017-18 for the Kempegowda International Airport, Bengaluru (BLR Airport).

During winter 2017-18, the daily Air Traffic Movement (ATM) is expected to be at 614 at the start of the schedule, and will progress to reach 660 ATM per day – a projected growth of 19 per cent in overall ATMs. New airlines that will begin operations from BLR Airport are Malindo Air that will connect travellers to Kuala Lumpur twice each week and DHL Aviation (cargo) that will operate to Bahrain once a week from BLR. New Routes include daily connectivity by Jet Airways to Amsterdam, Indigo will start two daily flights to Tirupati starting December 20. The top domestic carriers for this schedule will be Indigo and Jet Airways, while Emirates and Etihad Airways will be the top international carriers.

The government has given infrastructure status to logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments. The government has been working on ways to attract more investments into transport and logistics as part of efforts to bolster infrastructure development in the country.

Amending the existing framework, a notification issued by the Department of Economic Affairs (DEA) has widened the category of infrastructure sub-sectors to “transport and logistics” from the earlier sub-head of “transport”. Having the infrastructure status would help the logistics sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters. Logistics costs of exports are very high in India and due to this, Indian goods are less competitive in global markets. The definition of logistics includes industrial parks, warehouses, cold storages and transportation. According to the notification, logistics infrastructure includes “Multimodal Logistics Park comprising Inland Container Depot (ICD) with minimum investment of `50 crore and minimum area of 10 acre”.

Further, a cold chain facility having an investment of at least `15 crore as well as warehousing facility with investment of minimum `25 crore would come under logistics infrastructure.

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Indian Logistics sector might grow by 10% annually: ICRA Terming the outlook for logistics companies as positive in the medium term, rating agency ICRA said India’s logistics sector is likely to grow by about 10 per cent annually.

“With a gradual improvement in most of economic indicators over the past couple of months, the outlook for the logistics companies is positive in the medium term...The Indian logistics industry is expected to grow by 9–10 per cent per annum over the medium term,” ICRA said in a statement.

It said that while there have been fluctuations in the economy and freight demand due to GST implementation, the impact of the same would be temporary and would be corrected over the near term.

Shamsher Dewan, Vice President and Sector Head, Corporate Ratings, ICRA said, “Our analysis of the Q1 FY 2018 performance of key listed logistics companies indicate that their revenue growth at 6.2 per cent (on Y-o-Y basis) outpaced the real GDP growth, much of

Will bring logistics cost down to 12%: Nitin Gadkari With logistics cost in India alarmingly high, the government is working t o w a r d s lowering it by a third by developing coastal shipping and inland waterways as alternative modes of transport, Union Shipping Minister Nitin Gadkari said on Saturday.

In his address at “World Food India 2017”, Gadkari said the logistics cost in India was as high as 18 per cent compared to China where it was between 8 and 10 per cent.

“We are trying to bring this cost down to around 12 per cent which would make Indian goods more competitive in the international market,” Gadkari said, adding that the government was prioritising coastal transport and inland waterways compared to road and rail mode as costs were significantly lower for the former.

“For every `10 of transportation cost by road, it is `6 for railways and only `1 for waterways.

That means you would be able to transport goods spending only 10 per cent of the current cost,” said Gadkari, who is also the Road Transport and Highways Minister.

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it was supported by increase in freight rates since the latter half of FY 2017 while volume growth remained flat for most of the companies.”

In addition, companies have benefited from the underlying sectors such as automobile, consumer durables etc. which have bucked the economic slowdown trend, it said.

From a profitability perspective, while the aggregate operating profit margins improved marginally on a sequential basis to 9.7 per cent during Q1 FY 2018, there was pressure on the margins on a Y-o-Y basis, it said.

India helped Sri Lanka in fuel crisis Following Sri Lanka’s request for emergency shipment of fuel, Prime Minister Narendra Modi assured President Maithripala Sirisena of “all possible assistance.”

The two leaders spoke over telephone and a 21,000 kilolitreshipment left Paradip Refinery in Odisha and according to a press statement issued by the Indian High Commission in Colombo.

Lanka IOC, the Indian Oil Corporation subsidiary in Sri Lanka, has made 3,500 kilolitres from its stock available to the state-owned Ceylon Petroleum Corporation (CPC), with which it controls retail distribution of fuel in Sri Lanka.

As promised a 40,000-metric tonne shipment of petrol, for CPC’s supply, reached Colombo. India has assured Sri Lanka of additional petrol from the Kochi Refinery, should a need arise, officials said.

1st Indian wheat consignment via Chabahar reaches Afghanistan In a significant sign of trilateral cooperation, the first consignment of wheat from India to Afghanistan, that was flagged off by External Affairs Minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbani on October 29, reached the Afghan city of Zaranj near the Iran-Afghanistan border on November 11 via the Iranian port of Chabahar, thereby bypassing Pakistan.

“First India wheat shipment via Chabahar welcomed into Zaranj Afghanistan with traditional song, dance and joy! Proud moment!!,” Indian Ambassador to Afghanistan Manpreet Vohra tweeted. Vohra p pictures of Prime Minister Narendra Modi, Afghan President Ashraf Ghani and Iranian President Hassan Rouhani decorated Zaranj as the shipment arrived.

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Tuticorin port sets cargo handling record

India to be 3rd largest aviation market in 2019

V O Chidambaranar Port created a new record by handling 1,65,189 metric tonne of cargo in a single day on November 11, surpassing the previous single day record of 1,61,935 metric tonne on April 15 this year.

The major cargoes that contributed to the achievement are industrial coal, thermal coal, fertilizer and fertilizer raw materials and containerised cargoes.Port Trust chairman I Jeyakumar IRTS thanked all the stake holders, officers and the employeesof the port who have contributed to the achievement. He said, “The port is continuously striving to achieve improvement in performance and productivity to attract more volume of traffic in the coming days.”

Financial year 2018-19 is likely to see more than 150 million passengers taking flights from Indian airports, making the country the world’s third largest aviation market for departures, says a report by global consultancy and research firm Centre for Asia Pacific Aviation (CAPA). Earlier, the International Air Transport Association (IATA) has predicted that India is on its path to become the third largest aviation market—both departing and arriving passengers - after the US and China by 2025. But CAPA estimates that India will get there by the end of 2022-23.

Indian airports are estimated to serve over 460 million fliers that financial year, up from 265 million in 2017-18.

However, experts say Indian airports are ill-prepared in catering to the increased number of passengers. Indian airport system is expected to exceed its maximum structural capacity

by FY 2022 and this level could be breached earlier if the new airport projects are delayed.

Major airports such as Mumbai, Delhi and Chennai are at the highest risk of saturation. Smaller airports like Agartala, Dehradun, Guwahati, Jaipur, Kozhikode, Lucknow, Mangalore, Pune, Srinagar and Trichy are already operating beyond their design capacity.

Vizag airport gets new intl air cargo complex Union Minister f or Civil Aviation Ashok Gajapathi Raju recently inaugurated the international air cargo complex at the Visakhapatnam airport.

The minister encouraged Vizag to compete with Mumbai and Chennai in handling air cargo in view of the vast potential of the area.

“The facilities at the Vizag airport will be further improved and the new airport at Bhogapuram in Vizianagaram district will also come up for future needs of the city,” he said. The complex is likely to give a push to export of pharmaceuticals, seafood, garments and metallurgical products. Initially, the facility will handle five tonnes per day.

China launches world’s first fully electric cargo ship China launched world’s first fully electric cargo ship in Guangzhou, capital city of Guangdong province. It is the first ship in the world to use lithium ion battery. The ship will be mainly used to run in inland section of Pearl River for carrying coal for generation of electric power. The 2000-metric-ton ship was manufactured by the Guangzhou Shipyard International Company Ltd. It is 70.5 meters long and is powered by 26-tonne lithium battery. It has battery energy of about 2400 kilowatt (kw) hours which is same energy of 40 new energy cars. It can run 80 kilometers after being charged for two hours. Its highest speed is 12.8 kilometers per hour. This all-electric ship will help in reducing shipping costs for electric power operators.

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Stocks of LSPs jumped after infrastructure status Investor confidence on the logistics sector reflected on the stock market after the Finance Ministry of India recognised it as a subsector of Infrastructure in India. Shares of companies like Aegis Logistics, VRL Logistics and Snowman Logistics gained between 1-4 per cent during the early trade session on BSE Sensex. Shares of Allcargo Logistics Ltd, TCI Express Ltd and Transport Corp of India Ltd rose as much as between 3.15 per cent and 4.1 per cent.

In a bid to develop an integrated logistics framework within the country, the logistics sector was awarded the infrastructure status by the Indian government. This will enable companies operating cold chains, industrial parks and warehousing facilities to raise long-term credit from banks and other financial institutions at low rates, and attract foreign investment.

news

TA Varghese elected as new President of ACAAI The 47th Annual General Meeting (AGM) of the Air Cargo Agents Association of India (ACAAI) was held on September 27 at Kohinoor Continental Hotel in Mumbai.

TA Varghese, the current vice president of ACAAI, has been elected unopposed as the new president of ACAAI. Varghese replaced Hemant Bhatia who served on the post for the last two years. Sunil Arora, the current Secretary-General has also been elected unopposed to ACAAI’s vice president post.

T A Varghese – President

Sunil Arora – Vice President

Afzal Malbarwala – Hon. Secretary General

C K Govil – Hon. Treasurer

Afzal Malbarwala elected as a Secretary-General and CK Govil elected as a Treasurer in the AGM. The AGM also adopted the audited account for the financial year 2016–17. A report of the Managing Committee for the year 2016–17 was also presented at the AGM.

Future Supply Chain IPO opens on Dec 6 Future Supply Chain Solutions Limited proposes to open an initial public offering of up to 9,784,570 equity shares of face value of `10 each on December 6, 2017 for cash at a premium through an offer for sale of up to 7,827,656 Equity Shares by Griffin Partners Limited and up to 1,956,914 Equity Shares by the Company’s Promoter, Future Enterprises Limited. The Offer closes on December 8, 2017. The Offer would constitute up to 24.43 per cent of the post-Offer paid-up Equity Share Capital. The Price Band for the Offer is fixed from `660 to `664 per Equity Share. Bids can be made for a minimum lot of 22 Equity Shares and in multiples of 22 Equity Shares thereafter. The Equity Shares are being offered through the Red Herring Prospectus dated November 27, 2017 and are proposed to be listed on the BSE Limited and the National Stock Exchange of India Limited. The Global Co-ordinators and Book Running Lead Managers to the Offer are Edelweiss Financial Services Limited, CLSA India Private Limited and Nomura Financial Advisory and Securities (India) Private Limited.

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CargoConnect - DECEMBER 2017

Profile

AAI initiatives turn NSCBIA a success story

S

pread over an area of 2,460 acres, Netaji Subhas Chandra Bose International Airport (NSCBIA) in Kolkata, West Bengal, serves the Kolkata metropolitan area. The largest hub for air traffic in the eastern part of the country and one of the two international airports operating in Bengal, the airport handled over 15.8 million passengers in fiscal year 2016-17 making it the fifth busiest airport in India in terms of passenger traffic after Delhi, Mumbai, Bangalore and Chennai.

In 2014 and 2015, Kolkata Airport won the title of Best Improved Airport in the Asia-Pacific region awarded by the Airport Council International, which is a feather in the cap of AAI as they own and operate the airport.

Modernisation of cargo facilities In September 2012, AAI upgraded the airport’s cargo-handling capacity, enabling it to cater for the demand until 2020. There has been a 25 per cent growth in international cargo movement to and from Kolkata airport and a 15 per cent increase in outward transit. Automobile parts accounted for the bulk of the growth in the movement of cargo from the city to other countries. In November 2008, the first Centre for Perishable Cargo (CPC) in West Bengal was opened at the airport. The CPC has an area of 7,992 sq ft and an Major commodity profile-export annual storage capacity of 12,000 million tonnes. The CPC had been undergoing trials that started in SL NO. COMMODITY PERCENTAGE(%) June 2008 and was built with INR 01 Leather Product 36 67.5 million grant-in-aid from the 02 Ready-made Garments 09 Agricultural and Processed Food 03 Live Mud Crabs 07 Products Export Development 04 Vegetable, Fruits (CPC) 07 Authority (APEDA), a part of the Commerce Ministry.

05 Machine Spares 07 06

Textile

06

07

Misc. Items

28

Major commodity profile-import SL NO.

COMMODITY

PERCENTAGE(%)

01

Machine Spares

18

02

Mobile Phones & Accessories

14

03

Electronic/Computer HW

11

04

Equipments

08

05

Perishable

03

06

Misc. Items

46

Salient features There are four park ing bays exclusively for freighter fleet, which can accommodate up to B-747 type of aircraft. AAI has created this air cargo terminal with various facilities for processing air cargo in the terminal building at par with any international airport.

Growth potential The growth potential of Cargo at NSCBI Airport, Kolkata depends on opening of more traffic via new destinations and industrialisation

New International Cargo Terminal Specifications Total area: 39,150 sqm out of which covered area is 22,585 sqm Covered area of import: 14.085 sqm Covered area of export: 8,500 sqm Annual handling capacity: 100,000 million tonnes out of which cargo handled during 2016-2017 was 60,910 million tonnes.

Integrated Cargo Terminal Objectives To provide hassle-free services to the users of the Cargo Terminal Quick deliveries as per Citizen Charter AAIs role is to provide Integrated Cargo Terminal as a common user facility Make available all regulatory and facilitating agencies under one roof Automation in Cargo Handling.

ETV in export wing ASRS in import wing CPC for perishable cargo.

Computerisations of cargo handling operations

Cargo Handled During the Year 2016-17 Export Cargo: 37,758 million tonnes Import Cargo: 23,152 million tonnes Domestic Cargo: 34,641 million tonnes of incoming and 36,987 million tonnes of outgoing of the state of West Bengal. Efforts need to be put in to convert Kolkata into a major hub catering to the entire South-East Asia and further to Europe and United States of America. However, the expected growth in Kolkata is around 20 per centage.

In this regard Cargo Terminals are being established at eastern and north-eastern airports so that cargo can move from these regions to Kolkata for their international destinations.

DECEMBER 2017 - CargoConnect

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Dhaka Workshop organised by Celebi Delhi Cargo Terminal Celebi Delhi Cargo Terminal Management India Pvt Ltd, organised a workshop in Dhaka on the 5th of October 2017, to showcase Celebi Delhi Cargo and Delhi Airport as the Exit Bangladesh solution to Dhaka customers for their export cargo. Ramesh Mamidala, CEO Celebi Delhi Cargo, Sanjiv Edward, Head Cargo DIAL and Arvind Aggarwal, Senior Manager – Business Development Celebi Delhi cargo attended the workshop at Dhaka. The Trade members of Bangladesh and press were present in large number to make this session a success.

Ramesh Mamidala welcomed the guests and highlighted the importance of Delhi airport for Bangladesh exporters, more so after the ban on direct cargo flights from Dhaka to any EU country. Since over 54 per cent of Bangladesh Exports are destined to EU, the cargo needs to be rescreened at a third country and Celebi Delhi Cargo has turned into an indispensable Hub for Third Country rescreening , since it charges less to Airlines for handling and screening , besides having ample warehousing space. “We have been handling Bangladesh cargo at Celebi for last six months and now handle over 400T per month” said Ramesh Mamidala adding that the rates are cheaper than in other Airports and the average staying period of EU bound goods at Delhi Airport is 6 hrs to Transshipment Cargo. “We are holding road shows in Dhaka for higher cargo handling business as it has a very bright prospect for us,” Ramesh Mamidala said, adding that the company is aiming to handle 4,000 tonnes of cargos a month from Dhaka.

Transport and Social Infrastructure team from Frankfurt visits JNPT

A delegation from the Transport and Social Infrastructure division from Frankfurt, Germany visited JNPT to discuss and identify investment opportunity in port and port infrastructure sector in India. Shri Neeraj Bansal, Chairman in-charge, JNPT welcomed the delegation led by Uwe Mueller, Director and Team head, Transport and Social infrastructure along with Jens-Oliver Schuenzel, Vice President and Project Manager, Frankfurt, Germany.

Chief Traffic Manager, Dr Unnikrishnan Nair, JNPT briefed the visiting delegation on the various capacity expansion projects being implemented at JNPT.

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Sanjiv Edward said “The poor logistic service in any country merely increases the cost of doing business. So, both Dhaka and Delhi can collaborate to improve the logistic service in the airports for smooth operations of export and import businesses.”

As per Arvind Aggarwal, Celebi is working along with their JV Partner M/s Om Logistics, to find solutions for Bonded Trucking of Transshipment cargo from Dhaka and Chittagong to Delhi Airport under BBIN project, which allows vehicles to enter each other’s territory and does away with transshipment of goods from one country’s truck to another at the border.

Avvashya CCI commences operations at Bhiwandi Avvashya CCI Logistics (ACCI), a subsidiary company of Allcargo Logistics Ltd announced that it has started operations at its new warehouse in Bhiwandi. The state-of-the-art warehouse is located at the Renaissance Logistics Park, WB-09 Bhiwandi. Spread across 1.31 lakh sq ft, the warehouse meets global standards in safety and security compliances. The facility functions on a multi-client mode and has a clear height of 10 meters, with mid height being 11.5 meters and fully racked with a capacity of 10,776 pallet positions.

The Bhiwandi warehouse has a geographical advantage as it is located on the proposed junction of Delhi Mumbai industrial freight corridor and Nagpur – Mumbai Industrial corridor thus having the attention of both central and state government for all its projects. The complex is located on the state highway no. 40 which is a proposed 4 lane road in the years to come, and is well connected with close proximity from Kalyan and thane railway stations as well as Kalamboli CFS.

events

Kerry Indev celebrates 10 years of ICD Irungattukottai

Kerry Indev Logistics Pvt Ltd, one of the leading service providers for sea freight, air freight and inland logistics, organised a trade get together on 3rd November, 2017 which marked the 10th anniversary of the ICD Irungattukottai. Xavier Britto, Chairman, Kerry Indev Logistics, on the occasion of the anniversary also inaugurated a new Customs block and a new yard. He said, while congratulating the ICD team, said, “It was a difficult place to perform and requires a lot of perseverance. I am proud of the ICD team. With all the difficulties, they have marched forward and the ICD is at full capacity now. I congratulate Selvaraj and Manikandan and their entire team for successfully completing tenth year.�

9th edition of ICE organised in Chennai After successful editions of ICE since 2009 in cities like Delhi, Mumbai, Agra, Ahmadabad, Chandigarh and Indore, the 9th edition was organised in Chennai, Tamil Nadu.

The event witnessed 2,000 visitors from 11 countries and 90 exhibitors showcasing 100+ brands. ICE has been effectively acting as a medium to dissipate latest technologies, best practices and governing policies in the cold chain sector and has productively brought together the buyers, suppliers and all stakeholders.

ICE is an amalgamation of exhibition, conference, awards and networking dinner. It is focused on cold chain industry and brings together users and service providers from all over the globe. It is a unique networking opportunity for decision makers, opinion leaders and the entire cold chain fraternity. Through an innovative format of Conference, Exhibition and Awards, ICE enables global best practice exchange delivering knowledge and thought leadership to the Cold Chain.

ICE showcased the complete range of cold chain technologies and solutions on one platform. The exhibition, conference, workshops and award’ night provided an opportunity for the modern cold chain, logistics, retail and other related industries to identify new trends, discuss new ideas, witness latest innovations, view a wide range of products specific to the industry.

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JNPT participated in “Building Warehousing Competitiveness 2017” Jawaharlal Nehru Port Trust (JNPT) participated in “Building Warehousing Competitiveness 2017” conference organised

by CII with the theme of “Emergence of Science in storage”.

The role of warehouses has increased due to wider product range, emphasis on shorter lead times and constant changes in customer demand. Harnessing of technology to meet these new challenges in the warehousing operations will result in better service at lower costs.This was stated by Shri Neeraj Bansal, Chairman in-charge, JNPT while delivering the key note address at the “Building Warehousing Competitiveness 2017” organised by CII Institute of Logistics.

Elaborating on the theme, Mr Bansal said that in countries like India which is

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dependent on monsoon-fed agriculture, efficient warehousing system would play a vital role in promoting agricultural marketing and also help in reducing the imbalance during harvesting season and off season by providing efficient storage facility.

With emphasis on ‘make in India’ scheme, the whole world is looking to our country in the field of manufacturing industry. India manufacturing has entered in all most all sectors. Top world as well as domestic automobile manufacturers is making India an automobile hub. This requires huge warehousing facilities for manufacturing and value additions. The SEZ projects in the country and JNPT’s upcoming Port Based SEZ emphasises modern and state of the art warehousing facility, Bansal observed.

Eicher launches new variants for the E-commerce industry

DHL renews partnership with Hero ISL

Eicher Trucks and Buses, part of VE Commercial Vehicles, organised the Eicher Pro Biz Expo – Smart Solutions for E-commerce Business, showcasing the largest range of Light and Medium Duty trucks, specially focused on catering to the buoyant e-commerce industry in the country. The company showcased 5 new variants in the Pro 1000 and Pro 3000 series range - Pro 1110, Pro 1110XP, Pro 1110XP, Pro 3012/3014 and Pro 3015 at the expo.

The Eicher Pro Biz Expo is being held at Dr. Prabhakar Kore Convention Centre in Bengaluru between November 22 -23, 2017. The expo is aimed at bringing together customers and key stakeholders in the e-commerce and logistics space, to provide them a first-hand experience of Eicher’s smart solutions like Aftermarket Lifetime Support System, telematics, and high end technology, among other features for their transportation requirements. These vehicles are specifically designed keeping in view the specific needs of the sector from long haul to short haul and last mile delivery.

With these new additions, Eicher has further strengthened its position in the LMD segment and now offers the largest and widest smart range of trucks suited for voluminous goods applications.

The new variants offer a 24-feet long cargo body, which makes Eicher the leading player in the industry to do so. Other benefits include higher Volume Space Index with best-in-class payload and fuel efficiency, offering great value and maximum profitability to the customer. Delivering high power and torque, the trucks also offer a cost-effective run with the longest service interval of 50,000 kms.

DHL recently announced the renewal of its partnership with the Hero Indian Super League (ISL).

This marks the company’s third year in its sponsorship of the country’s top professional football league as Associate Sponsor. This season, ISL has grown to 95 matches from last year’s 65, and will be played over the course of five months DHL is proud to be the Official Match Ball partner for all games. It will also award the ‘DHL Winning Pass’ to the player with the highest number of assists in each game, as well as for the entire season. Additionally, DHL will unveil an exciting 360 degree interactive brand campaign specifically created for this season which has the potential to be seen by 215 million television viewers and 1.5 million in-stadia spectators.

R S Subramanian, Country Manager, DHL Express India said, “ISL has grown to be an integral part of the country’s sporting calendar. With our shared passion for football, at DHL, we see this partnership getting stronger each year. The increase in the number of games this season gives us greater opportunity to engage with our audiences on and off-ground for an even longer period of time.

We have brand engagements planned including an upcoming 360 degree brand campaign. We are excited to be part of this journey!”

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MAB Kargo and Allied Aviation felicitates top agents MAB Kargo, which is the main cargo division of Malaysia Airlines Berhad, recently felicitated their top forwarders for their support during the financial year of 2016-17 at a special event in Mumbai. The event was held on November 23rd at Waterstones Hotel, Mumbai. The event was held in association with Allied Aviation Pvt Ltd, which is the GSA for MAB Kargo in North India.

MAB Kargo is a cargo airline with its head office based at the Advanced Cargo Centre (ACC) on the grounds of the Kuala Lumpur International Airport (KLIA) in Sepang. It operates scheduled, chartered air cargo services, ground handling services as well as airport to seaport cargo logistics via ground transportation. Recently, MAB Kargo along with its industry partners led

the expansion of the IATA Secure Freight Programme, an initiative to promote global air cargo supply chain security standards which aims for a secure supply chain program, hence strengthening cargo security in the region.

Allied Aviation Pvt. Ltd. is an leading independent cargo General Sales Agent representing a plethora of airlines and is a recognised member of FAGSA, TIACA and IATA. Executives from MAB Kargo who were present at the event included Ahmad Luqman Mohd Azmi (CEO), Amiroel Shazrie Mohd Yussof (General Manager Sales and Marketing) and Abdul Hamid Mohamed (Manager Regional Sales Middle East and South Asia).

BOM station has seen an increase in

capacity against last financial year by more than 100 per cent. MAB Kargo started operating scheduled freighters to BOM twice weekly and effective Winter Schedule 2017 the Passenger Aircraft seen an upgrade to A330-300 with capacity of 15Tons daily.

This capacity is here to stay to cater to the rise in demand of Pharma from this part of the world to Far East sectors. The current capacity ex BOM is 450,000 kgs with weekly two freighters and ten passenger flights.

MAB Kargo has a solution for all pharma needs both Active Containers and Passive Containers.

The agents felicitated at the event included Odyssey Logistics, DHL Global Forwarding, CEVA, DSV, Magnum Cargo and Expeditors International.

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Vice President of India inaugurated 2nd Aero Expo 2017 Vice President o​​ f India, Venkaiah Naidu asked the Civil Aviation Ministry to evolve stringent security related norms for aviation sector to completely plug of any possibility of air traffic accidents and make sure that such norms also succeed in ensuring total air safety for entire air and cargo traffic.

Inaugurating 2nd Aero Expo India 2017 under aegis of PHD Chamber of Commerce and Industry, Venkaiah Naidu observed that demonetisation and GST would ultimately expand the economy exponentially in course of time and push it to many many trillion economy. “The issue of air safety and completely accident free air traffic should be restored with stringent norms in place so that flying and cargo movements are optimised though the government has taken the twin issue with utmost sincerely but lot more needs to be done on this front so that accidents in civil aviation become a thing of past,” said the Vice President adding that the Modi government is eliminating red tape replacing them with red carpet.

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Kerry Logistics honoured at Global Freight Awards

FedEx launches programme to address road safety

Kerry Logistics N e t w o r k Limited made its debut appearance at the 21st Lloyd’s Loading List Global Freight Awards in London, taking home the Global Freight Solutions Provider of the Year award. Held at the Lancaster London Hotel on 16 November 2017, the award ceremony was attended by more than 500 guests from the global freight and logistics industry.

Kerry Logistics was honoured for its innovative multimodal solutions and successful development of an integral Eurasian overland transportation network between Europe and China with new LCL rail options, providing greater flexibility to its international customers. Thomas Blank, Managing Director of Europe, Kerry Logistics, said, “We are excited to win the Global Freight Solutions Provider of the Year award. With the ambition to become a major logistics service provider for the new Silk Road, we are strategically expanding our network by sea, air, road and rail, devising new innovative solutions to offer our clients a competitive advantage. We are committed to offering a full range of upstream and downstream services to meet the demands of today’s shippers, from industrial freight, down to smaller e-commerce commodities.”

International Road Assessment Programme, a registered charity dedicated to preventing road deaths through safer road infrastructure, in association with FedEx Express, recently announced the launch of the Indian Road Assessment Programme (IndiaRAP), in New Delhi.

The IndiaRAP programme aims to address the highest risk roads around the country in partnership with national and state agencies.

The programme will be led by local experts, using local research and resources, supported by the global International Road Assessment Programme that includes partners in more than 80 countries.

IndiaRAP will provide policy, performance tracking and investment tools for governments to measure and manage road safety infrastructure and optimise investments across the country.

The IndiaRAP team will also build local capacity and expertise by connecting Indian road safety experts with colleagues from around the world.

The programme will be guided by the International Road Assessment Programme’s evidence-based Star Rating methodology and investment planning tools which provide a simple and objective measure of the level of safety which is ‘built-in’ to the road for vehicle occupants, motorcyclists, bicyclists and pedestrians. Five-star roads are the safest while one-star roads are the least safe.

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Grand CII SCALE Award 2017 organised in Hyderabad CII successfully organised CII SCALE Award 2017 at Hotel Novotel on November 24 in Hyderabad.

The award show witnessed a huge number of footfall of Logistics and Supply Chain professionals.

Executives of more than 150 companies participated in the show. Among the present professionals in the show, 55 Supply Chain professionals representing different companies received the prestigious CII SCALE Award on behalf of their respective companies. Companies were awarded for their excellence in supply chain designing and logistics skills. Awards were a recognition of companies’ dedicated efforts in the logistics domain. Supply Chain and Logistics Excellence Awards-SCALE was commenced in the year 2013 to promote Excellence in Logistics and Supply

Chain Management practices in the industry. CII SCALE 2017 Award was the fourth edition of “Supply Chain and Logistics Excellence (SCALE) Awards.”

The SCALE Award 2017 were instituted

by Confederation of Indian Industry (CII) to appreciate companies focused on growth through innovation and optimisation. CII followed a stringent six level procedure of shortlisting and selection. The selection is done by independent assessors comprising experts in the field of Supply Chain Management. The set parameters included the quantified impact, cost-benefit balance, rigorous monitoring and evaluation procedures, and sustainability. There were 158 companies who participated in the award show.

FFFAI’s delegation discussed EXIM issues with CBEC Federation of Freight Forwarders’ Associations In India visited Central Board of Excise and Customs on November 27, 2017 to discuss issues regarding EXIM Trade. Delegation led by Ashish Pednekar (Chairman–FFFAI), A V Vijaykumar (Chairman – Elect, FFFAI), P S Atree, Rajesh Verma, Sudip Dey, Kartik Pancholi, Sashidhar Hebbar, S Ramakrishna (Vice Chairmen- FFFAI) Amit Kamat (Honorary Secretary – FFFAI and Congress Co-ordinator FIATA World Congress 2018), Vinod Sharma (Honorary Treasurer– FFFAI), Alan Jose (Executive Committee Member – FFFAI and Honorary Treasurer FIATA World Congress 2018) Debashis Dutta (Former chairman –FFFAI and Chairman FIATA World Congress 2018) met with Hasmukh Adhia – Revenue Secretary. The delegation discussed on issues pertaining to Zero tolerance of corruption, complete digitalisation of Custom Broker processes, Reduction of dwell time and cost, FFFAI being a self regulating authority of custom brokers in India, Goods and Service Tax Act and implementation of circulars and instructions issued in this regards, and FIATA World Congress 2018 to be held in Aerocity New Delhi from 26-29 September 2018. Hashmukh Adhia, Revenue Secretary, appreciated the points raised during the meeting and expressed whole hearted support of his department to the Federation towards Zero Tolerance of Corruption. He advised the delegation to support achieving the goal of the Government and to intimate to his office, regarding cases where undue delays and harassment are caused by Govt. Officers in clearances, with an intent to corruption, so as to bring in complete transparency in the process of clearances.

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DEL Cargo facilitating North East produces into Global Market The first air cargo consignment of North Eastern Region of India reached Dubai on 14th October via IGI Airport, opening up the air-locked regional connectivity of cargo movement from NER to rest of the World.

In stride with government’s initiative to support economic growth and prosperity of north-eastern regions of India, DEL Cargo created a new air cargo lane for facilitating

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perishable produce from NER to global market, such as Middle-East and Europe in partnership with APEDA (Agriculture and Processed Food Products Export Development Authority) and with support from DoNER (Development of North Eastern Region), NERAMAC (North Eastern Regional Agricultural Marketing Corporation), NEC (North Eastern Council) and Government of Tripura. The first

movement of perishable cargo from Guwahati to Delhi was initiated on 11th September for domestic consumption with NERAMAC. In this path breaking effort, to start with, this movement of produced from Guwahati to Dubai via IGI Airport was undertaken by Spicejet with support from APEDA. DEL Cargo is also in discussion with other domestic carriers, like Jet Airways, Indigo, Air India etc.

TVS LSL CEO wins Overall Excellence Trophy

APM Terminals Inland Services expands services

TVS Logistics Services Limited (TVS LSL), India, which is the arm of the TVS Group of companies that offers Integrated Supply Chain Solutions to its customers, was crowned at the CII’s SCALE Awards 2017, with the ‘Overall Excellence in Logistics and Supply Chain’ Golden Trophy. The Honorable Deputy Chief Minister of Telengana, Mohammad Mahmood Ali presented the award to R Shankar, CEO TVS LSL, India in the presence of R Dinesh, MD, TVS Logistics at the awards ceremony held on 24th November 2017, in Hyderabad.

Other senior management personnel from TVS Logistics present on the dais are Siddharth Jairaj, Director, TVS DGFS along with Suresh V and MSR Kumar. This is the second consecutive year TVS LSL has bagged the Overall Excellence Trophy. TVS LSL was nominated for three categories ‘3PL’, ‘Industrial Warehousing’ and ‘Freight Forwarding’, this year.

APM Terminals Inland Services inaugurated its new state-ofthe-art Inland Container Depot and supply chain solutions facility designed to serve one of India’s fastest-growing hubs for industrial development and manufacturing in the Pune district in Maharashtra state.

The new facility, which is over 12 acres in area, can handle more than 60,000 containers annually. Services include Customs clearance, bonded and non-bonded warehousing, empty container acceptance, transportation solutions and container repairs which are typically offered near ports.The facility is located 150 kilometers inland from Mumbai. Regional industries and manufacturing will now benefit from these local services.

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| APPOINTMENTS

upcoming events 4th East Coast Maritime Forum on December 08, 2017 at The Spring Club in Kolkata organised by Exim India Shipping Times

India Cold Chain Show 2017 from December 12-14, 2017 at the Bombay Exhibition Centre, Mumbai organised by Reed Manch Exhibitions

PHARMACONNECT 2018 A Pharma Logistics Conference on January 18, 2018 at Shangri-La’s-Eros Hotel in New Delhi organised by CARGOCONNECT.

Air Cargo India 2018 from February 20-22, 2018 at The Grand Hyatt, Mumbai organised by The Stat Trade Times.

Conquest 2018 Business Forum on Infra and Logistics on February 23, 2018, at the Eros Hotel in New Delhi organised by EXIM INDIA

Global Logistics Show from February 22-24, 2018 at Bombay Convention and Exhibition Centre, Mumbai organised by Infinity Expo

Shipping, Marine and Ports World Expo from March 01, 2018 to March 03, 2018 at the CIDCO Exhibition Centre in Mumbai

Chandilya is new CEO of Adani Ports’ logistics business Adani Ports and Special Economic Zone Ltd (APSEZ) on Monday announced the appointment of former AirAsia CEO MrithyunjayChandilya as Chief Executive Officer – Logistics Business.

“We welcome Mrithyunjay Chandilya to the Adani Group. Logistics is the backbone of our economy, providing efficient and cost-effective flow of goods on which other commercial sectors depend. As a group we aim to build our identity around an integrated logistics business model, we are not going to be known as just a port company but more as a logistics company led by our ports business,” Karan Adani, CEO, APSEZ was quoted in the release.

PS Atree re-elected as prez of DCCAA The Delhi Customs Clearing Agents Association (DCCAA) has re- elected PS Atree as its president as it chose new office bearers and managing committee members for the year 2017-19.

Puneet Jain will take on the role of vice president, while Gurvinder Singh and Bhim Singh Jain will take charge as secretary and joint secretary respectively. Harjit Singh will be the treasurer.

Managing Committee Members are Anil Kumar Chand, Deepak Kumar Verma, Devendra Singh Bhadoria, JogeshSethi, Kuldeep, Ram Naresh Yadav, Satya Pal Singh and Vaneet Aggarwal.

Soomar is next CEO and MD of DP World for Indian Sub-continent region Global trade enabler DP World has appointed Rizwan Soomar, as the new CEO and Managing Director for its Indian Subcontinent region with effect from 1st January 2018.

Soomar has spent over two decades in the maritime and logistics industry with senior leadership roles at AP Moller Maersk Group including tenures as Managing Director of the Group’s logistics arm in Egypt, Managing Director for Maersk Line – India and Sri Lanka and Vice President and Global COO of Svitzer. Soomar will replace former Anil Singh, SVP and Managing Director who is taking over new responsibilities outside India.

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PEOPLECONNECT

Success is defined by the team you have created” Ram Menen served as the Divisional Senior Vice President Cargo Emirates SkyCargo of the Emirates Group and Emirates Airline right from its inception in 1985 to June 2013. He was one of the founding Vice Chairman of TIACA and served on the Board as its Chairman, President and CEO during the span of 1994-96. He also served as the Chairman of IATA Cargo Committee between 20082012. Menen, who currently serves as the non executive director on Boards of a few companies in an exclusive chat with Deepashree Banerjee opens up about his 40 year old journey in the air cargo industry and much more.

What motivated you to be a part of the logistics industry and how has your experience been so far?

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As was the case with most of my generation folks, I came into this industry by default and just loved it.

growth of e-commerce. Archaic government regulation from protectionism has changed to facilitating smoother international trade and commerce. We are currently in a very dynamic evolutionary stage where old rules don’t apply and new ones are not written.

the change from production in low cost regions to on/near shoring process closer to where the end market is likely to be. 3-D printing will also have a very big effect on manufacturing and logistics activity.

How has the industry changed from the time you stepped in?

What was the biggest challenge that you have faced till date?

The industry has gone through some major changes. When I first came into this industry, it was very fragmented, Air, Ocean, land transportation and forwarding were all separate groups and worked as independent entities and there wasn’t much inter-alia communications. Forwarders were more agents and brokers and forwarding was just finding its feet. However, this has all changed driven by the science of supply chain management and all elements now realise that they are part of one chain.

Every aspects of manufacturing processes starting from inventory management to logistics has changed. Globalisation of production and marketing has brought in better cost efficiencies. Driven by technology the changes are now evolving faster than ever and now digitalisation is driving the

The biggest challenge that we have gone or going through is changing the mindset of the traditional air cargo industry. It has been a struggle to get them all on to the evolving digital world.

I believe in managing today rather than focusing in the past. Anticipating the change and being able to be ahead of the curve is very important in this very dynamic world.

Success is defined by how well you have delivered your product to your customer profitably. Customer loyalty is generated by how well you have added value to their business. Success is also defined by the team you have created and working together in a team is very much similar to playing soccer.

CargoConnect - DECEMBER 2017

Apart from work what are your other interests?

I am retired now. Although I keep ta b on what’s going on in the industry, my life is now driven by another interest, which is basically catching up with family and friends!

Where do you see the graph of the logistics industr y moving in the coming decade?

Logistics will always be a growth industry as this is one wheel of trade and commerce.

The traditional trade lanes will change with

How will you define success?

Do you have any message for those who aspire to work in the logistics industry?

My message to the aspirants will be that this is a very exciting industry with tremendous scope for making a difference. Science of supply chain management is very exciting and quite open for disruption in the evolving world of e-commerce. Without this industry, commerce would come to a grinding halt.

INDIA FOCUS WITH GLOBAL CAPABILITIES

KerryIndev is always on the cusp of cutting-edge solutions.

COMPETENT • COMPETITIVE • COMPREHENSIVE

Our ICD / AFS facility at Irungattukottai is located on the Chennai-Bangalore Highway, with a total area of 19.5 acres and warehousing capacity of 3,50,000 sq. ft, specializing in export consolidation with CE / self-seal containers.

Our ECCT CFS at Chennai / Ennore is a C-TPAT-approved CFS with a total area of 30 acres and warehousing capacity of 2,00,000 sq. ft. It’s the first AEO-certified CFS with exclusive empty container handling and storage.

Our CFS facility in Mumbai is equally impressive with a warehousing capacity of 50,000 sq. ft, equipped with self-owned Indital reach stackers and forklifts. We also intend to invest in next-generation equipment to further efficiency.

OUR BRANCHES ARE LOCATED ALL ACROSS INDIA CHA / Transport Air Freight / Project Division

P K EIumalai:

+91 98400 19992

IFF, FTWZ Supply Chain Management

P T Balaji:

+91 91763 09000

Infrastructure Division - CFS/ ICD

V S Hari:

+91 98401 75565

V T Deepesh:

+91 98400 39995

NVOCC & Shipping Agency

R Muralidharan:

+91 98407 71881

HO: Swamy Complex, No. 81 (41), Thambu Street, Chennai - 600 001 | Tel: +91-44-3010 1010 | Fax: +91-44-4216 1005 | www.kerryindev.com

@TheJSWGroup

www.jsw.in

JSW Jaigarh Port India’s modernised greenfield multi cargo environment friendly deep water port regularly servicing capesize vessel

Creating world-class maritime infrastructure to 200 MTPA by 2020

JSW Jaigarh Port is poised to service:

400,000 tonnes

350,000 tonnes

VAleMAx VeSSelS

Very lArGe Crude CArrIerS